the UK after the end of the year. This would involve a doubl. penalty on such shipments (quota and tariff). Some
Commonwealth countries might argue that all that
maintenance of the control would secure would be a
relatively short though significant delay in the increase of shipments in 1972 to the unrestricted level which will be determined by the tariff. They will also be disappointed
by the Chancellor's denial of tariff relief. On the other hand, acceptance of the recommendation would reduce
disruption of the market, and this would benefit the
*
Commonwealth countries. It would also delay for a short time their exposure to the unrestricted competition which they fear from Taiwan and Korea. This is an argument which is likely to carry some weight with India and Hong Kong.
8. On balance we believe that, in order to achieve the smoothest possible transition in the general interest and to avoid depriving Lancashire of some of the protection it has been led to expect, quota control should be maintained over all their 1971 exports, and import licensing therefore continued for the first three months of 1972. If you agree, there are three things that must be done:
(i) Exporting countries with bilateral or country quotas must be warned now that they must continue to operate the quota controls and provide export certificates for all shipments up to the end of 1971, as import licences will not be issued for shipments made in excess of the quotas.
(ii) As regards other shipments from restricted
countries, importers must be put on warning that the goods must be covered by a global licence (if exported in 1971) or (if shipped on or after 1 January 1972, and