ร
DRAFT SUBMISSION
!
COTTON TEXTILES: TRANSITION FROM QUOTAS TO TARIFFS
Ministers are asked to approve inclusion in the Finance
Bill of a clause to enable imports of cotton textiles from
developing countries (and South Africa) in the Commonwealth
Preference Area to be relieved of duty (which will be imposed
on CPA cotton textiles from 1 January 1972) if they are shipped
under quota in 1971 but do not arrive here until 1972. The
powers need only apply for a few months, but are required to
enable the transition from the quotas now in force to tariffs
to be carried through with the minimum disturbance to trade.
If the market became seriously disturbed during the transition
CT fear there could be strong pressure from the UK industry
for the reimposition of quotas, which would both frustrate
HMG's purpose of fostering the development of a cotton textile
industry able to live with tariff protection alone and damage
the trade interests of developing countries. (The quotas
not
apply to the date of shipment from the exporting country,
to the date of arrival in the UK, so it is not possible simply
to ensure that arrivals up to 31 December do not exceed the
quota and to substitute the tariff for the quota on the following
day.)
2 The transitional problem is that we can expect temporarily
a double upsurge of imports in 1971 and early 1972, firstly
because CPA exporters will make sure that the whole of their
1971 quota arrives in the UK before duty-free entry ends
(normally shipments carry over for two months or longer into
the following year) and secondly because there will probably
i