WHAT SAFEGUARD WOULD THERE BE IF FURTHER PROTECTION WAS NOT GIVEN NOW?
7. An integral part of the new tariff policy was the statement that "Her Majesty's Government would consider the use of quotas only on particular products under the Long Term Arrangement of the GATT (LTA) and only if total imports of cotton textiles rose significantly above the present level and caused disruption to the market in those particular products". As recently as 11 October in response to representations by the BTEA, Sir John Eden reaffirmed this position saying that "if evidence was produced after the new import régime had come into effect that real damage was being done, whether to the industry as a whole or to some significant part of it, the Government would certainly consider what could be done to remedy the situation".
FOREIGN POLICY CONSIDERATIONS
8. Apart from the current position of the British textile industry, the main argument made by the DTI for action now is the decision by Ministers not to seek derogation from the Article IV Agreements on Cotton Textiles maintained by the EEC; and that a move to the dual protection of tariffs and quotas
would be welcome to the EEC.
9.
One has sympathy for the difficult position in Lancashire but we should hold to our belief that the reflationary measures taken this year should increase consumption and reduce unemployment. We should not be driven into a policy of increased protectionism at the behest of a small group of textile manufacturers (the
major textile concerns appear not to share the views of the BTEA) ; imports were to be one of the key elements to provide the
pressure to get rid of the less viable firms.
CONFIDENTIAL
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