The Basic FCO View
3.
We should strongly resist the DTI case. The
DTI a searching for plausible arguments to justify
yielding to the pressures of Lancashire without
too much regard for our overall economic interests
or for the effect their proposed action will have on
our international relations and international
reputation.
The steps which the DTI envisage would
be widely seen and criticised throughout the world
as giving yet another twist in the direction of
protectionism in international trade following on
the American measuris and continued by the Danish
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import surcharge. We would be acting contrary to
the provisions in Article XXXVII of the GATT that
'it is doubtful whether we could show "compelling
reasens" at this point of time why we should not
reduce or citminate barriers-to-imports from the
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4. We would be breaking solemnly-given undertakings,
particularly to Hong Kong and India (see paras.
below).
Is there a Case for Increased Protectionism?
5. The 1969 Textile Council report was a blueprint
for the restructuring of Lancashire industry to
become fully competitive by European standards.
The Council believed that a tariff would offer a
margin of protection that was both stable and
predictable, so enabling the industry to plan ahead
with confidence and to undertake the investment
needed to make it more competitive. The industry
has had 2 years to adjust to the decision to switch
from quotas to tariffs and most of the present fuss
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