CONFIDENTIAL
3 We believe that the proposals below on cotton textiles
are not incompatible with the kind of restraints we could
expect as members of the EEC (these will probably be based
on existing national patterns), but there are too many
uncertainties about the precise form which the enlarged
Community will be able to negotiate for it to be worth
trying to anticipate them in 1972. Nor is it practicable
to try to anticipate the kind of preferential duty-free
arrangements for developing countries which the enlarged
Community might establish. In a word, we think we have
to concentrate on short-term measures if these are needed
at all to contain imports in 1972 before we become full
members of the Community.
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4 The medium and small firms in Lancashire which are
making most of the present noise have exaggerated the effect
of low-cost imports on the industry as a whole.
this year, the run-down in employment and in the number of
mills has gone more slowly than forecast in the Textile
Council's Productivity and Efficiency Study; the drop in
imports in 1969 and 1970 allowed less competitive units
tɔ survive and the sharp increase in 1971 has occurred
mainly because Lancashire has not contained costs as well
as overseas suppliers. The new tariff should go some way
to rectifying this. Otherwise, the streamlining in the
industry which is now taking place could be welcomed were
it not for the difficulty in finding other jous for
redundant labour and this, too, should gradually come
right as the national economy recovers.
3