from the less competitive suppliers like India. The reactions of the developing countries to it would vary in relation to their assessment of their prospects in the UK market in 1972; publicly, they would no doubt all oppose our action; but we should not in fact be reliant on their co-operation in operating the controls. A global system would tend to depress prices, as competition from overseas suppliers for the available licences intensified. Lancashire would dislike this, but on the other hand there would
be an advantage to the balance of payments in this situation.
(b) Continuation of quotas broadly on the present basis
35.
The quota arrangements which have operated for the six years 1966-71 consist of:
Restraints operated by the exporting country
(i) A bilateral agreement with India, with annual export
quotas now at a level of
(ii)
(iii)
12m.lbs. of yarn
205m.sq.yds. of cloth and made-ups
A bilateral agreement with Hong Kong, with annual export quotas now at a level of
7m.lbs. of yarn
197m.sq.yds. of cloth and made-ups
Country quotas allocated to 34 of the global quota countries (but not formally agreed by them)
4.lbs. of yarn
69m.sq.yds. of cloth and made-ups
"Global" licences issued to UK importers
36. These can be used for imports from any of the developing countries (other than India and Hong Kong), including the larger suppliers which also have country quotas (see (iii) above). Cotton textiles are imported from over 70 global quota countries under these arrangements, but Pakistan takes up a very high proportion of the licences, which total
4m.lbs. of yarn
69m.sq.yds. of cloth and made-ups
19