MR SANDERS CRE
Dep Seal
сору
Mr Bullock Mr Houghton c Secu
Mr Carter T
Mr Edwards
Mr R Gray
Mr McEnery
Miss Welch
Mr Heath
CRES CRE1 CT2
CT1
52
soon
пералан Лизой
Линазы
Laird
THILD pos 25/6
CTT w/end.
FCO
Прождь
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COTTON TEXTILES:
TRANSITION FROM QUOTAS TO TARIFFS
It is my
Your minute of 21 June surprised me a little. recollection that at the meeting which led to Mr Carter's submission to the Minister for Trade of 23 April you agreed (with reluctance, it is true) to the line proposed.
2 I agree that Ministers must weigh carefully the pros and cons of quota enforcement if it does not prove possible to take powers to give temporary duty relief. The draft annexed to my minute to Mr Carter of 16 June (which in substance is the same as the one to which I thought we all agreed last April) was designed to put Ministers in a position to take such a judgment. There is no more of substance to be said about the domestic case for quota enforcement. We cannot, of course, be quite certain until the event that there will be a bunching of imports this year and early next year. But we know already that imports this year are higher than usual, because of an exceptionally large carry-over from 1970. It would hardly be credible if importers did not try to use up duty-free facilities to the utmost during 1971, thus bringing forward into the calendar year shipments which normally would be spread into the first three months of next year. It is also hardly credible that countries like Taiwan and South Korea, which have been held down very hard indeed by the global quota, should not make some attempt to expand their market share. Therefore, the risk of bunching is substantial. The real point, however, as I see it, is that whether or not the risk materialises, Ministers would be seriously vulnerable to criticism if, having foreseen it, they did nothing and serious market disruption took place. It is basically for this reason that CT Division have consistently advocated that Ministers would be unwise to take a chance on not enforcing the quotas.
1
3 If you think that the submission could add more to bring out these or other considerations, perhaps we could examine drafting changes. I feel bound to point out, however, that it is now more than 4 months since we have tried to reach finality on the transition, during which time the trade here and abroad have been kept in suspense. It is over a month since the importers made strong, and in my view fully justified, complaints to Mr Noble on this account. The longer we go on arguing, the more we expose Ministers to criticism. By the same token we should not put off a submission on quota enforcement while we
enfo wait for a final decision on duty relief. 74