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4. THEY HAVE, HOWEVER, COME TO THE CONCLUSION THAT, AT A TIME WHEN THE BRITISH MARKET IS PECULIARLY VULNERABLE, THE POLICY PREVIOUSLY ANNOUNCED OF REINTRODUCING QUANTITATIVE RESTRICTIONS
SELECTIVELY ONLY IF AND WHEN IMPORTS OF PARTICULAR PRODUCTS CAUSE DISRUPTION, IS UNLIKELY TO GIVE THE NECESSARY STABILITY OF MARKET AND EMPLOYMENT CONDITIONS. IN PARTICULAR, THEY
DO NOT FEEL CONFIDENT THAT IN A SITUATION SUBJECT TO VERY RAPID
CHANGE, THEY COULD TAKE ACTION AGAINST DISRUPTION QUICKLY ENOUGH ON A
PRODUCT-BY-PRODUCT BASIS. IN FACT, IT HAS ALREADY BECOME
APPARENT THAT ORDERS IN THE PIPELINE, IN ANTICIPATION OF A
QUOTA FREE MARKET NEXT YEAR, ARE AT A LEVEL CONSIDERABLY HIGHER
THAN USUAL.
5. THEY HAVE, THEREFORE, DECIDED TO RETAIN IN 1972 THE EXISTING QUANTITATIVE RESTRICTIONS IN ADDITION TO THE NEW TARIFF.
6.
THE BRITISH GOVERNMENT HAVE TAKEN THIS DECISION ONLY
AFTER THE MOST ANXIOUS CONSIDERATION. THEY BELIEVE THAT THE
STABILITY THAT THIS ACTION WILL BRING TO THE BRITISH MARKET
WILL BE OF VALUE TO OVERSEAS SUPPLIERS AS WELL AS TO THE
BRITISH INDUSTRY,
7.
THE BRITISH GOVERNMENT CONSIDERED WHETHER, IF QUANTITATIVE
·RESTRICTIONS HAD TO BE MAINTAINED, THE NEW TARIFF MIGHT PE
DEFERRED. BUT FOR OVER 2 YEARS THE BRITISH TEXTILE INDUSTRY HAS.
PLANNED ITS INVESTMENT AND MARKETING IN THE EXPECTATION OF PRICE AND
PROFIT LEVELS RELATED TO TARIFF, AND QUOTAS ALONE WOULD BE NO
SUBSTITUTE FOR THAT. THE BRITISH GOVERNMENT CONTINUE TO BELIEVE
THAT EFFICIENT PRODUCERS WILL BE ABLE TO SELL PROFITABLY IN THE UK
OVER THE NEW TARIFF AND THE RESTRICTIONS NOW BEING RETAINED WILL
PERMIT A LEVEL OF COTTON TEXTILE IMPORTS FAR HIGHER PROPORTIONATELY
THAN THAT ALLOWED IN OTHER MAJOR INDUSTRIAL COUNTRIES, ALL OF WHOM
HAVE LONG SINCE APPLIED A COMBINATION OF QUOTA AND TARIFF PROTECTION,
DESPITE THE UNEMPLOYMENT IN THE BRITISH COTTON TEXTILE INDUSTRY THE
QUOTAS FOR 1972 WILL BE INCREASED BY 1 PER CENT AS IN EARLIER YEARS.
-2- SECRET
/8. THE BRITISH
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