SECRET
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.
во
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 WILLL 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 BE 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.
8. TO AVOID EXCESSIVE CONCENTRATION OF IMPORTS IN THE EARLIER PARTS OF 1972, THE BRITISH GOVERNMENT ARE UNABLE TO AGREE THAT EXCESS SHIPMENTS IN 1971 SHOULD BE LICENSED IN ANTICIPATION OF THE 1972 QUOTAS. CONTRACTS ALRADY PLACED FOR SHIPMENT AFTER 1 JANUARY 1972 MUST BE ACCOMMODATED WITHIN THE 1972 LIMITS, NO
-2- SECRET
/COTTON TEXTILES