For discussion
CONFIDENTIAL
on 14th December 1971
REGISTRY No. 51
- 3 JAN 1972
HILK6/540,
XCC(71)73 Copy No
MEMORANDUM FOR EXECUTIVE COUNCIL
EXPORTS OF COTTON YARNS AND WOVEN COTTON TEXTILES TO BRITAIN WITH EFFECT FROM 1ST JANUARY 1972
Introduction
Honourable Members will recall that, at their meeting on 30th November 1971, His Excellency the Governor mentioned the possibility of Her Majesty's Government changing its announced policy in respect of cotton yarns and woven cotton textiles imported into Britain from presently restricted suppliers. They will also be aware that HMG invited the Hong Kong Government to send representatives to London for discussions and that the Financial Secretary, accompanied by the Deputy Director of Com- merce and Industry (Mr Ho) left on Saturday, 4th December for discussions with Ministers and officials of the Foreign and Commonwealth Office and the Department of Trade and Industry.
Summary of Discussions held in London
2
The Financial Secretary first called on the Parliamentary Under Secretary for Trade in the Department of Trade and Industry (Mr Grant) during the morning of 6th December. The Minister said that he wished to explain "the elements in the present situation which had led to the decision to keep on quotas". These were:
(a)
(b)
(c)
the unemployment problem in Britain, combined with the failure of the economy to pick up despite the Government's reflationary measures;
the US decision to force through restraints on exports of man-made fibre textiles by the four main Asian suppliers (presumably his argument was that there could be a diversion of trade in non-cotton/cotton type products, which would add a new dimension of uncertainty to the situation facing Lancashire);
the need eventually to harmonise British policy on cotton textiles with the common commercial policy of the EEC.
3
The Minister claimed also that there was evidence of a surge in imports in the pipeline for delivery in 1972 and that this would come on top of understandably heavy shipments in the latter months of 1971 to avoid the new tariff. All this had added up to severe pressure on the Government which inevitably had influenced the Cabinet when they came to consider the issue. He argued that the modified policy would safeguard the British market against disruption, would provide a reasonable measure of protection for Lancashire and would safeguard the position of traditional suppliers such as Hong Kong in the British market.
CONFIDENTIAL