Cotton textile quotas
The following is the text of a statement made in the House of Commons on December 8, by Mr. John Davies, Secretary of State for Trade and Industry.
'Following a recommendation from the Textile Council in 1969 the then President of the Board of Trade announced the decision to rely principally for the protection of our own cotton textile industry upon a tariff from January 1, 1972. An order putting a tariff on cotton textile imports from the Commonwealth preference area has been laid before Parliament. It was recognised at the time that this arrangement might be subject to adjustment if we joined the Common Market; though the Common External Tariff approxi- mates to the level we propose to introduce. Moreover it was made clear that although this decision meant ending the general quota system when the tariff came into effect, recourse to quotas might be resumed if total imports rose above present levels to the extent of causing disruption of our own production of particular products.
'It was always foreseen that there would be contraction in our own industry but that contraction is taking place in substantially changed circumstances both as to the world-wide state of the industry and as to the domestic situation where the level of unem- ployment causes great concern.
"The voluntary restraints upon the export of textiles to the USA agreed with certain Asian countries undoubtedly place an added weight on exports elsewhere and notably to this country whose imports as a proportion of consumption are far higher than those of any other major industrial country.
'In all the circumstances I have come to the conclusion that for the benefit not only of our own industry but also because of the stability this will give in the British market for our traditional suppliers I must retain in 1972 the present general system of quantitative restrictions in addition to the tariff. I am fortified in taking this step by the indications I already have of the build-up of orders for next year and by the knowledge that in the rapidly changing situation affecting this industry I might not otherwise be able to take action quickly enough to forestall disruption.
"This decision has been the subject of discussion with the Govern- ments of countries that have been our main suppliers with a view to demonstrating that nobody's interests would be served by a surge of exports into our market in 1972 originating from a wide range of sources. Whilst regretting the inconvenience our decision may cause them we appreciate their understanding of our problem. We have asked those who currently administer restrictions at the point of origin to continue to do so, whilst making it clear that should they find that impracticable we shall undertake the task from here. All imports of currently restricted cotton textiles from the countries in question will continue to be restricted and I must stress that we will not be prepared to licence excess shipments in 1971 in anticipation of 1972 quotas. No assurance can be given that licences will be issued for contracts entered into from today unless the Government are satisfied that the orders can be accommodated within the quotas for 1972. Fuller details of these arrangements are being issued to those concerned. The arrange- ments, moreover, will make the adaptation process to the EEC casier.
"The Government underlines that the object of this action is to avoid a situation of major disturbance arising next year that might occasion damage both to our own industry and to that of our main suppliers.'
A delegation of Hong Kong officials held discussions on Decem- ber 6 and 7, with Mr. Anthony Royle, Parliamentary Under- Secretary of State for Foreign and Commonwealth Affairs, Mr. Anthony Grant, Parliamentary Under-Secretary of State for Trade, and FCO and DTI officials about the British Government's decision to retain the existing system of quantitative restrictions on imports of cotton yarn and woven cotton textiles from Hong Kong and other currently restricted countries. The Hong Kong officials visited London at the invitation of HMG. The British and Hong Kong Governments have agreed to further talks beginning on January 10, 1972, in order to examine in more detail the impli- cations of the decision for Hong Kong's trade in cotton textiles with the UK.
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TRADE AND INDUSTRY 16 DECEMBER 1971
Notices to Importers
The following is the text of a notice which is being published in the DTI series of Notices to Importers.
FURTHER ARRANGEMENTS FOR COTTON TEXTILE QUOTAS
As announced on December 8 cotton textiles exported on or after January 1, 1972 from India and Hong Kong and the global quota countries will continue to be subject to quantitative restriction. The global quota countries comprise all countries and territories other than Japan, India, Hong Kong, Canada, the United States, Australasia, the Irish Republic, Southern Rhodesia, the EEC and EFTA countries and Eastern Area'countries. The arrangements for imports of cotton textiles exported in 1972 from India, Hong Kong and the global quota countries will be as for 1971 subject to the following changes and the relevant provisions of Notice to Importers 1331 of July 15, 1971 are hereby cancelled.
The Governments of India and Hong Kong and of those global quota countries with country quotas have been asked to state by December 31, 1971 whether they will continue to administer these quotas in 1972. In so far as they agree to do this, arrangements will continue as before with the governments concerned issuing country quota export certificates direct to Import Licensing Branch, who will then issue licences to United Kingdom importers. These governments are being asked to accept as first charge against these quotas orders made before the announcement of December 8 where the orders have been confirmed by an irrevocable letter of credit opened before that date. In any cases where governments do not confirm that they will continue administering their country quotas, the United Kingdom Government will be responsible. Further announcements will be made as and when it is known which countries will continue to administer their country quotas. In the meantime no further orders should be placed for cotton textiles to be exported in 1972 from India, Hong Kong and the Import Licensing Branch. global quota countries without a valid import licence issued by
Licences will be issued under the global quotas for imports from any of the global quota countries subject to what is stated in (b) below.
In cases where the United Kingdom government assumes responsibility for administering country quotas, the following new arrangements are envisaged:
(a) Against cach country quota which it administers, Import Licensing Branch will consider applications for import licences from importers to whom licences have been issued in 1971 under that country quota for imports of cotton textiles in the relevant country quota category, in respect of firm orders placed before December 8 1971 and covered by irrevocable letters of credit opened before that date. If the amounts of these orders fall short of the total amounts category by category of import licences issued to an importer for imports from the country in question in 1971, increased by 1 per cent, ILB will consider issuing further licences to that importer on application by him up to the amounts which he was licensed to import in cach category under that country's country quota in 1971. When first applying for licences 'importers should give particulars of all orders for export in 1972 placed before December 8, 1971 and covered by irrevocable letters of credit opened before that date and particulars of all licences (including the licence number) issued to them under country quotas in 1971 for imports of cotton textiles from the country in question. No assurance can be given that it will be possible to meet all applications, and any imports in excess of the quotas not covered by a valid licence issued by ILB will be liable to seizure by Customs. No anticipation of 1972 quotas will be permitted for goods exported in 1971 in excess of the 1971 quotas. If licences issued on the foregoing basis fail to exhaust a particular category within a country quota, further applications will be invited.
(b) The global quotas will be allocated to importers who have qualified for licences under the global quota arrangements in 1971. In the first instance allocations will be made for half the 1971 level (plus 1 per cent) valid until the end of 1972. Applications for such licences should be made as soon as possible and should reach Import Licensing Branch by January 1, 1972. These licences
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