COD: 13-77

To Members of the Textile Working Party

Reference

POLYESTER COTTONS FROM CERTAIN LOW-COST SOURCES

97

We are very grateful for the many helpful comments on our earlier draft. These have been taken into account, as you will see, in the attached revise. Although we have not been able to accommodate the views of those who wish we were not making this recommendation at all because they question its economic wisdom, nor of those who wish for excellent reasons that it did not apply to a particular country, we hope that we have clarified the presentation of the main argument, namely that this ection is a necessary consequence of the decision taken last year.

Meanwhile licence applications continue at the rate of nearly 5m co zás a week. We have therefore modified our approach, so as to treav all countries alike. As a result, Macao drops off our list for immediate totion, but a reserve list (only Macao plus Brazil so far) comes into being. If our 2 million sq yds figure is reached by any other country, we would hope to allow a little time for consultation within Whitehall, but to inform Ministers of added membership of the club rather than formally ask them for a decision in each case.

The avoidance of forestalling of import restrictions is virtually impossible, since anything one does with this intent seems bound to produce a contrary effect. But we hope to contein the forestalling within reasonable bounds this time. To help us do so, could you please let us have your comments by lunchtine on lon?ay 13 Juryah.

3 D Lowne (Miss) 021

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9 August 1973

Room 2035

Millbank lower

834 4422 Ext 459

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