CONFIDENTIAL
Leesures unilaterally to restrict imports from the countries concerned, subject only to the right of our partners to require consultations as provided for by the Council decision of
19 December 1972. We would welcome such consultations and consider that we would be able fully to demonstrate that the action which we were taking was consistent with the principles which we expect to see embodied in a new GATT International Textiles Agreement, and to which we have given our support. While our Community obligations do not prevent us from introducing now restraints unilaterally, we are not free to negotiate bilaterally with supplying countries on our own account. Consultations with the countries concerned are not ruled out, however, and our aim should be voluntary export restraints operated by the supplying countries (as is now the case with respect to Hong Kong's exports of polyester/cotton made-ups to Germany). If those were not introduced as the result of consultations, which could not last more than a couple of weeks from our initial approach, we would have to introduce import restrictions and allocate the new quotas anongst interested UK importers. If (see paragraph 12 below) wo were to announce a moratorium on an issue of new licences above any likely quota limits, this would constitute a quantitative restriction on imports of which we should have to give advance notice to the Commission under the terms of the Council decision mentioned above.
Levels of proposed restraints
12. The trede is so new, and we are proposing to take action so early, that the usual 1A concept of a base period of 12 months, ending 3 months before the first request for consultations, with 5% annual growth, is only of limited relevance in this instance. We think that it would be fair, internationally defensible, probably acceptable to the exporting countries, and effective as protection to set the level for 1974 in each case at the lower oft Be
umounts imported into the UK in 1973 + 59; b. 2,000,000 sq yards. As for Korea in 1972, we would provide for licensing orders outside the quota limits in 1973, to allow for contracts already made, but we would make the cut-off date the day that wo request consultations in each instance. We told also war import is that further applications for licences for goods from any country with which consultations are requested will be shelved
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