Telephone 01-
P W Ridley Esq CBE
Chemicals and Textiles Division
DTI
Millbank Tower
SW 1
Millbank
Your reference
Our reference
Date 27 November 1973
Dear Rudly,
COTTON YARN QUOTAS
1. Roger Hart wrote to Miss Lowne on 23 November about your proposal that we should ask our Community partners for a derogation from our Treaty obligations to enable us to continue to impose restrictions on imports of cotton yarn after the end of this year. You will now have seen UKREP Brussels telegram no 5782 on this subject, in the light of which Hart asked your office not to take any action on his letter for the time being.
2. I must admit that I do not find convincing the arguments deployed in your draft submission in favour of approaching the Community. I do not see how we could use what you are proposing on cotton yarn as an example of how we are practising what we are preaching on liberalisation in Community discussions about the GATT negotiations for a new Multifibre Agreement. Cotton yarn is due to be liberalised at the end of this year. Moreover, it is not a product on which we can claim that UK imports are high in relation to those of our Community partners. Also the UK industry has really had plenty of time to prepare itself for liberalisation at the end of the year.
3.
UKREP telegram no 5782 puts strongly the case for not seeking a further derogation on this issue. We ourselves admit that on the merits our case is weak. How much weaker will it appear to our partners? We shall therefore have to fall back on the purely political argument: "British Ministers need this derogation; so please may they have it?" Do we really want to use up political credit in this way? And if we are not prepared to fight to the last ditch, as I assume we would not be, we shall in any case not get what we want. Is it worth fighting at all if we are likely to be defeated? Finally and perhaps most importantly, we are at present engaged in Brussels on a number of battles of great import- ance to us (particularly to the DTI) over GSP, Brazil, the Mediter- ranean and Article XXIV:6 where we are firmly on the side of the liberalising angels. It will not help us in those battles, which we hope will be decided in the next few weeks, if we now turn up with a request for an illiberal derogation.
14.