11
w/12
Mr naru
COTTON YAKN
As I tola you on une telephone this alternoon, the DTI are deeply divided on whether or not to maintain restraints on cotton yarn alter the end of this year. On the one nand CKE are demanain complete liberalisation
the other, Chemicals and Textiles Division wish to continue restraints but phasing them out over not more than 3 years. They are at present in the process of ararting a divided submission to their minis.er.
and on
2.
+
a
You will already have received a copy of the drait Conclusions and kecommendations of the DTI submi... si on which CT Division circulated on 2 November (copies are now attached for other recipients of this minute). I have told CT Division that we shoula refer to see reasoned DTI submission before reaching conclusions on this problem rather than just a summary or the conclusions. I fear it may be some time before we get this. In the meantime I am assured that the submi.. ion will incorporate the arguments which were accepted at the meeting of the Textile Working Party and which I set out in my minute of 1 November. You will see that the araft conclusions and recommendations suggest an increase of 10% as a first step towards phasing out in 1974; CKE are urging CT Divis.on to increase this 20%.
I
3. In view of this divergence or views within the DTI I ao not think we need to reach a swirt decision on this problem. From a general trade policy point of view. TRED would prefer to see imports of colton yarn liberalised from i January 1974, but proviued the Ti propose a phasing out of the restraints in accordance with the policy we have been advocating for the harmon- isation of textile imports within the Community and provided they are not contrary to the new GTT muici- fibre Agreement, which is now emerging in Geneva, uo not think we would wish to oppose them. Dince le likely results of liberalisation would be that Pakista.... would take over some of the export periorance o. inaia and hong kong, and since Egypt's exports of cotton yarı to Britain at present are fairly Small, I Would suggent uhat the geographical departments would not wish Lo oppose une proposal either. I recognise, Lowever, biat you, in consultation with UKREP Brussels may have reservations. If there are any points which you or une other recipients of this minute would wish me to put to the DTI at the present time, pernaps you would
nave them.
14 November 1973
cc:
Mr Tarlton, Econ. Dept. Mr Nixon, NENAD
let me
KW. Hog &
A W Hazle
or
Trade Relations Exports Department
Mr murray, SAD
| Mr Gooufellor, KTOD
DD 145177 219242 500M 4/73 GM 3643/2