draft submission to Ministers
FUTURE IMPORT RESTRICTIONS ON COTTON YARN
Conclusion and Recommendations
There is no justification in terms of our established textile policy and the guidelines which we hope and expect to see incorporated in the new GATT multifibre agreement for the retention in the longer term of import restrictions on cotton yarn.
Although
We are therefore faced with the choice of allow- ing full liberalisation on 1 January 1974, when our current derogation from alignment to the EEC's Common Liberalisation List in respect of cotton yarn expires, or seeking a transitional period for phasing out the restrictions. the industry has put forward a case for retention of quotas foI three years (and liberalisation thereafter) we recommend only a qualified acceptance of this case, in that our request to the Community for a further derogation would be expressed as a proposal for increasing the quotas progressively over three years, and then eliminating them, rather than for a three-year extension of present arrangements with normal annual growth (which is what the industry want).
The main points taken into account in the framing of this recommendation are:
a
b
Liberalisation in one move would tend to undermine industry's present confidence in Government policy and endanger important investment plans.
The question is also politically sensitive since the vocal Lancashire textile lobby is closely tied to the spinning sector of the industry.
Ending of quotas on 1 January 1974, especially without a fight, would be interpreted as sacrifice of British interests to Community regulations, and would thus feed anti-EEC feeing.