YOUR TELEGRAM NO 97:
FORTUGUESE TEXTILES.
1. I SAW RAQUEL FERREIRA THIS AFTERNOON AND MADE THE POINTS TR PARAGRAPH 2 AND 3 OF YOUR TELEGRAM UNDER REFERENCE. SHE SAID THAT THE PORTUGUESE GOVERNMENT'S MEETING WITH ITS INDUSTRY WOULD NOW BE ON 2 JUNE. THEY WOULD SAY THAT THE UK WAS INSISTING ON THE DECEMBER LEVELS AND WAS NOT PREPARED TO ACCEPT THE APRIL AGREEMENT. THERE MIGHT, HOWEVER, BE A POSSIBILITY OF A COMPROMISE SOMEWHERE BETWEEN THE DECEMBER AND APRIL LEVELS. WOULD THE INDUSTRY AGREE TO THE GOVERNMENT EXPLORING THIS POSSIBILITY FURTHER 7 FERREIRA SAID THAT SSUMING THE INDUSTRY RESPONDED FAVOURABLY TO THIS PROP- OSAL, HERE PERSONAL VIEW WAS THAT A COMPROMISE MIGHT BE ACCEPT- ABLE TO THE PORTUGUESE BUT THAT IT WOULD BE MUCH EASIER TO ACHIEVE IF WE COULD OFFER SOME CONCESSIONS IN RETURN FOR PORTUGUESE CONCESSIONS IN THE THREE CATEGORIES WHICH CAUSED US GREATEST DIFFICULTY. THIS WAS THE PATTERN OF THE EXCHANGES WHICH SHE CONFIRMED WERE TAKING PLACE WITH THE FRENCH: THE FRENCH HAD HINTED
THAT IF THE PORTUGUESE WOULD MAKE CONCESSIONS ON SHIRTS THEY WOULD
RECIPROCATE WITH COMPENSATORY CONCESSIONS ELSEWHERE.
2 I SAID THAT ON THIS TIMING IT WAS NOT CLEAR THAT THE
PORTUGUESE WOULD BE ABLE TO GIVE SUFFICIENTLY FIRM ASSURANCES TO
JUSTIFY YOUR REFRAINING FROM ASKING FOR SAFEGUARD ACTION AT THE
COUNCIL ON 6 JUNE. FERREIRA SAW THIS DIFFICULTY AND SAID THAT
SHE WOULD CONTACT US ON THE AFTERNOON OF 2 JUNE AND ASSUMING
THAT THE MEETING HAD GONE WELL, WOULD BE AS SPECIFIC AS SHE COULD
ABOUT FLEXIBILITY ON THE PORTUGUESE SIDE.
3. I EXPRESSED THE PERSONAL VIEW THAT IT WOULD BE EXTREMELY
DIFFICULT FOR YOU TO OFFER ANY COMPENSATORY CONCESSIONS. BUT
COULD SHE SAY ANYTHING MORE ABOUT THE CATEGORIES WHERE SUCH CONCESSIONS MIGHT BE OF MOST INTEREST TO THE PORTUGUESE ? SHE
DECLINED TO DO SO BUT SAID THAT SHE MIGHT BE ABLE TO SAY MORE
AFTER THE MEETING ON 2 JUNE.
4e
SHE REACTED NEGATIVELY TO THE IDEA OF LOOKING AGAIN AT THE
INDICATIVE CEILINGS. IT HAD BEEN A POINT OF PRINCIPLE FOR THE
PORTUGUESE THAT IF THEY ACCEPTED QUANTITATIVE RESTRICTIONS ALL
IMPORTS SHOULD BE DUTY FREE. IF THE GOVERNMENT WERE TO
PROPOSE TO THEIR INDUSTRY THAT THERE SHOULD BE INDICATIVE CEILINGS FOR DUTY FREE IMPORTS BELOW THE AGREED QUANTITATIVE LEVELS, THEIR INDUSTRY WOULD REJECT THE WHOLE IDEA OF QUANTITATIVE RESTRICT- TONS.
I URGED HERE NEVERTHELESS TO KEEP THIS IDEA IN MIND AS