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Foreign and Commonwealth Office
London SW1A 2AH
RECEIVER
8 MAR 1985
W J Hall Esq
ITP 3
Department of Trade & Industry
1 Victoria Street
LONDON
SW 1
་
T. kon
20 February 1985
@
Dean John,
MULTI-FIBRE ARRANGEMENT
1. At our meeting with Rex Browning on 7 February, I undertook to let you have some suggestions on how you might expand the scope of the DTI position paper with a view to reducing to a minimum the areas requiring inter-departmental discussion at EQS.
2.
The main paper usefully sets out the implications for the UK economy and our trading interests of implementing Silberston's recommendations. I do not object to its general thrust. It is right to define clearly a UK economic interest; but our objectives need, in our view, to be set in a wider context. In particular, suggest that the paper needs to consider in more detail:
a) the approach of the main LDC and NIC suppliers; the strength of their "combined front"; and possible repercussions on the UK and the EC of failing to meet suppliers' demands;
b) the position of EC partners;
c) the current US protectionist stance.
In addition you will be expanding the key passage on Portugal.
The Suppliers
I
3. Some LDCs (paragraph 13) may have a strong interest in seeing an MFA extension which continues to give them assured levels of access. Others more dependent on textiles for their export earnings, such as Bangladesh (79%), Nepal (86%) and Pakistan (71%), might be expected to gain most from greater liberalisation. In practice however the NICs have been more successful in exporting under the MFA. The majority of LDCs, including probably Pakistan, Bangladesh and Sri Lanka, are therefore unlikely to want to go as far as the majority of NICS in liberalisation. India's general opposition to protectionism in general could well outweigh any consideration of advantage from guaranteed quotas under a
Accordingly they might be expected to work alongside the NICS, such as Hong Kong, Taiwan, Singapore and South Korea, who stand most to gain from a speedy return to full liberalisation. Of course because they are the main threats to our own industry it
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