XN000022-1978-01-27 — Page 13

Tu maag Makapary, Mira kis

In such

We know that the justification for this restrictive agreement

cannot stand up to economic or statistical analysis, and this was

consistently evaded. It was politically motivated; a response to massive

and persistent unemployment and all the pressures it generated.

circumstances it was easier to lay the blame at the door of so-called

'market penetration' by imports than to consider rationally what their

effect on employment really was in comparison to that of increased

productivity and other factors, and agree appropriate levels of restraint,

The major cause of unemployment in Europe has not been imports

but the unexpectedly slow recovery of the economies of Europe and

America from recession for reasons that are basically financial,

psychological, fiscal and political, rather than commercial.

We have signed the agreements and must now get on with making

the best of them. But I do suggest that we have a duty to ourselves

and to all small trading units to keep alive the issue of the rule of law in international trade, and to emphasise whenever we reasonably can both

the economic fallacies behind the violence that has been done to these

rules at our expense, and the danger to world trade that could result if such attitudes about textiles are allowed to spread to other items.

Because that is precisely what is already beginning to happen. the principle is accepted that protection may be freed from accepted rules,

the political pressures to widen its scope are very strong.

Once

I hope this situation is an ephemeral product of the post-oil-

crisis world of today. I hope that the threat will fade as economies

and employment recover and the normally liberal Governments of our principal markets are released from the prosont pressures, This, I think, will bo

a matter of time and above all of the crow ton of confidence through successful

leadership.

World trade has picked up from deep recession, but has got stuck

short of complete recovery. A demonstrable success, whether in stabilising an international trouble spot or in legislating for one of the major economies

such as that of the U.S. would have a tonic effect.

Meanwhile one may expect a period in which the threat of protectionism cxists, porticularly, but not exclusively, in respect of Asian products.

bic orn