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on our exceptions lists are cotton textiles. If we follow the

EEC offer, we would have to offer duty free entry on cotton

textiles originating from those beneficiary countries that are

members of the ITA, but the level of the duty quotas would be

the level of imports permitted under the existing quantitative

restrictions, which, in the case of the U.K. are generally

covered under the LTA although they are not fully in accordance

with it. The advantage of this approach would be that the volume

of cotton textile imports would be restricted to the existing

arrangements, or to whatever future arrangements for quantitative

restrictions under the LTA apply in the future. It could also

be claimed that the offer was of value to developing countries

in that they would no longer have to pay the full rates of

duty of 17% on cloth and 20% on made-ups. The difficulty of

it is that it cannot be reconciled with the recommendation of

the Textiles Council that the solution to the U.K. industry's

problems would be to phase out existing quota restrictions and

to substitute for them a tariff on Commonwealth cotton textiles.

This depends on imports from non-Commonwealth sources continuing

to be dutiable at the full rate. Imports of cotton textiles

from non-Commonwealth developing countries are currently

restrained to a negligible proportion of the total (about 6%

of our imports) but a solution will have to be found to the

difficulties we find in reconciling the Textile Council's

recommendation with our agreement in principle to provide

preferences and with the EEC's offers on cotton textiles.

As regards non-cotton textiles it would be necessary to select

a number of tariff headings, as the EEC have done, on the basis

of those items that are most competitive with U.K. production,

or substitutable for cotton textiles. It would appear arguable

that since the textile industries of the EEC and the U.K. are

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