Textileg
You will have cocn Telogram No.641 from Ganova reporting what Ambassador Nakayama oald to sir Eugane Melville after tho U.S./Japanese talks had gone into rocess.
2. You should now ace the attachod letter to me from Mr. Abbott which reports on a furthor discussion with the Japonesa on November 24. The position clearly is that the Japanese have stood firm and have given no undertakings about restraints on any non-cotton textile items.
The next stage will be further U.9./Japanese talks before (and possibly during) the next meeting of the G.A.T.T. Cotton Textiles Committee (Decembar 15 to 17).
4.
It also seems there is a reasonable chance that nothing definite will be decided either on cotton or on non-cotton taxtiles at the December meeting.
5.
As you know, wehad a full discussion with Mr. Jordan and Mr. Jonoa at a moeting which I hold yesterday, the record of which will be issued as soon as possible. ir. Jordan and Mr. Jonca both made it clear that on the hypothesis that son10- thing would have to be done eventually to satisfy the Americans, their strong preference would be an extension in scope of the Cotton Textiles Arrangement to permit restraints to be imponed on blends (evon with a small cotton content) and some weakening of the "substitution" rule. One of their reasons for this is that they would hope then to scoure "roll-in arrangements" under which overall restraint levels might be negotiated for cotton and non-cotton goods such as shirta, blouses etc.
6. Ir. Abbott's letter makes it clear that this is not at all what the Japaneco would like. Their exports of cotton goods to other developed countries are relatively modent and "roll-in" has no attractions for them, I m de it clear at the meetings that the statement we had made at the October meeting of the G.A.T.T. Cotton Textiles Committee implied, although it did not state in terms, that we would prefor any G.A.T.T. axamination of the American non-cotton textilos problc to be conducted outside the Cotton Textiles Committee.
7. If necessary, I think we shall have to allow Hong Kong to express their own point of view on this issue in Geneva, since I see little chance of reconciling our views with theirs on it.
8.
We shall, of course, be scoing Herr Ernst on December 1 and 2. I see no nocoscity at present for saying anything publicly which goes beyond what we have already said in Geneva. The fact 10 that the Americans have not succeeded this year in socuring acquiescence in any restraints in spite of their threats and we may be able to hold the line for quite some time yat. All we need to do is repeat our willingness to take part in a G.A.T.T. examination of the American problem in order to Judge how significant it really 10.
9. I have arranged with Mr. Carey that we shall have a meeting to thrash out the line of a more detailed brief when he returns from India and after the talks with Herr Ernst have taken place. Mr. Jordan will be back in London to take part in these talks and I will try to settle with him then a line as nearly agreed as ponsible but baying frankly to him that if feels it necessary to express an independent line on any issue
I does not Same to me that no cewe shall not stand in his way, although we would hope The BoT shmek
7.
that/
Sag this. It may be the right line had it to list für Bot to take it. Mother4/12
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