(h) Duty-free entry for cotton textiles will continue to
apply to EFTA and the Irish Republic because of our Free
Trade Area commitments to those countries.
COUNTRY NOTES
CANADA has contractual rights to duty free entry in the UK market
for cotton textiles and we shall have to negotiate the waiver of
these. Board of Trade officials will be discussing with the
Canadians in Ottawa during the second half of September and some
of the main issues will probably be given a preliminary airing.
Canada's exports of cotton textiles to the UK have grown rapidly
in recent years, since quotas were imposed, first on India and
Hong Kong, and later on other developing countries. The
Canadians may say that the most likely beneficiary of the new
tariff will be the United States. But Canada's exports to the UK
have grown most rapidly in grey cloth which is normally a field for
expansion by developing countries.
INDIA is the Commonwealth country likely to suffer most severely
as a result of the change. The President of the Board of Trade
said, in his statement, that Britain would, when the time came to
determine the level of aid to India after 1972, "take into account,
against the background of India's general aid requirements at that
time, any adverse effects on her exports arising from the tariff." This is as far as we can go at present about the possibility of
compensation. We have confirmed to the Government of India that
we are prepared to enter into early consultations about all aspects
of the change, not excluding discussion of the point of principle
involved. We have mentioned informally to India that we would
not be ready for consultations until after the GATT Cotton
Textiles Committee meeting in early October, so they could not take place until later that month at the earliest.
CONFIDENTIAL
/PAKISTAN
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