ANNEX 'A'
I.
SPEAKING NOTES (DEFENSIVE)
It may be stated by some delegates that this is a major
breach of the Commonwealth Preference System
We are,
of course, fully aware that we have contractual
obligations to certain Commonwealth countries regarding the tariff
treatment of our imports of cotton textiles from them. As we have
said, we propose to consult with those countries about these
questions.
This does not mean, however, that the British Government
have made any fundamental change in their attitude towards
Commonwealth trade. The cotton textile industry has been regarded
internationally as sui generis. In Britain the proportion of total
consumption of cotton textiles accounted for by imports has risen
to over 50%; one third of our consumption is supplied by the
developing countries, a far higher proportion than is the case in
other major developed countries. The quota system will be
discontinued at the same time as the new tariffs are introduced,
and we are therefore substituting one form of protection for another,
not operating tariffs and quotas simultaneously, as do most other
developed countries.
II. Delegates may ask why, if the U.K. still values the
Commonwealth connection, the solution to her cotton textiles problem
should have to breach Commonwealth commitments, while leaving
GATT mfn bindings and our EFTA obligations to European suppliers
untouched.
our
Quite apart from the complications of unbinding mfn rates (Commonwealth preferential rates are not bound), a raising of mfn
CONFIDENTIAL
/rates
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