TNAG-0139-FCO40-175-Effect-of-EEC-common-commercial-policy-on-Hong-Kong-exports-1969 — Page 24

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A continuation of quotas on the other hand, would not give the

industry the confidence or the incentive to undertake the

investment needed to make it more competitive.

Imports of cotton textiles into Britain, the greater part

of which enter duty-free, have now reached 53 per cent. of total

domestic consumption. This is a far higher proportion than in any

other major developed country. In these circumstances, we have

the alternatives of renegotiating the present unsatisfactory

quota arrangements, or adopting a tariff which would be broadly

in the line with those of ther developed countries.

The Government have decided that the right course is to

introduce as from 1st January, 1972, a tariff on imports from the

Commonwealth preference area on the lines proposed by the Textile

Council. From that date the existing general quota system would

be terminated; and the Government would consider the use of quotas

only on particular products under the Long-Term Cotton Arrangement

of the G.A.T.T. and only if total imports of cotton textiles rose

significantly above the present level and caused disruption to the

market in those particular products. These decisions would, of course,

be subject to any modifications that might be required if we joined

the E.E.C.

In reaching this decision I have taken account of the fact

that a number of countries in the Commonwealth have rights to

duty-free entry into the United Kingdom market; and I shall now

initiate the necessary discussions with the Governments concerned.

I am equally conscious, on the other hand, that cotton textiles

have long been treated internationally as a special case; and this

decision will not create a precedent for further departures from

our traditional policy on Commonwealth trade in advance of any

/general

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