TNAG-0142-FCO40-178-Long-term-policy-on-International-trade-in-textiles-1969 — Page 118

CONFIDENTIAL

were a bit stricter?

4

This carries awful dangers of a reversion to general protectionism. In other words if the chances are that the Article XIX policy would lead to a deterioration in the situation, it's not worth pursuing. If the idea was welcomed only by the importing countries, this would be a pretty sure sign that nothing good would come out of it,

16.

I have written at such length because I honestly believe as I said in the final paragraph of my Preliminary Comments that the policy that Hong Kong has proposed would be in the interests of both Britain and Hong Kong. In theory I see no reason why we should not have different policies, that is to say that I see no logical connection between Britain's responsibility for Hong Kong's external relations and the suggestion that our policies should be identical. I see no reason why a British spokesman should not be able to say 'This is our policy as regards Britain itself and this is our policy as regards our dependent territories? But I see no need for this to arise in the present case.

17.

I might add that I have seen David Sellers' draft inter- vention for FCO Ministers, and agree with it, I was hoping to send it and the draft of this letter to John Cowperthwaite before he left but I haven't been able to manage it. However, I don't think he would be in serious disagreement with it.

18.

And since I have written at such length, I think I had better try and summarise, as follows :

(i)

Britain's burden of low-cost textile imports is in cotton;

(ii) This burden is not attributable to the LTA or to its

abuse by other countries;

(iii) No evidence has been produced to show that the use of

the LTA by other importing countries has deflected trade to Britain;

(iv) Britain's imports of mmf have not yet caused 'serious injury' and to the extent that they may pose a future threat, this is due to EFTA duty-free entry;

(v)

Article XIX of the GATT cannot be used against EFTA members;

(vi) Britain has already decided to bring the tariff treatment

of cotton broadly into line with mmf from 1 January 1972;

(vii) Britain cannot use Article XIX of the GATT on textiles so

long as the LTA is in existence because

(a) the major share of imports is held by cotton, which

should be dealt with under the LTA,

(b) imports of mmf (except perhaps from EFTA) would not

justify it;

CONFIDENTIA !

/(viii) If

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