TNAG-0142-FCO40-178-Long-term-policy-on-International-trade-in-textiles-1969 — Page 158

International Trade in Textiles

Preliminary Comments on B.O.T. Paper of 2.9.69

6

Say it be continum

ventutin •

woleniamy

xolation.

The paper recommends that H.M.G. should oppose the extension in time of the LTA and a fortiori oppose its extension in scope; and propose the setting up of a GATT working party to "review the situation" on international trade in textiles, bearing in mind that Britain's main object is to see that qrs are held to a minimum and based on strictly observed criteria of serious injury. In other words H.M.G's main object is to bring about a situation in which grs would be imposed only in accordance with Article XIX of the GATT strictly interpreted.

2.

This latter suggestion appears to be based on the belief that Article XIX of the GATT is by definition the internationally accepted instrument for this purpose.

3.

But this is not s0. Article XIX of the GATT was drafted before the present situation of "market disruption" arose, i.e. a situation in which rapidly increasing imports of particular products from a limited number of countries have caused a threatened "market disruption". This situation first arose over cotton textiles in the late 50's. It led not to the use of Article XIX but to the establishment of the GATT working party on Market Disruption and thence to the Long Term ***** Arrangement. That is to say that the Contracting Parties felt that Article XIX did not hold the solution to the "problem of low-cost imports" of cotton textiles. What reason is there to believe that they will agree that Article XIX does now hold the solution?

4. The developed countries do not wish to take non- discrimin÷tóry action against textile imports. Those that have already taken such action have taken it only against "low-cost" imports. That is to say that they are prepared to protect their textile industries to some extent against what they regard as unfair competition but they are not prepared to featherbed them by protecting them against all competition.

5. I therefore believe that it is unrealistic to imagine that this line will be accepted internationally. The developed countries which might use Article XIX will not be prepared to see the criteria of its use strictly defined. Article XIX is after all the "escape-clause". It enables a Government under severe internal political and economic pressure to escape from its general GATT