TNAG-0142-FCO40-178-Long-term-policy-on-International-trade-in-textiles-1969 — Page 166

CONFIDENTIAL

(THIS DOCUMENT IS THE PROPERTY OF HER BRITANNIC MAJESTY'S GOVERNMENT)

PCO (69) 17

2nd September, 1969

CABINET

3

COPY NO

OFFICIAL COMMITTEE ON COMMERCIAL POLICY

INTERNATIONAL TRADE IN TEXTILES

Memorandum by the Board of Trade

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INTRODUCTION

The Long Term Arrangement Regarding International Trade in Cotton Textiles entered into force on 1st October, 1962, for an initial period of five years. It was renewed for a further three years as from 1st October, 1967. Negotiations on the possible further renewal of the Arrangement will begin in Geneva at a meeting to be held on 8th - 10th October. There are likely to be many further meetings before a settlement is reached.

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When the Arrangement was renewed in 1967 the "douceur" offered to developing countries by the United States and the E.E.C. took the form of a modest reduction in their tariff on cotton textiles. The E.E.C. made the reservation that the tariff reductions would remain in force only so long as the London Term Arrangement continued.

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The United States will probably propose that the scope of the Arrangement should be extended to include all textiles. If this were done, the President of the United States would be able to implement his Election undertakings to restrict imports of non-cotton textiles from low cost sources.

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The purpose of this paper is to consider what line the United Kingdom delegation should take in the forthcoming talks in Geneva, both on the question of a straight extension of the Long Term Arrangement and on the question of its possible extension to cover non-cotton textiles.

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This consideration has to take into account the recent Government decision to abolish quotas on cotton textiles as from 1st January, 1972, and in the case of the Commonwealth to replace the quotas with a tariff. The President has also agreed that the present quota restrictions on imports of all kinds of textiles from Japan should be removed after 1972 provided the Japanese remove their remaining restrictions on our exports.

COTTON TEXTILES

In announcing the decision to abolish quotas and to introduce a tariff on Commonwealth imports as from 1st January, 1972, the President reserved the Government's right to reimpose quotas on

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CONFIDENTIAL