TNAG-0142-FCO40-178-Long-term-policy-on-International-trade-in-textiles-1969 — Page 172

tentu ya K

quoted-tieni until 1990 ?

जीन

textiles

Generally

CONFIDENTIAL

Nevertheless there are dangers. Importing countries may sometimes use their power to impose unreasonable restrictions. The effect of this might soon be seen if the US.A., having failed to get the L.T.A. extended to non-cotton textiles, were to play off several Asian countries against each other in bilateral negotiations. Other importing countries might be encouraged to go further in this direction than they have done so far and a network of restraints might develop which would lead sooner or later to something like a L.T.A. for non-cotton textiles. We might ourselves find it impossible to maintain our present stance and, in face of pressure from our own industry, have to contemplate restraint arrangements with, at the least, Hong Kong and Portugal.

ACTION RECOMMENDED

27.

The immediate issue is what line our negotiations should take in the Cotton Textiles Committee of the G.A.T.T. in Geneva on October 8-10; (these instructions will have relevance for the British representatives at talks in Ottawa on September 22 with the Canadians, who are trying to clear their' own minds about their textile import policy in face of pressure from some of their textile firms, particularly in the Quebec area.).

28. The discussions on cotton textiles in Geneva are likely to last for some time. We need therefore be in no hurry to decide on a final line. Against the background of decisions taken recently by Ministers our opening position should be that we should like to see the L.T.A. brought to an end when it expires on 30 September 1970. Because of this view and for the reasons summarised in para. 26(i) of this memorandum we should resist any proposal by the U.S. for the extension of the Agreement to non-cotton textiles.

29. We could then be prepared to say at an appropriate stage that we do not however regard the present position on the prospects. as satisfactory. It does not allow the developing countries adequate opportunities for the assured growth of a reasonable export trade, which is so important to their economies; it does not ensure that the impact of these exports is reasonably shared between importing countries; it does not provide for any consistent basis related to objective economic criteria, on which defensive action, other than tariffs, can be taken unless it is justified; it maintains a distinction between cotton and non-cotton textile products that is in some respects increasingly unrealistic; the defensive arrangements so far adopted have been taken either by way of derogation from the G.A.T.T.(i.e. under the L.T.A.) or outside the framework of the G.A.T.T. (the export restraint agreements); and finally it contains the seeds of actions and attitudes which may strengthen protectionism rather than facilitate the flow of international

trade.

30.

We could then say that we have in mind to propose that the G.A.T.T. should set up a Working Party to review the situation and to recommend the best ways of dealing with it. Among other things this might provide the U.S. with a face-saving device.

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CONFIDENTIAL