2.
Paragraph 2
5.
We agree that the most reasonable working hypothesis is to assume that the Cotton Textiles Arrangement will be extended in time more or less in its present form. But it will probably be found that in practice this cannot be divorced from the second problem of extending it in scope. Ideally there are certain changes that Hong Kong would like to see in the Arrangement and, if there is a question of extending the scope by one means or another, there may be some possibility of obtaining improvements as a quid pro quo.
Paragraph 3
6.
The possible courses of action are set out more exhaustively in Enclosure 2. In particular your list omits a new, separate multilateral agreement on non-cotton textiles, which Stanley Nehmer told me was the Commerce Department's preferred solution. In your (v) I think "voluntary" should be kept in quotation marks. Our list, however, omits the unbinding
of tariffs by the use of Article XXVIII.
Paragraph 4
7
·
Although "no action" in the international field cannot be ruled out, we feel that, given the political pressures involved, we should be deluding ourselves if we assumed that Stans was anywhere near giving up yet.
Paragraph 5
8.
The first sentence should possibly be recast. Disinflationary policies are being followed. The question is whether they will be effective. Experience in the past with recessions or slowdowns in the U.S. economy has been that imports are affected more than domestic production, and Anthony Jurich accepted that this was a distinct possibility, as does the textiles man in the American Consulate here. But it is possible that, if domestic production of textiles is hit at all and unemployment goes up, pressures to cut down imports further by direct action will remain strong. When he was in Hong Kong in May Mr. Stans brushed aside our suggestion of the use of adjustment assistance measures as the way out of his problem, although Jordan reminded him of his own reference to it in his statement to the Joint Economic Committee of Congress on 27 February 1969.
Paragraphs 6 and 7
9.
We do not think it is true to say that the extension of the L.T.A. to other textiles has been Mr. Stans' prime objective. As we see it, his prime objective is to obtain some arrangement or arrangements to "moderate the rate of growth of imports" (his own phrase) and that if only he could achieve this he would not much care about the form of the arrangement. As we have already mentioned, Stanley Nehmer told Jordan that the Commerce Department would prefer a new, separate international arrangement. But it does not appear that this is what they have been pressing on the Japanese in the second round of talks in Tokyo. It appears now that they might be satisfied with a "voluntary" bilateral agreement with the Japanese which they would then no doubt use as a club to beat Korea, Taiwan and Hong Kong into a similar submission. They realise, as we do, that Japan is the key to the whole exercise.
10./
Page 180Page 181
No comments yet.
Private notes are available after approval.