TNAG-0142-FCO40-178-Long-term-policy-on-International-trade-in-textiles-1969 — Page 204

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It is not in the U.K. interest that there should be a discussion of substance in the C.T.C. on a proposal to extend the C.T.A. to non-cotton textiles. The Americans would press their case strongly and other developed countries might feel inhibited by domestic political pressures from resisting them as strongly as we would wish. We need have no hesitation in acknowledg ing the existence of a problem indeed, the fact that competition from the developing countries has shifted from cotton to man-made fibres is one of the justifications we would advance for proposing the dismantlement of the restrictions on cotton textiles but we would wish to insist on it being discussed in a separate Working Party, making it clear at the same time that we were not prepared to agree to the United States or any other countr being allowed to bend the rules of the G.A.T.T. to enable them to impose restrictions on imports in cases where serious damage had not been caused nor actually threatened to domestic producers of like or directly competitive products. The Working Party would therefore need to be told to limit its study to cases which the importing country considered would justify recourse to Article XIX of the G.A.T.T.

Escape Clauses

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The C.T.A. originated in a threat by the United States to invoke Article XIX of the G.A.T.T. to impose restrictions on imports of cotton textiles at a time when imports accounted for less than 5 per cent of domestic consumption. The other Contracting Fartics were reluctant to see Article XIX invoked when it was far from evident that imports had caused or threatened serious injury to the domestic industry. It was thought at the time that an arrangement under which the developed countries agreed not to have recourse to quotas unless imports caused market disruption would compensate the developing countries for giving up their right under Article XIX to be treated in the same way as the developed countries. In the event the C.T.A. has been applied more restrictively than the developing countries expected, and from the United Kingdom point of view it has not succeeded in spreading the burden of low-cost imports fairly among the importing countries.

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