TNAG-0142-FCO40-178-Long-term-policy-on-International-trade-in-textiles-1969 — Page 222

to be - (1) non-discriminatory, and

(ii) subject to compensation to those

whose trade suffers.

Developed countries wishing to restrain inconvenient imports of non-cotton textiles have sought to escape from these condi- tions by arriving at gentlemen's agreements with exporting countries under which latter exercise voluntary restraint of their

exports. Arrangements of this kind have been made by Canada, Sweden and Norway with the main low-cost suppliers of textiles. (A similar arrangement made by Germany with Hong Kong has lapsed). (There are of course restrictions on imports of textiles and other items, maintained by various countries under pre-GATT legislation, as well as agreed quotas on tex- tiles in the various bilateral agreements which the U.K. and other western countries have with Japan and state-trading countries.)

19. The main risks which this situation contains for us are

(a) The risk that so-called "creeping bilateralism"

would extend beyond trade in low-cost textiles by

a limited number of countries to international

trade generally. It is difficult to estimate how great this risk is - so far the only example of "voluntary restraint" outside the textiles field is the U.S. arrangement with certain iron and steel

suppliers but there is no doubt that it exists

to some extent. Mr. Stans, the U.S. Secretary of Commerce, has already indicated that he might support claims for similar arrangements for low-

cost footwear.

To trio agreed les Boi?

(b) If other developed countries entered freely into

restraint arrangements, there would be a risk of

diversion to the U.K. market. This may not occur in every single case e.g. of a voluntary restraint arranged between Norway and Taiwan, but the risk is clear, and the pressures from U.K. industry to

which it gives rise.

(c) The U.K. is inhibited from seeking voluntary restraint from the exporters in similar circum-

stances by our special relationships with Hong

Kong and with Portugal.

(a) To accept voluntary restraint arrangements out- side the aegis of the GATT as a means of dealing

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