TNAG-0142-FCO40-178-Long-term-policy-on-International-trade-in-textiles-1969 — Page 94

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Textiles Working Party

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It seems clear that GATT would give us a better chance, but possibly only initially, of heading off an LTA for non-cotton textiles. On the other hand, one needs to know more about voting alignments and methods of setting up and providing the members for subsidiary working parties of GATT. We also have to take into account that the Cotton Textiles Committee might give us a better chance vis à vis the developing countries.

2. I think we are in danger of mixing up our objectives, or at least the priority they should be given. The Americans may need a face-saving device, or it may be that it would suit us better to let them come head on into a position which would demonst- rate in the open that they are going for protectionist policies. I think Mr. Dunnett recognises that the first part of our second objective will be a difficult thing to achieve and that possibly all one can hope for is the reference that he gives in the preamble to the terms of reference.

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3. There are absolutely no grounds for expõeting the product areas to be considered by the Working Party, rather the reverse. Given that the Cotton Textiles Committee has the responsibility for undertaking studies on trade in cotton textiles, we should confine any working party terms of reference to non-cotton textiles.

4. Given the key role that the American position plays in all this, I would suggest that both tactically and from the point of view of our own interests, there is much to be said for supporting the German approach for a fact-finding group and thus trying to get the Americans to put on the table the necessary statistics which they have studiously avoided doing so far with the Japanese and the Hong Kong Governments.

5. One would therefore envisage narrow terms of reference with the idea that they would call upon the services of a statistical sub group (clearly the composition of this would be an important factor) to obtain from the appropriate governments statistical information bearing on import/export trends and the effects these trends were having on individual governments. The statistical sub group could be asked to report on the basic information it had obtained in a fixed period, e.g. three months, when the main working party could meet to decide whether the situation disclosed would make it appropriate to consider remedial action. This is not too different from what Mr. Dunnett proposes in paragraphs 8(a)(i) and (ii) but I believe that the wide wording he gives in 8(b) will lead us straight into the risks we wish to avoid. If it is felt that we have to hand the Americans another bone, as well as presumably protect our own future position and excessive imports, (b) might be subsumed into (a)(ii) with specific direction for remedial action such as the strengthening of Article XIX of GATT. On the whole, however, the la st paragraph of Mr. Dunnett's note suggests that it is preferable to keep this card up our sleeve.