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PRIORITY FOREIGN AND COMMONWEALTH OFFICE
TELEGRAM NUMBER 94
CONFIDENTIAL
NEUTRAL
TO PARIS
19 FEBRUARY, 1969
(MCC 13/3)
ADDRESSED TO PARIS TELEGRAM NUMBER 94 OF 19 FEBRUARY AND TO BONN
ROME REPEATED FOR INFORMATION TO WASHINGTON UKDEL BRUSSELS,
JKMIS GENEVA.
PRESIDENT NIXON'S VISIT.
THE FOLLOWING PASSAGE IS INCLUDED IN THE TALKING POINTS IN THE PRIME MINISTER'S BRIEF ON U.S./U.K. TRADE POLICY.
BEGINS.
THERE ARE TWO OTHER GRAVE MATTERS IN WHICH THE US WILL PLAY A CRITICAL ROLE. FIRST, WE ARE CONCERNED AT REPORTS ABOUT POSSIBLE RESTRAINTS ON IMPORTS OF TEXTILES INTO THE US A. PROTECTIONIST
ACTION IN SO IMPORTANT A FIELD BY A NATION SO WEALTHY AND POWERFUL AS THE US COULD START OFF. A CHAIN REACTION THROUGHOUT THE WORLD, NOT ONLY ON TEXTILES BUT ON OTHER INDUSTRIES TOO. THE EFFECT ON THE MAJOR OBJECTIVE OF PROMOTING FREER TRADE, AND ON MANY OF THE DEVELOPING COUNTRIES, COULD BE GRAVE. WE HOPE, THEREFORE, THAT VERY SERIOUS CONSIDERATION WILL BE GIVEN TO THE ISSUES INVOLVED BEFORE ANY RETROGRADE STEP IS TAKEN. INCIDENTIALLY, !. SOME OF THE PROPOSALS FOR ACTION BY VOLUNTARY CONTROL BY EXPORTING
COUNTRIES THAT HAVE BEEN MENTIONED DO NOT SEEM TO US TO BE
PRACTICABLE.
SECONDLY, THERE IS THE QUESTION OF WHAT IS CALLED THE AMERICAN SELLING PRICE (A.S.P.) SYSTEM OF VALUATION, UNDER WHICH A RANGE OF CHEMICALS ATTRACTS DUTY IN THE UNITED STATES, NOT ON THE NORMAL BASIS OF EXPORT VALUE, BUT ON THE BASIS OF THE VALUE OF . SALES OF CORRESPONDING PRODUCTS IN THE DOMESTIC MARKET. THE FULFILMENT OF THE FULL KENNEDY ROUND AGREEMENT ON CHEMICALS DEPENDS ON IMPLEMENTATION BY THE UNITED STATES OF HER UNDERTAKING
TO ABOLISH THIS SYSTEM OF VALUATION. I WISH STRONGLY TO URGE THAT! THE NEW ADMINISTRATION SHOULD USE ALL ITS INFLUENCE TO ERSUADE CONGRESS TO ENACT PTHE NECESSARY LEGISLATION. IT SEEMS
TO US VERY IMPORTANT IN THE CONTEXT OF ECONOMIC COLLABORATION
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