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CONFIDENTI AL
ECO 15/413/3
BRITISH EMBASSY,
WASHINGTON, D.C.,
14 February, 1969
Mf.
"Pl. copy to: MA
27
to: Mr. Preston & Mr. Alt. Stewart Enter & re-cire to Miss Stoddart
U.S. Textile Restraints
JMU
17/2
}
In his letter to Bill Hughes of 11 February Eric Midgley promised material to illustrate. the point that the American textile industry generally, far from being hurt by imports, is experiencing a period of high prosperity. I enclose for convenience a copy of the summary which Alec Hermann prepared a year ago of the Tariff Commission's report on the industry, which demonstrated that up to the end of 1967 imports could not be said to be hurting. I also enclose a paper which has been prepared by Bob Vastine, the Washington Secretary of the Emergency Committee for American Trade. annex shows that by almost every indicator the industry's position continued to improve in 1968. The third enclosure contains figures for, 1968 which we have prepared ourselves; although they differ in some respects from Vastine's they show the same strong trend of rising prosperity. Vastine's paper also contains other useful arguments against the extension of textile protectionism.
2.
His
The evidence is accumulating that President Nixon's decision, on domestic political grounds, to take action against non-cotton textile imports was made as a piece of "instant government" very soon after the inauguration. Administration officials, including Ellsworth, appear to be making a real effort to reconcile such action with wider considerations of foreign trade policy; but for the moment they are stuck with the President's decision. It looks as though we may hear two lines of argument:
(a) Mr. Nixon's statement at the press conference
on 6 February means that he will stand firm on liberal trade policies generally if foreign countries will help him out over textiles. (This argument may well be sincere. But how could the Administration refuse protectionist claims from other industries after giving in to one so palpably weak as textiles? continuing pressure from the steel protectionists does not inspire confidence in appeasement of protectionism.)
The
(b) Other developed countries already restrict non-
cotton textile imports from low-cost countries like Japan, Hong Kong, Korea and Taiwan. (It would be worth refuting this allegation if we can. But it is in any case irrelevant to
G. J. Mcllahon, Esq., C.B., C.R.G.,
Board of Trade.
cc's: A.G. Britten, F.C.0.
S. Stewart, Esq., H.C., B.O.T.
-1- CONFIDENTIAL
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