TNAG-0143-FCO40-179-Exports-of-textiles-to-United-States-of-America-1969 — Page 148

-2-

Third, to an exporter there is little difference between "voluntary".

and legislated quotas. Both mean control of trade, loss of exports, and

a negative balance of payments effect. Both mean control of trade by

bureaucrats through cumbersome administrative machinery. In this case,

where there is little economic justification for protection, and where

exporters have a strong interest in maintaining their export sales, the

exporting countries can be expected to bargain very hard.

•

Fourth, the climate for world trade would suffer immeasurably were

the Nixon Administration to make its first foreign economic policy objec-

This essentially tive the negotiation of a limitation on textile imports.

protectionist move, taken on behalf of an industry with a political claim

for quotas, but no economic justification for them, would be both a black

eye for the new Administration and an open encouragement to protectionists

in other countries to press, their own import protection claims.

has led the world toward trade and payments liberalization.

interests, particularly our foreign investments, can be badly hurt were

we to abandon this leadership.

The U. S.

Our economic

Fifth, the United States is currently engaged in a number of sensi-

tive and important discussions with foreign countries that would suffer

as a result of an attempt to obtain additional textile quotas.

the issues at stake are:

Some of

Soybeans. The EEC tentatively plans to impose an internal tax on imports that would hit imported (mainly U. S.) oilseeds and oilseed products. A major objective of U. S. agriculture inter- `ests is to ensure that this tax is not imposed.

Border Taxes. The European border tax adjustment system is under fire from U. S. exporters and others. We are in the process of difficult negotiations intended to modify the discriminatory trade effects of this system.

The

Japanese limitations on U. S. auto imports and investment. U. S. auto industry is deeply committed to obtaining from Japan liberalization both of its controls on U. S. investment in auto-making production in Japan and its limitations (many of a