TNAG-0143-FCO40-179-Exports-of-textiles-to-United-States-of-America-1969 — Page 159

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that President Nixon at a press conference on February 6th declared publicly and categorically that he supports free trade and "takes a dim view of the tendency to move towards quota restrictions". But he also declared that textiles were a special problem.

Current Problems

6. The tariff reductions of the first two stages of the Kennedy Round have increased the significance of non-tariff barriers and other obstacles to trade. There is a wide- spread feeling in the U.S., even among those who oppose protectionism, that the U.S., having done her part in reducing tariffs in the Kennedy Round, is being deprived of the benefits to which her export industries are entitled through the operation of non-tariff barriers, border taxes and the like. A large number of these are under examination in the various multilateral trade bodies, and in general the U.S. and the U.K. are broadly in accord on these problems. Progress in these fields will be important so as to strengthen the Administration and the anti-protectionists against the powerful protectionist forces. There are already certain instances where the Americans have sought a unilateral solution or where there are points of dispute.

American Selling Price (A.S.P.)

7.

The Prime

The U.S. undertaking, in the Kennedy Round Supplementary Agreement on Chemicals, to abolish A.S.P. was due to be implemented in 1968. The parties to the Agreement have

The agreement agreed to its extension to the end of 1969. provides for the U.S. to receive tariff concessions on chemicals, and other benefits, when legislation providing for the elimination of A.S.P. has been passed. Minister is recommended to remind President Nixon that we attach importance to the removal of this substantial barrier to our exports of chemicals. Failure to abolish A.S.P. could spark off pressures for inward-looking tariff policies in Europe.

Steel

8.

Steel has always been a major protectionist issue and recently, following a significant rise in U.S. imports, the Common Market and Japanese steel industries agreed, under pressure from the Johnson Administration, to accept voluntary restrictions on steel exports to the U.S. for the next three years. The British Steel Corporation also came under pressure but managed to stay outside the agreement.

Textiles

9. There is very strong pressure in the U.S.A. for extending the Long Term Agreement on cotton textiles to . cover wool and man-made fibres. Following undertakings given to the textile industry during his election campaign, President Nixon recently announced that the U.S. proposes to initiate exploratory discussions to induce the major countries involved to accept voluntary restraints, i.e• themselves to impose controls on their exports to the U.S.A. Mr. Wilbur Mills, the very powerful chairman of the Ways and Means Committee of the House of Representatives, has also declared himself in favour of some form of control. The Tariff Commission's report of January 1968 in no way indicates that such action is justified, and this is also borne out by increased profits in the U.S. textile industry.

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