TNAG-0143-FCO40-179-Exports-of-textiles-to-United-States-of-America-1969 — Page 173

C. a 1. 371

2700698

3,000-7/67-355638

From: Counsellor for Hong Kong Commercial Affairs, Washington

To

: Pirector of Commerce and Industry

c. London, Brussels and Geneva Offices

emorandum No. $ 4

RESTRICTED

24)111492

BRITISH EMBASSY, WASHINGTON, D.C.

28 January, 1969.

DD

το

19

OFFICE CIRCULATION ONLY

BY REGISTERED AIRMATI

32

Roth Office Report on U.S. Foreign Trade Policy

You will recall that during my recent visit to Hong Kong we discussed the possible contents of the report by the Special Representative for Trade Negotiations to the President on future U.S. Foreign Trade Policy.

The report was released on 15 January. It is at present in short supply, but I will send you a copy as soon as possible. It will be some time before I have time to study it in detail myself, but meanwhile, to give you something to brood over, the following were the principle recommendations according to my Embassy colleagues:-

(1) To avoid the conflict between Congressional prerogative and Executive authority which arose over, for example, the Anti-Dumping Code, Congress should be invited to express a general intention that the President should conduct negotiations on Non-Tariff Barriers or sectoral tariff reductions subject to the ulterior enactment by Congress of any necessary implementing legislation.

(2) If general international agreement could be reached upon a definition of export subsídics for both industrial and agricultural products the United States should be ready to enter into a reciprocal bargain on counter- vailing duties as part of which the United States countervailing law should be amended to include a material injury test and the power to take action on behalf of a third country. GATT should be able to require contracting parties to countervail subsidised imports.

(3) Price regulation for agricultural products in countries' domestic markets should be limited to price stabilisation as against income guarantee systems which stimulate uneconomic surpluses. Import charges on such products other than moderate tariffs should be confined to offsetting Lubsidisation: and levies and Linimum import price schemes should be eliminated. In return access to the U.S. for agricultural imports should be improved and the Tariff Commission should review existing Section 22 quotas to this end. The GATT waiver for Section 22 action might be abandoned in respect of quotas not otherwise consistent with GATT (e.g. under Article XI). U.S. agricultural export subsidies might be phased out if other countries did likewise, but should be used to combat the latter in third markets.

(4) The United States should negotiate with other developed countries for a more equitable distribution anongst them of cotton textile exports subject to the Long Term Cotton Textile Arrangement. criteria of market disruption could be agreed quotas should be imposed only If meaningful against imports causing such disruption. There is no mention of extending quotas to other textiles.

(5) Article XII of GATT should be reviewed, including consideration of the use of import surcharges, export rebates or other alternatives to quotas. Recourse to such Balance of Payments measures should be subject to tight GATT and IMF control. Countries in Balance of Payments surplus should also be expected to make some contribution, e.g. by border tax suspensions or

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