TNAG-0143-FCO40-179-Exports-of-textiles-to-United-States-of-America-1969 — Page 32

CONFIDENTIAL

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GUARD

(A) TO SET OUT TO MR. STANS THE SERIOUS FOREIGN AND COMMERCIAL

POLICY OBJECTIONS TO THE TEXTILE PROPOSALS, BUT ALSO (B) TO ENSURE THAT HE SEES, BEFORE IT IS TOO LATE TO TURN ASIDE,

WHERE THE ROAD ENDS IF HE PERSISTS WITH HIS PROPOSALS

AND IF FOREIGN COUNTRIES REJECT THEM.

THERE IS NO ECONOMIC JUSTIFICATION FOR RESTRAINT PROPOSALS ON TEXTILES IN GENERAL (EVEN MR. STANS SEEMS TO BE REALISING THIS, AND IT WILL PRESUMABLY BE RUBBED IN DURING HIS TALKS IN LONDON AND HOPEFULLY IN OTHER EUROPEAN CAPITALS). AS WE SEE IT, THEREFORE, IF THE UNITED STATES TOOK UNILATERAL ACTION ON TEXTILES THIS COULD NOT BE JUSTIFIED UNDER ARTICLE XIX, NOR IN THE CIRCUMSTANCES COULD THEY HAVE MUCH HOPE OF AN ARTICLE XXV WAIVER: THEY WOULD HAVE TO ACT IN CONTRAVENTION OF THE GENERAL AGREEMENT, WITH ALL THAT THAT WOULD ENTAIL. WE ARE CONFIDENT THAT THE NIXON ADMINISTRATION WOULD BE VERY RELUCTANT INDEED TO TAKE SUCH A COURSE, AND WOULD NOT WILLINGLY GET THEMSELVES INTO THE POSITION OF BEING CONFRONTED WITH IT. WE ALSO THINK THAT RESPONSIBLE ELEMENTS IN CONGRESS, NOTABLY WILBUR MILLS, WOULD HESITATE TO PRESS LEGISLATION WHICH WOULD PUT THE U.S. GOVERNMENT IN THIS POSITION, AND EVEN A TEXTILE QUOTA BILL WOULD STAND A FAIR CHANCE OF DEFEAT IF BOTH THE ADMINISTRATION AND MR. MILLS WERE AGAINST IT.

5. WE ARE NOT SURE THAT MR. STANS IS AS YET LOOKING THIS FAR AHEAD. WE THINK THAT IT WOULD HELP TO OPEN HIS EYES (AND REINFORCE THE POSITION OF THOSE HERE INSIDE AND OUTSIDE THE ADMINISTRATION WHO ARE EMPHASISING THE INTERNATIONAL RISKS) IF HE WERE TAKEN SOBERLY AND FACTUALLY THROUGH THE STAGES BY WHICH THIS SITUATION WOULD BE REACHED. IT WOULD OF COURSE DE COUNTER-PRODUCTIVE TO SEEM TO BE MAKING THREATS, WHICH MIGHT PUT HIS BACK UP. RATHER

/WE

CONFIDENTIAL - GUARD

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