TNAG-0143-FCO40-179-Exports-of-textiles-to-United-States-of-America-1969 — Page 79

C. & 1. 371

2700393

3,000-7/67-B55633

From

To

punsellor for Hong Kong Commercial Affairs, Washington

rector of Commerce and Industry

c.c.ndon, Geneva and Brussels Offices

Memorandum No. 51

RESTRICTED OFFICE CIRCULATION ONLY

BRITISH EMBASSY,

WASHINGTON, D.C.

21 March, 1969.

BY REGISTERED AIRMAIL

U.S. Textile Policy

We have recently picked up reports of apparent indiscretions let drop by U.S. officials, (usually with reference to the forthcoming visit of the Secretary of Commerce to Europe,) to the effect that it is intended to offer to European countries some sort of immunity against the effect of "voluntary restraints" on all-fibre textiles, in exchange for their supporting an American push against "low-cost" imports.

2.

This may be merely a Nehmer whispering campaign, but if there is anything in it it seems to us to indicate clearly, for the first time, that the Americans are thinking in terms of a CTA-type international agreement rather than of requests to individual countries to restrain their exports. For they can hardly be planning to exercise open discrimination by requesting some countries and not others to restrain textile exports to the U.S., and an ostentatious request to European countries, coupled with a secret assurance that no restraint was really expected, would leave them where they started if the real problem countries refused to cooperate. Whereas they could,without open detriment to G.A.T.T. principles, ask European countries to join them in sponsoring an international agreement giving importing countries the right to demand export restraints by category, while assuring those countries that in practice no "Article 3" requests would be put to them.

We may know more of how American plans are crystallising after Secretary Stans has addressed the American Textile Manufacturers Institute on 22 March.

3.

4.

I do not know enough about the G.A.T.T. and the history of the C.T.A. to know whether, if the European countries (and perhaps Japan) agreed to negotiate an All-Textiles Arrangement and the 1.d.c.'s refused, such an Arrangement could come into being. But we should obviously be on our guard, and it seems to me that one essential is for you to ensure that London are primed, not only with the standard arguments about trade restraints in general and the lack of justification in the U.S. for textile restraints, which they have at their finger- tips, but also with specific arguments against this form of approach, and considerations applying particularly to their responsibility for Hong Kong. It would also be valuable to alert as many 1.d.c.'s as possible to the threat to their interests which a C.T.A.-type agreement would pose.

5. Here are some points which strike me think of many more:

w

-

you and Derek Jones can doubtless

(a) The pusillanimity of the Department of Commerce when under pressure from industry (not to mention the duplicity of certain people) is such that it is hard enough to get them to stick to their obligations spelt out on paper, If the U.S. were given the right to demand restraints, unpublished assurances of immunity would be worth very little as soon as industry started complaining about some import from the U.K., or another "immune" country. This is a point that might profitably be made to other European governments if need arises.

(b) The conclusion of an all-textile arrangement would invite, not

י:

/only