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Mr. Combs
Liscussions with Mr. Stans: Hong Kong
Mr. Stans, as expected, was seeking our acquiescence to the proposal that there should be a GATT conference to consider the introduction of new restraints on imports of wool and man-made fibre textiles into the United States similar in general character to the Long Term Arrangement on cotton textiles. He made it clear that the American intention was to curb imports primarily from four Asian countries: Hong Kong, Japan, Taiwan and South Korea.
The basis of Mr. Stans' case was that if it were not possible to reach agreement internationally upon an import scheme of this character, the protectionist lobby in Congress would insist on passing legislation much more inimical to the interests of the countries concerned (and he mentioned some Bill which had passed the Senate last year but had been blocked by Mr. Wilbur Mills in the House of Representatives which would have cut Hong Kong's non-cotton textile imports to the United States by something like 70 per cent). He also made it clear that Congress would not pass the legislation necessary to implement the agreement on the American selling price on chemicals unless something were done to curb 1.8. imports of Asian textiles.
At a meeting with some members of the delegation last night at which the President of the Board of Trade and Mr. Mulley as well as myself and a number of Board of Trade officials were present, it was agreed that we need not during the present round of discussions in London give any indication to Mr. Stans whether we were likely in the end to fall in with his propositions or not. Mr. Stans returns to Washington in a fortnight and then embarks on an Asian tour on which his second port of call will be Hong Kong. He played it in such a way that Hong Kong will be left to develop her own case. We know privately that she would prefer extension of the LTA to unilateral action by the United States. By about the end
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