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2.
THE ASIANS HAD CAVED IN, THE ADMINISTRATION WOULD BE ABLE, OR EVEN WILLING, TO RESIST PRESSURES FOR THE EXTENSION OF RESTRAINTS TO NON-ASIAN PRODUCTS, INCLUDING THOSE OUTSIDE THE TEXTILE SECTOR. 2. ACCORDINGLY, WHILST I AGREE THAT WE SHOULD NOT AT THIS STAGE SLAM THE DOOR IN STANS' FACE, I CONTINUE TO BELIEVE THAT IT WOULD PAY US TO LEAVE HIM IN LITTLE DOUBT THAT OUR EVENTUAL ANSWER TO HIS PROPOSALS IS LIKELY TO BE NEGATIVE.
3. ON PARTICULAR POINTS IN THE PAPER:-
(A) IT SEEMS TO IMPLY THAT THE U.S. GOVERNMENT MIGHT BE ABLE TO JUSTIFY UNILATERAL ACTION UNDER ARTICLE XIX OF GATT. AS SEEN FROM HERE, AND SUBJECT TO SIR E. MELVILLE'S COMMENTS, IT WILL BE IMPORT- ANT TO ARGUE THAT IN PRESENT CIRCUMSTANCES THE SITUATION OF THE U.S. TEXTILE INDUSTRY IN GENERAL WOULD NOT ENABLE A CASE OF SERIOUS INJURY TO BE SUSTAINED AND THAT ACCORDINGLY ARTICLE XIX COULD NOT REPEAT NOT BE PRAYED IN AID OF ACROSS-THE- BOARD U.S. ACTION SAVE AT THE RISK OF RETALIATION UNDER ARTICLE XIX.3(A) SEMICOLON. (B) WE HAVE SEEN NO SIGN THAT, AS SUGGESTED IN PARA 3 (E), THE UNITED STATES GOVERNMENT HAVE FACED UP TO THE PROSPECT OF EITHER RETALIATION OR COMPENSATION. SINCE THEIR TARIFF NEGOTIATING POWER LAPSED IN 1967 THEY DO NOT EVEN HAVE STATUTORY AUTHORITY TO GIVE COMPENSATION IN THE TARIFF FIELD. I AM NOT AT ALL SURE THAT THEIR THINKING TAKES ANY REALISTIC ACCOUNT OF THE FACT THAT THIS IS WHERE THEIR PRESENT COURSE IS TAKING THEM SEMICOLON
(C) CONSISTENTLY WITH THE FOREGOING ARGUMENTS IT WOULD, I SUGGEST, WEAKEN OUR POSITION IF WE WERE TO SAY ANYTHING AT THIS STAGE ABOUT A QUID PRO QUO IF, IN THE LAST RESORT, THE AMERICANS TOOK SOME ACTION (PARA 9 (E)). IN ANY EVENT THER COULD AS YOU KNOW BE NO QUESTION OF OUR GETTING A QUOTE FIRM UNDERTAKING UNQUOTE TO ABOLISH A.S.P. FROM THE ADMINISTRATION. THEY ARE IN THE HANDS OF CONGRESS AND, JUST AS IN THE KENNEDY ROUND, THE LATTER REMAIN FREE TO REFUSE LEGISLATIVE AUTHORITY.
F.C.O. PASS ROUTINE TO UKDEL EEC BRUSSELS AND UKMIS GENEVA.
MR. FREEMAN
[REPEATED AS REQUESTED]
[ ADVANCE" COPY SENT TO BOARD OF TRADE]
INTERNATIONAL TRADE DISTRIBUTION TRADE POLICY DEPT. COMMODITIES DEPT. AAAAA
NACD
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ADVANCE COPIES SENT
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