TNAG-0145-FCO40-181-Exports-of-textiles-to-United-States-of-America-1969 — Page 48

4.3

ECO 15/413/3

CONFIDENTIAL

1. In Stevent

Ons 2. Mr.

Int. Barry, 1.

BRITISH EMBASSY,

WASHINGTON, D.C.,

17 June, 1969.

·0.0.bestemmis

my. Dienmett

n Star

185

Paris

1/6

Dew Peter

U.S. Trade Policy Textiles

In his letter to Bill Hughes of 12 June, reporting on Deniau's visit to Washington, Sir James Marjoribanks referred to the idea that the United States might unbind their textile tariffs. As you may have seen from the Ambassador's letter to Sir Denis Greenhill, copied to Sir Antony Part, of 6 June, Stans also mentioned the possibility at his lunch with the EFTA Ambassadors earlier this month, and it came up in a talk which Fred Davies from the C.B.I. had last week with Julius Katz.

2.

I took the opportunity to ask about it when I called on 11 June on Ken Davis, the new Assistant Secretary of Commerce for Domestic and International Business. Stanley Nehmer, who was present, said that it was indeed an option under serious considera- tion. The United States Government would have the right to propose such an unbinding in the period from 30 June to 30 September in preparation for the Article XXVIII "open season" in GATT beginning on 1 January, 1970. I asked the obvious question about compensation, since unless new trade legislation wore enacted the United States would have no power to compensate in the tariff sector. fehmer suggested that compensation might be unnecessary if the new tariffs were pitched at such a rate as not to cut trade below the current level and to allow for some growth consistently ith the objective which Stans had outlined to European and Asian governments. He said that after the "chicken war" a GATT working party had concluded that the United States was not entitled to compensation for the E.E.C. levy on their poultry exports in a somewhat comparable situation. He also asked whether the U.K. would welcome such a solution, since higher tarifis would apply to imports from all sources whereas under the L.T.A. approach the United States would not envisage restraining imports from the U.K. I emphasised that I was not taking a position on the suggestion, only seeking information about American thinking.

3.

It would, I suggest, be worth considering perhaps in concert with the other goverments concerned how to react to the proposition if it is put forward. From the point of view of J.K. textile exports it would appear to have the disadvantage which Nehmer mentioned. There can be very few

P.. Carey, Esq.,

Board of Trade.

cc's: G.J. MacMahon, Esq., C.B., C.H.G., Board of Trade

R. Goldsmith, Esq., Board of Trade

R.G. Britten, Esq., Trade Policy Dept., F.C.0. F.H. Jackson, Esq., 0.B.E., UKDEL EEC Brussels P.H.2. Marshall, Esq., UK IS, Geneva

Director of Commerce & Industry, liong Kong

RECEIVED IN REGISTRY No.51 26 JUN 1969

NICK 6/3041 аккы

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CONFIDENTIAL