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British textile products which could stand a tariff increase unless of course the increases were selective enough to avoid catching products in which we have the main interest. other hand it would, I think, be difficult for the U.S.
On the Government to launch the proposal without getting involved both domestically and internationally in some discussion of compensation, which would have the not inconsiderable merit of bringing home to other American interests the possible cost to them of textile protectionism. It might also be difficult for
the Americans to get very far in negotiating an Article XXVIII solution if they had no power to give tariff compensation, so that their choice of this route could do something to help the passage of new trade legislation, including hopefully the abolition of A.S.F. My own first reaction is that we would do better to continue for the time being to resist any form of general textile restraints. Nothing has happened since Stans' visits to invalidate the argument that the U.S. textile industry as a whole has no economic case for higher protection. It is of the greatest importance not to lose sight of this fundamental objection. If we have to give ground it seems to me that we should continue to steer the Americans towards Article XIX arrangements for products where they can demonstrate a threat of serious injury to domestic producers.
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Supposing --
It may be of significance that when this possibility came up at my meeting with Davis, Larry Fox, who was also present, asked whether the U.K. would consider taking the initiative in proposing such a solution. I said I had no idea. impression from the account of Stans' discussions that he had
I had the dismissed the idea out of hand on several occasions. just supposing a foreign government were to propose it, would the U.S. Government now see it as a possible way out? Nehmer said that the Hong Kong authorities had dodged his question
Stanley when he asked whether they would negotiate a restriction on shirts and went on to develop the usual arguments about the difficulty of making restraints on individual products effective against diversion -- shirt manufacturers would turn to women's blouses. then to pyjamas and so on.
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It would be tempting to conclude from this discussion that the Dep stment of Commerce are beginning to cast around for face-saving solutions. I do not think that this is necessarily the case. Stans has committed himself so far in public that his personal reputation is involved and I am sure that he will not give up easily. At the same time his time-table is beginning to slip. It is now a fortnight since he was due to present his plan of action, but as far as we know he has not yet done so. Although there is still little sign of effective opposition to him within the Administration Carl Gilbert is still not confirmed as Special Trade Representative and the State Department appear to be lying very low several people in Congress normally on his side have, for whatever reason, latelycome near to kicking into their own goal. Senator Hollings from South Carolina
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