TNAG-0145-FCO40-181-Exports-of-textiles-to-United-States-of-America-1969 — Page 6

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In April, Mr. Stans, the U.S. Secretary of Commerce, who has

assumed personal responsibility for solving the textile problem,

visited Europe and later the Far East to sound out the reactions of

the major supplying countries and to float the idea of a special

conference in GATT. He was surprised by the strength of the

resistance he met and on his return to the U.S. undertook to put

forward recommendations to the President on a possible solution.

These long-awaited recommendations have now been given to the

President. Their content has not been disclosed to our Embassy

in Washington, but it is thought that they contain the suggestion

of an extension of the LTA to include non-cotton textiles and the

possibility of unbinding U.S. textile tariffs. The reaction of

other Government Departments in Washington to these proposals is

understood to be unfavourable and the President is expected to make

a decision shortly.

In general, the U.S. preoccupations with combating inflation

and solving their balance of payments problems are assuming

increasing importance and most other trade problems, with the

exception of their opposition to the E.E.C. Agricultural policies,

are consequently temporarily assuming less importance.

There is a strong move towards protectionism in several sectors

of the U.S. economy and this is gaining increasing support. from some

unions.

Any move by the Administration to give inxx to the textile

lobby is certain to spark off an avalanche of protectionist

pressures from other sectors of U.S. Industry, and the true test of

the New Administration's declared free trade policies will be their

ability to withstand these pressures.

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