TNAG-0146-FCO40-182-Exports-of-textiles-to-United-States-of-America-1969 — Page 180

}

CONFIDENTIAL

آسا

ould also be procedural complications in that before bound tariffs could be increased public hearings would have to be held by the Trade Information Committee (part of the Office of the Special Trade Representative) or even by the Tariff Commission. For these reasons the present feeling which could easily prove optimistic is that Stans may have overreached himself. In particular the more liberal elements of the Republican Party are said to be waking up to the damage which the President could do himself and the party by accepting Stans' proposal, and to be seeking to prevail upon the letter to modify them out of his own regard for the President's position. I am not sure how far we can rely on this kind of manoeuvre. With the President's recent decisions on the Knowles affair and on school desegregation his liberal image has taken quite a mock and this flank of the party may well be feeling that he needs to do something to restore it. On the other hand, now that he has shown himself susceptible to pressure from the right he may find it harder to stop himself from being shoved farther.

3.

Although Mr. Nixon has not so far shown much enthusiasm for quick or clear-cut decisions he is under some pressure of circumstances to decide the textile issue quick_ly. As you know one of the regular meetings between the United States and Japanese Governments at Ministerial level takes place in Tokyo on 28 and 29 July. Textiles can hardly fail to be a major topic, and it would be difficult for the U.S. to go to the table with nothing now to say. The Fresident leaves for his rendezvous with the astronauts and his visits to Asia and Rumania on 22 July. He must take a decision before then if it is to be in time for the Tokyo meeting.

4.

If Stans got his way the Japanese would presumably have to take the first shock of the attack. According to Yoshino, the Japanese Minister in Washington with whom I dined last night, they are not disposed to give ground. As I ace it, a hard-nosed confrontation might strengthen the hand of the advocates here of a less intransigent policy, as well as, incidentally, perhaps doing something to soften up the Japanese on their own inport policies. The aftermath ofsuch a confrontation could conceivably provide an opening for compromise proposals by other foreign governments.

5.

Mike Daniels and his friends continue to urge what they now describe as the Article XIX approach to deal with proven difficulties on selected products, and it looks as if this is also the solution which the anti-Stans lobby in the Administration and in the Republican Party will be urging upon the President. I thought it as well to remind Danicle that, although e`selective approach probably offered the only way out short of total abandonment of the American proposals, it would not be without difficulty for the U.K. and other exporters of high- priced textiles; Article XIX required restraints to be non- discriminatory and we would not be particularly happy for, say,

-2-

CONFIDENTIAL

Page 180Page 181