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17/10/691
Three-Year LTA Renewal Expected in Europe)
By BERNARD LEASON Cuble Fairchild News Service
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LONDON. European industry sources believe LTA will be prolonged, per- haps with slight increases in growth rates, when GATT cotton committee meets again in December.
Highly placed sources say they expect renewal to be for three years and no long- er, which is the period sug- gested by UK at the com- mittee meeting in Geneva last week.
Meanwhile, it's thought likely United States would be successful in obtaining bilateral quota agreements with Japan, Formosa, Hong Kong, and Korea.
Although this would be clear accomplishment for Nixon Administration, go ing a long way to fulfill its pledges to domestic in-
dustry, it would be matter of growing concern to Eu- ropean textile industry. It's reasoned here that if bilat- erals are agreed with these four large exporters such secondary exporters as Phil- ippines, Vietnam and so on will find it more difficult to break into the American market. In this case, it's considered in the cards that their export efforts would be diverted to Europe.
For this reason, Euro- pean industry leaders but not necessarily their Governments are becoming convinced what's needed is mul- tilateral negotiations and an agreement on world quotas. Al- though United States says it wants a comprehensive agree- ment, it's considered that if Washington gets satisfactory bi- lateral agreements it will be less disposed to go along on multi- lateral arrangements. Europeans - evidently feel it's immaterial
whether multilateral
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arrange- ment were included in LTA or ran alongside it under GATT auspices.
Another reason for European concern is if Japan does accept quotas for American trade it will by force of its own dynamism begin looking more to European markets.
Thus, even though a decision on LTA extension was deferred in Geneva, elements of present jigsaw are beginning to fall into place.
European industry circles after sifting information from Geneva also agree with the American position that quotas, whether bi- laterally or multilaterally ar- ranged, are preferable to tariffs. There's doubt, and not least within British textile industry that the British decision to go over to tariffs in 1972 would work because unless tariffs are absolutely prohibitive low cost countries can slide under. And the situation would become more acute with conversion of these producers to man-mades. It's ex- pected debate will be taken fur- ther at IFCATI meeting in Por-! tugal in 10 days.
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GATT Chief's Japan Visit Stirs Reports
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Olivier Long, Director Gen- eral of GATT here early next month has strength- ened speculation that fur- ther detailed discussions of United States-Japan textile problems will be held through GATT.
A Foreign Office spokes- man said Long will be in Tokyo Nov. 2-11 to meet with top Japanese officials.
Belief persists that United States will seek multination .conference under rules of GATT. The Government here has said that it would participate in a conference if it were within frame- work of GATT.
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