US Makes Strong Case A+GATT for Voluntary All-Textile Agreements
By BERNARD LEASON
Cable Fairchild News Service i
GENEVA.-The United States made a strong case Anesday for voluntary international agreements to in- Sure orderly growth not only in cotton, but wool and man- made fiber import-export markets. The U. S. also informed the GATT cotton textile committee that Washington favors continuation of LTA on cotton textiles after its scheduled cutoff date of Sept. 30, 1970.
The impression here, however, is that no firm decision on the LTA future will be taken at this meeting. Another session of the committee is reportedly to be called in early December.
The U. S. delegation, led by Henry Brodie, who is economic affairs counselor at the American Mission in Geneva with Deputy Assistant Secretary of Commerce Stanley Nehmer at his side, gave no indication in his open- ing statement that the U. S. is now considering asking a broadening of LTA to include wool and man-made fibers. The implication is that this could come, if current efforts to reach bilateral agreement on export levels are not suc- cessful.
The statement said the U. S. wants to avoid legislating import quotas, preferring "acceptable international ar- rangements" to achive an orderly flow of imports into the U. S. domestic market. The statement said the U. S., therefore, cannot "urge too strongly for cooperation of our textile trading partners."
The U. S. position is that the rapid growth of man- made fiber and wool textile imports "carries with it the same serious problems of market disruption that existed for cotton textile products at the birth of the LTA eight years ago. Overall imports of cotton, wool and man-made fiber textiles are now at an annual rate of 3.7 billion square yards compared to 1.5 billion in 1964. Man-made fiber textile imports at the rate this year of 1.8 billion yards are exceeding imports of cotton textile products for the first time and wool textile imports have taken 25 per cent of the American domestic market.
This is an outline of the situation the U. S. claims is a threat to its domestic textile industry, which plays a
Continued from Page One major role in providing employ- ment for the underskilled.
Having stated baldly that tex- tile imports have reached dis- ruptive proportions, it is a question of what the U. S. will do about it.
now
American sources agreed Wednesday it was true LTA ex- tension would not really con- front the multifiber problem, but nevertheless its continuation would retain a precedent for this type of control machinery.
Indication is strong that if no decision is taken on LTA until December, then the intervening time must provide fruitful an- radical or much more American action is to be ex-
swers
pected.
Britain remains against any controls, claiming the American industry doesn't know what real disruption is and cannot plear a case to merit quotas or a more inclusive 1TA. Chances are Brit - ain will be negative or indif- fcrent to LTA continuation.
The Japanese are going over to British thinking-sources here said the feeling is all controls should be scrapped and they maintain the present uproar is more political than economic. It looks like the Japanese and the
British.are acting in unplanned concert to make sure if they can that the American market stays free.
The American statement point- ed out that many other coun- tries have acted on textile im- ports by agreement or otherwise and thus "the U. S. market is the only major unrestricted market in the world. This situation has been a major contributing factor in the overall U. S. textile im- port problem, a problem which requires international solution."
It is significant that Japan and Britain are now talking about abolishing their mutual quotas and other trade barriers, possibly to set an example, but the real prize is the American market. One Japanese source said removal of the Anglo - Japanese quotas was of little interest to the Japa- nese textile industry as the Brit- ish market is very small.
The agenda for this week's meeting has been set strictly to deal with: 1. Review of LTA op- eration during the previous 12 months; 2. Adjustments in indus- try's structure in the past year; 3. The future of LTA.
It's evidently considered that the United States delegation stepped out of line in the open- ing review by bronching the sub-
ject of wool and man-mades, which strictly speaking don't fall into LTA terms of reference.
GATT spokesman said other speakers limited themselves to the first item. The Japanese del- egate reported Tokyo had made every effort to reach agreement with importing countries, which he urged to be more flexible. British, Canadian and Hong Kong representatives spoke briefly. Mexican delegate reported on bl- lateral arrangements with the United States and the Israeli speaker asked for a more flexible approach. It was reported that Israel indicated it would not ob- ject to LTA fading away next year.
There was no officially report- ed reaction 10 the American statement and, according to schedule, item 3 on the LTA fu- ture will be reached Thursday afternoon.
Industry circles commenting outside the meeting said develop- ments depend on an American- Japanese bilateral agreement be- ing reached. They saw no reason why the present LTA should not be extended, arguing that it's in the interest of developing nations because it provides them nearly guaranteed markets which could be denied by free competition.
The consensus was that Japan would agree to United States proposals for a bilateral arrange- ment, and there's no reason why this couldn't run alongside a prolonged LTA.
One suggestion is, however, that similar agreements would be needed with Korea, Hong Kong and other low cost producers of man-mades and wool. Hong Kong is said to be prepared to go ang
This line of reasoning contin- ues that it might in the long run be simpler to broaden LTA into wool and man-mades and thus avoid a multiplicity of mar- ginal bilateral agreements, not only those of the United States with its trading partners but others.
American strategy, therefore, may be to seek a stopgap bilat- eral arrangement' for wool and man-mades, which are increas- ingly products of international textile trade, and offer them as a model for inclusion in future sophistication of
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