0003230
G.F. 323
CONFIDENTIAL
- 2.
4.
(d) nevertheless the vast bulk of growth in the home market
had been met by increasing U.S. production and not by imports, and in a time of recession, such as 1967, imports had fallen off more significantly than home production.
Nehmer continued to maintain that disruption was a present fact in "large parts" of the U.S. industry and that the threat of disruption was causing problems in other parts of it. When he claimed that it was not Hong Kong imports, or any other single supplier's, but the totality that was responsible for this, he was challenged as to whether the U.S. would also ask the others to negotiate. He confirmed that "other principal suppliers" would be approached (one other in addition to Japan already had been), but then admitted that only "low-cost" suppliers were to be involved and specifically stated that the U.K. would not be approached on wool.
5.
On employment aspects, the U.S. side claimed that the textile industry had lost 30,000 jobs since January. The emphasis was wholly on the social problem that would result if a marked decline in the industry's labour force took place but there was no real effort to demonstrate that this was an imminent danger. We pointed out that the link between imports and such loss of jobs as had occurred seemed tenuous. There was even less attempt to deny the favourable picture of rising profits, sales and product- ion except to claim that published statistics did not cover private textile firms and revealed only part of the story: non-published surveys showed that private firms were faring worse than public companies.
6.
Outlining the U.S. proposals on the form of the com- prehensive bilateral agreement proposed, Nehmer indicated that mmf and wool would be separate, that for each there would be group ceilings for apparel and other goods, and that within these ceilings some categories would be allotted specific levels of restraint. These categories would be considerably less in number than in the existing cotton agreement (which they were prepared to renegotiate as part of the bargain). The inclusion of the overall ceiling was in his view essential to the whole concept in the light of the ability of Hong Kong and other Asian garment manufacturers to switch rapidly from production of one item to another. Growth factors were negotiable, in general he expected growth to be of the order of what had occurred in cotton (where the import/consumption ratio had more than doubled since the LTA was signed).
7.
We reiterated that discussion on these points was premature and that time would be needed to assess the position again in the light of Cotton Textiles Committee meeting and of these discussions before we could draw any new conclusions on the facts of the situation. At present we could give no reaction. Nehmer accepted this but went on to argue that the bilateral arrangements on non-cottons already agreed with Canada, Sweden and Norway seemed to be a precedent for the type of arrangement he now proposed. In those cases problems of principle in GATT terms had not seemed to be insuperable. We pointed out that none of these agreements was comprehensive and that restraint had been conceded only where serious injury had been demonstrated.
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CONFIDENTIAL
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