TNAG-0147-FCO40-183-Exports-of-textiles-to-United-States-of-America-1969 — Page 94

5.

IT MAY BE WORTHWHILE NOTING, IN THE CONTEXT OF NEHMER'S REMARK QUOTED IN PARA, 2(1) OF GENEVA'S TELEGRAM 551, AND POSSIBLY DRAWING AMERICAN ATTENTION TO IT AT A SUITABLE MOMENT, THAT THE COTTON ARRANGEMENTS WERE PRESENTED BY THE AMERICANS

IN 1961 AS A PRODUCT-BY-PRODUCT ARRANGEMENT AND ASSURANCES WERE RECEIVED FROM THEM THAT THEY WOULD ADMINISTER IT IN THIS WAY.

WHILE FROM THE START THEY TENDED TO ABUSE THEIR RIGHTS UNDER IT

ABUSE

BY REQUIRING UNJUSTIFIED RESTRAINTS, IT WAS NOT UNTIL 1966,

FY WHICH TIME U.S. IMPORTS HAD DOUBLED AND VIRTUALLY ALL PRODUCTS

LTA,

HAD BEEN DEALT WITH UNDER ARTICLE 3 OF THE L T A, THAT HONG

KONG AGREED A COMPREHENSIVE BILATERAL ARRANGEMENT WITH THE U.S.

6.

I DO NOT THINK THAT IT IS NECESSARY TO MAKE ANY SPECIFIC RESPONSE JUST YET TO THE AMERICAN PRESENTATION IN GENEVA, AT LEAST UNTIL AFTER THE JAPANESE PRIME MINISTER'S VISIT TO WASHING-

TON.

7. ON THE WIDER ISSUES, WHILE A MESSAGE TO THE PRESIDENT MIGHT PROVE NECESSARY EVENTUALLY (BUT, AS MELVILLE HAS SUGGESTED, LATER ON RATHER THAN NOW), I WONDER IF AN APPROACH MIGHT USEFULLY BE MADE TO THE U.S. SECRETARY OF STATE FAIRLY SOON ( 1.E. BEFORE MR.SATO'S VISIT), PARTLY TO ATTEMPT TO SWAY HIM AND PARTLY TO PAVE THE WAY FOR ANY SUBSEQUENT MESSAGE TO THE PRESIDENT.

8.

SUCH AN APPROACH MIGHT BE ON SIMILAR LINES TO PARAS 1 - 3

25% OF THE DRAFT IN WASHINGTON TELEGRAM 2715, BUT INSTEAD OF THE

LINE TAKEN IN PARA, 4 OF THAT DRAFT WE SHOULD NOW RATHER EMPHASISE THAT, THOUGH THE WHOLE BUSINESS ENDANGERS THE GATT, IT WOULD BE PREFERABLE TO CONSIDER IT WITHIN THE GATT FRAMEWORK RATHER THAN CUTSIDE IT, AS THE E E C AND UK DELEGATION TO THE C T C SUGGESTED.