TNAG-0153-FCO40-189-Exports-of-cotton-textiles-to-Canada-1969 — Page 130

CONFIDENTIAL

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(1) SUCH A STAND HAS NO HOPE OF SUCCESS, SINCE CLEARLY THERE WILL BE NO SUPPORT FOR THE GIVING UP OF THE RIGHT TO NEGOTIATE BILATERAL

AGREEMENTS.

IN ANY CASE WE DO NOT REGARD VOLUNTARY RESTRAINTS OF

THE KIND WE ARE PREPARED TO AGREE AS BEING OUTSIDE THE GATT, AND BELIEVE THAT ANY CHALLENGE IN THE GATT IS LIKELY TO RESULT IN MUCH MORE DAMAGING DISCRIMINATORY IMPORT RESTRICTIONS WHICH, IF NOT

BLESSED, WILL NOT BE DAMNED BY THE GATT.

(2) I BELIEVE THAT THERE IS NO ALTERNATIVE TO THE FURTHER EXTENSION

IN TIME OF THE CTA AND THE CONTINUATION OF QUANTITATIVE RESTRAINTS UNDER IT (EXCEPT DISCRIMINATORY ACTION BY IMPORTING COUNTRIES). FURTHERMORE FAR FROM WEAKENING THE CASE AGAINST STANS, TO ACCEPT

ANY REASONABLE CASE FOR RESTRAINT ON AN ITEM BY ITEM BASIS STRENGTH-

ENS IT.

5. YOUR PARAGRAPH 2. NOTHING WE DO WILL WEAKEN JAPANESE

INTENTIONS FURTHER THAN THEY HAVE BEEN WEAKENED ALREADY BY THE

SURCHARGES THE CANADIANS HAVE ALREADY IMPOSED ON OTHERS. TO SUPPOSE OTHERWISE IS UNREALISTIC. FURTHERMORE, I DO NOT BELIEVE THAT THE JAPANESE WILL GO SO FAR AS TO REFUSE TO EXTEND EXISTING

AGREEMENTS, THUS WEAKENING THE CANADIAN RESISTANCE TO STANS AND LETTING THEMSELVES IN FOR A PROHIBITIVE SURCHARGE IN THE CANADIAN

MARKET.

6. YOUR INSTRUCTIONS IN THESE MATTERS ARE PUTTING US AT SERIOUS

ECONOMIC AND POLITICAL RISK SEMI COLON AND CREATING SEVERE LOCAL

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DIFFICULTIES AND EMBARRASSMENT SEMI COLON FOR REASONS WHICH I'AM

BY NO MEANS CONVINCED ARE ADEQUATE OR SOUNDLY BASED, AND WHICH

CANNOT BE DEFENDED LOCALLY. I HOPE YOU WILL INDEED BE ABLE TO SATISFY ME (YOUR PARAGRAPH 4) THAT YOU ARE ACTING IN OUR INTERESTS.

IF YOU CANNOT, I WILL HAVE NO ALTERNATIVE BUT TO REQUEST A FULL

REVIEW OF THE RELATIONSHIPS BETWEEN US IN MATTERS AFFECTING THE

CONDUCT OF OUR TRADE WITH THIRD PARTIES.

/7. IN THE

CONFIDENTIAL