TNAG-0165-FCO40-201-Export-of-textiles-to-Norway-and-Sweden-1969 — Page 153

Views of Industries 1 Division on policy to be adopted in the forth- coming llong Kong/Swedish negotiations

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1.

The concern of Industries 1 Division is to ensure that

Government policy towards the textile industry on protection is

consistent with its foreign commercial policy. The Government has,

with one exception, set its face against the use of quotas to protect

industry. That exception is cotton, where the policy is under

review; but whatever the outcome on cotton it would be a major

departure for H.M.G. not to exercise its authority to stop quotas

from being extended on a more or less permanent basis outside the

cotton field. The consequences we face if the Swedes get their way

seem to I.1 to be the following :-

(a) it would greatly encourage Mr. Stans to act unilaterally

if the exporting countries (including at least Italy among the

developed countries) did not agree to an extension of the

L.T.A. or voluntary restraints. H.M. Embassy, Washington, told

us on 29th May that Mr. Stans' claim that the U.S. is "the only

free market in the world for textiles" is regarded by the State

Department and others as one of the strongest arguments in

Mr. Stans's case;

(b) it would increase the already very severe pressure on

the United Kingdom market, which is suffering from exactly the

same sort of problem as the Swedes outside the cotton field.

We have so far managed to resist strong pressure from the shirt

and knitwear manufacturers to impose controls on m.m.f. and wool

garments on the grounds that this would be contrary to our

international obligations. This defence would be untenable if

we gave the Swedes what they want;

/(c)

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