TNAG-0165-FCO40-201-Export-of-textiles-to-Norway-and-Sweden-1969 — Page 93

4. CRE Division, Hong Kong and ourselves have argued that to

avoid a concerted move to extend the C.T.A. to non-cottons we

must accept the existence of these voluntary undertakings on a

strictly limited basis. This was the basis on which the recent

American initiative was handled both in London and Hong Kong last

month, in accordance with a brief prepared by the Board of Trade

and agreed with them. There is no evidence (except to the contrary)

that the Americans are interested in voluntary restraints. There is

no history of widespread recourse to such arrangements, which have

so far been confined to meeting the problems presented in very

limited non-cotton sectors by competition from low-cost producers

and have served as a safety-valve to rising pressure for a formal

C.T.A.-type arrangement.

C. The

The Alternative of Article XIX action

5. Industries Division propose that situations of serious injury

to domestic industry should be handled under Article XIX of the

GATT. They consider that the difficulties of so proceeding (e.g.

the requirement to act on a non-discriminatory basis) would check

the "creeping bilateralism" they fear.

6. CRE Division, Hong Kong and ourselves consider that Article XIX

would be no obstacle to action by importing countries and that, if

it were widely resorted to, Hong Kong's trade interests would be

seriously and unnecessarily damaged. Although attempts have been

made to define serious injury in the terms of this Article, it is

in fact the importing country which decides whether injury has been

caused. There is some doubt whether the non-discriminatory applica-

tion of measures under Article XIX would in fact be required or

/ enforced .......