CONFIDENTIAL
12
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Lancashire industry's probleno.
The quotas were originally
conceived as a temporary Leasure to give the industry a breathing
space to enable it to re-organise and re-equip to meet competition.
However, the breathing space has now lasted for ten years and
there is no reason to believe that an extension of the present
scheme until 1973 or 1975, if that were negotiable, would succeed
in restoring the industry's confidence in ite orm future.
ad.
The Textile Council believe and their belief is supported
by the analysis in their Report that a moderate tariff of only
15 per cent (1.e. 85 per cent of the m.f.n. rate on cloth) would
enable the industry to compete more successfully with imports than
would be the case under tho quotas. Above all, they believe that
it would restore confidence and ctability in the industry. If
the Goverruzent turn down the Council'e recomendation gresoure is
bound to mount for a substantial reduction in the quotas, as
advocated in the inority Report, or for the setting up of a
regulating Commission on the lines put forward by the Parliamentary
Labour Party jointly with the Unions in 1955, endorsed by the
Prime Minister in 1957 and -in a modified form - Ir. George Brown
in July, 1963. However, the Frime Minister's support for the
1955 proposal was limited to the situation which would have arisen
if agreement had not been reached with India on a voluntary
restraint and Mr. George Brown's modification of it has also
overtaken by evonts, A reduction in the quotas would be contrary
, to the Long Term Arrangement and would be strongly opposed by
exporting countries, In any case it is difficult to see how a
Buying Commission could be established consistently with
Article III (4) of the GATT, which prohibits the setting up of a
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