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SAVING TELEGRAM
PRETORIA TO FOREIGN AND COMMONWEALTH OFFICE
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TEL. NO. 2 SAVING
UNCLASSIFIED
26 JUNE 1969
25)
Your Telegram No. 714 to New Delhi.
381
Textile Council Report on J.K. Cotton
and Allied Textile Industry
Some of the points listed in your Paragraph 2 are relevant for Afro-Asian and other developing countries but not for South Africa and the question of compatibility, with the G.A.T.T. is one for London. I do not therefore propose to refer to specific points, especially as South Africa is not a member of the Commonwealth. My assessment will be based on South Africa's rights under the Ottawa Agreement, her reaction to the imposition of textile import quotas and her known attitude to proposals for reduction of her rights under the Ottawa Agreement.
2.
Under Article 1 of the Ottawa Agreement South Africa has a contractual right of duty free entry into the United Kingdom for cotton textiles and allied products. I assume that it is not proposed to impose a tariff on them without South Africa's consent. To do so might perhaps not cause her to denounce the Agreement in view of its great advantage to her, but it would certainly do very serious damage to our trade and other relations with her which are already strained for political reasons. She might also take retaliatory action by abolishing some of the preferences to which we have a con- tractual right.
3.
At present South Africa's exports of cotton goods to the U.K. consist entirely of made-up articles which are subject to quota restrictions imposed in 1966. The value of these exports is not large and they are not separately recorded in the published South African trade statistics, but from our statistics it would appear that our imports from South' Africa are considerably in excess of £100,000 yearly and in recent years South Africa has strenuously resisted proposals to reduce her preferences on goods in which the trade is far smaller. It must therefore be expected that the South African cotton textile industry and the Government will strongly resist any proposal to impose a tariff on South African cotton and allied textile goods. This resistance is likely to be all the stronger because of South Africa's need to increase her exports of manufactured goods. to compensate for the inevitable though slow decline of gold mining.
RECEIVED IN REGISTRY No.51 -4 JUL 1969
4/16/548/8
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