TNAG-0172-FCO40-208-United-Kingdom-Productivity-and-Efficiency-Study-effect-on-H-1969 — Page 155

PRIORITY OTTAWA

TELNO. 632

CONFIDENTIAL

ch

Textile Council File

CONFIDENTIAL

TO FOREIGN AND COMMONWEALTH OFFICE

27 JUNE 1969

35

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YOUR TELNO. 714 TO NEW DELHI: TEXTILE COUNCIL REPORT.

CANADIAN OFFICIALS, WHO ARE CURRENTLY MUCH PREOCCUPIED WITH

THE GROWTH OF CERTAIN TEXTILE IMPORTS INTO CANADA FROM A WIDENING

RANGE OF DEVELOPING COUNTRIES AND JAPAN, HAVE TAKEN A GREAT INTEREST

IN THE REPORT SINCE ITS PUBLICATION. ON THE BASIS OF VARIOUS CON-

VERSATIONS WE HAVE HAD OVER THE PAST TWO MONTHS, OFFICIAL CANADIAN THINKING SEEMS TO BE ON THESE LINES:

(A) THEY ARE CERTAIN THAT THE IMPOSITION OF A TARIFF ON COMMONWEALTH

TEXTILES WOULD VERY MUCH REDUCE CANADIAN EXPORTS TO BRITAIN. THIS WAS THE POINT MADE BY MR. PEPIN, MINISTER OF INDUSTRY TRADE AND COMMERCE IN HIS RECENT DISCUSSION WITH THE PRESIDENT OF THE BOARD OF TRADE. MR. PEPIN SUGGESTED THAT THE UNITED STATES WOULD BE THE MAIN BENEFICIARY BUT WE UNDERSTAND THAT CANADIAN OFFICIALS CONSIDER THAT LOW-COST NON-COMMONWEALTH SUPPLIERS IN ASIA WOULD ALSO GAIN SUBSTANTIALLY AT THE EXPENSE OF INDIA, PAKISTAN AND HONG KONG WHOM THEY REGARD AS PLACED IN A FAVOURABLE POSITION BY OUR PRESENT QUOTA AND TARIFF STRUCTURE. THE CANADIAN CONCERN ABOUT A POTENTIAL LOSS OF EXPORTS GOES BEYOND THEIR NORMAL DESIRE TO PRESERVE EXPORT TRADE. THE CANADIAN TEXTILE INDUSTRY IS PRESSING THE CANADIAN GOVERNMENT STRONGLY TO INTRODUCE A GLOBAL CONTROL ON THE LINES OF OUR OWN SCHEME AND THE POTENTIAL LOSS OF ONE OF THE TEXTILE INDUSTRY'S MARKETS ACCORDINGLY INCREASES THE DIFFICULTIES OF THE CANADIAN GOVERNMENT IN RESISTING PRESSURE FOR COMPREHENSIVE IMPORT CONTROL. (B) WHILE OFFICIALS THINK THAT CANADIAN EXPORTS WOULD SUFFER, THEY DOUBT WHETHER THE IMPOSITION OF A TARIFF ON COMMONWEALTH TEXTILES WOULD SECURE THE DEGREE OF PROTECTION AND THE REDUCTION OF IMPORTS WHICH THE TEXTILE COUNCIL REPORT SUGGESTS. THIS HAS BEEN A CON- SISTENT THEME OF CANADIAN COMMENT TO US EVER SINCE THE REPORT WAS PUBLISHED. THE CANADIAN ARGUMENT IS THAT COSTS IN CANADA AND

RECEIVED IN REGISTRY No.51

30 JUN 1969

NK KG /SW8

CONFIDENTIAL

LAST

RCF

25

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/BRITAIN