TNAG-0172-FCO40-208-United-Kingdom-Productivity-and-Efficiency-Study-effect-on-H-1969 — Page 170

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3. AS REGARDS THE SPECIFIC POINTS IN YOUR PARA 2, MY COMMENTS

ARE AS FOLLOWS:-

(A) INDIANS WOULD BE PARTICULARLY ALIVE TO THIS POINT BECAUSE OF THEIR GRIEVANCE OVER THE SEPARATE EFTA QUOTA FOR JUTE GOODS.

B) IT FOLLOWS FROM MY PARA 2 ABOVE THAT THEY COULD BE EXPECTED TO MAKE FULL USE OF THE GATT AND UNCTAD ARGUMENTS AGAINST

ANY TARIFF.

(C) SELF-INTEREST WOULD DETERMINE THEIR ATTITUDE ON THE GENERAL COMMONWEALTH PREFERENCE ARGUMENT, BUT IF SELF-INTEREST SO DICTATED THEY WOULD USE IT TO THE FULL. WOULD THEY ALSO HAVE A BILATERAL CASE UNDER THE TRADE AGREEMENT OF 19397

(D) GIVEN THE IMPORTANCE OF HER TEXTILE EARNINGS AND HER SCARCITY OF FOREIGN EXCHANGE INDIA'S ARGUMENT ON TRADE AND AID GROUNDS WOULD BE PARTICULARLY DIFFICULT TO REFURE.

4. ONE ADDITIONAL ARGUMENT MADE STRONGLY TO TURPIN BY THE TEXTILE INDUSTRY IN BOMBAY AND REPORTED FULL IN HIS LETTER UNDER REFERENCE) IS THAT WHILE THE PRESENT QUOTA IN TERMS OF YARDAGE GIVES AN INCENTIVE TO INDIA (AND PAKISTAN AND OTHERS) TO QUOTE TRADE-UP UNQUOTE AND SO INCREASE THEIR EARNINGS, ANY CHANGE TO A TARIFF MIGHT LEAD TO INCREASED COMPETITION AT THE CHEAPER END OF THE TRADE AND A DOWNWARD TREND IN PRICES WHICH WOULD BE AS MUCH AGAINST LANCASHIRE'S INTEREST AS THAT OF COMMONWEALTH SUPPLIERS,

SIR M. JAMES

FILES

COMMODITIES DEPT

SOUTH ASIAN DEPT

N.A.C.D.

WEST AFRICAN DEPT

EAST AFRICAN DEPT

SOUTHERN EUROPEAN DEPT

HONG KONG DEPT

G.S.A.D.

S.W.P.D.

TRADE POLICY DEPT

SIR A.

SNELLING

MR. GALLAGHER

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