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FINANCIAL TIMES
23 JUL 1969
Cutting dated
19
COMMONWEALTH TEXTILES
Tariff to replace import quotas in 1972
FINANCIAL TIMES REPORTER
THE GOVERNMENT is to introduce. from January 1, 1972, a tarif on textile imports from the Commonwealth preference area and to terminate the general quota system. Mr. Anthony Crosland. President of the Board of Trade, told the Commons yesterday.
The announcement follows the Government's examination of the Textile Council's Report on Cot. ton and Allied Textiles.
"The Report addressed а number of recommendations to both the Government and the in- dustry, and these have been the subject of continuing consultations with the Council," Mr. Crosland said.
Recommendations to the in- dustry concerned in particular the need to increase the rate of re-equipment, to extend multi-shift working, and to develop closer -technical and commercial links between the different stages of production and marketing. I attach great importance to these three requirements, and I am working closely with the Textile Council on their implementation.
"The main recommendations to the Government concerned future policy on imports and financial assistance to encourage equipment.
85% rate
re-
"On import policy, the Council recommended that the present quota system should be replaced by a tariff on imports of cotton textiles from the Commonwealth preference area at a rate not less than 85 per cent. of the most favoured-nation duties.
On cotton cloth, the main item
of trade. this would mean a duty of
15 per ccnt. The Council
believes that a tarif would be a better solution both for the industry and the country than a continua tion of quotas.
"It would offer a margin of pro- tection that was both stable and predictable, so enabling the in- dustry to plan ahead with confi- dence. A continuation of quotas, on the other hand, would not give the industry the confidence or the incentive to undertake the invest ment needed to make it more com- petitive.
Imports of cotton textiles into Britain, the greater part of which enter duty-free, have now reached 53 per cent. of total domestic con- sumption. This is a far higher proportion than in any other major developed country. In these circumstances we have the alterna- tives or renegotiating the present unsatisfactory quota arrangements, or adopting a tariff which would be broadly in line with those of other developed countries.
"The Government has decided that the right course is to intro- duce, as from January 1, 1972, a tariff on imports from the Com- monwealth preference area on the lines proposed by the Textile
Council.
"From that date, the existing gen- eral quota system would be termi- nated, and the Government would consider the use of quotas only on particular products under the Long Term Cotion Arrangement of the GATT, and only if total imports of cotton textiles rose significantly above the present level and caused disruption to the market in those particular products.
"These decisions would, of course, be subject to any modifica
4
tions that might be required if we joined the FEC.
"In reaching this decision I have taken account of the fact that a number of countries in the Com- monwealth have rights to duty-free entry into the U.K. market; and I shall now initiate the necessary discussions with the Governments concerned.
"I am equally conscious, on the other hand, that cotton textiles have long been treated internation- ally as a special case; and this decision will not create a precedent for further departures from our on Common- traditional policy wealth trade in advance of any general change of system which may be required by our entry into the EEC,
Effects
"The effect of the new arrange- ment should be to reduce imports the developed countrics from
benefited markedly which have
the from
existence of quota restrictions on imports from the developing countries.
"There is no reason to think
that, with the possible exception of India, the developing countries of the Commonwealth generally will be able to export less to Britain over a tariff of this amount than they would under a continua- tion of the quota system.
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So far as India is concerned, the Government will, when the time comes to determine the level of aid to India after 1972, take into account, against the back- ground of India's general aid requirements at that time, any adverse effects on her exports arising from the tariff.
JKX6/548/8
PTO
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