CONFIDENTIAL
FCO TELNO 840 TO DELHI
5.
LEVEL OF AID TO INDIA IN 1972. THIS IS AS FAR AS YOU CAN GO IN HINTING AT THE POSSIBILITY OF COMPENSATION. WE HAVE CONSIDERED POINT IN PARA (D) OF YOUR TELEGRAM NO. 1323 BUT REGRET THAT THERE WOULD BE CONSIDERABLE DIFFICULTIES HERE IN ANY CHANGE IN THE FORMULA IN THE STATEMENT ON THE LINES WHICH YOU ENVISAGE BECAUSE OF RISK OF SETTING DANGEROUS PRECEDENT.
2. WE RECOGNISE THAT WE SHALL NEED TO SEEK A WAIVER OF INDIA'S CONTRACTURAL RIGHTS TO DUTY-FREE ENTRY AND PREFERENCES ON COTTON TEXTILES.
TO AUSTRALIA, NEW ZEALAND AND SOUTH AFRICA ONLY.
WE RECOGNISE THAT THESE GOVERNMENTS HAVE CONTRACTUAL RIGHTS TO DUTY-FREE ENTRY, AND THAT IT WILL BE NECESSARY TO NEGOTIATE A WAIVER FOR COTTON TEXTILES. THEIR INTEREST IN THIS MARKET IS HOWEVER VERY SMALL IN 1968 COTTON TEXTILE IMPORTS FROM AUSTRALIA AMOUNTED TO £41,039, FROM NEW ZEALAND £15,398 AND FROM SOUTH AFRICA £169,900. SOUTH AFRICA SHOULD BENEFIT FROM THE REMOVAL OF THE QUOTAS ON HER TRADE, WE BELIEVE WE ARE RIGHT IN SAYING THAT ALL THREE COUNTRIES HAVE INCREASED THEIR OWN TARIFFS AND/OR REDUCED OUR MARGIN OF PREFERENCE ON AT LEAST SOME TEXTILES SINCE THE WAR.
TO PAKISTAN ONLY.
WE EXPECT PAKISTAN TO GAIN BOTH IN VALUE AND VOLUME FROM THE REPLACEMENT OF QUOTAS BY A TARIFF. ALTHOUGH THE PAKISTAN AIDE MEMOIRE DATED 3RD JULY HAS ONLY JUST REACHED US THE POINTS IN IT WERE TAKEN INTO ACCOUNT. WE ARE PREPARING A REPLY.
CONFIDENTIAL
/TO
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