TNAG-0173-FCO40-209-United-Kingdom-Productivity-and-Efficiency-Study-effect-on-H-1969 — Page 37

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UNOFFICIALLY AT LEAST, BRITAIN ALSO REJECTS THE INDIAN

CLAIM THAT THE PROPOSED MEASURES TO SAFEGUARD THE COTTON INDUSTRY OF LANCASHIRE ARE A VIOLATION OF GATT. THE VIEW HERE IS THAT UNDER GATT, BRITAIN IS EXPECTED TO MAINTAIN THE MOST-FAVOURED NATION STATUS AND A GENERAL TARIFF. SHE IS NOT BOUND TO GIVE PREFERENTIAL TREATMENT.

THE SITUATION MIGHT MILITATE EVEN FURTHER AGAINST INDIAN INTERESTS, BECAUSE THE BOARD OF TRADE SAYS IT WILL REIMPOSE QUOTAS TO KEEP THE LEVEL DOWN IF AT ANYTIME TOTAL IMPORTS OF COTTON THREATEN TO RISE. IMPORT QUOTAS MAY ALSO BE REIMPOSED UNDER GATT. IN ANY CASE, THE ENTIRE QUESTION OF QUOTAS AND TARIFFS WILL HAVE TO BE RE-EXAMINED IF BRITAIN SUCCEEDS IN ENTER ING THE EUROPEAN COMMON MARKET BY 1972, WHEN THE NEW PROPOSALS WILL COME INTO EFFECT, BUT WHATEVER HAPPENS INDIA IS LIKELY TO LOSE FOR EVER HER GUARANTEED MARKET.

SIR M. JAMES

INTERNATIONAL TRADE DISTRIBUTION

COMMODITIES DEPT.

SOUTH ASIAN DEPT.

WESTERN EUROPEAN DEPT.

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