TNAG-0173-FCO40-209-United-Kingdom-Productivity-and-Efficiency-Study-effect-on-H-1969 — Page 93

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IF TOTAL IMPORTS OF COTTON TEXTILES ROSE SIGNIFICANTLY ABOVE THE PRESENT LEVEL AND CAUSED DISRUPTION TO THE MARKET IN THOSE

PARTICULAR PRODUCTS. WE ARE DISTRESSED TO FIND THAT A

CONCLUSION ON THE TREATMENT OF SUCH AN IMPORTANT PRODUCT IN

CUR TRADE WITH THE U.K. AS COTTON TEXTILES SHOULD HAVE BEEN

[SIC]

REACHED WITH PRIOR CONSULTATIONS WITH US.

3.

AS THE HONOURABLE MEMBERS ARE AWARE, THE TRADE BETWEEN INDIA AND THE U.K. IS REGULATED BY THE INDO: U.K. TRADE AGREEMENT

OF 1939. UNDER THIS AGREEMENT INDIAN COTTON TEXTILES

ARE ENTITLED TO A DUTY-FREE ENTRY AND A GUARANTEED

MARGIN OF PREFERENCE IN THE U.K. MARKET. IT ALSO PROVIDES

THAT ANY PROPOSAL TO VARY ITS TERMS SHOULD BE THE SUBJECT OF CONSULTATION'S BETWEEN THE TWO GOVERNMENTS.

4a IN 1959, WHEN THE U.K. PROPOSED TO BECOME A MEMBER OF THE EUROPEAN FREE TRADE AREA, THE BRITISH GOVERNMENT APPROACHED

US FOR RELEASING THEM FROM THE OPERATION OF CERTAIN PROVISIONS

OF THE INDO-U.K TRADE AGREEMENT OF 1939 TO BE ABLE TO REDUCE

AND FINALLY ELIMINATE DUTIES ON IMPORTS FROM EFTA COUNTRIES.

AT THAT TIME THE VIEW OF THE BOARD OF TRADE WAS THAT UK. AS

MEMBERSHIP OF THE #FTA WOULD NOT MATERIALLY AFFECT INDIA'S

INTERESTS. THE BOARD OF TRADE RECOGNISED THAT IF, FOLLOWING THE

REDUCTION OR ELIMINATION OF COMMONWEALTH PREFERENCES ONE OR

THE OTHER EFTA COUNTRIES SHOULD BUILD UP A NEW TRADE IN THE

UK. SUCH AS WOULD CAUSE MATERIAL INJURY TO INDIA'S ESTABLISHED

TRADE INTERESTS, THE GOVERNMENT OF INDIA SHOULD HAVE THE RIGHT

TO REOPEN THE MATTER. THE GOVERNMENT OF INDIA AGREED TO GIVE

THE RELEASE ASKED FOR BY THE U.K. GOVERNMENT WITH, INTER ALIA,

THE FOLLOWING UNDERSTANDING AND RESERVATIONS:-

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(A) "THE

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