CONFIDENTIAL
Papers for an inconing Government
Non-Cotton Textiles
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Present position
Since Mr. Nixon took office in 1968, the Americans have tried hard to make arrangements to fulfil his electoral promise to protect the U.S. textile industry against competition from imporus.
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2. In spring 1969, the Secretary of Commerce, Mr. Stans, visited a number of capitals, including London, to seek agreement to an extension of the present Long Term Arrangements for Cotton Textiles which permits countries to make bilateral arrangements to control their imports of coupon textiles. They wished the new arrangement to cover all textiles cotton and non-cotton. There was solid resistance to this approach on the grounds that there was no good economic or inter- national legal justification for such comprehensive restraints: was in restraint of trade and contrary to the spirit of the GATT. Instead the Americans tried to impose, by negotiation, comprehensive restraints on the non-cotton textile exports of the four major low- cost Asian producers (Japan, Hong Kong, South Korea and Taiwan); although pressure has been concentrated on the Japanese for the past nine months, they have not yet reached agreement with the Americans. Part of the pressure has taken the form of an enabling draft Bill, sponsored by Mr. Mills, Chairman of the House Ways and Means Committee which would, inter alia, set quantitative restrictions on the import of non-cotton textiles into the U.S. If the Japanese refuse to accept voluntary restraints Congress may proceed with the
Mills Bill.
3. We have tried to stiffen Japanese, and other Asian producers, resistance to American demands. Mr. Wilson raised the matter personally with Mr. Nixon in January and subsequently wrote to the President about it, suggesting that the problem might be discussed in GATT; Mr. Stewart spoke to the Japanese Foreign Minister in April and to M. Rogers in May. We, and the EEC, proposed a four power meeting (US, UK, EEC and Japan) be held to consider the problem.
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