TNAG-0212-FCO40-248-Departmental-briefs-on-Hong-Kong-1970 — Page 131

NOTHING TO BE WRITTEN IN THIS MARGIN

CONFIDENTIAL

M

101 2/6/20

Separate copies to

Mr. Laird, (HKD) Mr. de Courcy

Ireland (American Dept) Mr. Pugh (Trade Policy Dept)

Grateful for any comments by 3.30 today.

H.E.J.Hale

29/5/70

DRAFT

Papers for an incoming Government

Non-Cotton Textiles

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

imports.

2. The Secretary of Commerce, Mr. Stans,

visited a number of capitals, including

London, to seek agreement to an extension of

the present Long Term Arrangement for Cotton

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 international legal justification for the

case: it 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 exports of the

four major low-cost Asian producers of textiles

(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,

in the Ways and Means Congressional 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 bilateral

"

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