TNAG-0241-FCO40-277-Agreements-under-GATT-long-term-arrangements-for-exporting-o-1970 — Page 68

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6.

I find Mr. Crosland's reference to the use of the L.T.A. after 1st January 1972 difficult to reconcile with your declared attitude to the prolongation of the Arrangement, as expressed by the leader of the U.K. Delegation in the Cotton Textiles Committee meeting in October 1969. However, on the assumption that the Arrangement will be prolonged for a further period, I have interpreted the President's remark as meaning that you would after 1st January 1972 seek no quantitative restrictions on cotton textile imports until such time as total imports had risen significantly above the level prevailing in the year to July 1969; that no such action would be taken unless imports of a particular product (or products) were causing market disruption in terms of Annex C to the Long Term Arrangement; and that such action would be taken only in accordance with Article 3 of the Arrangement. I assume that no action would be taken:

(a) if imports took a larger share of the

British market, provided that there was no significant increase in the actual level of imports;

(b) against increased imports from any

particular supplier, provided that that supplier's gain was at the expense of other supplying countries, so that

again there was no significant increase in total imports;

and I should be grateful for your confirmation that these assumptions are correct. I should be grateful for your early confirmation of the above interpretation and assumptions or, if they are not correct, for clarification of what actually is intended.

7.

I should also be grateful to know what is the basis for the President's statement that "the effect of the new arrangement should be to reduce imports from the developed countries which benefited markedly from the existence of quota restrictions on imports from the developing countries". From the figures available here (see table attached) it would appear that the developed countries that have "benefited markedly" in recent years have been Canada and the members of E.F.T.A., who have benefited not so much from the quota restrictions as from duty-free entry, a benefit that E.F.T.A. will continue to enjoy after 1st January 1972. I find it difficult therefore to accept Mr. Crosland's statement that "the effect will be felt not so much in the developed countries as a whole as in those developed countries which have recently significantly increased their exports to us". It would appear that they in fact will not be affected.

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