CONFIDENTIAL
8.
In short the kind of solution we might discuss with
Trezise would be:
(1) U.S. to limit request for restrictions to two or in thing
three items where injury or the threat of injury can
plausibly be shown.
ANX?
Principe
(ii) U.S. to limit restrictions to Asiatic) suppliers. Asian
(The position of Italy as the U.S.'s No.2 supplier of sweaters would need special discussion).
Mermany? mining work in
"new" martels: eg. longo]
(iii) These suppliers would agree not to insist on full
compensation in return for retaining control at the exporting end.
9. To buttress such a solution it would be necessary to
ensure that other countries outside the arrangement did not press objections to it. Some might wish to argue that trade
would be diverted to their markets from the U.S. market and
they were therefore "interested contracting parties" in the terms of GATT Article X1X para 3(a), whose agreement was required.
Once such an argument is admitted the repercussions
of any U.S. action becomes almost impossible to contain. It
must be admitted that the risk of this argument being pressed is greater if there is a large gathering under the aegis of
the GATT to discuss the matter. This is therefore a point
against bringing the issue to the GATT as we have continuously
recommended.
10. However it can be said that). an agreement even of this limited kind between the U.S. and a few suppliers is too big
an event to be allowed to pass without notice: that a meeting where all interested countries can say their piece would in fact help to contain the issue, provided careful bilateral preparations for the meeting were first made. meeting could be organised, perhaps in the margin of the resumed GATT Cotton Textiles Committee meeting in May, at
which an arrangement of this kind could be announced and a tacit understanding sought that other countries would neither
seek to take advantage in the American market of the opening
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3.
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