CONFIDENTTAL'
DRAFT
07
9
Steering Brief
TRADE POLICY: Speaking Note
We are glad that the Administration has introduced the Trade Bill and we welcomed President Nixon's support in his message for a free trade policy. We note that the Bill extends the President's powers to restrict imports and retaliate against restrictions on Us exports and we would like to be assured that these new powers will be used in accordance with Us obligations under the GATT. We hope that the Administration will maintain its stand against congressional protectionist pressures.
In his message to Congress, President Nixon declared that a "further movement towards free trade" was one of his major objectives. Some of the Administration's actions seem hard to reconcile with this objective: as the President's advisers know, we have raised with them a series of points, such as their treatment of imports of dairy products and the high duties maintained on carpets and on glass products under "escape clause" powers. But most serious of all, the moves which the Administration has made in the field of textiles, where the Administration has been pressing strongly for new restraints on imports, appear directly contrary to the Fresident's declared policy,
policy, and have caused us and other Governments concern. New restraints on imports of non-cotton textiles would be dangerous because no-one outside the USA has been satisfied that the US textile industry is suffering injury as a result of increased imports. The threat would remain even though new restraints took the form of an extension of so-called voluntary restraint agreements negotiated bilaterally with the exporting countries. Bilateral action by a major country to restrict imports over a broad sector of textiles would be even more damaging. The appetites of all those pressing for restraints in other industries would be whetted, and the chief, although not the only sufferers, would be the developing countries which need export markets.
NP. If the Americans set this example, it will be impossible for
other Governments to resist pressure from their industries to
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