CONFIDENTIAL
2.
growth in imports has been much less in absolute terms than the growth in domestic production; imports of wool textiles fell in 1969 as compared with 1968; and although imports of man-made cloth increased, imports of yarn fell by a greater amount. Imports of apparel grew in 1969, but the index of production remained at a high level and for most of the year employment was at a record level for
the decade.
4.
If in these circumstances widespread limitations on imports were imposed, it would be likely to encourage the growth of protectionism and discourage trade liberalisation in all the developed countries. This would still be the case if these limitations were introduced under bilateral
arrangements of a kind which are not formally prohibited
by G.A.T.T. Moreover they would appear to be contrary to the spirit of the Agreement and it would be known in all countries that they had been accepted under duress.
5. However, it is possible that there are limited sectors
of industry where the existence of serious injury, or the
threat of it can be established by reference to the normal
criteria. Should there be such cases they could be
discussed in the G.A.T.T. forum where any special elements
in the problem could be considered and the justification
and the remedial measures to be taken could be approved.
/CONCLUSION
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