Reference...
Tergan
MR R. GOLDSMITH (CRE1)
c.c. Mr Hughes (SEC) - for information,
Mr Vinter (Mintech, Dep.Sec.D.) - for information.
" (Hd, CT) - for information, o.r.
Mr Carey
Mr Sanders (CRE2)
Mr Dunnett CRE1
Mr Heath
Mr Murray
(FCO) (FCO)
Mr McEnery (lid, CT2)
Mr Slater (Ha, EI/1
Miss Welch (CTÍ)
neverthe.
lers.
Led
Non-Cotton Textiles
I am sorry to have to return to this subject happily for the last time but there is still a need to get some of the issues
solved.
2 Unfortunately "roll-in" matters a great deal, as your arithenetical example fails to bring out. The point is that, as imports of m.m.f. blouses rise, so imports of cotton blouses are likely to fall. Roll-in means that actual imports of m.m.f. blouses are added to the quota for cotton blouses, giving the exporting country the right to increase its trade significantly above the previous level. This would surely be an unacceptable solution to a country' which had deferred taking action until total imports of blousen had caused or threatened serious injury to domestic producers. You may say that what you had in mind was a quota based on the actual level of trade in the reference period, but, if so, you were effcctively talking in terms of Article XIX and not about "roll-in",
3 It is also not the case that the extent of the injury has been contained because we have quotas on cotton items. The quotas cover fairly broad headings and in several cases, c.g. handkerchiefs, wide sheeting and sheets, and drills, wipe an industry has been seriously injured by imports, in some cases Lecause of the fall in consumption and in other cases because the exporting countries have chosen to concentrate on a particular item within the heading. As you know, we eventually took action on wide sheeting and sheets, but not without strong opposition from the overseas side, who were not willing to concede in our case what they quite readily conceded to e.g. Sweden and Canada. It follows from these and many other cases that we could not possibly look at injury on non-cotton items as a separate issue in many if not most cases we do not even have separate production figures. This is a multi-fibre, multi- process industry and in the case of garments the only worthwhile distinction is between knitted and non-knitted.
4
Your point of principle about administration amounts to saging that we should replace the lost trade by ail, but there are surely better ways of giving aid than putting money in the pockets of the firms in the exporting country which happen to be trading ten years ago? However, the Treasury will not share your view: in 1965 they pressed very strongly for global quotas to be administere at this ond. We thought that administration by the exporting country would reduoo disruption by raising prices, but while it has this effect while trade is good, it has precisely the opposite effect when trade in bad. The lack of stability has aggravated the industry's difficulties. Finally, country quotas
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