TNAG-0298-FCO40-334-Entitlement-of-Hong-Kong-to-generalized-tariffs-preferences--1971 — Page 150

THE US TRADE SURPLUS, HAVE BROUGHT RENEWED PRESSURES TO REVERSE

LIBERALISATION. HENCE THE TRADE BILL PASSED BY THE HOUSE OF

REPRESENTATIVES IN THE LAST CONGRESS, WHICH WOULD HAVE WEAKENED

THE FIGHT AGAINST INFLATION AND LAID US EXPORTS OPEN TO

RETALIATION. ALTHOUGH THE BILL DID NOT BECOME LAW, THE PRESSURES

REMAIN STRONG, AND IF THE GAINS FREE TRADE HAS PRODUCED FOR

THE ECONOMY ARE TO BE SUSTAINED 'IT IS IMPORTANT THAT THE WIDER

PUBLIC INTEREST BE VOICED AS STRONGLY AS THE COMPLAINTS OF

ADVERSELY AFFECTED PARTIES

DOMESTIC ADJUSTMENTS

3. THE REPORT SAYS THAT THE ADVOCATES OF FREE TRADE TOO OFTEN

IGNORE THE BURDENS OF THOSE ADVERSELY AFFECTED BY IT.

IMPORT RESTRICTIONS, HOWEVER, ARE NOT THE BEST SOLUTION. A

BETTER APPROACH, THE REPORT SUGGESTS IN SEVERAL PLACES, IS THAT OF

ADJUSTMENT ASSISTANCE. OF COURSE THE COSTS OF THIS HAVE TO BE

PAID FOR BY THE TAX-PAYER, BUT THESE EVENTUALLY DECREASE

WHEREAS QUOTAS IMPOSE CONTINUING COSTS ON THE CONSUMER AND

EXPOSE EXPORT INDUSTRIES CIN WHICH WAGES ARE USUALLY HIGHER THAN

IN IMPORT-COMPETING INDUSTRIES) TO THE RISK THAT OTHER

COUNTRIES MAY IMPORT LESS FROM THE US. VOLUNTARY RESTRAINTS

JUSTIFIA

MAY OCCASIONALLY BE JUSTIFIABLE, BUT TARIFFS ARE PREFERABLE

TO QUOTAS AND PRELIMINARY EFFORTS IN GATT TOWARDS THE REDUCTION OF

NON-TARIFF BARRIERS SHOULD BE INTENSIFIED IN 1971.

IMPORT RESTRICTIONS AND DOMESTIC PRICES

4. THE REPORT STATES THAT FOR A COUNTRY TO BENEFIT FROM TRADE

LIBERALISATION IT IS NOT NECESSARY THAT ITS PARTNERS ALSO HAVE

LIBERAL POLICIES: HOWEVER, EXPERIENCE SHOWS THAT RECIPROCAL

ACTION IS MORE LIKELY THAN UNILATERAL TO BRING PROGRESS TOWARDS

FREE TRADE.

· /THE EEC ·

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