DRAFT BRIEF FOR THE SECRETARY OF STATE'S TALK WITH
AMBASSADOR DAVID KENNEDY ON THE 18 May:
in discussions which are due to
begin
on 7 June
TEXTILES
The principal issue is what the Secretary of State should say to Ambassador Kennedy about the possibility of Hong Kong and the USA reaching an agreement about the restraini ots to the US market. The points that we hope the Secretary of State will make are set out in the final paragraph of this brief.
ΟΙ
Background
2. Two years of discussion between the Americans and the Japanese in 1969 and 1970 failed to produce bilateral :greement to implement President Nixon's election pledge to the textile industries. Broadly speaking the Americans asked for a lower base period and much more detailed control on particular textiles than the Japanese were prepared to concede. When, towards the end of last year, it appeared that the bilateral discussions would produce no positive result, the Chairman of the Ways and Means Committee introduced the Bill which bore his name (the so-called Mills Bill) which provided...to be filled in by CRE:57 As it passed through the Congress, the Bill became more and more restrictionist and the world breatheȧ a sigh of relief, as we suspect Chairman Hills did, when in the early days of this year it narrowly avoided being passed. Then, after a period in which there was much speculation about whether the new Congress would pass legislation for the control of imports, there were three events which took everybody by surprise:-
(1) In-early Harah The Japanese Textile Federation announced that it was prepared to restrain exports of all textiles to the USA as from the 1st July at the level reached in the year ending March 1971 and with some, though not much, control over the levels of particular textile items. Simultaneously the Japanese Government announced that in view of this offer it saw no point in further negotiation between the two Governments. It speedily emerged
/that
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