A
11.
CONFIDENTIAL
a) whether in the light of Community requirements we
should reconsider our intention to replace quantitative
restrictions by tariffs on 1 January 1972; and
b) if we go ahead as planned and introduce tariffs,
whether we should retain them when we reintroduce
quantitative restrictions on entry, or whether we
should opt for duty-free quotas.
On (a), although the Foreign and Commonwealth Office
resisted the original decision to change to a tariff policy in
1972, our position now is that we should hold firmly to the new
policy in 1972 even against likely pressure from British industry
to supplement the tariff with quota restrictions. We have already
had to "pay" for the new policy by agreeing compensation for
Canada; by terminating the Anglo-Indian Trade Agreement and (in
order to prevent a bad build-up in textiles imports in the latter
half of 1971) inserted a clause in the Finance Bill to permit
delayed entry, and without paying the tariff, in the first months of
1972. Thus to retreat now would create more problems than it would
solve.
12.
(b) is both more difficult, and of more direct concern to
the FCO. In a minute of 22 October from Mr Wood's Assistant
Private Secretary to Mr Graham, the ODA argue strongly that,
for the reasons given in the letter, we should, when we re-impose
quantitative restrictions, make the quotas duty-free, and recommend
that a decision in principle to this effect should now be taken.
13. Trade Policy and Commodities Departments also believe that
the FCO should hold strongly that quotas, when re-imposed, should
incorporate the duty-free element of the EEC Generalised Preference
and that the decision to protect British industry by
Scheme;
CONFIDENTIAL
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