TNAG-0300-FCO40-336-Entitlement-of-Hong-Kong-to-generalized-tariffs-preferences--1971 — Page 112

likely to ve unchanged) but vill doet revenue of about 13.9 m a jo

Other developing countries, including Pakistan, Jamaica,

Spain, Taiwan and South Korea, stand to pick up the share of trade lost

by India, but will lose about £2.0 mn a year in revenue (of which two-

thirds would have gone to Commonwealth countries).

4. lf, in 1973, we reimposed quotas upon these suppliers in addition

to the tariff, this could only be done on the basis of past trade, and

the latest figures would relate to 1970 or 1971 (i.c. bofore the

imposition of the tariff). Such an arrangement would give the

Indians a chance to recover part of the trade they lose next year, but

because the tariff would make their textiles more expensive we

calculate that they would only get back about a half, and they would of Mortare, tre held 1973 world untomku korand un maka jadi da.

The other suppliers would lose

course still face the revenue loss.

L

their chance to compensate for revenue losses by increasing their

No one, therefore, is going to be happy about a change in

British policy.

exports.

5.

We should not forget that we are pledged, by paragraph 28 of the

Ull Second Development Decade Strategy, to do what we can to help the

developing countries "with a view to the expansion of the production

and exports of semi-manufactures and manufactures".

The Government

made no reservations on this particular paragraph. A decision to

reimpose quotas, as well as to maintain a tariff, on cotton textile

imports at this juncture would be a free propaganda gift for the

Eastern countries in their search for weapons to embarrass the Community

and ourselves at the Third UNCTAD Conference, which opens in Santiago

next April.

6. Mr Wood's view is, therefore, that (unless the Government is thinking

again about the introduction of the new regime on 1 January 1972) it should be recognised straight away that it would be disadvantageous in our relations with the developing world generally, and Commonwealth

developing countries in particular, to impose both quotas and tariffs

at the same time upon their cotton textile imports; and that a decision