TNAG-0300-FCO40-336-Entitlement-of-Hong-Kong-to-generalized-tariffs-preferences--1971 — Page 36

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also of the direction in which we might want to advise Ministers. In various parts of his minute, it is generally brought out that the problems now faced by the British textile industry do not have as their root cause any significant change in imports which we had not assumed in the original decision to change from quotas to tariffs or, in the reaffirmation of this policy by the current Government.

5.

This is not to deny the often expressed FCO view that the new policy would not provide the kind of protection which its authors claim for it.

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6. If Ministers accept that the likely import position is not a justification for reversing the introduction of the tariffs, there is no reason for the FCO to argue differently at this time. Indeed any such change would, given the various shifts which are inevitable in our policy because of accession to the EEC, add to the uncertainty of overseas governments about our real intentions and create a serious credibility gap; Ministers have very recently reaffirmed the policy to individual foreign statesmen; we are paying compensation to the Canadians; we have given notice of termination of the Anglo-Indian Trade Agreement; and the impassioned attacks on the tariff policy are only now beginning to wane.

7. Nevertheless Ministers may wish to consider various options affecting imports of textiles in spite of Mr Ridley's main thesis that drastic steps immediately to reduce imports would be unjustified and that any practicable action on the import front could have no bearing on the immediate problem in Lancashire. As the exercise develops, there could be additional options to those set out in paragraph 16 of Mr Ridley's minute and paragraph 4 of the minutes of the meeting on 25 October. However it is worth considering now (and I should be grateful for any comments you have on my assessment) which of the options the FCO might collectively prefer in case Ministers call for action on the import front.

8.

Briefly the options are:-

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/COTTON TEXTILES

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