TNAG-0301-FCO40-337-Effects-of-tariffs-on-imports-of-cotton-textiles-to-UK-from--1971 — Page 108

DRAFT LETTER FROM THE MINISTER FOR INDUSTRY TO THE CHANCELLOR OF THE EXCHEQUER

I am sorry to have to approach you at this stage with

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another proposal for inclusion in the Finance Bill, but we

have an awkward problem over the transition at the end of

this year from quotas to tariffs on imports of cotton textiles

from the Commonwealth Preference Area to which the only

practicable solution is a small amendment to the Import Duties

Act 1958.

Briefly, we need powers to relieve from duty for a few

months early in 1972 imports of cotton textiles from developing

countries in the Commonwealth Preference Area (and also South

Africa) which are shipped under quota in 1971 but do not arrive

here until 1972. Unless we can give such relief, we fear, for

the reasons set out below, an unnecessarily heavy bunching of

imports during the transition period which could not only cause

serious disturbance to the market to the detriment alike of

domestic and overseas suppliers but also lead to severe and

embarrassing pressure from Lancashire for the reimposition of the

quotas which we are about to remove.

Unless we can take steps to minimise it, we expect this

bunching to result from a double upsurge of imports in 1971

and early 1972, firstly because exporters in the Commonwealth

Preference Area will make sure that the whole of their 1971

quota arrives in the UK before duty-free entry ends at 1 January

1972 (normally shipments carry over for two months or longer

into the following year), and secondly because there will

probably be an initial scramble for market shares on the part