TNAG-0301-FCO40-337-Effects-of-tariffs-on-imports-of-cotton-textiles-to-UK-from--1971 — Page 92

Unless we had done what we could to check it, excessive bunching

and we would expose HMG to serious criticism from Lancashire;

could expect strong pressure for the reimposition of quotas which would frustrate HMG's declared purpose of fostering a cotton textile industry able to live with tariff protection alone and would also

Such pressure damage the trade interests of developing countries. could be resisted on the grounds that an initial dislocation was inevitable and might prove to be relatively short-lived, but the

Industry would claim pressure would nevertheless be embarrassing. that instead of maintaining quotas to the end of 1971, HMG had in effect allowed them to lapse up to 3 months earlier.

5. CRE and Tariff Division are concerned at the likely effect of CT Division's recommendation on our commercial relations with the supplying countries. Acceptance of the recommendation would reduce disruption of the market, and this would benefit the Commonwealth countries, It would also delay for a short time their exposure to the unrestricted competition which they fear from Taiwan and Korea, Nevertheless, many Commonwealth countries are likely to feel strong Either they could resentment. They would be faced with a dilemma. ship the whole of the 1971 quota so that the goods arrive before the end of 1971 (and thus qualify for duty-free entry) and then cease

perhaps two or shipments for the last month or two of the year three months in the case of distant suppliers such as India and Hong Kong. This would involve an unwelcome interruption or re-phasing of production. Or they could maintain an even rate of shipments, and pay duty on shipments made within quota which arrive in the UK This would involve a double penalty on after the end of the year.

Some Commonwealth countries might such shipments (quota and tariff). argue that all that maintenance of the control would secure would be a relatively short though significant delay in the increase of ship- ments in 1972 to the unrestricted level which will be determined by the tariff, They will dislike the continuation of export certification and they will be disappointed by the Chancellor's denial of tariff relief. CT Division's proposals would also introduce an unwelcome complication into the discussions which Ministers will shortly be having with the Indians about our need for a waiver of our Trade Agreement obligations in order to introduce the tariff on 1 January 1972.

6. If nevertheless it is decided to maintain the import control during the first quarter of 1972, three things must be done:-

1.

ii.

Exporting countries with bilateral or country quotas must be warned now that they must continue to provide export certificates showing date of shipment for all shipments expected to arrive in the UK before 1 April 1972, as import licences will not be issued for shipments made in 1971 in excess of the quotas, and the goods will be liable to be seized.

Importers must be warned now that for shipments under the global quotas, it will be their responsibility to ensure that evidence of the date of shipment is provided to the DTI.