TNAG-0302-FCO40-338-Effects-of-tariffs-on-imports-of-cotton-textiles-to-UK-from--1971 — Page 101

31. If it is decided that steps must be taken immediately to ensure that low-cost cotton textile imports are kept within reasonablo bounds in 1972, we must face up to the fact that any, method chosen will inevitably be in contravention of our international obligations (soo paragraphe 11 to 13 of this paper) and will go back on specific assurances given to the Commonwealth developing countries (and, perhaps less importantly, to the non- Commonwealth developing countries too). If Ministers are prepared, however, to accept the consequences of unpleasantness, if not a major row, with the developing countries both

individually and collectively, the following two courses of action are recommended for consideration,

(a)

(b)

a continuation of specific licensing for the developing countries' cotton textiles, a ceiling being fixed for the amount to be licensed for imports from these sources collectively (ie a global quota)

an attempt to negotiate a continuation of the present system of bilateral and country quotas.

Considering these two alternatives in turn:

(a) A global quota for 1972

32.

Specific licensing for the developing countries' cotton textiles (which was to have been discontinued next spring) would instead be continued for the rest of next year. It would be announced that the total amount to be licensed would be equivalent to, but no more than, the sum of the Indian, Hong Kong and global quota countries' quotas for 1971. Since the Indian quota, in particular, has been considerably under-used since the beginning of 1969; the quantity available in the pool of licences, for which all the developing countries would compete, would be some 100 a.sq.yds. or about 20% above the level of actual inports in the last few years. It is suggested that the ceiling for 1972 should not be categorised in detail, like the existing quota controls, but instead should be broken down into perhaps three groups only (a) greycloth (possibly combined with yam, if it is decided to continue to restrict yam imports) (b) finished

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