TNAG-0302-FCO40-338-Effects-of-tariffs-on-imports-of-cotton-textiles-to-UK-from--1971 — Page 104

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37. It will therefore be seen that over nine-tenths of the total quota (the Indian, Hong Kong and country quotas allotted to certain global quota countries) are administered by the Gov. rhmont of the Country concerned. Considerable difficulty was 'experienced in persuading the restricted countries to extend the quota arrangements, which were originally intended to cover the five years 1966-70, for the additional year 1971; they were induced to do so with the bait that one final year of restraint would be followed by liberalisation of the trade. Similar arguments were used in an attempt to reconcile the developing Commonwealth to the tariff; we were, we said, moving from a quota system which froze trade in traditional patterns to tariff protection alone, which would enable any reasonably efficient developing country to maintain if not increase its trade, and trade up (in a way that was not possible under the categorised quotas) into the more highly finished products, particularly made-ups.

33. There would be no disguising the fact that, in attempting to continue the present restraints after the CPA tariff comes into operation, we should be going back on explicit former undertakings. The developing countries, especially those of the Commonwealth, would be united in expressing their sense of outrage. We should be unlikely to obtain the agreement of most of them to continue to operate restraint and would have to take over licensing ourselves. Hong Kong would probably decide in the end to maintain its export controls there is financial advantage to an exporting country in administering the quota itself. Given however that importers have now placed forward orders for at least the first six months of 1972, no doubt radically altering their pattern of supply in expectation of an unrestricted choice of sources under liberalisation, it is now going to be difficult to force the trade back into the bilateral and country quota strait-jackets, bearing in mind that some of the most competitive suppliers have hitherto been hold down by

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