TNAG-0302-FCO40-338-Effects-of-tariffs-on-imports-of-cotton-textiles-to-UK-from--1971 — Page 58

The Basic FCO View

3.

We should strongly resist the DTI case. The

DTI a searching for plausible arguments to justify

yielding to the pressures of Lancashire without

too much regard for our overall economic interests

or for the effect their proposed action will have on

our international relations and international

reputation.

The steps which the DTI envisage would

be widely seen and criticised throughout the world

as giving yet another twist in the direction of

protectionism in international trade following on

the American measuris and continued by the Danish

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import surcharge. We would be acting contrary to

the provisions in Article XXXVII of the GATT that

'it is doubtful whether we could show "compelling

reasens" at this point of time why we should not

reduce or citminate barriers-to-imports from the

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4. We would be breaking solemnly-given undertakings,

particularly to Hong Kong and India (see paras.

below).

Is there a Case for Increased Protectionism?

5. The 1969 Textile Council report was a blueprint

for the restructuring of Lancashire industry to

become fully competitive by European standards.

The Council believed that a tariff would offer a

margin of protection that was both stable and

predictable, so enabling the industry to plan ahead

with confidence and to undertake the investment

needed to make it more competitive. The industry

has had 2 years to adjust to the decision to switch

from quotas to tariffs and most of the present fuss

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