TNAG-0302-FCO40-338-Effects-of-tariffs-on-imports-of-cotton-textiles-to-UK-from--1971 — Page 79

CONFIDENTIAL

5 The case for measures to contain imports over and above the new tariff rests on a combination of two other factors; evidence of greatly increased quantities of cheap textile imports already in the pipeline for early next year and the risk (of which the industry is still largely unaware) of a further rise in imports once it becomes known that we shall have to re-introduce quantitative restrictions under the EEC régime in 1973 and suppliers rush to build up base positions. We cannot be certain that these enlarged quantities could be cut back once we joined the Community and if they became an enduring pattern, they could have an intolerably disruptive effect even on efficient firms in Lancashire. This situation may provide grounds for more comprehensive safeguards than those envisaged in Mir Crosland's statement of July 1969, which provided only for the re-imposition of selective quotas, after due consultation in accordance with the GATT Long Term Arrangement on Cotton Textiles, if particular products caused disruption.

6

It must be recognised that any departure from the Crosland formula will create an uproar in the Commonwealth textile exporting countries, who objected strongly to the decision, and to whom we have justified it with the explicit assurance that quotas (save under the terms set out by Mr Crosland) would disappear. In September 1970 the Chancellor of the Duchy of Lancaster told Hong Kong that he "foresaw no danger of Hong Kong having to face both tariffs and quotas before British entry into the ESC"

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