CONFIDENTIAL
existing quotas, at the expense possibly of Hong Kong and
certainly of India, who have large bilateral quotas.
It could be presented as a loosening-up of the precent
quota system. It would involve an increase of about 20%
in the present level of imports because the Indian quota
has been underused. Lancashire would object strongly
to this and to the risk of a concentration of imports on
narrow market sectors. It would be difficult to administer.
10 The fourth option is to maintain the existing quota
system with the minimum of change. This would favour
traditional suppliers, notably Hong Kong and India, and the
former at least would probably agree (under protest) to
carry on with their present export control arrangements,
which would considerably ease our administrative burden
by comparison with Option 3.
Lancashire would get what
they want on cotton textiles, but it would mean trying to
put back in a straight-jacket trade for which many contracts
have already been placed in anticipation of ending quotas.
11 Under Options 3 and 4 it would be possible not to
maintain any restraint in yarn. The BBC have no Community-
wide yarn quotas and in this capital-intensive sector
Dancashire should in theory be able to compete. But
omission of yarn would infuriate the Lancashizo lobby
where the small spinners are in the van.
7
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