TNAG-0302-FCO40-338-Effects-of-tariffs-on-imports-of-cotton-textiles-to-UK-from--1971 — Page 91

Becondly, Ministers have now decided that the UK should not seck

a derogation from the obligation to fall into line, from the date of our entry into the Common Market, with the Community's cotton textile restreint arrangements with the major low cost suppliers. This means that, in the course of 1972, the Commission will renegotiate its existing agreements with seven countries to include quotas for the UK and the other three EEC applicants. Once this becomes generally know which may happen at any time, now that we have made our position clear

in Brussels there is a serious risk that UK

importers and exporting countries alike, realising that there will be only one year of liberalisation between the ending of the present UK quota scheme, and our adoption of the possibly more restrictive EFC arrangements on 1 January 1973, will build up vast stocks of deported cotton textiles in the UI in the course of 1972, to

forestall the new controls.

Thirdly

reliable informants in the importing trode tell us that the more responsible importers themselves are becoming alarmed at the size of the forward contracts they have entered into for 1972, not only with established suppliers like Hong Kong and others like Taiwan and S Korea, which had been particularly unfavourably placed under the quota controls, but also from a string of new Asiatic suppliers (Thailand, Indonesia etc). With so many suppliers competing for business, the prices which are being quoted are said to be exceptionally low.

Fourthly, following the agreement of Hong Kong, Japan, 5 Korea

and Taiwan to restrict their exports of non-cotton textiles to the United States to quantities home 30% below existing levels of trade, there is a risk (except in the case of Japen, which restricts her textile exports to the UK and the EIC) that the other three

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