TNAG-0303-FCO40-339-Effects-of-tariffs-on-imports-of-cotton-textiles-to-UK-from--1971 — Page 120

Mr Graham

COTTON TEXTILE IMPORTS

[Flag A]

On 25 November the Economic Policy Committee

considered a paper by the Secretary of State for Trade

and Industry proposing that we should retain the present

quantitative restrictions on imports of cotton textiles

from low cost countries from 1 January, in addition to

the new tariff. The recommendation is based on the

+

need to take account of unemployment in Lancashire and

the fact that we shall in any case have to impose quotas

in 1973 as a member of the EEC.

[Flag B]

2.

The imposition of quotas, as well as tariffs, would

run counter to the assurances given to overseas suppliers,

in particular India and Hong Kong, during prolonged

negotiations, that the tariff was intended to replace the

quota. The quotas might not cut back imports from these

two areas, but would be deeply resented as a breach of

faith.

Flag C] 3.

Mr Godber wrote to the Chancellor of the Exchequer

asking that no decision should be taken until the Secretary

of State had had an opportunity to consider the matter.

4.

The Economic Policy Committee invited the Secretary

of State for Trade and Industry to discuss the matter

CONFIDENTIAL

/further

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