TNAG-0303-FCO40-339-Effects-of-tariffs-on-imports-of-cotton-textiles-to-UK-from--1971 — Page 46

1

FM FCO D1.18362

SECRET

NEUTRAL

RECEIVED IN

R.GISTRY N.51

-SDEC 1971

NK

WKK 6/548/J

TO IMMEDIATE HONGKONG TELEGRAM HO. 902 OF 1 DECEMBER.

MIPT

LAST

REF.

(112)

FOLLOWING IS TEXT

NEX

REF.

113

1

DECINS

1. AS THE

GOVERNMENT WILL BE AWARE, THE BRITISH GOVERNMENT ANNOURCED IN JULY 1969 THAT ON 1 JANUARY 1972 A TARIFF WOULD BE

INTRODUCED FOR COTTON TEXTILES IMPORTED FROM THE COMMONWEALTH

PREFERENCE AREA. THE BRITISH GOVERNMENT ALSO ANNOUNCED THEIR INTENTION OF ENDING AT THE SAME TIME THE EXISTING GENERAL QUOTA SYSTEM WHICH RESTRICTS IMPORTS OF COTTON YARN AND WOVEN COTTON TEXTILES FROM INDIA, HONGKONG AND THE COMMONWEALTH AND HON-COMMON-- WEALTH COUNTRIES INCLUDED IN THE 'GLOBAL' SCHEME, AND OF CONFINIUS THE RE-INTRODUCTION OF QUOTAS AFTER 1 JANUARY 1972 TO SPECIFIC

CASES WHERE TOTAL 111PORTS ROSE ABOVE PRESENT LEVELS AND CAUSED

DISRUPTION TO THE MARKET FOR THE PARTICULAR PRODUCTS CONCERNED. IT WAS MADE CLEAR THAT THESE DECISIONS WOULD BE SUBJECT TO ANY MODIFICATION REQUIRED IF WE JOINED THE EUROPEAN ECONOMIC COMMUNITY.

2. IT REMAINS THE BRITISH GOVERNMENT'S INTENTION TO INTRODUCE THE NEW TARIFF WHICH HAS NOW DEEN LAID BEFORE PARLIAMENT FOR APPROVAL.

3. THEY HAVE, HOWEVER, COME TO THE CONCLUSION THAT, AT A TIME WHEN THE BRITISH MARKET IS PECULIARLY VULNERABLE, THE POLICY PREVIOUSLY ANNOUNCED OF RE-INTRODUCING QUATITATIVE RESTRICTIONS SELECTIVELY ONLY IF AND WHEN IMPORTS OF PARTICULAR PRODUCTS CAUSE DISRUPTION IS UNLIKELY TO GIVE THE NECESSARY STABILITY OF MARKET AND EMPLOYMENT CONDITIONS. IN PARTICULAR, THEY DO NOT FEEL CONFIDENT THAT IN A SITUATION SUBJECT TO VERY RAPID CHANGE THEY COULD TAKE ACTION AGINST DISRUPTION QUICKLY ENOUGH ON A PRODUCT-BY-PRODUCT BASIS. IN FACT, IT HAS ALREADY BECOME APPARENT THAT ORDERS IN THE PIPELINE, IN ANTICIPATION OF A QUOTA FREE MARKET NEXT YEAR, ARE AT A LEVEL CONSIDERABLY HIGHER THAN USUAL.

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