TNAG-0303-FCO40-339-Effects-of-tariffs-on-imports-of-cotton-textiles-to-UK-from--1971 — Page 47

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CONSIDERABLY HIGHER THAN USUAL.

TEAK, AKG AT A

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4. THE BRITISH GOVERNMENT CANNOT YET SAY IN DETAIL WHAT ARRANGEMENTS WILL APPLY AFTER ENTRY INTO THE CEC AND THIS IS A MATTER TO BE RESOLVED DURI8A 1972. THE PROSPECT OF RETURNING TO A SYSTEM OF QUANTITATIVE RESTRAINTS IN 1973, HOWEVER, MAKES IT IMPOSSIBLE NOW TO RELY ONLY ON THE POLICY OF DEALING WITH DISRUPTIVE IMPORTS ON A PRODUCT BY PRODUCT BACTS DURING THE COURSE OF 1978, THE PRESSURE ON THE BRITISH MARKET IN THE SHORT TERM DECAUSE OF FORESTALLING WOULD BE TOO CREAT. THE BRITISH GOVERNMENT ALSO HAVE TO BEAR IN MIND THE CONGEQUENCES OF US RESTIRCTIONS ON IMPORTS OF NON-COTTON TEXTILES WHICH CREATE A RISK OF DIVERSION OF ASIAN GOODS OF A TYPE PRODUCED IN LANCASHIRE AND INCREASE THE PRESSURE ON COTTON TEXTILES

OU HOT ONLY BECUASE THESE PRODUCTS ARE DIRECTLY COMPETITIVE BUT ALSO BECUASE THE SAME PLANE CAN WEAVE COTTON AND MAN-MADE FIDAES, IN ADDITION, A SHARP ACCELERATION IN THE RATE. OF INCREASE OF MILL CLOSURES AND UNEMPLOYMENT IN LANCASHIRE AT THIS TIME OF EXCEPTIONAL UNEMPLOYMENT GENERALLY AND INDICATIONS OF HEAVY SHIP- MENTS ALREADY IN THE PIPELINE RECESSITATE FURTHER STEPS TO CONTAIN THE IMPACT OF IMPORTS ON JOBS.

5. THEY HAVE, THEREFORE, DECIDED TO RETAIN IN 1972 THE EXISTING QUANTITIATIVE RESTRICTIONS IN ADDITION TO THE NEW TARIFF.

6. THE BRITISH GOVERNMENT HAVE TAKEN THIS DECISION WITH REGRET AND ONLY AFTER THE MOST ANXIOUS CONSIDERATION. THEY BELIEVE THAT THE STABILITY THAT THIS ACTION WILL BRING TO THE UK MARKET WILL BE OF VALUE TO OVERSEAS SUPPLIERS AS WELL AS TO THE UK INDUSTRY.

7. THE BRITISH GOVERNMENT RECOGNISE THAT THE GOVERNMENT OF .... WOULD HAVE WISHED, IF QUANTITATIVE RESTRICTIONS HAD TO BE RETAINED, FOR THE NEW TARIFF TO HAVE DEEN DEFERRED. DUT FOR OVER TWO YEARS THE DRITISH TEXTILE INDUSTRY HAS PLANNED ITS INVESTMENT AND MARKETING IN THE EXPECTATIONS OF PRICE AND PROFIT LEVELS RELATED TO THE TARIFF AND QUOTAS ALONE WOULD DE NO SUBSTITUTE FOR THAT, THE BRITISH COVERNMENT CONTINUE TO BELIEVE THAT EFFICIENT PRODUCERS WILL DC ABLE 70 SELL PROFITABLY IM THE UK OVER THE NEW TARIFF AND THE RESTRICTIONS NOW BEING RETAINED WILL PERMIT A LEVEL OF COTTON TEXTILE IMPORTS FAR HIGHER PROPORTIONATELY THAN THAT ALLOWED IN OTHER MAJOR INDUSTRIAL COUNTRIES, ALL OF WHICH HAVE LONG SINCE APPLIED A COMBINATION OF QUOTA AND TARIFE PROTECTION. IT WILL STILL DE POSSIBLE FOR IMPORTS TO SATISFY UP TO COX OF WESTIC CONSUMPTION OF COTTON TATILES, A FAR HIGHER PRODONTION TE! ANY OTHER HAJOR INDUSTRIM. COUNTRY.