TNAG-0303-FCO40-339-Effects-of-tariffs-on-imports-of-cotton-textiles-to-UK-from--1971 — Page 67

105.

9

MEETING BETWEEN THE PRIME MINISTER, THE SECRETARY OF STATE AND MR DAVIES ON 29 NOVEMBER

COTTON TEXTILES

While imports in cotton textiles have risen in 1971

(in comparison with 1970) the increases have been less than,

and within, the limits of the current quota arrangements which

the DTI seek to extend to 1972. Bunching and upsurge was

expected.

Indeed this was the justification for including in

the Finance Bill relief from the tariff for the first three months

of 1972.

2. We cannot therefore argue to overseas suppliers that we

are taking action in a situation of proved disruption. They

will not understand why our need to adapt to Community regulations

in 1973 should be regarded as the excuse for anticipating this

action by twelve months. They will argue that we should do what

we said we would do in re-affirming our intentions to rely on

tariffs alone in 1972 (the relevant extract of the statement is

annexed), namely that "if evidence was produced after the new

import regime had come into effect that real damage was being

done, whether to the industry as a whole or to some significant

part of it, the Government would certainly consider what could

be done to remedy the situation"; as recently as 11 October

Sir John Eden re-affirmed this decision to the British Textile

Employers Association.

3. The only course which completely keeps faith with overseas

governments would be to monitor the volume and pattern of imports

in 1972 from countries now subject to restrictions by retaining

import licencing against them. The quantities would not initially

CONFIDENTIAL