TNAG-0303-FCO40-339-Effects-of-tariffs-on-imports-of-cotton-textiles-to-UK-from--1971 — Page 80

5.

AIL

LOVING CONTAPAS A A EXPLANATION OF THE REASONS FOR

RETAINING GLOTAS NEXT YEAR. WE STILL CANNOT YET SAY IN DETAIL WHAT

ARRANGEMENTS WILL APPLY AFTER CUR ENTRY INTO THE EEC AND THIS IS A MATTER TO BE RESOLVED DURING 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 BASIS DURING THE COURSE OF 1972.

THE PRESSURE ON CUR MARKET IN THE SHORT TERM BECAUSE OF FORESTALLING

WOULD BE TOO GREAT. WE ALSO HAVE TO BEAR IN MIND THE CONSEQUENCES OF

US RESTRICTIONS ON IMPORTS OF NON-COTTON TEXTILES WHICH CREATE A RISK

OF DIVERSION OF ASIAN GOODS CF A TYPE PRODUCED IN LANCASHIRE AND INCREASES THE PRESSURE ON COTTON TEXTILES NOT ONLY BECAUSE THESE

PRODUCTS ARE DIRECTLY COMPETITIVE EUT ALSO BECAUSE THE SAME PLANT

CAN WEAVE COTTON AND MAN-MADE FIBRES. IN ADDITION, A SHARP

ACCELERATION IN THE RATE OF INCREASE OF MILL CLOSURES AND UNEMPLOY-

MENT IN LANCASHIRE AT THIS TIME OF EXCEPTIONAL UNEMPLOYMENT

GENERALLY AND INDICATIONS OF HEAVY SHIPMENTS ALREADY IN THE PIPELINE

NECESSITATE FURTHER STEPS TO CONTAIN THE IMPACT OF IMPORTS ON

JOBS.

9. CONTINUATION OF EXISTING QUOTAS WILL NOT REDUCE THE QUANTITIES

OF TEXTILES IMPORTED FROM DEVELOPING COUNTRIES BUT WILL ONLY PREVENT

A FURTHER DAMAGING INCREASE. IT WILL STILL BE POSSIBLE FOR IMPORTS TO SATISFY UP TO 50 PER CENT OF DOMESTIC CONSUMPTION OF COTTON

TEXTILES, A FAR HIGHER PROPORTION THAN IN ANY OTHER MAJOR INDUSTRIAL COUNTRY.

10. WE RECOGNISE THAT THE RETENTION OF QUOTAS WOULD REPRESENT A

SHARP REVERSAL OF POLICY IN THE FACE OF MANY PUBLIC AND PRIVATE

ASSURANCES TO THE CONTRARY. BUT CIRCUMSTANCES HAVE CHANGED. THE

ORIGINAL STATEMENT OUTLINING THE TARIFF FOLICY RESERVED THE PRINCIPLE

OF QUANTITATIVE SAFEGUARDS AND ALSO INCLUDED A RESERVATION THAT

THE POLICY WAS SUBJECT TO ANY MODIFICATIONS THAT MIGHT BE REQUIRED

IF WE JOINED THE EEC. WE BELIEVE THAT SOME COUNTRIES WHICH HAVE

RELATIVELY HIGH QUOTAS AND SOME REASON TO FEAR INCREASED COMPETITION

MIGHT COME TO SEE SOME ADVANTAGE IN THE RETENTION OF QUOTAS BUT

WE DO NOT EXPECT THIS VIEW TO EMERGE IMMEDIATELY. THE NEW TARIFF

MUST BE INTRODUCED AS PLANNED ON 1 JANUARY 1972. THE POSSIBILITY

OF INCLUDING TEXTILES IN OUR UNCTAD OFFER CAN ONLY BE CONSIDERED IN THE CONTEXT OF WHATEVER TEXTILE TRADE POLICY THE ENLARGED

COMMUNITY EVENTUALLY ADOPTS AFTER OUR ENTRY.

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