TNAG-0303-FCO40-339-Effects-of-tariffs-on-imports-of-cotton-textiles-to-UK-from--1971 — Page 81

(TO NEW DELHI, BOMBAY, ONLY)

11. THE QUOTA FOR INDIA IN 1972 WILL BE THE PRESENT 13 MONTH QUOTA SCALED DOWN TO 12 MONTHS AND INCREASED BY 1 ACCORDING TO THE USUAL FORMULA. WE COULD ONLY AGREE TO DISCUSSIONS WITH THE INDIANS ON THE CONTINUATION OF QUOTAS IF THEY CAN BE HELD IN LONDON DURING DECEMBER WE CANNOT HOLD CUT ANY PROSPECT OF CHANGE IN THE NEW TARIFF TREAT- MENT OF COTTON TEXTILES FROM INDIA, THE TERMS OF OUR OFFER OF AID TO INDIA IN RESPECT OF ADVERSE EFFECTS ON HER EXPORTS ARE UNAFFECTED BY THE CONTINUANCE OF QUOTAS. A MAJOR FACTOR IN OUR DECISION TO RETAIN EXISTING QUOTAS RATHER THAN IMPOSING NEW RESTRICTIONS (WHICH MIGHT HAVE BEEN JUSTIFIED BY INDIA'S SUBSTANTIAL UNDER-USAGE OF HER QUOTA IN RECENT YEARS) HAS BEEN OUR DESIRE AS FAR AS POSSIBLE TO PRESERVE THE ACCESS TO OUR MARKET TRADITIONALLY ENJOYED BY INDIA. WE BELIEVE THAT THE CONTINUATION OF INDIA'S LARGE BILATERAL QUOTA IS IN HER INTERESTS AS TO SOME EXTENT IT SHIELDS HER FROM THE COMPETITION OF MORE EFFICIENT SUPPLIERS. HOWEVER, INDIA WILL NO DOUBT BE UNWILLING TO ADMIT THIS PUBLICLY. WE SHALL ALSO PROCEED WITH OUR INTENTION TO ACCORD DUTY FREE ENTRY TO GENUINE TRADITIONAL HANDLOOM COTTON AND SILK PRODUCTS, SUBJECT TO THE NEGOTIATION OF SUITABLE CONTROL ARRANGEMENTS WITH THE INDIAN GOVERNMENT.

(TO ISLAMABAD, KARACHI ONLY).

*

12. PAKISTAN WILL CONTINUE TO BE INCLUDED AMONG THE GLOBAL QUOTA COUNTRIES, BUT WE ARE CONFIDENT OF HER CONTINUED ABILITY TO COMPETE SUCCESSFULLY AMONG THEM. OUR INDICATIONS ARE THAT EXCEPTIONALLY HEAVY ORDERS FOR PAKISTAN COTTON TEXTILES HAVE ALREADY BEEN PLACED FOR 1972 WHICH MAY TEMPT HER NOT TO CO-OPERATE IN CONTINUING QUOTAS. IN THAT EVENT, WE FULLY INTEND TO IMPLEMENT OUR WARNING OF TAKING OVER ADMINISTRATION OF QUOTAS OURSELVES. THERE IS ALSO MOUNTING RESENTMENT IN THE LANCASHIRE INDUSTRY AGAINST THE PAKISTAN EXPORT BONUS VOUCHER SCHEME. WE SHALL ALSO PROCEED WITH OUR INTENTION TO ACCORD DUTY FREE ENTRY TO GENUINE TRADITIONAL HANDLOOM COTTON PRODUCTS, SUBJECT TO THE NEGOTIATION OF SUITABLE CONTROL ARRANGMENTS WITH THE PAKISTAN GOVERNMENT.

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