TNAG-0387-FCO40-433-Exports-of-non-cotton-textiles-from-Hong-Kong-to-the-EEC-1973 — Page 21

CONFIDENTIAL

until it becomes clear whether they could be granted within whatever quota limits are set.. To protect the UK clothing industry we would set internal limits in the 1974 quotas for a. all pade-up goods and b. ren's and boys' shirts, as we have done for South Korea and Taiwan. (Hong Kong, with its much larger figures, has some additional sub-limits.)

Existing cotton textile restrictions

13. The 1973 quotas for exports of woven cotton textiles from these sources, based on performance when they were introduced in the early 1960's, plus 1% annual growth, are as follows:

Thailand

Colombia

Macao

Brazil

21,442 sq yds

491,038

2,049,922

4:534,829

#1

1}

All four countries administer these quotas. It will be seen that the Thai and Colombian levels are derisory. In view of the formula proposed above for the setting of polyester/cotton restreint levels from these countries, we believe that the Thai and Colombian cotton levels might be increased to im sq yds or possibly even to a maximum of 2,000,000 square yards each as part of the deal. This would be an inducement to accept the new export restraints on polyester/cottons; it would make our action easier to justify if challenged in an international forum; and it would enable us to give the newly restrained countries the seme limited transfer facilities between cotton and polyester/ cotton quotes which are included in our arrangements with Bong Kong, South Korea and Taiwan. Similar action might be taken in ony future cases where the cotton quote is very small. (This does not apply either to Macao or to Brazil.) The UK industry night protect, but the amounts involved are mininal in the context of our total cotton imports, end we are proposing to make this small concession as part of a package deal whose main purpose and effect will be to consolidate protection for UK producers of polyester/ cottons. In any case, we are likely to wish to introduce some minimum country quota level as a general rule before long, for a variety of good reasons, In the meanwhile we could resist any pressures from other restrained countries for similar treatment, on the grounds that the concession applied only to countries

CAN