TNAG-0391-FCO40-437-Restriction-on-cotton-textile-exports-from-Hong-Kong-to-the--1973 — Page 40

FUTURE IMPORT RESTRICTIONS ON COTTON YAM!

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Background

In May 1972, Ministers agreed that we should seek from the Community a derogation from our obligation contained in the EEC Accession Treaty that we should and our system of quantitative restrictions on imports of cotton yarn from low cost sources es from 1 April 1973. We accepted that imports from the Community's Mediterranean associates should be liberalised without delay but were concerned to retain restrictions on other low-cost suppliers - particularly India, Pakistan and Hong Kong. We have secured formal agreement for the retention of our cotton yarn quotas till December 1973.

Industry views

To help us in taking a view of longer term needs, we asked the British Textile Confederation in lay this year to prepare a paper on future import prospects and, if the industry consider: A thứt quotas would be needed after 1975, to develop the arguments for this. The Confederation replied in ter s which live boun endorsed by the textile trade unions as well as employers, esking the Government to negotiate for the retention of the quot system until the end of 1976 for the following reasons:

a) To limit not only the increase in merket penetration by

imported yarns which can be erected bvb also the overal`

consequences to lik manufacturers of cotton tmě : Flied

textiles who expect to be advomnely affccted ly a mber

of trade harmonisation measures which ye have to take

as a consequence of joining the Cón muni dg

b)

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To encourge investment and in hustarial develope out in the UK;

c) To protect employment; and

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To enable the industry to remain efficient and uravide

A firm base for the expansion of exports.