CONFIDENTAL
Yes, but
put
not.
nicely!
7. THE UNITED KINGDOM BALANCE OF PAYMENTS SITUATION HAS IMPROV MARKEDLY RECENTLY, AND BRITISH TEXTILE EXPORTS HAVE ALSO IMPROVED SIGNIFICANTLY. FOR EXAMPLE, UNITED KINGDOM TEXTILE EXPORTS TO THE UNITED STATES (FOLLOWING WORD UNDERLINED) DOUBLED IN 1976 OVER 1975 AND THUS FAR IN 1977 ARE 15.5 PERCENT OVER THE 1976 LEVELS. WE UNDERSTAND A SIMILAR, FAVORABLE SITUATION PREVAILS WITH OTHER FOREIGN TEXTILE MARKETS OF THE UNITED KINGDOM.
8. IF THE MFA FAILS AND THE COMMUNITY OR ITS MEMBER STATES TAKE UNILATERAL MEASURES AGAINST TEXTILE IMPORTS, OTHER IMPORTING COUNTRIES WILL BE TEMPTED TO FOLLOW SUIT. THIS WOULD, OF COURSE, IMPACT DIRECTLY UPON THE UNITED KINGDOM, AS ITS TEXTILE MARKETS WOULD BE REDUCED, AND MARKETS FOR OTHER PRODUCTS IN THE LDCS WOULD BE UNDER STRAIN DUE TO THE LDCS INABILITY TO PAY FOR THOSE PRODUCTS. WE UNDERSTAND HONG KONG HAS ALREADY RAISED THIS POSSIBILITY WITH HER MAJESTY'S GOVERNMENT.
9. FAILURE OF THE MFA WOULD ALSO LEAD TO RESTRICTIVE IMPORT LEG- ISLATION IN OTHER IMPORTING COUNTRIES, MOST LIKELY ON AN MFN BASIS. THE UNITED STATES EXPERIENCED SUCH A POSSIBILITY IN 1971 WITH THE MILLS BILL WHICH WOULD HAVE ROLLED BACK TEXTILE IMPORTS FROM ALL SOURCES BY AS MUCH AS 50 PERCENT OVER THEN EXISTING TRADE LEVELS,
10. THE UNITED STATES BELIEVES THE MFA IS ESSENTIAL NOT ONLY FOR ORDERLY TEXTILE TRADE BUT ALSO AS A MEANS TO KEEP THE CONTENTIOUS TEXTILE ISSUE FROM COMPLICATING PROGRESS IN THE MTN. A KEY FACTOR IN THIS IS THE UNITED KINGDOM'S ROLE AND ITS ABILITY TO ACT IN A REASONABLE, STATESMAN-LIKE MANNER REGARDING TEXTILE IMPORTS. EXTREME POSITIONS, OR POSITIONS WHICH ARE LEGITIMATELY UNACCEPTABLE TO TEXTILE EXPORTING COUNTRIES, CAN ONLY WREAK HAVOC IN INTERNATIONAL TEXTILE TRADE AND MOST PROBABLY LEAD TO THE BREAKDOWN OF THE MFA. UNQUOTE
JAY
INTERNATIONAL TRADE
DISTRIBUMON
TRED
NAMO
EID (E)
2
CONFIDENTIAL
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