Memorandum of Suggested Terms of a Voluntary Arrangement Limiting Japanese Exports of Cotton Piece Goods to the Philippines53


The subcommittee suggests the following terms for a voluntary [Page 961] limitation of Japanese imports of cotton cloth into the Philippine Islands:

1. The arrangement should he made for the period of two years with the provision that it might be reconsidered and revised at the end of one year. If economic conditions should change during the first year, it might be possible to suggest larger allotments to Japan for the second year.

2. A definite quantitative limitation on imports fixed at 40,000,000 square meters. Because of the expected decline in Philippine consumption of cotton cloth during 1935, this figure seems to be as liberal as is practicable at this time (40 percent of estimated consumption). There is also the possibility of increased shipments from other sources, especially from Japanese controlled plants in China and Manchuria.

3. A definite limitation on each type of cloth imported based on average imports for 1933 and 1934 as follows:

Type of cloth Square meters
Bleached 2,000,000
Unbleached 8,800,000
Dyed 16,400,000
Printed 12,800,000
Total 40,000,000

4. A maximum limitation on imports during any one quarter of 15,000,000 square meters and during any one half year of 25,000,000 square meters. The larger quarterly limitation would permit adjustments for seasonal and other variations in demand.

5. A maximum, limitation on quarterly imports of each type of cloth imported as follows:

Type of cloth Quarterly Square meters Half year Square meters
Bleached 750,000 1,250,000
Unbleached 3,300,000 5,500,000
Dyed 6,150,000 10,250,000
Printed 4,800,000 8,000,000
Total 15,000,000 25,000,000

6. It is suggested that the Japanese Government should exercise its influence to prevent the demoralization of the price structure in the Philippine cotton textile market. It is understood that such action is contemplated for the United States market under the direction of the recently formed export association of cotton textile manufacturers in Japan.

7. The limitation should become effective on May first, since conversations began in April and excessive shipments prior to limitation [Page 962] might nullify the beneficial effects of the arrangement. The first period would then include only May and June. The limitation for this period would be on a proportionate basis, i. e., maximum imports of 10,000,000 square meters.

8. If tariff rates in the Philippines should be materially raised, it would be understood that the arrangement could be reconsidered or terminated.

  1. Report adopted by the Inter-Departmental Committee on the Philippines.