440. Circular Telegram 1771 to Certain Diplomatic Missions, May 101

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Paris for USRO and Embassy. Brussels for USEC and Embassy. Geneva for GATT. Re Depcirtels 1707 and subsequent.

A. As preliminary background, following is summary of tentative plan under study here for approach to multilateral understanding on textiles and textile products. Being readied for exploration with other governments beginning with May 15 US-UK-Canada London talks. Not yet fully cleared here and therefore subject to change. Subject to further change later in light discussion other governments.

B. Plan envisages 2-stage multilateral arrangements among major consuming and exporting countries, along following lines:

1. Interim arrangement:

(a) Acceptance following objectives: (i) widening total export market by relaxation existing import restrictions in certain countries; and (ii) providing for major consuming countries acceptance of systematically increasing quantities textile imports, under controlled orderly arrangements with exporting countries to avoid disruption established markets.

(b) Commitment by governments to adapt policies and procedures [Facsimile Page 2] to work toward those objectives and refrain from action inconsistent with them. Some escape provisions may be added. Note: Specific formulas not suggested as part of initial interim proposal. However, if long-term arrangement does not mature quickly enough, commitment might be later extended to include interim formulas (perhaps 6-month adaptations of long-term formulas).

(c) Establishment multilateral Study Group to maintain surveillance international textile situation and call attention to any significant developments. This or a separate group to act as Preparatory Committee to develop specific terms of long-range arrangement GATT facilities will be drawn on to provide Secretariat support for preparatory work and subsequent conferences.

(d) Individual consuming countries remain free to negotiate agreements with supplying countries re level of exports from latter to former.

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2. Long-term arrangement: multi-year agreement (1962–64) on cotton textile products—yarn, cloth, garments, etc—with following main provisions:

(a) Countries now without import quotas or other discriminatory restrictions on imports from low-cost countries agree—perhaps subject to escape provision—refrain introducing such restrictions. Apparent eligibles: US, Canada, Switzerland, UK, and BENELUX, latter two except as to Japan.

(b) Countries now maintaining discriminatory restrictions on imports from low-wage countries agree relax such restrictions gradually. (Formula in mind would permit cooperating low-cost countries access to at least 5% of domestic markets by end 1964.) Apparent eligibles: France, Germany, Italy, Austria; also UK and BENELUX, as to Japan.

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(c) Low-cost exporting countries agree maintain controls—by categories—over exports to “a” countries—or any other countries later falling within category—with view to limiting annual increases in exports to each such country, according to some formula. (Formula in mind is a percentage increase—perhaps 5%—in exports to that country during base period, e.g. 1960–61.) Apparent eligibles: Japan, Hong Kong, Taiwan, Korea, India, Pakistan, Egypt, Spain, Portugal.

(d) Continuation of Study Group.

C. COMMODITY COVERAGE: US concerned about entire range textiles and textile products from all fibers. However, considering giving priority attention to categories of widest international interest and urgency—i.e. cotton textiles, as in para B–2 above.


1. Series of exploratory bilaterals and trilaterals, beginning London May 15, continuing in certain European capitals, and then picking up in Washington and/or through US missions, with other countries including Japan. Expect cover at least most key countries this way before multilateral talks. Possible UK and Canada may also undertake coordinated bilateral approaches.

2. Multilateral meetings: (a) Seeking Paris session May 29 under OECD aegis, with major consumers attending, for agreement—at least in principle—on lines US approach. (b) Official-level mid-June Geneva meeting major consuming and exporting countries, under GATT aegis, hopefully to accept interim arrangement, establish Study Group, and arrange earlier follow-up policy-level conferences. (c) Policy-level late July or mid-September Geneva meeting same countries, again under GATT aegis, to seek reach long-range agreement. Further meeting to be [Facsimile Page 4] scheduled if necessary with view reaching final agreement before end December. (d) GATT endorsement of effort for multilateral understanding and authorization for use GATT Secretariat will be sought.

  1. Textiles: tentative U.S. approach. Confidential. 4 pp. Department of State, Central Files, 411.006/5–1061.