Foreign Relations of the United States, 1961–1963, Volumes VII, VIII, IX, Arms Control; National Security Policy; Foreign Economic Policy, Microfiche Supplement

482. Memorandum from Read to Bundy, December 20¹

December 20, 1963

SUBJECT

• Wool Textiles

The attached memorandum provides information concerning United States imports of wool textiles and quantitative limitations imposed by Italy and the United Kingdom on wool textiles exported by Japan. This information was requested in a letter to the Under Secretary from Mr. Feldman dated November 20, 1963.

Benjamin H. Read

Executive Secretary

Enclosure

1. United States Imports of Wool Textiles

The information in the New England senators’ letter to President Kennedy on imports of wool textiles is generally consistent with data for the first eight months of 1963 contained in the October 1963 issue of the “Wool Situation” published by the Department of Agriculture. The “Wool Situation” reports imports in pounds of raw wool equivalent.

According to this publication, the percentage increases in imports of wool tops and apparel over the first eight months of 1962 are exactly as given in the letter from the New England senators, i.e., 23 percent and 47 percent, respectively. The increase in total imports of wool textiles is one point higher (14 percent) and that for wool yarn is one point lower (10 percent) than in the letter. Also, the “Wool Situation” does not break out “apparel cloth” from woven wool fabrics. The letter to President Kennedy states that “Woven wool apparel cloth imports are up 9% while American production is down 8%.” However, imports of woven fabrics, including apparel cloth, were up 5 percent, according to the “Wool Situation.” Production of woven wool fabrics, which is reported in this publication on a quarterly, rather than a monthly, basis was running only 2 percent less than a year ago as of June 30, 1963. The marked drop in output of apparel fabric was partially offset by a 74 percent increase in production of blanketing.

2. Quantitative Restrictions by Italy and the United Kingdom

Both Italy and the United Kingdom have bilateral trade arrangements with Japan which include highly restrictive quantitative limitations on some types of wool manufactures. In point of fact, since World War II most industrialized countries have restricted low-cost imports from Japan, not only of textiles but of many other commodities as well. However, the trend in recent years has been toward liberalization of such trade rather than the reverse, and the United States has taken the lead in encouraging such liberalization. For example, under the Anglo-Japanese Commercial Treaty concluded in November 1962, the United Kingdom lifted all restrictions on Japanese wool tops and yarn, and with effect from April 1963, withdrew its invocation of Article XXXV of the GATT, which permitted unilateral discrimination against Japanese exports. Under this agreement Japan exercises voluntary control over exports of the following items to the United Kingdom, inter alia:

		Quotas for
Description	Unit	1963	1964	1965
Woven wool fabrics	Syds.	400,000	500,000	600,000
Knitted fabrics and apparel of cotton, wool or man-made fibers	[illegible in the original]	500,000	600,000	700,000
Gloves and mittens, wholly or mainly of cotton, wool or man-made fibers	[illegible in the original]	125,000	140,000	160,000

Specific information on Italy’s current import quotas for Japanese wool textiles is not immediately available. The Embassy in Rome has been asked to report.

Since 1957 Japan has voluntarily controlled exports to the United States of “low quality” wool fabrics and types of wool apparel. The annual quota for fabrics is currently 5.25 million square yards, but this has not served to prevent a substantial rise in overall exports of wool fabrics to this country, with high-quality goods accounting for the entire increase.

Attachment

December 12, 1963

SUBJECT

• Wool Textiles

The attached memorandum has been prepared in response to Mr. Feldman’s letter to the Under Secretary (Tab B) on imports of wool textiles.

As indicated in our reply, the import figures cited in the letter from New England Senators to the President are accurate. As a further check, we obtained from Commerce (Office of Textiles) the following figures on total U.S. imports of wool textiles calculated in accordance with the formula approved by the Cabinet Textile Advisory Committee earlier this year, which also show a continuing rise:

Wool Textile Products: Imports, Exports, Domestic Consumption and Rate of Imports to Apparent Domestic Market (in millions of pounds of clean fiber equivalent)

			January–August
	1960	1962	1962	1963
1. Imports (including Virgin Islands)	62.9	79.6	52.2	59.3
2. Exports	3.2	2.6	1.6	1.9
3. Domestic Production	333.1	365.6	250.0	243.4
4. Apparent Domestic Market	392.8	442.6	300.5	300.8
5. Ratio 1:4	16.0%	18.0%	17.4%	19.7%

Mr. Feldman’s letter asks that we comment only upon two points of fact, and we have prepared our reply accordingly.

Attachment

November 20, 1963

Dear Mr. Ball:

The President will see these members of Congress in the near future. I would appreciate it if you would furnish me with a memorandum commenting upon:

1. The second paragraph of the letter and the accuracy of the statistics

2. The statement that quantitative limitations against Japanese textile products imposed by Italy and the United Kingdom.

Senator Pastore told me on the telephone that this was the information that concerned him the most. He said that if Italy and the UK were already imposing quantitative limitations objections by them to similar limitations would come with poor grace.

I will be back from Japan on Wednesday. The meeting will probably be arranged for shortly after that time.

Sincerely,

Myer Feldman

Deputy Special Counsel
to the President

Attachment

November 14, 1963

Dear Mr. President:

Our concern as members of Congress over wool textiles and apparel imports expressed in our letter to you of August 20, 1963, has now reached a point of alarm.

For the first eight months of this year such imports exceed by 13% those for the same period in 1962. Woven wool apparel cloth imports are up 9% while American production is down 8%. Wool top imports are up 23%; wool yarn imports up 11%; imports of wool apparel are up 47%. Inevitably imports for the consumption of wool textiles and apparel in 1963 will exceed the all-time 68,200,000 pound record established in 1962.

Nations which resist restrictions advanced by the United States are themselves limiting imports to their countries. We refer specifically to the quantitative limitations against Japanese textile products imposed by Italy and the United Kingdom.

What “principle” can possibly baffle our State Department in equally and equitably protecting the interests of the United States textile industry?

We believe that our State Department with proper persistence and insistence can achieve an international arrangement limiting wool textile and apparel imports into the United States.

If efforts fail to resolve this problem by voluntary agreement then we assert our firm support of the recommendation contained in the most recent Report of the Special Senate Textile Subcommittee—that in such an event it is imperative that the United States act unilaterally to prevent the utter extinction of the wool and apparel industry with its investment and employment so vital to the New England economy.

In behalf of management and employees who are our constituents, we respectfully ask that you direct the proper agencies to take firm and summary action to avert this mortal threat.

Respectfully,

1. Transmits undated memorandum on U.S. wool textile imports and restrictions on Japanese wool textiles exported to Italy and UK. Also attached is a November 14 letter from 12 Senators to Kennedy expressing concern over wool textile and apparel imports. No classification marking on Read memorandum. Attachments are unclassified. 7 pp. Department of State, Central Files, INCO–WOOL 17 US–JAPAN.