Foreign Relations of the United States, 1964–1968, Volume IX, International Development and Economic Defense Policy; Commodities

217. Memorandum of Conversation¹

Washington, May 5, 1964.

SUBJECT

• Wool textile imports

PARTICIPANTS

• See attached list²

Mr. Elbert explained that the Wool Product Importers Group, which was affiliated with the National Council of American Importers, had been formed in January 1963 following a meeting between President Kennedy and Senator Pastore, at which the latter urged action to limit imports of wool textiles. The WPIG had written to the President opposing Senator Pastore’s proposal.

Mr. Daniels said that the group was seriously disturbed by the efforts of the textile industries in America and Europe to promote an international agreement on trade in wool textiles. They were particularly concerned that industry spokesmen were misrepresenting what had occurred. Referring to a memorandum which he distributed (copy attached),³ he related the history of industry meetings in Rome and Paris and pointed out that the knitwear and garment people, important elements of the industry, had not been represented at the Rome meeting. Subsequently, although represented at the Paris meeting, they had split over the resolution. The Italian knitwear industry and the British garment industry were completely opposed to any international arrangement. Furthermore, the European and American-Canadian positions as to what type of agreement was desired were “oceans apart.”

Mr. Daniels said that despite industry pressure the British and Italian Governments remained firmly opposed to an agreement. So were the Belgian, Netherlands and Swiss Governments. In Japan, both government and industry were opposed.

Continuing, Mr. Daniels discussed briefly each of the points set forth in the attached memorandum. In addition, he made the following arguments.

1. The domestic fabric industry is not being injured by imports. The imported goods are high quality fabrics which do not compete with American-made low and medium-grade fabrics.

2. The real problem is a combination of automation, the movement of the industry southward from New England, changes in styling, mergers, etc.

3. Statistics on mill closings cited by the industry and its represent-atives in Congress are misleading. Most of the mills which had been sold were re-opened and back in full production. Those which remained closed had in many instances not been making the type of goods which would be affected by imports.

4. The United States industry was dominated by the “big three”, Burlington, Stevens and Deering-Milliken, which together probably accounted for 75% of United States production of wool fabrics. They had an absolute monopoly on blended fabrics of dacron and wool and were not being hurt in any appreciable way by the imports of higher quality goods.

Mr. Daniels produced a series of charts showing imports compared to domestic production of woolen and worsted fabrics and woven apparel cloth, wholly or chief weight wool. These indicated that except in the year 1959–60 there was no correlation between rising imports and declining production. In summary, he saw no justification for the USG to jeopardize the GATT trade negotiations by a new approach for a wool textile arrangement.

Following a brief discussion on some of the points raised, the Under Secretary thanked Mr. Daniels and his colleagues for their interesting and helpful presentation.

Mr. Daniels voluntered to provide additional data on the production and imports of woolen sweaters and other knitwear.

1. Source: Department of State, Central Files, INCO–WOOL 17 US. Unclassified. Drafted by Hugh W. Wolff (E/OR/FTD), cleared by Robert Anderson (U) and Nehmer, approved in U on May 12.
2. Not printed. Under Secretary Ball met with three officials of the Wool Product Importers Group: Edwin Elbert, Bernard Hohenberg and Michael P. Daniels.
3. Not printed.