268. Memorandum From the Under Secretary of State (Ball) to President Kennedy0
SUBJECT
- Your Discussion on Wool Textiles with Senator Pastore and Other Members of Congress
In their meeting with Governor Herter I understand that the wool textile industry representatives kept repeating two assertions that are not accurate. You may wish to set this record straight.
FIRST ASSERTION:
The Administration has failed to carry out the President’s Seven Point Program of Assistance to the United States Textile Industry of May 2, 1961.1
The points of that program and the performance are as follows:
Point 1. Department of Commerce to launch an expanded program of research.
Performance. Commerce asked Congress for funds for this purpose last year but the bill died. Commerce has reapplied for the funds this year.
Point 2. Revision of existing depreciation allowances on textile machinery.
Performance. New and much more favorable depreciation schedules were promulgated in October, 1961.
Point 3. Small Business Administration to assist cotton industry to obtain modernization financing.
Performance. Measures to this end were taken in Spring and Fall of 1962.
Point 4. Correction of differential due to two-price cotton system.
Performance. Administration is supporting legislation to this effect. Such legislation is currently pending before House Committee on Agriculture.
Point 5. Adjustment Assistance for industry injured by imports.
Performance. Such arrangements have been provided under the Trade Expansion Act.
[Page 579]Point 6. Calling of conference of textile exporting and importing countries to seek an international understanding “which will provide a basis for trade that will avoid undue disruption of established industries.”
Performance. The State Department was able to negotiate, first, a Short-Term and, then, a Long-Term World Cotton Textile Agreement that has checked the flow of cotton textile imports and effectively prevented market disruption. With the exception of the Japanese voluntary arrangements, no previous administration had ever provided quantitative limitations on textile imports before. The World Cotton Textile Agreement is, in fact, without precedent for any industrial product, and it was achieved without having to penalize other US industries through the payment of any compensation. Many wool textile companies have greatly benefitted by this agreement since they are also producers of cotton textiles.
SECOND ASSERTION:
The Administration has not seriously tried to negotiate a wool textile agreement.
This is just not true.
By the use of great pressure we convened a meeting in London last December of all countries interested in the wool textile trade.
During that meeting we urged a solution to the United States textile problem. Our efforts met a completely negative reception.
Thereafter we undertook—utilizing the good offices of the Executive Secretary of the GATT, Mr. Wyndham White—to work out a voluntary arrangement with the exporting countries. Again, the reaction was uniformly adverse.
We have gone far enough to recognize the impossibility of obtaining a negotiated agreement. To restrict wool textile imports by unilateral action would result in prohibitive costs in compensation; would, quite likely, bring down the entire structure of cotton textile production; and would poison the international atmosphere for the forthcoming trade negotiations under the Trade Expansion Act.
- Source: Department of State, Central Files, INCO-WOOL US. Confidential. Drafted by Ball.↩
- See Document 213.↩
- Printed from a copy that indicates Ball signed the original.↩