Office of the Historian

283. Memorandum From the President’s Deputy Special Counsel (Feldman) to President Kennedy0

Washington, July 30, 1963.

SUBJECT

  • Wool textile imports

Attached are letters from Burlington Industries which report the results of discussions between leaders of the U.S. wool textile industry and leaders of the British textile industry.1

Senator Pastore requested the meeting in order to call to your attention the progress made in these discussions. The American industry was unwilling to accept the State Department statement that it was impossible to arrange an international agreement on wool like the international agreement on cotton. From the letters written to you and to Senator Pastore, it would appear that the United Kingdom would be amenable to such an arrangement.

Senator Pastore may also wish to discuss the report of his Subcommittee on Textiles. They held hearings in May, and they filed a report on July 18. The report recommends:

(1)
the negotiation of an “effective international agreement to limit imports of wool textiles and apparel products;” and
(2)
if such agreement cannot be negotiated, then “the United States must take unilateral action to insure that the defense-essential wool textile and apparel industries are not irreparably damaged by the unrestrained flood of imports.”

As a matter of fact, wool textile imports have increased markedly during the past year. In May 1962, they stood at 13.6 percent; in May, 1963, they stand at 19.3 percent. Secretary of State Rusk met with the British and Italian Ambassadors on April 6 to request that they exercise voluntary restraints on their exports of wool textiles to the United States, but received a negative response from them a month or so later.

Recommendation

It seems to me that the only response that can be made to the presentation by Senator Pastore is:

(1)
We will seek to exploit the assurances received by the American industry from their counterparts in the United Kingdom. This will mean conferring with Alan Green of the United Kingdom Board of Trade on the mutual interest of the U.S. and the U.K. in an international agreement. If the U.K. reaction is favorable, we will request the Italian and Japanese Governments to join us in a meeting. This will take approximately 2 months, and it must be attended with the greatest possible secrecy.
(2)
We cannot take unilateral action at this time. This would be in conflict with our trade expansion program, it would mean compensation in the neighborhood of $200 million, and it would doom negotiations in the Kennedy round.
(3)
There are minor steps that we are taking to reduce wool textile imports. For instance, imports from the Virgin Islands will be reduced to a fraction of their present volume for 1964. Reductions in effect already will make the total about 6.5 million linear yards for the last 9 months of 1963. They will be 2.8 million linear yards for 1964.

We will also give consideration to preventing the circumvention of the tariff regulations by putting braid on the wool. The ad valorem tariff on wool fabrics is between 50 percent and 100 percent. However, by put-ting braid on the fabric it is reduced to 42.5 percent. To evade the tariff, importers have the braid attached and then take it off after it has been imported. Senators Saltonstall and Kennedy have introduced legislation to make the fabric dutiable at the higher rate even when it has braid attached to it. I believe we can support the legislation to close this loophole.

Myer Feldman2
  1. Source: Kennedy Library, Feldman Papers, Wool. No classification marking.↩
  2. Only one letter from Vice President Robert P. Lyon to Feldman, July 25, is attached to the source text. In this letter, Lyon confirmed their telephone conversation of the night before. He informed Feldman that Alan Green, Minister of State in the Board of Trade, was the most sympathetic as well as the most appropriate British official to contact to discuss restrictions on wool products into the United States. Lyon added, “the United Kingdom government would in all probability accept an invitation if extended by the United States to meet and discuss with the United States and others in an international meeting the subject of restriction on imports of wool textile products into the United States. I believe it is fair to say that the United Kingdom government now awaits such an invitation.”↩
  3. Printed from a copy that bears this typed signature.↩