291. Telegram From the Embassy in Pakistan to the Department of State1
976. Rawalpindi’s tel 472 to Karachi dated October 29 rptd FYI.
“Ref: (A) Geneva’s 2 to Karachi. (B) Geneva’s 3 to Karachi.2 Subject: Cotton textiles: Wyndham White proposal. GOP reaction to WW package [Page 728] proposal is almost completely negative. In long conversation October 29 with Commerce Deputy Secretary, M.L. Rehman, EmbOff made points outlined Ref B, stressing advantages to GOP from combination of tariff reductions and liberalized administration of LTA as contained in WW proposal. Rehman, who probably will be GOP delegate at LTA review session in late November, said he was “dead against” package proposal. Pakistan wanted no part of extended LTA and had no hope that Kennedy Round would yield any benefit in cotton textile field. Pakistan was not interested in tariff reductions on textiles as long as developed countries continued to use LTA as mechanical to protect own textile industries not to assist LDC’s. Quantitative restrictions not tariffs only significant factor in limiting Pakistan’s access to foreign markets. Rehman added he did not have any faith in possibility of liberalized administration of LTA. Pakistan’s experience with LTA had been bitter and all previous assurances about expanded access to markets had proved ephemeral. He spoke with particular bitterness of UK proposal to freeze Pakistan’s quota at present level until 1970, and noted that GOP now considering some kind of overall restriction on UK exports to Pakistan possibly taking form of ceiling on volume UK exports. Rehman argued against EmbOff’s suggestion that WW package only way to get domestic industry to accept changes in tariffs and stated unfair interpretation of criteria for market disruption not tariff levels at root of problem. What was needed, he felt, was for government to stop coddling domestic producers and take action to bring about structural changes in textile industries which had been promised at time of signing of LTA.
EmbOff also learned in discussion with Rehman that GOP may attempt to float with USG on bilateral basis [garble] at LTA review session in open forum proposal [garble] global quotas for which all exporting countries would compete. Under such a scheme importing country would set overall levels of imports for particular category at level tolerable to domestic manufacturers and then all or specific part of this quota would be reserved for free competition between exporting countries. Rehman expressed view that at least 50 percent should be set aside in this way with remainder divided on basis of fixed country by country quotas. GOP has proposed such system to UK but has not had favorable response owing to desire of UK to assure special place for Hong Kong and India in British market.
Comment: Basic GOP position on WW proposal fairly inflexible. Virtually certain GOP rep in Geneva will be instructed to oppose proposal on November 8 and little likelihood change this position until LTA review session completed in mid-December. Rehman, whose voice in GOP textile policy discussions often decisive, clearly believed WW proposal a device of developed countries to obtain extension of LTA which in his view is fundamentally prejudicial to Pakistan’s interests. Rehman [Page 729] personally would welcome abrogation of LTA but extremely doubtful GOP would go along at this time. However, he will probably be permitted to engage in strong criticism of LTA.
Signed Spielman.”
- Source: Department of State, Central Files, INCO–COTTON GATT. Confidential. There is no time of transmission on the source text; the telegram was received at 6:48 a.m. Also sent to Geneva.↩
- Reference is to TAGG 3506 and TAGG 3507, Documents 289 and 290.↩