TEXTILE IMPORTS:
U.S. favors quotas . . . The Nixon Administration's "reluctant" support of Rep. Wilbur Mills' (D.-Ark.) import quota bill, H.R. 16920, gets a rousing cheer from most domestic man-made fiber producers. Administration-proposed changes to the bill, however, have some chemical industry lobbyists and representatives scurrying about Congressional offices "educating" members to the perils of the Administration amendments— especially one which could threaten a multibillion-dollar market for the U.S. chemical industry. The House Ways and Means Committee set about the delicate and mammoth chore last week of writing a trade bill, just four days after Commerce Secretary Maurice Stans told the committee that last-minute talks in Washington between Kiichi Miyazawa, Japan's Minister of International Trade and Industry, and Mr. Stans had failed to get a voluntary agreement to limit textile imports. Mr. Stans said that the Administration in principle does not favor quota legislation, but in the absence of agreements with Japan and other key countries "the only means presently available for solving this problem is the textile legislation now before this committee." The Administration supports the Mills bill, he said, with two reservations on textiles—disclosed when he testified before the committee on May 12. The bill's definition of textile articles, he said, should be changed to exclude man-made staple fiber and filament and silk products, but should include filament yams that have been processed, and quotas should be waived when imported articles are not found to be causing or threatening disruption of the domestic market. The proposed exclusion of manmade staple fiber and filament upsets a lot of people. Chemical industry spokesmen point out that if the Administration amendment becomes law then the Japanese and others may well flood the U.S. with man-made fiber materials. They add that some preventive medicine now—including man-made fiber materials in the quota legislation—may well avoid almost certain injury to the domestic industry. The Administration, however, argues that man-made fiber materials are products of the chemical rather than of the textile industry and does not believe quotas are needed. Charles B. McCoy, president of Du Pont, disagrees. Mr. McCoy comments that the "bill should provide quotas for man-made fibers as well as other textile articles." J. D. Mahoney, Monsanto group 12 C&EN JULY 6, 1970
vice president, says it's "imperative that synthetic fibers be included in any textile quota bill." Louis Laun, president of Celanese Fibers Marketing Co., comments that "the Mills bill is now necessary." He says it's essential to have man-made fibers included in the bill. When the committee finishes its deliberations, which chairman Mills hints may be by July 20 and certainly by month's end, textiles and shoes may not be the only commodities getting an import quota. Several members are pressing for a general quota bill; others want quotas on certain other commodities. But chairman Mills runs the committee with a firm hand and may report out a bill confining quotas to textiles and maybe shoes. The committee will also decide in the coming days the fate of the Administration's trade bill, H.R. 14870, which includes a call for repeal of the American Selling Price (ASP). Certain provisions of the Administration bill, such as trade adjustment assistance and escape clauses evoked little colloquy during hearings, and may well be part of the overall trade package. But chances that ASP will be part of the final bill, committee observers say, is about 50-50. In any event, the Senate has yet to take action, but Senate passage of some form of quota legislation appears almost certain. C&EN's Tokyo News Bureau filed the following story on Japanese reaction to the U.S. position on textile imports.
. . . Japan resigned Do shyomonai, a verbal shrug meaning "it can't be helped," is a muchused phrase in Japan that applies equally well to floods or rising prices. And it sums up Tokyo's reaction to the breakdown of cabinet-level negotiations with Washington over the vexed question of Japanese synthetic and woollen textile exports to the U.S. (C&EN, June 29, page 2 9 ) . "Since Japan's reasonable claims and sincerity. . . were not understood," editorialized the influential newspaper, Asahi Shimbun, "we believe the breakdown was unavoidable." In Osaka, center of Japan's textile industry, the breakoff of negotiations was met with something like a sigh of relief. In a show of opposition to government guidance that's rare in Japan, fiber and textile producers have opposed down the line Tokyo's attempts to reach a compromise with the U.S. on export restraints, even threatening legal action (C&EN, April 13, page 12). There was no assurance, in fact, that its leaders would have accepted the official Japanese
offer made to Washington, even had it been adopted by the U.S.—a fact that sharply limited whatever bargaining flexibility minister Miyazawa might otherwise have shown. Proof of injury remains the core of the Japanese industry's argument against export restraints. U.S. refusal to use existing measures under Article 19 of GATT to gain relief from imports if injury can be shown is pointed to as proof that U.S. textile firms have in fact suffered no injury from Japanese competition—at least, not by GATT criteria. Another argument, though, gets closer to Japanese unwillingness to impose even short-term, selective restraints on textile exports to the U.S. It's the "bitter experience," in one executive's words, of existing restrictive agreements on cotton textile trade (C&EN, March 16, page 14). Japan began by agreeing in 1956 to shortterm unilateral restraints on exports of four categories of cotton products to the U.S. After talks between the two governments the following year, the list grew to 25 categories under restraint, with all cotton products subject to restraint for a five-year period. Then in 1962, the present multinational long-term arrangement (LTA) on cotton textiles trade was concluded. Arranged as an exception to GATT rules, LTA was ostensibly an interim measure to allow the U.S. and other major textile importing nations a breathing space to modernize their own textile industries. The net result for Japan—14 years of cotton textiles export restriction with no end in sight. "The U.S. has consistently taken advantage of Japan's good faith in negotiations about control of cotton textiles to the U.S.," comments Toyosaburo Taniguchi, federation president and chairman of Toyobo Co., a major Osaka spinning firm. The Mills bill, in short, looks little worse to Japanese eyes than do selfimposed restraints, if the latter follow the cotton route. If restraints are inevitable, quotas imposed by the U.S. itself are in fact the lesser of the two evils, as Osaka textile executives are well aware. Agreeing now to "voluntary" restraints on synthetic textile shipments to the U.S. would leave Japan open to similar demands from other importing nations and could well undo the gradual removal of import barriers to her synthetics that Japan has gradually achieved in western Europe (C&EN, Sept. 15, 1969, page 32). But better no restraints at all, and the textile industry federation is already urging Tokyo to take retaliatory steps under GATT rules if the Mills bill is enacted—a last ditch bid, apparently, to deter passage of quota legislation by Congress.
