Snag in Textiles

President Nixon suggested in his economic speech last week that a new commission will look into the nation's import policy, seeking to reduce U.S. prices by increasjng supplies from abroad. Even as he spoke, the Government was getting ready to stiffen prices by cutting back one major category of imports: tex tiles. The U.S. has long been pushing and poking Japan and other Asian allies to reduce their textile shipments. Washington has insisted that there should be so-called voluntary quotas for all textiles; Japan has been equally adamant in offering to hold down exports of a selected list of them, and then only when the U.S. industry can prove injury. House Ways and Means Committee Chairman Wilbur Mills has been conducting hearings on a bill that would force a reduction of textile imports to 30% below last year's levels --unless a "voluntary" agreement is forthcoming.

The threat of mandatory quotas has apparently been effective, though at a considerable cost in terms of U.S. esteem among the Japanese. This week Japan's Minister of International Trade and Industry, Kiichi Miyazawa, and Foreign Minister Kiichi Aichi will fly into Washington with not one but two new proposals.

Miyazawa will offer a one-year freeze, at 1969 levels, on imports of 20 categories of textiles, including woolen suits and sweaters and synthetic dresses and blouses. After that, the two countries would try negotiating again, through the General Agreement on Tariffs and Trade. Miyazawa's plan is close to one proposed in March by PepsiCo President Donald Kendall, who headed a high-level delegation of U.S. businessmen in talks with Japanese industrialists and government officials. The Kendall plan was considered negotiable by diplomats of both governments, but was summarily rejected by both textile industries. Now the Japanese appear ready to impose it on their own industry, provided Washington can do the same.

Back-Up Position. The Japanese foreign ministry seems convinced that Miyazawa's offer will fail. If it does. Foreign Minister Aichi is ready to retreat to a back-up position that seems more acceptable to the U.S. It would provide for a three-year agreement restricting imports in a number of categories--possibly to 1969 levels, although that base year would be negotiable. This plan also could be rejected, since it does not offer the all-inclusive quotas that U.S. textile men demand. It is quite likely that unless the Japanese agree to sweeping "voluntary" reductions in their shipments. President Nixon will call for mandatory quotas to help out his friends in the South.

One way or another, the U.S. stands to win fairly broad quotas. But the Japanese public is up in arms over what many consider to be a crude and arrogant American stand. Japanese businessmen will be watching to see if their textile industry was right in warning that it was only the first to come under U.S. pressure for import quotas. They may not have to wait long. Next week top executives of the U.S. steel industry plan a one-day blitz of Congress to plead their case for more restrictions on imports of steel products.

This file is automatically generated by a robot program, so reader's discretion is required.