Ⅰ Letter from Mr.Walter T.Smith, Counselor of American Embassy
for Economic Affairs, to Mr.K.T.Li, Vice-chairman of the Cou-
ncil for International Economic Cooperation and Development
of China
February 3, 1964
American Embassy
Taipei, Taiwan
Republic of China
Dear Mr. Li:
I refer to your letter of December 4,1963, proposing that the c-
eiling for category 50 (trousers, slacks and shorts [outer,] not
knit, men's and boys'), presently set at 122,000 dozen for the
twelve-month period beginning October 1, 1963, under the provis-
ions of the United States-Chinese bilateral agreement concerning
trade in cotton textiles, be raised to 155,182 dozen, and that
compensatory adjustment in the amount of the square yard equiva-
lent of the increase of 33,182 dozen be made in category 63 (we-
aring apparel, not knit, not elsewhere specified).
I am authorized to inform you that the United States Government,
after giving careful consideration to the Chinese Government's
proposal, would be in principle prepared to agree to the onet-
ime admission of 33,182 dozen men's and boys' trousers and sh-
orts (category 50) in the period October 1, 1963 through Sepe-
mber 30,1964. However, in place of the proposed compensatory
adjustment in category 63, my Government wishes to propose th-
at compensation be effected by charging against the agreed le-
vels of category 50, 16,591 dozen in each of the second and t-
hird years of the agreement.
Furthermore, at the same time, the United States Government w-
is hes also to present for the consideration of the Government
of China the proposal that, within the present agreed level f-
or category 26 (woven fabric, not elsewhere specified, other,
carded) for the twelve-month period beginning October 1,1963,
a subceiling of 1,800,000 square yards be imposed on shipments
of cotton
duck fabric from Taiwan to the United States. This proposal is
impelled by pressing difficulties in the domestic market for co-
tton duck which arise in great part from the increasing proport-
ion of duck in category 26 imports over recent months.
The United States Government would be pleased to receive the ag-
reement of the Government of China to the proposed revisions to
the bilateral agreement as outlined in this letter.
Sincerely yours,
(Signed)
Walter T. Smith
Counselor of Embassy for
Economic Affairs
Mr. K. T. Li
Secretary General of the Council for International Economic Coo-
peration and Development
118 Hwaining Street
Taipei, Taiwan, China

Ⅱ Letter from Mr. K. T. Li, Vice Chairman of the Council for I-
nternational Economic Cooperation and Development of China,
to Mr. Walter T. Smith, Counselor of American Embassy for Ec-
onomic Affairs
March 18,1964
C2-64-0486
Mr.Walter T. Smith
Economic Counselor
American Embassy
Taipei, Taiwan
Dear Mr. Smith:
Reference is made to your letter dated February 3,1964 regarding
our proposal for revision of the ceiling for category 50 under
the United States-Chinese Cotton Bilateral Agreement concerning
trade in cotton textiles.
I wish to inform you that the Chinese Government is willing to
accept the counterproposal made by your Government that the exc-
eeding portion of 33,182 dozen men's and boys' trousers and sho-
rts exported to the United States under category 50 during the
period October 1,1963 through September 30,1964 will be compens-
ated by charging against the agreed levels of category 50,16,591
dozens, in each of the second and third years of the agreement.
The Government of China also agrees to the United States Govern-
ment's proposal that, within the present agreed level for categ-
ory 26 for the twelve-month period beginning October 1,1963, a
subceiling of 1,800,000 square yards be imposed on shipments of
cotton duck fabric from Taiwan to the United States.
Sincerely yours,
(Signed)
K. T. Li.
Vice Chairman
cc: FETCC
2nd Div.