American-Japanese Cotton Goods Agreement

Abstract

REPRESENTATIVES of the American and Japanese cotton-textile industries on January 22, 1937, attached their signatures to an understanding limiting the volume of Japanese exports of cotton piece goods to the United States for a period of two years. The essential features of the understanding are, first, for the year 1937 the basic quota was put at 155,000,000 square yards and for the year 1938 the basic quota agreed upon was 100,000,000 square yards. An element of elasticity was provided by according the Japanese the privilege of transferring not more than one quarter of the 1938 apportionment to the 1937 quota. This arrangement may be expressed otherwise as follows: The quotas agreed upon for the two-year period constitute a maximum of 255,000,000 square yards. Of this amount the 1937 apportionment should not exceed 180,000,000 square yards or be less than 155,000,000 square yards. Should the Japanese take advantage of this option and export the maximum of 180,000,000 square yards to the United States in 1937 then the 1938 quota automatically becomes 75,000,000 square yards. The entire responsibility for the administration of the quota arrangement is lodged with the Japanese industry and the agreement in its entirety is predicated on considerations of good faith rather than on those of a contractual and technical charac-