CONFIDENTIAL
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6
DSR 11C
Preventive Measures
11.
Prevention is better than cure. Appendix 'C' therefore
We are
sets out to identify a number of Third World countries where the
UK could be particularly vulnerable, on the basis of the
volume of UK trade, the size of the UK direct investment and
the value of UK contracts under way or in prospect.
already doing our utmost to minimise the risk of discrimination
arising from the UK's position on such major issues as Arab-
Israel or Southern Africa. We have already made strenuous
efforts to increase the number of signatories to the GATT
Government procurement code or to increase the number of LDCs
with whom the UK has Investment Promotion and Protection
Agreements (IPPAs). Perhaps more important is to ensure that
Britain does not set itself up as an obvious target for further
discriminatory action in future. This may be difficult in the
present economic climate.
12. While it would be in the UK interest to have some general
agreement in the EC that other members would refrain from
exploiting situations where individual member countries become
targets for discrimination, it seems highly unlikely that
such a 'non-undermining' proposal would find much support in
this or any other international forum. The competitive press-
ures, which are exacerbated in the present world recession, are
too great and the lure of inidiviudal contracts would almost
certainly prove overwhelming. Moreover, countries like the
FRG, which have not been exposed to trade discrimination by
LDCs, would have difficulty in justifying support
for an
agreement of this kind domestically, when unemployment is at
its highest level since the war.
13. One relevant lesson of the dispute with Indonesia is that
British interests
terests in the Third World can be seriously jeopardise
C