CONFIDENTIAL
- 6
DSR 11C
Third World and does not appear to have been the subject
of trade discrimination by LDCs recently.
Preventive Measures
10.
Prevention is a more effective approach to the
problem of trade discrimination than fire-fighting after
the event. Annex 'C' therefore 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 UK direct investment and the value
of UK contracts under way or in prospect. It is doubtful
whether more can be done 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)
Some UK companies are anyway sceptical about the worth of
IPPAS where a serious deterioration in bilateral relations
has taken place. Perhaps more important is to ensure that
Britain does not set itself up as an obvious target for
further discriminatory action in future. This will be
difficult in the presant economic climate.
•
11. One relevant lesson of the dispute with Indonesia
is that British interests in the Third World are now
seriously jeopardised as a result of UK protectionism.
Maintaining good relations with the NICs is an important
British interest, but it is not easy in recession to shift
/trade
* While this paper is concerned primarily with trade discrimination by LDCs, it should be noted in passing that Australia has recently considered taking retaliatory trade sanctions against the EC because of objections to the workings of the Common Agricultural Policy. Since the UK has far closer trade links with Australia than any other member of the Community, such
action would be tantamount to discrimination against the UK.
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