CONFIDENTIAL

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DSR 11C

trade policy in a more liberal direction. The FCO

should nonetheless ensure that the dangers of a hawkish

stand on trade issues affecting the NICs are understood

within Whitehall and that the lessons of the Indonesian

incident are well publicised outside. Any new threat of

discrimination against UK exports arising from irritation

over protectionist policies should be taken as a further

opportunity to press for less aggressive policies in those

areas such as textiles where pressure for import controls

is strong. In international economic negotiations of

interest to the IDC's (for example the MFA) we should aim

to stay in the middle of the EC/developed country pack.

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12. We should recognise that future public expenditure

cuts may give rise to problems similar to those created

by the recent increase in overseas dudent fees. An obvious

case in point is the proposal to charge foreigners with the

full cost of treatment under the National Health Service.

Some damage to British interests will probably be

unavoidable. But we should aim to mitigate this as far

as possible by explanation at an early stage and ensuring

that the implications are properly understood. Any

complacency in our relations with the richer developing

countries of the Commonwealth could carry a high political

and economic cost.

13. In countries where a single multinational corporation

or a small group of British-controlled multinationals have

a disproportionate stake in the economy, we should use

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CONFIDENTIAL

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