DAR 11C
3.
It is impossible to estimate precisely the commercial
cost of the incident. But export revenues lost between
April and August 1980 probably amounted to some tens of
millions. The political cost was arguably nil. No
concessions were made over the freedom of the media in
Britain. The greater attention paid by ministers to
Saudi Arabia may have contributed to an improvement in
relations that would otherwise not have come about.
Indonesia
4.
Britain's dispute with Indonesia began in autumn
1979 when imports of trousers, blouses and shirts from
Indonesia exceeded the trigger level at which the UK was
entitled to seek a quota restriction under the terms of
the bilateral EC-Indonesia Textiles. This Agreement is part
of the EC common policy on low-cost textiles. Despite
the fact that imports into other member states were also
in excess of the relevant trigger levels they chose either
to concede inflated quotas (Benelux) or to hold off
submitting a request for action on their behalf (France,
Italy, Ireland). This left the UK on its own, as an easily
identifiable target. Indonesia first ignored the routine
request to suspend exports pending negotiations with the
Commission. The negotiations themselves then broke down in
mid-1980 and the Commission proposed that quotas should be
imposed unilaterally. All member states with the exception
of Germany, Netherlands and Denmark voted for this proposal
in the textile management committee and it was therefore
carried. Soon afterwards, Indonesia retaliated against UK
exports. British companies were told that their bids
for government contracts would not be considered.
in 1981 the UK backed down and conceded much larger quotas
CONFIDENTIAL
/than
Early