Many contracts are covered by irrevocable letters credit.
forced importers to breach contracts entered into
on the basis of our repeated assurances that there would be no quota restrictions in 1972;
although the Government would not be legally liable
for broken contracts, importers would face the risk
of legal action by their suppliers if the latter thought this worth while. The policy might also cause dislocation and even some temporary
unemployment where imported materials ordered for
further processing could not immediately be replaced from domestic sources (although this risk could be mitigated by licensing outside the quota require- ments which could not be met by Lancashire).
Overseas Governments would feel that we had
compounded the injury of our decision to retain
quotas and there might be some damage to our
relations and commercial interests abroad.
!
8 Of the two variants of OPTION II, the first
would leave importers largely at the mercy of the authorities of the supplying country, who might choose in some instances to ignore outstanding
orders, particularly if placed with non-ttraditional
exporters. If foreign countries allowed exports
in excess of the quotas, deliberately or otherwise, the goods would have to be seized oy H M Customs The second variant would mean our trying to allocate very limited motas as fairly as possible, a
difficult and contentious task which would need
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