CONFIDENTIAL
Trade Discrimination
9. Two ASEAN countries have demonstrated their willingness to act against British commercial interests because of their dissatisfaction with British policies. Faced with increasingly protected markets and world recession, they may resort increasingly to trade discrimination in retaliation for UK protectionism or unrelated issues. This action is difficult to counter since other OECD countries will regard it as providing an opening for their own exports rather than as an issue over which to make common cause with the target of discrimination. Counter measures could all too easily backfire on the UK for example by causing ASEAN to gang-up. We should therefore concentrate on preventive measures to ensure that Britain does not set itself up as an obvious target for further discriminatory action in future. In international economic negotiations of interest to ASEAN such as the MFA or commodity negotiations or in any EC reaction to counter-purchasing policies we should try to stay in the middle of the EC pack. We should recognise that any further public expenditure cuts, eg. in BBC external services could give rise to problems similar to those created by the increase of overseas student fees.
Defence Commitments
10.
Despite the end of our direct military role in South East Asia in 1971, we still have residual defence commitments to four of the ASEAN countries as well as Brunei. A Malaysian attempt to take Brunei over is unlikely but an outbreak of civil disorder in Brunei could present problems for HMG if the Sultan tried to involve the large number of British loan service personnel in his armed forces or the resident British Ghurka battalion. On present plans, British forces are likely to remain in Brunei for a period after full independence in 1983 and for as long as they remain there is a risk that the Sultan would seek to enlist their help in operations embarrassing to us. As a signatory of the Manila Pact we are committed to consult with other signatories in the event of a threat to Thailand or the Philippines. Under the Five Power Defence Arrangements we are required to consult with the other signatories in the event of an attack or threat of attack upon Malaysia or Singapore but a threat to either country is remote at present. Apart from the small team of RAF personnel which we contribute to the Integrated Air Defence System in Malaysia, there are no UK forces in place and none in the area save for the Hong Kong garrison and our Ghurka battalion in Brunei. The Malaysians and Singaporeans are both rapidly building up their own military capability and air defence systems.
CONFIDENTIAL
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