TNAG-2469-FCO40-3593-Most-favoured-nation-status-for-China-Hong-Kong-interests-1992 — Page 214

m.pus.sos2

FROM:

PS

TO:

PS/NO 10

CONFIDENTIAL

A CLINTON ADMINISTRATION

We have been giving some thought to the direction which a Clinton Administration would take and its implications for the UK. I now attach a paper on this subject based largely on reporting from Sir R Renwick in Washington. been approved by the Foreign Secretary.

The paper has

We do not underestimate the problems which a Clinton Administration could cause for us. Clinton himself is an unknown quantity so far as the UK is concerned. Despite his time at Oxford, his attitude towards us is likely to be unsentimental. He has not, to our knowledge, met any British political leaders (though the list of his advisers, many of whom we know well, is reassuring).

Clinton would be likely to look at international issues through a predominantly economic prism. Such statements as he has made on foreign policy give priority to Japan and Germany because of their economic importance and success. He does not mention the

UK.

Domestic economic priorities (particularly jobs and tackling the deficit) would be likely to weigh much more heavily than foreign policy in the early part of a Clinton Presidency. This could cause problems for us in the following areas (which amplify some points listed in paragraph 37 of the paper):

Europe. Clinton is ambivalent about European

integration. (A revealing statement by him was that "It is too early to say whether the integration of Western Europe will be a plus or a minus for America"). His attitude will largely be determined by whether or not European markets are further opened to US goods.

- Trade and Investment. Although a free trader at heart, Clinton will be more subject than Bush to protectionist pressure from his own party in Congress. He has finally come down in favour of NAFTA, with conditions. But we do not know what his attitude would be, as President-elect, to a GATT deal concluded by the outgoing Administration. His proposals for increased tax on foreign-owned corporations would cause us problems if he pursued them.

CONFIDENTIAL