CONFIDENTA,
2-
and other members of CECD.
DER 11C
Apart from OPEC's oil
weapon, of which much has been written, the economic lever that
is most relevant in this context is the discriminatory
use of government procurement policy (see Annex 'A'). But
developed countries may also be vulnerable to other restrictio
on the free flow of goods; to threats against direct
investment; or to financial sanctions such as the withdrawal
of bank deposits.
3.
The problem is exacerbated where LDCs are not
signatories of the GATT itself (like several of the oil
producers) or, more particularly of the GATT Government
Procurement Agreement. Some are not susceptible to pressure
and influence in other multilateral fora and place little
value on an open trading system.
Sources of Tension
4. The UK is most obviously and predictably at risk
where
we are forced to confront awkward choices in regional
conflicts such as the Arab/Israel dispute or Namibia.
There are historic bones of contention, as with
Argentina over the Falkland Islands.
Domestic political and economic priorities prevail
over British overseas interests, as with the recent
increases in overseas student fees, the nationality
bill or protectionism.
15.
CONFIDENTIAL
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