TNAG-2978-FCO40-1470-Trade-relations-between-Hong-Kong-and-the-UK-1982 — Page 77

DSR 11C

our influence to encourage good behaviour. There will,

however, be occasions when the interests of shareholders

will conflict with the general British interest: the

highest bidder for local assets may not be the one favoured

by the LDC government concerned. In such circumstances,

we should ensure that the government understands that we

have exercised what influence we can, but that our power is

limited to persuasion. With other bodies beyond the reach

of the British government, the most we can do is to

anticipate intelligently and to educate LDCs in the limits

of our influence over private bodies and individuals.

༄སྐ*་།ཎ་

Conciliatory measures, threats, actions.

In most

14. Where trade discrimination against the UK is the

result of a single, unpredictable incident, conciliation

may be the most appropriate course of action. If the problem

arises from a more fundamental deterioration in relations,

this response may not be adequate and there may be a need

to look at threats and possible counter-sanctions.

cases, however, these will be costly and ineffective.

Economic sanctions are best applied multilaterally; even

then they usually work only for short periods since it is

difficult to maintain solidarity between countries with

different trading interests. If the UK alone refuses to

supply a counrry with goods and services, the country will

turn elsewhere except in those very rare cases where we have

a monopoly of products that are urgently needed. Financial

sanctions cannot be imposed without serious risks of damage

to confidence in the British financial system. Only where

/one

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