TNAG-2978-FCO40-1470-Trade-relations-between-Hong-Kong-and-the-UK-1982 — Page 84

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than originally intended. The defeat was not total, since

the increased quotas were still in line with the upper end

of the normal rage (2-5 times the trigger level) and

considerably less than the volume of actual imports of the

products concerned from the US (which, being considered

as a'high cost' producer is not subject to any restraint).

5. Since the EC-Indonesia Textile Agreement is essentially

protectionist, the UK's dispute with Indonesia was as much

about trade discrimination by the UK against the Third

World as vice versa. By taking a more hawkish stand on

textiles than many of its EC partners, Britain put at risk

competitive expats valued at up to £200 m for the sake of

some £5-7 m of unsophisticated goods (trousers, blouses

and shirts) in which Britain had little or no comparative

The disagreement appears to have had no lasting

damage on political or economic relations. But there

has been a demonstration effect. Mexico threatened

similar retaliation when it saw the weakness of the response

advantage.

of the Ten. Malaysia's readiness to take issue with the UK

may also have increased as a result of the incident.

Malaysia

6. A policy of discrimination against British bidders for

Malaysian public sector contracts was announced by the Prime

Minister, Dr Mahatir, in October 1981. Hostile comment

on Britain had been expected, since Dr Mahatir

and believes that Britain colonial administrators

and businessmen caused the present tension between the Malay

and Chinese races. The specific factors that appear to

have prompted trade discrimination include:-

CONFIDENTIAL- The