Malaysia lifts UK trade ban

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SEVEN months after a newspaper article provoked Malaysia into imposing an embargo on British companies bidding for government contracts, the Malaysian government yesterday decided it had made its point and lifted the ban.

Although the decision had been expected for some time, British business and political circles welcomed the opportunity to compete once more in one of the world's fastest-growing economies. Diplomatic efforts to heal the breach began almost immediately after the embargo was announced on 25 February.

Whitehall sources said it could probably be judged a Foreign Office success that the dispute lasted only seven months. However, Opposition parties pointed out that the damage would never have occurred had the Government not gone ahead with the Pergau dam deal that its own Overseas Development Agency had called a 'bad buy'. It was later admitted that the project had become entangled with British efforts to win a pounds 1.3bn arms order from Malaysia.

Jack Cunningham, Shadow foreign secretary, said Labour welcomed the end of the ban wholeheartedly, but added: 'Any damage to British trade which has occurred over the last few months is the direct responsbility of the Conservative Government.'

Menzies Campbell, the Liberal Democrat foreign affairs and defence spokesman, said: 'There's a lesson for the British Government in this matter. Defence orders and aid must be scrupulously separated. If that had happened in the beginning, the embarrassment and loss of opportunity of the last seven months would have been avoided.'

Counting the cost, page 3

Leading article, page 13