In a memo dated January 23, Richard Luce, the Foreign Office minister, told trade minister Paul Channon about how Libya was now demanding doing trade on credit. He wrote: "I share your reluctance to see a cash market turning to credit but clearly if our trade competitors make such a move, we must be able to match them if we are to build on our already substantial exports to Libya."
Mr Luce admitted the US Government's view of Colonel Gaddafi was not fully shared by the UK. America had introduced trade sanctions on Tripoli following the 1981 Gulf of Sidra incident when Libyan jets opened fire on US ones during a naval exercise. He told his colleague: "Given their view of Gaddafi, which we do not fully share, they are bound to be critical. As you know we already have plans afoot to tackle with the Americans some of the problems we are having with them over trade with Libya.
"I do not consider that we should put ourselves at a competitive disadvantage by delaying action on this particular issue, pending agreement with the Americans on the broader question."