Washington, April 4, 1962.
At the January 26, 1962, meeting of the National Security Council Standing Group it was agreed that the Department of State should submit to you recommendations regarding possible sale of food grains to Communist China.1See . The application that prompted the Standing Group discussion was rejected on March 23. A March 26 memorandum from Rice to Harriman quotes the text of a Department of Commerce announcement that day stating there was no evidence that the order was based on a request from the governments concerned. Rice's memorandum states that according to Chayes, the decision was made at a meeting on another subject that day among Kennedy, Dillon, Secretary of Commerce Luther Hodges, Chayes, and Martin and that its purpose was to forestall a prospective Congressional resolution opposing any grain sales to Communist China. (Department of State, FE Files: Lot 64 D 25, Communist China)
In formulating such recommendations we have sought to take into account the background facts of China's international crises and its dispute with the U.S.S.R.; the Cuba precedent in the context of exports of both food and medicines; humanitarian concern of Americans for the plight of suffering people, whatever the character of the regime under which they live; the clearly demonstrated determination of the Chinese Communist leadership not to accept American charity; restrictions imposed by U.S. legislation; the desirability of having Communist China's foreign exchange used for food purchases rather than industrial development; availability of non-U.S. sources of supply; the undesirability of our seeming to be motivated unduly by commercial considerations; Communist China's international behavior; the known unwillingness of China's present principal suppliers to attach political conditions to sales of foodstuffs to Communist China, together with the near certainty that Communist China would reject efforts explicitly to establish such a connection; the probable domestic and foreign repercussions of now changing present policy; the needs to retain flexibility and to bring about a more fruitful dialogue between Communist China and the U.S.; the long-term possibility of a different relationship between the U.S. and Communist China; and the related undesirability of establishing a record of unwillingness to supply food to the Chinese people when they badly need it and if it cannot be obtained elsewhere.
Against this background we have formulated four recommendations. In considering them we would point out that adopting the second recommendation may serve useful purposes vis-a-vis the American people and world opinion, but would probably be regarded by the leaders of Communist China as principally designed to call attention to their and their country's failures of policy and performance. Especially if it were accompanied by propaganda fanfare, it would inhibit the dialogue intended to be promoted by the third recommendation.
The following are our recommendations:
1. The Department of Commerce should forthwith place shipments of medicines to all destinations under general license (on the grounds that the U.S. Government should not place obstacles between such medicines and the human beings who may need them).
2. The U.S. Government should make known, but without accompanying propaganda exploitation, that it has not been our policy to deny licenses for the export of food parcels to Communist China, and that the Department of Commerce henceforth also will license bona fide private gift shipments of food, or food grains, to that country.
3. Ambassador Cabot, in his talks with Wang Ping-nan in Warsaw, should state:
a. The U.S. Government has been told that the Chinese Communist regime is interested in the purchase of U.S. grains. We have reason to doubt whether such interest does exist. However, if there is such interest, we are curious to know why, since the Chinese Communist regime has not exhausted possibilities of meeting its needs from other free world suppliers;
b. United States legislation now precludes our Government's selling grain to Communist China on credit terms as favorable as those offered by other suppliers;
c. If the Chinese Communists were able to finance United States grain purchases, given the foregoing legal restrictions, they should also be able to finance the equivalent purchases from other suppliers;
d. The U.S. Government is not now interested in modifying the relevant policies from commercial or financial motives, and could not justify revision of trade control policies for humanitarian motives so long as Chinese needs can be met by other principal suppliers;
e. It could reconsider the matter at such times as it may become evident that mainland China's needs cannot be met elsewhere; and
f. The U.S. Government would not propose to make propaganda capital out of the fact of an approach to us for food grains.
4. The Department of State should inform the Governments of Australia, Canada and France that the U.S. Government has considered but has not adopted proposals which would have put the United States in competition with those countries as suppliers of grain to mainland China; that we do not expect or ask them in present circumstances to attach extraneous conditions to their supply of food grains to Communist China; that it might, however, be possible to deter deeper Chinese Communist external involvement at the expense of the free world if the Peiping regime were to recognize that there would be a relationship between the direction of any important change in its external behavior and continued availability to it of non-bloc food grains, and that we would hope those Governments would at an appropriate time find suitable means of conveying this fact to the Chinese Communists.2In a meeting with the Canadian and Australian Ambassadors on January 16, Ball conveyed U.S. interest in “any potential lever which might be useful as a possible restraint on any aggressive intentions of Communist China.” He emphasized that he was not suggesting that Canadian and Australian wheat sales should be stopped and that “it might even develop that increased sales would be found useful.” (Ibid., Central Files, 493.009/1-1662)