693.419/7–2649: Telegram
The Secretary of State to the Ambassador in the United Kingdom (Douglas)
2678. Dept has read with disappointment tentative Brit response to US proposals re joint control of exports to China as reported in Embtel 2956 of July 26. Please reopen matter with FonOff at highest level along following lines, and in context broad question US–UK cooperation in Far East:
Dept seriously concerned that proposed Brit response represents far less than absolute minimum requirements joint protective measures in present Chi situation. Failure demonstrate effective western control selected exports of key importance to China’s economy would represent abandonment most important single instrument available for defense vital western interests in China and Far East generally. Implications of completely passive role western nations in economic relations China extend not only to all strategic aspects of Chi problem but cast serious doubt as to possibility effective joint approach in combating spread of communism throughout Asia.
Control of 1A exports to China is, of course, necessary to prevent possibly occasional trans-shipments via China to Soviet orbit. Dept appreciates importance obtain prior assurances Belgian, French and [Page 868] Dutch Govts for similar action re their metropolitan and Far East colonial territories. SCAP is now controlling strategic exports to China in accordance proposed joint US–UK policy, and US Govt prepared obtain Philippine cooperation. However, since 1A list contains little, if anything, of importance to China, joint action in this regard provides no leverage in dealing with Chi Commies. Joint control of petroleum shipments to China is regarded as important aspect of general control pattern, but by itself has no symbolic value since it would be effected largely through informal arrangements with private companies rather than by export licensing, and since China’s petroleum purchases over foreseeable future are likely to be far below normal civilian requirements.
Dept recognizes difficulties of inclusion 1B items in present pattern UK 1A licensing system. Unable understand, however, why control selected 1B exports to China could not be effected by creation new list under which licenses would be required, in effect, only for exports to China and adjacent areas, thus limiting procedural deterrents on Britain’s export trade to marginal scope. Brit point, made in recent London discussions, that this impossible because it would represent open discrimination not understood by Dept. Present pattern UK export licensing involves open discrimination as between broad areas of world, and US export controls represent even greater degree discrimination. Present world situation obviously justifies discrimination on security grounds, and this position has been successfully maintained in GATT51 conferences. That 1B exports to China do not represent as immediate and direct threat in military terms as do 1A exports to Eastern Europe should not be allowed to obscure the fact that mutual security interests of western world must be considered, certainly so far as Asia is concerned, at least as much in terms of political and economic strategy as in terms of direct military factors. Difficult for us to understand what “political and administrative difficulties” outweigh importance of solidarity in adoption strategy for maximum protection vital long-range interests.
- General Agreement on Tariffs and Trade.↩