690.119/10–2049: Telegram
The Secretary of State to the Ambassador in Korea (Muccio)
886. For Emb and ECA. ReDeptel 473 Jun 17 and urtel 749 Jun 20, export controls for China and adjacent areas. You will note from [Page 886] Dept Circ Agam Oct 11 US has reached agreement UK this subject and proposes institute necessary controls here early date. Dept undertook assure effective control possible transshipments South Korea.
Your position opposing subjection US exports South Korea to R procedure carefully considered here but Dept unconvinced alternative suggested either desirable or effective. Dept concedes ECA control ECA financed exports and accepts your view ECA can obtain adequate cooperation re non-ECA goods which actually arrive South Korea, but points out danger of transit trade developing from use dol funds outside either ECA or South Korean control, and possibility use of South Korea as “cloaking” destination for goods never intended to arrive there. Fact South Korea not hitherto important transshipment point of no significance in view geographic proximity Commie areas and effective controls to be imposed alternative entrepôt centers. Reliance South Korean coop wld also require disclosure strategic lists to that Govt and might impose undue burden on its customs and preventive services. This connection Dept requests you review position in light ur A–291 Sep 2770 and case of Nor[wegian] SS Daviken which you requested by Hong Kong investigate last Mar–Apr. Hong Kong reported this not first case diversion ships at sea from South Korean destinations.
Believed ur objections polit grounds insufficient weight overcome above arguments. You will note from refAgam SCAP cooperating and view special relationship US to occupation auths Japan impractical subject US exports Japan to R procedure. Special circumstances present polit relations Phil Govt dictate attempt first secure Phil coop rather than subj trade US controls; in addition different geographical situation adequate ground for different treatment. In any case Dept recognizes may have cover Phil in scope controls eventually, and actual form adopted (several alternatives under discussion here) may in fact be completely non-discriminatory. Shld also be emphasized friendly areas Europe now subj these controls, and other friendly areas Far East will likewise be included. Believed therefore can be explained South Korean Govt in inoffensive way.
Re objection ECA administrative review here, all Eur ECA programs subj same review and procedures can be worked out simplify process. Expected that ECA shipments wld be approved without undue delay.
ECA concurs this msg.
Request ur views soonest.
- Not printed.↩