460.509/7–750: Telegram
The Secretary of State to the Embassy in France 1
secret
Washington, July 14,
1950—8 p. m.
258. Excon. ReEmbtel 137, July 7.2
- 1.
- Export license decisions in Deptels June 30 to London, Rome, Stockholm3 considered fully consistent with spirit of Torep 816,4 which remains basis US export control policy. Deptel 18 to London (14 to Paris5) is special case. None of these actions shld have any effect on current US efforts to negotiate mutually agreed control program on voluntary basis.
- 2.
- Dept continues opposed to use economic sanctions, including threat of withholding ECA or MDAP aid or denial export licenses, to force agreement with US proposals. Without violation this principle, Dept recognizes there may be cases where US Govt will wish ascertain, prior to approval of a specific 1–A or 1–B shipment to WE, whether such a shipment (machinery, etc.) is likely result in substantially increased export of a highly strategic item from WE to Soviet bloc. This info and other factors will determine US decision. If increased export such items to EE were to result direct or indirectly from US shipment to WE (esp in case of entire plant part ECA-financed as in Ital case), effectiveness US control program wld be reduced. Dept sees no inconsistency between (a) pursuing goal of mutually-agreed program, without coercion, to restrict strategic exports to east and (b) refusing consent to exports from US which might increase strategic exports from WE to east. Other PCs need not accept US position that item concerned shld be embargoed but must recognize that until question of its strategic significance is resolved by mutual agreement such exports shld at least not be increased.
- 3.
- Reference in Deptel 18 to denial pending applications concerns (a) denial license to US firm which desires ship rocker shovels direct to Czecho and (b) denial to another US firm, with assembly facilities under contract in UK, which desires ship parts to UK for assembly and reexport Czecho, hence is similar to cases of transshipment. Apart from discrimination angle, there is impt security aspect since we now know this item especially suitable for uranium mines and unsuitable coal mines Czecho. Dept’s request for UK coop in interim admin embargo, without prejudice eventual UK position CoCom, is not out of line with previous US policy.
- 4.
- If Dept had intended adopt coercive policy it might logically have withheld licenses UK and Sweden and approved Ital case, as Emb suggests. Fact that these cases involve unsettled List III items not material. Placement on List III reflects disagreement mainly as to extent of export control which shld be applied and we believe implies that, pending outcome negots, PCs shld at least exercise caution to prevent increased exports. In case of ECA-financed bearing plant for Italy, abnormally large exports steel alloy bearings to EE in 1949 lead us to seek assurances against repetition in future. Evidence reduced exports early 1950 is welcome as establishing more appropriate level but inconclusive as to intentions re future exports.
- 5.
- Such action as Dept is taking in specific cases, by requesting assurances as to intentions re future exports, concerns matter of principle, namely that during this interim period when US is maintaining substantially more restrictive controls than those in WE, other PCs must recognize that US will not frustrate its controls over US exports direct to Sov bloc by permitting exports of US equipment, etc to WE when these may in turn increase exports from WE to EE of same items we are embargoing.
- 6.
- Foregoing may be used in Emb discussions with other PCs as deemed appropriate, and by Embs Rome, London, Stockholm, subj Paris concurrence in seeking assurances requested reftels June 30.
- Other agency positions unchanged.
Acheson