Foreign Relations of the United States, 1950, Central and Eastern Europe; The Soviet Union, Volume IV

400.119/8–2550

Position Paper Prepared in the Department of State¹

secret

[Washington, undated.]

1. The NSC agrees that the U.S. position on 1–B items should be reviewed with the objective of deleting from negotiation those of lesser importance which are objectionable to the Europeans, and of deciding upon List I or II treatment for the balance.

2. The NSC agrees that the U.S. will drop its proposals for pre-consultation and severely restricted quota controls, and that the current interpretation of List II treatment shall be accepted (i.e., unilateral limitation of shipments and exchange of information).

3. The NSC considers that the U.S. should not, in seeking acceptance of its export control proposals, threaten to withhold economic or military assistance. It further considers that both military security and economic recovery must be taken into account in the negotiations.

4. The NSC urges that full use be made of NATO channels to reenforce the parallel action negotiations.

5. The NSC recommends that the Secretary of Commerce approve the export licenses for the Austrian Steel Mill.

6. The NSC considers that the ratings of the rail transportation equipment, except for the items already agreed to be 1–A, shall be 1–B.

7. The NSC confirms the policy of treating Austria, Sweden, and Switzerland on the same basis as other OEEC countries in terms of U.S. export controls.

1. The source text is included in the files as an attachment to a memorandum by Robert W. Barnett, Officer in Charge of Economic Affairs, Office of Chinese Affairs, Bureau of Far Eastern Affairs, not printed, which explained that this paper was agreed upon by the Bureaus of European, Far Eastern, and Economic Affairs in advance of a meeting on August 23 at which Secretary of State Acheson was briefed on the question of East-West trade in preparation for the meeting of the National Security Council the following day. Attending the briefing meeting were Ambassador at Large Philip C. Jessup, Acting Deputy Assistant of State for European Affairs James C. H. Bonbright, Director of the Bureau of German Affairs Henry A. Byroade, Deputy Assistant Secretary of State for Economic Affairs John E. O’Gara, Associate Chief of the Economic Resources and Security Staff Willis C. Armstrong, Max Bishop, the Department of State’s member of the National Security Council Staff, and Barnett. In the course of the briefing meeting, Barnett recommended, and the Secretary and Jessup heartily agreed, that the problem of Japan’s trade with Communist China and North Korea be regarded as disposed of for the time being, even though the Department of State and Department of Defense were likely to disagree if and when the Korean crisis was resolved and something approaching normal economic life was restored in the Far East. Barnett also recalled that during the briefing meeting, Secretary Acheson “outlined a masterful statement on the whole subject of East-West trade,” which several of the participants immediately afterwards attempted to put on paper in outline form. (For a possible version of an outline of the Secretary’s remarks, see Jessup’s memorandum of August 24, infra.) Barnett indicated that Secretary Acheson attended the National Security Council meeting on August 24 (see the Record of Actions of that meeting, p. 179) unassisted by any staff.