The Secretary of State to the Secretary of Commerce (Sawyer)
My Dear Mr. Secretary: The approval by the National Security Council on December 29, 1949 of NSC 48/2 (The Position of the United States with Respect to Asia), the conclusions of which were signed by the President the following day, does away with considerable uncertainty that had arisen regarding implementation of NSC 41 (United States Policy Regarding Trade with China).1 Paragraph 48g (4) of NSC 48/2 has the effect of reaffirming the principles of NSC 41. The Department of Commerce is responsible for implementing the export control aspects of these two papers in so far as exports from the United States are concerned. The procedure of the National Security Council requires that the coordinating agency, in this case the Department of State, should “notify all departments and agencies of the actions for which each is responsible in implementation of the paper, and ensure that such actions are taken in a coordinated manner.” In accordance with this procedure, the following observations may be helpful.
It is my understanding that your Department, by its action of November 4, 1949 and subsequent actions to expand the “positive list” of exports controlled to all countries except Canada, has made substantial progress toward establishment of the export control machinery required. The policy recently reaffirmed calls for further action to bring under control the export from the United States to China and adjacent areas of all 1B list items which the United States Government denies or restricts to the USSR and its eastern European satellites. The question of whether such additional controls are created on a universal basis or made applicable only to China and adjacent areas is immaterial from the point of view of the policy set forth in NSC 48/2.
Paragraph 48g (4) of NSC 48/2 sets forth the principles that should govern the application of the controls referred to above and clearly provides the policy basis for unilateral denial by the United States Government of such export applications as are not allowed by its terms.
Your Department has been informed of steps which have been and are being taken to secure the cooperation of Belgium and of the United Kingdom, the Netherlands, and France, with respect to both their metropolitan and Far Eastern territories, in the application of controls over an agreed list of strategic exports to China and adjacent [Page 622]areas. This Department also intends to seek the cooperation of the Philippine Government, although it appears that action by the Philippine Legislature may be necessary before parallel action can be obtained. The Department of Commerce will be notified of the outcome of these efforts.
There is enclosed for your information a copy of a message, drafted jointly by the Departments of the Army and State, that was sent to SCAP on January 13, 19502 advising him of the policy decision referred to above and of the criteria regarding the conduct of Japanese trade with the USSR, its satellites and adjacent areas which are consonant with this and other United States policies.