Foreign Relations of the United States, 1951, National Security Affairs; Foreign Economic Policy, Volume I

450.6031/6–551

Memorandum of Conversation, by the Assistant Secretary of State for European Affairs (Perkins)¹

secret

[Washington,] June 5, 1951.

Subject: East-West Trade

Participants:	Sir Oliver Franks, British Embassy
	Mr. Perkins, Assistant Secretary
	Mr. H. Raynor, Director, BNA
	Mr. Linder, E

Mr. Linder explained in some detail the background surrounding the passage of the Kem Resolution and what we are intending to do about it. He said to have any chance of obtaining better legislation or avoiding a worsening of the present legislation by way of foreclosure of the existing exemption privilege or extending the types of assistance covered to include military items, we felt certain things would have to be done. Mr. Linder mentioned that we must make progress on extending controls in the 10% area constituting those items now on our 1A list which are not on the list approved by the COCOM countries. Mr. Linder expressed the hope that as the difference between the UK and US was so small that it should be possible to resolve the matter. He also stressed the importance of being able to say more publicly and to the Congress about what has already been done and is being done today. He implied that a full disclosure of the many steps which have actually been taken might have avoided the present resolution. During the conversation he also stressed the importance of avoiding dramatic cases particularly rubber which has become a symbol in the public mind of East-West trade in general. It was pointed out that the manner in which rubber was handled in the UK report to the Additional Measures Committee of the UN² might be of great importance. We also mentioned the importance attached to the two tankers which have been built in the UK on Polish account. Mr. Linder also stressed that in our presentation to Congress we must stress what is being obtained in return which benefits the West. He said he thought arrangements of a trade agreement type which actually listed what would be exported behind the “curtain” and showed what would be received in return would be helpful. Mr. Linder also explained the procedures which we have underway mentioning first the general procedural exception in order to provide time and then to go up for exceptions country by country in cases where we feel they could be justified. We pointed out that, of course, the NSC would be the judge as to whether or not to grant exceptions and we could not predict how the NSC would act in any given case. We pointed out that we had initially intended to send up a request for the UK at an early date but after studying the matter we were not satisfied at the moment that we had a sufficiently good case to send up. It was also pointed out to Sir Oliver that while the assistance involved to the UK was probably small that we felt the UK should look at this from the broad point of view of the effect of the amendment on other countries and also the effect on the UK should its coverage be broadened to include military items.

Sir Oliver said he could speak only personally but he wanted to mention a few points which occurred to him with respect to this matter which he agreed was a serious one. He said we must remember the UK is a trading nation and instinctively reacts against any trade restrictions. He said we must bear in mind that the overwhelming public opinion of England still held to the view that war was not inevitable and that there was apprehension that steps of this type could be harmful in developing a situation which would make war more likely. He said this feeling led many in England to advocate the continuance of all possible relationships including economic in order to avert war. He also said that the manner of passage of the Kem Resolution and the impulsive nature of the action was also the type of thing which usually brought about a negative reaction in the UK.

Sir Oliver indicated he was very pleased to have had this discussion and to obtain the background information we had given him which he would be able to make use of in his discussions in London.

During the course of the conversation Ambassador Franks stated that it would be of the greatest importance to the UK to know the limits of possible additional controls which would be necessitated as the British understandably are afraid of embarking on a “slippery slope” being called upon to take one action after another in this field.

G[eorge] W. P[erkins]

1. Drafted by G. Hayden Raynor, Director of the Office of British Commonwealth and Northern European Affairs; the source text was initialed by Linder.
2. Documentation concerning this subject is included in the compilation on the injunction of United Nations economic sanctions against North Korea and the People’s Republic of China presented in volume vii.