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

460.509/7–1751: Telegram

The Ambassador in the United Kingdom (Gifford) to the Secretary of State ¹

secret
niact

London, July 17, 1951—2 p. m.

323. Excon. From Linder. After mtgs reported Embtel 318, July 16, rptd Paris 108,² Berthoud proposed US-UK mtg last night to “break deadlock” on disagreed 1 A items. He felt some compromise solution cld be found to resolve UK interministerial differences (stemming mainly from Min of Supply and BOT) and permit Cabinet decision Wednesday. He understood US position not completely inflexible, although he recognized we prefer solution 99 percent pure. Clearly understood that USDel in no way committed by UK offer, which US Govt free to find unacceptable.

Berthoud introduced offer by reiterating that UK believes remaining items do not meet criteria for list I. To put them there wld require exceptions of varying scope. UK considered this most unwise, since if UK and Fr begin making exceptions on important scale other PCs wld follow and strict embargo rule under list I wld be seriously compromised. UK policy had always been not to make exceptions. Same objections voiced to zero quota device. They felt practical effect of putting items of list II, and treating under para B–3 (d)—permitting exports only to extent required assure essential imports—wld be same as placing on list I and allowing exceptions.

As to specific items, UK proposed disposition along fol general lines:

1. Place both tin and rubber on list II and treat under para 3 (a), fixing quotas which wld permit “normal” peacetime shipments approximating “hold the line.” (We commented that post-Korea cld not be considered normal.)

2. Four coal mining items wld be placed on list III. In view vital European need for Pol coal and tight US shipping situation, UK cld not understand US insistence on embargo these items. Agreed that two of items have general uses mining low grade ores but saw little hope that suitable definitions cld be found which wld separate out non-coal mining items. Pointed out 9 percent of UK exports these items past three years have been of [to?] Pol and good part known definitely installed in coal mines.

3. Nine transportation and three heavy construction items wld be placed list II and treated under para 3 (d). Some indication that one or two transport items and part of one construction might possibly be raised list I.

4. Silicon carbide might be considered for list I in return for putting residual parts of asbestos item and insulated wire cable item on list II–3(d).

5. UK referred to interest of Fr del in aluminum and proposed this also be treated under list 11–3(d). Berthoud had advised Fr of this mtg. (We had understood Fr probably willing go along on embargo except for 5 or 6 items including aluminum.)

UK officials meeting today to firm up proposal, which they will discuss further with us Wednesday in Paris, at which time we will firm up CG presentations.

USDel has not had time study full implications UK proposal, especially as to how proposal cld be put to other PCs so as to encourage widest de facto embargo these items (i.e., substituting other exports as quid for the quo). We believe it may be possible work out UK control for all disagreed items (except tin, rubber and coal mining equip) which wld be roughly equivalent to embargo with clearly justified exceptions, and that exports other items such as tin cld be justified as necessary part of quid pro quo arrangement. This wld mean net result of complete embargo roughly two-thirds of additional I A items we proposed, and controls over remainder ranging from de facto embargo to reasonable quota treatment, plus a practical solution to long-standing rubber problem. In opinion USDel, it shld be possible for US Govt to accept this solution as representing adequate and defensible security controls over items we regard as of primary strategic importance. USDel convinced that solution roughly as indicated above is best obtainable without causing breakdown of multilateral cooperation in this field, or creating such disturbance that likelihood of our obtaining more adequate controls over goods of secondary strategic importance wld be seriously impaired.

From viewpoint US legislative situation, furthermore, we see some advantage in UK proposal for list II treatment under para 3 (d), which opens way for de facto embargo of these primary items by other PCs. Alternative wld be fixed quotas on some items, whereas quid pro quo approach permits strong US pressure not to allow any exports unless advantage to west clearly demonstrable. USDel wld, of course, insist on statement along that line as part of CG presentation. If Dept deems desirable, USDel cld also make clear at CG meeting that widest possible embargo these items will reduce number of specific exceptions possibly required under legislation such as Battle Bill. Alternative is to make this situation clear through direct approaches to other PCs.

Emb has followed this negot closely and is of opinion that this represents sincere effort by UK to produce acceptable compromise. If we press for full position we run risk of losing additional concessions proposed by Berthoud last night. Makins has emphasized both to Holmes and Linder his view that this is most difficult problem in US–UK relations and there is real possibility that Cabinet will simply refuse to budge if we push too hard. Therefore, we do not feel that any further high level approach shld be made at this time.

USDel proceeding Paris today.

Appreciate any comments or instructs Dept may have on foregoing, preferably by tomorrow afternoon.³ [Linder.]

Gifford

1. Repeated to Paris.
2. Ante, p. 1148.
3. In telegram 385 to Paris, July 17, the Department of State informed Linder that the United States Delegation was in the best position to judge whether the latest compromise offered by the British was the maximum which could be obtained without seriously risking the breakdown of multilateral cooperation in the security control field and whether it would be accepted by the NSC as a suitable basis for making exemptions under either the Kem Amendment or the Battle Act. (460.509/7–1751)