Foreign Relations of the United States, 1951, Korea and China, Volume VII, Part 2

611.9322/8–2351

Memorandum by the Deputy Director of the Office of Chinese Affairs (Perkins) to the Deputy Assistant Secretary of State for Far Eastern Affairs (Merchant)

top secret

[Washington,] August 23, 1951.

Subject: CFM Position Paper: Basic Disagreement with EUR

The attached draft position paper (Tab A)¹ is the result of another go-round with Miss Camp² of RA, who states that the underscored portions³ represent the minimum position of EUR, concurred in by EDT. It is RA’s position that if FE is unable to agree to the inclusion of these portions, it will be necessary for the paper to go forward to the Steering Committee on a non-agreed basis.

We believe that the FE position, which would exclude the marked portions, is the correct one. The original FE paper, which was cleared by Mr. Popper for UNP and Mr. Schaetzel⁴ for E, was even stronger in its insistence that if the Kaesong talks should break down or bog down, the United States should seek economic controls by other nations nearer the level of controls exercised against the Communist Chinese aggressors by the United States.

The language added by the RA drafter in paragraph (a) under the United States position would have the United States Government favoring the suspension of the May 18 GA strategic embargo Resolution in the event of a long drawn out stalemate, thus removing one of our most potentially hopeful UN weapons against aggression and permitting the Chinese Communists to build up their strategic stores either for further aggression in Korea or elsewhere in the Far East. It would represent no foreseeable advantage militarily or politically to the UN or to the United States but would represent a real advantage to the Chinese Communists in restoring their pre-Cease Fire military stockpile position and in encouragement to their divisive efforts against the Free World.

The non-agreed language in (b) under the United States position, if incorporated in the final paper, would tell the Foreign Ministers and the world that the United States would press for further denial of strategic materials to the Chinese Communist aggressors only in the event that a breakdown in negotiations was followed by something which would fit the definition of “a massive new Chinese Communist aggression”. Such a position would be a real inducement to the Chinese Communists to continue their tactics of delay and stall while building strength for a new aggressive effort in Korea or elsewhere in the Far East.

In the paper entitled “Courses of Action in Korea in Event no Armistice is Achieved” (Tab B Top Secret)⁵ which is understood to be one of several such papers already approved by the Secretary, several alternative situations and courses of action in the light of the Kaesong talks are proposed, ranging from the most unfavorable position to the most favorable position which the drafters of that paper could conceive. Alternative (3) (page 5) represents the mildest assumption made: that negotiations fade out without a clear break, the Communists do not launch offensive or massive air attacks, and they appear to be attempting a de facto cease fire. Even in that case, it is proposed that in the United Nations, the United States should seek “additional economic measures against China, looking toward complete economic blockade, including possible alternatives to naval blockade, e.g., calling on nations to control their own shipping, or to agree to have UN help them control shipping” (page 7).

It seems to us, and we believe that we have support throughout the Government, that any relaxation, suspension, or failure to go forward progressively on the implementation of an economic control program aimed at the aggressor, except in the case of a truly satisfactory outcome to the Kaesong talks, would play into Communist hands. Tab C, a SANA telegram from Moscow dated July 13,⁶ points out the possibility of a Soviet drive to force the world to abandon the China embargo and to relax U.S. export controls, especially those adopted by Western European countries.

Recommendation: As the time is growing short before the meeting of the Foreign Ministers, CA recommends that you give consideration to attempting to discuss these differences with EUR at the Assistant Secretary level before submission of a non-agreed paper to the Steering Committee.

Alternatively, we can prepare a memorandum to accompany our draft to the Steering Committee, using the above argumentation.

[Tab A]

Memorandum Prepared in the Department of State

secret

[Washington,] August 23, 1951.

China and North Korea

The Continuance of United Nations Controls Against China and North Korea

problem

What position should the United States Government present to the British and French Foreign Ministers on the continuance of UN economic controls against Communist China and North Korea?

united states objective

The United States objective is to obtain maximum multilateral cooperation in a program of economic controls for Communist China and North Korea, the severity and scope of which should be determined by Chinese Communist intention and capability to engage in aggressive activities which threaten the security of the Free World in the Pacific area.

position of british and french governments

The French and British Governments, after some delay, gave full support to the GA strategic embargo Resolution of May 18. British controls being applied at Hong Kong and throughout other areas under British jurisdiction are considerably more severe than those they apply to the USSR and Eastern Europe. This is also true of French controls. The British and French are reluctant to apply controls, particularly in the shipping and financial fields, as severe as those of the United States. Both countries are keenly aware, particularly since the MacArthur hearings, of U.S. interest in stopping trade with Communist China. Both must deal, however, with domestic public opinion which is reluctant to engage in all-out economic warfare against Communist China or any other part of the Soviet sphere.

united states position

The position of the United States will differ depending upon the outcome of the Kaesong talks:

(a) Situation during a cease-fire:

In the view of the United States Government, a cease-fire resulting from the Kaesong talks would be merely an interim situation, neither reducing the military potential of the Chinese Communist aggressors nor radically affecting their military position in such a manner as to lessen the need for economic controls. Accordingly, in this situation the United States believes that the GA Resolution of May 18 should be continued and that the NATO and other countries should continue to apply to Communist China and North Korea controls more stringent than they apply to the rest of the Soviet Bloc. If there is a prolonged armistice pending final agreement on a settlement in Korea, consideration might be given to suspending the application of, hut not revoking, the May 18 resolution. We would assume that other NATO Governments would nevertheless continue to apply controls at least as severe as those applied to other members of the Soviet Bloc.

(b) Breakdown of negotiations at Kaesong:

In the event of a breakdown of the Kaesong negotiations, and a massive new Chinese Communist aggression, the United States would seek more stringent UN action than that envisaged by the May 18 GA Resolution.

(c) Conclusion of a satisfactory political settlement in Korea:

If there is a settlement in Korea, satisfactory to the UN and US (by definition including unification of Korea on democratic basis with genuine assurances against resumption of aggression) the GA Resolution of May 18 would, of course, be revoked. However, in this event we believe the NATO countries should apply to Communist China the same controls that they apply to other parts of the Soviet Bloc.

1. Below. This document was drafted in anticipation of the forthcoming meetings of the Foreign Ministers of the United States, the United Kingdom, and France, to be held in Washington in September.
2. Miriam Camp was an International Economist in the Office of European Regional Affairs.
3. Set here as italics.
4. J. Robert Schaetzel was Special Assistant to the Assistant Secretary of State for Economic Affairs.
5. For text of this paper, WFM T–10/1, August 18, see p. 835.
6. Not printed.