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

S/S Files: Lot 59 D 95

Department of State Position Paper¹

secret

[Washington,] November 1, 1951.

NOV D–4/1b

Additional Economic Measures Against Communist China and North Korea

problem

To acquaint the British Foreign Secretary with the proposals regarding additional economic measures against Communist China and North Korea which the United States Delegation is to bring forward at the Sixth Session of the General Assembly; and to enlist British support and advocacy of these proposals and to persuade the U.K. Government to adopt additional controls over the carriage of goods to Communist China or North Korea, without waiting for formal United Nations action.

u.s. objectives

To obtain broad agreement to the application of economic measures which will have a maximum adverse effect upon the war potential of Communist China and North Korea as long as their aggression continues.

probable positions of other countries

1. If an armistice in Korea materializes, the British, French, and others may be expected promptly to urge the immediate suspension or revocation of the United Nations strategic embargo.

2. If an ambiguous situation respecting the possibility of an armistice in Korea continues, the British, French, and others will probably generate no proposals of their own respecting U.N. action and will probably oppose, mainly on the ground that such a step would be prejudicial to the armistice negotiations, U.S. proposals that the Additional Measures Committee and the General Assembly recommend certain ancillary measures designed to make the existing selective embargo more effective.

The British, French, and others may propose the adoption of certain additional economic measures by unpublicized action outside the United Nations. In fact, the British have just manifested a willingness to discuss in COCOM ancillary measures short of a shipping ban on Communist China; and this indicates that the British Government may now be more receptive to U.S. proposals than had been anticipated previously.

3. If the armistice negotiations definitely break down or if full scale hostilities are resumed, the British, French, and others may suggest that a few additional categories of goods be added to the five categories presently embargoed, and they may favor some additional ancillary measures in connection with shipping, chartering, transshipment, and re-export. They would probably oppose the idea of an unconditional shipping ban and severe financial controls such as fund freezing.

The British, French, and others may propose the adoption of certain additional economic measures by unpublicized action outside the United Nations.

position to be presented

1. If there is an armistice, the existing embargo should be continued in full force for the time being, certainly as long as the Sixth General Assembly session continues in Paris, pending clarification of the Korean situation.

2. If an ambiguous situation respecting the possibility of an armistice continues into the Sixth Session of the Assembly, we should press for UN action to tighten the existing embargo through such measures as cargo and selective shipping controls. We should emphasize our hope that the U.K. would take additional measures of this character without awaiting U.N. action.

3. If armistice negotiations definitely break down or there is full-scale resumption of hostilities, we contemplate asking for a total United Nations embargo, supported by ancillary measures, but the U.S. Delegation in Paris is being instructed to say, for the present, in any discussions of the economic aspects of this contingency, unless otherwise instructed, only that still more severe economic measures would be needed.

discussion

If there is an armistice, the interests of the U.S. and the free world will continue to require economic controls against Communist China as long as it remains a serious military threat to the free world. Certainly the situation in Korea will remain uncertain for the duration of the Sixth Session of the General Assembly in Paris and there should be no relaxation of the embargo at this Session. If the British and others urge the prompt removal of the embargo, we might stress, inter alia, that (1) so long as the Chinese Communists maintain their forces in Korea they may still be considered technically aggressors, (2) United Nations forces may have to stay in Korea after an armistice so long as the Chinese Communists maintain an aggressive posture, and nothing should be done to assist the Chinese Communists to renew the hostilities, (3) the ability of the Chinese Communists to menace the Indo-Chinese states would be enhanced by the lifting of the United Nations embargo. Whatever happens to the United Nations embargo, however, the United States and others may and should maintain or institute unilateral or multilateral controls (e.g., COCOM) against Communist China as against the entire Soviet Bloc. If the United States Delegation encounters heavy pressure by others for the lifting of the embargo, it is to consult the Department. If the United States Government is obliged to compromise to avoid a sharp split because of such pressure it will doubtless seek agreement to hold the embargo in abeyance rather than the revocation of the embargo.

If an ambiguous situation respecting the possibility of an armistice in Korea continues, the U.S. Delegation to the UN General Assembly would commence at the outset of the Sixth Session privately to try to enlist support for additional ancillary measures to strengthen the existing embargo, but it should not seek the embargoing of new categories of goods unless substantial support for this is found to exist. These ancillary measures include controls relating to the carriage of embargoed goods, transshipment and re-export, sale or chartering of vessels and aircraft, and bunkering, port and insurance facilities.

Our effort to obtain U.K. action along the lines of the position stated above should proceed from the fact that the UN General Assembly Resolution of May 18, 1951 was adopted largely because U.S., U.K., and other COCOM countries had already put in effect the recommended action; actual subscription to tighter controls by the U.K. prior to formal UN General Assembly action would contribute to their success. Various additional measures respecting shipping are now under discussion with the British.

If the armistice negotiations are definitely broken off or if full-scale hostilities are resumed: The determination that this situation exists would be made in Washington. Our proposals for UN action, if the Korean situation takes such a turn, approximate the U.S.’s present controls against Communist China and North Korea. The U.S. Government would need to determine whether, in the light of self-interest, any exceptions to a total embargo should be recommended in order to permit the U.S. and its allies to import critical items from Communist China.

1. Prepared as a United States negotiating paper for the meetings of the Foreign Ministers of the United States, the United Kingdom, and France held in Paris and Rome, November 2–30. A covering memorandum by Mr. George Denney indicated that this paper was based on NOV D–4b, October 30 (see footnote 1 supra); that it was drafted by Walter S. Anderson, Jr. of the Bureau of United Nations Affairs; and that it was approved at the working level in the Departments of State and Defense.