Foreign Relations of the United States, 1952–1954, General: Economic and Political Matters, Volume I, Part 2

S/P–NSC files, lot 61 D 167, NSC 152 Series

Report to the National Security Council by the Department of State, the Department of Commerce, and the Foreign Operations Administration¹

secret

Washington, June 11, 1954.

Disagreed Items in COCOM Negotiations

Problem

1. The problem is to determine what course of action the United States should follow with respect to the items on which unanimous agreement has not been reached in the present Coordinating Committee list review.

Background

2. The Coordinating Committee review of the International Lists, in accordance with the instructions of the Consultative Group, will be completed on June 20. At that time it is probable that the results will be as follows:

	I/LI	I/L II (B)*	I/L III	Total
Agreed to retain	130	15	30	175
Disagreed	55	20	7	82
Agreed to delete	85	45	87	217
Adjusted Total	270	80	124	474‡
Total, assuming agreement on all disagreed items	(185)	(35)	(37)	(257)

3. It has been agreed that following the completion of the COCOM review there will be consultation between the US, UK and French resident CG delegates in an effort to resolve the disagreed area referred to in paragraph 2. This consultation on the official level may be followed by a tripartite consultation on the ministerial level prior to the CG meeting tentatively scheduled for early July.

4. All of the disagreed items resulting from the COCOM review are those which are regarded by the U.S. as strategic to the Soviet bloc and which have been considered as meeting the revised criteria for continued embargo or quantitative control.

5. The disagreed items in the COCOM review fall into several categories. The most serious and extensive problem relates to those items which are disagreed for embargo or quantitative control by the UK and France. If agreement could be achieved on these items the remaining area of disagreement with other COCOM countries on various items could probably be resolved.

This problem must be viewed in the perspective that the U.S. has already agreed to the deletion of about 217 of the total of 474 items considered in the COCOM review and to a substantial redefinition of many of the remaining items. If the disagreed items were to be deleted also, the extent of list reduction will clearly exceed the degree originally contemplated in NSC 152/3.² The extent to which the US has already agreed has resulted from the necessity to reach agreement in order to preserve Anglo-American unity.

[Omission in the source text.]

9. The third possibility appears to be the only course of action which can be realistically supported at this stage. Previous discussion in London with the British and French envisaged trilateral consultation prior to COCOM review on a category by category basis with the disagreed items subject to ministerial review. The process of high level review of disagreed items has to a certain extent taken place on individual categories by way of an exchange of correspondence between Mr. Stassen and Mr. Thorneycroft. The London discussions, however, clearly envisaged consultation on a tripartite basis in an effort to dispose satisfactorily of the disagreed area. The real problem therefore is one of determining the U.S. negotiating position for further tripartite consultation on the disagreed items.

10. There are 82 items falling in this category. Of the total of 82 disagreed items a preliminary review indicates that perhaps 10 to 15 of the items stand a good chance of being resolved within the outlines of the negotiating possibilities which have developed in the COCOM review; the basis on which settlement appears possible for such items is derived from analysis of each individual item and would be the position sustained by the United States in further discussions either on a tripartite basis or in the Coordinating Committee. This would leave approximately 70 items on the U.S. “hardcore” list.

Proposed Action

11. In order to implement the course of action recommended in paragraph 9 above, the following steps are proposed.

(a) The U.S. resident CG delegate should be given the results of the review contemplated in the foregoing paragraph as a basis for negotiation on an official level with the British and French CG delegates in tripartite negotiations concerning the disagreed items to take place in Paris at some time after June 20. The U.S. delegate may negotiate within the degree of flexibility indicated above and should ascertain from discussion with the British and French the degree of flexibility which they are prepared to consider with respect to the disagreed items.

(b) The results of the official level tripartite review in Paris should then be evaluated to determine the magnitude of the remaining area of disagreement. The U.S. should review the area of remaining disagreement to determine whether the U.S. should hold fast or make further concessions. This determination would then be used as a basis for ministerial level discussions with M. Schumann and Mr. Thorneycroft prior to the CG meeting in July. Guidance for these discussions should include an appraisal of the importance to be assigned to the maintenance of over-all cooperation with the British and French in relation to the strategic importance of the commodities remaining in disagreement.

(c) A major negotiating effort should be made in the tripartite ministerial review to resolve the remaining area of disagreement.

(d) If the results of the ministerial tripartite consultation present a remaining area of disagreement too great for the U.S. to accept, consideration should be given to the desirability of:

(1) A message from the President to the Prime Minister and the French Premier in a final effort to reach a satisfactory tripartite settlement, or

(2) Entering into intensive bilateral negotiations with the other COCOM countries in an effort to obtain support for the U.S. “hard-core” position. On the basis of such support, strive for a moratorium on the disagreed items whereby the present control level on these items would be maintained for a period of four to six months at the end of which the problem would be reviewed in the light of the situation then prevailing.

Related Problems

12. The current Indo-China situation raises a serious question as to the desirability or propriety of instituting a major relaxation of controls on shipments to the Soviet bloc in the near future. While the relaxation is to apply only to trade with the European Soviet bloc and not to China, the fact that many items will be removed from the control list for the European Soviet bloc will inevitably aggravate the illogic between the differential levels of control applicable to the two parts of the Soviet bloc. Since this differential has been in existence for a considerable time, the relaxation will be an aggravation in degree rather than in kind. If the negotiating situation in Geneva and the military situation in Indo-China deteriorate between now and the July CG meeting, it will not be possible for the U.S. to agree to the decontrol of the items agreed for deletion. The present indications are that the British would strongly oppose any postponement except in the case of outright intervention in Indo-China whereas it now appears likely that the French would favor postponement even under the current situation in Indo-China. The consideration of the courses of action set forth above should also take into account the problem of timing with respect to Indo-China. The U.S. position at present is that the U.S. cannot at this time agree to a firm date for implementation of relaxation pending some clarification of the outcome at Geneva and the situation in Indo-China. It must be assumed that if the situation at Geneva or Indo-China should not deteriorate seriously beyond that prevailing at present it will probably be necessary for the U.S. to continue with relaxation towards the European Soviet bloc as agreed at the previous CG meeting unless the Council reaches a determination to the contrary. In the latter case, the proposed action as outlined in paragraph 11 would be affected both as to approach and timing.

13. The action to be followed by the Department of Commerce in adjusting U.S. export licensing policy toward the European Soviet bloc following the conclusions of the multilateral negotiations has been set forth in a separate paper to the NSC.³ The reference paper presupposes the conclusion of the International List negotiations and deals with the action to be taken by the U.S. with respect to items deleted from the International Lists.

14. The NSC paper referred to in the previous paragraph also contains an annex outlining the problems relating to the Battle Act List of strategic commodities. It is obvious that the list maintained by the Battle Act Administrator should be made as closely comparable as possible with the international embargo list. Since the Battle Act deals with the policies required of aid-recipient countries subject to possible termination of aid under the provisions of the Battle Act, the Battle Act List should not differ significantly from the list agreed by the U.S. in multilateral negotiations concerning trade controls. It therefore follows that the implications of the Battle Act must be taken into account in evaluating the basis on which a settlement of the disagreed items is to be made.

15. There obviously will be a problem within the U.S. if the embargo list maintained by the Department of Commerce is substantially longer than the embargo list maintained by the Battle Act Administrator. The fact that the Department of Commerce prevents American firms from exporting commodities to the European Soviet bloc when under the Battle Act exports of the same commodities would be permitted by foreign firms would be difficult to explain to the American public and to the Congress. However, the differences between the purposes and provisions of the Export Control Act and the Battle Act are such as may justify some differences between the two strategic lists, so long as the differences can be held to a minimum. Since the Battle Act in essence deals with a sanction to be imposed upon aid-recipient countries, the Battle Act Administrator’s list should clearly contain those items whose uncontrolled shipment would have a serious consequence for U.S. and free world security.

1. This report was transmitted to the members of the National Security Council under cover of a memorandum by Lay which stated that the subject was to be discussed in an NSC meeting on June 17; see the memorandum of discussion of that date, p. 1197.

2. Subject to reservation by the British and certain other countries on the principle of quantitive control. [Footnote in the source text.]

3. Includes 2 new items already on International Lists and 16 proposed to add to International Lists. [Footnote in the source text.]

2. For text as revised, see p. 1207.
3. Infra.