S/S–NSC files, lot 63 D 351, NSC 152 Series
Paper Approved by the Executive Committee of the Economic Defense Advisory Committee for Transmission to the National Security Council
East-West Trade Controls
problem
To establish the U.S. position on the following questions in discussions with the British (Thorneycroft) here July 2–3:
- a.
- Should the U.S. object to, or concur with, prompt decontrol of items agreed for deletion from the International Lists, notwithstanding (1) the current Indo-China situation, and (2) present lack of agreement on certain important enforcement improvements—i.e., transaction and transshipment controls?
- b.
- Should the U.S. hold firm to its positions on the 80-odd items disagreed with the U.K. and/or other member governments or negotiate a compromise with the U.K. for subsequent negotiation with other member countries?
background
As the result of COCOM negotiations in Paris, 178 items have been agreed for embargo or other control, about 220 items (or parts of items) have so far been agreed for deletion under the current criteria, 18 new items have been agreed for addition to the embargo list, and 80 items remain disagreed, with the U.K. opposing the U.S. position in the case of most of those items. Trilateral discussions in Paris June 21–23, pursuant to NSC–1157b,1 failed to produce any definitive reduction in the area of disagreement. (There is a further group of disagreed ship items which represent a special and major problem COCOM-wise but on which the U.S. and U.K. are now in basic agreement on a compromise basis.)
The U.K., and most other governments, are anxious for prompt decontrol of all the items agreed for deletion. In bilateral exchanges [Page 1217] with the U.K., the U.S. in accordance with NSC action has recently stressed the undesirability of decontrol at this time in view of the Indo-China situation. At the ministerial level, the U.K. has strongly reiterated the desire for decontrol and stated there is no overriding connection between that question and the Indo-China situation. Although the U.S. has stressed the close interrelationship between list reduction and improved enforcement—particularly transaction and transshipment controls—it has not yet specifically claimed decontrol should be conditional on improved enforcement.
The U.K. has declared its willingness to adopt transaction controls if (1) the embargo list is reduced to a satisfactorily “short” list, and (2) other governments adopt satisfactory transshipment controls. As the result of extended COCOM discussions on transshipment controls, all governments except France are willing to accept a certain transaction control system (“TAC” Scheme) but France is willing to accept it only if coupled with a supplementary identification procedure (“R” Plan). The U.K. and several others are unwilling to accept the supplementary procedure. Thus, there is an impasse on enforcement controls.
possible courses of action
- a.
- On the decontrol issue, the following possible courses of action are
available:
- 1.
- Oppose decontrol of agreed deletion items for the time being. (This will probably result in delaying further progress on improved enforcement procedures.)
- 2.
- Concur in prompt decontrol of agreed deletion items, provided transaction and transshipment controls are fully agreed for implementation within the near future.
- 3.
- Concur in prompt decontrol, on the understanding that active study of transaction and transshipment controls will continue, with the view of producing earliest possible solution.
- b.
- On the disagreed-items issue, the following courses of action are
available:
- 1.
- Adhere to the last-established U.S. positions (NSC 1157-b) on all the disagreed items and urge the U.K. to yield on security grounds, recognizing that the reductions already agreed represent substantial concessions to the U.K. position in the interests of unity.
- 2.
- Seek to negotiate—on a political basis—a compromise which,
while retaining the U.S. position on selected items [to which
the U. S. attaches greatest relative importance],2 may
result in:
[Page 1218]
- a.
- Quantitative, rather than embargo, control for other disagreed items; and/or
- b.
- Balanced concessions on the remaining disagreed items, as may be needed to resolve all the disagreed items.
- 3.
- Seek disclosure of the U.K. rock-bottom position and, after very prompt review and appraisal, determine whether it can be accepted as over-all compromise, as submitted or with a limited number of negotiated changes.
- 4.
- 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.
Recommendation: Alternative 3 should be attempted and, if unsuccessful, alternative 4 should be followed. As a last resort alternative 2 should be accepted.