Foreign Relations of the United States, 1955–1957, China, Volume III

116. Memorandum of Discussion at the 269th Meeting of the National Security Council, Camp David, Maryland, December 8, 1955¹

Camp David, December 8, 1955

Present at the 269th NSC meeting were the President of the United States, presiding; the Vice President of the United States; the Secretary of State; the Secretary of Defense; and the Director, Office of Defense Mobilization. Also present were the Secretary of the Treasury; the Special Assistant to the President on Disarmament; the Director, Bureau of the Budget; the Deputy Secretary of Defense; the Special Assistant to the President for Atomic Energy; the Director, International Cooperation Administration (Item 2); Assistant Secretary of State Bowie; Assistant Secretary of Defense Gray (Item 2); the Deputy Assistant Secretary of Defense (Item 2); the Deputy Director for Programming and Planning, ICA (Item 2); Mr. John H. Tobler, ICA (Item 2); Brig. Gen. James K. Wilson, USA (Item 2); Commander Joseph W. Philippbar, Jr., USN (Item 2); the Executive Officer, Operations Coordinating Board; the Chairman, Joint Chiefs of Staff; the Director of Central Intelligence; the Assistant to the President; Special Assistants to the President Anderson and Rockefeller; the Deputy Assistant to the President; the White House Staff Secretary; the Executive Secretary, NSC; and the Deputy Executive Secretary, NSC.

There follows a summary of the discussion at the meeting and the main points taken.

[Here follows discussion of agenda items 1 and 2: “Significant World Developments Affecting U.S. Security” and “Review of Military Assistance and Supporting Programs”.]

3. Multilateral Export Controls on Trade With Communist China (NSC 5429/5)²

In the course of the discussion of the previous item on this agenda, the Secretary of State asked permission to raise the problem of export controls imposed by the free world countries on trade with Communist China. He informed the Council that the British had just served notice on us of their intention within a few weeks of reducing their controls on trade with Communist China to a point where the controls on trade with Communist China were the same as the controls on trade with the USSR and the European Soviet bloc. This move presented the possibility, said Secretary Dulles, that as a result of unilateral British action the whole system of multilateral controls established under the COCOM and CHINCOM committees would collapse. In order to salvage whatever could be salvaged of the free world’s control system, Secretary Dulles felt that we must agree to something like the British suggestion. If the levels of free world trade with Communist China were going to have to be changed, they had better be changed by the agreement of the free world nations as a whole rather than as a result of unilateral action by individual free world governments.

At this point Mr. Anderson read to the Council the concluding paragraphs of Secretary Dulles’ letter to the President,³ which described the British proposed action, and Secretary Dulles’ proposed response.

The President said he thoroughly approved of what the Secretary of State was proposing to do, but he wondered whether we could not do it on an individual basis, agreeing to decontrol specific items rather than proceeding to decontrol the entire China Committee list. Clearly the United States would have to modify its previous position, but the President said he hated to see the whole CHINCOM list torn to bits. Could we not get the British to accept this other proposal of an individual approach to decontrol?

Secretary Wilson said that it seemed perfectly reasonable to him to put trade with Communist China on the same basis as trade with the Soviet European bloc, if for no other reason than that Communist China could get whatever materials it needed via the Russians. Accordingly, Secretary Wilson believed the time had come to go along with the British in their proposal. Secretary Humphrey said that in any event we didn’t have a real choice in the matter. The Vice President believed that the President’s suggestion of a method seemed a lot better from the point of view of the domestic political repercussions. Governor Stassen agreed with the Vice President.

Turning to the Secretary of State, the President told him to see what kind of deal he could work out with Foreign Secretary Macmillan, even including trying to induce the British to adopt the proposal which he, the President, had suggested.

Admiral Radford observed that the course of action proposed by the Secretary of State was of a very serious nature. In point of fact there were very few remaining controls on the level of free world trade with the Soviet European bloc. Moreover, was our own virtually complete embargo on trade with Communist China also going to be discontinued? On this point the President said he thought we were simply making a bow to Chiang Kai-shek. Admiral Radford then went on to point out that the proposed reduction of the levels of trade with Communist China to those of trade with the Soviet Union would deprive us of about our last means of making a deal with the Chinese Communists with respect to Korea.

Secretary Dulles argued with Admiral Radford, pointing out that the negotiating value of the controls on trade with Communist China had just about reached the zero point. He simply could not hold the dike any longer; his thumb was not big enough. The last time that he had discussed this matter with Macmillan, the British Foreign Secretary was not only firm on this course of action, but was positively angry when Secretary Dulles had argued with him. He had insisted that the United Kingdom was a trading country and simply could not live if it was denied the opportunity to trade throughout the world. Admiral Radford replied that, nonetheless, to reduce our controls on trade with Communist China would have tremendous repercussions. Before we gave in to the British point of view a study should be made of the effects and implications of this course of action. Admiral Radford predicted that if we went through with this proposal we would be “finished” in the Far East.

Mr. Anderson pointed out that for any discussion of this subject the Secretary of Commerce should be present. Mr. Anderson suggested it might be desirable to staff this problem and to present it to the National Security Council at a later date, with the Secretary of Commerce on hand. The President then inquired of the Secretary of State whether the British could be induced to postpone carrying out their proposal until after their forthcoming visit to Washington in the latter part of January.⁴

Secretary Humphrey said that it appeared to him that there were two alternatives which we could embrace. We could let the British go ahead and trade with the Chinese Communists while we refused to. This would create a policy split between the U.K. and the U.S. Or, alternatively, we could go along with the British and ourselves trade with Communist China. Whatever we do, said Secretary Humphrey, we can be dead sure that the British are going to make a deal with Communist China.

Admiral Radford again warned that if we accepted the British proposal it would require us to reorient our entire policy towards the Far East.

Governor Stassen predicted that the British would prove willing to yield in some degree from the initial position which they were taking and which the Secretary of State had outlined in his letter to the President. Governor Stassen also took issue with Admiral Radford’s earlier statement that most of the items which had formerly been subject to multilateral export controls on shipments to the European Soviet bloc, had now actually been decontrolled.

Turning to Admiral Radford, Secretary Wilson said he nevertheless simply could not see how we could hold to a tougher line on trade with Communist China than we adhered to on trade with Russia itself. Admiral Radford replied by pointing out that the proposed course of action would end by placing Japan right under the control of Communist China, on which Japan would be dependent for coal and coke. An entirely new situation was bound to be created in the Far East. Secretary Dulles replied to Admiral Radford, stating that the pressure on the United States by Japan itself to reduce the CHINCOM list to the same level as the COCOM list, was of such a nature that we would not be able to induce the Japanese to maintain the existing level of controls on their trade with Communist China much longer.

Governor Stassen inquired whether the National Security Council did not need an intelligence estimate on the effects and implications of this proposed course of action. The President said that this was a fine idea, but could the intelligence estimate be prepared in time? Secretary Dulles was inclined to think it could not. He pointed out that if negotiations between the U.S. and the U.K. on this issue could begin quickly, the United States might be able to salvage quite a lot from the wreck of the multilateral framework of controls on Western trade with Communist China. On the other hand, if we delay inaugurating negotiations, our negotiating position would be impaired. Indeed, it diminished every week and every day that we waited. The British were going to begin to decontrol items on the China list in the middle of January, and Secretary Dulles said he could not agree with Governor Stassen’s optimistic view that we could drag out negotiations with the British on this subject for months. Governor Stassen clung to his position, and said that it was based on much experience in negotiating with the British on the subject of export controls.

The Vice President said that it seemed to him that the Secretary of State would simply have to make the best deal he could with the British. Smiling, the President said we would create the Secretary of State “Chief Salvage Official”. Secretary Dulles reassured the President and the Council that of course he would not “sell out” to the British, and would indeed make the best deal that he could. Admiral Radford said that he was still terribly concerned about the proposal. When Secretary Dulles pointed out to him that the Chinese got whatever they really needed of Western materials through the Soviet Union, Admiral Radford replied by pointing out that there was a difference of opinion as to how much Western goods reached China via the Soviet Union. Besides, whatever the Chinese Communists do get in this way they are obliged to pay for. There was a great deal of talk about how the United States must understand the necessities which governed British policy. Was it not now about time for the British to take account of the situation and requirements of the United States?

The President pointed out that, according to paragraph 7–c–(3) of NSC 5429/5, the Secretary of State was under obligation to report to the National Security Council if our efforts to maintain current export controls toward Communist China had reached the stage of being divisive vis-à-vis our allies. Did Admiral Radford think that we should tell our British ally to go to hell?

Admiral Radford replied that he was simply arguing that we ought to have more time, and that the British should give us a chance to talk with them about this proposed course of action before they began unilaterally to carry it out.

The President seemed impressed with the point that Admiral Radford had made and, turning to the Secretary of State, said don’t fail to remind the British that if they are going to proceed to make all the important decisions before coming to Washington to talk with us, there wasn’t much point in their coming at all. Such a line by the Secretary of State, the President thought, might help him to salvage something more, and if the British agreed it would at least give us the interval until the end of January before the decontroling process began.

At the conclusion of the discussion, Mr. Anderson asked the President whether he wished the NSC Planning Board to do any staff work on this problem. The President replied in the negative, but asked Mr. Anderson to inform the Secretary of Commerce what had developed.

The National Security Council:

a. Noted and discussed a letter to the President from the Secretary of State which:

(1) Advised that the British have put the U.S. on notice of their intention to act unilaterally in early January to reduce the level of export controls on trade with Communist China to the level applicable to the remainder of the Soviet Bloc, without observing the framework of multilateral procedures of the Consultative Group in Paris.

(2) Reported, in accordance with the requirement of paragraph 7–c–(3) of NSC 5429/5, that “our efforts to maintain the current differential export control towards Communist China have passed the stage of being divisive; they present us with the prospect of total disintegration of the multilateral control system.”

(3) Recommended that the Secretary of State “be authorized to begin negotiations as soon as possible with the United Kingdom and other interested countries as appropriate with the aim of preserving the multilateral control system and, through its orderly procedures, to maintain the controls over trade with China at the highest negotiable level but in no event below the levels of the Soviet bloc controls.”

b. Noted the President’s statement that, while the responsible departments and agencies urgently study the effects and implications of the reduction of export controls on trade with Communist China proposed by the British, the Secretary of State should strongly urge the British Government to defer unilateral action until this subject could be discussed at the forthcoming meeting of the President with the British Prime Minister.⁵

Note: The action in b above, as approved by the President, subsequently transmitted to the Secretary of State and to the heads of other responsible departments and agencies, including the Secretary of Commerce, for appropriate implementation.

S. Everett Gleason

1. Source: Eisenhower Library, Whitman File, NSC Records. Top Secret. Prepared by Gleason on December 9.
2. Dated December 22, 1954, but the portion relevant to this discussion, subparagraph 7–c, received NSC approval on January 5, 1955; see vol. ii, Document 2 and Ibid., Tab B to Document 1.

3. Dated December 8; it is scheduled for inclusion in the economic defense compilation in a forthcoming volume. The letter concludes:

   “For the foregoing reasons I must report, in accordance with the requirement of NSC 5429/5, that our efforts to maintain the current differential export control towards Communist China have passed the stage of being divisive; they present us with the prospect of total disintegration of the multilateral control system.

   “To salvage this system we must accept a graduated reduction in the China controls to a level which will gain mutual agreement among countries participating in the Consultative Group. I recommend that I be authorized to begin negotiations as soon as possible with the United Kingdom and other interested countries as appropriate with the aim of preserving the multilateral control system and, through its orderly procedures, to maintain the controls over trade with China at the highest negotiable level but in no event below the level of the Soviet bloc controls.” (Department of State, CA Files: Lot 60 D 171, East–West Controls with Communist China)

4. Prime Minister Eden was scheduled to arrive in Washington for a visit on January 30.
5. The lettered subparagraphs constitute NSC Action No. 1487. (Department of State, S/S–NSC (Miscellaneous) Files: Lot 66 D 95)