102. Memorandum From Ruth H. Phillips of the Office of European Regional Affairs to the Director of the Office (Palmer)1
- U.S. Export Policy on Ferrous Scrap
Following several months of discussion and negotiation between the Departments of State and Commerce on the need for additional export controls on scrap, Secretary Weeks has informed the Dodge Council that we have concluded that current controls are adequate and should be continued; that export policy will be reviewed again in two to three months when the ODM study of mobilization requirements is completed; and that the Department of State will “as appropriate occasions arise, continue to make clear to the principal foreign consumers of U.S. scrap the desirability of achieving a proper balance in the use of scrap and pig iron and the desirability of avoiding undue dependence on the United States as a source of scrap.” Mr. Weeks closes his letter with the statement that he assumes this resolution of the problem closes the matter as far as the Dodge Council is concerned.2
This action by the Commerce Department represents a complete victory for the State Department’s position on this question and is the culmination of several months’ efforts by Department personnel, our CSC Mission, and the CSC High Authority, to head off the imposition of quantitative export controls on scrap.
The decision to continue the existing policy on scrap exports will be regarded by the High Authority as further evidence of U.S. support of the CSC. Coppe, during his recent Washington visit, stressed the importance of a high level of U.S. scrap to the maintenance of the common market in scrap. Monnet, in a letter to the Secretary, also urged the continuation of exports to the CSC at the current level.
Existing U.S. scrap controls are an open-end type with certain administrative safeguards, permitting a generally free flow of scrap abroad. The principal foreign consumers of U.S. scrap are the countries of the CSC, the UK, and Japan. Initially, we were the only agency on the inter-departmental Advisory Committee on Export Policy opposed to quantitative controls on scrap exports and we undertook [Page 299] a single-handed, comprehensive effort to convince the other agencies that the economies and defense build-up of our foreign allies would be adversely affected by a reduction in U.S. scrap exports. We also held that the other agencies had failed to prove that U.S. security interests were being damaged by the free flow of the scrap abroad. If any single factor can be isolated as the most influential in substantiating the Department’s position, I would select the letter from the High Authority on the importance of a continuation of U.S. scrap exports and the action in support of this letter by Robert Eisenberg and Department staff in E and EUR.
EUR also resisted undertaking immediate, strong representations to the principal foreign consumers on the desirability of avoiding undue dependence on U.S. scrap, which Commerce wanted as a condition to agreement not to impose additional controls. It was our view that vigorous approaches along these lines had recently been made, that follow-up at this time would not be productive, and that the matter of such representations had to be left to the State Department’s discretion. This position was eventually accepted by Commerce.
The Commerce Department will eventually be putting out a Program Determination on the decision to extend the existing program and presumably will be issuing a press release on the Program Determination.3
- Source: Department of State, Central Files, 460.509/6–1555. Limited Official Use. Copies were sent to Barnett, Boochever, Fidel, and George A. Tesoro, Acting Economic Adviser, Office of Western European Affairs (WE).↩
- Sinclair Weeks’ letter, dated June 3, was attached to the source text, but not printed.↩
- On June 23, at the 304th meeting of the Operating Committee of the ACEP, the acting chairman of the committee announced that, in accordance with Weeks’ letter to Dodge, control on exports of ferrous scrap would continue to be the same in the third quarter as they had been in the second quarter. (Memorandum by George M. Pollard of the International Resources Division (IRD), June 23; Department of State, Central Files, 400.119/6–2355)↩