Foreign Relations of the United States, 1955–1957, Foreign Aid and Economic Defense Policy, Volume X

110. Memorandum for the Record, by the Under Secretary of State (Hoover), Washington, April 19, 1956¹

Washington, April 19, 1956

SUBJECT

• East-West trade

Following the Cabinet meeting on April 19th, the President met with the Secretary and me to discuss the East-West trade situation with regard to the U.K.

The Secretary made the following points:

1. The U.K. first asked us to review their request for a revision of the CHINCOM list in October 1955. We discussed this matter during Eden’s visit in January 1956. At this meeting we agreed to review individual items, although we did not accept a major revision of policy. Lloyd later sent a message to the Secretary asking how we intended to proceed. The Secretary felt that he must answer this letter immediately since six months had elapsed from the time of their first approach to us.

2. The Secretary outlined the hearings currently being held by the McClellan Committee, and the difficulties being placed in the way of the passage of the Mutual Security Act. He specifically referred to the danger of possible restrictive amendments which would prohibit aid to countries trading with the communist bloc. I pointed out that many of our difficulties stemmed from Defense Department witnesses who opposed almost any trade with the bloc and the desire of certain committee members to engage in partisan politics. It seemed inadvisable to engage in a formal high-level negotiation looking toward a lowering of controls on strategic items under these circumstances.

3. The Secretary outlined inter-departmental differences that had arisen in the Council on Foreign Economic Policy and the difficulty of reaching an overall Administration position. He described a meeting of a few hours earlier between himself, Secretaries Humphrey, Wilson, and Weeks, Mr. Hollister, Mr. Gordon Gray, Adm. Leyton of the JCS, and myself. The Secretary had stated in this meeting the necessity of answering Lloyd’s letter immediately. Widely divergent views were expressed and none of those present appeared willing to accept the responsibility for making a decision. The following points arose during the meeting:

(a) Desirability of restoring copper wire to the COCOM list.

(b) Avoidance of formal negotiations with the UK until late 1956.

(c) Probability that some lowering of CHINCOM controls, including rubber, would be necessary if the voluntary control system was to be maintained. It was pointed out that some leading countries were giving formal notice of “exceptions”, such as trucks and steel, followed by shipments of the items.

No agreement was reached at this meeting.

4. The Secretary proposed to the President that he would write a personal letter to Lloyd outlining the dangers of the legislative situation and some of the substantive points included in (3) above. The President agreed.

The President stated that many of the nations in the free world had to trade with the bloc if they were to survive economically, and that the items on the strategic list should be held to an absolute minimum. He agreed, however, that we should make every effort to persuade the UK to put copper wire back on the COCOM list.

H H Jr.

1. Source: Department of State, Central Files, 450.60/4–1956. Secret.