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

125. Memorandum From the Deputy Under Secretary of State for Political Affairs (Murphy) to the Secretary of State¹

Washington, July 12, 1956.

SUBJECT

• United States Position on Proposed British Shipments to Communist China

Problem

Should the U.S. opposition to the UK request in the China Committee for approval to export to Communist China 350 Land Rovers (jeeps) and a quantity of heavy tractors be changed to approval?

Background

On July 9² the British requested U.S. acquiescence in a UK proposal (a) to export to Communist China Land Rovers … and heavy tractors (no longer under control to the European Soviet bloc but … still on the China differential); and (b) to change the CHINCOM exceptions procedures so that all items on the differential embargo to China (including those under quantitative control to the European bloc) could be shipped under the liberal …procedure rather than the stricter procedure now … .

On July 10 I gave Ambassador Makins a note (Tab A)³ expressing U.S. opposition to both proposals. On July 11 the British notified us that they would propose the shipment of the jeeps and tractors in CHINCOM on July 12 but that they would not put forward the general proposal.⁴ Later in the day we transmitted instructions to the USDel in Paris which, while recognizing British difficulties, opposed the UK request in CHINCOM on the grounds that the items are strategic and the justification inadequate.⁵ Today (July 12) Ambassador Makins called me to emphasize that unless the U.S. could find it possible to accommodate the UK on the two shipments, repercussions in the UK would be bad and the U.S. would be pictured as promoting British unemployment.

Discussion

1. If we refuse to make an accommodation to the British position the consequences would be that: (a) we would probably not in fact prevent the shipment; (b) we would, however, be acting consistently with the position we have taken with other countries on other exceptions cases of similar importance; (c) we would be acting consistently with the NSC policy direction; (d) we would be in a defensible position towards the Congress and the public; (e) the unpopularity of the U.S. in the UK arising from our opposition, if it became known, would not be essentially different from the already widespread unpopularity among most of the other participating countries of the U.S. refusal to modify its China trade control policy for the last two years, though the British attitude might be somewhat more pointed in view of unemployment in the British automotive industry.

2. If we do make an accommodation to the British, the consequences would be that: (a) our acquiescence would likely become known and would result in a Congressional hue and cry, particularly over the Land Rovers, with an impact on the foreign aid program; (b) the approval would lead to other large exceptions for the same or equally important commodities; (c) the U.S. would have acted inconsistently with the position we have taken towards other countries on similarly important cases—notably Italy and Japan; (d) the U.S. position would be inconsistent with the existing CHINCOM criteria which require justification in terms which the British cases do not meet.

Recommendation

It is recommended that the U.S. not alter its opposition to the proposed UK exports.⁶

1. Source: Department of State, Central Files, 493.009/7–1256. Confidential. Drafted by Wright; concurred in by Howard Jones, Moline, Kalijarvi, and Hoover.
2. The British note of July 9 is attached to a memorandum from Kalijarvi to Hoover dated July 10. (Ibid., 493.009/7–1056)
3. Not attached to the source text; it is Ibid., 493.419/7–1056, along with a memorandum of conversation by Kalijarvi.
4. A memorandum of that conversation, drafted by Kalijarvi, is Ibid., 493.419/7–1156.
5. Reference is to Topol 57 to Paris, July 11, not printed. (Ibid.)
6. Dulles initialed his approval on the source text. Later that day, Murphy telephoned Ambassador Makins and, in the Ambassador’s absence, informed Coulson of the U.S. decision regarding the proposed British shipments to the People’s Republic of China. “Coulson hemmed and hawed a bit,” Murphy explained in a July 12 memorandum to Fisher Howe, “saying he thought the British Government would have great difficulties with this and would have to reserve their position.” (Ibid., 493.009/7–1256)