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

140. Instruction From the Department of State to Certain Diplomatic Missions¹

CA–5218

Washington, December 27, 1956.

SUBJECT

• COCOM/CHINCOM Trade Controls

Excon. Reference: CA–2286, September 11, 1956.²

1. The interested Washington agencies have reviewed the question as to what action the United States should take in the light of present circumstances (particularly the Near Eastern and Hungarian situations) with respect to multilateral strategic trade controls. The course of action outlined below has been approved by the Economic Defense Advisory Committee.³

Discussion

2. The United States, on September 12, 1956, proposed to other participating countries (PC’s), an interim course of action with respect to China trade controls and, conditional upon unanimous acceptance of the United States proposal, committed the United States Government to participate in a Consultative Group (CG) meeting in December 1956 to discuss a definitive solution of the problem created by pressures from most of the other PC’s for reduction of the CHINCOM controls. Although the majority of PC’s responses were prompt and affirmative, two responses, from the United Kingdom and Norway, must be considered to be equivocal. Moreover, a number of the PC’s have utilized the exceptions procedure to such an extent that not only has the U.S. interim proposal for restraint in this respect not been met, but there is ground for belief that the general effectiveness of the CHINCOM controls has been seriously endangered. When this lack of restraint was called to the attention of Germany, in connection with an important exception case, the German response was to the effect that the U.S. had failed to call a CG meeting and consequently the interim policy was regarded by Germany as not being in effect.

3. The new situation created by Russian actions in Eastern Europe and the Near East, together with clear evidence of Communist Chinese support for Russian aggressiveness, may provide an opportunity for the U.S. to take the lead in revitalizing the multilateral control structure.⁴ At the same time, it is uncertain to what extent the recent UK-French differences with the U.S. may affect the receptivity of those countries to U.S. views on strategic trade controls. The U.S. Delegation to CHINCOM (USDEL) has recommended that if it is decided not to hold a CG meeting before the end of the year because of priority of other high level diplomatic negotiations, further bilateral discussions should be held to emphasize to other PC’s the political reasons making desirable a deferral of a CG meeting and to attempt to forestall further deterioration in the CHINCOM operations.

Action Requested

4. In light of the circumstances outlined above it has been decided that high level bilateral discussions with the COCOM/CHINCOM PC’s should be held on the basis of the attached proposed Note in order to ascertain the extent to which the views of the other PC’s are in agreement with the views of the United States namely that prompt action should be taken for an overall tightening of COCOM/CHINCOM controls either at an early CG meeting, or within the COCOM/CHINCOM organization. Accordingly, the Embassies in the European COCOM/CHINCOM countries are requested to present an appropriate form of the attached Note (Attachment A) to the respective governments. (The discussion with Japan will be held by the Department in Washington with the Japanese Embassy.) USDEL may informally advise the COCOM/CHINCOM Chairman of the substance of the U.S. representations.

5. The Note at Attachment A refers to the excessive use of CHINCOM exceptions, in particular by certain PC’s, and to the desirability of imposing a more effective limitation on the use of the CHINCOM exceptions procedures. Attachment B includes a general analysis of … exceptions cases. Attachment C⁵ is a table of all CHINCOM exception cases (by value) … . We are aware of the differences of viewpoint between the US and some PC’s on the strategic value of items covered by exceptions. However, Embassies should, as appropriate, draw upon both of these attachments for supplemental material on CHINCOM exceptions and may present comments either orally or in writing. It is requested that the following Embassies make specific references as indicated below:

[Here follow specific instructions for the Embassies in Bonn, Brussels, London, Paris, Rome, and Tokyo. The instructions referred to particular strategic items to which each of those respective countries had applied exceptions procedures; the Department requested the respective Embassies to “express particular concern” with those exceptions cases.]

6. For the Embassies’ information, the US has proposed bilateral talks between US and UK defense experts for the purpose of reaching agreement on the strategic justification for an upgrading of the controls over copper wire as a preliminary to US proposals in COCOM. It is hoped that these discussions will be initiated shortly. If the question is raised, the Embassies may state that the US objective is the embargo of all types of copper wire and cable and that the US hopes other PC’s will restrict the licensing of these commodities pending COCOM resolution of US proposals to upgrade the item.

7. If the Embassies are requested to clarify the intent of the reference in the Note to a curtailment of shipments of IL II items, it may be indicated that the US considers (a) PC’s should use IL II quotas sparingly, and (b) shipments of items subject to 3(d) control should be made only in accordance with a strict application of the 3(d) requirements … .

8. The CG meeting referred to in the final paragraph of the Note would be a meeting for the purpose of dealing primarily with the three specific proposals included in the Note, but it is not intended that it would consider proposals for a definitive settlement of the CHINCOM controls.

9. The respective Embassies should obtain written statements of the views of the respective governments and forward them promptly to the Department together with reports of the Embassies discussions and their comments thereon as promptly as possible in view of a February 1 deadline for EDAC consideration of the issues relating to a possible CG meeting.

Dulles

Attachment A

PROPOSED NOTE

The Embassy has the honor to refer to conversations held in September of this year between the Department of State and your Embassy in Washington, in which the U.S. Government made certain proposals for restraint in the use of the China Committee (CHINCOM) exceptions procedures. It was further indicated that if all the participating countries accepted these proposals as a basis for handling CHINCOM exceptions during the remainder of the year, the U.S. for its part would be willing to participate in a Consultative Group (CG) meeting before the end of the year. Although most of the Participating Countries (PC’s) have now accepted the U.S. proposals for the interim handling of CHINCOM exceptions, certain participating countries did not, and in practice the use of the exceptions procedures by a few PC’s has increased beyond reasonable expectations. Most of the PC’s have indicated a desire for a CG meeting to deal with the question of the CHINCOM controls although not necessarily urging a meeting by the end of the year.

However, since the time of the September conversations the international situation has drastically altered. The U.S.S.R. has used or threatened force in a manner seriously increasing the danger of war both in Eastern Europe and the Near East. The Chinese Communists have supported these Soviet moves. It is the considered view of this Government that the possibility of aggressive or intensified subversive action by the Communist bloc in the Far East has been significantly increased by these developments.

In these circumstances, the U.S. believes that efforts to strengthen the free world’s defenses must be intensified, and in particular that an overall tightening of COCOM/CHINCOM controls is an essential step. Specifically, the U.S. considers that action should be taken promptly to bring about:

(a) An effective limiting of the use of the CHINCOM exceptions procedures pending a CG meeting at a later date when world conditions warrant a definitive settlement of the China trade controls problem;

(b) A sharp curtailment of shipments of copper wire to the European Soviet bloc;

(c) A curtailment of shipments of all items under I/L II quota control, including those items for which quotas have not been fixed.

If other PC’s agree with the U.S. appraisal of the situation, the U.S. is prepared to participate in an early CG meeting in order to attain these objectives unless the desired tightening of controls can be achieved within the COCOM/CHINCOM organizations.

The Embassy requests a statement of the views of the Government of________to the proposals outlined in this Note.

1. Source: Department of State, Central Files, 493.009/12–2756. Confidential. Drafted by Knoll and Wright and approved by Wright. Sent to Ankara, Athens, Bern, Bonn, Brussels, Copenhagen, Geneva (for Johnson), The Hague, Helsinki, Hong Kong, Lisbon, London, Luxembourg, Paris (pass USRO/ST), Oslo, Ottawa, Rome, Stockholm, Tokyo, and Vienna.
2. Document 133.
3. The action of the EDAC was summarized in a memorandum of December 19 from Wright to Kalijarvi, with attachments.(Department of State, Central Files, 493.009/12–1956)
4. Recent reports indicate uncertainty as to whether other PC’s agree with the U.S. appraisal of the current situation. While unwilling to speculate upon the effect of Hungarian developments on COCOM/CHINCOM operations, certain delegates have not restrained their opposition to the existing CHINCOM controls level. The U.K. has stated that a CG meeting could not be fruitful at this time in view of the international situation, and that France agrees with this (confirmed by the CG Chairman). Other countries have deplored U.S. failure to call a CG meeting, although not taking the initiative to call a meeting themselves. [Footnote in the source text.]
5. Neither Attachment B nor C is printed.