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

144. Telegram From the Embassy in the United Kingdom to the Department of State¹

London, March 1, 1957—3 p.m.

4595. Excon. Reference: CA–5218² and Embtel 3697.³ FonOff handed Embassy today note in reply Embassy’s note January 10 re over-all tightening strategic controls E–W trade. Substance of note follows:

“HMG have been disappointed learn US Govt no longer appear contemplate early meeting CG purpose securing definitive settlement China controls problem. Their views on US proposals tightening China and Soviet bloc controls in certain respects, are as follows.

(a) CHINCOM exceptions procedures. HMG have long considered the additional controls on trade with China over and above those on trade with Soviet Union and certain other countries are illogical and ought to be abolished. Recent international events have not caused them modify this view, and they accordingly regret could not see their way accepting US suggestion use of exceptions procedures should be limited pending definitive settlement this question.

(b) Copper wire. HMG have taken due note US Government consider there should be sharp curtailment shipments copper wire to Soviet bloc. This question one to which HMG would wish give further study and will communicate with US Government further on subject in due course.

(c) Soviet bloc controls. UK view is controls on E–W trade should be confined to items real strategic importance and not used as weapon of economic warfare. HMG believe present controls are more extensive than strategic considerations require and see no justification in recent events for adding to them. As far as particular question quantitative controls concerned, HMG do not regard items IL–II high strategic importance, and would therefore be unwilling accept general policy reducing quotas.

HMG wish take this opportunity reaffirm great difficulties which exist for them continued operation controls on trade with China additional those applying trade with Soviet bloc. UK economic situation (including recent increased unemployment in certain industries) makes it important for UK concentrate more than ever on promotion exports, and at this particular time pressure Parliamentary and business opinion in favour relaxing controls is especially severe. In HMG’s view it not possible defend maintenance China ‘differential’ on strategic grounds. These additional controls are an unnecessary burden on economies both of UK and her dependent overseas territories, in particular Hong Kong, and HMG are unlikely be able hold the line in maintaining them very much longer.”

Whitney

1. Source: Department of State, Central Files, 493.009/3–157. Confidential. Repeated to Paris (for USRO/ST), Bonn, Tokyo, The Hague, Rome, and Geneva for Johnson.
2. Document 140.
3. In this telegram, January 10, the Embassy reported that it delivered a note to the British Government that day regarding China trade controls. (Department of State, Central Files, 460.509/1–1057) The note followed the Department’s instructions in CA–5218. The text of the U.S. note of January 10, as well as the text of the British response of March 1, were transmitted to the Department in despatch 2163 from London, March 4. (Ibid., 493.009/3–457)