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

153. Letter From the British Ambassador (Caccia) to the Deputy Under Secretary of State for Economic Affairs (Dillon)¹

Washington, April 7, 1957.

Dear Doug: You will recall that when the question of China trade was discussed at Bermuda Mr. Dulles informed us that a proposal for dealing with the China differential was under consideration and that he hoped to be in a position to present a fresh position in the next two weeks.

It is only just two weeks since the Bermuda talks took place, but in case you have not already heard it from your Embassy in London, I have received instructions from the Foreign Secretary to draw attention to the fact that the Government were put under considerable pressure and criticism about China trade in the debate on Bermuda in the House of Commons on April 1. In fact a Motion has been put down on the Order Paper supported by over 100 members on both sides of the House as follows: “That this House deplores the damage which British export trade suffers as a result of the China embargo; endorses the appeal made recently to the Government by the Federation of British Industries and other industrial and commercial organisations; and regrets that the Prime Minister has not been able to announce, as a result of the Bermuda Conference, at least a modification of the embargo.”

According to the press this morning the Secretary for Commerce spoke on the subject yesterday and indicated that talks with the other nations concerned would take place “shortly”.² But I see that the same press sources interpreted this as meaning “within three months.” Three months is of course considerably longer than we had understood from what Mr. Dulles said at Bermuda, and I shall be grateful if you can give me some early indication which I could pass on to London.

I notice too from the press account that any relaxation of the restrictions on trade with China may be accompanied by an increase in the restrictions on trade with the Soviet Union and her satellites. According to the press Mr. Weeks said that this was a “quid pro quo to be offered if the pressures from our partner nations are successful.” I realise that Mr. Dulles said at Bermuda that consideration was being given to getting rid of the differential by adding a few items to the COCOM list and equating the China list to it. But may I also draw attention to the passage in the paper which the Foreign Secretary handed to Mr. Dulles on March 23? It read: “We shall give urgent consideration to such a proposal (that is, a proposal for the amalgamation of the China and Russia lists) and meanwhile only wish to urge that any co-ordinated list should be one which could command general respect. With this in mind the existing Russia list itself should be kept under revision and any proposal merely to add certain items from the China list to the Russia list would not in our view obtain general acceptance.”³

Yours sincerely,

Harold Caccia

1. Source: Department of State, Central Files, 411.9341/4–757. Confidential.
2. Apparent reference to Weeks’ remarks on the China trade controls, reported in the New York Times, April 5, 1957.
3. A note attached to the source text from Charles S. Whitehouse, Special Assistant to Dillon, to George S. Vest, Staff Assistant, EUR, dated April 9, noted:

   “No action is required as Mr. Dillon has informed the Ambassador by telephone that he is confident that action will be taken on this matter in far less than three months and that he believes the Ambassador is overly pessimistic in this regard.”