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

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

CA–8615

Washington, April 17, 1957.

SUBJECT

• Forthcoming Negotiations on China Trade Controls

1. Procedures

The USDel was authorized to concur in CHINCOM on April 12 to the scheduling of substantive discussions beginning May 7 with a view to making recommendations to CG for a definitive settlement of the China Trade Controls problem.² It is anticipated that the U.S. will submit substantive proposals prior to the date scheduled for CHINCOM discussion. In the period prior to such discussion the Department of State will outline the U.S. proposals in Washington to the Embassies of the other participating countries. (Proposed Aide-Mémoire attached) The list of items proposed by the U.S. for addition to the IL’s will also be given to interested PC’s prior to submission to CHINCOM.

The Washington bilaterals will be on a high level and are intended primarily to seek political understanding of the U.S. position so that the U.S. proposals may be negotiated to the maximum extent as a package in order to reach an early settlement of the problem. If the Department is successful in accomplishing this objective it may be possible to avoid extensive technical discussions in CHINCOM.

2. Proposals

A. The U.S. will seek to retain under continued embargo to Communist China all of the items on I/L’s II and III in addition to I/L I.

B. The U.S. will agree to the decontrol of the 207 items on the Consolidated China Special List except for those items (approximately 50 items in whole or in part) which it believes are sufficiently strategic to warrant their continued embargo to Communist China and their addition to I/L III to prevent frustration of that embargo. (The list of items will be transmitted shortly) The U.S. will seek COCOM/CHINCOM agreement to the addition to I/L III of these latter items. (Several of the items have recently developed special military characteristics that appear to warrant their transfer to I/L I or to the International Munitions List. However, the U.S. will defer this proposal for a more appropriate time.)

C. In the event that strategic justification is requested either bilaterally or in CHINCOM for items proposed for I/L III, detailed fact sheets will be available for use by U.S. negotiators.

D. The U.S. will attempt to obtain an undertaking by the PC’s to take all feasible measures to assure the effective implementation of all controls applicable to strategic trade with Communist China. More specifically, the U.S. would urge agreement by the PC’s to restrict licensing to the European Soviet bloc of the items on I/L’s II and III when there is likelihood of diversion.

E. Proposals outlined in paragraphs A through D above will be negotiated as a unit. FYI Alternative proposals by other PC’s will be referred for urgent interagency review in order to ensure final settlement of the problem once negotiations are begun. End FYI.

F. The U.S. will propose that the COCOM Document 471 procedure … be made applicable for all exceptions to Communist China (i.e. I/L’s I, II, and III). Under existing procedures most of the items which would be retained under embargo to Communist China already are covered by the Doc. 471 procedure. This proposal would result in the elimination of the COCOM Doc. 782 procedure which is now applicable to several items which will be proposed for retention under embargo control. FYI The U.S. will be prepared to consider on an urgent basis alternative proposals by the other PC’s for exceptions procedures; however, in consideration of such proposals the U.S. will press for the elimination of the objectionable features of the present Doc. 782 procedure.

G. Similarly, the U.S. will be prepared to propose or to consider on an urgent basis proposals for modifying the … procedure … applicable to items embargoed to Communist China. End FYI.

H. The U.S. will propose that the COCOM Export Control Subcommittee consider further means for preventing the frustration of the China embargo by illegal export or diversion of embargoed items. If specific proposals have been approved by EDAC prior to discussion by CHINCOM of the U.S. package, such proposals will be introduced at the same time for consideration by either CHINCOM or the Export Control Subcommittee.

I. The U.S. will propose that existing voyage licensing and bunkering controls be applied to the revised China embargo list and that these controls be examined by either CHINCOM or the Export Control Subcommittee with a view toward making them more uniform in coverage and application.

3. Instructions for USDel submission of the U.S. proposals to CHINCOM will be forwarded shortly. The USDel may inform the Chairman of CHINCOM in advance of the substance of the U.S. proposal.

Dulles

[Enclosure]

AIDE-MÉMOIRE

The United States Government has given careful study to the question of the multilateral China trade controls in an attempt to find a settlement which will take account of the differing views of participating countries. The United States for its part continues to believe that special trade controls towards Communist China are warranted for political and strategic reasons. The United States is well aware, however, of the political and commercial pressures in other countries for a revision of controls. It considers that an agreed solution of the problem can be reached if accommodations are made by each of the participating countries to the views of the others.

The United States accordingly will be putting forward in CHINCOM proposals (attached) which would provide an enlarged area for trade by other participating countries with Communist China but would also maintain effective multilateral controls towards Communist China covering categories of significant strategic importance at a level more restrictive than that applied to trade with the European Soviet bloc. The differential treatment towards Communist China which the United States proposes that the CHINCOM continue would take the form of continued embargo to Communist China of all items on the International Lists II and III in addition to List I. The United States is prepared to consider the decontrol of the 207 items on the Consolidated China Special list except for those items which are sufficiently strategic to warrant their addition to International List III (with continued embargo to Communist China). We anticipate that there may be approximately 50 such items which the United States would wish to propose for addition to International List III. The United States will communicate this list to other participating countries prior to the CHINCOM meeting.

The items selected resulted from an intensive intelligence and technical review of the entire Consolidated China Special List. In this review particular attention was given to those sectors of the economy which the Communist Chinese are developing rapidly in order to support their military efforts. We recognize that the Communist Chinese can obtain many categories of goods directly from the European Soviet bloc countries and that some goods, not now on International List I or II, can also move freely from Free World sources to the USSR and the European satellites and then be transshipped to Communist China. We found, however, that there are some types of goods which appear to be in short supply throughout the Sino-Soviet bloc countries and which for that reason are more difficult for Communist China to procure by any means. It is believed that continued embargo of such items will have a real effect upon the Communist Chinese capabilities to wage war.

U.S. Proposals

The U.S. proposes:

a) The retention under continued embargo to Communist China of all of the items on International Lists II and III in addition to International List I;

b) The decontrol of the 207 items on the Consolidated China Special List except for those items (approximately 50 items in whole or in part) which in its view are sufficiently strategic to warrant their continued embargo to Communist China and their addition to International List III to prevent frustration of that embargo;

c) COCOM–CHINCOM agreement to the upgrading to International List III of the approximately 50 items reported in paragraph (b) above;

d) An undertaking by the Participating Countries to take all feasible measures to assure the effective implementation of all controls applicable to strategic trade with Communist China. (More specifically, the U.S. urges agreement by the PC’s to restrict licensing to the European Soviet bloc of the items on International Lists II and III when there is likelihood of diversion.);

e) The application of the COCOM Doc. 471 procedure … to all exceptions to Communist China (i.e., International Lists I, II, and III);

f) Consideration by the COCOM Export Control Subcommittee of means for preventing the frustration of the China embargo by the illegal export or diversion of embargoed items;

g) The application of the existing voyage licensing and bunkering controls to the revised China embargo list and the examination of these controls by either CHINCOM or the Export Control Subcommittee with a view toward making them more uniform in coverage and application.

1. Source: Department of State, Central Files, 611.93231/4–1757. Confidential. Drafted and approved by Knoll. Sent to Bern, Hong Kong, Geneva for Johnson, Singapore, Stockholm, Vienna, Kuala Lumpur, Ankara, Athens, Bonn, Brussels, Copenhagen, The Hague, Lisbon, Luxembourg, London, Oslo, Ottawa, Paris, USRO/ST in Paris, Rome, and Tokyo.
2. The Department transmitted this instruction to the U.S. Delegation in Topol 1924 to Paris, April 11. (Ibid., 493.009/4–1057)