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

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

London, May 14, 1957—11 a.m.

6179. Excon. Following is text of memorandum handed me by Selwyn Lloyd last evening referred to in my immediately preceding telegram.² Begin verbatim text.

China Trade Controls.

1. At the Bermuda Conference United Kingdom Ministers urged that any coordinated list to be proposed by the United States Government for China and the Soviet Bloc should be one which could command general respect; and that any proposal merely to add certain items from the China list to the Russian list would not, in the United Kingdom view, obtain general acceptance.

2. As the United States Government has been made aware, the United States proposals as presented to the China Committee do not meet the substance of the United Kingdom position.

3. In particular the following aspects of the United States proposals present serious difficulties:

(a) Of the existing China “differential” of nearly 300 items, only 157 items would be dropped;

(b) A strict control would be maintained on those items on which there is great pressure for relaxation from United Kingdom trading interests (e.g. land rovers; heavy tractors; diesel engines; certain chemicals; locomotives; surveying instruments; ball-bearings etc.);

(c) In addition, certain of the items which can now be exported to China subject only to notification, would in future require the prior approval of the China Committee, under a very strict procedure for consultation and justification. This retrograde move would cover items of importance to United Kingdom trade, such as small generating sets; motor trucks; civil engineering and road-making equipment; some mining machinery; tires for farm tractors; as well as rubber, an item of vital concern to Malaya and Singapore.

4. Quite apart from commercial considerations, the United Kingdom remains strongly opposed to controls which in practice maintain a differential between exports to China and exports to the Soviet Bloc.

5. The discussions in the China Committee of May 7 and May 9 have shown that United Kingdom disappointment at the United States proposals was shared by almost all the other members of the China Committee.

6. There is widespread resentment in the United Kingdom at the absence of a satisfactory solution to this problem. Countries which do not have the general support of COCOM member countries are not acceptable to United Kingdom opinion. Moreover, the present unsatisfactory situation can only undermine the entire strategic control system.

7. In view of parliamentary pressure in the United Kingdom, this matter is one of urgency for H.M. Government.

8. H.M. Government understand that the United States Delegation in the China Committee may be ready for further discussions on May 17. H.M. Government cannot contemplate prolonged discussion on such an unsatisfactory basis as the present United States proposals and they earnestly trust that on May 17 some radical modification of those proposals will be possible.

Whitney

1. Source: Department of State, Central Files, 493.009/5–1457. Secret; Priority. Repeated priority to Paris for USRO.
2. In telegram 6178 from London, May 14, Ambassador Whitney reported that Lloyd called him to the Foreign Office on the afternoon of May 13 and gave him a memorandum regarding China trade controls. “He stressed urgency of problem,” the telegram reads, “noting that situation in House of Commons is becoming increasingly difficult.” Regardless of developments in Commons, Lloyd explained, pressure from the Conservative Party as well as the opposition party “is such that decision cannot be delayed beyond another ten days.” (Ibid.)