165. Telegram From the Department of State to the Embassy in the United Kingdom1
8071. Please deliver following from Secretary to Selwyn Lloyd: [Page 458]
“Dear Selwyn: I have your note of May 13th about the China trade controls. We are very anxious to find a basis for agreement and not to put added strain upon our relations. However, we cannot go all the way to meet you and in effect wholly abolish the differential. In our opinion, this differential has a real significance in retarding the buildup of Communist China’s vast military potential. On the other hand liberalizing the list will not, we believe, lead to any substantial increase in the volume of trade. It will, I fear, mean that the Chinese Communists’ rather limited possibility of buying abroad will merely shift from less critical to more critical items, the total value remaining substantially static.
However, we are giving increased discretion to our negotiators in Paris in a genuine effort to achieve a result which you can accept and thus keep our cooperation going in this field. But as I say, we cannot go all the way that you would want.
What we are doing represents a great effort within the Executive Branch of Government and with the Congress to meet you. But if this is not acceptable, and you should decide that you are unable to continue cooperation with us in this area, it will, of course, have a bad reaction in this country. We shall do our very best to hold those reactions to a minimum, but we cannot give any assurance that it will not have troublesome repercussions.
Sincerely yours, Foster”
- Source: Department of State, Central Files, 493.009/5–1757. Secret. Niact; Limited Distribution.↩