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

179. Letter From the Chairman of the Council on Foreign Economic Policy (Randall) to the Secretary of Commerce (Weeks)¹

Washington, June 6, 1957.

Dear Sinclair: You are, of course, familiar with the course which the CHINCOM negotiations in Paris took with respect to the China differential in East-West trade.

The full degree of liberalization authorized by action in CFEP and NSC, when offered by our negotiators, proved to be insufficient, and Great Britain announced that, by unilateral policy, she intended to eliminate the differential completely. It now seems clear that her example will be followed by other countries, and that the differential, as a part of multilateral policy, will disappear.

As soon as this highly significant change in trade policy on the part of other countries becomes effective, it would seem reasonable to expect that competitive pressures will build up that will be prejudicial to American businessmen, and it seems almost inevitable that in due course the United States will have to take a second look at its unilateral policy.

Yesterday, in his press conference, the President took publicly in forthright fashion the viewpoint which many of us have heard him express privately, namely that he himself favored liberalization of our trade with Communist China, since trade “can be used as a very great instrument of Government policy”.²

I suggest to you the thought that it might be well for us to reexamine the whole question of United States trade policy toward Communist China before events force us in that direction.

If you approve, I shall be glad to appoint an interagency committee to examine this whole question, to be chaired by someone from Commerce, whom you would nominate.³

Sincerely yours,

CBR
Special Assistant to the President

1. Source: Commerce Department Files, Office of the Secretary, Council on Foreign Economic Policy. Secret.
2. For text of the President’s news conference of June 5, see Public Papers of the Presidents of the United States: Dwight D. Eisenhower, 1957 (Washington, 1958), pp. 429–445.
3. In his reply of June 14, Weeks indicated that Commerce had made a recommendation that trade policy be studied and had appointed Marshall Smith as the Commerce representative for the study that Randall proposed. (Department of Commerce Files, Office of the Secretary, Council on Foreign Economic Policy)