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

190. Memorandum of a Conversation, Department of State, Washington, October 22, 1957¹

Washington, October 22, 1957

SUBJECT

• Control of Copper Wire to Soviet Bloc

PARTICIPANTS

• Foreign Secretary Selwyn Lloyd
• Ambassador Caccia
• Lord Hood, Minister Br. Embassy
• Mr. Jackling, Coun. Br. Embassy
• William Morris, First Secretary
• Dennis Laskey, Personal Secretary to Foreign Secretary
• The Secretary
• Ambassador Whitney
• Deputy Under Secretary Dillon (latter part of discussion)
• Asst. Secretary Elbrick
• Mr. Timmons—RA
• Mr. Dale—BNA, Mr. Wright—ECD

Foreign Secretary Lloyd opened the discussion by noting that the difficulty with copper wire control was that Rhodesia had to dispose of its copper output. He referred to the U.S. proposal of June 19, 1957 that the U.K. join the U.S. in making a joint proposal in COCOM to restore copper wire to the embargo list for the Soviet bloc.² He said he regretted that the U.K. could not agree to take the action requested by the United States. He said that in the view of the British Government, we need at this stage a complete reexamination of what the strategic controls consist of and what our objectives should be in respect thereto. It was the British view that a comprehensive and up-to-date set of principles should be worked out as a basis for examining the need to embargo copper wire as well as other items on the International List.

As far as copper wire is concerned, Mr. Lloyd said that he was under continuing pressure from other Ministers to permit the export of wire. The best he could offer under the circumstances was the limitation of copper wire exports during the first six months of 1958 to 30,000 tons which was approximately equivalent to the rate of export during the last twelve-month period. (Note: The U.K. exported 51,000 metric tons of copper wire in 1956 and has been exporting during 1957 at the rate of 55,000 to 60,000 tons annually.) He regretted that an accommodation to U.S. views was not possible, but the British position represented a Cabinet decision.

Mr. Lloyd said the United States argument in favor of embargoing copper wire appeared to hold that since the Soviet bloc was short of copper, the Soviets had to make withdrawals from the copper stockpile to meet their essential requirements. The British, Mr. Lloyd said, were prepared to concede that such an estimate may be accurate, but they were not disposed to think that the size of the Soviet stockpile mattered particularly, since a war, if it came, would be over so soon that neither the necessity nor the opportunity to draw on a stockpile would arise. Under these circumstances, he said, the British looked at the copper wire question as a trade matter. From their standpoint, the critical question was one of assisting the Rhodesian economy and to some extent that of the United Kingdom.

Mr. Elbrick recalled that the British and American defense and intelligence experts had met in London in March, 1957 to discuss the Soviet bloc supply situation with respect to copper.³ Ambassador Caccia said that the need now was rather for a discussion of criteria. He felt the copper wire question was really illustrative of a problem which we had started to look at in the Middle East context—namely, major foreign exchange earning products which certain countries are unable to get rid of, such as cotton, apples, or in the case of Rhodesia, copper.

Mr. Elbrick noted that in the matter of the Soviet copper stockpile, the March consultation between the British and American experts found that the significant point was the Soviet inability to meet its stockpile needs which affected direct military requirements. The Secretary read from the conclusion of the joint US/UK report of March, 1957⁴ which stated that there was in 1956 a shortfall of 220,000 tons of copper in the Soviet bloc, consisting of 50,000 tons in the civilian economy, the probable withdrawal of 35,000 tons from the strategic stockpile, and the failure to add 135,000 tons to it. He said that while the situation may have changed from that prevailing when the study was completed six months ago, the facts were sound. The Secretary said the points raised by the U.K. were of a general character—whether it was more important to help their own economy or to keep the copper wire from the Russians.

With respect to stockpiling, the Secretary noted that we are stockpiling on the basis of a five-year war. Mr. Lloyd said it was a question of what kind of war we think will be waged. He said that when he was Minister of Supply, the principle which was applied was not to let the other side get anything which would make their economy very much more efficient. The question now was whether the objective of holding down the Soviet copper stockpile was a sufficient reason to penalize the economy of the United Kingdom and of Rhodesia.

The Secretary inquired how the British would propose to go about a re-study of the strategic concepts of the control system. Mr. Lloyd said the United Kingdom regarded it as a Board of Trade matter. He presumed a working group would be in order, similar to the arrangement in 1954 when the previous review was undertaken with Harold Stassen representing the United States. The Secretary said that the British seemed now to be posing questions which could not very well be handled by an essentially technical group. The proposal which Mr. Lloyd had made was for new criteria. It was not clear how such criteria should be framed. One possible criterion might be to keep from the Soviet bloc advanced types of machinery. With respect to the category of wire, there was the criterion of hindering the Soviet construction of a system of secure land-line communication.

Mr. Lloyd said that someone should identify the nature of the criteria problem and identify the correct objectives for present conditions. The Secretary said that this was not easy to accomplish since the Board of Trade view will probably differ from the U.K. military view, which probably coincides with the military view in Washington.

Mr. Lloyd suggested that the trade control program as presently constituted works at cross purposes with policy on exchanges. He said that the denial of fast merchant ships to the Soviet Union seemed at odds with a policy on other forms of exchange which assumed that the more the Soviets see of us, the more difficulty they will have at home.

The Secretary acknowledged that to some extent we may be working at contradictory purposes. He said it seemed proper for the Prime Minister to raise this question in his talks. He said he would not wish to make any decision immediately on Mr. Lloyd’s proposal without having an opportunity to discuss it with Mr. Dillon. He said he would also like to look into the matter of the existing criteria and the American attitude thereon.

The Secretary reverted to the copper wire question after Mr. Dillon joined the discussion, noting that the copper market is pretty dead now with serious effects upon the Rhodesian economy, and that Mr. Lloyd had asked for a review of the criteria for the strategic lists.

Mr. Dillon said that copper is one of the few major raw materials in which the Soviets are deficient and thus one of the few items whose embargo is likely to have a serious effect on the Soviet war machine. It might, of course, be appropriate to examine the lists again to see whether the items are of the same strategic importance as they were three years ago.

Mr. Lloyd inquired whether a fat or a thin man was more likely to attack one. He said that with respect to cultural contacts, we have come to the conclusion that the more the Russians see of us and the more frequently they leave the Soviet bloc, the better. He said the recent Youth Festival⁵ demonstrated that the West was gaining through contacts. A rising standard of living was likely to make people somewhat more fond of eating well and somewhat less belligerent. He felt it was time that we rethink our philosophy of trade controls.

Ambassador Caccia noted that if we retain a tough control system, we will have to decide what to do about problems such as Rhodesia.

The Secretary suggested that if copper wire goes to the bloc, there seems little purpose in keeping other forms of copper on the list. Mr. Dillon endorsed this point, recalling that the bloc has been importing more wire than they are using as wire. He said he could not answer Mr. Lloyd’s basic question, since the effect of Mr. Lloyd’s proposal would be to reverse our accepted plan of putting a strain on the Soviet economy and would substitute the philosophy that if the Russians become fat and happy, they will become soft. He said that if this theory were accepted, it would affect the entire COCOM list.

The Secretary said that Gromyko had commented last week that this cultural exchange is all right, but what we really need is to get away from all these economic restrictions and embargoes. The Secretary said he had never been clear whether the Soviets object to the restrictions because they really hurt them economically or because they only hurt their national pride.

1. Source: Department of State, Central Files, 460.509/10–2257. Confidential. Drafted by Wright. Prime Minister Macmillan, Foreign Secretary Lloyd, and other British officials were in Washington for a series of talks, October 22–25.
2. Not further identified.
3. Documentation on these talks is in Department of State, Central File 461.419.
4. Not found in Department of State files.
5. The World Youth Festival, sponsored by the Young Communist League, was held in Moscow in August.