Office of the Historian

201. Minutes of the 14th Meeting of the Council on Foreign Economic Policy, Executive Office Building, Washington, March 29, 1955, 4 p.m.1

Washington, March 29, 1955, 4 p.m.

ATTENDANCE

  • Messrs. Hoover, Jr., Kalijarvi, Humphrey, Burgess, Butz, Weeks, Anderson, Teetor, Blackman, Mullin, White, Stassen, Matteson, Delany, Thorp, Wormser, Tidwell, Hauge, Cutler, Saulnier, Brundage, Cooley, Rock, Dodge, Hutchinson, Cullen

Draft Minutes of the 13th Meeting, Tuesday, March 22, 1955 were approved.2

AGENDA SUBJECTS

CFEP 523—Export of Steel Scrap.

1.
In CFEP 523/1 Commerce stated that the ACEP recommended a quota of 225,000 tons on export of heavy melting steel scrap for the second quarter of 1955. The Secretary of Commerce3 reviewed the reasons why he considered the recommendation sound and stated he sought advice of the Council before making a final determination since he understood State would appeal the ACEP recommendation and it was his desire to shorten the appeal procedure.
2.
Commerce considered the proposal necessary under the terms of the Export Control Act “to protect the domestic economy from excessive drain of scarce materials and to reduce the inflationary impact of abnormal foreign demand.”4 Conditions leading to this conclusion by Commerce are summarized in CFEP 523/1. Treasury and Defense supported the Commerce proposal.
3.
An extended discussion revolved around the following points related to the proposal:
(a)
Strategic importance of the domestic scrap supply.
(b)
No indication of a current shortage.
(c)
No indication of inflated or distorted price relationships.
(d)
Increased exports when related to past periods should consider the fact of quantitative controls in 1950–53 and the low level of foreign production following the war.
(e)
Effect of quotas on the requirements of foreign nations for their expanded economic growth, rearmament, and trade.
(f)
Conflict between the quota proposal and the trade liberalization policy of the Administration.
(g)
Implications of imposing economic controls on a case-by-case basis.
(h)
Quotas on scrap exports might not conserve U.S. supplies without quotas on end products.
(i)
Implications of imposing export controls to meet a shortage and not providing corresponding assistance to meet a surplus.
(j)
Exclusion of Canada and Mexico might be inconsistent with the most favored nation clause.
(k)
No indication that scrap exports were going behind the Iron Curtain and no indication of foreign stockpiling.
(1)
Imposition of a quota on short notice and with no warning would create consternation abroad.
4.
As a result of this discussion, it was the consensus of opinion that quotas should not be established on the export of ferrous scrap pending the consideration of more complete information based on a further study by ACEP concerning:
(a)
Effects of scrap exports on current and expected steel production; if the problem is of short or long term nature.
(b)
Requirements of scrap for friendly foreign countries, particularly Japan, the United Kingdom and the European Coal and Steel Community.
(c)
Possible evidence of abnormal stockpiling abroad.
(d)
Reasons for the high proportion of exports of heavy melting scrap.
(e)
Possible movement of U.S. scrap or its end products behind the Iron Curtain.

GENERAL

1.
Because of the time consumed in discussing CFEP 523, consideration of remaining agenda subjects was deferred to the next meeting.
2.
The Chairman has been notified that the President has approved NSC Action No. 1356–c5 of March 24 which requested the Council on Foreign Economic Policy to sponsor a thorough review of Governmental objectives of U.S. trade or commerce with foreign nations in relation to the requirements of the U.S. domestic economy, foreign policy, and national security, and to make recommendations of policy thereon which would be in the national interest under current world conditions; including in such report, among other factors, consideration of (a) the desirability of change in the objectives, provisions, and administration of the anti-trust laws as they affect U.S. trade or commerce with foreign nations, (b) the [Page 532] continued use of most-favored-nation clauses in treaties, and (c) the increasing pressures for the imposition of import quotas.

This subject has been titled CFEP Agenda Subject #524 “Effect of Existing Anti-trust Laws on U.S. Foreign Activities.”6

Paul H. Cullen
Lt. Col. USA
  1. Source: Department of State, E–CFEP Files: Lot 61 D 282A, Export of Steel Scrap, CFEP 523. Secret. Drafted by Cullen.↩
  2. Not printed. (Eisenhower Library, CFEP Records)↩
  3. Sinclair Weeks.↩
  4. Reference is to the Export Control Act of 1949 (Public Law 81–11), enacted February 26, 1949; for text, see 63 Stat. 7.↩
  5. See footnote 9, supra.↩
  6. Not printed. (Eisenhower Library, CFEP Records)↩