44. Report to the Council on Foreign Economic Policy1
REVIEW OF ECONOMIC DEFENSE POLICY AND PROGRAM
The U.S. economic defense program requires answers to the following basic questions:
- Should export controls be designed to control commodities directly related to Communist-bloc war production, or to control, in addition, commodities related to the basic industrial development of the bloc?
- Should the U.S. differentiate in its economic defense objectives and programs between Communist China and the European Soviet bloc?
- Should the U.S. encourage non-strategic trade with the Soviet bloc?
- In negotiations with friendly governments to achieve common actions, to what extent should the U.S. use the economic leverage and bargaining power potentially available in various U.S. programs and actions?
- In the face of growing Communist economic power, should the U.S.—while not overlooking what trade controls have done and can do—embark on a broad, long-range, positive program to bring about greater relative economic strength in the free world, particularly in crucial areas of the Far East?
Attached are two documents.2 The first is a brief paper which states the assignment, gives the current status of the trade-control program, and poses the above basic questions. The second is a background paper which outlines some of the principal aspects of trade controls toward the European Soviet bloc and Communist China.