44. Report to the Council on Foreign Economic Policy1
Washington, January 20,
1955.
REVIEW OF ECONOMIC DEFENSE POLICY AND PROGRAM
Summary
The U.S. economic defense program requires answers to the following basic questions:
- 1.
- 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?
- 2.
- Should the U.S. differentiate in its economic defense objectives and programs between Communist China and the European Soviet bloc?
- 3.
- Should the U.S. encourage non-strategic trade with the Soviet bloc?
- 4.
- 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?
- 5.
- 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.