69. Report by the Steering Committee of the Council on Foreign Economic Policy1

CFEP 501/7


In connection with the formulation and implementation of the U.S. position upon the trade aspects of the agenda item on East-West contacts, to be discussed at the forthcoming Four Power Foreign Ministers’ Meeting, scheduled to open in Geneva on October 27, the Council on Foreign Economic Policy:

With respect to controls over trade with Communist China and North Korea, notes with approval the U.S. position that such controls are not to be discussed or considered at the Four Power Meeting.
With respect to controls over strategic trade with the European Soviet bloc, notes with approval the U.S. position, presently agreed with the U.K. and France, that the strategic controls as such should not be negotiated with the Russians, that any adjustment in the scope of such controls would be a matter for determination by the West unilaterally, and that any such relaxation in these safeguards could be considered by the West only in the light of substantial Soviet concessions, not in the trade field alone, but primarily in the field of security.
With respect to “non-strategic” trade, i.e., trade in items not specifically rated as strategic for export control, recommends that:
As a general matter the U.S. be prepared to take those actions toward facilitation of East-West trade which can be accomplished within the present legal and policy framework and which lie within U.S. power readily to halt or reverse. Although no specific compensating concessions need be exacted from the Soviets as a condition precedent or simultaneous to these U.S. actions in an “earnest of good intentions” stage, the U.S. should not, and could not realistically, go very far toward eliminating trade barriers without obtaining assurance of some matching actions by the Soviets. [Page 258]
Such U.S. actions toward reducing trade barriers should include:2
Public statements by prominent U.S. officials making clear to the business community that the government actively favors the conduct of peaceful trade with the European Soviet bloc and U.S. participation, both governmental and private, in various promotional activities, including Soviet bloc trade fairs.
A policy of general approval in licensing exports in borderline cases (including sales for dollars of government-held agricultural surpluses at or above world market prices) which might otherwise be denied.
The progressive removal of the special individual export licensing requirement for the European Soviet bloc, through placing non-strategic (non-rated) items on general license to that area.
Such actions should be taken, disclosed or pledged during or shortly after the Geneva Meeting.
Upon decision by the Secretary of State that any of the specified actions is appropriate, its timing and pursuit should depend upon his advice as to the progress and probable outcome of the negotiations and as to the effect of the actions upon such outcome.
To the early stage of facultative U.S. actions outlined above should be added:3
The barter of agricultural surplus for strategic materials when such action is in the national interest, in the event that a reexamination of the Attorney General’s opinion should disclose that such barter is permissible under the present law.
An Executive Branch pledge to seek from the Congress amendment of Public Law 480 in order to permit sales of agricultural surpluses for local currency or (if statutory amendment is necessary) barter of agricultural surpluses.
As a general matter such other actions as would require or represent legislative or major policy change (e.g., restoration of the availability of most-favored-nation tariff rates to imports from the Soviet bloc, alteration of the policy against remittance of U.S. Government checks to Soviet bloc individuals, etc.) should be withheld until a later stage in negotiations and should not be taken until the Soviets themselves have made sufficient accommodation toward reducing the barriers to East-West economic and cultural exchanges.
The justification for U.S. actions to reduce or remove barriers to peaceful East-West trade need not be looked for in the trade field alone, but may be found in the wider field of cultural or technical exchanges, or in the fields of security and East-West political [Page 259] relations. However, the following specific actions which could be taken by the Soviets would benefit U.S. interests in the field of trade and commerce: (1) definition of a code of commercial practices to facilitate trade with Soviet bloc state trading organizations,(2) adoption of the multilateral standards for observing copyright and patent rights, (3) improvement of statistical reporting on production and trade, and (4) agreement to a recognized arrangement for providing non-partisan arbitration and adjudication of claims.4

  1. Source: Eisenhower Library, CFEP Records. Secret. On October 5, Cullen transmitted this paper to the CFEP, along with a transmittal memorandum by the Chairman of the Steering Committee and a guidance paper on which the recommendations were based. These accompanying documents, which were attached to the source text, are not printed.
  2. For discussion of advantages and disadvantages see pp. 68 of Guidance Paper. [Footnote in the source text.]
  3. For discussion of advantages and disadvantages see pp. 911 of Guidance Paper. [Footnote in the source text.]
  4. For further discussion see pp. 1112 of Guidance Paper. [Footnote in the source text.]