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

70. Telegram From the Office of the Permanent Representative at the North Atlantic Council to the Department of State¹

Paris, October 6, 1955—7 p.m.

Polto 504, Excon. Subject: Pre-C.G. meetings. References: (a) Topol 351;² (b) Poltos 489,³ 492,⁴A–217,⁵ 494,⁶ 497.⁷ Supplementing previous reports (reference b), following are round-up comments and USDel personal impressions on main aspects above discussions:

A. China Control Differential:

1. Both United Kingdom and French clearly unwilling agree China differential has any strategic value or is required by United Nations Embargo Resolution.

(a) Re strategic aspects, they disagree United States points or consider them irrelevant. While not flatly asserting China obtains all differential goods it wants through triangular deals and transshipments, they convinced at least substantial quantities go and therefore defeat embargo. Unpersuaded higher costs materially reduce Chinese acquisitions but consider point irrelevant anyhow since higher-cost net a strategic objective and since still means embargo as embargo defeated. Doubted differential produces “pariah” psychosis (feeling this insignificant as compared United Nations non-membership and denial diplomatic recognition). But, in any event, a political and not strategic consideration. Having only these two points to play, USDel had difficulty defending strategic value of maintaining differential but stressed objective of “political” considerations were strategic—i.e., maintaining peace in F.E.

(b) Re U.N. Resolution, they disagree it necessitates maintenance of differential, disagree it imposes “legal obligation”, considered it really non-operative since Korean hostilities ceased, and felt that anyhow it would be met by denying China goods now on List I since that covers all categories specified in resolution (with possible exception, in French view, of some additional transportation items).

2. Both also felt United States domestic public opinion problem balanced off by same problem, in reverse, in PC’s. In response off-record United States allusion to Battle Act, United Kingdom Del said Act merely talks about supporting U.N. Resolution, on which comments had already been made.

3. Both recognized importance Geneva bilaterals to United States and West. However, doubted differential constitutes real pressure and, even if so, value is decreasing and, if used, must be used very soon. Nevertheless, USDel gathered impression that, as political matter in light Geneva bilaterals, United Kingdom/French might be willing ease up somewhat on their objective of early elimination differential but, presumably, would be willing do so only in return for some commitment from United States on subject—e.g., advance agreement to do something about differential. In this context, easing up might be confined to agreeing some delay in implementing reduction.

4. In light past history Tri negotiations on security controls, and independently of para 3 above, possible that United Kingdom/French positions have some “give”. However, firmness their initial position in favor total elimination differential suggests they would only very reluctantly accept reduction short of elimination. Even then would expect them to insist eliminating not only “deadwood” but also items of major trade interest (e.g., iron/steel). Might further insist on some agreement concerning later elimination of remaining differential in which event result might amount simply to progressive rather than simultaneous peel-off.

5. Seems clear that, in absence advance Tri agreement, United Kingdom and French would make strong effort line up other PC’s to support differential elimination at next C.G. tenor of remarks indicated French and possibly United Kingdom have already discussed with other PC’s and found considerable encouragement. Manner and extent of approaches not indicated but both stated expectation “all other PC’s” would support them. United Kingdom/French closely supported each other during Tri meetings which may have been by prearrangement.

6. Net impression: United Kingdom/French tactic in these discussions was to seek demolish any strategic argument for retention China differential or any argument based on U.N. Resolution and to limit United States position to political considerations in re Geneva bilaterals. Both seem convinced differential should not—and cannot—be maintained much longer, strongly determined to drive for elimination, and definitely planning do so at next C.G. They would much prefer move on Tri agreed basis and, in order have United States concurrence, may be expected be prepared make some concessions, on political (not strategic) basis and as negotiating compromise (see paras 3 and 4 above). As situation shaping up, choices facing United States seem to be:

(a) Very high-level effort to induce United Kingdom/French refrain from pressing for change in China controls for time being, on basis political objective not under-cut Geneva bilaterals. For such approach, assume they would expect information on United States plans and expectations on Geneva talks.

(b) Stand on reference a position, with any reinforcement possible, and battle it out in C.G. even with little, if any, support.

(c) Attempt negotiate some advance Tri compromise at C.G. Del level, along lines various possibilities indicated above or others. Believe such negotiation can be successful only if United States can either do some yielding now or, alternatively, declare what and when United States willing do in relaxation.

B. Soviet Bloc Controls:

1. Discussion this point limited and generalized since United Kingdom unable put forward very specific proposal. However, clear United Kingdom is determined seek early substantial reduction, considering that as important as China reduction. Triple rationale advanced—i.e., new concept global warfare, failure existing controls to serve their purpose, and consequent difficulty defend domestically. On other hand, French attitude is open for time being, until outcome Geneva Foreign Ministers conference. If that outcome favorable (or not unfavorable), French may be expected support relaxation movement, very possibly to extent United Kingdom suggesting.

2. Unable evaluate specific scope United Kingdom plan until more definite version available but it clearly envisages very substantial reduction. As USDel understands concept, sees possibility United Kingdom would propose heavy pruning List I (perhaps with some new or upgraded items added) and elimination List II and maybe List III. United Kingdom has said a.e. and munitions lists would not be affected.

3. United Kingdom claims no inconsistency between proceeding with new concept and Tri position for Geneva. Gave only vague response to United States point that new concept is special matter, beyond competence certain delegations and not yet internationally established. Believe United Kingdom somewhat vulnerable on this point, particularly if not consistent with NATO status. In this connection, attention called to Polto A–218 October 5⁸ (repeated London Polto A–57) recording United Kingdom comments during recent annual review examination.

4. Net impression: USDel feels best point exploit on this problem is United Kingdom prematurity, in relation need await outcome Geneva meeting and need allow adequate time for study specific proposal, before unveiling at C.G. this might be accompanied by stressing list reduction last year was geared to long-haul and too soon now to undertake further fundamental alteration. However, inclined believe United Kingdom will be sticky and therefore suggest pressure would best be applied bilaterally at high level.

5. As incidental observation, USDel raises question whether it would not be best to deal with China and Soviet bloc reductions matters together, since United Kingdom/French position on China controls is not ad hoc elimination of present differential but elimination of principle of any differential. Under their concept, China control level would therefore be reduced not only by elimination of existing differential but also by any reduction of bloc level itself.

Will need Washington guidance on above and reference b messages by October 14.

Perkins

1. Source: Department of State, Central Files, 460.509/10–655. Confidential. Repeated to London, Bonn, and Tokyo.
2. Document 68.
3. Polto 489, October 4, reported on the pre-Consultative Group meeting of the previous day between the U.S., British, and French Delegations. It summarized the French and British positions, noting that both countries favored an “early elimination China differential as unwarranted discrimination, ineffective and aiding economies of transshipping bloc countries to detriment Western economies.” (Ibid., 460.509/10–455)
4. Polto 492, October 4, reported further on the pre-CG meeting of the previous day. It also summarized the meeting that had been held that day, during which the U.S. Delegation made a statement regarding its strong opposition to an elimination of the China differential. (Ibid.)
5. Polto A–217, October 5, transmitted the texts of the opening statements of the French, British, and U.S. Delegates at the first pre-CG tripartite meeting on October 3. (Ibid., 460.509/10–555)
6. Polto 494, October 5, clarified the British and French positions on the reduction of strategic trade controls. (Ibid.)
7. Polto 497, October 5, reported on the pre-CG meeting held that day. It also reported the reactions of the French and British Delegations to the U.S. rationale for opposing the elimination of the China differential. (Ibid.)
8. Not printed. (Ibid., 740.5/10–555)