78. Letter From the Under Secretary of State (Hoover) to the Secretary of Commerce (Weeks)1
Dear Mr. Secretary: I have read with considerable interest your letter of November 23, 1955,2 in regard to certain East-West trade problems. As you are aware, problems of this nature became particularly difficult to handle in the pre-Geneva atmosphere. I am hopeful now that the Geneva discussions are behind us that the Paris Committees will be able to proceed with their business on an orderly basis. We hope in this connection that the Secretary’s representations to the United Kingdom and France will soon have placed us in a position where we could more accurately judge the [Page 271] extent to which the United States could now usefully press for improvement in the current multilateral control operations and where it would be in our interest to suggest an early meeting of the CG.
As to your particular concern, we share your feelings about the copper wire situation which has been a source of concern to us for a considerable period of time. The large amounts of copper wire licensed by the COCOM countries in the last fifteen months are very disconcerting since such exports obviously result in a substantial frustration of the embargo control over copper itself. As you doubtless know, we are faced with the fact that some months ago the British Cabinet took a firm position that this item should not be restored to the embargo list. Notwithstanding this decision, we are inclined to agree that a new effort should be made to plug this loophole in the embargo. Owing to the level at which the last decision on this question was taken in the British Government and on account also of other strategic control questions we now have pending with the United Kingdom and in the Paris Committees, careful consideration clearly has to be given to questions of the timing and the nature of any renewed negotiations for raising the level of controls over copper wire. These questions, however, are operating details on which our representatives in the Economic Defense Advisory Committee structure will be consulting with your representatives and those of the other interested agencies.
The matter cited in your letter concerning the exports of four-wheel drive vehicles by the British is quite a different sort of question. We have generally felt that it is permissible for a COCOM country to draw upon the reserve quota in accordance with COCOM procedures or to borrow from other countries’ quotas as long as there is no effect upon the agreed global quota. As a matter of fact, we have at times suggested the use of the “borrowing” technique so that an individual country would not have to request an exception for a shipment in excess of the quota and so that the total level of shipments would be kept within the agreed global quota.
We do not feel that our acquiescence to the recent British shipments is inconsistent with the suspension action taken in regard to two officials of the Willys-Overland Corporation. In the first place, the type of vehicle involved is no longer under multilateral embargo as it was when the transaction in the Willys-Overland case was executed. Secondly, and more importantly, the reason for suspension of export privileges in the Willys-Overland case rested on the fact that the firm in effect knew that the purported destination of the shipment given to the United States licensing authorities was incorrect. The infraction of United States regulations represented by [Page 272] this deception would be grounds for punitive action whatever the level of control over the item might be at the time. Such a consideration is not present in the case of the United Kingdom exports of Landrovers; on the contrary, these exports appear to have been made in conformity with the applicable regulations.
Although we too would like to see the “3(d)” quotas eliminated, we have not felt that they permit “unlimited” shipments of items so controlled. It is our hope that both the other countries and ourselves will show greater flexibility in dealing with these items in the future and that COCOM will thus be able to agree upon specific quotas rather than 3(d) control. In this connection, it may be noted that COCOM will shortly undertake the usual periodic review of the List II quotas.
We are giving consideration, of course, to the relevance of the recent Geneva discussions to the possible policy implications of the review of economic defense policy which has been held in suspense by the Council on Foreign Economic Policy since last summer. Speaking generally, the discussions on the trade questions at Geneva developed substantially in accord with the predictions previously made by the United States. They provided us an occasion for demonstrating sincerity and constructiveness in our approach to the development of East-West contacts. On the other hand, they demonstrated the fact that the blame should be accorded to the Soviets for preventing progress toward this objective. It appears important to us that in the months to come we continue our flexible and reasonable treatment of trade control questions in order to emphasize and not to impair the record of good faith which we established at Geneva and in order to allow the attitude and actions adopted in furtherance of the President’s policies to have the fullest opportunity for gradual and cumulative effect. We hope to prepare for CFEP consideration specific proposals based on the CFEP review and on our recent negotiations with the United Kingdom, France and the Soviet Union. These will have as their purpose the maintenance of a multilateral trade control system effectively contributing to free world security and unity.3
Sincerely yours,
- Source: Department of State, Central Files, 460.509/11–2355. Secret. Drafted by Goodkind and Stuart D. Nelson of ECD. a signed copy of this letter is in Department of Commerce Files, Office of the Secretary, Trade and Export Controls 1954–58 (Sinclair Weeks).↩
- Supra.↩
- On December 3, Hoover forwarded a copy of this letter to Dodge. (Eisenhower Library, CFEP Records)↩
- Printed from a copy that bears this stamped signature.↩