81. Letter From the Secretary of State to the President1
Dear Mr. President: NSC 5429/5 of December 22, 1954, provides in paragraph 7c(2) that the United States should “urge other Free World countries to maintain the current level of export controls on trade with Communist China”. It provides further in paragraph 7c(3) that, “Whenever it may be determined by the Secretary of State that further effort to maintain the current multilaterally agreed level of export controls would be seriously divisive among our allies or lead nations needing trade with Communist China toward an accommodation with the Soviet Bloc, the Secretary should report such determination promptly to the Council for consideration of appropriate action”.
Since December, 1954, we have attempted to persuade other countries to maintain the multilaterally agreed controls, even though it was already apparent a year ago that other countries strongly believed the levels of controls applicable to Communist China should be reduced to the level applicable to the remainder of the Soviet Bloc. Notwithstanding our efforts the pressures in other countries for revision of the China controls have increased.
At Geneva I asked Foreign Secretaries Macmillan and Pinay to postpone consideration of revision of multilateral controls until the United States had reached a more advanced point in discussions with the Communist Chinese in Geneva. Both before and since these talks we have made unremitting efforts through other available channels to persuade the British, French and Japanese to hold the line.
The British response to our approaches definitively rejects our position and puts us on notice of their intention to act unilaterally in early January without observing the framework of multilateral procedures of the Consultative Group in Paris. The Japanese had informed us previously that in the absence of an agreement between the United States and Japan concerning a list of items to be dropped from the controls, the Japanese would support whatever position emerged in the Consultative Group as promising the maximum reduction in the differential China controls.
[Page 276]We are therefore faced with the question whether to negotiate immediately with the UK, and such other countries as may be necessary, to insure the continuance of the multilateral control system—albeit at a reduced level in the case of China—or alternatively to write off the CG structure and attempt to obtain satisfactory controls over trade by other means, e.g., bilateral arrangements buttressed by US economic and political pressures.
I believe there is no effective alternative to a voluntary multilateral control system. While bilateral pressures might coerce one or two countries into a halfhearted compliance, they would only alienate others—and the effectiveness of the system would be destroyed if one major producing country refused to bow to our pressures.
For the foregoing reasons I must report, in accordance with the requirement of NSC 5429/5, that our efforts to maintain the current differential export control towards Communist China have passed the stage of being divisive; they present us with the prospect of total disintegration of the multilateral control system.
To salvage this system we must accept a graduated reduction in the China controls to a level which will gain mutual agreement among countries participating in the Consultative Group. I recommend that I be authorized to begin negotiations as soon as possible with the United Kingdom and other interested countries as appropriate with the aim of preserving the multilateral control system and, through its orderly procedures, to maintain the controls over trade with China at the highest negotiable level but in no event below the level of the Soviet bloc controls.
Sincerely yours,
- Source: Department of State, CA Files: Lot 60 D 171, East-West Trade Controls with Communist China. Secret. Drafted by Goodkind, Wright, and Barnett; copies sent to Robertson, Bowie, and Kalijarvi. Merchant forwarded a draft of this letter to Dulles on December 7, under cover of a memorandum which noted that he, Robertson, Bowie, and Kalijarvi concurred in the draft. Dulles approved the draft without change and, according to a note on the source text, delivered the letter to the President on December 8.↩
- Printed from a copy that bears this typed signature.↩