322. Memorandum of Discussion at the 354th Meeting of the National Security Council0
[Here follow a paragraph listing the participants at the meeting and agenda items 1 and 2.]
3. U.S. Economic Defense Policy (NSC 5704/3; NSC Actions Nos. 1780 and 1854)1
Secretary Dulles said that while he had been at the meeting in Ankara, he had had a lengthy conversation with U.K. Foreign Secretary Lloyd,2 who had indicated that the British Government feels that it is imperative to undertake a complete review of the philosophy underlying our controls of materials going to the USSR. Lloyd had argued that the Soviet Union was now a very powerful industrial state which was quite capable itself of waging economic warfare. Therefore, it was out of date for the Western powers to try to prevent the USSR from becoming an industrial power by the restrictions we placed on trade. Lloyd felt that we should, of course, maintain our controls over items of clear military importance; but that anything like an economic [Page 693] blockade was out-dated. All that we gained was a reservoir of ill will in the allied countries, an ill will which was not counterbalanced by any security gains.
Secretary Dulles said that Lloyd recognized that the review he was proposing should be made at a high level. Secretary Dulles then expressed the view that the United States should review its own position prior to the COCOM meeting in March. He added that he was personally inclined to feel that there was a good deal in Lloyd’s point of view.
The President added that his views on the futility of much of our trade controls were too well known to need restatement.3
General Cutler suggested that the review of U.S. policy on COCOM controls be undertaken by the Council on Foreign Economic Policy, which would then present its recommendations to the National Security Council. Secretary Dulles pointed out that the U.S. position must be determined at least by the first of March, and that the process was bound to be controversial.
The National Security Council:4
- a.
- Noted and discussed an oral report by the Secretary of State on his conversations with the U.K. Foreign Secretary with respect to the United Kingdom’s position favoring extensive revisions of the COCOM multilateral trade controls.
- b.
- Agreed that the Council on Foreign Economic Policy should review U.S. policy with respect to COCOM controls, in the light of the U.K. position mentioned in a above;5 reporting to the National Security Council in time for Council consideration not later than March 1, 1958.
Note: The action in b above, as approved by the President, subsequently transmitted to the Chairman, CFEP, for appropriate implementation.
[Here follow agenda items 4–6.]
- Source: Eisenhower Library, Whitman File, NSC Records. Top Secret; Eyes Only. Drafted by Gleason on February 7.↩
- See footnotes 1, 2, and 4, Document 320.↩
- See Document 319.↩
- In a meeting, February 5, among Eisenhower, Secretary Dulles, and Ambassador Lewellyn Thompson (on leave from Moscow), the question of reducing trade control on strategic goods with the Soviet Union was discussed. The President “strongly favored” reducing the number of strategic goods denied the Soviet Union. (Eisenhower Library, Dulles Papers, Meeting with the President)↩
- Paragraphs a and b and the note that follows constitute NSC Action No. 1857, approved by the President on February 7. (Department of State, S/S-NSC (Miscellaneous) Files: Lot 66 D 95, Records of Action by the National Security Council)↩
- On February 6, Chairman of the CFEP, Clarence Randall, appointed a three-man committee composed of Dillon as the chairman, and Assistant Secretary of Defense Mansfield Sprague and Under Secretary of Commerce Walter Williams as the other members. Their task was to study the issue and report to the CFEP as soon as possible. (Memorandum from Randall to the CFEP, February 6; ibid., E/CFEP Files: Lot 61 D 282A, U.S. Economic Defense Policy, CFEP 566)↩