Foreign Relations of the United States, 1958–1960, Foreign Economic Policy, Volume IV

332. Minutes of the 78th Meeting of the Council on Foreign Economic Policy⁰

August 7, 1958.¹

[Here follows a list of participants.]

I. The Council on Foreign Economic Policy approved the minutes of July 29, 1958 as corrected.

II. CFEP 566—U.S. Economic Defense Policy

1. The CFEP considered a recommendation by the Department of State that Executive Branch approval be recorded on the recently negotiated new level of international multilateral security trade controls in the Coordinating Committee (COCOM) and the Consultative Group (CG), in the light of (a) the current international situation, (b) the requirements of national and free world security, and (c) the standards created in NSC Action No. 1865.² (See CFEP 566/3.)³

2. Under Secretary Dillon stated that on February 27, 1958 the National Security Council agreed, in connection with the then forthcoming international security trade control negotiations, that the best interests of the United States would be served by liberalizing the multilateral security controls on trade with the Sino-Soviet Bloc, thereby facilitating accord with our allies and agreement on the maintenance of an effective multilateral security trade control system. The NSC further agreed that such system should continue controls on munitions and atomic energy items and on other items having a clear military application or involving advanced technology of strategy significance not available to the Sino-Soviet Bloc. (See NSC Action No. 1865.) He added that this action was transmitted to the Secretary of State for implementation, in consultation with the Secretaries of Defense and Commerce and with the advice of the Director of Central Intelligence.

3. Mr. Dillon reported that the international negotiations have now been concluded and that the new lists will be announced on August 15. He said that while the resulting coverage of the control lists is not as wide as that proposed in the original United States submission to COCOM, it has facilitated accord among the participating countries and, thus, set the basis for the continued maintenance of an effective multilateral security trade control system. He stated that with the exception of the Department of Defense, all agencies represented on the Economic Defense Advisory Committee considered that the final agreement maintained controls on items having a clear military application or involving advanced technology of strategic significance not available to the Sino-Soviet Bloc.

4. Mr. Dillon advised the Council that the COCOM and CG negotiations had the following practical results:

a. The International Munitions List has been modernized and extended in coverage;

b. The International Atomic Energy List remains the same but is subject to review, beginning in September;

c. The international embargo list (International List I) covers about 120 items;

d. The secondary control list contains about 35 items which will be kept under surveillance and reports; and

e. There has been an agreement to review controls in the light of prevailing conditions in the fall of 1959.

5. Mr. Irwin reported that the Department of Defense considers that the new controls do not maintain effective coverage over many items which, in its opinion, have a clear military application or involve advanced technology of strategic significance not available to the Sino-Soviet Bloc, but that Defense has no alternative other than to accept the multilateral system as agreed in the CG. He added that the Department of Defense agreed that the results of the negotiations met the NSC requirements. He concluded by saying that the Department of Defense was submitting a paper to the CFEP further elaborating the Defense position. (This paper is attached.)

6. A question was raised in the CFEP as to whether the language in NSC Action No. 1865 meant that the United States should not agree to reductions in the Atomic Energy List as presently constituted when this list is reviewed in September.

7. The CFEP took the following action:

a. Noted that the agreements made by our negotiators in the recent COCOM and CG meetings on multilateral security trade controls meet the requirements of NSC Action No. 1865 and deserve Executive Branch approval.

b. Agreed that the NSC should be asked to note and concur in the actions taken by our negotiators at the COCOM and CG meetings.

c. Noted that the question as to the meaning of the language in NSC Action 1865 relative to review of the Atomic Energy List should be referred to the NSC.

Paul H. Cullen
Lt. Col., USA
Secretary

Attachment

⁴

Letter From the Assistant Secretary of Defense for International Security Affairs (Sprague) to the Chairman of the Council on Foreign Economic Policy (Randall)

August 11, 1958.

Dear Mr. Randall: Reference is made to CFEP Document 566/3 reporting the results of the recent Consultative Group negotiations and outlining State Department findings and proposals. It should be noted that a numerical comparison between the new International Embargo List of 120 items and the former list of 182 items is misleading because the magnitude of the reduction is much greater than the mere comparison of numbers would indicate as a result of the adoption of new definitions greatly narrowing the coverage on most items. The complete list with definitions has not yet been received in Washington, but Defense’s preliminary study indicates that the over-all coverage of the former embargo list may have been reduced by as much as 70 to 80 per cent.

The Department considers that the new controls do not maintain effective coverage over many items which, in its opinion, have a clear military application and incorporate advanced technology of strategic significance not available to the Sino-Soviet Bloc. However, the Department sees no alternative other than to accept the multilateral control system as agreed in the Consultative Group.

Sincerely yours,

Mansfield D. Sprague⁵

0. Source: Eisenhower Library, CFEP Chairman Records, CFEP Minutes, 1958. Secret.
1. The meeting took place in the Executive Office Building.
2. See footnote 9, Document 327.
3. CFEP 566/3, August 5, was a memorandum to the CFEP from Cullen reporting on NSC Action 1865, summarizing an attached letter from Dillon to Randall, August 4, which outlined the results of the agreement reached by the Consultative Group at Paris, and noting that the Secretary of State recommended approval of the new multilateral trade controls as agreed upon at Paris. (Department of State, E/CFEP Files: Lot 61 D 282A, U.S. Economic Defense, CFEP 566)
4. Secret.
5. Printed from a copy that bears this typed signature.