Foreign Relations of the United States, 1964–1968, Volume IX, International Development and Economic Defense Policy; Commodities

196. Memorandum Prepared in the Department of State¹

Washington, December 21, 1968.

MEMORANDUM ON THE EXPORT OF COMPUTER TECHNOLOGY TO EASTERN EUROPE AND THE SOVIET UNION BY OUR ALLIES

Problem

The basic problem raised by Secretary Clifford is that our allies place great importance on increasing their exports to Eastern Europe and less emphasis than we do on purely strategic considerations. We do have a framework of rules agreed upon with them, called COCOM, which has been reasonably effective in denying strategic goods to Communist countries on many other items but has not been as effective on computers as we would wish. This problem is now becoming greater with the efforts of France and Britain particularly to build plants in Communist countries which necessarily involve transferring some production technology to those countries.

This is a continuing problem and we do not propose to fix policy for the next administration. But we have the immediate problem of deciding how to react to:

1. The French decision to sell a computer system to Romania;

2. The British desire to try to cut the French out of the Romanian deal at the eleventh hour;

3. The British desire to sell a very large computer plant to the Soviet Union, which they have delayed temporarily because of the Czechoslovak invasion;

4. The British visit to Washington January 3 for talks which may be our last chance to reach agreement on these points.

These are the key factors:

1. We do not take issue with Secretary Clifford’s evaluation of the strategic significance of computer production technology although there is a considerable body of opinion that believes this is not as critical as it may first appear because the Soviets can, if they wish, mobilize sufficient resources for their top priority military needs and because the United States would continue to stay way ahead of the Soviets in this dynamically changing computer field.

2. The Europeans attach the highest priority not only to export and balance of payments considerations, but also to building strong computer industries, and both General de Gaulle and Prime Minister Wilson have shown tremendous sensitivity to United States dominance here.

3. They insist that these computers and the production capability to make these computers are needed for business and civilian economic uses in Eastern Europe, and they have not been impressed by our many and detailed arguments, including those of Defense with its counterparts in the British Government, that the military significance should be overriding.

Possible Actions

Secretary Clifford has outlined one alternative to threaten the denial of US technology and equipment to Western Europe to dissuade France and the UK from the transfer of computer technology to Communist countries. We are convinced this will not work. All the key countries would have to agree and it is clear that at a minimum the British, the French, and the Japanese would not agree. Secondly, the consequences of cutting off technology and computer equipment to these friendly countries would create a political and public reaction of very large dimensions, plus damage to our NATO alliances. It would hasten the development of an independent computer industry in Western Europe that would feel free to trade without any constraints with the Communist countries of Eastern Europe. American computer firms might have to terminate supplier and/or technical relationships with European firms including their own subsidiaries.

While there are many examples of the counter-productivity of pressure tactics on General de Gaulle, one of the most instructive is in the field of computers itself. The decision by the French to establish a French national computer company followed the decision by the United States to deny advanced computers to France under NSAM 294² and the Limited Test Ban Treaty, and was unquestionably influenced thereby. That independent French company is the one that has now signed a contract with Romania.

A preferable alternative course would be as follows:

1. Try to negotiate agreement among all our allies on replacing the present COCOM rule that permits each country to determine for itself which computers to embargo, with an agreed upon definition of performance criteria. We believe that there is a reasonable chance of getting agreement on the proposed Dutch criteria which are only slightly more liberal then the guidelines the United States uses in determining which computer exports to license. Success in this would mean that unanimous agreement would be required for the approval of any application to export more sophisticated equipment.

2. On technology, both the practical situation and our broad policy views regarding Romania require us and our NATO allies to be more liberal with Romania than with the Soviet Union and the other invading countries of Eastern Europe. Romania would still be required to give assurances on peaceful uses and against re-export which could be monitored. This would permit some kind of a British or French contract (Amb. Shriver feels the French decision is not reversible) with Romania but we would hope to negotiate a reduction in the scope of the technology to be passed to Romania.

3. We would hope to tighten and reduce the technology currently envisioned by our allies for transfer to the Soviet Union and the invading countries by negotiating agreement in COCOM for the embargo of key computer production equipment. Naturally, some compromise on all sides would be required to reach agreement.

We cannot guarantee that this strategy will result in final agreement but pursuing it has two advantages:

1. It is preferable both to the present situation and to Secretary Clifford’s proposed course of action;

2. It leaves the options open to the new administration since we can only begin discussions in January and they will be able to judge for themselves how much compromise they wish to accept in order to reach agreement—without agreement all options, including Secretary Clifford’s, are open to them.

1. Source: Department of State, Central Files, STR 13–1. Secret. No drafting information appears on the source text. Attached to it is a December 22 memorandum from John P. Walsh to Bromley Smith which indicates that Secretary Rusk authorized him to send the memorandum to Smith. Walsh added that if Secretary Clifford’s memorandum referred to in the source text was sent to the participants in the meeting on this question, then the Department of State suggested that this memorandum also be given to them. Secretary Clifford’s memorandum has not been found.
2. NSAM No. 294, “U.S. Nuclear and Strategic Delivery System Assistance to France,” April 20, 1964. (Department of State, S/S–NSC Files: Lot 72 D 316)