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40. Memorandum of Conversation1

SUBJECT

  • Possibilities for Increased US-Soviet Trade

PARTICIPANTS

  • Mr. David Rockefeller
  • Mr. Russell Dorr
  • The Secretary
  • SOVRobert I. Owen
[Page 99]

Mr. David Rockefeller came to the Department for discussions pertinent to his pending visit to the U.S.S.R. as one of a group of prominent private Americans who will have informal talks on current problems of mutual interest with a comparable group of Soviet intellectuals and public figures. Following the unofficial conference in Leningrad, July 26–31, it appears likely that Mr. Rockefeller will be granted an audience with Premier Khrushchev.

Much of the conversation during Mr. Rockefeller’s courtesy call on the Secretary concerned the possibilities for increased U.S.-Soviet trade and the related credit and other problems which make any substantial increase unlikely in the foreseeable future. The Secretary said that the Russians could be told that both in and outside of Government we are looking very seriously into the matter of increased bilateral trade. However, there is a wide variety of problems which suggest that any major increase is doubtful. He observed that the economic bases of our two economies are so much alike that neither has a ready market for a large range of commodities produced by the other. Furthermore, there are problems of financing, differing trade practices and also legislative problems.

The Secretary said that despite such difficulties we have been seeking ways to facilitate some increase in U.S.-Soviet trade. For example, we recently have granted an increasing number of licenses for specific exports to the U.S.S.R.; also we have not raised barriers to U.S. tourism there, thus providing exchange usable in trade. Essentially, we are interested in increased trade and quite prepared to take some steps in specific instances, but cannot give cause for hope of any major increase.

Mr. Rockefeller wondered whether he should ask the Soviets if, in return for increased trade, they might be willing to take a more favorable position on other issues outstanding between the two countries. For example shouldn’t we have a right to ask they cut down on the export of subversion in return for trade? The Secretary replied that this might be all right if posed as the kind of question which many Americans will ask. However, one gets in a kind of chicken-and-egg argument with the Soviets, with their claiming that improvement of relations follows rather than precedes an increase in trade. He said it was his conviction that political concessions for any increase in trade are out of the question as far as the Soviets are concerned.

When Mr. Rockefeller asked if there might not be some Soviet concessions with regard to patents or lend lease, the Secretary observed that as the Soviets now have more interest of their own in trademarks and patents they have started piecemeal to make some bilateral arrangements on these matters. The Secretary went on to draw attention to a particular Soviet sensitivity to any implication that their export [Page 100]market bag doesn’t contain sufficiently sophisticated export items. Consequently, they may stress to Mr. Rockefeller that they can offer steel mills and advanced technology, not just vodka and caviar. The Secretary emphasized that it is most difficult for a free enterprise system to have satisfactory trade relations with a state trading system.

In response to an inquiry, the Secretary touched briefly on credits, saying that we would have no real problems with regard to granting normal commercial credit, i.e., up to five years, depending on the items, but that long-term credits would cause difficulties. It was noted that the Soviets had paid cash for the U.S. wheat sales.

On the future use of U.S. bottoms in U.S.-Soviet trade, the Secretary said that any change in the present posture could come only within the larger context of a general increase in trade. It can be expected that the U.S. shippers and maritime unions will continue their strong opposition to the use of foreign shipping.

  1. Source: National Archives and Records Administration, RG 59, Secretary’s Memoranda of Conversation: Lot 65 D 330. Limited Official Use. Drafted by Owen on July 21 and approved in S on July 27. The meeting was held in the Secretary’s office.