306. Action Memorandum From C. Fred Bergsten of the National Security Council Staff to the President’s Assistant for National Security Affairs (Kissinger)1

SUBJECT

  • Administrative Liberalization of U.S. Export Controls

Secretary Stans needs a prompt response to his request for permission to release a liberalized list of export control items. The House-Senate Conference Committee on the Export Control Act meets on Thursday.

In response to your telephone request, Secretary Stans has now forwarded three alternative lists (60 items, 100 items, 135 items) (Tab B). Stans’ previous memorandum (Tab C) had agency concurrence for decontrolling the long list in implementation of the President’s NSDM 15 decision (Tab D).2 [Page 796]In the present memorandum Stans states that adverse press comment and the upcoming Senate-House conference on extension of the Export Control Act make it highly desirable to release now either the 100 item or 135 item list.

Commerce and Congressman Widnall believe administrative liberalization will blunt the Senate campaign to liberalize the Act. Bryce Harlow is dubious that any administrative action now will be very helpful.

Foreign policy considerations vis-a-vis the Eastern Europeans do not argue for administrative liberalization. However, the new moves of the Brandt government will highlight the appearance of U.S. immobility and with the passage of time our own domestic posture will seem more rigid. From late October 1966 until July 1968 the Johnson Administration liberalized about 500 items, most of them during the early period.3 For over a year there has been no liberalization and during that time Commerce has worked up the 135 items.

By waiting until after the conference before releasing lists we would avoid the appearance of influencing the conference, but unless we delay for a long time the liberals can then claim that the new bill, which will certainly be somewhat more liberal than the current Act, forced the Administration to move.

The qualitative differences among Stans’ three lists are not very large. Although the smallest list contains a large number of obviously non-strategic items (soft drink pumps, mops, flashlight batteries) it also has some more sensitive items (carbon steel ingots, alloy steel scrap, ferromolybdenum). The middle list adds other semi-sensitive items (agricultural machines, drill bits, aluminum ingots) as well as obviously non-strategic ones (multitype typewriters, insecticides). The additions making up the longest list contain the same diversity (cotton and synthetic tire cord and cattle stunners as well as trucks, meteorological balloons and non-computerized railway traffic control equipment).

It would, of course, be possible to pare down the smaller list so that it is completely innocuous. I would not, however, recommend this for then the list would appear frivolous and would serve mainly as an argument for those who are trying to amend the current law and force the Administration’s hand.

Commerce also needs strategy guidance in working with the conferees. Muskie and Mondale, on the Senate side are likely to push hard for the liberal Senate version. Several of the house conferees will not resist too hard unless they are promised a Presidential veto, which, I believe, would [Page 797]blow up the issue unnecessarily. Pro-Administration conferees, Senators Tower and Bennett and Representative Widnall, believe that some Administration compromises may help avoid the Senate version.

Assistant Secretary Davis of Commerce has forwarded you a list of acceptable changes (Tab E)4 which he wishes to propose. These are principally non-substantive though they would accept some of the Senate language.

The changes would:

  • —focus controls on goods contributing to the military potential (rather than military and economic potential) of other countries;
  • —state that it is U.S. policy (a) to trade with countries with which we have diplomatic relations unless the President determines it against the national interest and (b) to restrict exports that contribute to the military potential of nations and would prove detrimental to the national security (eliminating much of the cold war language);
  • —state that it is U.S. policy to use trade to further our own economy as well as to further national security.

The alternatives are:

  • —to refuse any compromise, with the possibility that the outcome may be more toward the Senate than the House version;
  • —to accept the Commerce compromises in order to bring an outcome that is closer toward the House version.

Recommendation:

1. That you agree to release of the middle list of 100 items.

Approve

Disapprove, prefer 135 items

Disapprove, prefer 60 items

Disapprove, prefer no liberalization5

2. That future decontrol be checked with you in advance.

Approve6

Disapprove

(The memorandum to Secretary Stans at Tab A4 incorporates these decisions.)

[Page 798]

3. That Commerce be allowed to work with Administration supporters in reaching cosmetic compromises that preserve the substance of the House version.

Approve7

Disapprove

  1. Source: National Archives, Nixon Presidential Materials, NSC Files, Subject Files, Box 401, Trade General, Volume I. Confidential.
  2. Tabs B and C are not printed. Tab D is NSDM 15, Document 299.
  3. For documentation on the liberalization of controls on East-West trade by the Johnson administration, see Foreign Relations, 1964-1968, vol. IX, Documents 181 195.
  4. Not printed.
  5. This option is checked, and a note in the right margin reads: “orally 11/5—passed to Commerce by CFB 11/5.”
  6. This option is checked.
  7. This option is checked, and a date of November 5 is written below.