317. Action Memorandum From the President’s Assistant for National Security Affairs (Kissinger) to President Nixon 1

SUBJECT

  • Export Controls—Implementation of New Export Administration Act

Congress passed a new Export Administration Act late last year, which puts us under heavy pressure (a) to liberalize our present list of controlled items and (b) to set up liberalized guidelines for deciding license requests in the future.2 Commerce has now submitted a paper, worked out with State and Defense, outlining your options for doing so (Tab A).3

The new Act makes two basic changes in the law:

1.

The old Act required export denial if the items would contribute to either the “military potential” or “economic potential” of a Communist country. The new Act eliminates “economic potential” as a criterion. However, instead of just letting “military potential” stand, it requires denial for “national security” reasons.

The implication is that we should not deny on “economic potential” grounds, but neither should we deny solely on “military potential” grounds. It is thus up to us to interpret where to draw the line in between, and this is a major issue to be decided. Defense and Commerce want to control exports which contribute to “military-supporting [Page 817]industrial capabilities”, while State would limit controls to items which contribute “to the development, production or use of military hardware.”

2.
The old Act made no reference to “consideration of foreign availability” as a criterion for determining our export controls. The new Act puts heavy emphasis on our permitting the export of items which are available in other non-Communist countries, and requires a report to Congress on any decisions to stop such items. Commerce wants to honor this mandate, while Defense argues against doing so as a general rule.

Option 1: Limit the control list to COCOM items plus items which can contribute significantly to the development, production or use of military hardware by the USSR and Eastern Europe, regardless of foreign availability.

Our controls would be limited to items contributing directly to Communist military potential. We would decontrol some items not directly related to military hardware, even when their lack of availability elsewhere makes our controls effective.

State favors this option as an opportunity to increase trade, to reduce frictions with our allies and to avoid Congressional and Public charges of inadequate liberalization under the Act.

Option 2: Would also control, beyond the Option 1 list, material contributing to the military-supporting industrial capabilities of the Communist countries when such material would NOT otherwise be readily available from other countries.

This option would maintain our controls on items where we could effectively deny additions to Communist industrial power. It would not be limited to directly military items. It would decontrol items available from other non-Communist countries, however, and would thus remove certain highly visible U.S. goods from the current lists.

Commerce favors this option.

Option 3: Control all the foregoing, plus items which would contribute significantly to the military-supporting industrial capability of the USSR and Eastern Europe, regardless of foreign availability.

This option would be the closest to our current controls. It would continue to control items well beyond those contributing directly to Communist “military potential”, and would not permit exports simply because the items were available in other non-Communist countries. (Even it would mean immediate decontrol of 216 items no longer considered strategic by any agency, with more later as the lists are reviewed.)

Defense supports this option on the grounds that our general relations with the Communist countries justify no more open policy. They [Page 818]believe that it is consistent with the new Act. State maintains that it would be contrary to the provisions and intent of the new Act. At a minimum, it would clearly frustrate the expectations of some Congressmen and the business community that the new Act would result in broad liberalization.

As a result of the new Act, there is a widespread expectation of some liberalization of our export controls, and your decisions will be judged against those expectations—not against our present control lists.

Option 1 would probably be interpreted as a fairly liberal implementation of the Act. Option 3 would be regarded as more restrictive than called for by the Act, because it would restrict (a) non-military items (b) available from other countries. Option 2 would be most in line with expectations and represent the most neutral possible foreign policy signal.

Recommendation:

That you approve Option 2, as recommended by Commerce that our control lists for the Soviet Union and Eastern Europe henceforth comprise: (a) COCOM items; (b) items which contribute significantly to their development, production, or use of military hardware regardless of foreign availability; (c) material contributing to their military-supporting industrial capability, when such material is not otherwise readily available. (This would mean immediate decontrol of 216 items deemed non-strategic by all agencies, which however would also be decontrolled under any other option.) William Timmons concurs.

Approve4

Disapprove, prefer harder Option 3 as proposed by Defense: in addition, control items contributing significantly to the military-supporting industrial capability of the USSR and Eastern Europe regardless of foreign availability

Disapprove, prefer softer Option 1 as proposed by State: limit the control lists to COCOM items plus military hardware regardless of foreign availability

  1. Source: National Archives, Nixon Presidential Materials, NSC Files, Subject Files, Box 401, Trade General, Volume II 4/70-12/70. Secret. Attached to an April 7 memorandum from Bergsten to Kissinger, on which Kissinger indicated his approval on April 9 of the Commerce Department’s recommendations on decontrolling additional items for export to Romania only, and approved the disapproval of Commerce’s recommendation for elimination of the special discriminatory category against East Germany.
  2. See Document 311.
  3. See Document 316 and footnote 5 thereto.
  4. The President checked this option and crossed out the other two options. The date of April 13 is stamped below the options. Ernest Johnston wrote in the margin next to the President’s approval: “Subsequently canceled by telephone call EJ. Apr 14, 1970.” See Document 318 and footnote 3 thereto.