Foreign Relations of the United States, 1969–1976, Volume IV, Foreign Assistance, International Development, Trade Policies, 1969–1972

338. Information Memorandum From Ernest Johnston of the National Security Council Staff to the President’s Assistant for National Security Affairs (Kissinger)¹

Washington, July 1, 1971.

SUBJECT

• Future East-West Trade Measures

After the flurry and confusion last night in preparing information we needed for your conversation with Ambassador Dobrynin, I fear there may be some misunderstanding between you and Peterson over what he is to do to prepare for future decisions on East-West trade relaxation.

You and he have had several conversations. My sole source of information on what went on in those conversations is from Peterson’s staff. Consequently, I hope it will be helpful if I outline to you where the Peterson operation now stands on this subject.

Peterson understands that you are in charge of this field. He is now considering the draft of a joint memorandum from you and him to the President which would outline a scenario of future moves. This scenario would merely list the possible actions we could take and would propose that over a period of time you and Peterson would ask the agencies to prepare separate options memoranda on each issue for submission to the President. I had hoped that Peterson would have this draft to you last week, but I presume he will send it forward now shortly. I sent a copy of it to you last night and another copy is at Tab A.²

On the Kama River Project, Peterson believes that you agreed that Commerce is now to prepare a paper for submission to the President, incorporating the views of State and Defense and listing the precise options that we would have. These options would be as follows:

• —Denial of U.S. company participation or continued delay in any decision.
• —A piecemeal approach with several variants similar to the one I outlined in my memorandum of June 30 at Tab B.³ Any of these piecemeal solutions would indicate some U.S. participation but not blanket acceptance of the entire proposal at this time.
• —A blanket approval for U.S. company participation in all aspects of the Kama River Project.
• —A blanket authorization for U.S. participation in the entire project provided the Russians agree to additional commercial purchases from the United States. (The Soviet Trade Delegation under Deputy Trade Minister Komarov had proposed the purchase of pencil sharpener factories, furniture factories, etc. if we agree to Kama.)⁴

I am hopeful that Peterson will send a draft of the scenario memorandum to you in the next few days. Commerce will try to submit the memorandum on the Kama River Project by the end of next week. It would be difficult for them to do this earlier if they are to incorporate the views of Defense, although the Commerce draft worked out by Peterson’s ad hoc group is in fairly good shape. After Secretary Laird’s memorandum to the President on June 22, 1971,⁵ I do not think that we should go to the President for a decision on this project without incorporating Laird’s views, especially since he took such a strong stand when Henry Ford was involved.

I intend to continue cooperating with Peterson’s staff along the lines mentioned above, unless I hear from you that these conflict with your understanding.

1. Source: National Archives, Nixon Presidential Materials, NSC Files, Subject Files, Box 402, Trade, Volume IV 7-12/71. Confidential.
2. Document 337.
3. See footnote 1, Document 337.
4. See Document 332.
5. Not found.