Office of the Historian

370. Memorandum From C. Fred Bergsten and Helmut Sonnenfeldt of the National Security Council Staff to the President’s Assistant for National Security Affairs (Kissinger)1

Washington, February 12, 1971.

SUBJECT

  • French Proposal to Manufacture Integrated Circuits in Poland

The memorandum at Tab I forwards to the President for decision agency recommendations on the French proposal for integrated circuit manufacture in Poland.2

We had previously hoped that a Defense Department “expert’s” report on the French production line3 would assist in reaching a decision on this issue. However, the report is not very helpful on the question of Eastern Europe capability in producing integrated circuits. The report (attached to the State memorandum)4 concluded that in the French plant there is a difference between the military and commercial production lines, but that the commercial production line produces a significant share of integrated circuits fit for military use.

State argues for approval mainly on the basis that the transaction does not represent a serious threat to U.S. security. (State neglects making a strong foreign policy argument.)

Commerce and Defense argue against the transaction primarily on the basis that it would enable the Eastern countries to produce high quality integrated circuits in great volume, something they are yet unable to do, though these agencies acknowledge that the Russians can produce a small number of these circuits already.5

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Your memorandum to the President makes no recommendation. I am afraid that if you want to make one you will have to weigh yourself the effect on our relations with France against the President’s either overriding (for the second time)6 or going along with Secretary Laird. The security issue seems to be insoluble as between the interested agencies. There is no way for us to make an independent judgment on it unless you want to commission a whole new study, subject it to debate and thus delay a decision even longer than it unfortunately has been already.7

After the President’s decision, you should sign the memorandum at Tab II if the President decides to approve the transaction, or the memorandum at Tab III if the President decides to deny the request.8

To avoid future memoranda straggling in from the various agencies addressing the subject in a piecemeal fashion, both of these decision memoranda also ask that future contested cases be sent to the President through established interagency procedures to avoid our having to solicit separate agency comments which bypass each other’s arguments.

Recommendation:

1.
That you sign the memorandum for the President at Tab I.
2.
That after the President’s decision you sign the appropriate memorandum at Tab II (approval) or III (denial).
  1. Source: National Archives, Nixon Presidential Materials, NSC Files, Country Files-Europe, Box 677, France, Volume VII 10/70-3/71. Secret. Attached to Document 371. At the top of the page is the handwritten note, presumably by Sonnenfeldt: “VERY URGENT.” Another handwritten note, dated February 17, by Kissinger reads: “Redo last page—I tend to agree with Defense and Commerce. French have not been cooperative enough to justify it on policy grounds.”↩
  2. Tab I was not found, but see Document 371.↩
  3. Not found.↩
  4. Presumably a reference to Document 368.↩
  5. In a February 9 memorandum to Kissinger, attached to Document 371, Laird wrote that after discussing the technical evaluation report again with Steenbergen, the Defense Department conclusions differed from those of the State Department, and he recommended sustaining the objection in COCOM. A February 12 memorandum by Secretary of Commerce Stans is also attached to Document 371.↩
  6. In 1969 the President had accepted the State Department position rather than that of the Defense Department. See Documents 364 and 365.↩
  7. Sonnenfeldt initialed in the right margin next to this paragraph.↩
  8. Tabs II and III were not found.↩