387. Draft Memorandum From the Chairman of the National Security Council Under Secretaries Committee (Irwin) to President Nixon 1

SUBJECT

  • Study of the COCOM System

On March 29, 1972, you directed that the Under Secretaries Committee, following the COCOM list review, undertake a basic examination of how the COCOM system should be used in the future to control exports to Communist countries.2

The Committee’s report is attached.3 [Page 972]All agencies agree that the system has been effective and has made a valuable contribution to our deterrent strategy. All agree also that there have been problems in maintaining the cooperation of the COCOM members in a relatively tight COCOM system and that these problems threaten the continued effectiveness of the system. Generally speaking, our present difficulties in COCOM arise from the prevailing spirit of détente, the new emphasis on East-West trade, and increased commercial pressures which have accompanied these developments in the U.S. as well as abroad.

The agencies have agreed that we should reject the more extreme options of abolishing COCOM and relying on U.S. unilateral controls (Option D), or reconstituting COCOM as an East-West trade coordinating body (Option E). The agencies have also agreed on a number of procedural steps to help the system function more smoothly (Option B, parts 1-3). The agencies differ, however, on the more basic course of action which the U.S. should adopt in dealing with the difficulties described above.

There are two such basic approaches reflected in the study: [Page 973]

  • —the first, proposed by Defense, envisages now a high priority effort focused on encouraging a more positive attitude and commitment in COCOM on the part of its members—a program as set forth in Option A consisting of a number of individual measures designed to secure greater recognition at home and abroad of the direct linkage between national security and strategic trade controls;
  • —the second, proposed by State and Commerce, envisages a thorough and probing analysis of the embargo list well in advance of the next COCOM List Review in order to satisfy both ourselves and our COCOM partners that we have made every effort to limit the embargo coverage to the minimum necessary based on sound strategic evaluations—a program as set forth in Sub-Option C (4) that would utilize the government-industry technical advisory groups provided for in the Export Administration Act as recently amended and would assure that U.S. objectives in COCOM are fully consistent with our changing political and economic relationships with the Communist countries.

The distinction between these two approaches has a great deal to do with timing and emphasis. Thus, Defense would not reject a careful review of the embargo list provided it is undertaken in connection with the program outlined in Option A and does not presuppose a further sharp reduction. While neither State nor Commerce supports Option A as set forth, Commerce believes that the approaches to other governments foreseen in Sub-Options A (1) and (4) could, indeed, be useful if tied to implementation of Sub-Option C (4) but believes strongly that the advantages from pursuing these approaches would be maximized if they were made at the outset of the next COCOM List Review, which will probably occur in late 1973 or early 1974, rather than now.

State considers that such approaches at an appropriate time and level might well be useful, but believes it is too soon now to determine such tactics which would be both undesirable and inappropriate if undertaken at this time. State also believes that we cannot legitimately influence the degree to which defense elements in member governments have a role in COCOM matters (Sub-Option A (2)) and that it would be impractical to try to relate COCOM formally to NATO (Sub-Option A (3)). The Atomic Energy Commission generally favors a positive program to prevent deterioration of COCOM as reflected in Option A and specifically recommends Sub-Options (4), (5), and (6). The Commission has also expressed the view that a review of the COCOM List as provided in Sub-Option C (4) should be undertaken within the kind of current policy guidance or criteria suggested in Sub-Option A (5) without preconception of how the list should be limited.

The choice between these two approaches involves a decision on the priority to be given the COCOM effort in relation to other elements in our national policies. The first approach involves a concerted and [Page 974]strenuous U.S. initiative to strengthen support for the system. It is based on a relatively high appreciation of COCOM’s past achievements and a pessimistic view of its future effectiveness without this major effort. The other approach would attempt to assure that U.S. efforts in COCOM are in perspective with current developments in East-West relations; it is based on a pessimistic view of the prospects for influencing our allies toward a stronger course of action in COCOM.

Sub-Option C (3) requires special comment. It recommends a moderate increase in the minimum value of exports proposed as exceptions to the embargo which must be submitted to COCOM for review. In the Study as circulated the proposal, supported by State and Commerce, was for an increase from the present $500 cut-off for new exports to $1000 and from the present $4000 cut-off for servicing of previous exports to $5000. Commerce has withdrawn its support for this recommendation on grounds that consideration of this Sub-Option should await further experience under the present recently-increased levels because there remains, in the Commerce view, too much question as to the likely adverse strategic impact of further increase at this time. The Department of State, as the only agency supporting this Sub-Option, has modified its recommendation to propose a $2000 rather than a $1000 level for new cases. This is a figure consistent with the basic analysis of the issue in the body of the Study which shows that during the sample period 28 percent of the cases submitted to COCOM were valued below $2000. State believes that leaving with individual countries the responsibility for deciding such minimum value cases would be an acceptable risk and would greatly relieve the work-load in the committee

  1. Source: National Archives, RG 59, S/S Files: Lot 83 D 305, NSDM 159. Confidential. The memorandum, a revision of the draft Armstrong sent Irwin on November 20 ( Document 383), is Tab A to a December 30 memorandum from Assistant Secretary Armstrong to Deputy Secretary Irwin recommending that it be circulated to members of the Under Secretaries Committee for their prompt concurrence. Armstrong noted that the revised draft contained revisions from the Defense and Commerce Departments and the AEC (see Documents 384 386). Tab E to Armstrong’s memorandum comprised several revised pages to the paper on COCOM review attached to Document 383. The memorandum was circulated to the Under Secretaries Committee on January 3, 1973, under cover of a memorandum from Seymour Weiss. (National Archives, RG 59, S/S Files: Lot 83 D 305, NSDM 159)
  2. See Document 380.
  3. The paper with the revised pages is not printed.