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127. Memorandum From the President’s Assistant for International Economic Affairs (Peterson) to the President’s Assistant for National Security Affairs (Kissinger)1

SUBJECT

  • China Trade

As you know, I am fully behind the President’s policy to open up our trade and travel restrictions with the People’s Republic of China. Not only are there economic advantages for us but I am convinced that the President has already and will continue to make domestic political gains from the process. This is particularly true, if the domestic political aspects are handled with care. My views on how to win extra domestic political points in the key border and agricultural states are set [Page 321]forth in the attached copy of a memorandum I sent the President on May 17.2

On substance, I’m with you and will support proposals as far-reaching as you think advisable.

Clearly, the key disagreed substantive issue for Presidential decision is the proposal to add grains on general license for export both to China and the Soviet Union. There is a real trade potential here; there is an opportunity with Bob Dole3 and the farmers to win domestic political kudos; and the situation is set up to eliminate some very shortsighted shipping restrictions. While labor and George Meany 4 may oppose this latter aspect, I have reason to believe that the west coast unions are prepared to load grains both for China and the Soviet Union.

On balance, it is better from the President’s standpoint, for Joe Curran 5 to be unhappy than for the American farmers to be unhappy. Particularly since grain exports do have the promise of improving the balance of payments, which is so important.

  1. Source: National Archives, Nixon Presidential Materials, NSC Files, Box 521, Country Files, Far East, China, Vol. VII. Secret.
  2. The attached May 17 memorandum to the President essentially restated the points raised by Peterson in this memorandum.
  3. Senator Robert Dole (R–Kansas) was Chairman of the Republic National Committee.
  4. George Meany, President of the AFL–CIO.
  5. Curran, President of the National Maritime Union (AFL–CIO).