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228. National Security Decision Memorandum 1701

TO

  • The Secretary of State
  • The Secretary of Treasury
  • The Secretary of Defense
  • The Secretary of Agriculture
  • The Secretary of Commerce
  • The Director of Central Intelligence

SUBJECT

  • USPRC Trade

The President has reviewed the memorandum submitted by the Department of State, with the Department of Commerce, on April 24 and the response to NSSM 149 submitted by the Ad Hoc Group on [Page 903]March 24 on the above subject.2 Based on these, he has approved the recommendations for actions over the next three months contained in the April 24 memorandum for proceeding to implement the statement on trade in the Shanghai communiqué with the following modifications:

  • —The memorandum for Ambassador Huang should indicate that we recognize the PRC’s interest in MFN but view this as a subject for later discussion.3
  • —The matter of alleged PRC failure to repay Export-Import Bank debt should not be raised by the PRC at this time. An interagency committee chaired by Treasury should examine this question and its effect on PRC eligibility for Export-Import Bank financing, and submit a report to the President by July 3. —The memorandum for Ambassador Huang should place greater stress on the necessity of beginning discussions in the near future on the settlement of the claims issue.
  • —References to the cotton textile issue and to US anti-dumping regulations and US prohibitions on imports of “certain endangered animal species” should be removed from the memorandum for Ambassador Huang. These matters should be dealt with in separate memoranda to be presented to Ambassador Huang within the next several weeks. In his oral presentation, Ambassador Watson should indicate that we intend to provide the PRC with such memoranda shortly. Memoranda on these subjects together with recommendations as to the timing of their presentation should be submitted to the President by June 23.4
  • —No mention should be made to the PRC at this time of possible US changes in transportation regulations. The Department of State, in cooperation with other appropriate agencies, should submit to the President as soon as possible documents necessary to revise US regulations regarding reciprocal visits by ships and aircraft. A draft statement announcing such decisions as well as a statement indicating that eventual establishment of scheduled air services would be subject to USPRC inter-Governmental discussions should also be submitted.

As to recommendations for longer term steps, the President has deferred his decision and requests that they be resubmitted with [Page 904]proposed memoranda, where appropriate, and specific recommendations as to timing.5

Henry A. Kissinger
PMF
  1. Source: National Archives, RG 59, Central Files 1970–73, FT 1 CHICOMUS. Secret; Nodis; Homer. The typewritten date on this memorandum, June 10, was changed by hand. Also issued as a Council on International Economic Policy Decision Memorandum.
  2. On April 24 Brown forwarded to Kissinger a covering memorandum and an 8-page report on recommendations for implementing NSSM 149. (National Archives, RG 59, Central Files 1970–73, FT 1 CHICOMUS) Regarding the March 24 response to NSSM 149, see Documents 217 and 219. NSSM 149 is printed as Document 208.
  3. See Document 242.
  4. Approved by Haig in the White House and sent as telegram 150506 to Paris, August 17. (Memorandum from Hormats to Haig, August 14, with attached telegram; National Archives, Nixon Presidential Materials, NSC Files, Box 529, Country Files, Far East, Homer, USPRC Negotiations, Paris)
  5. On June 12 Kissinger and Flanigan sent a memorandum to Rogers, Laird, Peterson, and NASA Administrator Dr. James C. Fletcher announcing that “in the review taking place on COCOM the United States should adopt as a general principle the termination of differential treatment for the PRC as the basis for development of the United States negotiating position. In the event that there are particular items which we and other COCOM countries agree should be treated on a differential basis, we should endeavor to apply the concept of ‘disguised differential.’” (Ibid., Box 525, Country Files, Far East, PRC, Vol. IV)