Foreign Relations of the United States, 1969–1976, Volume XVII, China, 1969–1972

242. Telegram From the Department of State to the Embassy in France¹

Washington, July 26, 1972, 0033Z.

134912. For Ambassador Only. Subj: US–PRC Trade—Memorandum to be Left With Ambassador Huang. Ref: State 134911.² The United States notes that there are a number of highly technical and specialized subjects relating to the facilitation of trade between the United States and the People’s Republic of China which could be the topic of discussion in Paris at times to be determined by mutual agreement.

We would welcome an opportunity for early discussion of the following subjects in particular:

1. Settlement of outstanding claims between the US and the PRC. There are many issues regarding claims which the US wishes to discuss with the PRC. It may be that the PRC will wish to raise issues of its own with the USG. For example, we are aware that China may wish to assert claims for assets blocked in the US since 1950. In the spirit of raising at this stage those issues which are capable of solution at present, we suggest that the problem of the claims of US private citizens be resolved in the near future by meetings between expert teams of the two sides. (US claims have been adjudicated as to validity and amount by the US Foreign Claims Settlement Commission pursuant to US law. The findings of the commission are a matter of public record and we will supply a copy to your Embassy in approximately one week.)

2. We recall that Secretary of State Rogers raised the problem of private claims in informal conversation with Minister of Foreign Affairs Chi P’eng-fei in Peking and that the Minister indicated that this was a matter which could be discussed by the two sides.³ It was also raised in the more recent “counterpart” conversations in Peking this June.⁴ We remain concerned that private claimants may attempt to attach by means of lawsuits Chinese commercial property or ships which come within the jurisdiction of US courts. We would be unable to prevent such suits despite the adverse impact that they would have on the progressive development of mutually beneficial trade between the US and China. We believe, therefore, that it is important for our two countries to begin negotiations soon to reach an equitable settlement of private claims. We propose that the two sides agree to hold meetings between expert teams to discuss these matters, either in Paris or Peking, starting September 15, 1972.

3. Scheduled air service between the two countries. One obvious way of facilitating trade might be to inaugurate scheduled air service between the United States and the People’s Republic of China. Action by the US Civil Aviation Board would be necessary to determine which US airlines would be authorized to serve air routes which might be established by mutual agreement between our two countries. We would welcome an expression of the Chinese view of inauguration of reciprocal scheduled air service at an appropriate time.

4. In the talks in Peking the Chinese side raised the issue of Most Favored Nation status and the effect that the lack of it would have on the development of trade relations between our two countries. The US side has agreed that the question of Most Favored Nation status can be taken up as a matter of principle at an appropriate stage in the development of our economic relations.

5. The problem of industrial protection. We note that the People’s Republic of China is not a signatory of the International Convention for the Protection of Industrial Property (Paris Union). Nevertheless, we are prepared to facilitate Chinese registration of trademarks and patents in accordance with our laws and regulations. We would welcome reciprocal treatment for our citizens by the People’s Republic of China.⁵

Rogers

1. Source: National Archives, RG 59, Central Files 1970–73, FT 1 CHICOM–US. Secret; Nodis; Homer; Immediate. Drafted by Freeman and W. G. Metson, and approved by Brown, Hummel (EA), J. L. Katz (E), and Kissinger.
2. In telegram 134911 to Paris, July 26, the Department instructed Watson to “seek an early appointment with Ambassador Huang to inform the PRC of a number of concrete actions the US has taken or is taking to implement the trade sections of the Shanghai Communiqué.” These actions included a Sino-American trade organization and lists of items with “the greatest potential for US–PRC trade.” It also instructed Watson to pass telegram 134912 on to the PRC representatives. (Ibid., POL CHICOM–US) In telegram 232422 to Paris, December 27, the Department informed Chargé Jack B. Kubisch of its intention of organizing the non-governmental trade council. In telegram 24970 from Paris, December 29, Kubisch reported that he had informed the PRC representatives on December 29. (Both telegrams are ibid., FT CHICOM–US) Watson left post on October 30; his successor, John N. Irwin II, was not appointed until February 2, 1973.
3. Apparent reference to the February 22 meeting between Rogers and Chi. (Ibid., Nixon Presidential Materials, NSC Files, Kissinger Office Files, Box 91, Country Files–Far East, China, Memoranda of Conversation between Secretary Rogers and PRC Officials, February 1972)
4. See footnote 1, Document 231.
5. As reported by Watson in telegram 14499 from Paris, July 28, he met with Huang on July 28 and passed along this message, along with lists of proposed trade items. “Huang listened but did not comment” on Watson’s presentation. (National Archives, RG 59, Central Files 1970–73, POL CHICOM–US) The PRC response was presented in a September 12 meeting between Watson and Huang in Paris. Watson reported: “Meeting was held at PRC request and strikes me as intense effort to be responsive to our proposals, moving ahead on simpler steps, such as expanding attendance at Canton Fair, while deferring for further study more complex issues.” The PRC response is in telegram 17171 from Paris, September 12; Watson’s report is telegram 17209 from Paris, September12. (Both ibid.) PRC officials met with Watson on October 14 to request more detailed information on private claims against the PRC. (Telegram 19630 from Paris, October 16; ibid.)