49. Memorandum From Charles Cooper, Robert D. Hormats, and Richard H. Solomon of the National Security Council Staff to the President’s Assistant for National Security Affairs (Kissinger)1
SUBJECT
- Problems in the China Trade
We are increasingly concerned about several problems in our economic relations with the People’s Republic of China which could cause substantial difficulties if they get out of hand. The two discussed in this memorandum are coming to a head, and you should be aware of them in case you may need to take action to resolve them.
The National Council for U.S.–China Trade
The National Council for U.S.–China Trade was set up, largely through the efforts of the Department of Commerce, to act as a facilitating organization in the promotion of U.S.–PRC trade. Through informational and liaison activities, it was to have served as a nongovernmental bridge between the American business community and the PRC in the same pattern of the private organizations that facilitate cultural and scientific exchanges. In practice, the Trade Council has gotten off to a very slow start because of a combination of staffing problems, the overshadowing influence of Commerce in various activities relating to the China trade, and the partisan, big-business and export orientation of the Council’s board.
We recently have picked up some negative comments about the Council from the PRC Liaison Office staff, who are disappointed with both the slow growth of the organization and its big-business orientation. The Chinese also may be giving encouragement to some of their local “friends” to set up a rival organization formed largely of small importers of Chinese products—who can help the PRC in its effort to bring its trade with the U.S. into better balance. The present danger is of a polarization between the Council and a rival group which would weaken USG influence over the development of trade and enable the Chinese to play one group against another. We are encouraging the Council to broaden its membership to include small traders, and to [Page 318] separate itself at an appropriate distance from the USG to give itself the independence necessary to gain wider support.
In this regard, a Council group scheduled to go to the PRC in early October had informally asked Secretary of Commerce Dent to join them. Dent declined, but suggested Deputy Assistant Secretary for East-West Trade Steven Lazarus to join the tour. The Council has now had second thoughts about Lazarus’ inclusion in the delegation, given his position in the USG and their desire to establish an independent position. We also feel that it would be unwise for Lazarus to visit the PRC with the Council group at this time. We trust that Commerce will accept the Council’s reversal of its invitation for his participation, but there may be some complaint.
USG Involvement in the Canton Fair
We are also concerned about excessive USG presence at the fall session of the Canton Fair. As a recent cable from our Peking Liaison Office (Tab A)2 indicates, present plans are for seven (7) USG officers (2 from the Liaison Office, 4 from the Hong Kong Consulate, and 1 man from Commerce) to staff at various times an office which the government would sponsor at the month-long Fair. In addition, the Trade Council is planning to establish an advisory facility to be of assistance to U.S. businessmen attending the Fair. While there is a legitimate role to be played by commercial specialists of the USG in assisting American businessmen, we may be—as the USLO cable suggests—“overloading” the Chinese by requesting that seven men participate at this stage of our commercial relations with the PRC. In addition, the USG presence will tend to overshadow the National Council, which is supposed to be playing the advisory role. Thus, we think it wise to discourage a highly-visible USG presence at the Canton Fair this fall. We are now attempting to cope with this issue through the China desk at State, which will suggest to USLO and the Hong Kong Consulate that they cut back on their representation.
- Source: National Archives, Nixon Presidential Materials, NSC Files, Box 527, Country Files, Far East, People’s Republic of China, Vol. 8, July 10–Dec 31, 1973. Confidential. Sent for information. Kissinger received the memorandum on August 22, and wrote at the top of the first page, “Make sure we reduce delegation to Canton.”↩
- Attached but not printed is telegram 789 from Beijing, August 15, containing additional information about the Canton Trade Fair.↩