Office of the Historian

238. Summary of Conclusions of a Policy Review Committee Meeting1

Washington, April 30, 1979, 9:30–10:35 p.m.

U.S.–CHINA ECONOMIC RELATIONS

PARTICIPANTS

  • State
  • Warren Christopher (Asst Sec of State)
  • Richard Cooper (Under Sec for Economic Affairs)
  • Jules Katz (Asst Sec for Economic and Business Affairs)
  • Treasury
  • Secretary W. Michael Blumenthal
  • Anthony Solomon (Under Sec for Monetary Affairs)
  • Defense
  • Ellen Frost (Dep Asst Sec, International Economic Affairs)
  • Agriculture
  • Secretary Bob Bergland
  • Tom Hughes (Administrator, Foreign Agriculture Service)
  • Commerce
  • Secretary Juanita Kreps
  • Frank Weil (Asst Sec for Industry and Trade)
  • Sam Nemirow (Acting Asst for Maritime Affairs)
  • Transportation
  • Secretary Brock Adams
  • STR
  • Richard Rivers (General Counsel)
  • Energy
  • Holsey Handyside (Acting Asst Sec for International Affairs)
  • Labor
  • Howard Samuel (Dep Under Sec for International Labor Affairs)
  • Justice
  • Nelson Dong (Special Asst to the Attorney General)
  • Export-Import Bank
  • Warren Glick (General Counsel)
  • DCI
  • Amb John Holdridge (NIO for China)
  • OMB
  • Bowman Cutter
  • OSTP
  • Ben Huberman (Asst Dir for National Security, International, and Space Affairs)
  • Domestic Policy Staff
  • Bill Johnson (Associate Dir, Transportation and Labor)
  • JCS
  • Lt Gen William Smith
  • White House
  • Zbigniew Brzezinski
  • NSC
  • Michel Oksenberg

SUMMARY OF CONCLUSIONS

Secretary Michael Blumenthal chaired a meeting to discuss issues involved in the Juanita Kreps trip to China. The meeting could not reach a consensus on whether to insist on a cargo-sharing provision in a maritime agreement with the People’s Republic of China. State is against such a provision because it would increase the cost of trade with the U.S. and perhaps drive Chinese trade elsewhere. Agriculture is opposed because the U.S. merchant fleet does not include grain cargo vessels capable of offloading grain at Chinese harbors. We rely on tankers for export of our grain, while Chinese harbor facilities can only handle freighters. Commerce and Labor wish a cargo-sharing agreement in order to protect our fleet against Chinese pressures to use their own ships exclusively. A paper outlining the issues will be submitted to you for your decision prior to Kreps’ departure.

Kreps is authorized to initial a trade agreement ad referendum providing the Chinese will have signed the claims/assets agreement. She is not authorized to initial a trade agreement if the Chinese continue to stall in the signing of the claims/assets agreement. This is a tactical posture which seeks to place maximum pressure on the Chinese to sign the claims/assets agreement.

On MFN, Kreps is authorized to indicate to the Chinese that granting of MFN to Beijing is not conditional on our granting it to the Soviet Union. We are considering our trading arrangements with both Moscow and Beijing on their merits and recognize the unique circumstances in each case. As soon as a trade agreement is initialed and a textile agreement signed, we will be prepared to take the MFN issue to Congress without delay.

Consultations on the trade agreement should begin with the private sector swiftly, to make sure there is public support for it. Commerce and State are responsible for the consultations.

Kreps will indicate the U.S. would like to initiate discussions on a civil aviation agreement.

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Negotiations on a textile agreement do not fall within Kreps’ mandate; negotiations on textiles will be resumed on May 21 in Beijing.

  1. Source: Carter Library, Brzezinski Donated Material, Subject File, Box 25, Meetings, PRC 103: 4/30/79. Confidential. The meeting took place in Room 305 of the Old Executive Office Building.↩