298. Memorandum From the Executive Secretary of the Department of State (Tarnoff) to the President’s Assistant for National Security Affairs (Brzezinski)1


  • Export-Import Bank Determination for the PRC

Now that the Chinese Trade Agreement has been approved by Congress,2 a further Presidential action is required to permit establishment of more normal trade and commercial relations with the People’s Republic of China.

Subsection 2 (b) (2) of the Export-Import Bank Act of 1945 prohibits the Bank from providing guarantees, insurance or credits in transactions involving communist countries or their agencies or nationals unless the President first determines that such activities would be in the national interest and reports his determination to Congress. (No further Congressional action is required.) This determination is in addition to the Trade Act’s JacksonVanik amendment requirements, which have been satisfied. Such determinations have been made for Poland, Romania, Hungary, Yugoslavia and the U.S.S.R. (although the U.S.S.R. is ineligible for Exim under JacksonVanik).

Exim financing will be an important element in the development of improved trading relations with the PRC. Both the U.S. and the Chinese have understood that action to make such financing available on normal terms and conditions would follow approval of the Trade Agreement, and Exim is preparing to initiate discussions with the Chinese to develop the necessary implementing arrangements.

We believe that Exim financing for the PRC is an important part of the process of normalizing our trading relations with the PRC, and would be wholly consistent with our policy towards the PRC. We therefore recommend that the President determine that the provision of Exim financing to the PRC would be in the national interest.3

Peter Tarnoff4
  1. Source: Carter Library, Brzezinski Donated Material, Subject File, Box 50, Presidential Determinations, 8/79–5/80. No classification marking.
  2. The Chinese Trade Agreement, which Carter sent to Congress on October 23 (see footnote 7, Document 278) was approved by Congress on January 24 and entered into force on February 1. (31 UST 4651; TIAS 9630)
  3. Attached but not printed is the proposed Presidential Determination, which Carter promulgated on April 2. See Document 307.
  4. Seitz signed for Tarnoff above this typed signature.