Foreign Relations of the United States, 1981–1988, Volume III, Soviet Union, January 1981–January 1983

231. Memorandum From the President’s Assistant for National Security Affairs (Clark) to President Reagan¹

Washington, November 9, 1982

SUBJECT

• NSC Meeting on November 9, 5:00 p.m., on East-West Economic Relations

Issue

Now that we have reached agreement with the Allies on the non-paper, the issue before you is to select the appropriate U.S. response in terms of modifying our unilateral oil and gas controls.

Facts

The following options will be presented to you at the NSC meeting:

Option 1: Lift all oil and gas equipment and technology sanctions against the Soviet Union.

Option 2: As recommended in attached memo² from Secretaries Shultz and Baldrige, cancel the June 22 measures, and resulting denial orders; retain December 29 controls with broad “exceptions” criteria including grandfathering pre-December contracts.

Option 3: “Toughen” the recommendations in the Shultz/Baldrige memo through an NSDD, requiring speedy agreement on multilateral controls on critical oil and gas equipment in the context of the study called for in the non-paper.

Option 4: Lift only the June 22 measures pending the separate successful negotiation of multilateral controls on critical oil and gas equipment.

Discussion

Your selection from these options depends on the approach you think will be most effective in translating the broad principles of the non-paper into specific firm commitments. Option 1 relies completely on the good faith of the Allies in living up to the spirit of the non-paper. The history of this issue is not encouraging in this respect. Option 4 requires new concessions from the Europeans before we will grandfather pre-December contracts, and would probably be contested by them, if not rejected. Option 2 occupies the middle ground on a U.S. response. You should understand that it will be difficult for the Commerce Department to administer, because of its complexity. Vigilant high-level attention will be required to ensure it does not degenerate into Option 1. The liberal “exceptions” policy of Option 2 can forfeit any future U.S. leverage and prejudge unfavorably the outcome of the study on oil and gas technology controls. Option 3 addresses these limitations directly by accelerating the study on multilateral oil and gas controls to replace the exceptions policy as quickly as possible.

The confused public handling of this issue in recent months argues strongly for a clear statement from you at this critical juncture. The cabinet must be informed that your statement and the White House-issued press guidance on these decisions will govern all public and private explanation of our policy. Poland remains at the center of this policy—the prolonged repression of the Poles has been the catalyst in the forging of an enduring, security-minded East-West economic policy.

RECOMMENDATION

That you select one of the four options modifying U.S. sanctions as the U.S. response to agreement on the non-paper.³

OK	NO
_____	_____	1. Lift all oil and gas equipment and technology controls against the Soviet Union.
_____	_____	2. Cancel June 22 measures, and resulting denial orders, while retaining December 29 controls, with broad “exceptions” criteria, including the grandfathering of pre-December contracts.
_____	_____	3. Same as Option 2, with an NSDD which requires speedy agreement on multilateral controls on critical oil and gas equipment to replace the “exceptions” policy.
_____	_____	4. Lift only June 22 measures; December sanctions would be maintained pending successful negotiation of multilateral controls on critical oil and gas equipment.

1. Source: Reagan Library, Executive Secretariat, NSC: NSC Meeting File: Records, 1981–88, NSC 00065 09 Nov 82 [1/2]. Secret. Printed from an uninitialed copy. An unknown hand wrote “advance” in the upper right-hand corner of the memorandum.
2. Not found attached.
3. Reagan did not indicate his preference with respect to these options on this copy of the memorandum.