S/S–NSC Files: Lot 63 D 351: NSC 69 Series

Memorandum by the Acting Assistant Secretary of State for European Affairs ( Thompson ) to the Secretary of State 1

top secret

Subject: NSC review of export controls and security policy

The Secretary of Commerce has submitted to the NSC a memorandum which proposes the possible use of strong pressure, including the withholding of ERP and MDAP assistance, in order to force the Western European countries to adopt security export controls as restrictive as those of the U.S. Commerce is under some pressure from American business to modify export control practices because U.S. controls, particularly on 1–B items are more restrictive than those currently applied in Europe. The Commerce Department’s suggestion represents only the most recent of a series of efforts to lay down a negotiating line which, in the view of State and ECA, would be self-defeating. Aside from the use of sanctions, the Commerce memorandum proposes no new policy except for the abandonment of the principle laid down in Ambassador Harriman’s original instructions that U.S. controls might have to be more restrictive than European since trade with Eastern Europe was more important to them than to us. Secretary Sawyer’s covering letter indicates that he is somewhat confused as to the status of present negotiating instructions to our representatives in Paris.

Attached are the following papers:

1.
The Commerce memorandum (Tab A). (NSC 69)2
2.
A suggested statement for your use at the NSC meeting on Thursday (Tab B).
3.
A paper which you could propose as an NSC action on this subject (Tab C).
4.
A more detailed comment on the Commerce memorandum (Tab D).3
5.
Telegram No. 2363 from London giving the views of Ambassadors Douglas and Jessup and Minister Bohlen and Colonel Bonesteel on the Commerce memorandum (Tab E).4

The general position here outlined has been coordinated with ECA and Mr. Hoffman5 is being briefed accordingly.

Tab B

top secret

Position Paper Prepared in the Department of State

Subject: Recommended Position for NSC Discussion of Export Controls and Security Policy

In the discussion by the NSC of export controls and security policy, it is recommended that you express the following position:

1.
ECA and State, as the negotiating agencies, have to date succeeded in obtaining a very substantial measure of agreement on a joint program of security controls with our Western European allies. An embargo list has been agreed and put into effect which includes most of the items on the U.S. 1–A list as well as items defined as arms; there is agreement on arrangements to take care of the special cases of Yugoslavia and Finland; we are making progress on the difficult problem of transshipment to Eastern Europe; and effective machinery to handle these and other problems has been established on a multilateral basis with the setting up of the “Paris Consultative Group”. These are significant accomplishments.
2.
It has been possible to persuade the Western European countries to go this far down the painful road of controlling their exports primarily because they recognize a common interest in the security of the North Atlantic area and as our partners in the NAT. Threats of denial of essential military or economic assistance would not serve the purpose of advancing our mutual security. In recognition of this basic negotiating situation, Ambassador Harriman recommended that East-West trade discussions be taken out of the ERP context in which they were originally placed and that the security aspect be emphasized by having State take over responsibility. This has been done. We will [Page 102] press these negotiations vigorously, as ECA has done in the past, but we must use our judgment as to the best bargaining tactics to pursue. We believe that solidarity with our Western European allies is a fundamental principle and that we must convince them of the soundness of our security export control policy on its merits. If their cooperation is given unwillingly as a result of threats of withholding aid, enforcement of their controls will be negligent and ineffective, thus undermining the practical value of the very substantial area of real agreement already achieved or in the process of being achieved.
3.
The most important unresolved question concerns the 1–B items on which we propose that the quantities shipped to Soviet-dominated areas should be limited. Our representatives in Paris and London are now engaged under the direction of Mr. Charles Bohlen in an intensive effort to persuade the other members of the Consultative Group to bring their controls up to the U.S. level. Our basic instructions to the U.S. representatives on this matter take account of the views of the Commerce Department and other interested agencies. We think it would be useful to discuss the essentiality of joint security restrictions in connection with the contemplated review of all aspects of the Cold War at the Foreign Ministers’ meetings and with the NAT Council. We must make our basic and continuing effort however in the agencies established to deal with these problems. This means that complete support for the staff under Bohlen in Paris which represents the U.S. in the Consultative Group is essential.
4.
We believe a new appraisal by the NSC of the problem of East-West trade should be undertaken after we know the results of the Foreign Ministers’ meetings and of the forthcoming Paris negotiations on 1–B controls. We will then be in a position to appraise the extent to which the Western Europeans are willing to go along with our present security control policy. This review should, of course, take account of changes in the Cold War and in the world economic situation since the NSC last reviewed the matter. The NSC should direct its staff to initiate the necessary factual studies. It is essential for the time being to maintain the long-established principle that U.S. controls may have to be more restrictive than Western European in view of the much greater importance economically to the latter of East-West trade.

Tab C

Paper Prepared in the Department of State
top secret

Subject: Export Controls and Security Policy

1.
Developments in the “cold war” and in the world economic situation since the National Security Council last reviewed the problems of [Page 103] East-West Trade, justify a new appraisal of United States policy. Accordingly, the NSC staff is directed to undertake the factual studies which will be required to make this appraisal. The data required will include a basis for a current appraisal of the importance of East-West trade to European recovery, impact of present controls on Eastern Europe, Soviet intentions with respect to trade, the reaction of other governments to U.S. 1–B proposals after full discussion, the points raised by the Secretary of Commerce in NSC 69, etc.
2.
The Department of State in its negotiations should meanwhile continue to make a vigorous effort to secure from the Western countries the greatest area of agreement possible in the adoption of controls over the items on the U.S. 1–A and 1–B lists.
3.
For the time being, controls in the United States which are more restrictive than those of the Western European countries should be maintained.
4.
The following steps will be taken as immediate measures to further United States objectives in this field:
(a)
The Secretary of State will take the opportunity to emphasize the importance which the United States attaches to common action in the field of security export controls at forthcoming meetings with the Foreign Ministers of Great Britain and France and with the NAT Council.
(b)
In all negotiations with our Western European allies on this subject, United States representatives will stress the importance of the common security interests of the nations of the North Atlantic area as the most effective means of obtaining action in this field.
  1. This memorandum was prepared in the Office of Regional Affairs, Bureau of European Affairs.
  2. The reference here is to Secretary of Commerce Sawyer’s letter of April 25 to National Security Council Executive Secretary Lay and the enclosed memorandum of the same date, p. 83.
  3. Not printed.
  4. May 1, p. 95.
  5. Paul Hoffman, Economic Cooperation Administrator.