Foreign Relations of the United States, 1969–1976, Volume IV, Foreign Assistance, International Development, Trade Policies, 1969–1972

301. Action Memorandum From the President’s Assistant for National Security Affairs (Kissinger) to President Nixon ¹

Washington, June 23, 1969.

SUBJECT

• Actions to Indicate a Possible Opening Toward China

You asked that I explore what could be done to indicate a possible opening toward China. I discussed this question with Elliot Richardson, who prepared the attached memorandum.² He recommends that:³

1. We could modify or completely remove the prohibition on transactions with China that now applies to foreign corporations owned by U.S. interests. This would not improve Peking’s access to U.S. dollars, and would be welcomed by friendly countries which now object to our assertion of controls over the trading practices of their U.S.-owned domestic corporations.

2. We could remove the restrictions precluding U.S. firms from supplying petroleum products to ships owned or chartered by Communist China or any ship destined for China. This restriction hurts our oil companies through loss of trade far more than it bothers the Chinese.

3. We could modify the Foreign Asset Control regulations prohibiting purchase of Communist Chinese manufactured goods to permit American tourists abroad to buy a limited quantity of such goods. This would not contribute significantly to Communist China’s foreign exchange earnings and would eliminate a source of irritation to our tourists.

4. We could modify the administration of the Foreign Asset Control regulations and the Export Control Act to permit a more liberal licensing policy for agricultural goods and pharmaceuticals. This could be followed by a selective reduction of controlled items which would allow for the gradual development of trade, generally balancing imports and exports.

Recommendation:

I recommend approval of these proposals. If you approve, we would send out a directive indicating your approval on foreign policy grounds of these measures. Such a directive would also call upon State, Treasury and Commerce to work out specific details within a certain time period. The Undersecretaries Committee could be charged with this task.⁴

1. Source: National Archives, Nixon Presidential Materials, NSC Files, Agency Files, Box 280, State, Volume III. Secret. Attached to a June 26 memorandum from Haig to Kissinger suggesting items for Kissinger to discuss with Richardson. Item 1 pertained to Richardson’s “proposals leading toward an opening with Communist China.” Haig attached Richardson’s June 21 memorandum and note to Kissinger (Document 300) and a draft NSDM reflecting the President’s decisions, and suggested that Kissinger discuss the NSDM “with Eliot to be sure that he is in agreement with it and that it is completely responsive to your combined judgment on how to proceed from here.” Kissinger wrote at the top of Haig’s memorandum: “NSSM—[two illegible words] NSSM—a Sino Soviet split”; presumably a reference to NSSM 63, “US Policy on Current Sino-Soviet Differences,” July 3.
2. The President’s request has not been identified. The attachment is a copy of Document 300.
3. The President wrote “OK” in the margin next to recommendations 1, 3, and 4. Next to recommendation 2, he wrote “no.”
4. The President initialed the Approve option and wrote below it “as amended.”