400.009/6–1251: Telegram
The Secretary of State to the Embassy in Indonesia
1359. Dept yesterday called in Ambs SEA countries to discuss Kem Amendment. Rusk and Gay1 spoke to Indo econ counselor Thajeb2 (in absence Amb Ali), who was accompanied by econ off Ompi.3 Thajeb stated he was familiar with Kem Amendment, having cabled it verbatim to his Govt one week ago.
Gay gave exposition Kem Amendment pointing out certification procedure will become effective after June 17. Countries unable meet [Page 673] Kem Amendment procedures may be subj of exception by NSC if determined in security interest US.
Commenting on desirability of friendly and frank discussion of amendment, Rusk said Dept hopes Indos will understand that Cong in passing this law has no desire to exert control over affairs of friendly govts, but is motivated primarily by strong desire support soldiers righting in Korea, by decreasing aid which may accrue to their enemies. Rusk emphasized he had discussed Kem Amendment with several Sens who although alert to its potential difficulties nevertheless supported it for above reason.
Thajeb pointed to obvious difficulties Indo Govt wld have in complying with Kem Amendment procedures in view Indo commitments under its existing bilateral trade agreements with such countries as Poland and Hungary. In response Thajeb’s question he was informed rubber wld be on controlled list.
Giving brief thought to possible results shld Indo Govt cancel its trade agreements with satellite countries, Thajeb asked whether in such eventuality Dept cld suggest alternative source or sources supply from which Indo cld acquire manufactured goods now covered by these agreements. Dept of course unable make compensatory supply commitment for US Govt. Thajeb informed that Kem Amendment affects only such econ and financial aid as grants and loans, but probably does not affect normal business channel purchases by Indo Govt in US or ECA claimant agency function.
Gay mentioned NSC now considering issuance temp blanket exception to permit more time study each country’s problems.
Rusk said Dept wld be grateful if Thajeb wld request info from his Govt on fol points: 1) broad policy attitude of Indo Govt to Kem Amendment, bearing in mind Amendment’s basic purpose assist soldiers now engaged in hostilities in Korea on behalf UN; 2) extent to which Indo Govt able and willing meet Kem Amendment requirements; 3) considerations which might cause NSC make specific exception in favor Indo under Amendment’s provisos, including problems such as caused by existing Indo trade agreements other countries.
Thajeb thanked Rusk for clarifying discussion Kem Amendment and related problems, and stated he wld request desired info from his Govt.
In response his question Thajeb further informed Am Emb has not yet discussed Kem Amendment with Indo Govt Djakarta. You may at your discretion assist Indo officials understand purposes and procedures Kem Amendment. Dept will supply further info as available. Pls continue keep Dept currently informed Indo public and Govt reaction Kem Amendment.