Foreign Relations of the United States, 1955–1957, Foreign Aid and Economic Defense Policy, Volume X

119. Telegram From the Delegation at the North Atlantic Council Meeting to the Department of State¹

Paris, May 4, 1956—2 p.m.

Secto 13.

1. Secretary May 4 discussed China trade control problem with Lloyd.² He emphasized US desire reimpose embargo copper wire as directly related matter. He explained US willingness indicate items on China differential list whose export to Communist China as exceptions would not arouse US objections. He explained US preference this course rather than definitive changes basic structure multilateral China differential controls.

2. Lloyd referred to rubber problem. Emphasized failure permit Malaya export rubber to Communist China would inflame Malayan demands for independence with serious effect upon UK efforts retain Malaya within sterling bloc. Lloyd wondered whether exception for rubber deliveries to China possible. Secretary said this possible within operative framework CHINCOM exception procedures. Referred to US action extending aid to Ceylon provided rubber exports Commie China held to 50,000 tons annually, suggested similar quantitative restriction possible in case Malaya.

3. Lloyd said embargo copper wire impossible in wake B–K³ visit, but willing consider quantitative control. However, such action by UK would require some deletion from COCOM list to counterbalance increased control copper wire. Secretary made clear US view improved control copper wire (preferably embargo) regarded by US as related US willingness liberalize its attitude on exceptions, not as related further reduction COCOM list. Latter question would have be reviewed.

4. Lloyd expressed interest in items considered by US fall within liberalized exceptions procedures proposed by Secretary. Noted recent UK export tractors helped UK in holding off commercial pressures for drastic revisions (“gave us a fortnight”). Asked whether US intended proposed liberalized exception understanding apply UK alone; Secretary said US would inform other CHINCOM countries at some point, mentioned discussion with Japanese in Washington. Ministers agreed as procedural method that items as to which US might provisionally tolerate CHINCOM exceptions would be discussed with UK and UK would give views on possible quantitative limits copper wire and items which it might desire deleted from COCOM list.

5. Later May 4 UK given list A and B plus rubber as spell-out of items subject US non-objection formula within framework outlined by Secretary.⁴ UK representatives pouched list London for urgent comment and agreed obtain London views on copper wire question which delegation unable provide. British made following points this discussion:

a. Noted US list did not contain many items on UK priority list except chemicals, specifically regretted absence wheeled agricultural tractors.

b. Inquired as to basis for US list; told it was based on strategic analysis items in relation Communist Chinese economy and war potential—i.e., list includes items of least relative strategic importance.

c. Inquired whether domestic publicity for changed procedures discussed by ministers; informed not and that US view would be that adjustment in exceptions handling would be accomplished quietly without public announcement.

d. Inquired for clarification how US proposal would differ from present situation (implying presently possible for UK ship differential items following certain CHINCOM formalities). US representative said difference likely be two-fold: first US non-objection as contrasted present time consuming CHINCOM debates; second possibility simplification CHINCOM exception formalities—i.e., limitation precedures on specified items to after-fact statistical notification.⁵

1. Source: Department of State, Central Files, 493.009/5–456. Secret; Limited Distribution. Repeated to London.
2. A memorandum of that conversation, drafted on May 15 by Rountree, is Ibid., Conference Files: Lot 62 D 181, CF 701.
3. Bulganin–Khrushchev.
4. These lists were approved by the NSC at its 282d meeting of April 26; see Document 113.

5. At 5 p.m., May 4, Robert Wright met with members of the British Delegation in accordance with the arrangements made by Dulles and Lloyd to discuss further the problem of China trade controls. Wright summarized the discussion in a memorandum to Merchant, May 4. (Department of State, Central Files, 493.009/5–456)

   In Tosec 26 to Paris, May 4, the Department stated that it questioned whether quantitative control for copper wire “can be significant enough improvement in control from US point of view” to justify the downgrading of any items on the International Lists. “Our experience setting quotas in COCOM,” the telegram reads in part, “is that competitive commercial rather than security considerations dominant with result quotas often meaningless. Case copper wire would expect several PC’s (e.g., UK, Japan, Germany, Belgium, Italy) make requests based on current shipments. Quite possible copper wire quota would be larger than quantity moving without control. Further, downgrading two or three items as concessions to UK could have snowball effect because other exporting countries would ask different concessions and lead wholesale relaxation COCOM controls. Any change COCOM levels so soon after McClellan Sub-Committee investigation 1954 revision of course subject further Congressional criticism.” (Ibid., 460.509/5–456)