Office of the Historian

149. Letter From the Chairman of the Council on Foreign Economic Policy (Randall) to the Under Secretary of State (Herter)1

Washington, March 21, 1957.

Dear Chris: On the off-chance that they might be useful in further discussion on the Hill with regard to the China differential, I should like to list here the points which I think might helpfully be made.

1.
The proposed change affects multilateral controls only. Our unilateral policy, which is stricter than that in the multilateral system, remains unchanged.
2.

The proposed change does not reflect a desire by the Executive Branch to be soft toward China. On the contrary, the purpose is to get tough with China by establishing a level of controls that is meaningful, and that will be enforced. At the present rate of [Page 433] deterioration, all controls will soon be undermined unless a new and effective line can be established by making this moderate retreat.

Assistant Secretary Kalijarvi has an excellent file, which documents the pressures we have been under nation-by-nation on this point.

3.

Our relationships with Japan will be improved by this step. It is a very sore point with Japan that their European competition, such as the Germans, are permitted to ship to China by transit through the satellite countries goods which they may not ship direct.

Improved relationships with Japan would have a direct bearing on two problems which are attracting wide attention currently in the Congress.

a.
The budget. It is the urgent objective of the Pentagon to persuade Japan to take a greater part of the military burden in the Pacific. To the extent that this can be achieved, American forces can be brought home, and our military expenditures cut.
b.
Japan is the best customer for our agricultural surpluses. It is, furthermore, a dollar market, and not a give-away market. The Department of Agriculture regards this step toward liberalization as very important in improving their opportunity in the Japanese market.

Sincerely yours,

CBR
Special Assistant to the President
  1. Source: Department of State, Central Files, 493.509/3–2157. Secret. a copy was sent to Sinclair Weeks.↩