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

64. Memorandum From the Deputy Director for Operations, International Cooperation Administration (DeLany), to the Director of the International Cooperation Administration (Hollister)¹

Washington, August 8, 1955.

SUBJECT

• Trade Controls

The attached cable expresses the intent of the French to call a CG (Consultative Group) meeting in September on the subject of the difference in the level of trade controls between Communist China and the Eastern European Soviet bloc.²

This would not only place the U.S. in an embarrassing position in view of the decision of the U.S., as expressed by the Dodge Council, that trade controls remain in a “status quo” at least through the high level meeting in October, but it would also result in a divisive action within the CG.

The fact that Communist China and the U.S. are meeting in Geneva now³ does not by itself create a situation that warrants any relaxation of controls towards China.

If it is the intent of the U.S. that trade controls towards both the Eastern European Bloc and Communist China are to be held in a status quo, then the U.S. will have to make a special effort to align other countries to support that intent. Without that it will be almost impossible for the U.S. unilaterally to avoid relaxation.

It is recommended, therefore, that the U.S. should approach the U.K., France, West Germany, Italy and Japan at the Ambassadorial level to seek their support in retaining the present level of controls until after the meeting in October.

This is a matter of urgency. Any member country can ask for a CG meeting on a particular subject. Our action is necessary now if we are to avoid this issue. This is of special significance because of the expressed intent of India to raise the question of UN embargo at the September meeting and the forthcoming visit of the Japanese Foreign Minister to the U.S.⁴ and Adenauer’s visit to Moscow.⁵ An added consideration is the fact that D’Orlandi, the mentioned COCOM (Coordinating Committee) Chairman, is now in Italy during the recess of the Paris Committees which are scheduled to reconvene on 15 August.⁶

1. Source: Washington National Records Center, ICA Director’s File: FRC 61 A 32, Box 312, Trade/E–W. Secret.
2. Telegram 549 from Paris, August 5, reported that on August 4 a French Foreign Ministry official informed Benson Timmons that the French considered the “disparity between level of Soviet bloc and China trade controls ineffective and that French wish to see this disparity eliminated by dropping Chinese Communist controls to COCOM levels.” He also informed Benson that the French would request the convening of a Consultative Group meeting on September 27.
3. Reference is to the talks between U. Alexis Johnson and Wang Ping-nan which opened in Geneva on August 1. The discussions concerned matters of mutual interest to the United States and the People’s Republic of China. See vol. II, pp. 678 ff; volume III, and the microfiche supplement to volume III.
4. Japanese Foreign Minister Mamoru Shigemitsu was scheduled to visit Washington August 29–31. See Document 67.
5. Konrad Adenauer, Chancellor of the Federal Republic of Germany, was scheduled to visit Moscow September 9–13.
6. In a memorandum for the files, dated August 9, attached to the source text, Hollister noted that DeLany had called him late in the afternoon of August 8 to tell him that the French had officially called a meeting of the CG. DeLany stated that “he was convinced if such a meeting were held it would be difficult to hold the line against weakening of controls with respect to Communist China.” Hollister also noted that he raised this matter at the Secretary’s staff meeting on the morning of August 9, and it was agreed “that it was something of extreme importance on which action should be taken immediately.” (Notes of the Secretary’s Staff Meeting; Department of State, Secretary’s Staff Meetings: Lot 63 D 75)