342. Memorandum From the Secretary of the Council on Foreign Economic Policy (Cullen) to the Council0
CFEP 579/1
January 19, 1959.
SUBJECT
- CFEP 579—Economic Defense Policy
- 1.
- On December 4, 1958 the Chairman of the Council on Foreign Economic Policy requested the Economic Defense Advisory Committee (EDAC) to examine and submit recommendations on U.S. Economic Defense Policy (NSC 5704/3).1
- 2.
- Attached as Inclosure 1 is the report by the Chairman of EDAC submitted pursuant to the above.
- 3.
- The Chairman, EDAC, reports that all EDAC agencies except the Departments of Treasury and Commerce support a continuation of the present policy. Commerce recommends a cessation of all trade with the Soviet bloc except where a clear advantage would accrue to the United States. Treasury reserves its position. The language required [Page 759] to effect the changes in policy proposed by Commerce are contained in Tab A, Inclosure 1. Justification for the Commerce proposal appears in Tab B, Inclosure 1.2
- 4.
- Inclosure 2 contains our present Economic Defense Policy (NSC 5704/3) together with the changes recommended by Commerce for changing this policy.
- 5.
- In addition, the Department of Defense, with the concurrence of EDAC, recommends that a study be made by a group outside of Government to determine the relative advantages and disadvantages to be derived from an expansion of peaceful trade with the Soviet bloc.
- 6.
- The National Security Council (NSC) on January 153 considered a CFEP recommendation concerning the question of trade with Communist China by foreign based subsidiaries of U.S. companies (See Incl. 3). The NSC deferred action on this recommendation pending completion of this review of U.S. Economic Defense Policy by the CFEP. This matter and the EDAC recommendations have been scheduled for CFEP consideration on Thursday, January 22, at 4:00 P.M. in Room 213 of the Executive Office Building.4
Paul H.
Cullen
Lt. Col., USA
Lt. Col., USA
- Source: Eisenhower Library, White House Office Files, Staff Research Records, East-West Trade. Secret. T.W. Stanley sent this memorandum with its enclosures to Goodpaster in the hopes of getting the issue placed in the President’s Staff Notes. On January 27, a summary of the issue was included as item 2 of Staff Notes No. 491, which was seen by the President. (Ibid., Whitman File, Eisenhower Diaries)↩
- See footnote 1, Document 320.↩
- Attached but neither printed.↩
- See Document 341.↩
- At its January 22 meeting, the CFEP considered CFEP 579/1 and agreed that existing U.S. Economic Defense Policy should be continued pending a CFEP study of the effectiveness of implementation of existing NSC policy on trade with Russia. The study was to be undertaken by a committee made up of representatives of the Departments of State, the Treasury, Commerce, and Defense, and chaired by Commerce. The committee was asked to report in 60 days on the terms of reference for a study by an outside agency on the advantages and disadvantages to the United States of peaceful trade with the Soviet Union, who should make the study, and how it should be financed. (Minutes of the January 22 meeting of the CFEP; Eisenhower Library, White House Office Files, Staff Research Group Records, Economic Policy)↩
- Secret.↩
- Not found.↩
- Not found.↩
- Document 335.↩
- NSC 5706, “U.S. Policy on Defectors, Escapees, and Refugees from Communist Areas,” February 13, 1957; NSC 5726/1, “U.S. Civilian Aviation Policy Toward the Sino-Soviet Bloc,” November 22, 1958; NSC 5808/1, “U.S. Policy Towards Poland,” April 16, 1958; NSC 5810, “Basic National Security Policy,” May 1, 1958; and NSC 5811, “U.S. Policy Toward Soviet Dominated Nations in Eastern Europe,” May 9, 1958.↩