Your memorandum of May 16th directed us to examine two questions
relating to U.S. trade with the USSR:
On the basis of the analysis attached, we make the following
recommendations. It should be particularly noted that the
recommendations bearing on possible policy changes with respect to
U.S.-Soviet trade should be negotiated and undertaken only in the
context of an easing of East-West tensions over a broad front.
- 1.
-
Given the fact that it is still unclear whether the U.S.
Government could organize arrangements which would permit us
higher compensation for technology sold to nations under
Communist control without incurring greater costs than
advantages from the effort, a study should be made to
provide adequate information and analysis, especially in the
following areas:
The ability to obtain precise identification of advanced
technology within industry and the status of its
dissemination (published or unpublished).
The ability to maintain a roster of changes in techniques and
the manner in which they are transferable.
The feasibility and effectiveness of unilateral controls over
technology, especially when they may be frustrated merely by
publication.
Feasibility of obtaining sufficient information on the
comparative standings of U.S. and European industry on
specific techniques, since the relevant comparison of
technologies, given a difference in treatment under control
by the U.S and its Western Allies, is not between the U.S.
and Russia but between the U.S. and the Allies which are
making such technology available.
[Page 735]
The advantages and disadvantages of restricting exports of
such technology to non-Communist countries to prevent
frustration of U.S. controls and feasibility and
desirability of restricting the sale of commodities made
with such technology, for the same reason.
Determining pricing and quid pro quo arrangements which would
assure adequate commercial and national returns from
permissible trade with the bloc.
Proposed Action: The Export Control
Review Board should, as a matter of urgency, analyze the
possibilities and problems inherent in an effort to organize
the sale of technology to nations under Communist control
and make policy recommendations. This study should develop
clear criteria for “adequate compensation” in the field of
technology; determine whether or not present prices meet
those criteria; examine the feasibility of acquiring in the
government the requisite information in particular fields;
weigh the likelihood of cooperation from other nations; and
assess the political and economic benefits and costs of such
a program, both within the United States and in our
relations with other nations.3
- 2.
-
Given a continuation of political and other tensions
between the U.S. and the USSR similar to those which have existed in the
recent past, no significant change should be made in our
export control policy with the USSR—either over goods or technical data. Some
rationalization of controls between the Departments of
Commerce and the Treasury in the field of technology is in
order. And we should avoid licensing decisions inconsistent
with the present negotiating situation. There is, however,
little to be gained from a serious extension of the controls
or a serious relaxation of them on a unilateral basis.
Proposed Action: The Department of
Commerce should keep existing procedures under review
through the ACEP structure
to make sure that individual licensing decisions are not
made in a manner so as to weaken a future negotiating
posture for the U.S. and so as to reflect the prevailing
state of relations with the USSR.
- 3.
-
As an immediate response and when the political
circumstances are judged appropriate, we should use the
discretionary authority in existing export licensing and
other legislation to respond effectively to overtures from
any of the satellite governments with which we have
relations including the possibility of bilateral agreements.
In this context, we should seek some specific response in
the areas of patent and copyright protection, tourism, etc.,
without the need for legislation.
[Page 736]
Proposed Action: In the light of the
rapidly changing conditions in Eastern Europe, Export
Control Review Board should prepare guidelines for a less
restrictive, step-by-step expansion in trade with individual
nations of Eastern Europe, within the present legal
structure.
- 4.
-
If a significant movement toward a relaxation of tensions
with the USSR gets under
way, the U.S. should be willing to take all necessary steps
to remove obstacles to trade, except trade in items of
direct strategic importance (COCOM items), if such action would gain equally
constructive moves on the part of the USSR. We should be prepared to
treat our trade control policy as a useful and uniquely
appropriate negotiating instrument in discussions with the
USSR directed toward
resolving outstanding issues. We should view the present
unilateral policy as amendable in circumstances that promise
a break in the cold war stalemate, to be substituted for by
a system of bilaterals.
Proposed Action: The Export Control
Review Board should prepare, on an urgent basis, a
contingency plan for negotiating a bilateral trade agreement
with the USSR. It should
explore the coverage of such an agreement. It should also
explore what is necessary for protection of industrial
property and copyrights, and should consider whether any
other means to secure better returns for the sale of
technology are feasible.
- 5.
-
In view of the possibility that the protection of the
national interest in East-West trade may require a stronger
institutional base than that now available, and that
government purchasing may be necessary to keep a better
balance in the accounts with bloc countries, consideration
should be given to the desirability of establishing a form
of U.S. Commercial Corporation, including its advantages in
the event of need to exercise preclusive buying.
Proposed Action: The Export Control
Review Board should promptly study whether U.S. national
interests in a period of expanded East-West trade could be
adequately protected by either a step-by-step or bilateral
agreements approach and whether it is necessary also to
constitute a U.S. Commercial Corporation.
- 6.
-
The Administration should be prepared as the situation
justifies, to seek Congressional enactment of a new
East-West Trade Act. Such legislation should be based on a
full and frank examination with the Congress of all the
relevant issues and would presuppose the existence of
evidence that the USSR was
in process of significant movement toward reducing the
dangers and strains of the cold war. Such legislation should
provide the President with all the administrative authority
he needs to use trade as an effective political instrument
for dealing with the USSR
and its satellites.
Proposed Action: The Departments of
State and Commerce should establish a working group to
determine the necessary content of such an
[Page 737]
Act and to develop data for
use in possible4 Congressional
consideration of the Act.
- 7.
-
We should make advance preparations for a discussion with
our Allies of the implications that a change in U.S. policy
would have on the multilateral system of controls and the
possible need we may face to modify its overtly
discriminatory form without damage to our ability to
maintain collective surveillance and the control of
strategic commodities as multilaterally defined. In keeping
with the objective of using trade more effectively for
political purposes, we should aim at a closer understanding
with the allies, whereby we would collectively restrict or
cut off trade as a response to Soviet-initiated crises. We
would, of course, make clear that the proposed changes in
U.S. arrangements involve no alteration in our policy
towards Cuba and Communist China. In addition, we must
assess the impact of any change in U.S. East-West trade
policy on Latin America and other third countries and
prepare to cushion reactions adverse to U.S. interests.
Proposed Action: The Department of
State should examine problems arising from relations with
our Allies and third countries in this sphere. It should
explore the feasibility of modifying the COCOM system but preserve the
substance of mutual security protection.
