Foreign Relations of the United States, 1964–1968, Volume IX, International Development and Economic Defense Policy; Commodities

163. Airgram From the Mission to the North Atlantic Treaty Organization and European Regional Organizations to the Department of State¹

POLTO A–392

Paris, January 6, 1965.

SUBJECT

• Economic Defense Officers’ Conference in Berlin, December 3 and 4, 1964

REF

• A. CA-4126, October 15, 1964
• B. CA-5171, November 13, 1964²

Begin Confidential

Economic Defense Officers (EDOs) from most of the addressee posts, and representatives from the military commands listed, attended a conference on export control enforcement problems in Berlin on December 3 and 4, 1964 with representatives of the Departments of State, Defense and Commerce, CAS and USRO/ST-Paris. This report follows the order of the agenda listed in ref. B.

1. Report on Multilateral Developments.

The US Del to COCOM gave a brief general description of COCOM, stressing its informal nature, and describing the general philosophies of the three leading COCOM countries, the US, UK and France, who follow every discussion in COCOM with the closest interest. Noting that Germany in its outlook could almost be considered a fourth member of the COCOM hard core, he stated that the remaining 11 participating countries (PCs) usually do not take active independent parts in debates unless their direct commercial interests are involved. This description of PC outlook led to a brief resume of the recently concluded List Review, wherein the US proposed adding several strategic items to the lists in order to have more effective strategic controls, whereas the only proposals made by other PCs were for deletion or relaxation of controls over items in order to further their commercial interests. The last List Review ended with several expressions of dissatisfaction. The UK and some other PCs felt that it had lasted too long. The French, who had second thoughts about a particular item they had agreed to, announced unilaterally that in the future they would not be bound by agreements reached on individual items until after the whole package of agreements had been reviewed.

As a corollary to the List Review and the PC philosophies pertaining to it, the exceptions procedure was mentioned as a good example where PCs other than the US take positions which favor their commercial interests, and in an apparent log-rolling operation, generally refrain from critical comments on the exception requests made by other PCs. The EDOs were advised that their representations in their assigned posts could materially contribute to a more active cooperation on COCOM controls.

The next List Review will commence in November 1965. Suggestions have been made by the Chairman and some PCs to streamline the procedure by requiring prior submission of thoroughly documented proposals and by making greater use of the existing authority to raise individual items for discussion between List Reviews. In cases where only two PCs are opposed on an item, much might be resolved by bilateral discussions held in advance of the List Review.

Questions were raised by EDOs concerning the future of COCOM and the strategic lists. The US Del explained that the US offers considerable resistance against unjustified relaxation of controls, but that the list has progressively been pared down, with items of principal civilian and commercial use being progressively decontrolled, especially since 1958.

In reply to a question concerning the Rumanian request to buy a nuclear reactor in the US and the resulting effect on COCOM, it was explained that some months ago the US press had reported the US willingness to consider the Rumanian proposal and the possibility of growing COCOM differentiation among Soviet Bloc countries. These reports provoked the foreign press into predicting a considerable relaxation of all embargo controls. All this raised some doubts among other PCs, especially because it preceded any COCOM discussion of the reactor problem. Both the COCOM Chairman and the French Del appeared to expect unfavorable effects on COCOM cooperation. After a preliminary COCOM discussion and a series of bilateral discussions with the most directly affected PCs, however, the initial misunderstandings are believed essentially to have been resolved.

2. Reports on U.S. Export Control Policy Developments.

The Director of the Office of Export Control, Department of Commerce, referred to the changing attitude on the part of US businessmen during the past 18 months to two years toward increasing trade with the Communist Bloc countries in Europe in non-strategic items, i.e., items not multilaterally embargoed. He stressed that this change was not toward more trade or any trade at all with Communist China, North Korea, North Vietnam or Cuba. He referred to the Businessmen’s Conference at the White House in September of 1963 and the recommendations of that group that US policies on East-West trade should be re-examined and re-evaluated.³ Following this he outlined the development of the statement of policy on East-West Trade through the Committees of the US Chamber of Commerce resulting in a statement of policy, somewhat modified, of the US Chamber in April 1964.⁴ He noted that the statement as finally issued was little different from the terms of the Export Control Act itself.

He referred next to the statement of the President at Lexington, Virginia relative to the “building of bridges” to Eastern European satellites and indicated that work was underway in Washington relative to this aspect of policy.⁵ He indicated that following the election and the Administration’s desire to examine the whole problem of East-West Trade, a group had been set up in the Commerce Department to examine thoroughly the problem from all angles without being influenced by any preconceived ideas or conclusions. In this connection he referred to the recent study of the Department of State where it had been concluded that US-USSR trade might possibly reach a half-billion dollars over a 5-year period.⁶

He then referred to the recent visit of 92 US business executives to Moscow under the auspices of Business International, the results of which were not yet known.⁷

As to the future he pointed out that there still remains a great deal of opposition to trade with the Communist Bloc on the part of a substantial portion of the Congress and the voluble public. He concluded by indicating that while some relaxation might occur in the coming months on trade in non-embargoed or non-strategic goods, he personally did not look for any substantial change in the reasonably near future. Reference was also made to the report by the Senate Foreign Relations Committee giving the views of business and university authorities on this subject.

[Here follow summaries of the Cuban denial program, U.S. Export Licensing procedures, EDO questions and suggestions regarding publications, special area problems, U.S. export control investigative and enforcement problems, non-member (COCOM) country controls, administrative action program, controls on MAP and foreign excess property, and EDO comments and special problems.]

U.S. Del Comments:

This was the first EDO Conference for many of those present. These, as well as their more experienced colleagues, showed a keen interest in the proceedings and made good use of the informal question and answer sessions which followed each presentation. The meeting served not only to acquaint EDOs with policies, regulations and practices of Washington export control agencies but with the peculiar and particular problems of their EDO colleagues from other countries. Not the least of the benefits derived from this meeting was the insight obtained by the Washington visitors into the varying situations and problems encountered by the EDOs in the field. The give and take of the question and answer sessions consequently did not result in a one-way flow of information from Washington to the field but a much more valuable two-way exchange of information and experience.

It was evident from the attitude and comments of the participants that these annual EDO meetings are valuable in stimulating the interest of the EDOs in their export control activities in clarifying policies and regulations, and in contributing to the general overall effectiveness of the program both in Washington and in the field.

As in the past it is considered beneficial to have as wide an attendance as possible from all major posts in COCOM Member Countries as well as from the important non-member countries and areas where aspects of export control activity are experienced.

The US Del is firmly of the opinion that these meetings should be continued on an annual basis as in the past.

Finletter

1. Source: Department of State, Central Files, STR 4. Secret; Priority. Drafted by Philip M. Lindsay and F. D. Hockersmith (ST) on January 5, and contents approved by Patten D. Allen (ST). Repeated to the NATO capitals except Luxembourg, Ottawa, and Reykjavik, and to Berlin, Algiers, Beirut, Belgrade, Bern, Bucharest, Budapest, Helsinki, Madrid, Prague, Rabat, Sofia, Stockholm, Vienna, Warsaw, Amsterdam, Antwerp, Barcelona, Bilbao, Birmingham, Bremen, Casablanca, Dusseldorf, Frankfurt, Genoa, Goteborg, Hamburg, Liverpool, Munich, Naples, Rotterdam, Stuttgart, Trieste, Zurich, EUCOM J4, USA-COMZEUR, USAFE, and PDD-Frankfurt.
2. Neither printed. (Both ibid.)
3. Reference is to the White House Conference on Export Expansion September 17–18, 1963. Highlights of the report on the conference are printed in Foreign Relations, 1961–1963, vol. IX, pp. 616–618.
4. Not further identified.
5. Reference is to President Johnson’s remarks at the dedication of the George C. Marshall Library on May 23, 1964. Text in Public Papers of the Presidents of the United States: Lyndon B. Johnson, 1963–64, Book I, pp. 708–710.
6. This study has not been found.
7. Reference is to a week-long roundtable conference in Moscow ending November 23, 1964. Reports on the conference were transmitted in telegram 1584 from Moscow, November 20, and telegram 1609 from Moscow, November 23. (Both in Department of State, Central Files, TP 3 USSR (MO))