SOME ASPECTS OF THE INTERNATIONAL MATERIALS CONFERENCE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP75-00662R000200150050-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 3
• Document Creation Date: December 9, 2016
• Document Release Date: February 13, 2001
• Sequence Number: 50
• Publication Date: October 19, 1951
• Content Type: MEMO

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Office Memoandu,. UNITED STATES GOVERNMENT
Chief, D/A DATE: 19 October 1951
A/E
SUBJECT: Some Aspects of the International Materials Conference
The initiative in the formulation and execution of the US export policy
at the present time rests largely with the Department of Cor:cerce and a system
of interagency committees, i.e., Advisory Committee on Export Policy, operating
Committee, R Procedure Committee and the Special Committee on East-est Trade.
The CIA is represented on these committees.
Internationally, the US export policy is expressed through participation
in COCOM, which deals with international control of exports of strategic
materials to the Communist countries. Indirectly, the CIA provides intelligence
support to the US delegation to COCOM.I
. Another international body came into existence early in 1951, whose opera-
tion bears directly on the US export policy. This is the International Materials
Conference, whose committees undertake to allocate internationally a number of
strategic commodities which are in short supply all over the world. CIA is
not represented on the interagency committees advising the US delegates to the
IMC.
It is important that the US delegates be fully aware of the security
aspects of international allocation due in part to the fact that the IMC is
concerned primarily with supply considerations. It was brought out at a recent
meeting that:
(1) The IMC does not yet require end-use screening.
(2) Some of the countries receiving allocations from the It1C on the basis.
of need would not receive such an allocation from the OC on security
grounds because they continue to sell critical commodities to
Communist countries.
(3) The IMC has not yet developed in practice a consistent policy with
regard to requirements for strategic stockpiles.2
(4) The allocations of the BIC are merely agreements not to buy up above
the prescribed level; the US Operating Committee quotas are in
effect likely to be filled; i.e., there is considerable assurance
that amounts authorized would be exported.
(5) The IMC has not yet developed a system of checks. An honor system
is in force for the time being.
The 311C is the collective title of a group of separate international
conunodity committees charged with reviewing the supply position for essential
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1 For the sake of completeness it may be added that internationally the US
export policy also finds expression at the United Nations Organization--
such as participation in the embargo of strategic materials to Communist
China and North Korea.
2 The US delegates have argued that the US strategic stockpile should be one
of the dp-Lerndnants of the quota. The position of other delegates varies
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materials which are in short supply or in danger of becoming so, and with
:recommencing to governments measures for increasing supplies and insuring
equitable distribution of such materials through the free world. The US,
UK and France invited interested countries to participate in the new
organization in January 1951.
A Central Group was formed initially of these three countries but has
since expanded to a membership of nine major countries together with repre-
sentatives from the OAS and the OE.EC. The chairman of the Central Group
is Lord Knollys, Minister of British Embassy in charge of raw materials.
The US delegate to Central Group is Mr. G. J. Ticoulat, Deputy Administrator
of DPA. The US delegates operate under a mandate of the President of the US
and Mr. Charles Wilson, Director of Defense Mobilization. The top US guiding
body concerned with the IMC is the DPA which appoints the US delegates and
provides overall policy objectives. The US representatives on each of the
commodity committees are assisted by special interagency Advisory Committees.
To date seven commodity committees have been formed under the Central
Group with 27 countries participating.) They are concerned with the follow-
ing commodities:
1. Copper, lead, zinc
2. Sulphur
3. Cotton, cotton linters
4. Tungsten, molybdenum
5. Manganese, nickel, cobalt
6. Wool
It is these commodity committees which establish quarterly allocations for
member countries, i.e., limits above which the countries are "advised" not to
buy in world markets. There is no attempt to physically apportion available
supplies of scarce commodities, or to influence flow of trade or directly to
affect prices.
Through the system of interagency committees, the US delegates to IUC
have begun to participate in the formulation of the US export policy. Their
recommendation, as time goes on, may be the deciding factor in the determina-
tion of the US export quotas for certain commodities.
An example is the quasi-joint meeting of the Operating Committee and the
Interagency Advisory Committee to the US delegation on IMC Tungsten Molybdenum
Committee on 3 October.
The Interagency Advisory Committee on tungsten and molybdenum met formally
while members of the Operating Committee sat by as observers. When the
Advisory Committee meeting ended the OC met formally with the Interagency
Advisory Committee members sitting by as observers and as technical advisors.
It was stressed by the chairman of both committees that this meeting was not
a precedent. The background of the meeting is as follows: During the past
1 W. C. Armstrong "The International Materials Conference" in US Department
of State Bulletin, 2 July 1951.
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month the US delegation to IMC had sought to obtain a larger fourth quarter
allocation of tungsten for the US. The current US tungsten position is not
as satisfactory as is desired. The country largely depends on imported
tungsten. However, the US is the largest producer of molybdenum and the
US export quota of molybdenum has a serious effect on the world's supply.
The Operating Committee on learning of this situation through its chairman,
several weeks ago, withheld its action on fourth quarter export quotas for
molybdenum and its products, which was overdue, until more was learned of the
US negotiations at the IMC. Instead the Operating Committee approved a
small temporary quota so as not to halt the licensing work of the OIT.
At the meeting of 3 October the Interagency Advisory Committee to the
US delegates on Tungsten Molybdenum Committee, voted to reject the proposed
IMC fourth quarter tungsten allocations feeling that the US share was
disproportionately small.
The Operating Committee at its meeting set a fourth quarter molybdenum
quota somewhat below that of the preceding third quarter so as to strengthen
the negotiating position of the US delegates at IMC. Should dire need arise,
a supplementary quota may be set in the future by the OC. The quota set was
deemed satisfactory to the LB delegate to the IMC Tungsten Molybdenums Committee.
Thus the US export policy was coordinated with US international negotiations.
One of the several interesting facts brought out at the Advisory Committee
meeting is the absence of a firm agreement on a system to be used by the IMC
committees in determining the national "quotas" for tungsten and molybdenum.
The US delegates think that allocations should be made on basis of current
needs including the US strategic stockpiles. The Western countries appear to
favor a historical pattern approach, with less attention paid to current needs.
Insofar as obtaining of information is concerned, it appears that produc-
tion, trade and other commodity statistics collected by the 1MG complex
(which include authoritative future forecasts) are not transmitted to the
CIA. Complete files are available for use of US government personnel in the
office of Mr. Willis Armstrong, State Department (Special Assistant, Office of
International Materials Policy).
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Distribu ion:
Orig & 1 - addressee
2 - A/E
1 - D/A chrono
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