REPORT BY THE NATIONAL SECURITY COUNCIL ON TRADE BETWEEN NORWAY AND THE SOVIET BLOC IN THE LIGHT OF SECTION 1302 OR THE THIRD SUPPLEMENTAL APPROPRIATION ACT, 1951

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP75-00662R000300070015-9
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 9
• Document Creation Date: December 12, 2016
• Document Release Date: July 28, 1998
• Sequence Number: 15
• Publication Date: June 14, 1951
• Content Type: REPORT

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Sun~-14,- 1951
NSC DETERMINATION NO. I
REPORT BY THE NATIONAL SECURITY COUNCIL
TRADE BETWEEN NORWAY AND THE SOVIET BLOC
IN THE LIGHT OF SECTION 170-2 OF THE THIRD
SUPPLEMENTAL APPROPRIATION ACT_ 1251
I. Background
1. Section 1302 of the Third Supplemental Appropriation Act,
1951 (Public Law 45, approved June 2, 1951), directs that no economic
or financial assistance shall be provided to any foreign country
which, after 15 days following the enactment of the Act, exports or
knowingly permits the export of certain named categories of commodi-
ties to the Soviet Bloc during any period in which the Armed Forces
of the United States are actively engaged in hostilities in carrying
out a decision of the Security Council of the United Nations. In
order to be eligible for economic or financial assistance each
country must certify that after the prescribed period it has not ex-
ported or knowingly permitted the export of the prohibited items to
the Soviet Bloc.
2. The Act requires that the Secretary of Defense certify to
the Economic Cooperation Administrator a list of specified articles
or commodities. The list in question was certified on June 5, 1951.
3. The Act authorizes the National Security Council to make
exceptions to the several provisions of Section 1302. Such except-
ions are to be made only upon an official determination by the
National Security Council that they are in the security interest of
the United States.
4. Norway received approximately $400 million under the EC A
program through the fiscal year 1951. The foreign aid program for
fiscal year 1952, currently before the Congress contemplates the
continuance of economic and financial aid to Norway in support of
its defense program.
5. Norway continues to trade with the Soviet Bloc because of
the importance of the goods which it obtains from the East. Exports
to the Soviet Bloc ($26 million in 1950) consisted principally of
fish and fish products which are not easily saleable in the West but
which are important to the stability of a principal industry. With
very few exceptions, Norwegian exports to the Bloc consisted of
goods of little or no strategic significance. The export of alumi-
num to the Soviet Bldc in 1950 totaled some 5000 tons and was the
principal bargaining item which enabled Norway to obtain needed
10, 1-1
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.1 1
imports from the East. Exports to China were valued in 1950 at less
tha
00
n 9
,000 and consisted primarily of pulp and paper.
6. In return for its exports Norway received from the Soviet
Bloc imports (valued at $39 million in 1950) consisting of a wide
variety of commodities including a number such as iron and steel
non-ferrous metals, and machinery, of the' kind referred to in '
Section 1302. Of particular importance among the imports were a
number the lack of which would cause serious difficulties to the
Norwegian economy. About 45 percent of Norway's imports of bread
grains and 25 percent of its total coal consum
tion
bt
i
p
were o
a
ned
from the Soviet Bloc. 20 percent of its manganese ore and 40 per-
cent of its phosphate rock (for fertilizer production) were obtained
from the U.S.S.R. Seventy percent of its potash fertilizer was ob-
tained
from Eastern Germany.
7. Norway is exporting to the Soviet Bloc materials certified
by the Secretary of Defense as falling within the categories set
forth in Section 1302.
II. Problem
8. In the circumstances therefore the National Security Council
has been faced with the choice of deciding that all economic and
financial assistance to Norway should be discontinued or of deciding
that aid to Norway should be continued in the security interest of
the United States by granting an exception to the provisions of
Section 1302.
III. I scussion
9. The maintenance of an independent, democratic Norway,
staunchly aligned with the United States is in our security interest.
The purpose of economic and financial assistance to Norway is to
further Norway's will and ability to resist Communism and to partici-
pate effectively in the North Atlantic Pact and the United Nations
system of collective security. This purpose is important to us not
only in order to achieve maximum cooperation for the defense of the
free world, but also because Norway occupies a highly strategic geo-
graphic position and possesses the third largest Merchant Marine in
the world.
10. Norway abandoned its traditional neutrality despite Soviet
warnings and its exposed geographic position. It has participated
vigorously in all mutual defense undertakings and has sincerely sup-
ported the cooperative efforts undertaken by the United States and
other NAT countries. This support is also indicated by the greatly
increased defense program which has been undertaken by Norway in ac-
cordance with the objectives of the North Atlantic Treaty.
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11. Discontinutation of assistance would seriously hamper and
delay Norway's defense effort. It would increase Norway's depend-
ence upon Soviet Bloc supplies and might even necessitate increased
exports to the Soviet Bloc. The abrupt change in the existing mutu-
ally cooperative relationship which would be implicit in the dis-
continuation of assistance, might seriously affect Norway's confi-
dence in the United States and its objectives, a confidence which
has been successfully established as a result of post-war United
States policies and programs.
12. Experience in negotiation of trade agreements between Norway 1
and the Soviet Bloc countries clearly indicates that the continued
receipt of important supplies such as bread grains, coal, manganese
and fertilizer, and indeed the continuance of all trade relations
between Norway and the Soviet Bloc depends upon Norway's willingness
to continue the export to the Soviet Bloc of the aluminum and other
such products, to a limited extent. Severance of Norway's trade witht
the Soviet Bloc would cause serious economic difficulties, particu-
larly in respect to the fishing industry as suggested above. It
would create a situation also in which Norway would be forced to
turn to the free world for coal and grain which, in turn, would re-
quire scarce shipping. Provision of products from the free world,
moreover would necessitate the provision of substantially increased
dollar aid. I1 atldi-tom .t,Y