BRITISH CONSIDERATIONS OF THE REDUCTION OF EAST-WEST TRADE CONTROLS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP64-00014A000100260020-2
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 5
• Document Creation Date: December 9, 2016
• Document Release Date: July 26, 2000
• Sequence Number: 20
• Publication Date: September 26, 1955
• Content Type: MEMO

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MEMORANDUM OF CONVERSATION
8b'02D
September 26, 1955
SUBJECT: British Considerations of the Reduction of
East West Trade Controls.
PARTICIPANTS: G. Wheeler, C. B., Under Secretary,
Ministry of Defence
H. Gresswell, C.B.E., Assistant Secretary
Ministry of Defence
Allan Edden, Head, Mutual Aid Department
Foreign Office
Admiral W. S. DeLany, Deputy Director
Mutual Defense Assistance Control
Robert W. Barnett, Regional Affairs Office
Department of State
Edwin G. Moline, Acting Deputy to the Minister
for Economic Affairs,
American Embassy, London
The meeting was in response to British initiative for some bilateral
discussions of East West trade matters, taking advantage of the oppor-
tunity of the visit to London of Admiral DeLany and Mr. Barnett. This is
a summary report of the British views expressed at the meeting.
After initial pleasantries, Mr. Wheeler said that he had particularly
wanted an opportunity to talk with responsible U.S. officials regarding
East lest trade matters because the British had under review at the present
time the question of a modification of the existing lists in the light of
the concepts which were now dominating a great deal of the military plan-
ning. Prior to the French initiative to call a CG meeting, the British
independently had been considering the meaningfulness of the present
control lists drawn up as they were initially against the concepts of
long-drawn-out warfare of attrition on a global scale. Nowadays, when
the military recognized the devastating power of thermo-nuclear weapons
and planned in terms of wars of short duration and nearly total destruc-
tion of industrial objectives with the initial attack and retaliation, the
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controls aimed at limiting the acquisition of conventional weapons and
of preventing the build-up of the industrial base necessary to support
a long-drawn-out war on a global scale, seemed to have even less purpose
than had previously been the case. Furthermore, when it was the British
judgment that the present controls were of very limited marginal import-
ance in terms of weakening the ability of the Soviet Bloc to wage a war
with conventional weapons, it was hard to rebut the case that the present
control lists were of even less significance against the new concepts.
In addition to this reexamination which the British had under way
when the French proposed the CG meeting (which the British found premature
because of the stage which their own studies had reached) they were con-
fronted with great domestic pressure both to relax controls generally
and to bring China:controls down to the level of those applying to the
rest of the Soviet Bloc. This pressure was to a large extent Parlia-
mentary pressure reflecting the opinion of the public in several consti-
tuencies, motivated both by the public reaction to the better atmosphere
following the Geneva talks, reaction to the exhortation of the Government
to export more, and the fact that some individual segments of business
failed to enjoy the general prosperity of the country.
It was too early to say what changes the British would have to sug-
gest in the control lists, as the matter had not been fully considered by
the Ministers. In the meantime, the British would stand upon the tri-
partite pre-Summit agreement on handling strategic trade controls in
negotiations with the U.S.S.R. It was thought, however, that the British
would be ready and would wish to talk in more detail'with the United
States in another three or four weeks about the outcome of their studies,
As a general indication of the conclusions towards which they were moving
it might be noted that in ph?-,.ce of the present criteria for listing items,
the British military were, in terms of strictly defense requirements,
testing the listing of individual commodities against the consideration
of whether their continued control would significantly limit the initial
readiness of a potential aggressor to launch an attack with thermo-nuclear
weapons or effectively limit the defense of the Soviet Bloc against
retaliatory attack of the same sort from the 'rest. here an item was in
the list at present primarily, to hamper industrial development useful to
the abilit=r of the Bloc to wage conventional war for a long period on a
global scale, it would be the British view on the basis of its new concept
that such an item should no longer be retained.
The British were asked whether they recognized the possibility of
limited localized wars being fought with conventional weapons, say on the
Korean pattern, or alternatively the possibility that the threat of thermo-
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nuclear destruction might be mutually regarded as'so real as to place
such weapons in the category of gas in the last.war, leaving the global
war to be fought with conventional weapons. They replied that while they
recognized such possibilities they did not seem to provide sufficient
reasons for maintaining controls over the types of things which might
affect Bloc capacity to wage such wars. In the British view, the Soviet
Bloc had adequate capacity and stocks of conventional weapons so as to
be completely beyond the reach of Western controls, which, on the most
optimistic appraisal, had had almost no effect on the Soviet's military
capacity. Some British opinion held this view so strongly that it felt
there was no reason why conventional weapons should be controlled. None-
theless, the British would not propose, in implementation of their new
concept, to remove conventional weapons from the list, or machinery so
specialized as to be useful only for producing such weapons or ammunition,
or items incorporating advanced military know-how.
In response to another question, the British said they were prepared,
as indicated above, to hold to the tripartite position previously agreed
in July with regard to the present East-West trade controls for the Foreign
Ministers' talk in Geneva. Even if they had not wished to do so, they would
not have been in a position to advance their new ideas by the time of that
meeting.
Mr. Wheeler spoke briefly to the point of the British dissatisfaction
with the differential between the China controls and those applying to
Eastern Europe. The sum total of the British presentation on this question
was to convey the impression that they took for granted the eventual estab-
lishment of one list applicable to the entire Bloc. In making their pre-
sentation on the point, however, they stressed the impossiblity of their
continuing to maintain in Parliament that there was any logic in keeping
differentials when the items on the Chinese list could be obtained through
Eastern Europe if they were essential to the Chinese economy, and be
acquired at an additional cost which was of little real significance so
far as its impeding Chinese industrial development or military potential
was concerned. The British contended that many of the differential items
were of a kind which were thought to be immediately useful in the prosecu-
tion of the Korean War, but this excuse was no longer valid since the hot
war had been concluded in the Far East. They argued further that perpetua-
tion of the system merely drove the Chinese more closely into the arms of
the Russians,
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Mr. Barnett made a closely reasoned presentation of the U.S. view
on the need to maintain both the Euopean controls and the Chinese
differential. He stressed in particular that the Chinese evidently
found the differentials extremely distasteful and were anxious to have
the trade controls removed. This important factor, in addition to the
real, though perhaps marginal, economic effects, was something that
should be regarded as a valuable bargaining asset. The voluntary, multi-
lateral, differential controls now applied should not be abandoned pre-
maturely when they might figure as a substantial factor in negotiating
an improvement in the situation between China and the Wiest. Attached
hereto is a summary prepared by Mr. Barnett of the argument he developed.
Messrs. Wheeler, Gresswell, and Edden remarked that they had found the
statement of justification for the U.S. attitude very illuminating, and
intimated that full account would be taken of it in presenting their
recommendations to the Ministers.
It remained the British contention, however, that the strategic
controls applicable to Qhina might be modified without doing violence
to the UN Resolution branding China as an aggressor. They suggested
that they were quite prepared to make such a change after discussion
with the other nations maintaining the multilateral controls. They
mentioned in particular that an additional element in their thinking
was their belief that the controls are disintegrating in any case and
had better be modified in an orderly fashion for some logical reason
than to be brought into disrepute by constant questions and wholesale
modifications#
On the specific question of a date for the CG meeting, the British
thought it would be agreeable to aim for a period ten days or two weeks
after the end of the Foreign Ministers' meeting but not earlier than the
first week of December. The British would have prepared their own views
by that time but thought that such a schedule would press a bit tightly
if there were to be a full-scale exchange of views with the US and French
prior to the meeting. They specifically said that they expected to talk
informally with the French prior to the scheduled October 3 trilaterals
in Paris conveying to them points that they had put before us.
In concluding the dicussion, the British said that they had partic-
ularly wished to have it understood by the United States that they not
only envisaged one list applicable to the entire Communist World, which
was clearly one Bloc, but they also contemplated a reduction in the European
SECRET
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control list. This had been an important consideration in their unwil-
lingness to discuss China controls in line with the French proposal for
a CG meeting, when they might later and within a short period have been
coming back with a proposal for a further reduction of the unified list.
In response to a question as to whether it would now be the British view
that an agreement should be sought on a reduction of the European list
and then a reduction of the China controls to the new European level, or
whether they contemplated an immediate reduction of the present China
controls to the present European levels while the new British concept
was being discussed, Mr. Whebler indicated the British intended now to
take the latter approach.
Attachment A- Summary of US Argumentation in US-UK
Bilaterals on East-West Trade
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