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NATIONAL SECURITY COUNCIL
Nancy:
Please note the edited memo to
covering meno to HAK
the Presidentis now Attachment
A¹.
Mary
Reproduced at the Richard Nixon Presidential Library
his document has been reviewed pursuant to Executive Order 13526 and has been determined
deliver y musinger
to adurses - 1ST
thing This sent G.M.
APR 12 1971 and Davishises Am RD
Reproduced
at
the
Richard
Nixon
Presidential
Library
DECLASSIFIED This document has been reviewed pursuant to Executive Order 13526 and has been determined to be declassified.
NUMBER
MO
DA
HR
NATIONAL SECURITY COUNCIL CORRESPONDENCE ROUTING AND CONTROL PROFILE
26167
02
23
19
TO: PRES x
FROM: ELIOT
CLASSIF:
U
EXDIS
DESCRIPTION
HAK
ROGERS
C
NODIS
LAIRD
LOU
EYES ONLY
DOC DATE:
02/23
IRWIN, I
s
RES DATA
TS
CODEWORD
SENSITIVE
PARIS MTG
NO FORN
SUBJECT:
STEPS towards Augmention of Travel L trade Setween Projalas
Repul 7102316 of ofchina LUS
ENCLOSURES:
(
)
(
) NOT XEROXED FOR SUSPENSE FILE
INTERNAL ROUTING AND DISTRIBUTION
ACTION REQUIRED
NAME:
MEMO FOR HAK
(
)
ACTiON
INFO
RCD CY
MEMO TO PRESIDENT
(
)
ADVANCE CYS TO HAK/HAIG
FOR:
REPLY FOR HAK SIGNATURE
(
)
STAFF SECRETARY
X
REPLY FOR PRES SIGNATURE
(
)
dir, SECRETARIAT
MEMO
TO
(
)
AFRICA
RECOMMENDATIONS
(
)
NR EAST/NORTH AFRICA
JOINT MEMO
(
)
RIAT DISTRIBU
EUROPE/CANADA
APPROPRIATE ACTION
(
)
LATIN AMERICA
ANY ACTION NECESSARY
(
)
UNITED NATIONS
CONCURRENCE
(
)
ECONOMIC
DUE DATE:
SCIENTIFIC
PLANNING GROUP
COMMENTS: (Including Special Instructions)
X
OGRAM ANALYSIS
rennedy
Desposition only one cy red
use folder, NSSM106
NSOM 17
DATE
FROM
TO
ACTION REQUIRED
2/24
NSC/S
2/27
Holdudge
trans From Davis
NSC/S
HAR
Signamo Preo For Decision (3/5)
INTERNAL ROUTING
3/3
HOLORDR
Haik
JAIG
For THER Action (0309)
Peas Fordecism (3/10)
08/05
HorD
03/08
HoLD
HAK
Pres for decision (03 10)
3/25
Hak sgnd ltrs
3/25
Pres
Decision
DISPATCH: LETTER/MEMO
NSC
STAFF
approval
DISPOS ION
PAF
HAK APPL
NOTIFY:
WHC
HAK MARGINALIA
SUBF
NS3 FORM REQUIRED
COPIES: (AS MARKED ABOVE)
* GPO: 1970-385-803
Reproduced at the Richard Nixon Presidential Library
DECLASSIFIED This document has been reviewed pursuant to Executive Order 13526 and has been determined to be declassified.
To:
Reunedy Holduke
pupure mylementary
directure as soow
as prible M
Reproduced at the Richard Nixon Presidential Library
SSIFIED This document has been reviewed pursuant to Executive Order 13526 and has been determined to be decla
3/20/71
Havid
/. The momor HAK
signedis the rewritten
one — ofto send to
President L. HAK did not sign
letters. Lassume that
President also withodal
his approval forms to
recommend you Hairy
approvally the letters -
when name is forwarded
sign Them for disputch
To Pusident.
Reproduced at the Richard Nixon RHK Presidential Library
SSIFIED This document has been reviewed pursuant to Executive Order 13526 and has been determined to be decla
MEMORANDUM
26167
NATIONAL SECURITY COUNCIL
ACTION
SECRET
March 21, 1971
MEMORANDUM FOR:
DR. KISSINGER
FROM:
JOHN H. HOLDRIDGE JANA
SUBJECT:
Steps Towards Augmentation of Travel
and Trade Between the Peoples Republic
of China and the United States
At Tab A is a memorandum from you to the President on the above subject
redrafted in accordance with your instructions. My original memorandum
to you is at Tab A¹. You will recall that it recommends your signing
letters to Mr. Packard and Mr. McClellan at Tabs B and C, respectively.
RECOMMENDATION:
That you sign the memorandum to the President at Tab A.
Approve
Disapprove
SECRET
Reproduced at the Richard Nixon Presidential Library
DECLASSIFIED This document has been reviewed pursuant to Executive Order 13526 and has been determined to be declassified.
MEMORANDUM
26167
NATIONAL SECURITY COUNCIL
SECRET
ACTION
For Signature (4/12/71)
MEMORANDUM FOR: DR. KISSINGER
FROM:
JOHN H. HOLDRIDGE Am
SUBJECT:
Steps Towards Augmentation of Travel and Trade
Between the Peoples Republic of China and the
United States.
In accord with your request (Tab B) at Tab A is an implementing directive
for your signature.
RECOMMENDATION:
That you sign the attached memorandum at Tab A.
Reproduced at the Richard Nixon Presidential Library
DECLASSIFIED This document has been reviewed pursuant to Executive Order 13526 and has been determined to be declassified.
DISTRIBUTION AUTHORIZATION
21
1. TYPE OF DOCUMENT:
NSDM 105
2. SUBJECT: Steps Toward Augmentation of Travel and Trade Between the
Peoples Republic of China and the US
3. DATE:
April 13, 1971
4. CLASSIFICATION: SECRET
NO. OF
ADDRESSEE
COPIES
RECIPIENT
TIME
DATE
R
Secretary ofS tate
1
Secretary of Defense
2
Chairman, JCS
Richard Helms, CIA
1
Attorney General
1
Vice President (K. Crane)
1
Director, OEP
1
Under Secretary ofStat e
1
Secretary of Treasury
1
Rm. 4330, Main Treasury
Secretary of Commerce
1
Rlm 5426, MainCo mmerce
Director, USIA
1
Gen. Haig
1
Dr. Smith
1
Col. Kennedy
1
Mr. Holdridge
1
Adm. Robinson
1
Peterson
/
mway, 2551
EI
Adv
0950
13apr 71
OSN
Mr. Bergsten
1
DISPATOHED
Reproduced at the Richard Nixon Presidential Library
DECLASSIFIED This document has been reviewed pursuant to Executive Order 13526 and has been determined to be declassified.
increased contacts between U.S. radicals and PRC intelligence agents.)
In putting forward its proposals, the Under Secretaries Committee carefully
considered the possible adverse impact of changes in our trade and travel regu-
lations on our relations with the GRC and the Soviets. Their reactions were
assessed as follows:
The GRC. The GRC lacks leverage to enable its dissatisfaction with any
of these moves to seriously inconvenience us. GRC diplomatic protests can be
handled up to the point where GRC attitudes prejudice efforts to work with them
on the Chinese Representation Question at the UN, when they would probably
pull back themselves. GRC unhappiness over any of these moves would not take
the form of limiting our military access to Taiwan, or our activities there.
--The Soviets. Any of these proposed actions, taken alone, would not be
more than a minor irritant to the Soviets. They have had ample warning that
the United States intends to take practical steps to improve relations with Peking.
What would matter to the Soviets would be the overall impression. Thus, simul-
taneous implementation of all the recommended options would be tantamount to
a much more active policy in Soviet eyes and, accordingly, professed suspicions
of our intentions would increase. One possibility is that the Soviets, seeing what
they would construe to be a new phase of U.S. China policy, would themselves
adopt a more conciliatory attitude toward the Chinese. They are in a position to
make concessions in areas of immediate importance to the Chinese, such as on
border problems.
The full Under Secretaries Committee report is at Tab F. I summarize the Com-
mittee's proposals for you below with my recommendations, along with the GRC
and Soviet reactions in more specific terms than I have outlined above. Your
decisions is requested now only as to the steps in Group I. The possible subse-
quent steps are also presented for your information and expression of your views.
These steps will be re-examined after we appraise results of the Group I steps.
Group I - For Implementation Within the Near Future
--Entry of Chinese. Following the expiration of the restrictions against
using U.S. passports to travel to Communist China, in order to establish our
willingness to facilitate on a reciprocal basis a flow of people between the two
countries, the Committee recommends a public statement by the U.S. Government
offering to expedite visas for groups of visitors from the Peoples Republic of
China to the U.S. This would implement your references to removing needless
obstacles to broader opportunities for contacts in your Foreign Policy Report.
Justice opposes this because it would afford the PRC better opportunities for
intelligence acquisition, permit close clandestine contacts between American
Maoists, advocates of domestic violence and the PRC, and make it easier for the
PRC to recruit intelligence agents. Commerce favored increased travel as neces-
sary to exploit commercial opportunities. State, Defense and the other agencies
felt that the American people were sufficiently resilient to resist any added sub-
versive burdens which the presence of Chinese Communist travelers might
SECRET
3/19/21 Reproduced at the Richard Nixon Presidential RIK: Library
DECLASSIFIED This document has been reviewed pursuant to Executive Order 13526 and has been determined to be declassified
SECRET
2
increased contacts between U.S. radicals and PRC intelligence agents. )
In putting forward its proposals, the Under Secretaries Committee carefully
considered the possible adverse impact of changes in our trade and travel regu-
lations on our relations with the GRC and the Soviets. Their reactions were
assessed as follows:
The GRC. The GRC lacks leverage to enable its dissatisfaction with any
of these moves to seriously inconvenience us. GRC diplomatic protests can be
handled up to the point where GRC attitudes prejudice efforts to work with them
on the Chinese Representation Question at the UN, when they would probably
pull back themselves. GRC unhappiness over any of these moves would not take
the form of limiting our military access to Taiwan, or our activities there.
The Soviets. Any of these proposed actions, taken alone, would not be
more than a minor irritant to the Soviets. They have had ample warning that
the United States intends to take practical steps to improve relations with Peking.
What would matter to the Soviets would be the overall impression. Thus, simul-
taneous implementation of all the recommended options would be tantamount to
a much more active policy in Soviet eyes and, accordingly, professed suspicions
of our intentions would increase. One possibility is that the Soviets, seeing what
they would construe to be a new phase of U.S. China policy, would themselves
adopt a more conciliatory attitude toward the Chinese. They are in a position to
make concessions in areas of immediate importance to the Chinese, such as on
border problems.
The full Under Secretaries Committee report is at Tab F. I summarize the Com-
mittee's proposals for you below with my recommendations, along with the GRC
and Soviet reactions in more specific terms than I have outlined above. Your im-
mediate approval is requested only for the steps in Group I, but the ongoing steps
are also listed for your information and approval if you care to give it.
presented
GROUP I - For Implementation Within the Near Future
Thepossisa
- Entry of Chinese. Following the expiration of the restrictions against
using U.S. passports to travel to Communist China, in order to establish our
willingness to facilitate on a reciprocal basis a flow of people between the two
countries, the Committee recommends a public statement by the U.S. Government
offering to expedite visas for groups of visitors from the Peoples Republic of
China to the U.S. This would implement your references to removing needless
obstacles to broader opportunities for contacts in your Foreign Policy Report.
Justice opposes this because it would afford the PRC better opportunities for
intelligence acquisition, permit close clandestine contacts between American
Maoists, advocates of domestic violence and the PRC, and make it easier for the
PRC to recruit intelligence agents. Commerce favored increased travel as neces-
sary to exploit commercial opportunities. State, Defense and the other agencies
felt that the American people were sufficiently resilient to resist any added sub-
versive burdens which the presence of Chinese Communist travelers might
SECRET
expression
views,
steps
tentative
weapprise
results
Reproduced at the Richard Nixon Presidential ibrary
DECLASSIFIED This document has been reviewed pursuant to Executive Order 13526 and has been determined to be declassified.
SECRET/SENSITIVE
NSC - U/SM 91
Page
INTRODUCTION
1
I
TRAVEL STEPS
2
II
TRADE STEPS
9
SECRET/SENSITIVE
Reproduced at the Richard Nixon Presidential Library
DECLASSIFIED This document has been reviewed pursuant to Executive Order 13526 and has been determined to be declassified.
SECRET/SENSITIVE
NSC - U/SM 91
TRAVEL AND TRADE WITH COMMUNIST CHINA
February 22, 1971
SECRET/SENSITIVE
Reproduced at the Richard Nixon Presidential Library
DECLASSIFIED This document has been reviewed pursuant to Executive Order 13526 and has been determined to be declassified.
SECRET/SENSITIVE
INTRODUCTION
The Under Secretaries Committee has examined
within the broad framework contemplated by NSSM 106,
as well as the earlier decisions of NSDM 17, various
steps which can be taken to relax restrictions on
travel to and further broaden trade with Communist
China. The steps considered by the Committee are set
forth below, in some instances providing more than
one variant depending on the degree of change desired.
The steps proposed are all within the authority
of the Executive Branch, since there are no legisla-
tive barriers to less restricted administration of
travel controls, and trade steps requiring legisla-
tion are more properly addressed in the larger con-
text of East-West trade.
The steps are also primarily unilateral, requiring
for the most part no Chinese response. It is recog-
nized that the results of the measures outlined here
will depend on how the Chinese react, and that further
steps might be possible if the Chinese evidenced posi-
tive interest in cooperating. Realistically, it was
felt that matters requiring Chinese assent are best
treated in the options contained in the long-range
study of NSSM 106.
SECRET/SENSITIVE
Reproduced at the Richard Nixon Presidential Library
DECLASSIFIED This document has been reviewed pursuant to Executive Order 13526 and has been determined to be declassified.
SECRET/SENSITIVE
2
INDEX OF TRAVEL STEPS
Page
Step 1: Travel of Americans to PRC--3 Options
Option A.
Remove all passport restrictions on
travel to the PRC prior to March 15.
3
Option B.
Continue passport restrictions on
March 15 except on travel to the
PRC - RECOMMENDED.
4
Option
C.
Drop restrictions on travel to the
PRC, North Korea and Cuba, on
March 15, leaving restrictions on
travel to North Viet-Nam.
5
Step 2:
Travel of PRC Citizens to US
Announce expedition of visas to
PRC groups - - RECOMMENDED.
6
SECRET/SENSITIVE
Reproduced at the Richard Nixon Presidential Library
DECLASSIFIED This document has been reviewed pursuant to Executive Order 13526 and has been determined to be declassified.
SECRET/SENSITIVE
3
Further Relaxation of US Restrictions Relating
to Travel Between the US and the PRC
Our attempted restrictions on travel to the PRC,
North Korea, North Viet-Nam and Cuba are, under present
law, largely unenforceable, and, it can be argued that
in the case of travel to the PRC such restrictions are
no longer desirable. Nevertheless, we continue to re-
strict passports for travel to the PRC unless specific-
ally validated for such travel. We have extended these
restrictions at six-month intervals by Public Notice
in the Federal Register. Without such action they
would automatically expire. Meanwhile, under succes-
sive relaxations we have already validated nearly
1,000 passports for travel to China, half of these in
the last two years. Favorable action is already taken
on the vast majority of applications. Possible further
steps relating to travel between the US and the PRC
follow:
Step 1: Travel of Americans
A. Remove all passport restrictions on travel to the
PRC prior to March 15 (the date passport restrictions
must either be renewed or will expire).
Principal Advantages
Would be a positive gesture which would attract
considerable attention and be viewed as consistent
with our desire to improve communications between the
Chinese and American peoples. Would put the onus for
preventing travel of Americans to the PRC entirely on
Peking. If appreciable travel developed, would ma-
terially increase our overt access to intelligence on
China.
Principal Disadvantages
The GRC would fear that this relaxation portended
further US reconciliation with Peking at the expense
of Taipei. The GVN and ROK would also be concerned.
If the PRC allowed American tourists to enter, they
SECRET/SENSITIVE
Reproduced at the Richard Nixon Presidential Library
DECLASSIFIED This document has been reviewed pursuant to Executive Order 13526 and has been determined to be declassified.
SECRET/SENSITIVE
4
would not receive USG consular assistance in the PRC
if in trouble. Would facilitate contact between the
PRC and the American radical left, who might transit
China to North Viet-Nam or North Korea.
Anticipated Result
For the near term, probably not many Americans
would get into China.
Preferred Timing
Any time before March 15.
Proposed Diplomatic Scenario
Inform the GRC, GOJ, ROK, and GVN three days in
advance, pointing out that our controls are not ef-
fective anyway, and that this is a positive act to
further improve communications.
Scenario for Congressional Notification and
Press Guidance
Notify key leaders- three days before this
announcement.
Stress would be placed upon the President's
desire to encourage people-to-people contacts. The
press would be told that this is a positive move to
encourage contacts between the Chinese and American
peoples, a move which the USG hopes the PRC will
reciprocate. Mention would be made of lack of con-
sular protection for US citizens traveling to the PRC.
B. When passport restrictions are due for renewal on
March 15, omit the PRC from the list of designated
countries, leaving North Viet-Nam, North Korea and
Cuba on the list--RECOMMENDED.
Principal Advantage
Essentially identical to A. above. Would
indicate that the US no longer classes the PRC with
1. See Appendix (NODIS).
SECRET/SENSITIVE
Reproduced at the Richard Nixon Presidential Library
DECLASSIFIED This document has been reviewed pursuant to Executive Order 13526 and has been determined to be declassified.
SECRET/SENSITIVE
5
the DRV, North Korea, and Cuba, and that the US
considers contacts with the Chinese people desirable.
Principal Disadvantage
Would have slightly less impact than dropping the
PRC restriction separately and earlier; it would still
prove a concern to the GRC and others, but probably in
lesser degree than A. above. Would facilitate contact
between the PRC and the American radical left, who
might transit China to North Viet-Nam or North Korea.
Anticipated Result
For the present, not many Americans would get
PRC permission to visit China.
Proposed Diplomatic Scenario
Inform the GRC, GOJ, ROK, and GVN three days in
advance that the passport restrictions for the PRC
will be dropped in order to facilitate non-governmental
people-to-people contacts.
Scenario for Congressional Notifications and
Press Guidance
Key leaders could be informed three days in
advance of announcement of new regulations that it
seems desirable to facilitate easier contacts between
Americans and Chinese. The press could be told that
the USG no longer wishes to prevent Americans from
using their passports to travel to the PRC, but that
travelers should be aware of lack of consular protection.
C. Drop restrictions on travel to the PRC, North Korea
and Cuba, on March 15, leaving restrictions on travel
to North Viet-Nam.
Advantage
Would have some of the impact of A and B, and would
definitely lessen GRC irritation over relaxations on
2. See Appendix (NODIS)
SECRET/SENSITIVE
Reproduced at the Richard Nixon Presidential Library
DECLASSIFIED This document has been reviewed pursuant to Executive Order 13526 and has been determined to be declassified.
SECRET/SENSITIVE
6
travel to the PRC, which would be grouped together with
North Korea and Cuba.
Disadvantage
Relaxation of restrictions on North Korea would
irritate Seoul. Elimination of all restrictions on
travel to Cuba could greatly complicate our ongoing
efforts to preventffurther erosion of the OAS sanctions
against Cuba following the repudiation of these sanc-
tions by the new Allende government in Chile. Would
facilitate contacts between the American radical left
and foreign communists.
Proposed Diplomatic Scenario
Inform GRC, GOJ, ROK, GVN and OAS countries three
days in advance. Stress unenforceability of those
travel restrictions which are being dropped. Existence
of armed hostilities necessitates continuance of con-
trols on use of passports to travel to North Viet-Nam.
Scenario for Congressional Notifications and
Press Guidance
Key leaders. could be informed three days in
advance of the announcement of new regulations that it
seems undesirable to continue unenforceable restrictions
relating to travel to the PRC, North Korea and Cuba.
The hostilities in Viet-Nam create a different situation
with regard to the DRV. The same points would be made
to the press.
Step 2: Expedite Travel of Groups of PRC
Citizens to the US--RECOMMENDED.
Make public announcement (after agreement with the
Attorney General) that in furtherance of a policy of
increasing personal contacts, the USG would expedite
the issuance of visas to groups of PRC scientists,
3. See Appendix (NODIS).
SECRET/SENSITIVE
Reproduced at the Richard Nixon Presidential Library
DECLASSIFIED This document has been reviewed pursuant to Executive Order 13526 and has been determined to be declassified.
SECRET/SENSITIVE
7
scholars, athletes, journalists, commercial
representatives and others.
Principal Advantages
Would highlight our desire for greater communication
between the Chinese and American peoples and lessen US
responsibility for restricting communication and travel.
Principal Disadvantages
The GRC would be irritated, especially if PRC
officials should be admitted (e.g., those accredited to
Canada). Depending on the timing and handling of spe-
cific cases, such action might be interpreted as a re-
flection of weakening US support for the GRC, thus
influencing future voting in the UN.
Groups would probably include some members who are
intelligence agents. Therefore, such trips would place
a greater burden on our counter-intelligence agencies,
and extra allocations of resources might be required to
maintain adequate surveillance.
Anticipated Result
Probably very few PRC visits, if any at all, in the
near future, but international knowledge that the door
is open should improve our public image, and enable us
to act readily if a useful opportunity should arise.
Correlation
Best correlated with relaxation on restrictions on
use of passports by U.S. citizens (Travel, Option B,
page 5).
Proposed Diplomatic Scenario
Inform the GRC and the GOJ a week before public
announcement of changes in procedure. Inform NATO and
SEATO allies, as well as GVN and ROK, the day before
any announcement.
SECRET/SENSITIVE
Reproduced at the Richard Nixon Presidential Library
DECLASSIFIED This document has been reviewed pursuant to Executive Order 13526 and has been determined to be declassified.
SECRET/SENSITIVE
8
Scenario for Congressional Notification and
Press Guidance
Inform key Congressional leaders- a week before
changes in procedure are made public, or several days
before first delegation is announced.
Press guidance would stress the Administration's
desire to further contacts between the Chinese and
American peoples.
4. See Appendix (NODIS).
SECRET/SENSITIVE
Reproduced at the Richard Nixon Presidential Library
DECLASSIFIED This document has been reviewed pursuant to Executive Order 13526 and has been determined to be declassified.
SECRET/SENSITIVE
9
INDEX OF TRADE STEPS AND OPTIONS
Page
EXPORTS AND IMPORTS
Step 1: Ease Export Restrictions
Option A. Accord approximately same treatment
as for Soviet Union.
14
Option
B. Issue broad list for General License,
but more restricted than treatment
given USSR, together with specific
licensing--RECOMMENDED.
16
Option
C.
Issue limited list for General
License, together with specific
licensing.
18
Step 2: Ease Import Restrictions.
Option A. Accord approximately same treatment
as for Soviet Union RECOMMENDED.
20
Option B. Permit restricted commercial imports.
21
OTHER OPTIONS
Step 3: Approve Sale of American Used Passenger
Aircraft to the PRC--RECOMMENDED.
23
Step 4: Ease Dollar Controls.
Option A. Relax restrictions on use of dollars
between PRC and US or third countries--
RECOMMENDED.
24
Option B. Relax restrictions on use of dollars
between PRC and third countries only.
25
Step 5:
Remove Bunkering Controls, Except for
Carriers to North Viet-Nam, North Korea
and Cuba RECOMMENDED.
26
SECRET/SENSITIVE
Reproduced at the Richard Nixon Presidential Library
DECLASSIFIED This document has been reviewed pursuant to Executive Order 13526 and has been determined to be declassified.
SECRET/SENSITIVE
10
Index of Trade Steps and Options, Cont'd.
Page
Step 6:
Invite or Propose Exchange of Trade
Delegations - - RECOMMENDED.
27
Step 7:
Ease Shipping Restrictions.
Option A. Permit US carriers to carry cargoes
to and from ports in PRC.
28
Option B.
Permit US carriers to carry PRC
cargoes between ports outside
PRC - - -RECOMMENDED.
30
Option C.
Permit US-owned foreign flag carriers
to carry cargoes to and from ports
in the PRC - - RECOMMENDED.
31
Timing Considerations
32
Option A.
Implement recommendations in spaced
stages - RECOMMENDED.
33
Option B.
Implement most recommendations as
one package.
35
SECRET/SENSITIVE
Reproduced at the Richard Nixon Presidential Library
DECLASSIFIED This document has been reviewed pursuant to Executive Order 13526 and has been determined to be declassified.
SECRET/SENSITIVE
11
Present Trade Controls
In December 1950, as a result of the PRC's attack
on UN forces in Korea, the United States established
a virtual embargo on direct and indirect trade with
mainland China, an embargo which remains largely in
effect today in spite of the minor relaxations of the
past two years.
In 1952 our Western Allies (COCOM), without
instituting a similar comprehensive embargo, sub-
stantially broadened and tightened their strategic
export controls upon shipments to Communist China
beyond those controls applicable to the USSR and
Eastern Europe. However, over the years, more and
more non-communist nations have moved to reduce their
restrictions and develop trade with the PRC, while at
the same time the PRC turned its trade away from the
USSR for political reasons. As a result, 80 percent
of PRC trade today is conducted with Free World partners,
in contrast to 70 percent with communist partners as
recently as 1959. Today, the only restrictions observed
by the industrial countries of NATO plus Japan (i.e.
COCOM) are the COCOM lists, containing disguised and
confidential controls (the "China Differential"), which
are somewhat more restrictive towards China than towards
the Soviet Union.
Even if the US embargo is removed, the remaining
US unilateral controls would still be considerably more
extensive than the COCOM lists and would keep additional
strategic and technologically advanced items from being
sold to mainland China. These unilateral controls are
intended to restrict goods over which the US has effec-
tive control, as well as generally to provide a leader-
ship example designed to persuade our Western Allies to
hold the COCOM line. Nevertheless, the principal com-
mercial result of our unilateral embargo is denial of
opportunity to American businessmen to participate in
China's non-strategic trade, while the political effect
is reinforcement of the image of the United States as
unwilling to deal with the PRC, even at the same level
as with the USSR.
SECRET/SENSITIVE
Reproduced at the Richard Nixon Presidential Library
DECLASSIFIED This document has been reviewed pursuant to Executive Order 13526 and has been determined to be declassified.
SECRET/SENSITIVE
12
US controls have been relaxed since December 1969
to a very modest extent: (a) amended Foreign Assets
Control Regulations now permit unlimited non-commercial
imports of mainland Chinese goods into the United States
and permit US subsidiaries abroad to engage in trade
with the PRC in non-strategic goods of foreign origin,
and (b) Department of Commerce authorizes, after a case-
by-case review, the use of US-origin components in a
limited range of foreign-made products destined for the
PRC. Otherwise the controls on trade remain essen-
tially unchanged.
Anticipated Results of US Trade Initiatives
It is extremely difficult to predict the volume of
commerce that might result from the US steps outlined
below. In the first place, the future course of US-
China trade will be influenced by political, economic
and psychological factors, in both countries, as well
as, on the US side, by legal factors. Indeed, the
likelihood of Chinese unresponsiveness to any US
gradual easing of trade restrictions cannot be ruled
out. (Commercial results of the minor relaxation in
US controls in late 1969 and early 1970 have been small
but tangible.) Obviously, developments in the political
sphere will be a major factor in the extent of Sino-US
economic relations.
On the other hand, we do know that the China trade
of the other COCOM members increased from a level of
$414 million in 1957 to $1.6 billion in 1969. This
expansion was due to a number of factors, including the
discontinuation of their special China controls (i.e.,
those more extensive than COCOM), and the PRC's decision
to turn toward Western suppliers. It should be noted,
though, that this expansion did not take the form of a
steady upward trend, but of several spurts followed by
a levelling off. Moreover, the experience of individual
Western countries has shown that China is neither a
predictable market nor a stable source of supply.
The United States probably could not expect to
match the volume or rate of expansion of the other
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COCOM members' trade with China, which was greatly
facilitated by the concurrent reorientation of Chinese
trade from communist to non-communist countries.
Furthermore, most US exports would now face stiff
competition from other Western industrial suppliers,
and from long-established Free World exporters of
wheat. The PRC's export potential to the United
States is also modest given the predominance of staple
foodstuffs and textiles among Chinese exports.
Nonetheless a modest, long-term trade potential
exists, if, following the easing of unilateral US
trade controls, the PRC should become receptive to
resuming trade with the United States. CIA estimates:
suggest a possible range, after several years of de-
velopment of Sino-US trade during which time American
firms could learn how to trade with the PRC, of $100-
200 million in Chinese exports and $0-270 million in
US exports. A modified estimate in the same publica-
tion places potential US exports at $175-200 million,
but that is predicated on the assumption that US
exports would include $100 million in grain. It would
most likely take several years for the volume of trade
to reach even the lower end of the estimated range of
two-way trade: $100 million to $470 million. While
this is less than 1 percent of total US foreign com-
merce, it is significant in terms of US East-West
trade. The projected levels would be equivalent to
1970 US exports to the USSR at the lower end of this
range; at the upper end they would exceed current US
two-way trade with all of Eastern Europe and the USSR.
5. ER-IM 70-95, July 19, 1970, US-China Trade
Potential (Secret). These estimates are based on an
analogy with other Western industrialized countries
currently trading with China and modified to reflect
specific features of the American export and import
market, together with political assumptions which
include the possibility of a PRC embargo on US exports.
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Trade Initiatives
(Note: Seven steps with various options are
listed below. The first two steps should be corre-
lated with each other and with some of the later
steps, as noted under the rubric Correlation. They
need not necessarily be adopted simultaneously.
For example, if the export move Step 1B, page 16,
is selected, it should be correlated with import
move Step 2 A, page 20, dollar control move
Step 4 A, page 24, and transportation move
Step 7 B, page 30. Several small moves which can be
taken independently are listed below the export and
import steps.)
EXPORTS AND IMPORTS
Step 1: Exports to China--3 Options
A. Sizeable Step: Accord approximately same
treatment as for Soviet Union
Accord the PRC the same treatment as the Soviet
Union in regard to published general licenses and the
published requirements for specific licenses, but in
licensing decisions on particular transactions take
into account differences in the technological and
military levels of development of the PRC and the USSR,
availabilities in other non-communist countries, and
the current PRC-US political context. This would mean
that some transactions approvable for the USSR might be
denied the PRC. (This is in accord with the principle
underlying the COCOM differential--the "China Differential")
Modify components controls accordingly.
Principal Advantages
This substantial relaxation would establish
approximate parity of treatment for the PRC and the
USSR, though there would continue to be some discrimina-
tion in licensing decisions. It maximizes opportunities
for increased peaceful trade and would remove friction
with our allies caused by our denial of exports from
their countries which contain US components or technology.
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Principal Disadvantage
Would present greater security problems than
Option B (page 16) since it would expand considerably
the general license treatment accorded the PRC to
include US commodities, technical data, and the
foreign-made products of US technologies, which,
given the present level of PRC industrial military
development, might be of some strategic significance
to the PRC. However, the range of US unilateral
controls in effect against the USSR would apply to
China as well. End-use and end-user information
effective in minimizing the security risks in partic-
ular export transactions for the USSR would not be
available in the case of the PRC.
Anticipated Result
According to a CIA estimate- US exports to China
could reach between $75 million (excluding grain) and
$200 million after a few years of development, assum-
ing that the PRC did not boycott US goods. Should the
PRC generally continue to avoid US merchandise, our
exports (both direct and as components in foreign-
made products) under the above option could still
reach ten million dollars per annum in the short term.
Correlation
Should be correlated with Imports, Option A
(page20), Dollar Controls, Option A (page 24) and
Shipping, Option B (page 30).
Proposed Diplomatic Scenario
Notify the GRC in Taipei and the Japanese in
Tokyo about one week in advance. NATO and SEATO
allies, GVN and ROK, should be notified about two
days in advance. The measure would be explained as
furtherance of the President's desire to expand trade,
decrease tensions and increase peaceful contacts, but
6. ER IM 70-95, July 1970, US-China Trade
Potential (Secret)
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with no implication of lessened support for the GRC.
It might be desirable to inform the PRC through the
Warsaw channel in advance of the announcement.
Scenario for Congressional Notification and
Press Guidance
Notify key leaders- one week in advance. The
positive nature of the move should be stressed:
enables American businessmen to compete in the growing
China market; and increases people-to-people contacts.
The press would be told the same as Congress
by the Department spokesman when regulations are issued.
B. Medium Step: Relax controls, but retain more
restrictions upon PRC than for USSR--RECOMMENDED.
Relax existing controls by (1) extending general
license for the PRC to all commodities under general
license to the USSR, except those commodities which,
after interagency item-by-item review, are deemed to
be of strategic significance to the PRC, and (2) ap-
proving export license applications for the PRC for
other commodities and technical data (including
those having some degree of strategic potential but
7. See Appendix (NODIS)
8. Since wheat is of major importance to China's
import trade, consideration should be given as to
whether we must automatically exclude US grain by
extending the same 50% American bottoms requirement
to the PRC that is placed on grain shipments to
Eastern Europe and the USSR. Our judgment on whether
in this one aspect our treatment of the PRC should be
more favorable than that accorded the USSR must take
into account the attitude of US labor and shipping
interests which have prevented removal of this re-
striction from the USSR and which might urge with
equal, if not greater force, that it should be
imposed upon the PRC. If the 50% American bottoms
principle is extended to the PRC, then Shipping,
Option A (page 28) must be adopted. This note applies
also to Export, Options A (page 14) and C (page 18).
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readily available to the PRC from elsewhere), when the
review of particular transactions indicates that the
exports would not prove detrimental to US national
security or foreign policy. Relax components controls
accordingly. (The goal would be to place trade with
the PRC on the same footing as with the USSR in the
future, but the Committee would review the experience
with the more restricted level of exports before con-
sidering further relaxation to obtain that objective.)
Principal Advantages
Would provide greater liberalization of controls
than Option C, and therefore have more political ime
pact on the PRC. Would be of greater commercial
significance than Option C to US business. Security
risks would be minimized by the interagency item-by-
item review and selection of commodities for general
license treatment, and by the careful examination of
each license application eligible for consideration
under the terms of this option. We would make a
significant step toward bringing our controls into
closer harmony with those of our allies, thereby
reducing frictions engendered by our denials of
applications to export products of US technology or
incorporating US components. We could preserve con-
siderable maneuverability in that the option can be
put into effect as a complete package or in install-
ments, as the review progresses.
Principal Disadvantages
Full implementation would require more time than
Option C. Moreover, continued US discrimination in
favor of the USSR in the published list of commodities--
a sensitive issue to the PRC--would still exist.
Anticipated Results
The results would depend on (1) the extent to
which vetting the list reduces controls--the greater
the reduction, the larger sales should be, and
(2) whether the PRC is willing to trade with the US.
Might reach several million dollars annually in the
short term.
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Correlation
Should be correlated with Imports, Option A
(page 20) or B (page 21) as well as Dollar Controls,
Option A (page 24) and Shipping, Option B (page 30).
Proposed Diplomatic Scenario
Notify the GRC in Taipei and the GOJ in Tokyo one
week in advance. NATO and SEATO allies, as well as
GVN and ROK should be notified two days in advance.
The measure would be explained as part of the Presi-
dent's desire to further trade while maintaining tight
security controls on the range of products sold to the
PRC, to decrease tensions and increase contacts, but
with no implication of lessened support for the GRC.
Scenario for Congressional Notification and
Press Guidance
Congressional notification should take place one
week in advance, informing key leaders. of both sides.
Would stress moves toward extension of trade while
retaining strong security controls, but affording
increased opportunities for person-to-person contacts.
Would emphasize that there is no implication of les-
sened support for the GRC. The press would be informed
similarly, but with less emphasis on security aspects.
C. Small Step: Restricted Exports
Relax existing controls by (1) publishing a
limited list of humanitarian and consumer-oriented
commodities permitted to move without restrictions
(i.e. under general license) to the PRC; (2) approv-
ing export license applications for other commodities
having no strategic significance; and (3) permitting
use of US-origin components and technical data in a
wider range of non-strategic foreign-made products
destined for the PRC than at present.
Principal Advantages
This would represent a limited but not
insignificant step, would not arouse concern from our
9. See Appendix (NODIS).
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allies, would minimize security and domestic political
problems, and preserve considerable maneuverability
for making further concessions as Chinese reactions
warrant. It could be quickly and easily implemented.
It would constitute a signal to the PRC and to US
businessmen that the US is ready to resume limited
direct commercial contacts.
Principal Disadvantages
US businessmen would continue to suffer significant
disadvantages vis-a-vis their Free World competitors
and would find little scope for expanding trade. Since
there would still be substantial US discrimination
against the PRC in favor of the Soviet Union, these
moves would probably have little positive impact on the
Chinese, and their limited nature could have a negative
impact.
Anticipated Results
This option would be too limited in scope to be
commercially meaningful and its value would be only as
a signal, which would probably be ignored or denounced.
Correlation
Should be correlated with Imports, Options A
(page 20) or B (page 21), as well as Dollar Controls,
Option A (page 24) and Shipping, Option B (page 30).
Proposed Diplomatic Scenario
Notification of Japan and the GRC, three days in
advance. Notification to ROK, GVN, NATO and SEATO
24 hours in advance. Measure would be explained as a
further step to decrease tensions and increase contacts,
with no implication of lessened support for the GRC.
Scenario for Congressional Notification and
Guidance
Notify key leaders 10/ three days in advance.
Stress the President's desire to develop trade, as well
10. See Appendix (NODIS).
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as explanation in Diplomatic Scenario above. Main
anticipated objection would be that such a step was
too limited. This could be explained as due to
certain specific factors in the current situation,
whatever applied at the time. The press would be
told the same as Congress.
Step 2: Direct Imports from the PRC--2 Options
A. Sizeable Step: Accord approximately same treat-
ment as for the USSR--RECOMMENDED.
Issue an unconditional general license allowing
all Chinese goods to be imported into the United
States, with the same restrictions as for USSR as
to quantity or type of commodity.
Principal Advantages
Would give the PRC greater incentive to develop
trade relations than a move only in the export field.
By placing our treatment of imports from the PRC on
the same level as the USSR, would obviate the need
to administer an almost inevitably discriminatory
licensing program for US importers such as proposed
in the next Option (page 21).
Principal Disadvantages
The PRC would be free to export to the US without
having to import US goods (although such refusal is
unlikely given Chinese interest in certain US goods)
Might disturb Asian allies who could question continu-
ing US resolve to support their independence.
Anticipated Results
The PRC eventually can be expected to take
advantage of its opportunities and encourage exports
to the US. A CIA study- estimates potential Chinese
exports to the United States as in the $100 to $150
million range after several years of trading. (Tariff
and quota restrictions would apply to imports from the
PRC on the same basis as the USSR.)
11. ER IM 70-95, July 1970, US-China Trade Potential (Secret)
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Correlation
Should be correlated with adoption of Exports,
Option A (page14) or B (page 16) and Dollar Controls,
Option A (page 24).
Proposed Diplomatic Scenario
Inform the GRC in Taipei, the GOJ in Tokyo, and
the British in London and Hong Kong about ten days
in advance, stressing the President's desire to in-
crease trade, decrease tension, and afford opportunity
for more peaceful contacts, without any impliaction of
lessened support for the GRC. Other NATO and SEATO
allies, as well as GVN and ROK, would be notified one
day in advance.
Scenario for Congressional Notification and
Press Guidance
Inform key leaders 12/ ten days in advance,
stressing the President's initiative to lower barriers,
provide opportunity for mutually beneficial commercial
contacts as well as people-to-people contacts. The
press would be told the same as Congress.
B. Small Step: Permit restricted commercial imports
from PRC.
Permit restricted commercial imports by issuing
general licenses for certain commodities that are of
short supply significance (e.g. tungsten and antimony),
and licensing other imports on a case-by-case basis up
to the greater of two figures: a predetermined amount
(for example, $50 million), or the current value of
US exports to China.
Principal Advantages
Restricted licensing would permit the beginnings
of commercial imports from China and demonstrate our
willingness to exchange goods, while maintaining limita-
tions in case the PRC refused to purchase American
products. The amount to be licensed could be a subject
for discussions at Warsaw.
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Principal Disadvantages
It would be somewhat difficult to administer such
a program in a fashion that would be equitable and
non-discriminatory for all prospective US importers.
Imposition of quota allocations for the purpose of
balancing trade would also be a retrograde step in
terms of general trade policy.
Anticipated Result
Given PRC limited export availabilities and
apparent policy of refusal to sell ores to US firms,
a limited move such as this one would probably not
lead to much trade.
Correlation
Should be correlated with Exports, Options B
(page 16 ) or C (page 18 ) and Dollar Controls,
Option A (page 24).
Proposed Diplomatic Scenario
Inform the GRC in Taipei, the GOJ in Tokyo, and
the British in London and Hong Kong about three days
in advance, explaining the measure as an increase in
opportunity of contacts on a people-to-people basis.
Other NATO and SEATO allies as well as GVN and ROK
would be notified one day in advance.
Scenario for Congressional Notification and
Press Guidance
Inform key leaders 13/ three days in advance,
explaining the move as a forward step in the pro-
gressive relaxation of trade controls which gives
opportunity for move contacts between Chinese and
Americans. The press would be told the same as
Congress.
13. See Appendix (NODIS)
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OTHER OPTIONS
Step 3: Significant Export Decision to
Approve Sale of American Aircraft
to PRC RECOMMENDED.
As a gesture enhancing the political impact of our
trade moves, approve the proposed sale, if firm orders
materialize, of three used Boeing 720B jet transports,
together with necessary spare and replacement parts,
but only after removal of certain strategic equipment,
by Pakistan International Airlines to the PRC's civil
air line. To avoid discrimination, accord the same
treatment to proposed transactions involving similar
used passenger aircraft of American manufacture, after
removal of certain strategic equipment.
Principal Advantages
Highly visible move which would have a favorable
impact on the PRC. Would give the US aircraft industry
a foothold in the potentially large Chinese market for
civilian transport aircraft, a market that European and
Japanese competitors stand ready to pre-empt.
Principal Disadvantages
Might be misinterpreted by other nations as a
lessening of US determination to continue COCOM controls,
particularly the "China Differential." If Exports,
Option C (page 18) were adopted, this action would be
inconsistent and would create difficulties in licensing
other commodities. Would be of concern to the GRC.
Anticipated Results
Could have meaningful commercial impact. Would aid
the US aircraft industry to get new sales by providing
Free World air lines with replacement aircraft.
Proposed Diplomatic Scenario
Notify the GRC and the GOJ, NATO and SEATO allies,
and GVN and ROK, one day before sale approval is
announced. Assurances would be given that this is a
commercial transaction and does not indicate a diminished
support for the GRC.
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Scenario for Congressional Consultations and
Press Guidance
Notify key leaders 14/ at the same time we notify
the GRC and the GOJ.
Inform the press that approval of this sale is
a further example of the Administration's efforts to
develop trade and contacts with the PRC.
Step 4: Currency Controls-- Options
A. Sizeable Step: General relaxation on use of
dollars--RECOMMENDED.
Relax Treasury controls under the Foreign Assets
Control Regulations--without releasing previously
blocked Chinese assets- - to permit the PRC to conduct
all transactions permitted the USSR, including pay-
ments and use of United States dollars in trade and
other normal banking transactions involving China,
either directly by the United States, or by third
countries.
Principal Advantages
Would place our financial treatment of the PRC
on the same level as the USSR. Facilitates direct
trade with the PRC. Would permit US financial in-
stitutions to participate directly in China trade.
Principal Disadvantages
The PRC would be free from US control over use of
dollars for subversive or other undesirable purposes.
Would permit PRC to maintain reserve balances in
dollars, minimizing present risks involving possible
devaluation of foreign exchange.
Anticipated Result
Effect would be principally a favorable political
impact upon the PRC by removal of an irksome dis-
criminatory regulation which causes foreign policy
difficulties. Experience thus far indicates that sub-
ventions to subversive groups would probably be very
limited.
14. See Appendix (NODIS).
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Correlation
Should be correlated with any Option in Exports
or Imports which may be adopted. Can also be imple-
mented independently of any other step.
Proposed Diplomatic Scenario
Inform the GRC in Taipei and the GOJ in Tokyo
three days before the announcement, emphasizing
dollar controls no longer useful. NATO and SEATO
allies as well as GVN and ROK would be notified one
day in advance.
Scenario for Congressional Notification and
Press Guidance
15/
Inform key leaders
three days before the
announcement, pointing out that dollar controls of
this nature are no longer useful, and the move would
further relax the hostile attitude taken toward the
PRC in connection with the Korean War.
The press would be told that this is the removal
of a control which is no longer useful, a necessary
condition for direct trade between the PRC and the US
and a move to improve US-PRC bilateral stance.
B. Small Step: Relaxation on use of dollars between
PRC and third countries.
Relax Treasury controls under Foreign Assets
Control Regulations--without releasing previously
blocked Chinese assets--to permit payments and use of
United States dollars in trade and other normal bank-
ing transactions involving the PRC and third countries.
Principal Advantage
Removal of the restrictions on PRC and third-
country use of dollars would further reduce the extra-
territorial application of our laws and reduce fric-
tions between us and third countries engendered by a
policy which is increasingly difficult to administer.
15. See Appendix (NODIS). .
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Principal Disadvantage
Might increase pressure on the US to unblock
Chinese assets which have not yet been vested.
Anticipated Result
Would reduce US discriminatory stance vis-a-vis
the PRC, improving atmospherics.
Proposed Diplomatic Scenario
Inform the GRC and GOJ embassies in Washington
the day before announcement. Also inform NATO and
SEATO allies, GVN and ROK embassies one day in advance.
Scenario for Congressional Notification and
Press Guidance
Inform key leaders 16/ or staffs one day in advance.
The press would be told that this is simply the
removal of a regulation which is unnecessary and
difficult to enforce.
Step 5: Ease Bunkering Controls--RECOMMENDED.
Change Commerce regulations (on use of US-origin
petroleum products) and Treasury regulations to permit
bunkering of Chinese-owned or controlled vessels and
aircraft (except those bound to or from North Viet-Nam,
North Korea, or Cuba) as well as bunkering of Free
World and East European vessels and aircraft bound for
China. (This relaxation would not affect our existing
controls on entry of PRC carriers into US ports.)
Principal Advantage
Would permit American oil companies to participate
in trade now denied them without altering our controls
on vessels going to North Viet-Nam or North Korea.
Principal Disadvantage
None.
16. See Appendix (NODIS).
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Anticipated Result
Very little commercial significance at first,
since PRC vessels would probably bunker elsewhere,
but would improve atmosphere of PRC-US bilateral
relationship by reducing barriers.
Proposed Diplomatic Scenario
Inform the GRC in Taipei and the GOJ in Tokyo
three days before the announcement. Also inform
NATO and SEATO allies and GVN and ROK one day in
advance.
Scenario for Congressional Notification and
Press Guidance
Inform key leaders
17/
or their staffs three days
in advance.
The press would be told that this increases the
opportunity of American companies to compete.
Step 6: Trade Delegations--RECOMMENDED.
Invite a PRC trade delegation or propose an
exchange of trade delegations.
Principal Advantage
This would be an initiative which we could use to
show our desire to increase contacts between the PRC
and the US on the non-political level.
Principal Disadvantages
Would probably not be acceptable to the PRC at
first. Would facilitate PRC intelligence collection.
Anticipated Result
Would demonstrate our good intentions and
eventually might be successful in leading to improved
commercial relations.
17. See Appendix (NODIS).
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Correlation
After adoption of one each of the Exports
and Imports Options. Would only be taken after a
positive PRC response to previous trade relaxations.
Proposed Diplomatic Scenario
This proposal should first be raised at the
Warsaw talks, the GOJ, the GRC, NATO and SEATO allies
and GVN and ROK to be informed only after agreement
is reached.
Scenario for Congressional Consultations
and Press Guidance
Key leaders 18/ in foreign trade and foreign affairs
committees should be informed at the same time as in
Diplomatic Scenario. Emphasis would be placed upon
President's efforts to stimulate contact and increase
trade.
The press should be told that the proposed
delegations are an example of the President's efforts
to increase mutually beneficial exchanges.
Step 7: Ease Shipping Restrictions--3 Options.
A. Sizeable Step: Permit US carriers to enter PRC
ports.
Modify or remove Transportation Orders and Foreign
Assets Control Regulations to permit US ships and air-
craft to call at Chinese ports and carry Chinese cargoes.
Principal Advantage
Would allow American carriers to compete in the
China trade. It would signal that we relied upon the
PRC to treat our carrier personnel with justice.
Principal Disadvantages
Some American seamen would inevitably get into
trouble in ports where they could not receive consular
services. Might also be expected to raise strong
18. See Appendix (NODIS).
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objections of the GRC with which we have agreed under
a bilateral civil air agreement not to allow American
planes to fly scheduled routes into China without the
prior consultation and agreement of the GRC. US air
lines now authorized under the terms of this agree-
ment to fly to Taiwan would object to this move if
they thought it would cause the GRC to denounce the
agreement. If the GRC did denounce it now, or, as
required by its terms, after a year's notice, there
would be no certainty that the GRC would permit US
carriers to maintain their current schedules.
Anticipated Result
At present it is not anticipated that the PRC
would allow American carriers to enter their ports,
but later on they would probably allow American
shipping to compete with the rest. It is also not
likely that they would authorize a scheduled air
service by US companies in the near future, but some
charter flights might be permitted.
Proposed Diplomatic Scenario
Notification in Taipei would be made a week in
advance, unless American aircraft service were actually
contemplated. In that case representations would have
to be made long in advance and the probable result
would be denunciation of the GRC-US air agreement.
Notifications to the Japanese in Tokyo at the same time
as to the GRC. Notifications to British and Canadian
Embassies as well as other NATO, SEATO, GVN and ROK
Embassies in Washington a few days in advance of
announcement.
Scenario for Congressional Consultation
and Press Guidance
Congressional leaders 19/ especially those concerned
with maritime and seamen's affairs, should be consulted
two weeks in advance. Stress should be placed on en-
abling US carriers to compete in an important market.
19. See Appendix (NODIS).
SECRET/SENSITIVE
Reproduced at the Richard Nixon Presidential Library
DECLASSIFIED This document has been reviewed pursuant to Executive Order 13526 and has been determined to be declassified.
SECRET/SENSITIVE
30
We would admit that we would not be able to offer consular
services to seamen in trouble, and would have to rely on
ships' masters to warn their men of the problems.
Press guidance would be the same as to Congress.
B. Small Step: Permit US carriers to carry PRC
cargoes, but not to China RECOMMENDED.
Modify Transportation Orders to permit US ships
and aircraft to carry to or from ports outside the
PRC, e.g. Hong Kong, goods authorized for export to
the PRC. In the absence of diplomatic or consular
representation, continue the prohibition on US carriers
calling at PRC ports.
Principal Advantage
Would please American carriers and remove unneeded
regulations.
Principal Disadvantage
GRC might object.
Anticipated Result
Would allow American carriers to participate in a
certain amount of freight hauling not now permitted.
Proposed Diplomatic Scenario
Notify GRC, Japanese, British and Canadian Embassies
in Washington, as well as other NATO, SEATO, GVN and
ROK embassies a day in advance of the announcement.
Scenario for Congressional Notification
and Press Guidance
Notify key leaders 20/ one week in advance, as well
as some leaders from coastal states. The press would
be told that this is a further step to help American
business to be competitive.
20. See Appendix (NODIS).
SECRET/SENSITIVE
Reproduced at the Richard Nixon Presidential Library
DECLASSIFIED This document has been reviewed pursuant to Executive Order 13526 and has been determined to be declassified.
SECRET/SENSITIVE
31
C. Permit US-owned foreign flag carriers to carry
cargoes to Chinese ports--RECOMMENDED.
Modify current Foreign Assets Control Regulations
to permit foreign flag carriers owned by US firms and
their foreign subsidiaries to call at Chinese ports
and to accept PRC cargoes.
Principal Advantage
Permits more direct US-PRC commercial contact
while minimizing the problem of protection of US
citizen crewmen since they normally are not employed
on such ships. Eliminates present anomalous situation
in which foreign subsidiaries of US firms may charter
foreign flag carriers for the China trade but are not
permitted to utilize their own foreign flag carriers.
Principal Disadvantages
Places American-owned carriers in PRC hands.
Would have to be made public but, not necessarily
publicized. GRC would probably raise objections.
Anticipated Result
Would be favored by US business and would expand
Sino-US trading ties. (US firms have already applied
to Treasury for license to ship to and from China in
their own foreign flag bottoms.)
Proposed Diplomatic Scenario
Notify GRC, GOJ, NATO allies and SEATO as well as
GVN and ROK day before announcement.
Scenario for Congressional Notification
and Press Guidance
Notify key leaders21/ day before announcement.
The press should be informed on announcement that
this is a relaxation of extraterritorial controls.
21. See Appendix (NODIS).
SECRET/SENSITIVE
Reproduced at the Richard Nixon Presidential Library
DECLASSIFIED This document has been reviewed pursuant to Executive Order 13526 and has been determined to be declassified.
SECRET/SENSITIVE
32
Timing Considerations-- 2 Options.
Adoption of options marked "RECOMMENDED" would
significantly reduce the restrictions on trade with
the PRC which are the legacy of the Korean War. It
would place trade with the PRC on a basis approaching
our position on trade with the USSR, demonstrate to
the world US willingness to deal with the PRC, and
remove many of the overt discriminations which are
very galling to the PRC. The Committee is agreed
that it is in our national interest to adopt all these
recommended options.
A major consideration in deciding whether to
implement our recommendations in one dramatic move
or in a steady undramatic sequence of steps is the
effect either of these approaches may have on our
consultation with Taipei over the crucial issue of
Chinese representation in the UN. We also need to
time our actions in relation to the determination of
our policy on Chirep.
If we decide to try to persuade the GRC to adopt
a more flexible approach on CHIREP, this will have a
direct bearing on the timing of further steps to
remove restrictions on trade with mainland China. A
recent series of articles and editorials in leading
Taipei dailies on US China policy and the Chirep
issue supports other indications we have that there
are some officials within the GRC who are now working
actively to move the government to a more flexible
position. It will be important to the success of
their efforts that they be able to maintain confidence
at high levels within the GRC and that the US con-
tinues to demonstrate a reasonable regard for GRC
interests and sensibilities despite a possible US
shift on Chirep and our continued efforts to improve
relations with mainland China. The sudden dramatic
removal within a short period of time of a broad
range of trade controls, such as a package of all the
recommended steps, desirable as it would be for other
reasons, is likely to have a contrary effect, particu-
larly since this could be taken by President Chiang
and his close advisors as an indication that the US
is moving rapidly toward an accommodation with the PRC
on a number of fronts without regard for GRC concerns.
SECRET/SENSITIVE
Reproduced at the Richard Nixon Presidential Library
DECLASSIFIED This document has been reviewed pursuant to Executive Order 13526 and has been determined to be declassified.
SECRET/SENSITIVE
33
There would be a better chance of avoiding such a
reaction if the recommended steps are made in orderly
successive stages, undramatic in fashion, and take
due account of discussions with the GRC on Chirep.
In fact, a first step in this process, if not too
dramatic, might well be helpful in making clear to the
GRC that while we are anxious to help preserve their
position, our purpose of seeking improved relations
with the mainland is still firm and something which
they would do well to take seriously.
It also is possible that if the full package of
recommended steps were put into effect before we have
made known to other governments the position we intend
to take on the Chirep issue at the 26th UN General
Assembly, this action will be misinterpreted as a sign
that the US is prepared to make a major retreat on the
Chirep issue, placing our interest in improving rela-
tions with the PRC ahead of our concern for the GRC
and for protecting its international position.
On the other hand, implementation of all the
steps marked "RECOMMENDED" as a package would be the
course most likely to have a favorable impact on the
PRC. A package approach would ensure that all aspects
of our trade relaxations are properly coordinated,
whereas a sequential approach would be likely to
produce temporarily disjointed positions. If the
US decides not to seek a significant change in Taipei's
position on Chirep this year, rapid implementation of
a package would be in our over-all interest.
A. Implement recommendations in spaced stages--
RECOMMENDED.
(1) Move now before we are fully engaged in
consultation with Taipei on Chirep to relax controls
on direct exports to the PRC at a level below that
of the USSR (Exports, Option B, page 16). Should
Export, Option A be chosen, i.e., a move to the
Soviet level, implementation should be staged so
that this level is reached only after Chirep
consultations.
SECRET/SENSITIVE
Reproduced at the Richard Nixon Presidential Library
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SECRET/SENSITIVE
34
(2) After the crucial stage of Chirep
consultation with Taipei, follow up at appropriate
intervals with a series of steps:
(a) relax controls on commercial imports
(Imports, Option A, page 20) ;
(b) relax control on use of dollars
(Dollar Controls, Option A, page 24) ;
(c) when appropriate, but not necessarily
in this order, relax controls on bunkering
except to or from designated countries
(Bunkering, page 26) ; permit US flag carriers
to carry PRC cargoes to and from ports outside
the PRC (Shipping, Option B, page 30) ; permit
US-owned foreign flag carriers to call at PRC
ports (Shipping, Option C, page 31) ;
(d) if a firm offer materializes, approve
the sale of used American aircraft (Step 3,
page 23) ;
(e) If circumstances warrant (e.g. a
positive PRC response to our trade relaxation
moves) , invite a PRC trade delegation or pro-
pose an exchange of trade delegations
(Step 6, page 27) ;
(f) when some experience has been
accumulated with more restricted controls, the
Committee will review the possibility of re-
ducing US controls on exports to the PRC to
the approximate level of the USSR.
Principal Advantages
Spacing moves would lessen adverse impact on the
GRC while we are trying to persuade the GRC to ac-
quiesce in any new approach to the Chinese representa-
tion issue. Would minimize the risk of sale of com-
modities which might have a strategic significance
for the PRC.
SECRET/SENSITIVE
Reproduced at the Richard Nixon Presidential Library
DECLASSIFIED This document has been reviewed pursuant to Executive Order 13526 and has been determined to be declassified.
SECRET/SENSITIVE
35
Principal Disadvantages
Adopting successive steps would diminish the
possible favorable impact a combined package might
have upon the PRC, and would run the risk of re-
ceiving successive scornful responses from the PRC.
Successive notifications as the recommendations are
implemented would repeatedly irritate the GRC.
B. Implement most recommendations as one package.
(1) Relax controls on direct exports to the
PRC, but not to the extent that would place the PRC
on parity with the USSR (Exports, Option B, page 16),
and place imports on the same basis as the USSR
(Imports, Option A, page 20) ;
(2) Relax dollar controls (Dollar Controls,
Option A, page 24) ;
(3) Remove bunkering controls except for
carriers going to and from designated countries
(Bunkering, page 26) ;
(4) Permit US carriers to carry PRC cargoes
to and from ports outside the PRC and permit US-
owned foreign flag carriers to call at ports in the
PRC (Shipping, Options B, page 30, and C, page 31).
Authorization of sale of used American aircraft
(page 23) and proposal of trade delegations, (page 27)
would follow when appropriate.
Principal Advantages
Would have maximum favorable impact on the PRC.
Would get major restrictions out of the way at one
time, avoiding the necessity of repeated notifica-
tions to the GRC.
Principal Disadvantages
Would probably seriously complicate our efforts
to persuade the GRC to acquiesce in any new approach
to the Chinese representation issue.
SECRET/SENSITIVE
Reproduced at the Richard Nixon Presidential Library
DECLASSIFIED This document has been reviewed pursuant to Executive Order 13526 and has been determined to be declassified.
SECRET/NODIS
APPENDIX TO NSC - U/SM 91
TRAVEL AND TRADE WITH COMMUNIST CHINA
Scenario for Congressional Notification
We believe that essentially the same scenario as
was followed in December 1969 should be used in the
current instance. At that time it was agreed, in
consultation with the White House, to limit the
number of persons notified to a few Congressional
leaders and important committee staff members, and
to keep the notifications in low key. With this in
mind, we have suggested notifying Congress of which-
ever moves we are making at the same time we notify
foreign governments. We suggest that the Department's
Office of Congressional Relations, in consultation and
coordination with Mr. Timmons office at the White
House, inform the following:
Senate Leadership
Senator Mansfield
Senator Scott
Senate Foreign Relations Committee
Senator Fulbright
Senator Aiken
House Leadership
Speaker Albert
Congressman Ford
House Foreign Affairs Committee
Chairman Morgan
Congressman Mailliard
SECRET/NODIS
Reproduced at the Richard Nixon Presidential Library
DECLASSIFIED This document has been reviewed pursuant to Executive Order 13526 and has been determined to be declassified.
SECRET/NODIS
2
Senate Banking and Currency Committee
Dudley L. O'Neal, Jr., Staff Director and
General Counsel (Majority)
John R. Evans, Minority Staff Director
House Committee on Banking and Currency
Paul Nelson, Staff Director (Majority)
Orman S. Fink, Professional Staff Member
(Minority)
Senate Finance Committee
Thomas Vail, Chief Counsel
Robert K. Wolthius, Legislative Assistant
to Senator Bennett
House Ways and Means Committee
John M. Martin, Jr., Chief Counsel
February 22, 1971
SECRET/NODIS
Reproduced at the Richard Nixon Presidential Library
DECLASSIFIED This document has been reviewed pursuant to Executive Order 13526 and has been determined to be declassified.
OF STATE
Department of State
UNITED STATES OF AMERICAN
TELEGRAM
CONFIDENTIAL 559
PAGE 01 STATE 063580
83
ORIGIN EA-20
INFO OCT-01 CIAE-00 DODE-00 PM-05 H-ø2 INR-08 L-04 NSAE-001
NSC-10 P-03 RSC-01 PRS-01 SS-20 USIA-12 AID-28 COM-08
E-15 FRB-02 TRSE-00 XMB-06 OPIC-12 TRSY-11 CIEP-01
IO-16 INT-06 CEA-02 /194 RI
66638
DRAFTED BY: EA/ACA: A JENKINS
APPROVED BY: EA : MARSHALL GREEN
EA/ROC EA/P S/PRS UNSEC: IRWIN USIA: shakespearei USIA* REINHARDT
S/S: CURRAN WHITE HOUSE: HOLDRIDGE
029595
P 150214Z APR 71
FM SECSTATE WASHDC
TO ALL DIPLOMATIC AND CONSUL POSTS PRIORITY
AMCONSUL HONG KONG
CONFIDENTIALSTATE 063580
INFORM CONSULS
JOINT STATE/USIA MESSAGE
REF: STATE 62771
1. THE PRESIDENT'S ANNOUNCEMENT ON PRCOBY SPOKESMAN ZEIGLER ON
APRIL 14 DESIGNED TO "CREATE BROADER OPPORTUNITIES FDR CONTACTS
between THE CHINESE AND AMERICAN peoples" IS PART OFI A CONSISTENT,
STEADY POLICY OF THE ADMINISTRATION TO TRY TO ESTABLISHI A MEANINGFUL
DIALOGUE WITH PEKING AS EXPRESSED IN THE PRESIDENT'S! FOREIGNI
POLICY REPORT OF FEB 25, 1971.
2. THESE STEPS INVOLVE CERTAIN RELAXATIONS ON DIRECTTTRADE
WITH PRC. THEY FOLLOW OTHER STEPS TAKEN DURING THEI
PAST TWO YEARS:
A) IN JULY 1969 WE PERMITTED TOURISTS TO IMPORT IN
THEIR ACCOMPANIED LUGGAGE UP TO DOLS: 100 WORTH OF MAINLAND
CONFIDENTIAL
Reproduced at the Richard Nixon Presidential Library
DECLASSIFIED This document has been reviewed pursuant to Executive Order 13526 and has been determined to be declassified.
DEPARTMENT OF STATE
Department of State
UNITED STATES OF AMERICA
TELEGRAM
CONFIDENTIALI
PAGE 02 STATE! 063580
CHINESE GOODS.
B) IN DECEMBER 1969 WE REMOVEDI RESTRICTIONS ON THE
AMOUNT AND METHOD OF IMPORT OF NON-COMMERCIAL GOODS BY
INDIVIDUALS AND NON-PROFIT INSTITUTIONS.
C) AT THE SAME TIME WE AUTHORIZED FOREIGN SUBSIDIARIES
OF AMERICAN FIRMS TO CONDUCT NON-STRATEGIC TRADE WITH THE
PRC.
D) IN APRIL 1970 WE ANNOUNCED THAT WE WOULD PERMIT
THE EXPORT OF CERTAIN TYPES OFI AMERICAN- MADEI COMPONENTS: TO
BE INCORPORATED IN FOREIGN-MADE COMMODITIES TO BE SHIPPED
TO THE PRC.
E) IN AUGUST 1970 WE AUTHORIZED BUNKERING FREE WORLD
SHIPS CARRYING NON-STRATEGIC CARGOES WITH NON-US ORIGINI
PETROLEUM PRODUCTS.
3. THE PRESIDENT'S ANNOUNCEMENT FOLLOWS HIS REVIEW OFI
RECOMMENDATIONS SUBMITTED BY THE UNDERI SECRETARIES
COMMITTEE OF THEI NATIONAL SECURITY COUNCIL EARLIER THIS
YEAR. IT IS UNRELATED TO US POLICY
WITH RESPECT TO CHINESE REPRESENTATION IN THE UNITEDI
NATION. IT DOES NOT AFFECT OR IMPAIR OUR FRIENDSHIP
WITH OR COMMITMENTS TO THE GRC.
4. WE DO NOT YET KNOW WHAT THE CHINESE RESPONSE WILLI BE
TO THE PRESIDENT'S LATEST MOVES ON TRAVEL AND TRADE BUT WE
HOPE IT WILL BE POSITIVE.
5. THE ANNOUNCEMENT SHOULD BE PLAYED IN A STEADY, LOW-
KEYED FASHION AS PART OF A POLICY CONTINUUM. IN THIS:
CONTEXT, COMPARISON BETWEEN OUR POLICIES TOWARD CHINA
AND THOSE TOWARD THE USSARI SHOULD BE AVOIDED. IFI THIS SUBJECT
SHOULD ARISE IN FUTURE DEPARTMENTAL ORI WHITEI HOUSE PRESS BRIEFINGS,
CARE SHOULD BEI TAKEN BY POSTS NOT TO GO BEYOND WHAT IS
SAID IN THOSE BRIEFINGS. FURTHER GUIDANCE MAY BEI
SUPPLIED ON BASIS OF THESE BRIEFINGS.
6. IMPLEMENTING REGULATIONS WILL BE WORKED OUT BY THE
DEPARTMENTS OF STATE, COMMERCE TREASURY ANDI OTHER
INTERESTED AGENCIES. UNTIL THEN, SPECIFIC QUESTIONS
SHOULD BE HANDLED WITHIN THE CONFINES OFI STATEMENTS BY
WHITE HOUSE AND DEPARTMENT OF STATE SPOKESMEN. IRWIN
CONFIDENTIAL
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OF STATE
Department of State
UNITED STATES OF AMERICA
TELEGRAM
UNCLASSIFIED 280
PAGE 01 STATE 063314
92-80
ORIGIN TRSY-11
INFO OCT-01 EA-15 AID-28 CIAE-00 COM-08 E-15 FRB-02 INR-08
NSAE-00 RSC-01 TRSE-00 XMB-06 OPIC-12 CIEP-01 NSC-10
SS-20 STR-08 VOE-ØØ SCA-01 ARA-12 L-04 HL02 PPØ3:
PRS-Ø1 USIA-12 IO-16 EUR-20 /217 RI
66636
DRAFTED BY:WRWEBER
APPROVED BY:JOHN M. HENNESSY, DEPUTY ASSISTANT SECREITARY
ALAN B. WADE, DEPUTY ASST. SECY. (PUBLIC AFFAIRS)
SPECIAL CHARGE: TX387
028759
P 150006Z APR 7 1
FM SECSTATE WASHDC
TO AMEMBASSY SINGAPORE PRIORITY
UNCLAS STATE 063314
ATTENTION: J. R. PETTY, HEAD
U. S. DELEGATION, ASIAN development
BANK MEETING
THE FOLLOWING WAS PREPARED PRIOR TO THE ANNOUNCEMENT
MADE AT NOON, APRIL 13, 1971:
THE PRESIDENT ANNOUNCED THIS MORNING THAT PURSUANT TO
A STUDY AND RECOMMENDATIONS FORWARDED TO HIM BY THE NSC UNDER
SECRETARIES COMMITTEE, HE HAD DECIDED TO CHANGE REGULATIONS
IN ORDER TO CREATE OPPORTUNITIES FOR CERTAIN TYPES OF DIRECT
TRADE AND OTHER CONTACTS BETWEEN THE PEOPLES OF THE UNITED
STATES AND MAINLAND CHINA. STEPS ARE BEING TAKEN TO
-- EXPEDITE VISAS FOR VISITORS OR GROUPS OF
VISITORS FROM THE PEOPLE'S REPUBLIC OF CHINA,
-- RELAX CONTROLS ON THE USEI OF DOLLARS IN
CURRENT TRANSACTIONS,
UNCLASSIFIED
Reproduced at the Richard Nixon Presidential Library
DECLASSIFIED This document has been reviewed pursuant to Executive Order 13526 and has been determined to be declassified.
DEPARTMENT OF STATE
Department of State
UNITED
AMERICA
TELEGRAM
STATES
OF
UNCLASSIFIED
PAGE 02 STATE 063314
- - PERMIT FUELING BY U.S. FIRMS OF CHINESE CARRIERS:
EXCEPT THOSE BOUND TO OR FROM NORTHI VIET-NAM,
NORTH KOREA OR CUBA,
RELAX CONTROLS ON CARRYING CHINESE CARGOES ANDI
PERMITTING U.S.-OWNED FOREIGN FLAG CARRIERS TO
VISIT PRC PORTS, AND
- - PERMIT LIMITED DIRECT TRADE WITH THE PRC. THIS:
WOULD INCLUDE BOTH DESIGNATED IMPORTS AND CERTAIN
TYPES OF NON-STRATEGIC EXPORTS.
THE DEPARTMENT OF STATE IS NOW ENGAGED IN IMPLEMENTING THE
PRESIDENT'S DECISIONS IN COORDINATION WITH THE OTHERI DEPARTMENTS:
CONCERNED.
Q. WHAT IS THE SIGNIFICANCE OF THE PRESIDENT'S STATEMENT WITH
RESPECT TO SINO-U.S. RELATIONS?
A . THE PRESIDENT'S DECISION IS A FURTHER INITIATIVE! TO REDUCE
BARRIERS AND CREATE OPPORTUNITIES FOR INCREASED CONTACTS
BETWEEN THE CHINESE AND AMERICAN peoples. IN MAKING THESE
MOVES WE HOPE THAT THE CLIMATE FOR AN IMPROVEMENT OFI SINO-
U. S. RELATIONS WILL BE ENHANCED OVER THE LONG RUN
Q. WHAT DO WE ANTICIPATE WILLI BE PEKING'S REACTION?
A. I WOULD NOT WANT TO PREDICT WHAT PEKING'S REACTION WILL BE.
naturally WE WOULD HOPE FOR A POSITIVELRESPONSE IN
PRACTICAL TERMS.
Q. ARE THESE STEPS JUSTIFIED SIMPLY ON THE BASIS OFI ANI IN-
VITATION TO OUR TABLE TENNIS TEAM?
A . THE PRESIDENT'S DECISION WAS MADE ON RECOMMENDATIONS WHICHI
WERE THE RESULT OF EXTENSIVE DELIBERATIONS OVER THE PAST
SEVERAL MONTHS IN THE U. S * GOVERNMENT. YOU WILLI RECALLI
THAT IN HIS MESSAGE TO CONGRESS THE PRESIDENT ANNOUNCED THAT
HE WOULD BE REDUCING NEEDLESS OBSTACLES TO CONTACTS BETWEEN
THE CHINESE AND AMERICAN PEOPLES. WHILE WE CERTAINLY WELCOME
THE CHINESE INVITATION TO THE U.S. TABLE TENNIS TEAMI THE
PRESIDENT'S DECISIONS WERE FORMULATED IN A LARGER CONTEXT.
UNCLASSIFIED
Reproduced at the Richard Nixon Presidential Library
DECLASSIFIED This document has been reviewed pursuant to Executive Order 13526 and has been determined to be declassified.
DEPARTMENT OF STATE
Department of State
UNITED STATES OF MEMBER
TELEGRAM
UNCLASSIFIED
PAGE 03 STATE 063314
Q. WHAT SIGNIFICANCE DOES: THEI PRESIDENT'S STATEMENT HAVE FOR THE
U.S. POSITION ON CHINESE REPRESENTATION IN THE UN? ARE WE
PREPARED TO FAVOR PRC ENTRY INTO THEI UN?
A ° THESE MOVES ARE UNRELATED TO THE ISSUE OF CHINESE REPRE-
SENTATION IN THE UN.
Q . WHAT WILL BE THE GOVERNMENTAL MECHANISM FOR CARRYING OUT THE
PRESIDENT'S ANNOUNCED STEPS?
A °
THE DEPARTMENT OF STATE IS: CONSULTING WITH COMMERCE AND
TREASURY AND OTHER INTERESTED DEPARTMENTS ON THEI MANNERI OFI
IMPLEMENTING THE PRESIDENT'S DECISIONS. THE NECESSARY CHANGES
IN COMMERCE AND TREASURY REGULATIONS WILLI BEI ANNOUNCED OR
PUBLISHED BY THE APPROPRIATE AGENCIES WHEN THEY HAVEI BEEN
FORMULATED.
Q. HOW DO WE ASSESS THE LIKELIHOOD OFI A WARSAW MEETING IN THEI
LIGHT OF RECENT DEVELOPMENTS?
A. I WOULD NOT WANT TO SPECULATE ON THAT. WE ARE, OF COURSEL
PREPARED TO CONTINUE OUR DIALOGUE AT WARSAW AT ANY TIMEL
Q. HAVE OTHER GOVERNMENTS: BEEN INFORMED IN ADVANCE?
A . YES. CERTAIN OTHER GOVERNMENTS HAVE BEEN INFORMED.
Q. IS THE PRC BEING INFORMED OTHER THAN THROUGH THIS ANNOUNCE-
MENT?
A . I THINK THE ANNOUNCEMENT SPEAKS FOR ITSELF.
Q. WILLI YOU CHARACTERIZE OUR TRADING PATTERN WITH THE PRC UP
TO NOW?
A . THERE HAS BEEN AN EMBARGO ON TRADE WITH THE PRC SINCE 1950€
IN THE PAST TWO YEARS WE HAVE TAKEN SEVERAL STEPS TO REDUCE
OUR CONTROLS ON TRADE BETWEEN AMERICANS AND THE PRC OVERSEAS,
WHILE RETAINING THE EMBARGO ONI DIRECT U.S.-PRC TRADEL
- - IN JULY 1969 WE PERMITTED TOURISTS TO IMPORT IN
THEIR ACCOMPANIED LUGGAGE $100 WORTH OF MAINLAND
UNCLASSIFIED
Reproduced at the Richard Nixon Presidential Library
DECLASSIFIED This document has been reviewed pursuant to Executive Order 13526 and has been determined to be declassified.
DEPARTMENT
OF
STATE
Department of State
UNITED STATES OF AMERICA
TELEGRAM
UNCLASSIFIED
PAGE 04 STATE 063314
CHINESE GOODS.
IN DECEMBER 1969 WE REMOVED RESTRICTIONS ON THEI
AMOUNT AND METHOD OF IMPORT ON NON-COMMERCIAL GOODS
BY INDIVIDUALS AND NON-PROFIT INSTITUTIONS.
AT THE SAME TIME WE AUTHORIZED FOREIGN SUBSIDIARIES
OF AMERICAN FIRMS: TO CONDUCT NON.STRATEGIC TRADE WITHI
THE PRC.
-- IN APRIL 1970 WE ANNOUNCED THAT WEI WOULD PERMIT THE
EXPORT OF AMERICAN-MADE COMPONENETS TO BE INCORPORATED
IN CERTAIN NON-STRATEGIC FOREIGN-MADE COMMODITIES TO
BE SHIPPED TO THE PRC.
IN AUGUST 1970 WE AUTHORIZED BUNKERING FREEI WORLD SHIPS
CARRYING NON-STRATEGIC CARGOES WITHI NON-US.-ORIGINI
PETROLEUM PRODUCTS.
BECAUSE OF THESE RELAXATIONS OF RESTRICTIONS, TRADE BETWEEN
THE PRC AND AMERICAN FOREIGN SUBSIDIARIES, TOURISTS, AND
MAKERS OF COMPONENTS MAY HAVE EXCEEDED $3.5 MILLION IN 1970.
Q. WHERE DOES THIS LEAVE US IN TERMS OF TRADE CONTROLS: APPLIED
TO OTHER COMMUNIST COUNTRIES? DOES THIS PLACE TRADE AT THEI
SAME LEVEL OF CONTROL AS WITH THE SOVIET UNION?
A. UNTIL THE DEPARTMENT OF COMMERCE COMPLETED A REVIEW OF ITS:
COMMODITY CONTROL LIST IT WILLI NOT BE POSSIBLE TO MAKE USEFUL
COMPARISONS WITH OTHER COMMUNIST COUNTRIES.
Q. SOME DETAILS PLEASE, ORI EXAMPLES.
A.
I WILL HAVE TO LEAVE THAT TO THE EXPERTS IN THE COMMERCEI
DEPARTMENT TO COMMENT ON AFTER THEY HAVE HADI A CHANCE TD
CONDUCT THEIR REVIEW.
Q. WHO WILL CONSIDER ITEMS FOR THE LISTS? WILLITHEM BE
PUBLISHED?
A * ANNOUNCEMENTS CONCERNING APPROVED ITEMS AND PUBLICATIONS: OF
LISTS ARE THE RESPONSIBILITY OF THE DEPARTMENT OF
UNCLASSIFIED
Reproduced at the Richard Nixon Presidential Library
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DEPARTMENT
OF
STATE
Department of State
UNITED STATES OF MEMBER
TELEGRAM
UNCLASSIFIED
PAGE 05 STATE 063314
COMMERCE. COMMERCE WILL MAKE RULINGS UNDER THE AUTHORITY
OF THE EXPORT ADMINISTRATION ACT AFTER CONSULTATION WITH
STATE, DEFENSE, AND OTHER INTERESTED DEPARTMENTS.
Q. HOW DOES THE STEP TO BE TAKEN ON BUNKERING CONTROLS DIFFER
FROM THE PRESENT REGULATION?
A ° THE PREVIOUS RELAXATION APPLIED ONLY TO FREE WORLD vessels
AND NON-U.S.-ORIGIN PETROLEUM PRODUCTS. THIS CHANGE PERMITS
BUNKERING PRC VESSELS AND AIRCRAFT, INCLUDING THE use OFI
AMERICAN- ORIGIN PETROLEUM PRODUCTS, EXCEPT WHEN THEY AREI
ENROUTE TO OR FROM NORTH KOREA, NORTH VIET-NAM AND CUBA.
Q. WHAT IS MEANT BY EXPEDITING VISAS?
A * IT WOULD MEAN THAT WE WOULD SPEED UPI THEI MACHINERY FOR VISA
ISSUANCE AND WOULD GIVE SYMPATHETIC AND EXPEDITIOUS CONSIDE
ERATION TO VISA APPLICATIONS.
Q. HOW ARE PRESENT CURRENCY CONTROLS APPLIED? WHAT IS THE
MEANING OF THE WORD "RELAX"? DOES THIS MEAN THAT SOME
CONTROLS IN THE USE OF DOLLIARS: AREI STILLI BEING APPLIED?
A * CONTROLS ON U.S. DOLLAR TRANSACTIONS ARE APPLIEDI BY THE
OFFICE OF FOREIGN ASSETS CONTROL IN TREASURY. THE PRESENT
CHANGE DOES NOT CHANGE TREASURY CONTROLS ON PREVIOUSLY
BLOCKED ACCOUNTS, IT MERELY PERMITS THE USE OF U.S. DOLLARS
IN PAYMENTS AND OTHER NORMAL TRADEI TRANSACTIONS.
Q. HOW ARE IMPORTS LIMITED OR DESIGNATED?
A . LICENSING OF IMPORTS WOULD BE OPERATED BY THE TREASURY
DEPARTMENT.
Q. DO YOU HAVE ANY INDICATION WHAT "ADDITIONAL" STEPS THEI
PRESIDENT HAS IN MIND?
A * NO. IRWIN
UNCLASSIFIED
Reproduced at the Richard Nixon Presidential Library
DECLASSIFIED This document has been reviewed pursuant to Executive Order 13526 and has been determined to be declassified.
NATIONAL SECURITY COUNCIL
SECRET
WASHINGTON, D.C. 20506
April 13, 1971
National Security Decision Memorandum 105
TO:
The Secretary of State
The Secretary of Defense
The Director of Central Intelligence
The Attorney General
SUBJECT:
Steps Towards Augmentation of Travel and Trade
Between the People's Republic of China and the
United States
The President has reviewed the recommendations forwarded by the
Under Secretaries Committee on steps to increase personal and
commercial contacts between the People's Republic of China and the
United States, and has directed that the following moves be undertaken:
-- - Issuance of a public statement offering to expedite visas for
groups of visitors from the People's Republic of China to
the U.S.
- - Relaxation of currency control to permit Chinese use of dollars.
- - Ending restrictions on American oil companies providing
bunkers except on Chinese owned or chartered carriers bound
to or from North Vietnam, North Korea, or Cuba. This
relaxation covers ships as well as planes, but would not affect
our existing controls on entry to PRC carriers into U.S. ports.
- - Granting permission to U.S. vessels to carry Chinese cargoes
between non-Chinese ports, and for U.S. -owned foreign flag
vessels to call at Chinese ports.
Commencement of a relaxation of controls on direct trade
between the U.S. and China by placing individual items under
general license for direct export to the PRC after item-by-item
interagency review to determine if they are of strategic significance.
The Under Secretaries Committee is to be charged with the
SECRET
Reproduced at the Richard Nixon Presidential Library
DECLASSIFIED This document has been reviewed pursuant to Executive Order 13526 and has been determined to be declassified.
SECRET
2
responsibility of determining which items should be placed on
general license, and should forward a report within 30 days
requesting approval of these determinations. Upon the com-
mencement of these limited direct exports, direct imports from
China of a similar and correlated nature will be allowed.
The President has also directed that the Under Secretaries Committee
review and report to him after a period of four months the results of
the steps taken. The report should include an assessment of the
reactions to these steps by the PRC and the GRC. The President will
then determine whether implementation of additional steps recommended
by the Under Secretaries Committee may be warranted.
the
Henry A. Kissinger
cc:
Secretary of the Treasury
Secretary of Commerce
Chairman, Joint Chiefs of Staff
Director, United States Information Agency
SECRET
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DECLASSIFIED This document has been reviewed pursuant to Executive Order 13526 and has been determined to be declassified.
28287
MEMORANDUM
NATIONAL SECURITY COUNCIL
SECRET
May 6, 1971
MEMORANDUM FOR:
DR. KISSINGER
FROM:
ERNEST JOHNSTON
E.T.
SUBJECT:
May 7 Agency Announcements on
Implementation of Some Parts of
the President's China Decisions
In his memorandum of May 3 Fred Bergsten informed you that Secretary
Connally had instructed Treasury to postpone until his return its proposed
announcement last Saturday on the freeing of the China foreign assets
controls. This is one of the steps to implement the President's China
decisions. Connally is now prepared to go ahead and Treasury plans
to make its announcement on May 7. On the same day Commerce and
Transportation will announce changes in the regulations on bunkering,
shipping and cargoes. These are the elements, marked on the attached
decision memorandum which did not need further referral to the Presi-
dent. A cable is going to the Asian posts prior to the agency announce-
ments.
The Decision Memorandum does, however, require that the Under
Secretaries Committee prepare for the President a series of options
on items to be allowed in the US/China export and import trade. These
will require further Presidential decisions prior to implementation.
That paper is now being put into final shape and should arrive in the
next few days.
Attachment
NSDM - 105
AAND
Clearance: Holdridge
SECRET
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DECLASSIFIED This document has been reviewed pursuant to Executive Order 13526 and has been determined to be declassified.
27336
MEMORANDUM
THE WHITE HOUSE
WASHINGTON
SECRET
April 19, 1971
MEMORANDUM FOR:
MR. PETER FLANIGAN
FROM:
HENRY A. KISSINGER
HC
SUBJECT:
Sale of Older Jet Planes to China
You asked about the possibility of selling American second hand
jet planes to China. This general subject was included in the
package to the President on relaxation of our regulations on and
travel between the U.S. and China, on which he has just made a
decision and which was announced on April 15. (NSDM 105 is
attached.)
The package suggested three groups of steps the President could
take. The sale of planes would be included in the second step,
which however would not be implemented until after we had assessed
reactions to the first step over a period of several months.
However, you might also wish to suggest that the sale of older
planes be judged on its own merits, including the commercial
considerations which you cite, which might be possible with fewer
political overtones than if it were done as part of an additional
broad package as now envisaged. I could conceive of such planes
being approved for general license under the procedures cited
in NSDM 105, or via specific licenses on an ad hoc basis. In either
case, of course, the fundamental consideration would have to be
our overall policy effort toward China and how such sales would
fit into it.
SECRET
Dispated 4/19/71
Reproduced at the Richard Nixon Presidential Library
DECLASSIFIED This document has been reviewed pursuant to Executive Order 13526 and has been determined to be declassified.
NATIONAL SECURITY COUNCIL
Plackin
SECRET
WASHINGTON, D.C. 20506
April 13, 1971
National Security Decision Memorandum 105
TO:
The Secretary of State
The Secretary of Defense
The Director of Central Intelligence
The Attorney General
SUBJECT:
Steps Towards Augmentation of Travel and Trade
Between the People's Republic of China and the
United States
The President has reviewed the recommendations forwarded by the
Under Secretaries Committee on steps to increase personal and
commercial contacts between the People's Republic of China and the
United States, and has directed that the following moves be undertaken:
-- Issuance of a public statement offering to expedite visas for
groups of visitors from the People's Republic of China to
the U.S.
-- Relaxation of currency control to permit Chinese use of dollars.
-- Ending restrictions on American oil companies providing
bunkers except on Chinese owned or chartered carriers bound
to or from North Vietnam, North Korea, or Cuba, This
relaxation covers ships as well as planes, but would not affect
our existing controls on entry to PRC carriers into U.S. ports.
-- Granting permission to U.S. vessels to carry Chinese cargoes
between non-Chinese ports, and for U.S. -owned foreign flag
vessels to call at Chinese ports.
-- Commencement of a relaxation of controls on direct trade
between the U.S. and China by placing individual items under
general license for direct export to the PRC after item-by-item
interagen :y review to determine if the are of strategic significance.
The Under Secretaries Committee is to be charged with the
SECRET
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DECLASSIFIED This document has been reviewed pursuant to Executive Order 13526 and has been determined to be declassified.
SECRET
2
responsibility of determining which items should be placed on
general license, and should forward a report within 30 days
requesting approval of these determinations. Upon the com-
mencement of these limited direct exports, direct imports from
China of a similar and correlated nature will be allowed.
The President has also directed that the Under Secretaries Committee
review and report to him after a period of four months the results of
the steps taken. The report should include an assessment of the
reactions to these steps by the PRC and the GRC. The President will
then determine whether implementation of additional steps recommended
by the Under Secretaries Committee may be warranted.
Henry A. Kissinger
cc:
Secretary of the Treasury
Secretary of Commerce
Chairman, Joint Chiefs of Staff
Director, United States Information Agency
SECRET
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DECLASSIFIED This document has been reviewed pursuant to Executive Order 13526 and has been determined to be declassified.
27336
MEMORANDUM
THE WHITE HOUSE
WASHINGTON
SECRET
April 5, 1971
TO:
HENRY A. KISSINGER
FROM:
PETER M. FLANIGAN
pmr
A major problem of the domestic airlines which are currently
in dire financial straits, is excess capacity. This excess
capacity is to some extent made up of older 4-engine jet air-
craft which cannot economically be retrofitted to meet modern
air pollution standards.
One of the major potential markets for these planes could well
be Communist China.
In light of the recent Presidential statement against the expan-
sion of trade with Communist countries, could an exception be
made under which these surplus airplanes could be sold to
Communist China. The benefits would be (a) a great financial
relief to our hard-pressed airlines and (b) a big step towards
noise and exhaust pollution control. May I have your answer
in the very near future as this is an immediate problem.
SECRET
Reproduced at the Richard Nixon Presidential Library
DECLASSIFIED This document has been reviewed pursuant to Executive Order 13526 and has been determined to be declassified.
MEMORANDUM
27336
NATIONAL SECURITY COUNCIL
ACTION
April 14, 1971
@
SECRET
MEMORANDUM FOR:
DR. KISSINGER
FROM:
C. FRED BERGSTEN
SUBJECT:
Sale of Airplanes to China
Peter Flanigan has written that the current financial plight of our
domestic airlines could be helped if they were permitted to sell
some of their old jet planes to China. He asks if he could receive
an answer from you promptly on the subject.
This is one of the issues which was included in your general memo-
randum to the President on trade and travel relations with China,
and which is not to be pursued at this time as a general matter.
Such sales could, however, be effected if the category were approved
for general license after the interagency review called for in NSDM 105.
They could also be effected via a specific request for specific sales even
if the category were not approved for general license. The memo for
Flanigan at Tab A therefore suggests that he might want to raise
these possibilities as a specific step separate from the "group"
measures now envisaged.
RECOMMENDATION:
That you sign the memorandum for Flanigan at Tab A.
Concurrence: JHoldridge
SECRET
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DECLASSIFIED This document has been reviewed pursuant to Executive Order 13526 and has been determined to be declassified.
DOC
RECD
LOG NBR
INITIAL ACTION OFF
MO
DA
MO DA HR
NSC CORRESPONDENCE PROFILE
04
05
04
06
10
27336
BERGSTEN
LOG IN/OUT ONLY
TO: PRES
FROM: ELIOT
U
NO FORN
NODIS
KISSINGER XXX
ROGERS, W
LOU
BUO
EXDIS
DOC SOURCE/CLASS/DESCRIPTION
HAIG
LAIRD, M
C
EYES ONLY
LIMDIS
S XX
CODE WORD
RES DATA
FLANIGAN, Peter
TS
SENSITIVE
SUBJECT: Sale of older four engine jet aircraft to Communist China.
REFERENCE: S/S
OTHER
NOT XEROXED
APP'TS: PRES
HAK
TALKER
MEMCON
DATE REQ.
INTERNAL ROUTING AND DISTRIBUTION
ACTION REQUIRED
ACTION
INFO
REC
MEMO FOR HAK
( XXX )
CY
ADVANCE CYS TO HAK/HAIG
FOR
memo FOR PRES.
(
)
STAFF SECRETARY
FAR EAST
Q
REPLY FOR
SIGNATURE
(
)
XXX
for DISTRIBUTION/DISPATCH
(
)
SECRETARIAT DISTRIBUTION/ACTION
AFRICA
MEMO
TO
(
)
NR EAST/NORTH AFRICA
RECOMMENDATIONS
(
)
EUROPE/CANADA
JOINT MEMO
(
)
LATIN AMERICA
REFER TO STATE
(
)
UNITED NATIONS
ECONOMIC
XXX
D
ANY ACTION NECESSARY
(
)
CONCURRENCE
(
)
SCIENTIFIC
DUE DATE:
9 April
LR PLANNING
COMMENTS: (Including Special Instructions)
PROGRAM ANALYSIS
NSC PLANNING
CONGRESSIONAL
DATE
FROM
TO
S
ACTION REQUIRED
CY TO
0414
PrekG
HAK
X
Sign Mimo to Flamign (04/19
INTERNAL/INTERIM ROUTING
4/16
HAM suped hero to Haryas
MICROFILM DATA
CROSS REF WITH
NOTIFY
DATE
SEE LOG
Hergan
DO
DISPATCH: LETTER/MEMO
INIT
DISPOSITION
JOINED BY LOG
COPIES: (AS MARKED above)
DATE 4/21
SPECIAL FILE RQMT:
SA,
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ORIG)
NSC
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PAF
SPECIAL DISPOSITION COMMENTS:
WHC
SUSPENSE CY ATTACHED:
YES
NO
SUBF
# GPO: 1971-412-412
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DECLASSIFIED This document has been reviewed pursuant to Executive Order 13526 and has been determined to be declassified.
PRO DOMINA JUSTITIA OF BE
OFFICE OF THE DEPUTY ATTORNEY GENERAL
WASHINGTON, D.C. 20530
*
SECRET
February 12, 1971
Mr. Arthur A. Hartman
Staff Director
NSC Under Secretaries Committee
Department of State
Washington, D.C. 20520
Dear Mr. Hartman:
This is in response to your request of February 2,
1971 for the comments of this Department on the Under
Secretaries Committee's draft memorandum to the President
and attached report on the proposed steps to relax restric-
tions on travel to and trade with Communist China.
Intelligence information available indicates that it
is Communist China's intention to direct its intelligence
efforts against the United States, given the opportunity.
The Chinese Intelligence Service is known to have sought
to gather intelligence data in the United States and
Canada. In fact, once having established an Embassy in
Havana, Communist Chinese trade, technological and cultural
missions fanned out across Latin America. Members of these
missions were trained agents, who engaged in intensive
subversive activities in some of the Latin American countries
visited. As the FBI pointed out its experience with trade
and similar delegations entering the United States from
Communist countries indicates continued use of such groups
for intelligence purposes.
The FBI has also observed that there are in the United
States individuals and groups in full agreement with the
Maoist ideological concepts of the inevitability of class
conflict and world revolution. These individuals are
among the advocates of domestic violence in this country.
Leading figures in the revolutionary movement in the
United States have traveled to China. This appears parti-
cularly troublesome today in light of the Vietnam war and
the hostility towards this country displayed by an increasing
number of young militants.
SECRET
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SECRET
- 2 -
Removal of restrictions on travel by United States
citizens to Communist China could open the door to an
intensification of existing Red Chinese intelligence
efforts against the United States, according to the
Bureau. United States citizens who travel to Communist
countries are regularly evaluated and assessed by hostile
Intelligence Services with a view toward recruitment
for intelligence purposes. Furthermore the Communist
Chinese would be presented with opportunities for close
clandestine contacts with United States citizens who
actively support the Maoist ideology.
Finally, with respect to the Committee's comment that
our attempted restrictions on travel to Communist China,
North Korea, North Vietnam and Cuba are unenforceable, we
call your attention to the fact that this Department
with the concurrence of the State Department, has strongly
recommended, the prompt enactment of legislation designed
to empower the Secretary of State to place effective controls
on the travel of American citizens to restricted countries
and areas.
In light of the foregoing considerations this
Department remains opposed to the draft proposals, which
would relax the current travel restrictions in effect
with regard to Communist China.
Sincerely,
Richard
Richard G. Kleindienst
Rcm
Deputy Attorney General
SECRET
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26167
THE UNDER SECRETARY OF STATE
WASHINGTON
S/S 7102316
NSC UNDER SECRETARIES COMMITTEE
SECRET/SENSITIVE
February 23, 1971
MEMORANDUM FOR THE PRESIDENT
Subject: Steps Towards Augmentation of Travel and
Trade between the People's Republic of
China and the United States
You have asked for recommendations for steps to
carry out your policy of increasing personal and com-
mercial contacts between the People's Republic of China
(PRC) and the United States as a step toward improvement
of relations between our two governments. After a review
based on NSDM 17 and the current studies under way in
NSSM 106, the Under Secretaries Committee* recommends
two steps to facilitate personal contacts by relaxing
restrictions on travel by American and PRC citizens, as
well as steps in seven areas which would provide the
basis for development of more normal commercial rela-
tions. All of the recommended steps can be implemented
without new legislation.
I enclose a study containing a full review of the
various issues and action possibilities considered by
the Committee. The following is a summary of our
action recommendations, with appropriate page references
to the full study.
The Committee was augmented for the purpose of this
study by representatives of the Departments of
Commerce, Treasury, Justice and Agriculture.
SECRET/SENSITIVE
Reproduced at the Richard Nixon Presidential Library
DECLASSIFIED This document has been reviewed pursuant to Executive Order 13526 and has been determined to be declassified.
SECRET/SENSITIVE
-2-
Travel
In the field of travel, the Committee recommends
removal of all passport restrictions on travel to the
PRC when they expire on March 15 (Travel, Option B,
page 4). The Department of Justice opposes this proposal
because it would afford the PRC better opportunities for
intelligence acquisition, permit close clandestine con-
tacts between American Maoists, advocates of domestic
violence and the PRC, and make it easier for the PRC
to recruit sympathetic intelligence agents (see Annex).
The remainder of the Committee believe the potential
gains outweigh the risks.
The Secretary of State, under whose authority the
passport regulations are issued, concurs in recommending
that controls on the use of passports for travel to the
PRC be dropped on March 15, while continuing them on
travel to North Viet-Nam, North Korea, and Cuba. This
would eliminate the last formal passport barrier on
our part to travel by American citizens to the PRC.
Because of court decisions, and in keeping with our
policy since 1969 of granting exceptions to the pass-
port restrictions on travel to the PRC for broad
categories of travelers, the barrier has in any event
had little practical effect.
Approve
Disapprove
Additionally, it appears to us desirable to make
a public statement offering to expedite visas for groups
of visitors from the People's Republic of China to the
U.S. (Travel, Step 2, page 6), in order to establish
our willingness to facilitate on a reciprocal basis a
flow of persons between the two countries. Justice
opposes because such groups would probably include
trained subversive agents (see Annex).
Approve
Disapprove
SECRET/SENSITIVE
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DECLASSIFIED This document has been reviewed pursuant to Executive Order 13526 and has been determined to be declassified.
SECRET/SENSITIVE
-3-
Trade
The United States relaxed some of its controls
affecting trade between the PRC and third countries
in December 1969, in April 1970, and again in August
1970 by a minor move on bunkering non-communist ships.
The Committee believes that we should now commence
relaxation of our controls on direct Sino-US trade,
eventually to accord the PRC approximate parity with
the Soviet Union. The closer our treatment of trade
with the PRC approaches that applied to the Soviet
Union, the more seriously our assertions of willing-
ness to improve relations with the PRC will be believed,
and the more likely it becomes that Peking will even-
tually respond favorably to our initiatives.
Timing
The trade steps could be accomplished separately
or in a single package. The single package would
probably have the most favorable effect on the PRC,
while gradualism runs a greater risk of inviting
scornful responses from Peking.
However, implementing these measures on a steady
phased basis, in an undramatic fashion, would minimize
an adverse effect on Taipei in general and on our
limited ability to influence the GRC on the sensitive
Chirep issue in particular. In fact a first step in
this process, if not too dramatic, might well be
helpful in making clear to the GRC that while we are
anxious to help preserve its position in the UN, our
purpose of seeking improved relations with the mainland
is still firm and something which it would do well to
take seriously. The timing of steps beyond the initial
one would depend on a number of considerations, including
the climate of US-GRC relations and the evolution of our
Chirep position. For these reasons the Committee makes
no recommendations on precise timing after the first step.
SECRET/SENSITIVE
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DECLASSIFIED This document has been reviewed pursuant to Executive Order 13526 and has been determined to be declassified.
SECRET/SENSITIVE
-4-
To sum up, therefore, the Committee recommends
approval of all the steps described below, in delib-
erately spaced stages, and in an undramatic fashion,
starting in the near future with authorization of direct
export trade (Timing, Option A, page 33). The Committee
is prepared to supervise the implementation of your
decision with the aim of completing the program at or
near the end of 1971.
Approve phased approach
Approve package approach
Exports
The Committee's objective is ultimately to place
exports to the PRC on the same footing as the Soviet
Union, but the Committee believes it is necessary to
review experience with a more restricted level of exports
before moving all the way to that goal. Specifically,
therefore, the Committee recommends at this time the
authorization of exports to the PRC under general license
of all commodities currently under general license to the
USSR except those which, after item-by-item interagency
review, are deemed to be of strategic significance to the
PRC (Exports, Option B, page 16).
Approve
Disapprove
Imports
The Committee recommends that later this year direct
commercial imports from the PRC be authorized on essen-
tially the same basis as the Soviet Union (Imports,
Option A, page 20). It is important that this move be
correlated with exports, preferably as one of the first
steps subsequent to the initial export step.
Approve
Disapprove
SECRET/SENSITIVE
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SECRET/SENSITIVE
-5-
Aircraft Sales
A gesture in the trade field which would enhance
the political impact of relaxation of export and import
controls would be a decision to permit the export to
China of used American passenger aircraft not under
COCOM restrictions (i.e. of a type which has been
operating in normal civil use for more than one year),
providing certain strategic equipment on board the air-
craft is first removed. We have in the past approved
the sale of British-made aircraft containing American-
made components, after strategic equipment was removed.
A large number of older American aircraft are owned
by airlines which would like to sell them to get capital
to buy new American aircraft--which would be much wel-
comed by our industry. A case in point is a proposal by
Pakistan International Airlines to sell to the PRC three
of its used Boeing 720B passenger aircraft, after certain
strategic equipment aboard them is removed (Aircraft
Sales, page 23). If the PRC makes a firm offer to PIA,
we recommend approval. We would accord the same treat-
ment on a case-by-case basis to proposed transactions
concerning similar used passenger aircraft of American
manufacture, after certain strategic equipment is removed.
Approve
Disapprove
Currency Controls
The Committee also recommends relaxation later this
year of our currency controls to permit Chinese use of
dollars (Currency Controls, Option A, page 24). This
would be important in conjunction with a decision to
permit direct trade, especially imports, but could also
be put into effect independently.
Approve
Disapprove
SECRET/SENSITIVE
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SECRET/SENSITIVE
-6-
Bunkering
An irritation to the PRC and to American oil
companies could be removed by changing bunkering con-
trols (including those on petroleum products of US
origin) to permit fueling Chinese-owned or chartered
carriers--surface as well as air (except those bound
to or from North Viet-Nam, North Korea or Cuba) as
well as non-communist and Eastern European carriers
bound to or from China (Bunkering, page 26). The
Committee recommends this relaxation of bunkering
controls before the end of this year. (This relaxa-
tion would not affect our existing controls on entry
of PRC carriers into US ports.)
Approve
Disapprove
Trade Delegations
A step in the trade field which would integrate
closely with efforts to spur travel between the U.S.
and the PRC would be to propose an exchange of trade
delegations if circumstances warrant (e.g. a positive
PRC response to our trade relaxation emerges) (Trade
delegations, page 27). The Committee recommends that
this step be authorized as a means of getting the
proposal on record with the PRC. (Justice opposes;
see Annex).
Approve
Disapprove
Chinese Port Entry and Cargoes
Finally, the Committee recommends adoption of two
steps to permit (i) U.S. vessels to carry Chinese cargoes
between non-Chinese ports and (ii) U.S.-owned foreign
flag vessels to call at Chinese ports (Shipping, Options
B and C, pages 30 and 31). We make no recommendation on
SECRET/SENSITIVE
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SECRET/SENSITIVE
-7-
amending current regulations to permit U.S. vessels and
aircraft to call at Chinese ports at this time.
We note, however, that a decision in the export field
to permit grain sales to the PRC--a major importer of
grain--would raise the question of whether to allow more
favorable treatment of the PRC than the USSR by not re-
quiring that 50 percent be shipped in American bottoms.
(The Department of Commerce expects shortly to refer a
case to the White House involving grain sales to the USSR
which is stymied because of the cost of shipping 50 per-
cent in American bottoms.) If we do extend the 50 per-
cent requirement to apply to the PRC as well, we might
defeat the purpose of permitting sales of grain to the
PRC because of high shipping costs. Moreover, regulations
would have to be amended to permit U.S. ships to call at
PRC ports.
Approve (i) above
Disapprove
Approve (ii) above
Disapprove
We recommend these steps, not in the expectation of
any substantial immediate increases in travel or trade,
but because their adoption would be designed to show the
genuineness of our desire to improve relations and even-
tually to develop significant trade.
John John Chairman N. Irwin II
Enclosures:
1. Annex: Department of
Justice letter.
2. NSC - U/SM 91.
SECRET/SENSITIVE
Reproduced at the Richard Nixon Presidential Library
DECLASSIFIED This document has been reviewed pursuant to Executive Order 13526 and has been determined to be declassified.
AISC # 26482
DEPARTMENT OF COMMERCE
THE ASSISTANT SECRETARY OF COMMERCE
Washington, D.C. 20230
UNITED STATES OF AMERICA
MAR 5
1971
SECRET
Honorable Henry A. Kissinger
Assistant to the President for
National Security Affairs
The White House
Dear Dr. Kissinger:
This will record with you an exception I feel I must take to
one aspect of the Memorandum and Report addressed to the
President from the Under Secretary of State on NSC-U/SM 91
(Travel and Trade with Communist China). The Memorandum
indicates that the NSC Under Secretaries Committee agreed
that "the Committee's objective is ultimately to place exports
to the PRC on the same footing as the Soviet Union, but the
Committee believes it is necessary to review experience with
a more restricted level of exports before moving on the way to
that goal.' This statement does not reflect the position of
the Department of Commerce.
Our position is that the Committee should recommend to the
President the adoption of Option B which, in brief, calls for
relaxing controls on exports to Mainland China on a selective
basis after an item by item interagency review establishes
that the items to be decontrolled would have no strategic
significance to the Chinese. More restrictions would be re-
tained for China than for the USSR. We opposed in Committee
calling on the President to decide now that the China controls
should be further relaxed in the latter part of 1971 (as State
then recommended) to put them on essentially a parity with the
controls to the USSR (Option A.) We are in agreement with DOD
that the effect of relaxation under Option B should be reviewed
before deciding whether or not to relax further. We do not
believe that at this point in time we are in a position to say
with certainty that our goal is to put Mainland China and the
Soviet Union on the same footing as far as U.S. trade controls
are concerned.
The position we took at the Under Secretaries' meeting on
February 11th can be properly expressed by making the follow-
ing changes in the Memorandum to the President:
a) On page 3, in the first paragraph, delete the phrase
starting on line 7 with the word "eventually" and ending on
GROUP 1
Excluded from automatic
downgrading and
declassification
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2.
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line 8 with "the Soviet Union. "
b) On page 4 under Exports, delete the initial part
of the paragraph through the word "therefore" on line 6.
c) On page 17 of the Study accompanying the Memorandum,
in the partial paragraph at the head of the page, delete the
parenthetical sentence following the underlined portions of
the paragraph.
Sincerel
Robert McLellan
Assistant Secretary for Domestic
and International Business
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26167
OF DEFENS:
Holdways
THE DEPUTY SECRETARY OF DEFENSE
WASHINGTON, D. C. 20301
UNITED STATES OF AMERICA
1 MAR 1971
Dr. Henry A. Kissinger
Assistant to the President
for National Security Affairs
The White House
Washington, D.C. 20501
Dear Henry:
I regret that I must inform you that the Memorandum and Report which
the President received from the Under Secretary of State on USM-91
(Travel and Trade with Communist China) was in error. Specifically,
the Memorandum states that the Committee agreed that "The Committee's
objective is ultimately to place exports to the PRC on the same foot-
ing as the Soviet Union, but the Committee believes it is necessary
to review experience with a more restricted level of exports before
moving all the way to that goal. 11 The Department of Defense specifi-
cally did not agree to this. In fact, it is the stated goal of
Option A which the Committee considered and rejected.
It is the Defense Department's position that the only change in our
export policy should be to place individual items under general
license for the PRC after interagency review to determine if they are
of strategic significance to the PRC but that there should remain a
significant differential in the levels of control over strategic
items for PRC and the USSR because of their different levels of
industrial and technological development. This step is in itself a
large and important one. After a year or two of experience, the
policy should then be reviewed to determine whether the US national
interest could be served by taking further steps to liberalize our
export policy toward the PRC. Perhaps at that time we might be in
a position to decide that our ultimate goal should be to place these
two communist countries on the same footing. I was under the im-
pression that the Commerce and Justice Department's representatives
at the USC meeting of 11 February 1971 took the same position.
Sincerel
"Dame
CC: HAR
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1002
Sec Def Cont Nr.
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MEMORANDUM
26167
NATIONAL SECURITY COUNCIL
SECRET
ACTION
(For Signature 3/18/71)
March 18, 1971
MEMORANDUM FOR:
DR. KISSINGER
FROM:
JOHN H. HOLDRIDGE
FRED BERGSTEN
JHH/MJ Dick-
HELMUT SONNENFELDT
SUBJECT:
Steps Towards Augmentation of Travel and Trade
Between the Peoples Republic of China and the
United States
The NSC Under Secretaries Committee has completed the study requested by the
President (Tab F).
We find it a thorough document fully consistent with the President's Foreign Policy
Report on this subject and alert to the advantages and disadvantages of either con-
tinued gradualism or a package move in this area.
With the exception of Justice opposition to any increase in travel by Americans
and Chinese between the two countries, and Defense and Commerce opposition to
setting as a policy the putting of trade with China on approximately the same level
as trade with the USSR, all members of the Committee agreed on all recommenda-
tions and on the statements of options for the President. These are as follows:
--Travel. To end restrictions on travel to the PRC when the regulations must
be extended on March 15 (already implemented), and to publicly announce our will-
ingness to admit Chinese visitors. Justice opposed this because it would afford
the PRC better opportunities for intelligence acquisition, permit close clandestine
contacts between American Maoists, advocates of domestic violence and the PRC,
and make it easier for the PRC to recruit intelligence agents. The formal CIA
position favors increased travel between the U.S. and China as a means of insert-
ing its agents into China, although General Cushman did not support this at the
Under Secretaries meeting. Commerce favored increased travel as necessary to
exploit commercial opportunities. State, Defense and the other agencies felt that the
fabric of American society was sufficiently strong to withstand the additional
strains which might be put upon it by ending these restrictions.
--Trade. The draft which came before the Under Secretaries Committee from
the Working Group favored reducing the restrictions on our trade with the PRC
down to the level of those on trade with the USSR as soon as practicable. State
vigorously defended the need for a policy decision along these lines. Defense and
Commerce have dissented saying that each proposed decision to reduce restrictions
should be examined separately on the basis of experience and information derived
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2
from preceding reductions.
The specifics of these travel and trade relaxations, to be implemented in phases,
are contained in your memorandum to the President at Tab A. Your memorandum
lays out the proposed phased actions and insures that the President will be con-
sulted before each group of actions is undertaken.
Should we decide to adopt some new approach to the Chirep question at the UN, such
as dual representation or universality, we would benefit from these initiatives by
allaying suspicions that we were trying to devise yet another set of tactics to keep
Peking out of the UN. Elimination of the trade and travel restrictions remaining
from the Korean War would serve to remove suspicions about the sincerity of our
intentions to bring Peking into the world community via the UN and therefore
strengthen our ability to gain vitally-needed supporters for Taipei's continued
participation.
At the same time, as we get into difficult negotiations with Chiang Kai-shek over
Chirep tactics later this spring, he will certainly put pressure on us not to undertake
any further initiatives towards Peking on the grounds that these would give "a wrong
signal" to wavering GRC supporters about the earnestness of U.S. support, and
Chiang will find receptivity for this view in some parts of the U.S. Government.
You should know that the Committee including Defense and Commerce unanimously
recommended the opening of direct trade with the PRC. In addition, State argued
for a policy decision to put China on approximate parity with the USSR under our
trade restrictions as evidence of our desire to lessen tensions with Communist
China. Agriculture favored such a policy decision on commercial grounds.
Deputy Secretary of Defense Packard (Tab D) and Assistant Secretary of Commerce
for Domestic and International Business McLellan have written you (Tab E) changing
Defense and Commerce's position in regard to relaxation of controls on trade with
Communist China. These changes in position do no alter the options presented to
the President in your memorandum. The Defense and Commerce positions are
identical to your Group I Recommended Option:
"Approve placing of individual items under general license for direct
export to the PRC only after interagency review to determine if they
are of strategic significance. "
John Holdridge and Herbert Levin were both at the Under Secretaries' Committee
Meeting and noted Defense and Commerce's positions as originally stated in
Mr. Irwin's memorandum covering USC/M 91. It is a tribute to the vigor of the
Defense bureaucracy that they have been able to get both Mr. Packard and
Mr. McLellan to reverse their agreement to State's request that the President be
asked to decide that putting our trade with China on approximately the same level
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3
as with the Soviet Union is a desirable policy goal.
Letters have been prepared for your signature (Tabs B and C) assuring Mr.
Packard and Mr. McLellan that their Agencies' position will be accurately pre-
sented to the President.
RECOMMENDATIONS:
That you sign the letters to Mr. Packard and Mr. McLellan (Tabs B and C).
That you sign the attached memorandum to the President at Tab A.
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MEMORANDUM
NSC 26167
THE WHITE HOUSE
26167
WASHINGTON
SECRET
ACTION
March 25, 1971
MEMORANDUM FOR:
THE PRESIDENT
THE
PRESIDENT
HAS
SEEN
FROM:
HENRY A. KISSINGER HK
SUBJECT:
Steps Towards Augmentation of Travel
and Trade Between the Peoples Republic
of China and the United States
As you requested, I have asked the NSC Under Secretaries Committee to
produce some suggested changes in the U.S. trade and travel regulations
with respect to Communist China with a view toward implementing addi-
tional relaxations in our present controls. These steps would be intended
to further your policy of broadening communications between the U.S. and
the Peoples Republic of China by removing obstacles to personal and
commercial contacts.
The Under Secretaries Committee went all out and developed a large package
of proposals which set a workable course in the direction which you desire.
The Committee did so not in the expectation of any substantial immediate
increases in trade or travel, but because the adoption of these proposals
would show the genuineness of our desire to improve relations and possibly
eventually develop significant trade. No new legislation or negotiations with
the Chinese would be required.
At the same time, however, the Committee's proposals would, if fully im-
plemented, put a severe strain on our relations with the GRC and perhaps
cause a crisis in U.S. -GRC - relations. There would also be implications
for our relations with the USSR. It therefore appears that a balance will
need to be struck between furthering your objectives with respect to
Communist China on the one hand, and the desirability of minimizing U.S. -
GRC strains, and keeping a watch on Soviet reactions on the other. The
questions of timing and the extent to which we should go in our approaches
to Peking will clearly need to be carefully considered.
Accordingly, I have broken down the large package from the Under Secretaries
Committee into three segments which we could carry out sequentially after
an assessment of the results attained (including the Chinese Communist, GRC
and Soviet responses) following each of the preceding segments. After assess-
ing these results, we could then consider whether to go on to the next segment.
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(Actually, in effect there were originally four segments, of which the first
was the non-extension of U.S. passport restrictions on travel to the Peoples
Republic of China after these restrictions expired on March 15. You have
already approved this step on the basis of the position put forward by State,
Defense, and other agencies -- over the opposition of the Department of
Justice that the fabric of American society was strong enough to resist
the additional strains which removal of the passport restrictions might put
upon it via increased contacts between U.S. radicals and PRC intelligence
agents. )
Group I - For Implementation Within the Near Future
Our purpose in this Group would be to show significant movement in the direc-
tion of easing travel and trade restrictions with Communist China while not
going so far as to antagonize or alarm the GRC unduly nor complicate our
relations with the USSR.
Entry of Chinese. Following the expiration of the restrictions against
using U.S. passports to travel to Communist China, in order to establish our
willingness to facilitate on a reciprocal basis a flow of people between the two
countries, the Committee recommends a public statement by the U.S. Govern-
ment offering to expedite visas for groups of visitors from the Peoples Republic
of China to the U.S. This would implement your references to removing need-
less obstacles to broader opportunities for contacts in your Foreign Policy
Report. Justice opposes this because it would afford the PRC better opportunities
for intelligence acquisition, permit close clandestine contacts between American
Maoists, advocates of domestic violence and the PRC, and make it easier for
the PRC to recruit intelligence agents. Commerce favored increased travel as
necessary to exploit commercial opportunities. State, Defense and the other
agencies felt that the American people were sufficiently resilient to resist any
added subversive burdens which the presence of Chinese Communist travelers
might introduce. Very few Chinese are likely to apply in the foreseeable future.
Currency Controls. Relaxation of our currency controls to permit
Chinese use of dollars would be essential in conjunction with a decision to per-
mit direct trade with China (discussed below), but could also be put into effect
independently.
Bunkering. The Committee recommends the ending of restrictions on
American oil companies providing bunkers except on Chinese owned or chartered
carriers bound to or from North Vietnam, North Korea, or Cuba. This relaxa-
tion covers ships as well as planes, but would not affect our existing controls
on entry of PRC carriers into U.S. ports.
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Shipping. The Committee recommends granting permission to U.S.
vessels to carry Chinese cargoes between non-Chinese ports, and U.S. -owned
foreign flag vessels to call at Chinese ports.
All of the foregoing moves involve relatively minor adjustments on our part
and would inspire little or no reaction from the GRC and the USSR. The main
GRC objection would be regarding the admission of Chinese Communists into
the U.S., and we could anticipate receiving an official GRC expression of con-
cern at the Ambassadorial level. The totality of our moves would of course
bother the GRC, but probably not to a point where real trouble would ensue.
The Soviets would be suspicious of our intent and also suspect some behind-the-
scenes U.S. -Chinese contacts, but are not likely to make much of an issue out
of the individual moves.
There is, however, a more complex proposal in Group I which deserves special
attention:
Trade. The Committee recommends that we should now commence re-
laxation of our controls on direct trade between the United States and China.
With Defense and Commerce dissenting, it observes that, "The closer our
treatment of trade with the PRC approaches that applied to the Soviet Union,
the more seriously our assertions of willingness to improve relations with the
PRC will be believed, and the more likely it becomes that Peking will eventually
respond favorably to our initiatives. 11 Defense and Commerce take the position
that we should not set in advance a policy of bringing our trade controls with
China into line with those affecting the USSR. In fact, a public policy of placing
China trade on a par with Soviet trade would be galling to both the GRC and the
Soviets. The Soviets would take the equal treatment of China with them as an
intentional slight, and would profess to believe that this signified U.S. intentions
to go further in the political field. Even though many of the trade measures
would obviously be in the U.S. commercial interest, the Soviets would not
accept such explanations. The GRC's view would be that a stated policy of
putting China trade on the same basis as that with the USSR, when added to the
totality of the other moves in Group I, indicated a definite U.S. intention of
downgrading GRC interests in favor of improving relations with Communist
China. In the formal sense, the GRC's response would probably be to lodge a
diplomatic protest, but we might in addition expect GRC non-cooperation in other
matters of joint concern such as Chirep tactics.
Nevertheless, the recommendation for commencing relaxation of our controls
on direct trade was unanimous, and the upshot was to leave as an accepted
course the approach favored by Defense and Commerce: to place individual
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items under general license for direct export to the PRC only after interagency
review to determine if they are of strategic significance. No material adverse
reaction would be anticipated from either the USSR or the GRC, although a pro
forma protest from the latter could be expected.
Once direct trade of a limited nature is on the books, the Committee would
then favor direct imports from China of a similar and correlated limited nature.
Group II
A reasonable period after implementation of Group I, and following an evaluation
of the results and the PRC, GRC, and Soviet reactions, the Under Secretaries
Committee would report to you the effect of these moves on our relations with
Moscow, Taipei, and Peking, and request approval to implement additional
moves, as set forth below. In making these moves, we would be going beyond
steps of a limited and still quasi-symbolic nature and working toward the
development of substantial two-way trade. With the Group I steps already on
the books, we would be making it plain that the relationship we seek with the
Chinese is one of substance and not just show.
Exports. Approve export to the PRC of all commodities currently under
general license to the USSR except those deemed to be of strategic significance
to the PRC.
Imports. Authorize direct commercial imports into the U.S. from the
PRC on essentially the same basis as the Soviet Union in a manner correlated
with allowing direct exports.
Aircraft Sales. End the restriction against the sale of American and
foreign airlines of older American civil aircraft not under COCOM restrictions,
on a case-by-case basis, after strategic equipment is removed. This would
provide the airlines with the capital to buy new American aircraft -- which
would be much welcomed by our industry.
With the Group II moves we would be coming close to placing trade with China
and the USSR on much the same basis, and both the Soviets and the GRC would,
for the reasons outlined above, be disturbed. They on balance would both
probably live with the situation, however, though we could anticipate a strong
protest from the GRC coupled with the difficulty already noted in obtaining its
cooperation in matters such as Chirep. If we did succeed in getting its co-
operation, the price would almost surely be considerably higher than would
have been the case otherwise.
I might note that the question of the sale of older American civil aircraft to
China could become an active issue, since Pakistan International Airways is
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5
attempting to dispose of some Boeing 720s to the Chinese. This issue, if it
actually arises (there has been no firm Chinese offer), could be handled as
a separate item from the other steps with fewer repercussions and problems.
Group III
A reasonable period after implementation of Group II, the Under Secretaries
Committee would report to you the effect of these moves on our relations with
Moscow, Taipei, and Peking, and request approval to implement a final group
of steps. These would make it very evident that we would be willing to go a
considerable distance in improving relations with the Chinese Communists, and
to this end would be prepared to accept a large measure of Soviet and GRC dis-
pleasure.
Trade Delegations. The Committee recommends authorization of a
proposal to the PRC to exchange trade delegations if circumstances warrant.
Justice opposes for the same reasons cited under the travel option (Group I).
The Chinese delegation would by the very nature of the regime be an official
one, and ours would probably assume something of an official character in the
public eye.
Grain Sales. The Committee notes that a decision in the export field
to permit grain sales to the PRC a major importer of grain would raise
the question of whether to allow more favorable treatment of the PRC than the
USSR by not requiring that 50 percent be shipped in American bottoms. If we
do extend the 50 percent requirement to apply to the PRC, we might defeat the
purpose of permitting sales of grain to the PRC because of high shipping costs.
Moreover, regulations would have to be amended to permit U.S. ships to call
at Chinese ports.
Waiving the 50 percent shipping requirement would constitute more favorable
treatment for China than for the USSR in a historically sensitive area, and might
be misunderstood politically abroad. In addition, the longshoremen and other
unions have vehemently opposed any relaxation of the shipping requirement for
the USSR; they would presumably be at least equally vociferous against
Communist China, for both commercial and ideological reasons. The unions
would maintain their opposition against the USSR if we were to relax on both
to avoid a discrimination in favor of China.
If we were to take this step, you would be taking on a major domestic political
battle. Since previous relaxations would have placed our trade with China and
the USSR under approximately the same level of restrictions, I see no need to
allow the PRC more favorable treatment by exempting grain exports from the
50 percent American bottom shipping requirement. However, Agriculture
vigorously favors this move.
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If you disapproved waiving the 50 percent shipping requirement, you would
wish to consider amending regulations to permit U.S. ships to call at PRC
ports, which is necessary in view of the 50 percent shipping requirement to
make grain sales a credible possibility and thereby to avoid legitimate PRC
claims that our moves are a sham.
A strong adverse reaction could be anticipated from both the USSR and the GRC
to the steps in Group III. From the Soviet standpoint, a more favorable treat-
ment for China than the USSR in the question of requirements for using
American ships would indicate that the U.S. attached a higher value to good
relations with China than with the USSR. Selling grain on the same terms would
not cause as much of a reaction, but even in this case the Soviets would be
suspicious that our motives were political rather than economic. Even if an
attempt to sell grain came to nothing, the Soviets would mark it down as a sign
of a change in the U.S. attitude.
The GRC would focus first upon the official quality of the proposed trade dele-
gations, seeing in them a U.S. desire to move toward diplomatic relations with
Peking. Grain sales and shipments to China on terms more favorable than
those granted the USSR would signify the same thing to the GRC. (Grain sales
alone would not be regarded differently from any other non-strategic trade item,
however.) Since the GRC would assume as a corollary a U.S. disposition to
bargain away its interests, we would need to take into our calculus the possi-
bility of a severe crisis in U.S. -GRC relations. Management of such a crisis
could prove very difficult, and we might not be able to count on the GRC's past
practice of backing away from extreme positions which it threatens to take.
RECOMMENDATION:
That you approve the implementation of the steps outlined in Group I.
Approve
Disapprove
That you authorize me to inform the Under Secretaries Committee that the
further steps proposed by it will be considered only after due consideration of
the results gained from the Group I steps, including an assessment of the re-
actions of the PRC, the GRC, and the USSR.
Approve
Disapprove
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