Memorandum from the Export Policy Staff to the Chairman, Advisory Committee on Export Policy

Return to SECRET PF SECRET ACEP DOCUME NO. 68 January 9, 1951 TO: Chairman, Advisory Committee on Export Policy FROM: Export Policy Staff SUBJECT: Revision of Security Export Control Policy for Hong Kong and Macao. On January 5, 1951, the Operating Committee discussed OC DOCUMENT No. 531, in which OIT proposed a revision of the interim licensing policy for Hong Kong and Macao. Appendix 1 of ACEP 68 incorporates the substance of the position on which a majority of the Committee was able to agree and is the recommendation of the Chairman of the Operating Committee, State and Defense have appealed the recommendation; State because the proposed licensing criteria are too severe, and Defense because in one particular they are not severe enough. The current licensing policy for Hong Kong and macao is set forth in P. D. 361, Amendment 4. It limits approvals of applications for Positive List commodities to MRO materials for public health and safety and essential items required by the Governments of Hong Kong and Macao. For non-Positive List commodities approvals are limited to a rate of 20 per cent of U. S. exports to those areas in 1949. All other cases for non-Positive List commodities are held without action. As a result a substantial backlog of cases has developed and there has been increasing pressure from the export trade for disposition of these cases. The proposed licensing criteria would establish standards that would permit action on all applications. Subject to a check on possible transship ent, a specific list of commodities of little or no strategic importance could be approved except where quantities applied for appeared exces- sive. Beyond these listed commodities approvals would be possible only if the rigid criteria set forth in Paragraph A (2) were met. The proposed standards for approval are admittedly severe, but they appear required by the current policy under which all shipments to Communist China are denied, and by the position of Hong Kong and Macao as entrepot centers for trade with China. The State Department objections are that, (a) action along these lines would be more effective on a multilateral basis or at a minimum with British cooperation, (b) discussions now being held with the British on this subject might be adversely affected, (c) the impact on Hong Kong trade would be so severe that Communist action against the colony might be stimulated either from within or outside. (over) SECRET DECLASSIFIED SECRET E.O. 12065, Sec. 3-402 16 State Dept. Guidelines, March 6, 1982 By DEB NLT, Date 4-5-85