S/S Files: Lot 63 D 351: NSC 104 Series
Memorandum by the Under Secretary of State (Webb) to the Executive Secretary of the National Security Council (Lay)1
Subject: Third Progress Report on NSC 104/2, “U.S. Policies and Programs in the Economic Field Which May Affect the War Potential of the Soviet Bloc”
NSC 104/2 was approved as Governmental policy on April 12, 1951. It is requested that this Progress Report (covering the quarter ended November 15, 1951) be circulated to the members of their Council for their information.
Export Controls
1. Prohibition of all Exports to Communist China, Manchuria and North Korea
No change. With the exception of a few publications authorized for exportation to all destinations except North Korea, all exports from the United States to Communist China, Manchuria and North Korea continue to be embargoed. (See paragraph 18.)
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9. International Controls Respecting Trade with Communist China and North Korea
There have been no meetings of the United Nations Additional Measures Committee since the General Assembly adopted the strategic embargo Resolution of May 18, 1951.
[Page 2052]The United States position arrived at prior to the opening of the Sixth Session of the General Assembly is outlined as follows:
If there is an armistice in Korea, the existing embargo should be continued in full force for the time being, certainly as long as the Sixth Session continues in Paris, pending clarification of the Korean situation. If an ambiguous situation respecting the possibility of an armistice continues into the Sixth Session of the Assembly, we should press for UN action to tighten the existing embargo through such measures as cargo and selective shipping controls. Agreement was not reached within the United States Government as to our policy regarding the strategic embargo if the armistice negotiations definitely break down or there is a full-scale resumption of hostilities.
The United States has, with varying success, continued to approach individual countries to induce them to accept and apply fully the provisions of the May 18 resolution, including the institution of ancillary controls in the spirit of the Resolution. The subject of a China embargo list also is under discussion in COCOM on the basis of specific detailed proposals submitted by the United Kingdom.
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18. Export Controls on Technology
The Department of Commerce on September 6 issued a General License allowing export to Soviet bloc countries, except North Korea, of technical publications generally available to the public. This action revoked the mandatory control imposed on March 1, 1951 on the export of these publications to the bloc. The General License is an interim one pending further study in a subcommittee of the Inter-departmental Committee on Internal Security.
Shipping (Recommendations 19 and 20)
In the quarter ended November 15 the Coordinating Committee, after examining a sub-committee report on United States proposals for tightening existing shipping controls, agreed to hold a full discussion of all United States proposals, and to convene a meeting of maritime experts if this need is indicated. The discussions, scheduled to begin by the end of November, were to cover controls over sale of ships to Soviet bloc countries, ships’ supplies, repairs, fittings, bareboat and long term chartering, and carriage of controlled items in participating countries’vessels.
The United States position in the United Nations Additional Measures Committee, if the present ambiguous situation respecting an armistice in Korea continues, will be to enlist support for cargo and selective shipping controls against Communist China.
The United States has approached the United Kingdom to develop [Page 2053] a common restrictive bunkering policy in the Far East in order to hinder the movement of strategic goods to Communist China and to minimize the danger of petroleum supplies reaching that destination in the form of excess bunkers.
An approach has been made to Panama to secure the adoption of shipping controls affecting the Soviet bloc (in addition to Panama’s present shipping controls respecting Communist China). Although Panama initially declined to institute such controls, negotiations are continuing on the basis of recent information concerning certain reported transfers of vessels from Panamanian registry. Bilateral approaches also have been made to the United Kingdom and Portugal to secure the cooperation of these countries in denying registration to vessels deprived of Panamanian registry for violation of the latter’s Decree prohibiting calls at Chinese Communist ports.
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Import Controls
24. Formal controls on imports from the Soviet bloc in order to minimize its dollar earnings have not proven necessary, except for imports from Communist China and North Korea which are effectively curtailed by the Foreign Assets Control Regulations of the Treasury Department.
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- In NSC Action No. 602, taken by the National Security Council at its 111th meeting, January 16, 1952, with President Truman presiding, the Council noted this progress report. The Secretary of Commerce participated in this Action with the Council, the Secretary of the Treasury and the Director of Defense Mobilization. (S/S Files: Lot 62 D 1: NSC Actions)↩
- Extracted here are only those portions of the report relating to China and North Korea.↩