Eisenhower Library, Randall Commission records, 1953–54
Memorandum by the Executive Secretary of the Commission on Foreign Economic Policy (Fleming) to the Members of the Commission1
- Subject:
- Interpretation of Consensus of Commission’s Thought on East-West Trade
Trade between the free world and the Communist Bloc is a controversial, emotional, and important matter. It directly affects the economic welfare of our allies, and at the same time it directly influences international tensions, engendered by the Korean War and Communist threats elsewhere in the world.
Among the factors restricting this trade are the controls exercised by the free world over East-West trade such as: the United Nations resolution limiting exports to China; United States legislation which in effect embargoes United States war and strategic materials to the Communist Bloc and which conditions foreign aid upon co-operation of the recipient nations in this program; similar regulations set up by other countries in accordance with the recommendations of the international Coordinating Committee in Europe; and certain restrictions imposed by the United States Departments of Commerce and Treasury. The Communist Bloc is relatively independent of outside sources of raw materials and, either through necessity or as a matter of policy, it has been hastening its trend toward self-sufficiency and lesser dependence on international trade as it has continued to develop its military potential.
The controls of the free nations have been aimed at stopping their contributions of military materials to the building up of the Communist war machines in North Korea, Russia, and the rest of the Soviet Bloc. Therefore as presently exercised, these controls interdict the movement of war goods and strategic materials to the Communist countries. The United States interdicts the movement of all goods from this country to China.
The security interests of the United States and other free nations necessitate the continued exercise of controls on war goods and strategic materials so long as the Communist Bloc maintains its present menacing attitude. At the same time the psychological and economic importance of non-strategic trade between the free world and the Communist Bloc must not be overlooked. For the free world, this non-strategic trade represents a link with the people behind the Iron Curtain and a tangible symbol of our continued [Page 1067] willingness to help ease international tensions and improve general living standards through trade. While the scope for enlargement of this trade is limited by the Communist Bloc’s pursuit of self-sufficiency, nevertheless it is of material importance to the countries close to the Curtain and to those whose marketing of surplus productions would be benefitted. Furthermore, an increase in Western Europe’s purchases of certain materials from Eastern Europe would tend to ease Western Europe’s need for dollars. For the people of the Communist Bloc, this trade represents one of the few remaining contacts with the free world which makes it possible for them to see tangible evidence of the strength, productiveness, and good will on our side. The alternative is a complete division into armed camps which would promote differences and therefore heighten the existing tensions rather than easing them.
We therefore recommend that the attitude of the United States toward the expansion of bonafide trade in non-strategic goods between the free nations and the European Communist Bloc be one of affirmative approval. We recommend also that the classification of goods as between strategic and non-strategic be made realistically, so that international control efforts can be concentrated upon those commodities which are genuinely strategic in terms of modern warfare.
We cannot extend these recommendations to include furnishing of war goods and real strategic materials to any of the Communist Bloc while the cold war lasts.
Any recommendation as to trade with Communist China would be inappropriate pending further clarification of the Far East situation.