US Economic Statecraft for Survival 1933-1991 Part 10

75 Ibid., box 159, folder: Subject File, Cabinet State Secy, of (folder 2), Morrison to Acheson, 10 May 1951.

76 Steve Marsh, 'The Anglo-American Special Relationship and the Anglo-Iranian Oil Dispute, 195054', PhD thesis, University of Wales, Swansea, 1999.

77 HST Lib., PSF box 112, folder: General File, Attlee, Clement, Washington Conversations, 6 Dec. 1950; ibid., box 115, folder: General File Churchill, Winston, 195152, Fechteler to Truman, 2 Jan. 1952.

78 Ibid., box 116, folder: General file, Churchill-Truman meetings, Far Eastern Problems, Negotiating Paper, 'Divergence of US and British Policies Respecting China', 5 Jan. 1952.

79 Ibid., box 159, folder: Subject File Cabinet State Secry. of (folder 2), Acheson to Truman, 25 Sept. 1952.

80 FRUS, 1951, vol. i, pp. 10005, Sawyer memo to NSC, 17 Jan. 1951. Fungiello, American-Soviet Trade, p. 41, claims that the US did not use the criteria of relative advantage and that this separated her from Western European countries. In fact, while the USA consistently took a harder line, it did not abandon the concept of relative gain so far as general US interests and the interests of the West as a whole were concerned, though it did inst.i.tute a comprehensive embargo of US exports against North Korea and the PRC. However, it tolerated, albeit with ill grace, the continuation of British trade with China, and recognised the importance of this and the relative gain Britain received.

81 Frland, Cold Economic Warfare, pp. 1703. Frland also notes that the view often taken that this was Truman calling for stricter controls misses an important point: the letter gave the State Department more authority in the embargo field, and thus strengthened Acheson's hand in trying to dilute the demands for stricter controls.

82 FRUS, 1950, vol. iv, pp. 2556, Truman to Acheson, 28 Dec. 1950.

83 Ibid., 1951, vol. i, pp. 10256, Acheson to Truman, 10 Feb. 1951.

84 Ibid., pp. 10512, NSC 84th meeting, NSC 104/2, 21 Feb. 1951.

85 Acheson Papers box 167, Index Card Summaries of Telegrams and Memos, East-West Trade, NSC Doc. 104/2, 4 April 1951.

86 See Mutual Defense a.s.sistance Control Act 1951, US Statutes at Large vol. 65, statute 644.

87 In 1956 Ceylon (Sri Lanka) was penalised for rubber sales to the PRC, but retaliation was hardly effective, as Ceylon was not at the time in receipt of US aid. See Kenneth A.Rodman, Sanctions Beyond Borders: Multinational Corporations, Extraterritoriality, and US Economic Strategies (Rowan & Littlefield, Boston, 2001).

88 CAB 128/24, 1(52)1, 3 Jan. 1952; FRUS, 195254, vol. i, pp. 8167, Penfield to State Department, 4 Jan. 1952.

89 HST Lib., PSF box 192, folder: NSC Determinations 1821, Determination 18, 21 Sept. 1951; when the Kem amendment had come into force the NSC had originally declared a three-month blanket exemption, much to the annoyance of Kem and his allies in the Congress.

6 Eisenhower: problems with colleagues and problems with allies 1 For an earlier treatment of some of these matters, specifically within the AngloAmerican context, see Dobson, Politics of the Anglo-American Economic Special Relationship, pp. 15561. For other contrasting approaches, see: Frland, Cold Economic Warfare, p. 259; Thomas Sch.e.l.ling, International Economics (Allyn & Bacon, Boston, 1958); Adler-Karlsson, Western Economic Warfare; Mastanduno, 'Trade as a Strategic Weapon'; Robert Mark Spaulding '"A Gradual and Moderate Relaxation": Eisenhower and the Revision of American Export Control Policy, 19531955', Diplomatic History, 17 (ii), 1993, pp. 22349; John W.Young, 'Winston Churchill's Peacetime Administration and the Relaxation of East-West Trade Controls, 195354', Diplomacy and Statecraft, 7 (i), 1996, pp. 12540.

2 Tor Egil Frland,'"Selling Firearms to the Indians": Eisenhower's Export Control Policy, 195354', Diplomatic History, 15 (ii), 1991, pp. 22144. Frland sets the issue of Eisenhower's role in making and executing embargo policy within the debate about bureaucratic policy-making and the revisionist and counter-revisionist arguments about Eisenhower as leader: see Morton H. Halperin, Bureaucratic Politics and Foreign Policy (Brookings Inst.i.tution, Washington DC, 1974); Fred L. Greenstein, The Hidden-Hand Presidency: Eisenhower as Leader (Basic Books, New York, 1982); and Spaulding, '"Gradual and Moderate Relaxation"'.

3 The idea of negotiating away trade controls for a quid pro quo from the Soviets became a more p.r.o.nounced characteristic of policy in the 1960s and early 1970s.

4 Frland, '"Selling Firearms to the Indians'"; Spaulding,'"Gradual and Moderate Relaxation"'.

5 This evocative phrase has been used by both Frland, and Fungiello, in American-Soviet Trade, quoting from Stephen E.Ambrose, Eisenhower, The President (Allen & Unwin, London, 1984), pp. 369.

6 Frland, '"Selling Firearms to the Indians"'.

7 FRUS, 195254, vol. i, p. 1219, NSG 205th meeting, 1 July 1954.

8 On 1 July 1954 Eisenhower wanted the US to be 'heavy handed' in trying to persuade her allies not to reduce trade controls on China. In October 1956 he not only wanted to relax the controls to make the differential more realistic, but also spoke of wanting to supply the Chinese with arms, though not of the most sophisticated types. FRUS, 195254, vol. xv, p. 1302, NSC 152nd meeting, 2 July 1953; Eisenhower Lib., Clarence Randall Journals, box 3, file CFEP 1956, 25 Sept. 23 Oct., entry 16 Oct. 1956.

9 Ibid., p. 940, NSC 137th meeting, 18 March 1953.

10 Eisenhower Lib. Ann Whitman File, NSC 137, 18 March 1953, alternative source FRUS, 195254, vol. i, pp. 93942.

11 Ibid., p. 1220, 205th NSC meeting, 1 July 1954.

12 FRUS, 195254, vol. ii, pp. 57797, NSC 162/2, 30 Oct. 1953.

13 Gaddis, Strategies of Containment, pp. 1456. For the New Look implications for Western Europe, see Saki Dockrill, 'Cooperation and Suspicion: The United States' Alliance Diplomacy for the Security of Western Europe, 195354', Diplomacy and Statecraft, vol. 5, 1994, pp. 13882. I would also like to acknowledge the fact that I have absorbed other views from Dockrill's work in general in this chapter, including from her Eisenhower's New Look National Security Policy (St Martin's, New York, 1996).

14 FRUS, 195254, vol. ii, p. 595, NSC 162/2, 30 Oct. 1953.

15 Ibid.

16 Ibid.

17 Ibid.

18 The CFEP was established in the aftermath of the Randall Commission's inquiry into foreign trade as a means to develop and co-ordinate foreign economic policy: for further information see below.

19 Eisenhower Lib., CFEP Records, Policy Papers Series box 1, folder: CFEP 501 East-West Trade Action Papers 1955 (3), 'Review of Economic Defense Policy and Program', 20 Jan. 1955.

20 Ibid., 'Review of Economic Defense Policy and Program: The Background', 20 Jan. 1955.

21 Ibid., Dodge to Amory, 7 Feb. 1955. In responding to this memorandum Vice Admiral Davies of the Defense Department uses the term fungibility, FRUS, 1955 57, vol. x, p. 222, Davies to Dodge, 23 Feb. 1955.

22 Eisenhower Lib., CFEP Records Policy Papers Series, box 1, folder CFEP 501 East-West Trade Action Papers 1955 (3), Amory to Dodge, 10 Feb. 1955.

23 Ibid., Steering Committee to CFEP and Cullen to Dodge, 23 and 29 March 1955; ibid., p. 222, Davies to Dodge, 23 Feb. 1955.

24 FRUS, 195254, vol. i, p. 938; CAB 129/58, C(53)21, memo by Eden, 21 Jan. 1953; CAB 128/26, 5(53)9, 27 Jan., 8(53)5, 10 Feb., 15(53)10, 26 Feb. 1953. In fact it was not until early 1955 that transaction controls were implemented.

25 The most celebrated clash between the USA and Western Europe over rearmament came when Dulles threatened an 'agonising reappraisal' of US policy if the Europeans could not agree on a means to draw West Germany into rearmament. The reappraisal would have involved America turning away from Europe towards the Pacific. In effect, it was a threat to revert to traditional isolationism.

26 Klaus Larres, 'Eisenhower and the First Forty Days after Stalin's Death: The Incompatibility of Detente and Political Warfare', Diplomacy and Statecraft, 6, 1995, pp. 43170.

27 Eisenhower Lib., Dulles Papers, Subject Series, box 1, folder: Bermuda Conference-Foreign Ministers Meeting, Conference at Dulles' house, 8 June 1953.

28 FRUS, 195254, vol. i, p. 914, Harriman to Lay, 19Jan. 1953, Sixth Progress Report on NSC 104/2.

29 Ibid., pp. 96881, NSC 152, 25 May 1953.

30 Ibid., Sixth Report on NSC 104/2, 19Jan. 1953.

31 Ibid., pp. 93942, NSC 137th meeting, 18 March 1953.

32 Ibid., pp. 94563, NIE-59, 'Probable Effects of a Severance of East-West Trade', 16 April 1953.

33 Ibid., pp. 96887, NSC 152, 25 May 1953.

34 Ibid., pp. 98791, NSC 148th meeting, 4June 1953.

35 Ibid.

36 Ibid., pp. 100914, NSC 152/2, 31 July 1953.

37 Ibid., p. 1010.

38 Ibid., vol. xv, pp. 11703, NSC 154, 'United States Tactics Immediately Following An Armistice in Korea', draft, 15 June 1953.

39 Ibid., p. 1300, NSC 152nd meeting, 2 July 1953.

40 Ibid., p. 1012, NSC 152/2, 31 July 1953.

41 Ibid., p. 1043, Lincoln Gordon to State Department, 10 Nov. 1953, reporting on British response to US proposals.

42 On 6 November 1953 it was redesignated NSC 152/3 after minor amendments to do with the problem of trade between Hong Kong and Macau, on the one hand, and China on the other.

43 CAB 128/26, CC(53)67, 17 Nov. 1953.

44 FRUS, 195254, vol. i, pp. 10624, Aldrich to British Government, 3 Dec. 1953.

45 FO 371/106008, Coulson to Scott, 23 Nov. 1953.

46 Eisenhower Lib. Ann Whitman File, Administrative Series, 'Report to the President and Congress, January 1954'-The Randall Commission on Foreign Economic Policy; ibid., Legislative Meetings Series, box 1, folder: legislative meetings 1954 (2) March-April, 29 March 1954 supplementary notes 47 Ibid., International Meetings Series, box 1, folder: State Dept. Report, memo of conversation Eisenhower and Churchill, 4 Dec. 1953. 48 CAB 128/27, 3(54)5, 18Jan. 1954. 49 Ibid., 9(54)6, 17 Feb. 1954. 50 Hansard, 25 Feb. 1954, 524, pp. 58291. 51 FRUS, 195254, vol. i, pp. 110816, NSC 118th meeting, 11 March 1954. 52 Ibid., p. 1111. 53 Ibid., p. 1109. 54 Ibid., p. 1110. 55 Ibid., p. 1111. 56 Ibid., p. 1114. 57 Ibid., pp. 110820, NSC 1888, 11 March 1954, and Eisenhower to Churchill, 19. March 1954. 58 Ibid., pp. 11323, Churchill to Eisenhower and his reply, 24 and 27 March 1954; CAB 128/27, 22(54)3, 24 March 1954. 59 Ibid., pp. 11345, Aldrich to State Dept. 29 March 1954; FO 371/111294, Thorneycroft to Churchill, 29 March 1954. 60 See Frland, Cold Economic Warfare, pp. 28793; and Young, 'Churchill's Peacetime Administration'. 61 FRUS, 195254, vol. i, pp. 114345, NSC 191st meeting, 1 April 1954. 62 Eisenhower Lib., Ann Whitman File, box 18, folder: Churchill visit June 1954 (1). 63 FRUS, 195254, vol. i, pp. 121821, NSC 205th meeting, 1 July 1954. 64 In March 1953 there had been an Anglo-American economic conference in Washington at which the British slogan had been 'trade not aid'. It yielded only modest results. See Dobson, Politics of the Anglo-American Economic Special Relationship, pp. 14754, and Eisenhower Lib., CF, Subject Series Confidential box 67, folder: State Dept. thru Sept. 1953 (3) and (4).

65 FRUS, 19524, vol. i, pp. 121821, NSC 205th meeting, 1 July 1954, pp. 1220 and 1221.

66 Ibid., pp. 12325, NSC 207th meeting, 22 July 1954.

67 FO 371/111214, UK delegation Paris to Mutual Aid Dept. FO, 24 July 1954.

68 FRUS, 19524, vol. i, p. 1238.

69 Fungiello, American-Soviet Trade, p. 86.

70 Ibid., 19557, vol. x, pp. 345356, NSC 282nd meeting, 26 April, 1956, p. 348.

71 FRUS, pp. 4218, NSC 315th meeting, 6 March 1957, p. 425.

72 Following the 1954 relaxation of the embargo, exports into the Soviet bloc in 1955 6 rose 20 per cent on their 1952 level. Thereafter they stalled for several months, partly to do with Soviet internal economic difficulties, but mainly because of uncertainties about policy as Khrushchev struggled to master the leadership of the Soviet Union. On this, see Robert Mark Spaulding, 'East-West Trade at the Geneva Summit', in Gunter Bischof and Saki Dockrill (eds), Cold War Respite: The Geneva Summit of 1955 (Louisiana State UP, Baton Rouge, 2000).

73 FRUS, 19557, vol. x, pp. 2034, Dulles to Eden, 7 Jan. 1955.

74 Ibid., pp. 20513, National Intelligence Estimate, 10055, 11 Jan. 1955.

75 Gaddis, Strategies of Containment, pp. 16970.

76 FRUS, 19524, vol. xii, pp. 106272, NSC 54295/5, 'Current U.S. Policy Toward the Far East', 22 Dec. 1954.

77 Ibid., 19557, vol. x, pp. 21623, Dodge to Amory and his reply, 7 and 10 Feb. 1955, Waugh to Hoover 21 Feb. 1955, and Davis to Dodge 23 Feb. 1955.

78 Ibid., pp. 22833, 'Interim Report on Review of Economic Defense Policy', 24 March 1955.

79 Ibid., pp. 2323, Tab A.

80 Ibid., pp. 2425, Kalijarvi to Hoover, 12 July 1955.

81 Ibid., pp. 23941, NSC 254th meeting, 7 July 1955. Spaulding also demonstrates that by the time of the foreign ministers meeting, the Soviets did not want to pursue the issue of expanding East-West trade, see Spaulding East-West Trade, pp. 24550. Soviet interest in trade did not pick up again until the spring of 1957, after Khrushchev had consolidated his leadership position. In February 1958 the Soviets signed a trade agreement with West Germany.

82 FRUS, pp. 2467, CFEP 25th meeting, 26 July 1955.

83 Ibid., pp. 2556, State Department to Permanent Representatives at the North Atlantic Council, 1 October 1955 referring to July 1955 trilateral agreement.84 He was unaware that this strategy would not bear fruit immediately because of Soviet reluctance to expand East-West trade further until the spring of 1957.

85 Ibid., pp. 2504, memo of conversation, 11 Aug. 1955.

86 Ibid., pp. 2556, Dulles to Permanent Representative at North Atlantic Council, 7 October 1955.

87 Ibid.

88 Ibid., pp. 2579, Report by Steering Committee of the CFEP, 4 Oct. 1955.

89 Ibid., pp. 2634, 28th CFEP meeting, mins. 11 Oct. 1955.

90 Ibid., p. 267, Telegram from Delegation at Foreign Ministers Meetings to Department of State, 16 Nov. 1955.

91 Ibid., Editorial note p. 273 and pp. 2734, US Emba.s.sy London to Department of State, 3 Dec. 1955.

92 Ibid., pp. 2756, Dulles to Eisenhower, 8 Dec. 1955.

93 Ibid., pp. 2889, Dodge to Hoover, 13 Jan. 1956.

94 Ibid., pp. 2789, Gray to Hoover, 12 Dec. 1955.

95 Ibid., pp. 2867, 36th CFEP meeting, 12 Jan. 1956 discussing CFEP 501/8; see also footnote p. 289 re Hoover's views.

96 Ibid., pp. 2813, Radford to Secretary of Defense Wilson, 12 Dec. 1956.

97 Ibid., pp. 3013, 27th NSC meeting, 26Jan. 1956.

98 Eisenhower Lib., Ann Whitman File, International Series, folder: Eden visit 301 Jan. 1956 Feb. 1956 (3), memo of conversation Eisenhower and Eden et al., pp. 18 21, 1 Feb. 1956. Dulles immediately steered the two leaders away from this topic, but it was a most extraordinary episode.

99 Fungiello, American-Soviet Trade, ch. 5.

100 FRUS, 19557, x, pp. 34555, 282nd NSC meeting, 26 April 1956.

101 Eisenhower Lib., Clarence Randall, Journals, 195361, box 3, file CFEP 1956, 25 Sept.23 Oct., entry 16 Oct.

102 Ibid.

103 Ibid., folder: CFEP 1956, 24 Oct.7 Dec., entry 14 Nov. 1956.

104 FRUS, 19557, vol. x, pp. 41011, Randall to Delany, 4Jan. 1957.