EDAC RECOMMENDATIONS ON JCS QUESTIONS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP61S00527A000100180127-8
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 3
• Document Creation Date: December 12, 2016
• Document Release Date: July 15, 1998
• Sequence Number: 127
• Publication Date: August 9, 1957
• Content Type: MEMO

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MEMORANDUM
To: Chairman, Council on Foreign Econcmi. ; Policy
From: Chairman, Economic Defense Advisory Committee
Subject: EDAC Recommendations on JCS Questions
EDAC D-135/5
August 9, 1.957
References: A. CFEP Chairman's Assignment to EDAC (Para. 5 of EDAC D-
B. Current Economic Defense Policy (NSC 57014/1)
C. Draft Revised Policy (EDAC D-135/4 Annex A)
EDAC has studied the points raised for .onside ration in paragraphs 3.b.(1--!
in the JCS memorandum to the Secretary of Defense dated 13 June 1957 (Ref. A.)r
Our Defense member has supplied a memorandum (attached as Tab A) designed tc
frame the intention of the JCS questions posed in .3.t . (1) and (2) Recouu,:en-
dations on each paragraph follow:
Question 3.b. 1
"Possible application of Battle Acts Export Control. Act and
Trading With the Enemy Act restrictions on trade with certain of
our Allies in response to their widened trade with Communist China."
Zecommendation
That the proposed redraft of economic defense policy (Ref. C. above)
takes into consideration appropriate application of the cited legislation
for anti-frustration purposes. EDAC, with respect to multilateral control,
and ACEP, with respect to U. S. unilateral export controls, provide the appro
priate means for interagency consideration of prcnosals on such matters.
Question 3.b.(2)
"The posture to be adopted by the United States in the face of
possible action on the part of our Allies further to weaken the
COCO CHINCOM controls." _~.
Recommendation
That the proposed redraft of foreign economic defense policy (Ref. C.
above) and the planned work program under that policy are designed to produce
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the best possible action on the part of the United States to achieve the
needed international security controls.
Question 3.b,(3)
"The advisability of introducing the trade control question
into the North Atlantic Council to insure tha the strategic and security
aspects of this vi Western col war nstrumen are accorded proper
emphasis vis-a-vis economic and commerci oonsiderations. The Joint
Chiefs of Staff --- -r
are s,.ron 1 of the o inion that this Ste should be
taken, and that the United States should thereafter intensi its role
of leadership in defending the controls.
Recommendation
1. That the U. S. draw the international security trade control
(Consultative Group (CG)) structure to the attention of the North Atlantic
Council (NAC) and ask that in its reporting activities, NAC bear in mind the
possible pertinence of trade control matters to subjects treated in its
reports, and that the whole or parts of any reports which deal with such
matters be made available to the CG for guidance unless specifically objected
to by NAC.
2. That NAC not be asked to make any special review of the trade control
question at this time.
Question 3.b. (L )
"In event of referral of the trade control question to NATO,
the procedures to be adopted for coordination with Japan."
Recommendation
That the procedures involved in the action proposed immediately above
would provide appropriate coordination with Japan because Japan would participant..
as an equal partner in any CG deliberation on the use of NAC guidance.
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c. The growing awareness that multilateral controls are not
adequately restricting the flow of strategic goods to the Communist Bloc
requires a careful scrutiny of U.S. trade controls to see whether re-
strictions of access to U.S. material and know-how can be utilized as a
means of limiting exports of friendly countries to the Bloc of goods which
the U.S. believes contribute to the war potential of the Sino-Soviet Bloc.
Three types of activities for example are considered to be
feasible:
(1) Control of U.S. exports which are identical with or
contribute to the manufacture of products exported by friendly country
to a Sino-Soviet destination,
(2) Control over subsidiaries or affiliates of U.S. firms,
(3) Denial of technology, patent information or licensee
privileges.
As a case in point in illustration of the above, it will be
noted that over the past year the trade, control participating countries
have approximately tripled their shipments of iron and steel to the Bloc.
This item accounted for the largest volume of shipments under the except-
ions procedure to Communist China in 1956. This trade has and will
improve the war potential of the Sino-Soviet bloc, which by chain action,
will involve greater Defense expenditures to maintain a satisfactory
deterrent position. At the same time, these same countries were large
importers of heavy melting scrap from the U.S. and are continuing to press
for larger allocations. This condition has created a shortage of scrap
in the U.S. to the extent that it'has materially affected the cost of
steel products. In turn, this increasing cost has had a significant
bearing on the purchasing power of the Defense dollar.
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