[THE SORT OF COMMODITIES MOST COUNTRIES WANT FOR ECONOMIC DEVELOPMENT ARE CAPITAL GOODS, MACHINERY, AND METALS OF VARIOUS KINDS, ALL OF PRODUCTION OR FROM INVESTMENT.]

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80B01676R000600010015-1
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 3
• Document Creation Date: December 14, 2016
• Document Release Date: May 21, 2003
• Sequence Number: 15
• Content Type: REPORT

Approved For Release 200 I-RDP80B01676R000600010015-1
The sort of commodities most countries want for economic development
are capital goods, machinery, and metals of various kinds, all of
which have to be taken away from either direct use in military
production or from investment. In addition, by allowing the recipient
countries to choose the precise composition of the bundle of goods
that would be offered, the U.S. would be demonstrating that one of
our objectives is really that of providing economic assistance to the
less fortunate areas of the world.
6. It is unlikely that such a proposal would Put a serious
strain on the U.S. economy, since, only very small amounts of
materials, critical to the U.S., would be included in the bundle
of goods. Further safeguards could be built into the proposal
by stipulating that either the U.S. or the USSR could substitute
one type of product for another in their contributions, but this
would be self-defeating as it opens up possibilities for interminable
negotiations, charges, and counter-charges. As mentioned above,
it is almost certain that equal contributions of axy set of industrial
goods would do considerably more damage to the USSR military program
than to that of the U.S.
7. If the proposal is to be studied at greater length, some
pitfalls should be pointed out:
a. The U.S. proposal would indicate a total dollar
sum that we are willing to supply, leaving it to
the receiving countries to determine the compo-
sition of goods included in the total. It should
be clearly indicated that the USSR will match the
U.S. in terms of the specific commodities requested
by the recipient country, not in terms of the dollar
total. Otherwise the whole question of the significance
of ruble prices compared to dollar prices would be
opened up. If goods are matched against goods,
much of this sort of difficulty will be avoided.
b. The proposal should specify that the USSR and the
U.S. contributions be equal. Since one objective
of the proposal is to reduce the size of the military
effort in both countries, a proposition that the
USSR supply some fraction of the U.S. contribution
would be interpreted to mean that we have a bigger
armament program than they have, and are therefore
bigger "warmongers."
c. The matter of what would be given in exchange by
the receiving countries would be difficult to
handle. From our point of view, a proposal that
State Dept. review completed
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the goods constitute a long term loan would
probably be best, since the USSR can less afford
to exchange present goods for future goods than
we can. In addition to increasing our military
strength relative to theirs (actually, weakening
them more), this might be more acceptable to the
beneficiary countries.
d. The magnitude of the supply of goods offered should
be decided by whether or not we look upon this as
having primarily psychological value. If we actually
expect that the USSR might accept the proposition,
than a modest sum would be in order. If we expect
that the USSR would not acoept the proposition,
than a larger offer is indicated.
8. In general, it is hardly li*ely that the USSR would accept
such an offer. There is thus some danger that the reputation of the
U.S. for honesty and sincerity in international relations (where we
still have such a reputation) might be damaged if the offer were to
be construed by the non-Bloc-non-NATO world as consisting of pure
propaganda. Its effect on our NATO allies might also be substantial.
F. Thomas Juster
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