NSC MEETING ON MACHINE TOOLS WEDNESDAY, 26 MARCH

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP88G01117R000501590004-7
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 13
• Document Creation Date: December 22, 2016
• Document Release Date: July 5, 2011
• Sequence Number: 4
• Publication Date: March 21, 1986
• Content Type: MEMO

Sanitized Copy Approved for Release 2011/07/05: CIA-RDP88GO1117R000501590004-7
Sanitized Copy Approved for Release 2011/07/05: CIA-RDP88GO1117R000501590004-7
 Sanitized Copy Approved for Release 2011/07/05: CIA-RDP88GO1117R000501590004-7
SEfGRET
The Di for of Central Intelligence
Washington, D.C. 20505
National Intelligence Council
NIC 01481-86
21 March 1986
MEMORANDUM FOR: Director of Central Intelligence
Deputy Director of Central Intelligence
Acting National Intelligence Officer for Economics
SUBJECT: NSC Meeting on Machine Tools Wednesday, 26 March
1. Attached are revised talking points for the NSC Meeting on
machine tools Wednesday at 1100. The 7 March memorandum on the politics
of the issue (Attachment A) gives adequate background and is still
essentially accurate.
Sanitized Copy Approved for Release 2011/07/05: CIA-RDP88GO1117R000501590004-7
 Sanitized Copy Approved for Release 2011/07/05: CIA-RDP88GO1117R000501590004-7
SUBJECT: NSC Meeting on Machine Tools Wednesday, 26 March 1986
4. TTAC, worked on this issue at Commerce and attended
an interagency meeting on the subject last week with Bob Gates. Should
you decide to take someone to the meeting, I believe____ would be the
appropriate choice.
Attachments:
A.
Memo for DUI from D/OGI and C/TTAC
7 March 1986
B.
Memo for the Record from
C/TTAC, 12 March 1986
C.
Supplementary Report on Effect of Imports of Machine Tools
D.
Letter from Weinberger to Malcom Baldrige, 14 Feb 86
E.
Washington Post Article, 5 March 1986
SECRET
Sanitized Copy Approved for Release 2011/07/05: CIA-RDP88GO1117R000501590004-7
 Sanitized Copy Approved for Release 2011/07/05: CIA-RDP88GO1117R000501590004-7
Sanitized Copy Approved for Release 2011/07/05: CIA-RDP88GO1117R000501590004-7
 Sanitized Copy Approved for Release 2011/07/05: CIA-RDP88GO1117R000501590004-7
Iq
Next 1 Page(s) In Document Denied
Sanitized Copy Approved for Release 2011/07/05: CIA-RDP88GO1117R000501590004-7
 Sanitized Copy Approved for Release 2011/07/05: CIA-RDP88GO1117R000501590004-7
Sanitized Copy Approved for Release 2011/07/05: CIA-RDP88GO1117R000501590004-7
 Sanitized Copy Approved for Release 2011/07/05: CIA-RDP88GO1117R000501590004-7
Iq
Next 1 Page(s) In Document Denied
Sanitized Copy Approved for Release 2011/07/05: CIA-RDP88GO1117R000501590004-7
 Sanitized Copy Approved for Release 2011/07/05: CIA-RDP88GO1117R000501590004-7
Sanitized Copy Approved for Release 2011/07/05: CIA-RDP88GO1117R000501590004-7
 Sanitized Copy Approved for Release 2011/07/05: CIA-RDP88GO1117R000501590004-7
Iq
Next 6 Page(s) In Document Denied
STAT
STAT
Sanitized Copy Approved for Release 2011/07/05: CIA-RDP88GO1117R000501590004-7
 Sanitized Copy Approved for Release 2011/07/05: CIA-RDP88GO1117R000501590004-7
Sanitized Copy Approved for Release 2011/07/05: CIA-RDP88GO1117R000501590004-7
 Sanitized Copy Approved for Release 2011/07/05: CIA-RDP88GO1117R000501590004-7
Sanitized Copy Approved for Release 2011/07/05: CIA-RDP88GO1117R000501590004-7
 Sanitized Copy Approved for Release 2011/07/05: CIA-RDP88GO1117R000501590004-7
Sanitized Copy Approved for Release 2011/07/05: CIA-RDP88GO1117R000501590004-7
 Sanitized Copy Approved for Release 2011/07/05: CIA-RDP88GO1117R000501590004-7
an iriay ux Japan to K strict
Machine-Tool Shipments to U.S.
A4ident Said Wighing Use of Quotos Based on National Security
By Stuart Awbach
UNWON p am W.W
Pliidest Reagan is considering
aat4 Japan to voluntarily cut its
she W machine tools in the United
Statsir fhrostening to ON quotas
other bee under natiooai-security
provi~oos of U.S. trade lee that
ha .drt been used befog, admix.
ha nth- alRcia4 said yesterday.
Tb import limits could last for
as lor# as five years to preserve the
ability of the hapat-battered do-
mma41 tool industry to produce ma-
to make weapons,
chinal said.
the amoes The derision is going to be made
by dent Reagan within the
next bouple of weeks,' said one ad-
-mm*ation oRiciat who has been
pushing for action an a three-year-
old Opdtion by American maehine-
tool ipaken to win trade protection
on a onal.security grounds.
Aldrough several countries sup-
ply iRecbioe tools to the American
marlet, any import restraints are
likel%to bbl on Japan, which is the
It supplier of general-use ma-
ebioitools to the United States.
F.r~opeao machine tools, which
come largely from West Germany
and Switzerland, we such special-
ised products that they do not com-
pete directly with U.S. products.
Japanese newspapers are speculat-
ing that the Ministry of Internation-
al Trade and Industry is preparing
for the restraints by seeking esti-
mates from major machine-tool
makers in that cormtry of their ex-
port projection for this year.
U.S. mschioe tool makers and
their congressional &S o have ar-
gued that foreign manufacturers
produce about three-fourths of the
state-of-the-art, computer- on-
troiled lathes and machinery cen-
ters, seoessery for manufacturing
weapons ranging from missiles to
titles.
HE WASHINGTON POST
5 March 1986
'!'be MY fouedahon a our na-
Nonni security and economic well-
being depend upon the skill and ca-
pacity d the saachine-tool indus-
trW,' g7 House Republicans, includ-
ing Minority' Leader Robert H. Mi-
diel (Ill.), said in a January letter to
President Reagan. There is a 'se-
rious threat to the national security
pond by aw prepring Flopp we we
ioporta for -technology de-
ion eorclve aoacbioery,' they
adds&
Commerce Secretary Malcolm
Baidrige, who two years ago this
week recommended that sharp lim-
Ms be placed on imports of machine
tools on national-security grounds,
is pressing for the voluntary re-
straints on Japanese imports.
His original proposal, which nev-
er went to the full cabinet, was far
stronger. It called for banning 90
percent of all imports, and effec-
tively would have eliminated Jap-
anese products from the United
States.
That recommendation ran into
sharp opposition from free-trade ad-
vocates within the administration,
who sought to bury the issue by
a~a n g it from a presidential de-
'You had stalling because people
thought it was a bad issue that
could be stalled away,' said an of-
ficial who bvors the import curbs.
-The mschii*4ool ddm was brought forcefully to the
Mention of White house Chief of
Staff Donald T. Reagan in Decem-
ber, when he was seeking support
for tax overhaul from House Repub-
licans.
They quickly reminded him of the
buried recommendation to help
US. machine-tool makers, and he
Promised to resurrect the issue.
Since then, it has moved toward
the front burner of administration
trade issue.
Secretary of State George P.
Shultz met last week with three Re-
publican House aamb~-Nancy
Johnson (Coon.), Henry Hyde (Ill.)
and Lynn Martin (110--on the is-
sue, and U.S. Trade Representative
Clayton Yeutter publicly criticised
the National Security Council for
ATTACHMENT E
delaying a resolution of the industry
petition.
Under questioning by Rep. Bar-
bara B. Kennelly (D-Conn.) at a
House Ways and Means Committee
hearing last month, Yeutter said,
'True to form, the National Secu-
rity Council has not yet given me a
date [for a meeting on machine
tools], and I cannot defend that at
But I can be a little more opti-
mistic than that because I really
think we will do this within the next
two to three weeks. I think we are
finally nearing the conclusion of this
Process, which has been indefen-
srvely Procrastinated."
He was scheduled to meet last
week with the president's national
security adviser, Rear Adm. John
M. Poindexter, but the meeting was
Postponed because of developments
in ppines.
The idea of pa
restraints the pan of the Japa-
nese is considered more palatable
to the free-trade ideology of the
Reagp administration than Bal-
&*'a original recommendation of
sharp limits on imports through
quotas and tariffs.
Rep. Johnson said Defense Sec-
retary Caspar Weinberger told her
he opposed import limits, but ap-
pared more sympathetic to volun-
tary restraints, even if they are
agreed to under the threat of im-
posed quotas.
Nose-counters within the admin-
istration and on Capitol Hill are un-
sure what the NSC will recommend
to the president. St's still up in the
air," said one administration official.
In the three years since the Na-
tional Machine Tool Builders As-
sociation filed its petition for import
restraints, ales of foreign machine
tools have increased steadily, going
from 26.4 percent of the U.S. mar-
ket in 1982 to about 43 percent last
year.
The value of Japanese imports
tripled in the same period, jumping
from $535 million in 1982 to about
$1.5 billion last year.
Sanitized Copy Approved for Release 2011/07/05: CIA-RDP88GO1117R000501590004-7