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Harold E. Stassen - East-West Trade Trends

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Book:
East-West Trade Trends
Author:
Harold E Stassen
Publisher:
U. S. GOVERNMENT PRINTING OFFICE
Genre:
Books / Politics
Year:
2015
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East-West
Trade Trends

MUTUAL DEFENSE ASSISTANCE
CONTROL ACT OF 1951

(the Battle Act)

* * *

FOURTH REPORT TO CONGRESS

Second Half of 1953

letter of transmittal

To the Congress of the United States:

I have the honor to submit herewith the fourth semiannual report on operations under the Mutual Defense Assistance Control Act of 1951 (Battle Act), the administration of which is a part of my responsibilities.

The period covered is July through December 1953.

A large part of this report is an examination of what the Soviet Union has been doing in its trade relations with the free world. In order to put the Russian activities of the last half of 1953 in a more understandable framework we have ranged back over the last 30 years to show how foreign trade fits into their economy and serves their purposes. To study Soviet trends and tactics is obviously important to the economic defense of the free world. To make a report to the Congress and the public on these matters should also be useful. There has been much public interest in the subject.

The selection of this theme, however, does not mean that Soviet trade activities are the only important consideration to be taken into account in the formulation of U. S. economic defense policy. They are not. Many other factors enter in, as told in Chapter V.

In preparing the report my staff has drawn heavily upon the expert knowledge of the Department of State and other agencies. But of course the responsibility for the report is ours.

In my last Battle Act report I said that the strategic trade control program had been hampered by lack of public knowledge. This is still true, but to a less extent, it seems to me. There is a better understanding of the Governments policies, a greater realization that the soundness of East-West trade policy is to be judged not primarily on the amount of trade, but more on what kind of goods move back and forth, and on what terms they move.

Signature of Harold Stassen

Harold E. Stassen ,
Director, Foreign Operations Administration.

May 17, 1954.

CONTENTS
INTRODUCTION:	Page
Note on Strategic and Nonstrategic	1
CHAPTERS:
I.	Stalins Lopsided Economy
Emphasis on Heavy Industry
How Forced Industrialization Affects Trade
How the Kremlin Controls Trade
West Has Never Barred Peaceful Exports
Stalins Last Gospel
II.	The New Regime and the Consumer
Letting Off Pressure
The New Economic Courses
Malenkovs Big Announcement
Khrushchev and the Livestock Lag
Mikoyan Advertises the Program
Has Stalin Been Overruled?
III.	The Kremlins Recent Trading Activities
The New Trade Agreements
More Consumer Goods Ordered
A Shopping Spree for Ships
Most of All, They Want Hard Goods
Something Different in Soviet Exports
They Have Dug Up Manganese
The Emergence of Russian Oil
Gold Sales Expanded
Reaching Outside Europe
IV.	Whats Behind It All
The Kremlin and Peace
A Mixture of Motives
Their Objectives Havent Changed
Their Practices Havent Changed
The Challenge
V.	U. S. Policy on Strategic Trade Controls
The Background
Basic Policy Reaffirmed
The New Direction of Policy
Reviewing the Control Lists
East-West Trade: Road to Peace
Trade Within the Free World
The China Trade Falls Off
They Play by Their Own Rules
United States Policy on the China Trade
VI.	The Battle Act and Economic Defense
Battle Act Functions
The Money and the Manpower
Meshing the Gears
Improving the Machinery
The Termination-of-Aid Provision
Miscellaneous Activities
Summary of the Report
APPENDICES
A.	Trade Controls of Free World Countries
B.	Statistical Tables
C.	Text of Battle Act
CHARTS
1.	Volume of Trade of OEEC Countries With European Soviet Bloc
2.	Free World Trade With the Soviet Bloc
3.	EDAC Structure

INTRODUCTION

Note on Strategic and Nonstrategic

To help protect the security of the free world, the United States and certain other countries have been working together for more than four years to withhold strategic goods from the Soviet bloc.

But how can you tell strategic goods from nonstrategic goods? A good many people have asked that question. It is a reasonable question and it deserves a nontechnical answer.

The answer is that strategic goods, as understood in the day-to-day operations of the program, are those goods which would make a significant contribution to the warmaking power of the Soviet bloc.

This is a practical guide to action. There is no rigid definition that holds good for all times, places, and circumstances. All strategic goods dont have the same degree of strategicness. The free countries have embargoed some, merely limited others in quantity, and kept still other items under surveillance so that controls could be imposed if necessary. Even the same item may vary in strategic importance, depending on the destination, the changing supply situation behind the Iron Curtain, and other circumstances which may change from time to time. Whether an item includes advanced technology is an important consideration. In specific cases, two experts of equal competence may disagree on these things. Two agencies of government, differing in function, may bring different points of view to a given problem. The same is true of governments.

Since there is no distinctly visible boundary between strategic and nonstrategic, some people insist there is no such thing as a nonstrategic item at all. It is true that even bicycles, typewriters, or ordinary hardware may help the other fellow by strengthening his general economy. And these people argue that anything that contributes to the general economy helps in a military way, too.

That is a correct concept in actual warfare but it is not an acceptable concept of strategic in the present situation, for trade on certain terms can help the free nations too. They carry on two-way trade with the Soviet bloc for concrete commercial benefits. The problem is to gain those benefits without permitting the Kremlin to accelerate the growth of military power or to divide the free world.

In rating items as strategic or nonstrategic, it is clear that there are innumerable commodities, used entirely or mainly for civilian purposes, which would not make a clearly significant contribution to war potential. No one would have trouble drawing a line between a jet plane and a suit of clothing, to take an extreme example. Few would have difficulty putting cobalt on one side of the line and butter on the other. As for the border area where it is less clear what contribution an item would make, the allied governments put their heads together, pool their facts, and try to arrive at mutually acceptable judgments.

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