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II. UNITED STATES EXPORTS TO AND IMPORTS FROM SOVIET BLOC AND ASIA

Total United States export and import trade with the Soviet bloc of Eastern Europe and Asia, by country

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Prepared in the Department of Commerce by International Economic Analysis Division, Office of International Trade, from basic data of the Bureau of the Census, March 1951.

III. TRADE BETWEEN WESTERN AND EASTERN EUROPE

Western Europe:1 Trade with Eastern Europe,2 1948-49 and January-June 1950

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Western Europe includes Austria, Belgium-Luxemburg, Denmark, France, Germany, Greece, Italy, Netherlands, Norway, Switzerland, Sweden, Turkey, and the United Kingdom.

Eastern Europe includes Albania, Bulgaria, Czechoslovakia, Hungary, Poland, Rumania, and U.S. S. R. Finland and Yugoslavia are not included.

The January-June 1950 figures exclude the trade of Portugal, Switzerland, and Turkey. For the full year 1950 the value of Switzerland's exports to Eastern Europe (ex-Finland and Yugoslavia) amounted to $75,172,000. The value of imports for the same period amounted to $44,495,000.

NOTE.-The figures shown above should be interpreted as rough estimates and not as an accurate tabulation of the trade of Western Europe with Eastern Europe. The data was assembled from compilations made from the published sources of the Western European countries which were based on principal commodities only. The figures in the above tabulation, therefore, do not necessarily represent the entire trade in the individual items with Eastern Europe. Any unidentified balance would be included in the "all other" category of the commodity group. Arbitrary decisions had to be made in an attempt to match the basket group with the list of selected items; thus, the margin of error is probably substantial.

SUMMARY PROVISIONS OF THE BILL

1. The bill declares it to be the policy of the United States to embargo the shipment of "arms, ammunition, and implements of war, atomic energy materials, petroleum, transportation materials of strategic value, and items of primary strategic significance used in the production of arms, ammunition, and implements of war to any nation or combination of nations threatening the security of the United States ***"'

2. It is also declared to be the policy of the United States not to give "military, economic, or financial assistance" to any nation unless it embargoes such shipments.

3. Responsibility for carrying out the purposes of the act is fixed in a single official who is to be the same as the official responsible for the administration of the Mutual Defense Assistance Act of 1949, as amended, and as it may be amended in the future.

4. This Administrator is to have responsibility, after full consideration of the views of the interested agencies, to determine the items which for the purposes of this act are to be embargoed. His determinations are to be "continuously adjusted to current conditions *

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5. If the Administrator recommends the termination of military, economic, or financial assistance to any nation, after such nation has had 60 days' notice of the items covered by the Administrator's list, all military, economic, or financial assistance "shall *** be terminated forthwith."

6. Insofar as the proposed embargo extends to items "other than arms, ammunition, implements of war, and atomic energy materials", the President may on the advice of the Administrator direct the continuance of assistance "when unusual circumstances indicate that the cessation of aid would be clearly detrimental to the security of the United States."

7. Provision is made for reports to selected congressional committees of the lists of items to be embargoed and for analysis of trade with Soviet bloc countries.

8. Provision is also made for regulation of the export of commodities, other than those covered by title I of this act, to nations threatening the security of the United States, and negotiations to control the export of such items not subject to embargo by countries receiving aid shall be carried out if the Administrator judges they should be controlled.

9. The bill makes it clear that the Administrator is to "coordinate those activities of the various departments and agencies which are concerned with security controls over exports from other countries."

PRINCIPAL DIFFERENCES BETWEEN THE KEM AMENDMENT, H. R. 4550, AND S. 1987

The Kem amendment, H. R. 4550, and S. 1987 are similar in that they accept the general proposition that the United States will not give assistance to any foreign nation which permits the export of arms, ammunition, or military material to the Soviet Union or any of its satellites when such material might contribute to the strength of the Soviet states.

H. R. 4550 and S. 1987 are broader in scope than the Kem amendment in that they provide not only that no economic and financial assistance shall be given, but also that no military assistance shall be given in the event embargoed items are shipped to the Soviet bloc. Moreover, H. R. 4550 and S. 1987 would continue in effect despite any cease-fire in Korea which would not be the case with the Kem amendment.

H. R. 4550 and the Kem amendment are similar in that they each provide a method whereby there may be exceptions to the absolute prohibition of aid to foreign countries that may be trading with the Soviet states.

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The Kem amendment authorizes exceptions to the blanket prohibition of aid "upon an official determination of the National Security Council that such exception is in the security interest of the United States." H. R. 4550, on the other hand, permits no exceptions to be made to the general rule with respect to trade in arms, ammunition, implements of war, and atomic energy materials, but it does permit exceptions to be made with respect to other materials, provided the exception is in the security interests of the United States. S. 1987, however, would permit of no exceptions with respect to the materials to which it would apply and these materials include "arms, armament, or military matériel, or articles or commodities (1) which the Secretary of Defense shall have certified *** are likely to be used in the manufacture of arms, armament, or military matériel, or (2) *** would be refused export licenses, by the United States in the interest of national security."

The fundamental difference between H. R. 4550 and S. 1987 is that H. R. 4550 recognizes that there may be cases in which the Executive should have discretion to continue giving assistance to certain foreign nations even through they may be engaged in some trade with the Soviet and satellite states in materials other than arins, ammunition, implements of war, and atomic energy materials. In exercising this discretion under H. R. 4550, the President must take into account the contribution these nations are making to mutual security and the importance of such assistance to the United States. S. 1987 does not permit discretion to deal with such cases, despite the fact that it may be in the national interest to continue such aid. H. R. 4550 would make the President responsible if such aid is continued. S. 1987 would eliminate any element of discretion on the part of the Executive once the list of items to be embargoed is prepared by the Secretary of Defense.

CONCLUSION

The committee believes that the security interests of the United States with respect to trade between nations receiving American military, economic, and financial assistance can best be protected if responsibility is clearly fixed in the executive branch to take action to prevent aid going to countries which export war materials to the Soviet and satellite states. H. R. 4550 has that effect.

The committee believes that some discretion is necessary with respect to the shipment of materials other than arms, ammunition, implements of war, and atomic energy materials to Soviet states, since there are undoubtedly a number of instances in which such trade might, on balance, be essential to the security interests of the United States and to the free world generally.

The committee believes that responsibility for exercising this discredition must be clearly fixed. H. R. 4550 makes this determination a responsibility of the President.

The committee recommends the early approval of this bill.

222. ELIGIBILITY FOR ASSISTANCE AND TERMINATION OF ASSISTANCE: MUTUAL SECURITY ACT OF 1951 (EXCERPTS), OCTOBER 10, 1951 1

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ELIGIBILITY FOR ASSISTANCE

SEC. 511. (a) No military, economic, or technical assistance authorized pursuant to this Act (other than assistance provided under section 408 (e) of the Mutual Defense Assistance Act of 1949, as amended) shall be supplied to any nation in order to further military effort unless the President finds that the supplying of such assistance will strengthen the security of the United States and unless the recipient country has agreed to

(1) join in promoting international understanding and good will, and maintaining world peace;

(2) take such action as may be mutually agreed upon to eliminate causes of international tension;

(3) fulfill the military obligations which it has assumed under multilateral or bilateral agreements or treaties to which the United States is a party;

(4) make, consistent with its political and economic stability, the full contribution permitted by its manpower, resources, facilities, and general economic condition to the development and maintenance of its own defensive strength and the defensive strength of the free world;

(5) take all reasonable measures which may be needed to develop its defense capacities; and

(6) take appropriate steps to insure the effective utilization of the economic and military assistance provided by the United States.

(b) No economic or technical assistance shall be supplied to any other nation unless the President finds that the supplying of such assistance will strengthen the security of the United States and promote world peace, and unless the recipient country has agreed to join in promoting international understanding and good will, and in maintaining world peace, and to take such action as may be mutually agreed upon to eliminate causes of international tension.

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TERMINATION OF ASSISTANCE BY PRESIDENT

SEC. 529. If the President determines that the furnishing of assistance to any nation

(a) is no longer consistent with the national interest or security of the United States or the policies and purpose of this Act; or (b) would contravene a decision of the Security Council of the United Nations; or

(c) would be inconsistent with the principle that members of the United Nations should refrain from giving assistance to any nation against which the Security Council or the General Assembly has recommended measures in case of a threat to, or breach of, the peace, or act of aggression,

Public Law 165, 82d Congress, 1st session.

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