377. Memorandum of Conversation0

SUBJECT

  • U.S.-Spanish Relations

PARTICIPANTS

  • United States
    • Mr. U. Alexis Johnson, Deputy Under Secretary
    • Mr. William C. Burdett, EUR
    • Mr. E. J. Beigel, WE
    • Mr. Frank Ortiz, WE
  • Spanish Embassy
    • Ambassador Antonio Garrigues
    • Minister Emilio Garrigues
    • Mr. Nuno Aguirre de Carcer
    • Mr. Juan Duran-Loriga

Mr. Johnson opened the meeting by saying that the memorandum submitted by the Ambassador on July 221 had been carefully studied within the U.S. Government, and that he was prepared to give a reply on behalf of the Government. He said that while he would not specifically respond to all of the points in the memorandum, he could assure the Ambassador that the U.S. has taken into account the philosophy expressed in the memorandum. He said that we are prepared to issue a new and significant statement marking our unique relationship with Spain. We have prepared such a document in an endeavor to be responsive to Spanish views.

Mr. Johnson went on to say that in addition to this proposed joint political declaration we would also like to propose an exchange of notes establishing a formal joint Consultative Committee on Defense Matters, to be located in Madrid, in which the United States Ambassador and any other high officials we agree upon could also participate.

Mr. Johnson handed the two drafts2 to the Ambassador.

Ambassador Garrigues said that in his view the documents contained many positive things in line with the thinking he had expressed. He asked how the proposed declaration would relate to the Defense Agreement.

Mr. Johnson said that the declaration would be in addition to and on top of the Defense Agreement. He said that the two proposals are designed [Page 1024]to deal with the matters raised by the Spanish Government in about the only way and to the extent that we believe possible. He said that we had carefully considered both the form and the language and had gone as far as practicable.

Mr. Aguirre de Carcer wondered whether the documents were not similar to the security treaty with Japan and the consultative arrangements with Japan.

Mr. Johnson replied that the documents do not follow any other arrangements, and are intended to provide for mutuality at the political and military levels. He said that the political declaration should be studied carefully, that the language had been carefully weighed in the drafting, and was of considerable significance.

Mr. Aguirre de Carcer said that with regard to political consultations the Department certainly keeps the Spanish Embassy well informed, and he cited recent consultations on the Secretary’s trip to Moscow, the Test Ban Treaty, and developments in Haiti. He said that it may be desirable to formalize these political consultations as well as the military consultations. He went on to say that it was of some importance that the reference to “a threat to either country” in the proposed declaration was not limited to threats only of certain specific origins. He added that Spain would also have proposals to make about some of the bilateral technical agreements subsidiary to the Defense Agreement, with a view to adapting them to the pattern existing between the U.S. and the NATO countries.

Mr. Johnson said that we would be glad to receive any specific suggestions that the Spanish Government may have in this regard. He recalled that he had already indicated the U.S. satisfaction with the present terms of the technical and procedural agreements.

Ambassador Garrigues said that the U.S. appeared to have in mind a political declaration on top of the Defense Agreement, to which certain consultative machinery is to be added. He referred to “political, military and economic relations” at the beginning of the proposed declaration and asked what we thought about the economic side.

Mr. Johnson said that in this connection he had reviewed the appendix submitted by the Ambassador on August 273 and that he would be glad to comment on it although the appendix would be subject to further study.

Mr. Johnson said that with regard to the suggestion of new PL 480 programs, it should be clear that such sales are made when countries have poor balance of payments positions or are not otherwise able to finance imports of these surplus agricultural commodities through normal [Page 1025]commercial financing. He said that neither of these situations prevails any longer in the case of Spain and further agreements are not justified.

Mr. Johnson said that the intent of the statement at the top of page 2 of the appendix was not clear to us. He went on to say that in so far as AID is concerned, it was made clear to the Congress in testimony last spring that a number of countries including many participants in the Marshall Plan, as well as Japan and Spain and Lebanon have had substantial economic growth and were no longer dependent upon external assistance. We gave a commitment to the Congress that no AID funds would be required for these countries.

Mr. Johnson went on to say that with regard to other sources of development financing, the Export-Import Bank will continue to be open to Spain. He noted that a very considerable dollar volume of applications was presently under study by the Bank. He said that it is the U.S. view that Spain is quite capable of successfully using funds from such conventional sources. He added that perhaps it would be useful if some kind of general statement could be issued about this Bank financing.

Mr. Aguirre de Carcer said that the Embassy was thinking along this line and that some kind of statement by the Bank would appear to be most useful for optical purposes. He said that from the Spanish viewpoint a continuation of such financing at the average level of recent years was all that was expected, that Spain did not expect any line of credit on top of the normal project financing by the Bank.

Mr. Johnson said that the Export-Import Bank offers real possibilities for Spain and that he would be glad to explore the possibility of a general statement by the Bank. He noted that the Bank was reluctant to give lines of credit, and also noted that there have been difficulties with some underdeveloped countries regarding general statements which were not followed up with satisfactory projects.

Mr. Aguirre de Carcer said that this difficulty would not arise in the case of Spain.

Ambassador Garrigues said that the U.S. position with regard to PL 480 programs is quite reasonable, but that Spain had considered the U.S. economy to be so large in relation to Spain that it had hoped that some channel was possible through which to receive some kind of special assistance. He said that the appendix of August 27 had been prepared merely to mention a few of the possibilities. He said that he had just received a letter from Secretary Dillon4 which gave a negative reply to his suggestions in every kind of way.

[Page 1026]

Mr. Johnson asked about the statement in the appendix that Spain was considering the reimbursement of PL 480 loans in dollars as a friendly gesture. He asked whether Spain intended to accelerate the normal amortization schedule.

Mr. Aguirre de Carcer said that this was not the case, but only to exercise the option of dollar reimbursement.

Mr. Johnson then asked about the reference at the bottom of page 3 to a U.S. suggestion of a blocked account in connection with military expenditures.

Mr. Aguirre de Carcer agreed that this had not been a formal U.S. suggestion but had arisen only in private conversation. He went on to ask about the possibility of U.S. military procurement in Spain.

Mr. Beigel said that a certain amount of procurement may be continuing under the present worldwide regulations governing military procurement overseas, but that the general question of further procurement in Spain of course related to Spanish military procurement in the U.S. and the proposals in this regard that had been made to the Spanish Government in Madrid last January.

Mr. Johnson summarized that we will proceed to consider the possibility of a statement by the Export-Import Bank, which would perhaps be related to the Spanish development plan.

Ambassador Garrigues said that in order to establish a better structure for the future there is need for declarations on other matters, in addition to the political declaration that had been proposed. He said that economic aspects and others had been left out of consideration so far. He said that the Spanish Government may not consider the present documents to be sufficient.

The Ambassador raised the question of the next steps in the discussions.

Mr. Johnson said that we had drafted the joint declaration with a view to signature by the Secretary of State and Foreign Minister Castiella at the time the Minister is in the United States next month. He said that we would expect both the declaration and the exchange of notes would be published at the same time. He said that arrangements could probably be made to sign the documents in Washington around September 26, and that we would intend to have formalities here and not treat this subject casually but in an important manner.

Ambassador Garrigues said that he appreciated the good spirit that underlies the documents given to him today and hoped that we would consider the August 27 appendix further in order to find some formulas aside from the Export-Import Bank statement. He said that the restrictions imposed in connection with procurement or investment in Spain are hard for Spain and mean very little to the U.S., although he admitted [Page 1027]that Spain is placing no securities in the U.S. market. He said that Spain is only asking for aid through normal channels. He said that inflationary effects in the Spanish economy arising from the U.S. presence must be alleviated.

Ambassador Garrigues went on to say that on the military side Spain wished to rebuild its armed forces. He said that Spain will look upon the joint declaration as only a platonic declaration without teeth, and it must therefore be complemented with other documents dealing with other sides of our relations in order that something substantive is achieved.

Mr. Johnson said that the MAP agreement will continue in effect.

Ambassador Garrigues asked about information and assistance provided to NATO countries.

Mr. Johnson said that other than Greece and Turkey, there are no new MAP programs for the European members of NATO. He said that some training continues and if Spain has special training problems we would be glad to know about them. He noted that this could be the kind of subject to be taken up in the joint Consultative Committee. He said that as much or as little could be made out of this machinery as the two sides wished.

Mr. Aguirre de Carcer said that Spain would be interested in receiving information on subversive activities in other countries that is available through NATO committees. He said that the Spanish Government hears about this information, such as the management of Soviet funds, from some of the smaller NATO members.

Ambassador Garrigues turned again to the proposed declaration and asked if the last phrase of the first paragraph could be clarified.

Mr. Johnson said that it is important to bear in mind in this connection that the U.S. can only speak for itself, and that the last phrase in the first paragraph had been carefully worded so that we would not appear to be speaking for others.

The Ambassador summed up by saying that Spain continues to look for something on the economic side in addition to the Export-Import Bank, and to the removal of the restrictions he had referred to; and on the military side Spain must be sure to have the same status as other allies, receive the same information and cooperation. He said that the joint committee should in his view include more political ingredients and not be purely military. He said that NATO meetings include Foreign Ministers and this bilateral arrangement needs political membership as well.

The Ambassador said that his Government would consider carefully the documents proposed to him today. He commented on the dispersal of the Spanish Government on vacation, and said that General [Page 1028]Franco would probably not return to Madrid until September 20, although a cabinet meeting would be held in northern Spain next week.

Footnote. On September 1, Mr. Aguirre de Carcer telephoned to Mr. Beigel to say that he was preparing a Spanish translation of the documents for submission to Madrid. He inquired whether “this agreement” at the end of the first paragraph of the Joint Declaration referred to the Defense Agreement and said that this appeared to be the logic of the sentence. Mr. Beigel confirmed that this was the intention. Mr. Aguirre de Carcer also inquired about the intent of the words “continuing” in both the third and fourth paragraphs and said they could be translated two ways in Spanish. Mr. Beigel suggested that when the Embassy has prepared Spanish versions of the documents it may be useful to provide them to the Department, so that a comparison can be made by the Division of Language Services to assure that the Spanish translation conforms to the intent of the original drafts. Mr. Aguirre de Career also referred to the phrase “a threat to either country, and to the facilities” and asked whether this meant “or” as well as “and”. Mr. Beigel said the use of “and” was deliberate and was intended to imply a general threat to the country in which a threat to the facilities would be a corollary, and not merely a threat to some part of either country.

  1. Source: Department of State, Central Files, Pol Sp-US. Secret. Drafted by Beigel and approved in G on September 5.
  2. Not found, but an undated summary of this 64-page memorandum indicated that its principles would have committed the United States to assist Spain in a number of ways. (Ibid., Def 15–4 Sp-US)
  3. Neither printed. Except for minor drafting changes, the declaration and exchange of notes are the same as those signed on September 26. For texts, see Department of State Bulletin, October 28, 1963, pp. 686–687.
  4. Not found.
  5. Not found.