Foreign Relations of the United States, 1964–1968, Volume XII, Western Europe

210. Telegram From the Department of State to the Embassy in Spain ¹

Washington, July 16, 1968, 1709Z.

202916. Following based on uncleared memcon and subject to revision on review.²

Summary:

1. During four-hour talks July 15 Secretary and Spanish FonMin Castiella discussed wide range of bilateral and international issues. Principal topics discussed were:

• Effects of balance of payment program on Spain;
• Renewal of the Bases Agreement;
• Spanish desire for some form of mutual security guarantees;
• Spain’s abstention from Non-Proliferation Treaty;
• Level of US military assistance as quid pro quo for base rights;
• Question of possible reduction of US bases in Spain;
• Revision of Technical Agreement;
• Gibraltar;
• Mauritanian feelers to resume relations with US;
• Relations with North African states;
• Status of Spanish Equatorial Guinea.

2. Secretary Rusk and the Foreign Minister also exchanged confidential diplomatic notes providing for the establishment of a Joint U.S.-Spanish Economic Committee to consult and examine financial and other economic matters of mutual interest.³ End Summary.

3. Balance of Payment Program:

Castiella repeated previous Spanish complaints about classification of Spain as Schedule C country referring to highly unfavorable Spanish trade balance with US and Spanish status as deficit country. He claimed that US investment in Spain had declined drastically. Castiella said that US must find ways to redress injustice committed to Spain. He said he hoped Joint Economic Committee would be helpful in finding solution. Secretary did not hold out any hope for reclassification. He explained that stability of the dollar and the US balance of payments deficit were serious matters and of concern not only to the US but to Spain and the rest of the Free World. He requested factual information on the practical effect of US measures on Spanish economy.

Castiella inquired about status of his request for credit for military equipment purchases. Secretary replied that there were problems with Congress concerning military sales and the use of Ex-Im Bank credits and that no decision had been made yet on the Spanish request. He promised to let them know shortly.

4. Renewal of Bases Agreement:

Castiella acknowledged that with forthcoming elections and worldwide commitment, this was not most propitious time for US to negotiate. He said that Spanish also had problems and that bases were less popular in Spain than heretofore. He indicated that Spain wished a security agreement comparable to the one contained in the treaty with Japan, and that it could not sign the NPT until it had some security guarantees. Secretary replied that the Joint Declaration of 1963 was big step forward and emphasized that circumstances were not good at the present for a more formal type of guarantee and that we would have major difficulties with Congress. He pointed out that the sacrifices presently being made by the American people in life and material constituted a demonstration of US fidelity to our commitments throughout the world. With respect to the level of mutual assistance to Spain, both Secretary and Acting Secretary of Defense Nitze explained that the Spanish list for military equipment assistance delivered recently was far beyond our capabilities and that Congressional approval was required before any assistance could be granted.

Castiella said that Spanish request was reasonable and that Spain needed something tangible if US wanted to keep bases and renew agreement.

Mr. Nitze said that DOD would send shortly some people to Spain for on-the-spot survey of Spanish military needs. Castiella thanked him and emphasized again need to move quickly with program of negotiation.

Castiella asked whether US wanted to keep all bases or reduce some. He said that US base at Torrejon was alarming to the three million inhabitants of Madrid, and that US should give firm indication on future need for all bases quickly.

Secretary replied we would inform the GOS as soon as possible when a determination had been made and that we would take GOS views on this question into consideration. He said that the administration contemplated no significant reductions in Spain.

5. Revision of Technical Agreement:

Castiella stated that the GOS was not happy with the US draft. He specifically referred: 1. provisions concerning jurisdiction over military tourists; 2. providing land on cost-free basis; and 3. question of payment for residual value of permanent facilities at the bases.

6. Gibraltar:

Foreign Minister repeated usual arguments for decolonization and referred to existing UN resolutions to which US should adhere. He stressed that there was great sensitivity in Spain on this subject. The Secretary indicated that we did not intend to become involved in the matter but suggested that Spain might usefully seek to woo the Gibraltarians. Castiella replied that Spain had made a very generous offer but that no progress had been made with the British towards decolonization. He said Spain would not use force but had other means of pressure at her disposal and would apply them.

7. Mauritania:

Castiella gave the Secretary a message from the Mauritanian Foreign Minister.⁴ Mauritania had expressed a desire to resume diplomatic relations with the US and had asked the Spanish Foreign Minister to sound out US reaction. The Secretary replied that he would check into the question immediately and give the Foreign Minister an official USG reply to transmit to the Mauritanians.

8. North Africa:

The Foreign Minister said that progress was being made on the decolonization of Ifni through negotiations with Morocco and talks had started. He said GOS hoped to solve the question within the next few weeks and that he hoped Ifni could be returned to Morocco within a few months.

Spain had good relations with Morocco and Algeria and had notably improved relations with Libya. Tunisia had just received a $20 million credit loan from Spain.

9. Equatorial Guinea:

He referred also to progress made towards independence for Equatorial Guinea and emphasized that this was another example of Spanish good faith on decolonization question. He said independence would probably be granted by October 12.

10. At the Foreign Minister’s request the Secretary outlined briefly the present status of US-USSR relations and gave his assessment of the status of the Paris talks on Vietnam.

11. At conclusion Secretary and Castiella agreed that there was much work left to be done on base renewal and that there was need to keep in close contact.

Secretary said he hoped we could aim for final negotiation in September but that we should not be idle in the meantime and keep working on the problems.

Rusk

1. Source: National Archives and Records Administration, RG 59, Central Files 1967-69, POL SP-US. Secret; Immediate. Drafted by Landau and approved by Springsteen.
2. A complete set of memoranda of conversation is in Department of State, Spanish Desk Files: Lot 71 D 32, Pol 7 Visits.
3. For text, see 20 UST 843.
4. Not found.