Foreign Relations of the United States, 1964–1968, Volume XVIII, Arab-Israeli Dispute, 1964–1967

115. Memorandum of Conversation¹

Washington, December 23, 1964.

SUBJECT

• U.S.-U.A.R. Relations

PARTICIPANTS

• The Secretary
• M—Governor Harriman
• AF—Governor Williams
• NEA—Mr. Phillips Talbot
• AA/NESA—Ambassador William Macomber
• AA/AFR—Mr. Edmond Hutchinson
• AFN—Mr. David Newsom
• NE—Mr. Rodger Davies

Mr. Talbot noted that the Secretary’s answer earlier in the day to a question on U.S.-U.A.R. aid negotiations² and President Nasser’s anti-American remarks,³ first excerpts of which were received after the Secretary’s press conference, would be interpreted by the press as a direct confrontation between the U.S. and Nasser. He thought our broader interest would suffer if we reacted sharply to Nasser’s remarks. He thought we should “sit on our hands” for now. He proposed that we suspend all action on any new economic aid to the U.A.R., including the request for amounts of corn supplementary to the agreed amounts for the third year of the multi-year agreement, pending resolution of our policy differences. Existing programs, he thought, should be continued.

Governor Harriman said he thought we should not take any new initiatives with the U.A.R. but carry out any standing commitments. These need not, he suggested, include further processing of the grain storage project which had been stalled for some time. Mr. Macomber said that there was approximately $15 million in the AID pipeline in non-PL 480 assistance.

The Secretary asked about the safety of dependents in the hinterland of the U.A.R. in the event of demonstrations in the aftermath of Nasser’s speech. Mr. Macomber said that there were some Americans in Assiut, but he did not believe under present circumstances these would be endangered. Mr. Talbot and Mr. Davies felt it highly unlikely that possible demonstrations would endanger American lives.

Mr. Talbot said he thought in considering future relations with Nasser, the last sentence of Marquis Childs’ article in Wednesday’s “Washington Post” was pertinent “… this (U.A.R.) is a new world and unless it is recognized as such, it will move wholly out of the orbit of the West.” The Soviets, he said, were standing by to pick up any advantage they could from deteriorating U.S.-U.A.R. relations. In addition, we had major interests such as Israel’s security, overflight rights, Hussein’s stability, facilities at Wheelus, Kagnew and other spots which could be damaged through U.A.R. influence or action. Nasser might, for instance, convince the Kuwaitis to draw down their security holdings in London. The question that faces us is whether we should seek confrontation with Nasser or continue our long-term effort to moderate his policies.

Governor Harriman said we should look at the reverse of the coin, how much would we pay to dislodge the Soviets from an enhanced position in the Near East and Africa. For all the vast Soviet investment, so far they have received few dividends. Their fortunes would look up if U.S.-U.A.R. relations deteriorate.

Mr. Talbot said at the same time we must recognize that Nasser’s policies and such recent incidents as the library burning, attack against the Mecom plane,⁴ and the Port Said speech would raise tremendous pressure domestically for termination of aid. If we decide to continue economic assistance, it will perhaps be necessary for a full and frank briefing of the Foreign Relations Committee and key members of Congress. He thought continued assistance was in the best interest of the U.S. He noted that inside the U.A.R. the drift toward the East had alarmed pro-West elements. We had received several indications that these felt U.S. economic support was essential to prevent a rise in pro-Soviet influence within the regime. We heard recently through a friendly intelligence service from the Egyptian General Intelligence Agency, ostensibly on behalf of Nasser, that he would welcome U.S. assistance in ameliorating his precarious financial situation and in improving relations. Earlier in the day Henry Fowler had told him that the speaker of the U.A.R. Assembly a few days before had proposed to an associate of Robert Anderson that a U.A.R. Vice Presidential party be invited to come to Washington to discuss with the President the Salhia project and means of improving relations.

To date no major U.S. interest has been hurt by Nasser. If we clash we are certain to incur some damage. We should now avoid any actions which would provide a basis for further deterioration of our relations.

The Secretary suggested that we might assume a posture of taking no initiative whatsoever and waiting until the U.A.R. came to us for economic or other discussions.

Mr. Macomber said that this would mean suspending action with respect to new projects contemplated in the $25 million FY ’65 level of A.I.D. loans. After recalling that no A.I.D. loans were made to the U.A.R. in FY ’64, Mr. Macomber noted that there were several projects still in the process of completion which had been funded in FY ’63. He indicated that there would be little difficulty in holding up on the new (FY ’65) projects but that, with the exception of the grain silo project, it would be a much more complicated task to suspend those FY ’63 funded projects which were presently underway. Mr. Talbot noted that since getting agreement in principle to the $20 million commodity loan for fiscal ’64, the U.A.R. had received $100 million in loans from Kuwait and $280 million from the Soviet Union. Our aid leverage, therefore, was limited except for PL 480.

The Secretary decided PL 480 and aid in pipeline except for silo project will continue. We will not at this time proceed with processing supplementary PL 480 request or new aid agreements.

The Secretary suggested that if the U.A.R.G. comes to us to discuss aid, we should indicate our desire to continue cooperation but also talk beyond to U.A.R. actions which make it difficult to justify additional aid to American people and Congress.

1. Source: National Archives and Records Administration, RG 59, Central Files 1964–66, POL UAR-US. Secret. Drafted by Davies on December 28 and approved in M on December 31.
2. Rusk was asked at his December 23 news conference if thought was being given to cutting off P.L. 480 aid to the United Arab Republic; he replied that this was not being discussed but that “relationships are reciprocal” and “if relations are to be good, both sides must make important investments in those relationships.” For text, see Department of State Bulletin, January 11, 1965, p. 39.
3. Reference is to Nasser’s December 23 speech at Port Said, summarized in a CIA Intelligence Memorandum of December 24, which called it “Nasir’s bitterest attack on the U.S. since 1956.” (Johnson Library, National Security File, Country File, UAR, Vol. III)
4. Reference is to an airplane owned by U.S. citizen John W. Mecom, which was shot down while overflying Egyptian territory on December 19. Related documentation is in the National Archives and Records Administration, RG 59, Central Files 1964–66, POL 31–1 UAR-US.