78. Memorandum From the President’s Special Assistant for National
Security Affairs (Bundy) to President
Johnson1
Washington, February 3, 1966, 6:25
p.m.
SUBJECT
- Sweetener for another ROK Division
in Vietnam
The attached memorandum from Bill Gaud2 asks your final approval of a commitment to make
a $15-million program loan to Korea [Page 165] during FY 1967, as
part of the deal to get another Korean division and brigade into
Vietnam. The loan commitment is $5 million higher than we would probably
make in normal course, but is much cheaper than any of the items on the
long list the Koreans requested. Moreover, Park must show that he got
something from us if he is to sell his electorate on the idea of a
second division.
I gave conditional clearance to the program loan component, subject to
your confirmation, in order to allow Win
Brown to negotiate with Park. As you know, Park has now
agreed, and you have sent him a letter of thanks. This is the last loose
end. I recommend that you approve Gaud’s request.
Approved3
Disapproved
Speak to me
Attachment4
Washington, January 25, 1966.
Memorandum From the Administrator of the Agency
for International Development (Bell) to the President’s Special
Assistant for National Security Affairs
(Bundy)
SUBJECT
- A.I.D. Commitments to Korea in Connection with the
Negotiations on Additional Korean Troops for Vietnam
Ambassador Brown’s
negotiations with the Korean Government for the dispatch of an
additional Korean division and brigade have reached the point where
he needs by tomorrow authority to present a packaged
counter-proposal to the very excessive Korean demands, in the hope
of completing the negotiations before the departure of President
Park and other government officials on a Far Eastern tour February
7.
Ambassador Brown has been
acting under instructions which recognize the likely necessity of
some forward commitments of A.I.D. [Page 166] support including a modest increase in
Supporting Assistance if necessary. In addition, his instructions
permitted assurance of special procurement opportunities for Korean
exporters to supply A.I.D. project programs in Vietnam. The Korean
Government has asked for enormous increases in Supporting Assistance
and Development Lending and a commitment to these higher levels for
the next five years. The Ambassador has rejected these demands, but
obviously needs to make some concessions if the negotiations are to
be concluded successfully.
Acting upon our understanding of the President’s desire for an early
agreement to provide the additional troops and within the spirit of
his pledge of U.S. long-term assistance to President Park last May,
we have concurred (with a qualification noted below) in Ambassador
Brown’s proposed
counter-proposal to the Korean Government which provides that A.I.D.
will:
- 1.
- Exclude all suppliers except U.S. and Korean from bidding
on certain items which A.I.D. is buying for its project
operations in Vietnam. This restricted procurement list will
be composed of commodities which we have found to be within
Korea’s capacity to produce satisfactorily and in exportable
quantities.
- 2.
- In addition to the $150 million Presidential development
loan program promised last May, finance additional
acceptable development projects of an unspecified amount and
during an unspecified time period, subject to the same
considerations of availability of funds, legislation, and
A.I.D. self-help criteria which apply to the $150 million
program. (This commitment is actually no more than a
restatement of the Presidential Communiqué of last May with
President Park of our anticipation of undertaking additional
projects when the $150 million had been obligated.)
- 3.
- Release from local currencies presently available to
A.I.D. of the modest net added cost to the Korean budget of
the movement of the troops to Vietnam and of the maintenance
of their replacements in Korea.
- 4.
- Support the Korean stabilization and development program,
if the Korean Government is fulfilling its commitments under
that jointly defined program, by providing a program loan of
$15 million in FY 1967. (At
the same time we expect to reduce the grant Supporting
Assistance by $10 million.) We had planned for FY 1967 a program loan of about
the same size as, or possibly $5 million larger than, the
recently approved $10 million loan. This new commitment,
conditioned on stabilization performance, thus represents no
significant departure from our plans, but it does limit our
ability to withhold the loan next fiscal year on grounds
other than failure to comply with the Stabilization
Agreement.
[Page 167]
Only item 4, the program loan commitment, requires White House
clearance under the present guidelines. Because of the urgency of
Ambassador Brown’s need for
authorization, Bill Gaud discussed this matter with you last night
and got your conditional agreement, subject to later reference to
the President. Accordingly, we have qualified our concurrence on
item 4 as being subject to further Washington review to be
undertaken immediately.
Will you please seek the President’s endorsement of this item so that
we may withdraw the condition limiting the Ambassador’s authority on
this point.
Mr. Berger concurs in this
memorandum.
