215. Memorandum for the President’s Files From the President’s Assistant and Director of the Council on International Economic Policy (Flanigan)1
At 10:00 a.m. on Thursday, May 11, 1972, the President met in the Oval Office with Minister Patolichev and Ambassador Dobrynin of the Soviet Union and Messrs. Kissinger, Peterson and Flanigan.
[Page 802]Minister Patolichev began by stating that he had had numerous discussions with Secretary Peterson over the preceding days.2 The President indicated that Peterson had reported on these discussions and also noted that Dr. Kissinger had reported fully on his talk in Moscow with Brezhnev and Kosygin.
Patolichev said that Secretary Peterson’s statement of the President’s position, e.g. that (a) the President wanted an expansion of economic and trade relations, (b) that within the framework of political relations, trade relations should be expanded first, and (c) that a new era of U.S.–USSR relations might appear, was accepted by the Soviet Union and was the basis for discussions. He further indicated that the Peterson meetings and the earlier meetings with Stans in Moscow3 had been positive, covering a wide range of problems, and that he had established warm relations with both Stans and Peterson. The President responded that Peterson had his full confidence and affirmed that anything offered by Secretaries Stans, Peterson and Butz and by Dr. Kissinger had been done with full Presidential knowledge and approval.
On substance, Patolichev indicated that the Soviets foresaw the potential for broad economic relations, in excess of hundreds of millions of dollars, between the two powers. Though many hurdles remained, the Soviets saw favorable perspectives. Regarding specific problems, the Soviets felt MFN status of primary importance although they recognized the difficulties this posed for the U.S. Also specifically mentioned was the credit problem, which the Soviets hoped could be resolved on the basis of reciprocity.
Particularly mentioned were credits for the Kama River project, which an American firm is designing, with contracts for $200 million [Page 803] due to be signed in May. If the U.S. extends a few hundred million dollars in credit, the Soviet Union will place orders in the U.S. Regarding the financing of a grain agreement, Patolichev indicated awareness that the credit terms required by the Soviets were not possible for the U.S. and understood our necessity to limit credit to three years and market interest rate. At the same time, since the Soviets export grain in some years, they thought favorable credit terms were necessary for a long-term purchase agreement. In any event, Patolichev said he would report to his government what terms are possible and stated his personal opinion that a “one-year deal”, with the re-opening next year of the purchase agreement on a revised PL 480 basis, might be possible.
The President responded to the specific points by saying that the U.S. would be prepared to move in the direction of MFN subject to Congressional approval, and that Export-Import Bank credit would be possible along the lines discussed by Secretary Peterson. More broadly, however, the President observed that while these matters and those discussed by the Secretaries and Dr. Kissinger were important details, he thought it desirable to view these discussions in a larger framework. The U.S. and the USSR are, both militarily and economically, the two most powerful countries on earth. The differences in philosophy and on local problems throughout the world, though important, are not crucial; they should not distract the two nations’ attentions from greater goals. As Allies in World War II, the two nations were able to look beyond smaller difficulties to solve overriding problems; the President expressed hope that the U.S. and USSR could transcend current problems and help the peoples of both countries through trade.
The President observed that a meeting between himself and Chairman Brezhnev was, by its nature, truly at the Summit, and that at such a meeting, “the mountains must not labor and produce a mouse”. The President stated he will be prepared to consider large goals to serve long-range purposes and expressed the hope that Brezhnev would deal on this basis. Patolichev indicated that Brezhnev would be a partner on a large scale.
The meeting concluded at 11:05 a.m.
- Source: National Archives, Nixon Presidential Materials, White House Special Files, President’s Office Files, Box 88, Memoranda for the President, Beginning May 7, 1972. Secret. The time of the meeting and the fact that members of the press and an unnamed White House photographer were present for short periods are in the President’s Daily Diary. (Ibid., White House Central Files) An undated memorandum for the President’s files outlines the key points for the President to make during his meeting. (Ibid., White House Special Files, President’s Office Files, Box 88, Memoranda for the President, Beginning May 7, 1972) Kissinger’s May 11 memorandum to the President provided a background briefing for the meeting. (Ibid., NSC Files, Box 719, Country Files, Europe, USSR, Vol. XXII, May 1972) A May 11 memorandum from Peterson to Nixon contained talking points. (Ibid.) Kissinger briefly describes the meeting in his memoirs. (White House Years, p. 1194) A recording of this meeting is ibid., White House Tapes, Oval Office, Conversation No. 723–5. Kissinger’s comments to Nixon immediately following this meeting also appear on a tape recording. (Ibid., Conversation No. 723–7)↩
- According to a transcript of a telephone conversation between Kissinger and Flanigan, May 4, 2:38 p.m., they discussed the approach Peterson was taking in his talks with Patolichev. Kissinger argued that several tentative agreements on substantive trade issues should be put into place for the summit whereas Peterson wanted to limit what would be decided at Moscow. In these dealings with the Soviets, Kissinger offered Flanigan the following direction: “We’re in a very tough position with them so what I’d like you to do is to dangle perhaps a fatter carrot in front of them than your commercial instincts would dictate but on the other hand, give them less than is attainable.” This incentive involved “some rather dramatic prospects of trade if our general relationships were good,” he added, and needed to be put forth “even if you lie a little bit.” (Library of Congress, Manuscript Division, Kissinger Papers, Box 372, Telephone Conversations, Chronological File) According to a transcript of a telephone conversation, Kissinger called Peterson at 4:49 p.m. on May 10 and advised him of the meeting: “Now I have arranged a meeting for Patolichev with the President for 10 o’clock tomorrow and we’d like you to be there but we don’t want to announce it ahead of time in case the goddamn thing blows up. You know, the summit blows up before then.” (Ibid.)↩
- See Document 14.↩