Foreign Relations of the United States, 1969–1976, Volume XVI, Soviet Union, August 1974–December 1976

106. Minutes of the Secretary of State’s Staff Meeting¹

Washington, January 3, 1975, 8:10 a.m.

[Omitted here is discussion of the management of joint commissions, Eritrean security, India and PL–480, and Latin America.]

Mr. Hartman: We have a memo coming to you today on the procedures to be followed on the Trade Act, as far as the Soviet Union is concerned, and Romania.²

Secretary Kissinger: Can I have that by Monday?³ And also I want to see you for a minute.

Mr. Sonnenfeldt: You will get it today.

Secretary Kissinger: Procedures amending the Trade Act Agreement with the Soviets?

Mr. Hartman: What the trade bill says is the steps that you have to go through.

Secretary Kissinger: Don’t we also have to amend the Trade Agreement with the Soviets?

Mr. Sonnenfeldt: We have to have an exchange of notes, which could be a vehicle for doing it.

Secretary Kissinger: Do you think the Soviets will do it?

Mr. Sonnenfeldt: No.

Mr. Hartman: That is the subject of another memo—what they might do.

Secretary Kissinger: Can somebody give me a memo of what I am supposed to say to the Soviet Union about our intentions with respect to trade?

Mr. Sonnenfeldt: The most urgent operational problem is the President’s statement at the signing today,⁴ which we have been unsuccessful in trying to get hold of. I think the rhapsodic statements about the trade bill have been entirely uncalled for in general—the public statements.

Secretary Kissinger: What do you mean—you have been unsuccessful in getting it?

Mr. Sonnenfeldt: It is kicking around over in the White House someplace. I tried to get it from the NSC staff.

Secretary Kissinger: Has the NSC staff got it?

Mr. Sonnenfeldt: I think Bob Hartman probably has it now. But I don’t know if anybody other than STR, which has its own slant on matters, has had a chance to look at the substance of it.

Mr. Hartman: Some time ago I think we sent over contributions.

Mr. Sonnenfeldt: But I have not seen—

Secretary Kissinger: We ought to make strong objections to the restrictions on OPEC, to the restrictions on the Soviet Union—and what else?

Mr. Sonnenfeldt: I gave Hormats a sentence or two on the latter part yesterday. But I have no idea what happened to it.

Mr. Ingersoll: Czechoslovakia.

Secretary Kissinger: I thought we won on that.

Mr. Ingersoll: No.

Secretary Kissinger: When I write my book on the Department, somebody will explain to me why we are all so excited about Czechoslovakia, but not about Chile, Turkey and other things.

Mr. Ingersoll: I don’t know how the Trade Bill affects Chile.

Mr. Hartman: There is another item—

Secretary Kissinger: If we have to be brutal to some country, and stupid, Czechoslovakia is an excellent candidate. I think it is a stupid amendment. But of all the amendments that they have passed, the one on Czechoslovakia bothers me least. Thirty percent PL–480 restriction bothers me enormously, Chile, OPEC, Turkey. Those are all disastrous things.

Mr. Ingersoll: But only one of those is in the trade bill.

Secretary Kissinger: I don’t give a damn where they are.

Go ahead.

We need to get on top of that.

Mr. Hartman: One other thing I discovered as we went through the procedures was that the final form of the trade bill requires a concurrent resolution in order to put the Romanian trade agreement into effect or any new trade agreement. So we are going to have quite a little time I think—although—

Secretary Kissinger: Wait a minute. A concurrent resolution to put into effect the MFN?

Mr. Sonnenfeldt: This is after the ninety-day period.

Secretary Kissinger: Wait a minute. It goes for ninety days and then you need a concurrent resolution? You need both?

Mr. Hartman: You need a positive concurrent resolution.

Mr. Sonnenfeldt: Not for the Soviets, because we already have a trade agreement with them. But any new trade agreement.

Secretary Kissinger: With anybody?

Mr. Hartman: The only one you would need would be for Eastern Europe.

Secretary Kissinger: Is it now for any trade agreement with any country that you need a concurrent resolution?

Mr. Hyland: Communist country.

Mr. Lord: We need it for China.

Secretary Kissinger: Supposing we make a trade agreement with China.

Mr. Hartman: It does say “trade agreement.” But it may be in the context of extending MFN.

Mr. Sonnenfeldt: I am sure it is in the context of extending a non-discriminatory tariff agreement.

Secretary Kissinger: An agreement with China would need a congressional resolution within ninety days, and then they could hang their amendments on it.

Mr. Hartman: I think in the House it is difficult. But I think their procedures on concurrent resolutions would make it very difficult to attach conditions and amendments to it.

Secretary Kissinger: Still they could kill it.

Mr. Hartman: Yes.

Mr. Sonnenfeldt: They always had that—

Mr. Hartman: Originally it was a negative power. Now it is a positive one.

Mr. Sonnenfeldt: Now they could kill it by non-action.

Secretary Kissinger: The very fact that we counted on that in the past to implement it—they can now use that to kill it. In the past the difficulty of getting a concurrent resolution to kill it was that it was used to pass it. Now the difficulty of getting it can be used to kill it.

Mr. Sonnenfeldt: I don’t think the Rumanian case is going to prove serious, because they have independent support. With China it may be a different matter later. But it does indicate with the other East Europeans we would be spending an awful lot of capital purely in congressional relations—

Mr. Hartman: They would be examining the President’s determination, that in fact people are able to emigrate freely. Because that applies to all of these now. A determination will have to be made in each one of these cases.

Secretary Kissinger: It is impossible.

Mr. Hartman: I think the determination can be made. When we have presented lists, when we have been able to see some action, some progress on those lists, I think a determination can be made.

Mr. Hyland: It is impossible for China to say there is free emigration from China.

Mr. Sonnenfeldt: The Jackson–Vanik waiver applies to all of them, if you want to use it. So for eighteen months you can make a determination that it supports the purposes of the title. And then you also have to assure them, and you have to communicate that you have received certain assurances for the first tranche. But in the case of the East Europeans, all these debt settlements will be scrutinized, going back into the fifties.

Mr. Hartman: We saw several of the Jewish leaders about East Germany, including Nahum Goldman. And I was struck by the fact that one of them volunteered—

Secretary Kissinger: We are not a Jewish agency. And I will be damned if we conduct the foreign policy of the Jewish agency here.

Mr. Hartman: Yes. No—we have told them we want to be aware of what they are doing with the East Germans. They came in to report. I advised them on the one matter where they asked us to intervene, that I thought it would be better from their point of view if they continued to do this on their own. They are going back through the East German Ambassador in Switzerland to continue the contact with the East Germans.

But what I wanted to say was that one of them volunteered that they had gone too far and they were getting very worried about the Soviet reaction—

Secretary Kissinger: You’re damned right they have gone too far. We have been telling them for two years. What are the Soviets getting out of it? They are paying $700 million in lend-lease debts over ten years, for which we give them $300 million in Export-Import Bank credits for four years. They are just about breaking even.

Mr. Hyland: They can get more credits if the President goes to the Congress and asks the ceiling be lifted.

Secretary Kissinger: And get 500 amendments.

Mr. Hartman: I think he would be going in the circumstances where there are particular deals in the offing—

Secretary Kissinger: Do you think any Soviet leader, after they heard what they heard from Nixon and Connally and Peterson about the prospects of trade—and what would happen if they did certain things—will believe that Congress will take certain measures? They would have to be crazy. They were never even told there was a possibility of congressional difficulty.

Mr. Sonnenfeldt: I think it is highly unlikely that you can get more than $300 million.

Secretary Kissinger: I think it is highly unlikely that you can get it.

Mr. Hyland: It depends on what happens with Jewish emigration. If it goes up from the present towards 30,000 in the next 12 months, I think the pressure against Russia in the Congress will relax.

Secretary Kissinger: I doubt that seriously. We had it at 35,000 and the pressure built up. We forget it was 35,000 two years ago. We haven’t had it back. Ever since Jackson’s negotiations, it has been going down.

Mr. McCloskey: Jackson is never going to let up on his own figure of 60,000.

Mr. Sonnenfeldt: The larger the number, the larger the number of applicants, and the more likely there will be incidents of harassment.

Secretary Kissinger: I think he is going to be hurt by this—because it now will become very clear that his method did not work. I don’t think the Soviets are going to agree to an amendment of the Trade Act. Two years ago, when the Soviets started negotiating with us, we had the unlimited right to give them Export-Import credits, and we were even discussing a separate facility, so that we could give them more than the Export-Import thing would carry. And they didn’t have MFN. There was never any question that they would get Export-Import credit at that time. The only question was, how we would be able to give them the large loans that were being discussed—whether it could be done without over-taxing the Export-Import facilities, or whether one should set up a separate bank. And they were going to get MFN, which was a sort of a marginal thing.

Now they have got a sort of a half-baked MFN and in effect no Export-Import credits. $300 million over four years is in effect no credit. $300 million over four years with a $40 million ceiling on energy projects means nothing. Try it on Israel. Try a $75 million ceiling on credits on Israel and see what the reaction is.

I don’t think that Jackson’s exchange will ever be implemented, do you, Hal?

Mr. Sonnenfeldt: Not the way he interprets it.

Secretary Kissinger: The way he interprets it, under no circumstances.

Mr. Sonnenfeldt: I think that at least this year the emigration will go modestly up. But I don’t think there will be any flood of emigrants. And I think there will be continued cases of harassment.

Secretary Kissinger: We can’t give them MFN unless we agree to amend the trade agreement.

Mr. Hyland: It depends on how we handle it; we rub their noses in it and demand that they accept an exchange of notes that repudiates the old agreement and so forth. But if we do it skillfully—

Mr. Sonnenfeldt: Legal has done the various possible formulations.

Secretary Kissinger: Let’s give them the least offensive one.

Mr. Sonnenfeldt: I will give them to you in a minute.

[Omitted here is discussion of the military situation in Vietnam and Cambodia.]

1. Source: National Archives, RG 59, Lot File 78D443, Transcripts of Secretary of State Kissinger’s Staff Meetings, 1973–1977, Box 5. Secret. According to an attached list, the following officials attended the meeting: Kissinger, Ingersoll, Robinson, Brown, Sonnenfeldt, Mulcahy, Rogers, Habib, Hartman, Sober, Hyland, Lord, Enders, Anderson, McCloskey, Vest, Blake, Holton, Feldman, Gammon, and Borg.
2. Reference is presumably to a memorandum from Hartman to Kissinger, January 3, entitled “The Feasibility of Credits for the Soviets Minus MFN and Lend Lease.” (Ibid., Lot File 81D286, Records of the Office of the Counselor, Box 8, Trade Bill, 1975)
3. January 6.
4. During a ceremony in the East Room that afternoon, the President signed the Trade Act of 1974 with the following caveat: “I will, of course, abide by the terms of the act, but I must express my reservations about the wisdom of legislative language that can only be seen as objectionable and discriminatory by other sovereign nations.” For the full text of his remarks, see Public Papers: Ford, 1975, No. 2.