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

293. Memorandum From the President’s Assistant for National Security Affairs (Scowcroft) to President Ford¹

Washington, October 1, 1976.

SUBJECT

• Soviet Violation of the Maritime Agreement

The US-Soviet Maritime Agreement of 1975 provides that one-third of all US grain shipped to the Soviet Union should be carried on US flag ships. However, the Soviets have taken a number of actions which have in effect denied US shippers the opportunity to carry the amount of cargo to which they are entitled under the agreement. As a result, since September 1975, US vessels have carried only 25.6% of the total amount of grain shipped to the Soviet Union, or approximately one million tons less than a one-third share. The Soviet actions include:

—A requirement that US shipowners and Soviet charterers agree upon freight rates, even though the Maritime Agreement provides that rates shall be established by designated (i.e. governmental) representatives.

—A prohibition on the use of tankers in the Far Eastern Soviet port of Nakhodka and a further restriction that the draft of all vessels destined for Nakhodka be no more than 32 feet.

—A requirement that only bulk-type vessels (as opposed to tankers) be used in shipments from our Atlantic Coast and Gulf ports to the Baltic and Black Seas.

US Maritime Administration officials have on a number of occasions pointed out to the Russians that these actions are contrary to specific provisions of the Maritime Agreement. Most recently, our Embassy in Moscow has delivered two notes strongly protesting Soviet violations of the agreement. We have complained that the Soviets are denying our shippers the opportunity to carry their fair share of the grain by offering to US owners cargoes (1) originating in areas in the US not served by American-flag vessels; (2) going to areas in the Soviet Union which do not accept US vessels; or (3) on routes for which conditions and freight rates were not agreed to by the designated representatives of the two governments.

The Soviets have refused to acknowledge any obligation to increase future grain cargo allocations to levels required to provide US carriers a full one-third share of the shipments. Although the Soviets’ latest response to our protests was more conciliatory than earlier ones, they deny violating the agreement and assert that the US is attempting to obtain “unilateral advantages” by making“artificial” charges against Soviet merchant marine organizations. They claim that the reason US shippers are carrying less than their share is because of operational/technical problems, namely the inability of US shippers to meet the conditions spelled out by Soviet charterers. The Soviets are unhappy about having to pay US owners high shipping rates under the formula established in the agreement and accompanying understandings. Thus, they may be looking for ways to justify placement of grain cargoes with lower cost shippers.

US shippers and the maritime unions are deeply concerned about these reported Soviet violations of the agreement. In August a joint committee of American shipping companies and AFL–CIO maritime workers called for nation-wide demonstrations demanding Russian compliance with the Maritime Agreement. The committee further charged the State Department with being a “contributing factor” in the situation because of “its longstanding unwillingness to support an American-flag shipping capability and its failure to insist on the Russians’ strict observance of the terms of the agreement.”

We expect to discuss these issues in greater depth in maritime negotiations which begin in Washington on September 30. The Soviets have expressed confidence that the disputed issues can be successfully resolved at the experts’ level, but that remains to be seen.

1. Source: Ford Library, National Security Adviser, Presidential Country Files for Europe and Canada, 1974–1977, Box 19, USSR (45). Confidential. Although no drafting information appears on the memorandum, Hormats and Clift forwarded it on September 21 to Scowcroft, who revised it 5 days later. A note on the memorandum reads: “The President has seen.” According to an attached correspondence file, Ford noted the memorandum on October 4.