Foreign Relations of the United States, 1969–1976, Volume XXIV, Middle East Region and Arabian Peninsula, 1969–1972; Jordan, September 1970

150. Memorandum From Secretary of Commerce Stans to President Nixon¹

Washington, May 26, 1971.

SUBJECT

• Recommended Discussion with King Faisal, May 28, 1971

I understand King Faisal will be visiting you on a brief, official visit beginning May 28th.²

Because of the recent oil settlement, Saudi Arabia will receive huge oil revenue increases in the coming years. They will spend a large percentage of these revenues in the areas of aircraft, telecommunications, transportation facilities, desalination programs, and other national infrastructure projects. The Saudis will be purchasing from foreign suppliers well over $1 billion annually in goods and services during this period; these future purchases represent a tremendous opportunity for U.S. exporters.

The importance which the U.S. Government attaches to Saudi Arabia’s development program is manifest by our assistance on a government-to-government basis. King Faisal’s country has greatly benefited from the significant research program which the Department of Interior has undertaken on water desalination and other programs for national development; for instance, a Federal Aviation team, partly funded by Commerce, is presently in Saudi Arabia assisting in the formulation of an air traffic control program. U.S. firms currently are interested in selling to Saudi Arabia, a national telecommunications system, an air traffic control system, desalination plants, petroleum and petrochemical plants, a new international airport for Jidda, and airplanes and ships for their military services. One major decision awaiting immediate resolution is the purchase of 50, F–5 aircraft by Saudi Arabia.³ This would be a very substantial transaction for Northrop Corporation and would obviously be most helpful to them at this particular time. It would be particularly helpful if you could mention this item to King Faisal.

Stiff competition for all these projects is coming from other developed countries, particularly Japan, France and the U.K.

I recommend you point out to King Faisal that the U.S. has great interest in all of these Saudi Arabian development projects. We would, therefore, be most appreciative of any special consideration which can be given to the highly qualified U.S. firms which are prepared to assist in Saudi Arabia’s development programs through providing the highest levels of technology and expertise.⁴

Maurice H. Stans

1. Source: National Archives, Nixon Presidential Materials, NSC Files, Box 937, VIP Visits, Saudi Arabia King Faisal Visit, May 1971. Limited Official Use.
2. See Document 151.
3. Saunders noted that the Saudis had already expressed their intent to purchase F–5s and he thought the President should not engage in “special pleading.” (Memorandum for record, June 2; National Archives, Nixon Presidential Materials, NSC Files, Box 937, VIP Visits, Saudi Arabia King Faisal Visit, May 1971) Prince Sultan signed a letter of offer, July 28, for F–5Bs Northrop. (Telegram 2644 from Jidda, July 29; ibid., Box 1277, Saunders Files, Saudi Arabia)
4. A handwritten postscript by Stans reads: “The 50 F–5 aircraft order would help employment in California, immediately.”