Foreign Relations of the United States, 1969–1976, Volume XXVII, Iran; Iraq, 1973–1976

182. Memorandum of Conversation¹

Tehran, August 7, 1976, 10 a.m.

SUBJECT

• Plenary Meeting of the U.S.-Iranian Joint Commission

Minister Ansary: Mr. Secretary and members of the United States Delegation, I warmly welcome you to Tehran and am very pleased that we are holding the third session of the U.S.-Iranian Joint Commission. We will review the performance of both sides in implementing the work of the last meeting of the Joint Commission which was held in a most friendly atmosphere in Washington.² That meeting was very instrumental in establishing further steps in the economic relations of our two countries.

Let me refer briefly to some highlights of the Joint Commission’s activities. At the meeting last year, with respect to the development of trade between our two countries, we first established a target of $15 billion over five years. You will recall that this was a very controversial figure at the time which we both got involved in at the press conference (laughter). But now we have every reason to set a new target of $26 billion. In examining the component of that estimate, we have concluded that the potential for U.S. exports to Iran is very considerable and, as time goes by, U.S. trade will be such as to exceed the current targets. I am very sorry, however, that Iranian exports to the U.S. have not gone up. We had hoped that the Joint Commission would have helped in this regard. I am referring in particular to the export of industrial goods from Iran which we hope will increase greatly. However, we here are faced with the problem of the absence of appropriate facilities of our exports to the United States. I am referring to the GSP. We know that all OPEC states are excluded from GSP and we feel very strongly about this. Iran did [not] participate in the embargo and very faithfully kept its commitments. We have provided the U.S. every facility of the MFN and we hope, Mr. Secretary, that you can use your influence to have these trade barriers removed and open the U.S. market to our goods.

The second point that I wish to highlight is the cooperation of our two countries in the field of energy as a whole. I am very pleased with the extensive talks that we have had to prepare the ground for full cooperation, particularly the transfer of technology. When we reach final accord on the nuclear energy agreement, Iran will be able to move forward more rapidly with its nuclear energy programs. I hope in our talks today we can finalize certain decisions.

Another important area of cooperation is in the field of agriculture where we have decided to cooperate in production in Iran of agricultural machinery, chemicals and pesticides. This will be very useful not only in Iran but we will also be able to export to the region. We also agreed to select a particular region of Iran for joint agricultural development. I must assure you, Mr. Secretary, that Iran is prepared to engage in negotiations at any time to complete the Committee’s decisions.

We are also very pleased that the Iranian side has been moving ahead to implement the manpower training programs which were agreed upon previously and we are highly optimistic that this area of cooperation will expand.

In industry, many American firms from the private sector have met with officials of the Iranian private sector, as well as officers of Government corporations. Some of the American firms have indicated clearly to us their concerns over the level of foreign investment which is permitted by our investment law. We have been talking with several companies about various petrochemical projects where foreign investment has been limited to 35 percent. I am very pleased to tell you that we will now be prepared to permit foreign investors up to 50 percent in the petrochemical field.

Another area for cooperation is in the field of electronics. We have been moving ahead fairly successfully and some agreements have been reached and others are pending. We hope that further sessions of the Joint Commission will permit certain projects to go ahead which will provide for the transfer of high technology to Iran.

Mr. Secretary, the Joint Business Council had a very successful meeting here bringing together the private sectors of both of our countries. I believe the Joint Business Council can take, and should take, more initiative in reaching project agreements. I would like to suggest that the United States Government officials meet with the members of the Joint Business Council to encourage them to develop new projects. We shall do this on our side.

We feel, Mr. Secretary, that American investment in Iran has been moving ahead well and Iranian investment in the U.S. has been encouraging. Our deal with Occidental Petroleum takes into account the comparative advantages of our two countries.³ This agreement is not limited to only petroleum and we will move ahead into agriculture and other forms of investment. We are still in the early stage of negotiations with Occidental.

In conclusion, Mr. Secretary, all in all the past year has been a successful one because of your support, encouragement and assistance. We are hoping that this session of the Commission and its approval of the decisions of the various Committees will keep all these projects going ahead.

Secretary Kissinger: Mr. Minister, I am very thankful for your remarks and on behalf of my colleagues express our appreciation. I am very pleased with the Joint Commission’s development and it is doing what I hoped it would do, that is to establish organic links between our two countries in many fields. Last night I expressed my views on the importance of our relations with Iran. Coming again to the American presence here, Iran is not important because of the presence of large numbers of Americans but rather they are here in such large numbers because Iran is important to us. I have been reflecting on how exciting it is to see Iran’s economic development and its aims for an economic level equal to Western Europe. We are pleased to be dealing with a country which is a force for stability in the region, solves its problems with its neighbors and which shares its resources so generously with other countries.

We attach, as I said before, great importance to our relations with Iran. We must keep in mind that in a free country any one can express the views he wants, but I have no doubt that, even if there is a change of Administration, reality will produce the same level of relations. Our work here is not tied to any particular Administration for the relationship with Iran will be very important regardless of who is in office in the United States.

I can only support the views you have expressed, Mr. Minister, about the work of the Joint Commission. It is really remarkable that $15 billion seemed so big last year. This year we will be able to explain at the press conference a figure of $26 billion (laughter) although Murrey Marder⁴ can defeat any one at a press conference. This $26 billion figure reflects very careful analysis of this extraordinary event.

In the field of nuclear energy we have had useful talks, and I had a very good discussion on this matter with His Imperial Majesty yesterday.⁵ I understand that we will be getting together later to see what we can do on this matter. With respect to LNG, the U.S. is going to increase by a considerable amount its imports and Iran will play a very significant role in this. We have also introduced into the work of the Commission solar energy, a development on which His Imperial Majesty places great emphasis.

You referred to agriculture as a field in which we can help. The activities which you mentioned can make a very useful agricultural program.

Concerning the transfer of technology, we have in the U.S. been paying great attention to this matter. It has been bogged down in a bureaucratic logjam and I don’t believe that Government should be so involved in it. We are having a conference later this year of leading scientists which will lead into the International Science Year. We are going to have regional conferences and I think we should do something in the context of this Joint Committee in order to intensify our activities.

Thank you, Mr. Minister.

Minister Ansary: Should we appoint from each side someone to work on the Communiqué and Joint Minutes?⁶

Secretary Kissinger: Mr. Poats.

(Ansary motions to Mr. Vafa to represent the Iranian side.)

Secretary Kissinger: Is it agreed that we sign and release both the Communiqué and the Minutes?

Minister Ansary: We release to the press the Joint Communiqué.

Secretary Kissinger: Why do we have the Joint Minutes then?

Minister Ansary: That is so we have a complete record of the Committees. The Joint Communiqué will be shorter and be for the press.

Secretary Kissinger: I have a draft of the Minutes and we can finalize the Communiqué later.

1. Source: National Archives, RG 59, Central Foreign Policy Files, P820118–0477. Confidential; Nodis. Cleared by Naas and approved in S on August 27. The meeting was held in the Iranian Ministry of Finance and Economic Affairs. The attached list of Iranian and American participants is not printed. Ansary led the Iranian delegation of 13 members, and Kissinger led the U.S. delegation of 15 members.
2. See Documents 108–110.
3. See footnote 2, Document 179.
4. A Washington Post reporter.
5. See Document 183.
6. The communiqué issued on August 7 is printed in the Department of State Bulletin, September 6, 1976, pp. 314–316. The agreed minutes of the third session of the U.S.–Iran Joint Commission for Economic Cooperation were transmitted in telegram Secto 20068 from Tehran, August 7. (National Archives, RG 59, Central Foreign Policy Files, D760305–0428)