47. Memorandum From the President’s Assistant for International Economic Affairs (Flanigan) to the President’s Assistant for National Security Affairs (Kissinger)1

At a meeting of the Oil Policy Committee, it was agreed that every effort would be made to meet the political requirements for Caldera’s visit in terms of imports of oil from Venezuela. It was further agreed that the appropriate language that should be used in discussions with Caldera is as follows:

“The United States contemplates an interim adjustment of the overall import quota for the remainder of 1970. There has been some increase in Canadian imports counted against the quota. But, there will be no reduction in the last half of 1970, as compared to the first half, in total crude imports from overseas, and hence no reduction in purchases from Venezuela if that country continues to hold its recent proportion of the U.S. market (which has provided about 40% of such imports in the last year). Some measures under consideration, if taken, should result in some increase in imports from Venezuela over the next year.”

You will note that the above language does not relate directly to a specific number of barrels. It is important that the President stick to this language.

The Venezuelans have made every effort, in conversations between Caldera and Stans in Caracas and between the Minister of Mines and me here in Washington, to defend the principle of equal treatment by the United States for Venezuela and Canada.2 We must be entirely forthright at this time regarding this matter and say that the equality of treatment cannot be maintained. We must make clear to the Venezuelans that from a security point of view, North American wells, whether located in the United States, the lower 48, in Canada or Alaska, tied in with U.S. refineries by pipelines, are preferable to Venezuelan wells. We can and should say that Venezuelan sources of supply are preferable to Eastern hemisphere sources of supply. But we must not allow the Venezuelans to believe that they can expect from us equal treatment with Canada. I took this position with the Minister of Mines and [Page 112]while he resisted it, he did accept the logic of the argument. Once we have established that Venezuela cannot expect equal treatment with Canada, then I think we can afford to be generous in terms of granting them preference over Eastern hemisphere sources.

  1. Source: National Archives, Nixon Presidential Materials, White House Central Files, Subject Files, Box 26, EXTA 4/CM Tariff Imports, Oil, May–August 1970. No classification marking. A copy was sent to Vaky.
  2. In telegram 31882 to Caracas, March 4, the Department detailed the various meetings held by the Venezuelan delegation in the United States on February 26 and 27. (Ibid., RG 59, Central Files 1970–73, PET 17–2 US)