97. Memorandum From the President’s Assistant for International Economic Affairs (Flanigan) to the President’s Deputy Assistant for National Security Affairs (Haig)1

    • US-Canada Oil Agreement

For some time, we have been urging the Canadians to negotiate an agreement whereby Canada would adopt adequate national security precautions against a cut-off of overseas oil imports in exchange for the US removing all quantitative limitations on imports from Canada under the Oil Import Program. General Lincoln, Jules Katz and I held a dinner meeting with Canadian officials last month during [Page 229] which they indicated the willingness to begin serious negotiations, and we promised to prepare a US position.

By the end of last week, we had prepared in broad outline a US proposal which I transmitted orally to the Canadians along with the suggestion that if key Canadian officials could agree with the basic principles set forth in the US proposal, the Prime Minister and the President could make a forthcoming statement about the development of the talks.

The Canadians were not interested in having any reference to the oil negotiations made during the Prime Minister’s visit yesterday. Accordingly, we simply reduced my oral proposal to writing and delivered it to Ed Ritchie, Under Secretary of State for External Affairs, for review by the Canadians. (see Tab A)2 We expect a reply from the Canadians in the near future and are hopeful that serious negotiations will then get under way.

  1. Source: National Archives, Nixon Presidential Materials, NSC Files, Box 367, Subject Files, Oil 1971. No classification marking.
  2. Not printed. Flanigan’s December 6 letter to Ritchie also included an attached U.S. proposal. In a December 10 memorandum to Haig, Sonnenfeldt summarized the U.S. proposal, remarking that Canadians should “make better provision for the security of their oil (particularly in their eastern market) in the face of any potential cut-off of their oil imports. In return, we would agree to remove the quantitative restrictions we have placed on imports into our western markets of Canadian oil.” (Ibid.)