265. Memorandum From Helmut Sonnenfeldt of the National Security Council Staff to the President’s Assistant for National Security Affairs (Kissinger)1

SUBJECT

  • Azores Negotiations

We have received Secretary Rogers’ memorandum on the Azores (Tab B). As I had previously indicated to you, the Secretary confirms that the negotiations are in serious trouble, and that our previous offer of a $5 million PL–480 program (as well as an oceanographic research vessel) is inadequate. The Portuguese have requested a minimum of $25 million in PL–480 for one year, at concessional rates.

To remedy the situation, the Secretary requests authority to offer a PL–480 program of $30 million, spread over three years, conditioned in [Page 823]the last two years on Portuguese recognition of soybean oil as edible (which would placate Agriculture by opening up a $15–20 million annual sales of soybean oil—but which the Portuguese may balk at because of their own domestic pressures). The memorandum notes that Agriculture would be willing to increase the previous total $5 million offer only to $7 million if it were conditioned on the soybean deal (the Portuguese reject this linkage). In addition, the Secretary notes that Defense is looking into the possibility of using their own contingency fund as was done with the Spanish base negotiations.

In the meantime, the negotiations have continued to sour. Prime Minister Caetano was interviewed by a UPI reporter and publicly made it clear that he was dissatisfied with the negotiations both as to the amounts involved and also as to our handling which is viewed as dilatory. Our Ambassador is convinced that the Portuguese would prefer to have the Azores bases mothballed as a stand-by NATO facility (as provided for in a bilateral 1951 agreement) rather than continue the unilateral US use on the terms of our previous offer.

The immediate question is procedural. USG consideration of this issue has not been in the NSC framework, but has been led by State, bolstered by Secretary Laird’s assessment of the continued need for the bases. Agriculture is opposed to the Rogers recommendation, in part because it will have a tough time explaining the PL–480 deal to Congress. Secretary Rogers has sent copies of his memorandum to Secretaries Laird, Hardin and Connally. Before the State memorandum is forwarded to the President, I assume you will wish to have their comments. If you wish to solicit these views by memorandum, one is attached at Tab A; alternatively, Jeanne Davis could contact her counterparts by phone and orally request the agency views. In any event, speed is rather important. The Portuguese have been claiming that they will need to know our proposal by the end of this month (in relation to their own commitment process for grain imports).

Recommendation

That you agree that Jeanne Davis should seek the comments of the other agencies on the Rogers memorandum.

Approve

Disapprove

I’ll sign the memorandum2

[Page 824]

(Note: After the agency comments are in, you can decide whether and how to put this into the NSC machinery—maybe the USC with a strong presidential directive that he wants the matter worked out promptly.)

  1. Source: National Archives, Nixon Presidential Materials, NSC Files, Box 701, Country Files—Europe, Portugal, Vol. I. Confidential. Sent for urgent action. The tabs are not printed.
  2. Kissinger checked this option and wrote “done.” The memorandum requested the views of the Secretaries of Defense, State, and Agriculture by April 20.