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


  • Azores Base Negotiations: Status Report

Ambassador Knight met with Portuguese Prime Minister Caetano on May 13,2 following his stay in Washington on consultations, in an effort to reduce Caetano’s inflated expectations on the size and nature of the US quid for the bases. Caetano made it clear that our previous offer ($5 million PL–480) was so little as to be “not only laughable but also offensive.” (In part this was a direct result of the inaccurate and exag[Page 826]gerated reporting done by Foreign Minister Patricio following his meeting last fall with Secretary Rogers.)3 Knight explained that, in accordance with the President’s recent letter to Caetano,4 he expected soon to be able to offer a significantly expanded program.

Knight’s judgment, which is sound, is that Caetano believes that the results of his pro-American stance have been so disappointing as to cause him difficulty (not danger) with his right wing opposition, the only opposition with which Caetano is concerned. That opposition has long pressed Caetano to seek some measure of US political support for Portugal’s African policies. Notwithstanding, Knight believes that Caetano is still pursuing an Azores agreement in a responsible fashion, leaving aside the African issues.

Most importantly, Knight judges that our new offer on the Azores (not yet advanced to the Portuguese) will be sufficient, but just barely. This offer now includes a $30 million PL–480 program over two years, a grant of $2.5 million of excess non-military equipment over five years, and up to $1 million in educational development projects (funded from Defense contingency funds).

There is one hitch, though. Because of insistence by Agriculture, the PL–480 program offer is conditioned on the Portuguese recognizing soybean oil as edible by the end of this year. Knight is convinced that the traffic will not bear this condition, and that its inclusion will seriously undermine the possibility of Portuguese acceptance of our proposal.5 The Embassy has been working over the last couple of years to secure Portuguese recognition of soybean oil, and Knight told me recently that he believes the Portuguese will come around on this within a year—but not so if we make it a condition in connection with the Azores negotiations.

State is now trying to get Agriculture to agree to drop the soybean condition. There is a slight possibility that State will convince Agriculture. But, if this is not possible, this issue will have to be resolved here, and with some speed. The purpose of this memorandum is simply to make you aware of the state of play, and the possibility that the soybean problem may surface here in the coming week.

  1. Source: National Archives, Nixon Presidential Materials, NSC Files, Box 701, Country Files—Europe, Portugal, Vol. I. Confidential. Sent for information.
  2. Knight reported on this meeting in telegram 1552 from Lisbon, May 14. Knight told Caetano that the United States had offered to increase its “quid” for the Azores bases and he outlined what this would be and the motivation behind the offer. (National Archives, RG 59, Central Files 1970–73, DEF 15 PORT–US)
  3. See Document 264. In telegram 1253 from Lisbon, April 22, Knight reported on the expansive nature of the Foreign Minister’s demands and his efforts to calm down an agitated Patricio and lower his expectations. (National Archives, RG 59, Central Files 1970–73, POL PORT–US)
  4. Not found.
  5. In an attached May 19 note to Haig, former Ambassador George Anderson reported that in a long telephone conversation with Knight, the latter had expressed his concerns about the addition of the soybean oil issue to the base negotiations package.