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268. Telegram From Secretary of State Rogers to the Department of State1

Secto 23/1856. Subject: Azores Base Negotiations.

1. During call by Secretary on Foreign Minister June 2 status of Azores negotiations was reviewed. Secretary stressed our willingness to be cooperative but asked for Portuguese understanding of difficulties we faced with Congress. He said that although the Mansfield Resolution was defeated2 existing attitude is that US is assuming too much of the burden in Europe. We know that Azores question was bilateral one between US and Portugal and while it is in our interest for Portugal to remain strong we still faced great difficulties with Congress in obtaining any type of financial assistance.

2. Rui Patricio made the following observations on the package proposed to him recently by Ambassador Knight.3

(a) Oceanographic Vessels. He said Portuguese Navy had informed him that two vessels offered were over thirty years old and would be of no value, particularly in view that the Portuguese Navy is retiring all ships older than ten years. We stressed that the age of the hull of oceanographic vessel probably was not important as long as equipment therein was valuable and useful. It was decided that Portuguese Navy would send a qualified technician shortly to Washington to discuss use and value of ships with the Oceanographer Admiral Behrens. FYI Landau will be in touch with Behrens June 9 with further details regarding issuing invitation to Portuguese to visit him.

(b) Non-Military Excess Equipment. Patricio said that he was pleased that Secretary had been able to increase previous offer of two and a half million non-military excess equipment to five million but that this figure still insignificant particularly in view that US desires to extend present situation in the Azores for another five years. He asked whether this figure could be further raised. The Secretary said that this would be hard to decide at this moment and that it was probably more important to first make a study to see what material was available. Moreover question was still open whether GOP would take oceano[Page 828]graphic vessels. He stressed again the importance of receiving specific indications from the Portuguese what type of equipment they wanted and what their priority areas of need were. He said that we had probably a great deal of non-military excess equipment but we could not tell the Portuguese what we had until we knew more clearly what they were looking for. Patricio asked whether the offer could be made “open-ended.” The Secretary said maybe it would be possible in the exchange of notes not to specify any amount and in an additional letter assure the Portuguese that they would receive at least five million dollars worth of non-military excess equipment over five years but leave the ceiling open in case more equipment of interest to the Portuguese could be found. He said he wanted to be careful because he did not want to mislead the GOP until we know whether in fact there was sufficient equipment of interest to the Portuguese to justify increased figure.

(c) PL–480. The Foreign Minister urged the Secretary to remove the condition of soybean oil as sine qua non to PL–480 transaction.4 Secretary outlined the reasons why the Department of Agriculture was insistent on removal of discriminatory regulation. Patricio said it would cause grave internal difficulties if this condition was not removed as public opinion would never understand this onerous requirement which was not directed specifically against the US but was a general worldwide prohibition of soy bean oil imports. He also expressed unhappiness that we offered PL–480 commitments for two years only while at the same time desiring a five year extension for US rights in Azores. Secretary expressed our legal restraints but said we would be willing to consider the matter of continued PL–480 in the light of circumstances prevailing at the time of any new Portuguese request.

(d) Assistance to Educational Reform. Patricio said he was pleased that US would assist Portuguese educational reform plan with one million dollars but asked Secretary to reconsider amount. Secretary made it clear that this was a firm figure and there was no likelihood for any increase.

(e) ExImBank Credit. The Secretary said that if Portuguese would find it useful to have the “global amount” of ExImBank credits it could be announced that the two governments reviewed Portuguese development projects in the metropole valued at 400 million and the USG declared its willingness to cooperate through ExImBank in financing of [Page 829]these projects. The Secretary added that if Portuguese want to nail down this figure they should apply for preliminary commitments from ExImBank on those individual projects they plan to put into effect in near future. Patricio appeared pleased with this proposal and said it would be useful. He said however the US proposal was still very meager and that he would be criticized for not having done as well as Spain. The Secretary assured him that he had done as well and suggested that he include in any announcement the proposed ExImBank credits in any public statement if and when agreement had been concluded in the same way the Spanish used the 120 million dollar loan from the ExImBank.

3. At the conclusion of the meeting Patricio reiterated it would be important to send a Portuguese technician to United States quickly to decide on the matter of oceanographic vessels.

Rogers
  1. Source: National Archives, RG 59, Executive Secretariat, Conference Files, 1949–72, CF 579. Secret; Exdis. Drafted by Landau on June 3; cleared by Knight and Hillenbrand and in S/S; and approved by Pedersen. Rogers was in Portugal June 1–6 to attend the NATO Ministerial meeting. Memoranda of his conversation with Caetano, June 3, are ibid.
  2. See Documents 62 and 63.
  3. See footnote 2, Document 267.
  4. According to a June 1 memorandum from Haig to Kissinger, an effort to give Rogers authority to decouple the soybean issue from the Azores negotiations failed due to opposition from the Departments of Agriculture and Commerce. (National Archives, Nixon Presidential Materials, NSC Files, Box 701, Country Files—Europe, Portugal, Vol. I) In order to break the impasse, Kissinger approved Haig’s recommendation to inform the President of the problem by memorandum. See Document 269.