269. Memorandum From the President’s Assistant for National Security Affairs (Kissinger) to President Nixon 1

SUBJECT

  • The Azores Base Negotiations and Soybeans

During his stay in Lisbon for the NATO meeting at the beginning of the month, Secretary Rogers held talks with the Portuguese Prime Minister and Foreign Minister on the status of our Azores base negotiations.2 The Secretary reported to you that he considered the talks satisfactory, and that he was reasonably confident that we will achieve an agreement—though some adjustments might have to be made in our offer to them.3

Our latest quid pro quo offer included a $30 million PL–480 program through FY 1973. This offer, however, was conditioned on Portu[Page 830]guese agreement to recognize imported soybean oil as an edible oil by the end of the year. The Foreign Minister appeared particularly displeased by this condition—which he argued was extraneous and would transfer negotiations for military cooperation into a commercial transaction—and urged that it be removed.

This condition was included in our offer at the insistence of Agriculture in exchange for Agriculture’s willingness to increase the PL–480 program from $10 to $30 million. On his departure for Lisbon, Secretary Rogers sent you a memorandum (Tab A) requesting authority to waive this condition if, in his judgment, it becomes clear that it will be a stumbling block to a successful conclusion of the Azores negotiations. Secretary Laird concurs in Secretary Rogers’ recommendation.4

Secretary Hardin does not agree with Secretary Rogers’ recommendation. He feels strongly (Tab B) that in the negotiations we should continue to press Portugal on the soybean issue as a condition to a $30 million PL–480 program. He is particularly concerned about Congressional reactions, and feels that to waive this condition runs the risk of jeopardizing the future of the PL–480 program as well as stimulating protectionist sentiment.

Pete Peterson feels that he can go along with Secretary Rogers’ recommendation, provided that a written communication of some kind (a letter from the Secretary or the Ambassador) is sent to the Portuguese which stresses the great importance we attach to the soybean issue and expresses our hope and confidence that the Portuguese authorities will soon be in a position to accept soybean oil as edible.

A successful and swift completion of the Azores negotiations is highly desirable since protracted haggling will increase pressures on Caetano to increase the price. While recognizing the difficulties which Agriculture may face, it seems more important for Secretary Rogers to have the authority he seeks. He has made it clear that he will work diligently toward a solution of the soybean issue even though disassociated from the base negotiations. In my judgment, Pete Peterson’s condition of a written communication would be an unnecessary restriction on the Secretary’s negotiating authority.

Recommendation

That you agree to authorize Secretary Rogers to waive the soybean condition if that condition becomes a stumbling block to the Azores [Page 831]base negotiations, on the understanding that State will exert every effort to get the soybean problem resolved subsequently.5

  1. Source: National Archives, Nixon Presidential Materials, NSC Files, Box 701, Country Files—Europe, Portugal, Vol. I. Confidential. Sent for action. The tabs are not printed. The memorandum bears the stamped notation: “The President has seen.”
  2. See Document 268.
  3. A copy of Rogers’s undated report is in the National Archives, Nixon Presidential Materials, NSC Files, Box 701, Country Files—Europe, Portugal, Vol. I.
  4. Sonnenfeldt reported in a June 3 memorandum to Kissinger that Laird agreed with the State Department position. (Ibid.)
  5. The President initialed the Approve option. In an attached July 1 memorandum to Rogers, Kissinger wrote: “The President has approved the recommendation contained in your memorandum of May 31, on the understanding that every effort will continue to be made to secure the reclassification of soybean oil even though disassociated from the base negotiations.” Rogers’s May 31 memorandum to Kissinger is ibid.