659. Telegram 5819 From the Embassy in Venezuela to the Department of State1 2

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  • Caracas 5814

1. President Caldera called me in late today to request the USG, before making a final decision on petroleum import policy, to consult with Venezuela. He said he feared Venezuela might be notified immediately prior to the decision, rather than consulted before the policy was established. He recalled that lamentably such had occurred during the Kennedy-Betancourt administration.

2. Caldera then emphasized the following points:

A. Venezuela’s aspirations of increasing its annual market in the US, perhaps by 100,000 barrels per day.

B. His government’s inability to understand why Canada and Mexico might receive better treatment than Venezuela.

C. Venezuelan oil as a secure source contributing to hemisphere security deserved a preferential position in the US market.

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D. A gradually growing market for Venezuelan oil in the US would reinforce President Nixon’s policy of “trade instead of aid.”

3. Caldera, after making these points, stated Venezuela was prepared, provided favorable treatment were given her oil, to maintain exports to the US within bounds and at reasonable prices. He then dwelled on the importance to hemisphere stability of a democratic Venezuela with a sound economy based on petroleum. Unequivocal and forthright support (un gesto claro y decidido) by the US would encourage the democratic system in the hemisphere and counter recent disappointments and failures in other countries.

4. Finally he said US-Ven relations would remain under a cloud as long as Venezuelan oil was discriminated against relative to Canada and Mexico. His government would be under strong and continued attack by opposition political parties and sectors of national life if it failed to obtain a satisfactory arrangement with the US on petroleum. This reality was brought strongly home to him at the Fourth Petroleum Workers Congress Saturday, November 29, when participating speakers directed strong attacks at the USG and its “discriminatory policy”. As a result the President said he had to comment (reftel). His intention had been otherwise. He referred then to [garble] he and his top advisors had given to Ambassador Julio Sosa Rodriguez return to Caracas for consultation, characterizing the consultation to the press as strictly routine.

5. The President and I then talked in general terms about some of the complicated economic considerations which had to be taken into account in the formulation of an import petroleum policy. I took pains to explain our special relationship and integrated economic ties with Canada. I added that although it was not possible to anticipate either the Shultz Committee’s recommendations to President Nixon nor the final policy which would result, that there were positive elements in the picture, not the least of which was the frank and continuing exchange of views and [Page 3] the opportunity for a more flexible hemisphere policy resulting from new policy directions made by President Nixon and set forth in his hemisphere policy speech of Oct 31. Throughout the conversation, although clearly preoccupied, President Caldera was cordial but intent on making it clear that Venezuela’s immediate future will be affected by the petroleum policy now being formulated. He returned several times to the importance of consultation before final US policy is enunciated, and to emphasizing the point that the Venezuelan position would be reasonable and that with good will an arrangement could be achieved satisfactory to the US and Venezuela.

  1. Source: National Archives, RG 59, Central Files 1967–69, PET 17–2 VEN. Limited Official Use; Immediate.
  2. DCM Francis Herron reported President Calderas’s request that the U.S. Government consult with Venezuela before making a final decision on petroleum import policy. Herron further indicated that Caldera stated that U.S. preferential treatment for petroleum from Canada and Mexico damaged U.S. relations with Venezuela.