Foreign Relations of the United States, 1969–1976, Volume E–10, Documents on American Republics, 1969–1972

660. Airgram A–10 From the Embassy in Venezuela to the Department of State¹ ²

Caracas, January 9, 1970

SUBJECT:

• POLITICAL BI-WEEKA No. 1 (Dec. 25, 1969–Jan. 9, 1970)

ITEMS

1. Strong Reactions to Reports of Changes in U.S. Petroleum Policy

2. 1970 Prospects for Political Coincidencias

3. COPEI Official Suggests Cabinet Changes

4. Venezuelan Diplomats Plan Strategy on Guyana Border Dispute

5. Diplomatic Activities

6. Relative Quiet Returns to Labor Front

7. Internal Security

1. Strong Reactions to Reports of Changes in U.S. Petroleum Policy

Influential business groups in Venezuela have reacted strongly to the December 21 U.S. announcement of its 1970 petroleum import quotas and to subsequent press reports on the nature of the expected recommendations of President Nixon’s Petroleum Task Force. Pro-Venezuela, on January 7, called for a re-examination of Venezuela’s entire trade and investment relations with the US. Earlier FEDECAMARAS and Central Bank spokesmen, in announcing the results of their year-end review of the Venezuelan economy, joined the chorus of voices from the press and political leaders complaining of “discriminatory treatment” against Venezuelan oil by the US. Pro-Venezuela’s extreme proposals will have repercussions in all sectors of Venezuelan life, including the government and the business community, with possible consequent effects on relations with the US Moreover, the posture of the GOV at the IA–ECOSCC meeting scheduled to open in Caracas on January 26 may also be affected in that it will give impetus to the thesis that a contradiction exists between stated US policy to seek to give preferential treatment to Latin American products and actual performance.

The recent build-up of public pronouncements against U.S. policies began following the US announcement before Christmas of 1970 import quotas. The GOV was thrown off balance by what in their opinion was a US policy decision, made without consulting Venezuela, that would mean a worsening of Venezuela’s market position in the US. Pro-Venezuela charged that the new quotas “inflicted grave harm on our economy and constitute a violation of established principles of international law.” This statement was followed by numerous newspaper comments critical of US policies and statements by FEDECAMARAS President GURUCEAGA, Central Bank President LOSADA and COPEI Secretary General BEAUJON. The objections were related primarily to a combination of factors: non-consultation, preferential treatment for Canada and fears of future erosion of the position of Venezuelan oil in the US market.

The most emotional and extreme reaction thus far was spelled out by Pro-Venezuela President Reinaldo CERVINI in a January 7 press conference. After an extended criticism alleging increasing deterioration in US/Venezuelan trade relations, Cervini called for a new Venezuelan trade policy. The principal elements were: orienting Venezuelan oil exports toward countries which do not impede import of Venezuelan products; channeling a larger portion of Venezuelan purchases to European countries and Japan, and a close look at foreign investment from countries which restrict Venezuelan imports. The weeks ahead are likely to see more public and private discussion of the Cervini proposals.

[Omitted here are Items 2 through 7.]

1. Source: National Archives, RG 59, Central Files 1967–69, POL 2 VEN. Confidential. Drafted by Luers; cleared in draft by Fimbres; approved by Walters. Repeated to COMANTDEFCOM, COMCARIBSEAFRON, USSOUTHCOM, COMUSAFSO, Addis Ababa, Bogotá, Brasilia, Buenos Aires, Georgetown, Guatemala City, London, Mexico City, Panama City, Port of Spain, Rio de Janeiro, Santiago, Santo Domingo, Curaçao, and Paramaribo. A stamped notation on the Airgram indicates that it was received at the Department of State at 3:23 p.m. on January 12 and at the Bureau of Inter-American Affairs on January 14.
2. Private-sector groups in Venezuela strongly disliked the U.S. Government’s announcement of its 1970 petroleum import quotas. Lack of consultation with Venezuelan leaders, preferential treatment for Canada, and fear of a future erosion of Venezuela’s petroleum market share in the United States explained the reaction.