669. Memorandum From the Executive Secretary of the Department of State (Eliot) to the President’s Assistant for National Security Affairs (Kissinger)1 2

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  • Follow Through on the Caldera Visit—Thirty-Day Progress Report

In the month following the Caldera visit we have taken action on the four major items.

(1) Oil and Venezuela (your memorandum to General Lincoln and Mr. Flanigan, dated June 6).

The oil policy, announced June 17, was warmly welcomed by both President Caldera and by the Venezuelan people. President Caldera has written a personal note of appreciation to President Nixon and we are drafting a reply which will emphasize the desirability for the Venezuelan Government to take adequate steps in developing national reserves through suitable service contracts or other arrangements; and the necessity to develop the economic and technical information which will contribute to a mutual and better understanding of the overall petroleum problem.

(2) Military Equipment (your memorandum to the Secretaries of State and Defense, dated June 5).

A joint Venezuelan-United States Logistics Requirements Committee is being formed in Caracas to examine Venezuela’s needs for modernization of its forces. A visit by the Minister of Defense will be scheduled once a consensus is reached as to equipment needs. We have in our hand a draft ten-year plan for procurement which, at first examination, appears to be reasonable but subject to study. [Page 2] Six C–130s are indicated, of which two or four may be made available pursuant to pending FMS legislation. These planes will be also used for civic action, greatly facilitating development of the southern part of Venezuela (CODESUR), a responsibility which the Ministry of Defense shares with the Ministry of Public Works.

(3) Commission for the Development of Southern Venezuela (CODESUR)—(your memorandum to the Secretary of State and the Administrator of the Agency for International Development, dated June 5).

We met with Luis Enrique Oberto, Government of Venezuela Chief of Planning and Coordination, and with Ambassador Julio Sosa on June 19. The Government has only the most preliminary of economic and sociological studies, but has already constructed a number of airstrips. There are presumed mineral resources but no known finds. It has modest resources in its budget. The IDB is sending an expert to Venezuela in mid-July to consider possible terms of reference for a feasibility survey. We have also alerted the IBRD about a possible claim on Bank resources at some indeterminate date in the future. The Covell-Lent of Venezuela is also attempting to ascertain the extent of Colombian and Brazilian interest in regional development of the area.

We agreed to share such information as we are able to develop and have already instituted a search in governmental files and the Army mapping department. The Venezuelans are not requesting specific assistance at this point and it will likely be some time before they have a development plan for the region which, while containing one-quarter of the Venezuelan land area, has less than 100,000 inhabitants.

(4) Trade Negotiations

Venezuela wants the present trade agreement substantially revised. The Department of State has on several recent occasions, and the Secretary of Commerce during his visit, [Page 3] affirmed that the U.S. was prepared to renegotiate. We have requested the GOV to advise us how they would prefer to proceed and now await their views in this regard. Both governments, without really pinning down dates, have spoken of setting up technical working groups “within thirty days”.

In conclusion, on each of the four major items, initial steps have been taken both in Washington and Caracas to indicate our interest and responsiveness, as affirmed by President Nixon during the State Visit. In general, next steps on each item now await action or proposals by the Government of Venezuela.

While United States oil import policy is set to the end of this year, considerable discussion with the Venezuelans must take place before our long-term policy is decided. The focal point for decision will be that date in 1971 when the general United States petroleum policy has been determined by the President and we will bear this timing in mind. We believe that progress with respect to CODESUR and the trade negotiations will move relatively slowly over the next year. We should be able to move ahead on an FMS arrangement shortly after expected passage of the act next month on some of the most urgent items, e.g. C–130s.

We will keep you informed and report when significant progress on the above items has taken place.

Theodore L. Eliot, Jr.
  1. Source: National Archives, RG 59, Central Files 1970–73, POL 7 VEN. Confidential. Drafted on June 26 by Robinson; cleared in draft by McClintock, Spence, Erickson, Sinn, and Slott; cleared in draft by Klein is the portion on CODESUR; and cleared by Crimmins and Meyer. R.C. Brewster signed for Eliot above Eliot’s typed signature. Kissinger’s memorandum to Lincoln and Flanigan has not been found. Kissinger’s June 5 memorandum to the Secretaries of State and Defense is Document 667, and his June 5 memorandum to the Secretary of State and the Administrator of AID is Document 668.
  2. Eliot provided a progress report on actions taken in the month following President Caldera’s visit in four major areas of U.S. policy towards Venezuela: oil, military equipment, CODESUR, and trade.