393. Telegram 214126 From the Department of State to the Embassy in Venezuela1
214126. Subject: OPEC Oil Price Decision.
1. You are requested to deliver the following letter from President Ford to President Perez as soon as possible. Quote: Dear Mr. President: I wish to present for your consideration my concerns on an issue of great importance to relations between developed and developing countries, and to the well-being of not only our two countries but all the nations of the world.
Since the consumer/producer preparatory meeting in Paris last April, the United States has made a major effort to re-establish a basis for dialogue and cooperation between the nations of the developing world, including those which export oil, and the industrialized nations. We have undertaken a fundamental review of our overall policy toward the developing countries. This review has resulted in a new approach to the producer/consumer dialogue that responds more fully to these nations’ concerns, particularly those raised by your government’s representatives and other delegations during the Paris meeting. Since Secretary Kissinger articulated the general outlines of this new approach in speeches in Kansas City and Paris in May, we have made much progress in establishing the constructive understandings necessary to promote further mutually beneficial cooperation among the nations of the world. Furthermore, as you know, we have made a number of important specific proposals for cooperation at the current special session of the United Nations General Assembly.
The economic dialogue will be a centerpiece in the new evolving relationship between the industrial and developing nations. We are pleased that our efforts, and those of your government and others, have succeeded in establishing a consensus for its resumption. Over [Page 1060] the past months, we have clearly demonstrated our commitment to a constructive dialogue and our belief that its success requires each participant to recognize and take full account of the vital interests of the others.
As you can appreciate, the progress which we have made in developing the new U.S. position has required considerable consultation with interested groups in our society in order to create a greater public awareness of the concerns of the oil producers and other developing countries and the need for cooperative solutions to our common economic problems. I am concerned, however, that this greater public understanding will be jeopardized should the member countries of OPEC increase the price of oil this fall. I do not mean to indicate that such action by OPEC would cause us to question our fundamental commitment to the dialogue. However, it would inevitably tend to affect support in this country for new solutions to international economic problems.
Another oil price increase by OPEC would also have a significant negative impact on the economics of all the oil importing nations—both developed and developing—at the very time that signs of progress in the fight against recession and inflation are appearing. Such a price increase would impose shocks on the U.S. economy, on the more vulnerable economies of Europe and Japan, and on the highly fragile economies of the developing world. It would at the very least reduce the progress toward economic recovery, and could in fact plunge a number of countries into extremely serious difficulties.
It is because I am aware, Mr. President, of your sensitivity to the interdependence of the world economy, of the high priority which you and your government give to promoting the welfare of all the developing countries, and of your commitment to a successful economic dialogue between developed and developing countries that I am asking you to weigh heavily the adverse effects—both psychological and real—which a price increase could have. It is my hope that you will use your considerable influence among the producer countries to assure that these concerns be properly emphasized and that the possible consequences be understood—not least of which is hindrance of movement toward the broader objectives which all of us seek to achieve.
For my part, you can be assured of a continuing determined effort to bring our two countries closer together, both in our bilateral relations and in cooperative efforts to solve broader world problems of mutual concern. Sincerely, Gerald R. Ford. His Excellency Carlos Andres Perez, President of Venezuela, Caracas. End quote.
2. Report when delivery effected.
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Summary: Ford informed Pérez that he thought an OPEC oil price increase could damage the world economy, and he urged the Venezuelan President to attempt to convince the OPEC nations not to increase oil prices.
Source: National Archives, RG 59, Central Foreign Policy File, D750312–0063. Confidential; Immediate; Exdis. Drafted by Creekmore; cleared by Enders, Luers, and Sorenson; approved by Kissinger. Kissinger’s May 1 Kansas City speech is in the Department of State Bulletin, June 2, 1975, pp. 713–719. Kissinger’s May 26–28 speeches in Paris are in the Department of State Bulletin, June 23, 1975, pp. 837–844 and 849–855. On September 26, Springsteen, in a memorandum to Scowcroft, summarized Pérez’s September 23 response to Ford, in which he stated an increase in oil prices would not have a significant effect on the world economy. (Ford Library, National Security Adviser, Presidential Correspondence with Foreign Leaders, 1974–1977, Box 5, Venezuela, President Carlos Andrés Pérez)
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