Foreign Relations of the United States, 1969–1976, Volume E–11, Part 2, Documents on South America, 1973–1976

404. Memorandum of Conversation¹

Washington, December 1, 1976, 4–4:46 p.m.

PARTICIPANTS

• President Ford
• Amb. Ignacio Iribarren Borges, Venezuelan Ambassador to the U.S.
• Brent Scowcroft, Assistant to the President for National Security Affairs

President: As I said yesterday in a preliminary way, I am very concerned about an oil price increase. The meeting is in December and as you know I have communicated with President Perez. I have read his reply very carefully. It is a very thoughtful communication and I read it in the spirit of our close cooperation. Of course, I do not agree with every point, but I think we can disagree as friends.

There are wide areas of agreement. One principal area is the need for cooperation between developed countries and the less developed countries. We agree in this area, but as much as we want to maximize our effort, in a stagnant economy our ability and that of other developed countries to contribute is greatly diminished. In addition to the economic impact, if the developed countries are in economic difficulty, the political problem of agreeing how to help is greatly magnified.

We started our recovery about May of last year. We have entered a pause—it’s longer than we anticipated—but I think the trend will reverse. The pause elsewhere—for example, in Japan—is even more pronounced. So, though we have made progress from the depth of the depression, we are not out of the woods yet. In addition, the international financial world is not as healthy as it should be. Any price increase will inevitable have an adverse impact. How severe it will be depends on how big it is. We would prefer none. President Perez makes a persuasive case to the contrary. But if the world economy should fall into a slump, the pressures on the U.S. would be severe, and despite our good intentions, we could not do what we wish for the under-developed countries. It seems to me it is too great a risk to chance a jolt to the world. I must state my case very frankly, as I have to Saudi Arabia and as I will to the Iranians.

Iribarren: As you know, we are a moderate in these matters. We will go to these meetings. The President sent you the frank letter—as befits a friend.

I cannot forecast the amount of any increase but I could not say there wouldn’t be one.

President: Even a delay, until the world comes out of this pause, would be helpful.

Iribarren: I understand there may be a postponement of CIEC. My President has always said there should be a close connection. If you could make a gesture in CIEC, it would help with my President.

President: Of what sort?

Iribarren: It is necessary to develop a new order in the world. You have recognized it in your statements. President Perez here would be very helpful.

President: I have always stood for reducing the disparity between the developed countries and less developed countries. We have made offers. We have accepted commodity agreements in a number of areas. We have shown our good will.

Iribarren: You have. I think the steel price rise will be very harmful with respect to OPEC.

President: I understand. My price advisory council met today on this. I haven’t seen their report, but I am very critical of the increase, as has been Governor Carter. Until then I can’t say what action I can take.

Iribarren: I will contact my President immediately. He has just returned from his long trip.

President: You know how strongly I opposed the trade restrictions against Venezuela. It was most short-sighted and I have done everything I could to get it reversed.

Iribarren: My President understands. Unfortunately some members of Congress thought my country participated in the embargo.

We are in a difficult situation. As my President said, the OPEC prices have been adjustments. We are just trying to maintain purchasing power.

President: I urge that there be no price increase, but if there must be one, I urge a delay until the world economy starts moving forward again. It is psychologically as well as substantially important. There are many countries having problems—Mexico, Canada, Great Britain, Italy, Portugal, etc.

I was pleased to see your President stop in Portugal. If Portugal were to fall off either to the left or the right it would be very bad.

Iribarren: We are helping a lot there. Also in Spain.

President: I am pleased with developments there. I think the King is doing a good job.

Iribarren: I think the appointment of Suarez was a wise move. He is doing good things.

1. Summary: Ford and Iribarren discussed the effects of higher oil prices on the world economy, and Ford urged Venezuela to delay an increase in the price of oil.

   Source: Ford Library, Memoranda of Conversations, 1974–1977, Box 21, December 1, 1976, Ford, Venezuelan Ambassador Ignacio Iribarren Borges. Secret; Nodis. The meeting took place in the Oval Office. According to the President’s Daily Diary, on November 30, Ford participated in a ceremony to receive diplomatic credentials from Iribarren from 11:15–11:22 a.m. (Ford Library, President’s Daily Diary) No record of the conversation has been found. Scowcroft’s undated briefing memorandum for the President’s December 1 meeting is ibid.