Foreign Relations of the United States, 1969–1976, Volume E–12, Documents on East and Southeast Asia, 1973–1976

317. Memorandum From the President’s Assistant for National Security Affairs (Kissinger) to President Nixon, Washington, March 16, 1973.¹ ²

Washington, March 16, 1973

MEMORANDUM
THE WHITE HOUSE
WASHINGTON
ACTION

March 16, 1973

MEMORANDUM FOR: THE PRESIDENT
FROM: HENRY A. KISSINGER [HK initialed]
SUBJECT: Review of U.S. policy towards the Philippines

An SRO meeting was held on November 30 to consider the interdepartmental response to our NSSM of last June asking for a review of U.S. policy toward the Philippines. The review was undertaken to consider actions which we might take in the face of growing political uncertainties in the Philippines, to protect our access to U.S. military bases and our substantial trade with (not quite $800 million) and private investment in (approaching $1 billion) that country, as well as to express our basic concern for Philippine long-term stability. Growing Philippine nationalism, finding its voice in the Constitutional Convention’s redrafting of the 1936 Constitution, threatened unacceptable restrictions on our base access and on U.S. private investment. Marcos, suffering from badly reduced political support and widely accused of wanting to perpetuate himself in power, resorted to the nationalistic ploy of asking for a basic review of all Philippine treaties and agreements with the U.S. Civil disorder continued the slow slide toward what Marcos and many others feared would become a revolution from the extreme left within the next decade.

President Marcos’ imposition of martial law in late September, however, somewhat changed the nature of the policy problem we faced last June. Essentially, Marcos’ action greatly increased his control over the government and country, but also made him more dependent on us. He now must look to us for important political support and for what may be critical assistance to the basic reform program on which he has staked his political future.

SRG Consensus

The SRG meeting resulted in a consensus on the following major points of policy:

• — There is no viable alternative to Marcos, and we believe him to be in effective control at least for the near-term.
• — We will continue to deal with the Marcos Administration as the effective Government of the Philippines to the extent that he cooperates with us in helping us pursue our basic interests in the Philippines. Conversely, we recognize that we now have an interest in Marcos’ succeeding in his gamble to improve stability in the Philippines through martial law and a thorough-going program of basic economic and political reforms. We will assist him with his reform program as long as we believe he is enhancing the prospects for long-term stability and cooperating with us in our pursuit of our other basic interests.
• — Marcos has already displayed his cooperative inclination toward us by resolving at least for the moment the threat to U.S. private investment posed by the Philippine Supreme Court’s decision in the Quasha case. (The decision held that U.S. private investors’ rights to exploit natural resources and to operate public utilities would lapse with the expiration of the Laurel-Langley Agreement in 1974, and called into question their titles to land not in the public domain.)
• — Reaffirmed the U.S. Government decision of 1966 not to seek an extension of the trade and investment privileges granted under the Laurel-Langley Agreement.

Other Aspects of Our Policy Problem

• — Continued effective access to our military bases in the Philippines. Our base access is strongly linked in the Filipino mind to an adequate level of grant military assistance. In recent years, this level has fallen from the $22-$25 million level to $14-17 million, with consequent Filipino expressions of discontent affecting our access. We have raised our requests to Congress for FY 73 and 74 back to $22 million.
• — Renegotiation of the Military Bases Agreement. The negotiations have been in abeyance since last February, with a number of important issues still to be resolved.
• — U.S. Philippine bilateral trade preference and the Philippine sugar quota. The Philippines has been pressing us for a continuation of preferential access to the U.S. market. Such an extension after the expiration of Laurel-Langley would be inconsistent with our global trade policy. The best we can do is to try to give close attention to Philippine needs in the framework of GATT and the General scheme of Preferences. On the Philippine sugar quota, which is guaranteed under the Sugar Act of 1971, we can do no better than assure the Philippines that we will urge Congress to extend the current quota when the Act comes up for renewal in 1974.

Marcos has indicated to Ambassador Byroade that he would like across-the-board negotiations on these and other major bilateral issues early this year. His tactic in such an approach no doubt is to try to link his leverage on base access and investment to what he wants on trade preferences and the sugar quota. Consequently, we believe we should try to negotiate the issues separately.

We believe we should withhold issuing a NSDM embodying these policy conclusions until the situation resulting from Marcos January 17 changes in the Philippine political system has clarified. (A draft NSDM is at Tab A.) If issued, such a policy directive might leak, which could then cause us problems at home, particularly with Congressional critics, and in the Philippines, where Marcos might be led to believe he had fuller U.S. support for his administration than is actually the case.

Peter Flanigan concurs.

Recommendation:

That you approve the basic U.S. policy line articulated above and in the draft NSDM which will not be issued at this time.

Approve [RN initialed]
Disapprove

1. Source: National Archives, Nixon Presidential Materials, NSC Institutional Files (H-Files), Box H–192, NSSM 155 [2 of 2]. Secret. Sent for action. Tab A, an undated proposed NSDM on U.S. policy toward the Philippines, is attached but not published. The President initialed his approval of the draft NSDM, which was subsequently released. See Document 318. The Laurel-Langley Agreement, which governed U.S. tariffs on Philippine exports and the privileges of U.S. investors, expired on July 4, 1974.
2. Kissinger described for Nixon the consensus that resulted from an SRG meeting regarding the Philippines and urged him to approve a NSDM to be released at a later date.