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303. Memorandum From the Deputy Secretary of State (Robinson) to Secretary of State Kissinger 1

Your Meeting with Genscher and Next Steps on FRG/Brazil Nuclear Issues

This memorandum brings you up to date on the openings we discern for postponing and reshaping the sensitive elements of the FRG/Brazil nuclear deal, in the light of the strategy you intend to pursue vis-à-vis France and Pakistan. It recommends points for you to make to Hans-Dietrich Genscher in Brussels and suggests deferring any approach to Brazil pending your return from Europe.

Framework and Background

You already have our proposed strategy for your meeting with Louis de Guiringaud, in which we note that U.S. readiness to tackle the FRG/Brazil nuclear deal could have an important effect on what the French are prepared to do in Pakistan. Ideally, we favor a sequence in which a general understanding between us and the French is the basis for further U.S. initiatives on the FRG/Brazil nuclear deal.

This by no means rules out exploring any openings in the Brazilian and FRG posture and encouraging both parties to reconsider their stance toward sensitive nuclear projects in Brazil. To the best of our knowledge, the FRG has not yet transferred sensitive nuclear equipment to Brazil; construction of the enrichment facility is expected to begin next year, and the pilot reprocessing plant one or two years after that. It is in that context that we should weigh the following developments and possibilities:

—While the Brazilians have publicly reaffirmed their view that their nuclear projects are a fait accompli and appear prepared to strongly resist U.S. pressure, I have reported to you that Ambassador Pinheiro expressed through Lincoln Gordon an interest in avoiding a confrontation with the new Administration, by agreeing on a moratorium on the FRG sale of enrichment and reprocessing facilities pending determination of the kind of international regime which could assure Brazil of its nuclear fuel requirements.

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—We know from London and Bonn that the Germans anticipate high-level bilateral discussions on Brazil. They are worried about the impact of French reconsideration of the Pakistani contract and are anxious to minimize confrontation with the new Administration. [less than 1 line not declassified] intelligence indicates that they have confided their concerns to the Brazilians about the implications of confrontation for the U.S. security commitment to the FRG. Following the November 26 article along similar lines in Die Zeit which we reported to you, the chief of the Foreign Office’s Science and Technology Division expressed concern to our people in Bonn about high-level confrontation and suggested that we explore “flexibility” in implementation rather than cancellation of the nuclear accord. I understand that this message has been confirmed in private conversations with visiting Americans by FRG officials in the foreign and technology ministries and Chancellor’s office.

—It should be underlined that these indications are not directly attributable to Geisel and Schmidt, who would be personally responsible for any shift in these nuclear projects. While we would expect their first inclination to be to insist on fulfilling their commitments, both their interest in good relations with us and the specific factors noted below might well make them amenable to some form of compromise.

—Geisel and Schmidt’s first economic priority is to ensure enriched uranium supply for the first four nuclear power reactors to be constructed in Brazil. Given the uncertainty of German Becker nozzle enrichment technology, Brazil and the FRG recognize that they may have to turn to U.S. or European enrichment sources for the necessary reactor fuel. An offer of guaranteed reactor fuel could therefore act as an attractive incentive for locating the Brazilian enrichment facility in the FRG or, at least, increasing FRG involvement in a Brazil-based but binational facility. Such an offer could prove commercially attractive to the two parties, open the possibility of French fuel services through Eurodif (in addition to U.S. and Urenco services), and would not require cancelling the FRG enrichment commitment to Brazil.

—While the enrichment project is more time-urgent than FRG reprocessing assistance, and apparently of greater concern to the French, Brazilian reprocessing is both less safeguardable and more susceptible to deferral. Therefore, even if we make relatively little headway on enrichment, we might still be able to secure indefinite deferral of reprocessing along the Iranian lines you will be exploring with the French. This will be important because there is no provision for enduring FRG participation in the initial, pilot reprocessing plant, although our first preference remains avoidance of both enrichment or reprocessing plants in Brazil because of the risk of abrogation of safeguards agree[Page 928]ments. (In the event of abrogation, the enrichment facility could prove the more immediate proliferation threat.)

—If the incentive for deferring or reshaping sensitive Brazilian nuclear projects is assured reactor fuel supply, the penalty for impasse could be U.S., French and British/Dutch refusal to provide enriched uranium capacity through American, Eurodif and Urenco sources. In addition, Bonn and Brasilia would have to calculate that the Symington Amendment and possibly additional punitive legislation could be triggered by sensitive nuclear transfers.

—Finally, we continue to receive intelligence of Argentine and Brazilian military interest in a nuclear weapons option, including GOA efforts to acquire a heavy water production plant and to proceed with national reprocessing of its own, undoubtedly inspired by Brazilian plans. We can use this disturbing intelligence to maximize FRG restraint, in the context of an overall effort to forestall nuclear proliferation in Latin America with its immediate implications for U.S. security.

Suggested Approach

I will not take any action on the Brazilian front pending your return from Europe. However, I continue to feel that we should explore possibilities for an indefinite moratorium on enrichment and reprocessing facilities to avoid the political “fall out” from unilateral U.S. action which is almost certain in the next Administration—either through executive or legislative action.

When you see Genscher in Brussels, I believe it will be important for him to understand that we are sharing with both Brazil and the FRG our view of the need to arrive at a durable and reassuring compromise without publicity, and that we should plan on discussing ways of arriving at this result without impairing our bilateral relationships. Proposed talking points along these lines are attached.

The initial approach is designed to give you maximum flexibility in deciding on next steps following your key meeting with de Guiringaud. It creates an opening for German suggestions at the highest level, while hedging against distorted reports reaching Bonn from Brazil. (We should bear in mind, in this connection, the good communications the Brazilians have with both the Germans and Pakistanis.)

If Genscher wishes to pursue concrete possibilities and you do not believe that it will impair our leverage with the French, you might float the possibility of deferring sensitive nuclear transfers while the FRG and Brazil discuss fuel assurance alternatives with us. In any event, we will be able to better determine on the basis of these discussions whether and how to engage on the substantive formulas outlined above.

Win Lord and Hal Sonnenfeldt concur in this memorandum.

  1. Summary: Robinson briefed Kissinger on FRG-Brazil nuclear issues.

    Source: National Archives, RG 59, Policy Planning Council, Policy Planning Staff, Director’s Files (Winston Lord), 1969–1977, Entry 5027, Box 367, WL Sensitive/Non-China 12/76. Top Secret; Nodis. Drafted by Jan Kalicki in S/P. Attached but not published are undated proposed talking points.