102. Memorandum From Secretary of State Vance to President Carter1
SUBJECT
- Newsom Mission to Libya
Summary
At your request, David Newsom visited Libya on June 16–18 to discuss relations with the U.S. and Libyan reaction to the Boeing turndown. Newsom met with the number two official, Major Jallud, and with the Foreign Minister.2 Qadhafi was unavailable, apparently because of his mother’s death. Newsom found the Libyans willing to talk, but firmly opposed to our efforts in the Middle East, unwilling to accept any linkage between what we do bilaterally and their wider policies, and angered by our decision not to supply 747 and C130 aircraft. You will recall that we stopped the 747s after the Libyans used 727s in their operations in Uganda. Following is a summary of Newsom’s conclusions on possible retaliation against us by Libya and next steps in our relations.
Setting
Action against U.S. interests in Libya is clearly possible but is not a foregone conclusion. Newsom’s reception in Tripoli indicates that Libya wants to maintain ties with the U.S., probably to avoid an appearance of dependence on the Soviets and a consequent loss of credibility with non-aligned countries. For this reason, Qadhafi is also courting the Europeans. He received Foreign Minister Genscher June 18–20 and hopes to visit Bonn, Rome, Paris and London during July. Fear of attack by Egypt is another restraining factor, and Jallud specifically raised the issue of U.S. arms supply to Sadat. Newsom said it was only prudent for Egypt to look to its defenses. He told Jallud we were not encouraging any Egyptian moves against Libya and similarly cautioned against any Libyan moves against Egypt. On the other hand, the Libyans have noted that our policy on commercial exports is tougher on them than on Iraq and other rejectionist states. The others, however, are not known to have used commercial aircraft for military operations [Page 259] as in Uganda. Finally, Libyan reaction to the 747 decision will be affected by a sense of inferiority which Newsom noted in repeated references by Jallud and others to being the underdog and “punished” by U.S. policy.
Possible Libyan Actions
Direct U.S. interests in Libya consist of 2,500 Americans (principally oil field personnel), oil imports of 700,000 bpd (10% of our imported oil), and investments with a current replacement value of $2.5 billion. If Libya decides to retaliate, a total embargo on oil is probably not feasible unless they cut back production which Qadhafi has thus far been reluctant to do. (Tunisian Prime Minister Nouira confirmed this assessment to Newsom).3 More likely, Libya would interrupt present marketing arrangements with the U.S., placing more oil on the spot market and seeking new contracts with Europe. We know that Qadhafi broached the possibility of expanded oil markets in Germany with Genscher this week. Other gestures, not to be excluded, given the emotional element in Libyan policy, include severing diplomatic relations, offering naval facilities to the Soviets, or nationalizing less productive U.S. petroleum-related investments. We will in the next month be sending an analyst to Libya to develop further what Libya’s options and general policies may be.
Next Steps
Newsom promised the Libyans he would report to you on his conversations and provide a further response to them after the Asian Summit meetings. The Libyans may also defer possible action until after the Muslim month of Ramadan beginning July 25. Qadhafi has no major speeches scheduled until the Tenth Anniversary of the Libyan Revolution on September 1. On my return from Asia, I will propose to Foreign Minister Turayki that we meet for further discussion while he is at the General Assembly in September.4 We do, of course, still have the option of releasing the 747s, but do not recommend it in the present circumstances. We are informing Boeing that we will let the licenses expire and do not intend to reconsider. We have asked Commerce to review all four-wheel drive vehicles on a case-by-case basis and will carefully review pending orders for jeeps without taking immediate decisions. We hope by these actions to buy some time before Libya takes a decision.
[Page 260]Recommendation
That you approve the next steps proposed above.5
- Source: Carter Library, National Security Affairs, Brzezinski Material, Country File, Box 48, Libya: 1/77–1/81. Secret; Nodis. Sent to Carter under a July 2 covering memorandum from Brzezinski, who recommended that Carter approve the recommendations.↩
- See Document 101.↩
- See Document 203.↩
- See Document 106.↩
- Carter checked the Approve option and initialed beneath the options.↩