70. Telegram From the Embassy in Oman to the Department of State1

890. For the Secretary from Bartholomew. Pass White House for Brzezinski and Aaron. Pass DOD for Komer, McGiffert and Jones. Subject: Oman Access.

1. (S-entire text).

2. Talks Wednesday and Thursday2 were very positive in tone and substance and we have made considerable progress on all elements of our approach. President’s letter3 (I gave Zawawi copy privately) and our construction and assistance memoranda4 strongly impressed Omanis.

(A) We already have agreement we sought on construction proposals (without having to commit to Musandam port)5 subject to further technical discussions.

(B) Omanis agreed to work out draft access agreement (which they had earlier rejected) and extensive discussion has substantially narrowed issues, though problems remain.

(C) Omanis have accepted FMS levels for FY 80 and 81, but want $25 million per year commitment extended to FY 82 and FY 83 (to match construction period) and a commitment to IMET program.

(D) On economic assistance, Omanis have dropped push for grant aid now (but asserted “Oman will keep trying” in future) and reacted positively to joint commission, but are insisting that “core issue” is US commitment to specific level of “concessionary” financing for FY 1981–83, saying joint commission is useless without it.

(E) Omanis want all elements—construction; assistance; access—agreed at same time and linked through single covering agreement or note.

3. Believe we have good chance of resolving all of foregoing and leaving Oman with ad referendum agreement on all elements, or with only few questions of detail and form remaining. We are in any event solidly on track with Omanis. Major issues which could block overall agreement at this point are commitment on financing (para 2D) and [Page 241] Omani desire for single agreement (para 2E). I see al-Alawi at 1900 this evening and leave for Salalah 0830 Saturday6 for meeting with Sultan and Zawawi to present President’s letter (with a second possible meeting in Muscat Saturday evening) and plan wrap-up session with Zawawi on Sunday. Some highlights and how I plan to proceed follow below. Any guidance will need to reach me by 0700 Saturday.

4. On construction (para 2A) Omanis expressed concern about size and visibility of Seeb construction. They did not seek to alter list of projects, but asked that we emphasize Masirah and Thumrait. (Point was made on exercises as well.) They made special point that follow on technical discussions were important as we proceed and that their general agreement was subject to this continuing process, as stated in our memorandum. They want to know if we will pay share of O and M7 costs for common use facilities like runways, and US role in funding manpower costs of increased operations, particularly at unusual hours. I am told we can agree to do both as part of routine operations and do not need to include it in agreement. Please advise.

5. On access agreement (para 2B) Omanis (starting with Zawawi) balked hard on notion that they would only be “consulted” on exercises and major build-up and insisted on Omani agreement. We accepted point and are working formula (e.g. “consultations and joint decisions”). We have substantial agreement on major issues of use, duration, personnel status, visas, simplified clearances, and construction but some problems remain (e.g., landing fees because of Omani law and commercial control of airports).

6. I recommend I be authorized to extend $25 million FMS credit commitment to FY 82 and FY 83 (para 2C). Though Omanis could still press for more when time comes, fact they pressed for this level and we acceded could be used to hold to that level in effect making it ceiling as well as floor for future. On IMET, I think there are problems in funding, but al-Ghazali made special point of this relating it to Omanization which is obviously a major benefit he sees in American connection. Please advise.

7. On specific financing commitment (para 2E) Omanis had Senior Economic Advisor Sharif Lutfy present to make pitch. After long wrangle, Omanis agreed to set issue aside for further consideration to permit us to get on to other questions. But they flatly stated this was “core issue” without which joint commission was useless leaving economic question unresolved. Since they want all elements agreed at once, if they hold firm this could stymie final agreement on other fronts. I plan [Page 242] another hard run at it on Saturday to see if they flinch at this prospect. If they don’t, I’ll play fallback, starting with less than whole, to clinch deal and drive them off other issues that might remain. Even fallback may not have easy going because they have repeatedly said that they do not consider Ex-Im credit terms sufficiently attractive (and that they have better alternatives) and want “real” concessionary loans.

8. On form of agreement, Omanis would like single exchange of notes citing broad bilateral framework of cooperation and covering 3 agreed annexes—construction, assistance, access (based on our memoranda). They want to link the elements, give them equal status as commitments/agreements, and demonstrate broad relationship so focus is not just on access. As I understand it, this would create problems since construction and assistance proposals would become formal bilateral agreements containing out year budget commitments (which would have to be sent to Congress which looks askance at this). I intend to sound out al-Alawi tonight on following alternative: a) there would be no single umbrella agreement, but 3 separate papers: a construction aide-memoire; an economic and security assistance aide-memoire; the access note and implementing agreement; b) all three would begin with similar language citing our discussion on a bilateral framework for cooperation on economic development, defense capability, and joint development and use of Omani facilities. This would relate all three, but aides memoires would not be agreements which must be transmitted in Congress and would not prejudice question of congressional appropriations as they reflect only executive decision to seek funds.

9. Omanis remain very allergic to public discussion of these issues and of negotiations and publicity could prejudice outcome.

  1. Source: National Archives, RG 59, Central Foreign Policy File, P880026–0333. Secret; Niact Immediate; Nodis.
  2. April 2 and 3.
  3. See footnote 2, Document 66.
  4. See Document 72.
  5. Reference is to the Port of Khasab, in the Musandam region of Oman, which sits on the Strait of Hormuz.
  6. April 5.
  7. Operation and Maintenance.