Foreign Relations of the United States, 1977–1980, Volume XXII, Southeast Asia and the Pacific

314. Memorandum From Michael Armacost of the National Security Council Staff to the President’s Assistant for National Security Affairs (Brzezinski)¹

Washington, March 21, 1978

SUBJECT

• Philippine Base Negotiations

We got our response to our compensation offer from Marcos today.² In a nutshell they are not “buying” our package yet; signalled their intent to make a counter proposal; and took a fairly hard line on several key base issues. They presented us with an aide memoire which requested that we give up the Subic waters (the Navy is adamantly opposed to this), the watershed around Subic (some compromise can probably be worked out on this), Wallace Air Station and the John Hay R&R facility (something can presumably be worked out here). In addition, they sought greater authority for the Philippine Base Commander (this amounts to some regression from the January 9–10 understandings)³ and promised a Philippine counterproposal to the “unsatisfactory” U.S. compensation offer sometime after the April 7 interim legislative elections. Finally, they raised anew the naughty [Knotty] criminal jurisdiction issue which we thought had been laid to rest.

Marcos described the aide memoire as a response and not a rejection. In the meeting he adopted a somewhat aloof stance, allowing his Defense and Foreign Ministers to do most of the talking.⁴ Newsom will seek a private meeting with Marcos to explore his own views. What we got, I suspect, is (1) a Marcos ploy to let Romulo and Enrile blow off some steam; (2) a typical Philippine bargaining maneuver designed to extract further concessions formulation; (3) a genuine expression of some disappointment at compensation levels that are $100 million below what Kissinger offered on the military assistance side; and (4) Marcos’ method of holding off any further movement on this issue until after the elections in order that he not be accused of entertaining seriously during the pre-election period a formula for agreement on the bases that would be difficult to portray in Manila as a great political triumph.

The Inter-agency Group will meet on Thursday⁵ to discuss next steps. We still have some negotiating flexibility. Newsom withheld $20 million in MAP and $30 million FMS from the levels authorized by the PRC and the services have not gotten to their bottom line on base issues such as Subic waters, Subic watershed, John Hay, and Wallace Air Station. I will keep you advised of the judgments we reach about next steps in the negotiations. One question which we must address fairly soon is whether to bring Dave Newsom out on schedule. At present he is planning to return to Washington on March 27. If the Vice President’s trip remains on schedule, I believe he should stay in Manila through April 15 to handle both the next steps in the base talks and to place the groundwork for a successful visit.

1. Source: Carter Library, National Security Council, Institutional Files, 1977–1981, Box 35, PRM 14 [1]. Secret. Sent for information. Armacost did not initial the memorandum.
2. In telegram 4590 from Manila, March 21, the Embassy transmitted the text of Marcos’s aide-mémoire responding to the U.S. offer. (National Archives, RG 59, Central Foreign Policy File, D780124–0297)
3. A summary of the January 9–10 negotiations, headed on the U.S. side by Holbrooke, is in telegram 483 from Manila, January 10. (National Archives, RG 59, Central Foreign Policy File, D780014–0586)
4. Telegram 4589 from Manila, March 21, transmitted an account of the meeting. (National Archives, RG 59, Central Foreign Policy File, D780124–0308)
5. March 23.