Foreign Relations, 1977–1980, Volume XXIII, Mexico, Cuba, and the Caribbean

247. Memorandum of Conversation¹

Washington, September 9, 1977, 2:45 p.m.

SUBJECT

• Bilateral Meeting between the President and Prime Minister Pindling

PARTICIPANTS

• The Bahamas

  • Lynden O. Pindling, Prime Minister
  • Paul L. Adderley, Minister of External Affairs
  • Livingston B. Johnson, Ambassador to U.S. and U.N.

• United States

  • The President
  • Secretary Vance
  • Assistant Secretary Todman
  • Mr. David Aaron, NSC
  • Mr. Robert Pastor, NSC
  • Mr. William Schwartz, Ambassador-designate to The Bahamas
  • Mr. Rush W. Taylor, Jr., Charge d’Affaires, Nassau

The President opened the meeting by recalling a visit he had made some years earlier with his wife and daughter to Green Turtle Cay. He expressed warm memories concerning the visit, and his hope that Ambassador-designate Schwartz would soon be “subverted” by the friendliness of the Bahamian people and the Island’s scenic beauty, and that Mr. Schwartz would enjoy The Bahamas as much as he and his family had.

The President continued that it meant a great deal for him to receive the approval and support for the Panama Canal Treaties from his fellow heads of state and chiefs of government in the hemisphere. He realized the personal sacrifice that many of the visiting Chiefs of State had made in order to come to Washington and he was grateful. The President expressed the hope that it had been an enjoyable and profitable experience for the Prime Minister to come to Washington and to get to know some of the other leaders in the hemisphere, and to get acquainted personally with each other.

Prime Minister Pindling congratulated the President on the successful completion of the Treaties and expressed his particular appreciation for having been invited to the signing, as the GCOB was not formally a member of the OAS but nevertheless was part of the western hemisphere. The Prime Minister went on to say that The Bahamas is only in its 4th year of independence and is one of the smallest but certainly one of the most stable governments in the area. He commented that, while he was perhaps being presumptuous, he felt his government in its position on and practice with regard to human rights might equal and even surpass that of the United States. The President thanked the Prime Minister for the Bahamian contribution and support in the field of human rights but noted that there was a long way to go in this area. He hoped that governments whose record left something to be desired would understand that their economic and social welfare would be enhanced should they be more forthcoming in the field of human rights. Prime Minister Pindling noted that the U.S. in the past had not in his opinion fully appreciated that the English-speaking Caribbean shares many common traditions with the United States and has great appreciation for democracy and the rights of man. He stated that the English-speaking region of the Caribbean was, in his opinion, the area in the western hemisphere which had the least problem with human rights and that there was a great reservoir of goodwill in the region for those who share similar views. While some in the region might attack democracy the principles inherent in it and the benefits derived from it were difficult if not impossible to assail. The President commented that a multinational approach on human rights is needed in order to let some of the more oppressive regimes know our feelings and that we are together in our opposition to the violation of those rights.

The President said that he had observed the Prime Minister’s election victory² with pleasure and complimented the Prime Minister not only for having been the father of an independent Bahamas but for having continued to maintain the abiding esteem and affection of the Bahamian people. The Prime Minister stated that his successes were due equally to his colleagues, “an able bunch of fellows.” He stated that although the last five years have not been easy the situation was a good deal better now, and that by and large prospects for the future were good.

The President asked about the economic prospects of the Bahamas. The Prime Minister responded by saying that the Bahamian economy which had been severely hit by the worldwide recession was nevertheless beginning to rebuild. There has been negative or minimal growth for the last three years and “help from friends would speed up their recovery.”

Air Routes. The Prime Minister said tourism was the country’s number one industry and over the years the Bahamian people had built up the necessary expertise to man that industry. The main problem at the moment is the “delivery of bodies to the Bahamas.” The situation was bad this summer and in his view it would be compounded during the winter tourist season, especially on the New York-Nassau air route.

He explained that Pan American Airlines which together with Eastern and Delta had been servicing The Bahamas had suspended service in the spring of 1976 and that he doubted if Pan Am would reinstate its routes. Delta was the only carrier from some New York airports to Nassau. American Airlines had requested to establish a service from New York which The Bahamas had strongly supported, but its petition had been rejected by the CAB. It was his understanding that American had reapplied. In response to the President’s question as to whether The Bahamian Government had spoken to Delta in order to persuade them to increase capacity, the Prime Minister stated that he was sure they had but without success.

The Prime Minister continued by saying that the problem was an immediate one in that extra seats should be made available before mid-December and that American Airlines, were it to get the route, would have to wait 90 days before it can begin flying the run. He also agreed with the President that 2 airlines serving the New York-Nassau run would be preferable to one. He reiterated his doubts that Pan Am would renew the route with which Secretary Vance agreed. The President expressed his sympathy and requested Secretary Vance to look into the matter and to contact both the Chairman of the CAB and the Secretary of Transportation and to tell them he was personally interested in this matter.

Fishing Rights. Prime Minister Pindling noted that his government had recently received a communication from the Embassy in Nassau concerning the negotiation of fishing rights between the two countries. He noted that his government was also anxious “to resume discussion” as legislation had passed in May which was similar to that of the U.S., claiming a 200 mile fisheries and economic zone, particularly as it related to the continental shelf. The President noted that it was important that we conclude an agreement with our close neighbor, The Bahamas, and that we are willing to press ahead with the matter. He expressed the hope that negotiations could be commenced in the near future. In response to the President’s question as to whether similar talks between The Bahamas and Cuba had been completed, the Prime Minister responded that they had requested conversations with the Cubans but that these had not yet begun.

Delineation of Maritime Boundaries. The Prime Minister pointed out that the eventual delineation of maritime boundaries between the two countries—a matter which had been the subject of February discussions³—presented no problems with regard to the “Bay Side”, i.e., the straits of Florida, but there were problems as far as the “ocean side”, between the Bahamas and the eastern seaboard of the United States. In this regard he noted that the GCOB had received a “communication” from the U.S. Embassy in Nassau which his government found rather difficult to accept since the U.S. seemed to be suggesting a different position with The Bahamas than in similar cases with other countries. Responding to the President’s question, he stated that his government had not yet made any formal response to the communication. The President stated that he would be waiting for such a response.⁴

Facilities Agreement. The President then raised the subject of military facilities in The Bahamas which he hoped were of mutual benefit for both governments. The Prime Minister responded that he could not really say that “the benefits were in fact mutual”. The President stated that we remained ready to work out a permanent agreement on the facilities and expressed hope that the rental derived from such an agreement would be of benefit to The Bahamas. The Prime Minister said that the problems of a facilities agreement involved both the basic rental payment as well as whether The Bahamas and the U.S. could agree in principle on direct economic assistance which would help in local industry, agriculture and fisheries, and education and health. The Prime Minister continued that there was no difficulty in agreeing in principle on the duration of a 10 to 15 year arrangement (15 years beginning in 1973 or 10 years beginning in 1978) but he noted that the U.S.’s past reluctance to agree on direct economic assistance had caused a problem. The President explained that base rental was easier for Congress to accept than direct economic assistance tied to securing bases. He expressed the view that Congress might be reluctant to establish a broader economic package for base rentals in The Bahamas particularly since it might offer a precedent for negotiations for bases in Greece, Turkey, Spain, Portugal, and the Philippines. It would, in his opinion, be best to separate the two items in discussing what the best quid pro quo for the bases might be. Secretary Vance agreed with the President who went on to say that while he did not wish to preempt the negotiators who would be primarily responsible for arriving at an agreement, he nevertheless wished to take this opportunity to point out the legal and other difficulties involved. The President repeated that any military base agreement with The Bahamas, our close neighbor and very good friend, would set a precedent which might complicate other base negotiations. In response to the Prime Minister’s question as to whether all forms of economic assistance must be approved by Congress, the President responded that it depended on the type of assistance. No special approval, for instance, was needed on PL 480 assistance but military base rental and bilateral economic assistance would require Congressional approval and the Congress is highly reluctant to equate the two.

The President stated that he had noted with interest the Prime Minister’s reaction to his expression of hope that military facilities in The Bahamas were of mutual benefit. The Prime Minister responded that he could not truthfully say that the bases were of no value whatsoever but at the same time they were only of “minimal” value. Bahamian employment at the bases was limited to the bottom rung of the scale. At the same time he felt that many more jobs existed at the bases for Bahamians higher up the ladder and that these jobs could be performed by Bahamians. The President noted that should this be the case the negotiators should most definitely take it into account and that it should be an integral part of any eventual agreement. The President went on to say that he very much hoped that this employment pattern did not reflect any vestiges of racial discrimination. The Prime Minister responded by saying that any discrimination which might exist was not to his knowledge racially motivated but the fact was that U.S. contractors were allowed to fill the higher paid jobs with Americans, leaving the Bahamians to work only as cooks, maids, and gardeners. The President requested that Secretary Vance look into the matter with the Secretary of Defense and requested that it be rectified now as we begin negotiations in order to promote a better climate for those talks to succeed.

The Prime Minister also noted one other minor problem in that his government had understood that only military personnel at the bases would be exempt from Bahamian customs, but in practice U.S. contract employees were also being exempted. The President noting that he appreciated the Prime Minister’s candor said that these were the sort of subjects which were not often brought to his or Secretary Vance’s attention and requested that the Secretary look into this matter as well.

Section 602 of the Internal Revenue Act of 1976. The Prime Minister noted that along with the Canadians, Mexicans, and Bermudans Section 602 of the Tax Reform Act of 1976 concerning taxable deductions for attending foreign conventions had presented problems for the Bahamians, and expressed the hope that a bill in Congress which would amend the section would be successful.⁵ The President inquired as to the status of the bill and asked Mr. Pastor to look into the matter.

Law of the Sea. The President expressed appreciation for the support which the GCOB had given in the LOS negotiations. He noted that our positions throughout the negotiations had been similar and that we were most appreciative for the work and efforts of the Bahamian Government in this regard.

U.S. Investments in The Bahamas. The President noted that U.S. investors accounted for the largest foreign investment in The Bahamas and asked if there were any problems in this connection. The Prime Minister responded that there were no problems but that it might be useful to investigate the possibility of a more liberal trade policy vis-a-vis Bahamian exports. He noted that the Bahamas principal export was “sun, sand and sea”, i.e., tourism and that anything which the United States might do to assist Bahamian tourism would fall into his definition of liberalizing “trade relations”. He mentioned that another opportunity in addition to extra airline seats and the amendment or repeal of Section 602 of the Tax Reform Act of 1976 would be the passage of another bill which he understood was now pending in Congress. This bill according to the Prime Minister would raise the amount of duty free goods which could be purchased by U.S. tourists from $100 to $300. Assistant Secretary Todman pointed out that the Virgin Islands might be opposed to such legislation and the Prime Minister stated that it was his understanding that customs free purchases in the Virgin Islands would be considerably higher which should cause the Virgin Islanders no problem.

Ambassador-designate Schwartz. The President noted in closing that Mr. Schwartz was a long-time friend with whom he and his family had a special relationship. He pointed out that the Ambassador-designate was a “good, sound, tough businessman” with considerable experience in the real estate field particularly in Florida. He stated that it would be to his own and Prime Minister Pindling’s mutual advantage if there were a friendly exchange of communications and open dialogue between the Prime Minister and the Ambassador. He hoped that through this contact we could not only maintain but enhance the trust and friendship which characterized the relations between the Bahamians and the U.S. The Prime Minister stated that he intended to make every use of the new Ambassador and very much hoped that he would stay long enough to get to know The Bahamas as Mr. Schwartz would be the fourth American Ambassador in Nassau in as many years.

In summing up, the President stated that we would look into the matter of air routes and the other matters raised, and stated that we look forward to hearing from the Bahamians on the matter of fisheries, facilities, and boundary delineation.

1. Source: Carter Library, National Security Affairs, Staff Material, North/South, Pastor, Country, Box 2, Pastor, Country, Bahamas, 6/77–12/78. Confidential. Drafted by Taylor. The meeting was held in the White House.
2. On July 19, Prime Minister Pindling’s Progressive Labor Party won a landslide victory in national elections.
3. Telegram 273 from Nassau, February 25, reported on the February 24–25 discussions on maritime boundaries. (National Archives, RG 59, Central Foreign Policy File, D770066–1257)
4. Reference is to a diplomatic note transmitted in telegram 192793 to Nassau, August 15. (National Archives, RG 59, Central Foreign Policy File, D770294–0068) The Bahamian Government did not reply until December 16. (Telegram 2012 from Nassau, December 19; National Archives, RG 59, Central Foreign Policy File, D770472–0940)
5. Section 602 of the Tax Reform Act of 1976 discussed deductions related to foreign travel. S.627, introduced in the Senate on February 4, proposed to repeal the amendments made by Section 602 and remove annual limitations on business deductions for conventions in foreign countries. The bill was referred to the Senate Finance Committee. A similar bill, S.749, was introduced on March 26, 1979.