336. Memorandum of Conversation1
- Financial Assistance to Jamaica
- U.S. Industrial Participation in Trinidadian Development
- Proposed LNG Discussions
- Caribbean Mini-State Problem
- Caribbean Integration
- Civil Aviation
- Human Rights
- OAS Membership and Belize
- Southern Africa
Trinidad and Tobago
- Prime Minister Dr. Eric Williams
- Minister Overand Padmore, Minister in the Ministry of Finance, and Acting Foreign Minister
- Minister George Chambers, Minister of Industry and Commerce, and Minister of Agriculture
- Mr. Lennox Ballah, Permanent Secretary, Foreign Ministry
- Mr. Frank Barsotti, Permanent Secretary, Ministry of Finance
- Ambassador Victor McIntyre, Ambassador to the U.S.A. and the OAS
- The Secretary of State
- Under Secretary Philip Habib
- Mr. Robert Rich, Charge d’Affaires a.i. in Trinidad and Tobago
- Assistant Secretary Terence Todman
The Prime Minister welcomed the Secretary to Trinidad and the Secretary in turn conveyed President Carter’s personal greetings to the Prime Minister.
Financial Assistance to Jamaica
Prime Minister Williams opened the discussion by directly plunging into the financial plight of Jamaica. He said that Prime Minister Manley had sought additional assistance from Trinidad and also Trinidad’s cooperation in forming a consortium of governments to come to Jamaican aid. Trinidad had earlier provided loans of considerable magnitude (U.S. Embassy estimate: U.S. $110 million) and was now considering up to $50 million in additional support in the form of export credits.
Williams emphasized, however, that the Government of Trinidad and Tobago was in no position alone to bail out Jamaica, and the Jamaican requirements appeared to be far in excess of Trinidadian capacities. There was also concern at the structural problems, and whether assistance would be wasted. No such program of help to Jamaica could be successful without U.S. assistance and support, particularly in view of the great weight which the United States carried in the international financial institutions. The Prime Minister sought the Secretary’s views and assessment.
In response, the Secretary acknowledged the acuteness of the Jamaican situation, particularly in the next two quarters of this year. Beyond this short-term question of balance of payments, however, lay the mid-term problems which were partially structural, and without a solution to which the short-term aid would merely be a band-aid which would not stop the hemorrhaging. For the mid-term, Jamaican agreement with the IMF was essential. IMF discussions directed at a $200 million stabilization program had been far advanced until recently, when the new Jamaican budget had been revealed to be excessive to anything considered by the IMF to be tolerable.2 The U.S. has urged the IMF to continue the dialogue, however, and we understand that a further attempt is underway to come to an understanding.
In response to questions by the Trinidadian side, the Secretary affirmed that an agreement with the IMF was indeed a condition precedent for U.S. assistance. Both Prime Minister Williams and Minister Chambers subsequently expressed their satisfaction with insistence that Jamaican agreement be reached with the IMF.
With regard to short-term U.S. assistance, the Secretary indicated that the U.S. was thinking of the consortium approach, since we could [Page 825] certainly not provide all the funds which Jamaica required. In the short run we might be able to provide approximately $50 million, a large part of which would be food aid under PL–480. This will require a supplemental appropriation from the Congress, however, and therefore it is impossible to give a firm commitment at this stage. Venezuela and Mexico have expressed some interest in helping, and the U.S. assumes that Trinidad and Tobago would also be a part of the consortium. Canada may roll over a $25 million loan coming due soon. Only token funds are likely to be available from the UK. When queried regarding possible German participation, the Secretary stated that he would be prepared to solicit German participation in a consortium after Jamaica had reached agreement with the IMF.3
The Prime Minister expressed considerable satisfaction with this approach, and stressed again that he felt Trinidad and Tobago should not be in the lead, both because the government’s financial assistance resources were limited, and because others such as the USG and the IMF were in a better position to require the Jamaican adjustments which would be necessary to make the financial assistance worthwhile.
The Prime Minister inquired of the Secretary whether the United States was also prepared to assist with a financial rescue package for Guyana, which was also importuning Trinidad for aid. The Secretary responded that he was not yet as fully familiar with the situation in Guyana, but that Under Secretary Habib would be proceeding to Georgetown after the current discussions in Port of Spain and would then report directly to him on his evaluation of the problems there.4
U.S. Industrial Participation in Trinidadian Development
The Prime Minister cited the wide American industrial participation in the Trinidadian petroleum industry and in the industrialization program being made possible by the available supplies of petroleum and natural gas. He noted the large Texaco and Amoco investments, as well as new joint ventures with the Trinidad Government for oil exploration which had been entered into by Occidental, Tenneco and others.
Dr. Williams stated that such cooperation was welcomed, although the government sought to maximize the training and developmental aspects of all such investments. In the future, firms would all be expected to contribute significantly to research, education, and development. He foresaw the inevitable breakup of the University of the West Indies (UWI) and the need to expand the Trinidadian campus to [Page 826] upgrade the engineering school and establish a full medical and dental faculty. Private enterprise would play a dynamic role in this.
Proposed LNG Discussions
The Prime Minister reported the recent discovery of significant new natural gas reserves between Trinidad and Tobago by Occidental Petroleum, adding to the already large reserves found in the southeast by Amoco. The Cabinet had therefore decided to resurrect earlier proposals for an LNG project now that the size of the reserves were clearly sufficient to support both Trinidad’s own industrialization needs (steel, aluminum, fertilizer, and petrochemicals) as well as LNG exports. Multiple proposals were presently before the Government, including a proposal from Occidental for an exclusive LNG relationship.5
The Trinidadian experience with U.S. industry was good. An American firm is supplying the technology for the Iron and Steel mill, and Morgan Bank is taking the lead in putting together the $150 million financial package. Delays have been experienced, however, in arranging the ExIm portion of the financing, designed to cover 85% of the US-origin equipment.
The Prime Minister and Minister Chambers proposed that the U.S. and Trinidad and Tobago consider some private bilateral discussions directed at the entire LNG arrangement. As this proposal was explored at some length throughout the evening, it was not entirely clear what the parameters of the dialogue desired by the Prime Minister were. Included definitely were the desire for a reliable and assured market, as well as facilitation of ExIm Bank assistance with the financial package. The Ministers stated that they wished to develop their proposals in more detail and would transmit them to the Secretary through diplomatic channels.
The Prime Minister indicated satisfaction that the United States was exploring normalization of relations with Cuba, and noted that he had caught hell a few years ago for advocating such rapprochement in the region. However, he hoped that American fascination with Cuba would not be at the expense of the more conservative governments in the area. Subsequently, he expressed strongly his personal distaste for Castro and his Government.[Page 827]
The Secretary asked the Prime Minister’s evaluation and recommendations regarding the proliferation of unviable mini-states in the Caribbean and also regarding the longer-term economic problems of the area. The Prime Minister commented that the problems were economic, political, and human. Chaos and radical solutions were the alternative to positive developments.
Minister Chambers noted that the small islands felt that, as independent entities, they would have greater access to the international financial institutions for development capital. Regional assistance efforts thus far had not been very effective. Proposals for a separate common market of the LDC’s had been stillborn. The Caribbean Investment Corporation, originally funded by Trinidad and Jamaica to help the smaller islands, had languished because the infrastructure to make use of the financing simply did not exist in most instances.
In a unique effort, Trinidad had established a counterpart fund to help the LDC’s provide that portion of CDB project financing which the Bank would not put up. No other nation had put any money into the counterpart fund, however.
Minister Padmore cited the multiplying claims on the Government of Trinidad and Tobago for assistance to the small territories. The Prime Minister noted that in this respect mini-state independence would not change things for Trinidad, which was already beseeched for funds. He expressed frustration, however, at the readiness of the mini-states to beg for Trinidad tax payer money on the one hand and immediately turn around and take actions which were inimical to regional integration or sound fiscal policy (such as abolishing local income taxes).
Dr. Williams cited civil aviation as a particularly thorny problem in the Caribbean which had been exacerbated by rivalries and lack of common purpose. While Trinidad had financially bailed out the carrier serving the smaller islands (LIAT), had guaranteed loans for inter-island shipping, and had developed the only viable regional airline (BWIA),6 others pursued conflicting policies while asking for Trinidadian loans with the other hand. Barbados, for example, was trying to gain aviation rights for a “national airline” which was essentially Canadian and European owned and sponsored. The U.S. CAB had flatly turned down the airline’s application (in 1976), but now Canada was proposing to accept the line and had only given Trinidad until June 30 to show cause why it should not grant routes to this rival—[Page 828]all at the expense of BWIA and general airline route viability in the area. The eventual prospect was for each mini-state seeking sovereign airline bilaterals for a “national” carrier. This was a source of considerable frustration for Trinidad and Tobago.
Several times in the discussion, the Trinidadian participants indicated that the Caribbean integration movement as represented currently by CARICOM was in trouble. The Prime Minister stated that Trinidad was the only CARICOM member which still adhered to all aspects of the common market, while on all sides others were imposing exceptions and trade restraints. Minister Chambers commented during dinner that the highly respected Secretary General of CARICOM, Alister McIntyre, was resigning to take up a position with the UNDP.7 There was no candidate of equal stature in sight who would undertake the job at this time with the Community in such disarray. With the expanding problems within CARICOM, it was even more important that Trinidad look to U.S. markets to keep her factories busy and her work force occupied.
The Secretary reported on the human rights discussions at the OAS General Assembly in Grenada and in his bilateral conversations with hemisphere foreign ministers there. He assured the Prime Minister that this concern was not a transient one for the U.S. Government. Dr. Williams expressed his full support and agreement.
OAS Membership and Belize
The Prime Minister expressed satisfaction at U.S. support for changing Article 8 of the OAS charter, which inhibits OAS membership for Guyana and Belize8. A brief discussion of the Belize–Guatemala situation followed, and the Secretary stated that he felt either binding mediation or arbitration might provide a mechanism for a peaceful solution. Perhaps Guatemalan-UK meetings in Washington in July would indicate the direction the dispute would take. The Prime Minister suggested that, if either the UK or the U.S. would guarantee Belize’s borders, then there would be no trouble. He advocated that all of the old boundary claims be abandoned throughout the world (excepting [Page 829] 20th century problems in Europe) and that existing state boundaries be accepted.
The Secretary described current efforts in collaboration with the United Kingdom to reach a solution in Rhodesia, and the somewhat improved outlook for a Namibian arrangement acceptable to the international community as a result of the Vice President’s talks with South African Prime Minister Vorster. Dr. Williams was pessimistic that any British Government would really bite the bullet on Rhodesia, however, since he had seen several successive governments in London make promises, yet fail to come to grips with the issue. Under Secretary Habib commented in turn that David Owen might surprise the Prime Minister, since Owen was indeed working hard to bring about a solution.
- Source: National Archives, RG 59, Central Foreign Policy File, P770122–0262. Confidential; Limited Distribution. Drafted by Rich; approved by Twaddell. The meeting was held in the Prime Minister’s residence. Vance visited Port of Spain June 16–17 after the OAS General Assembly session in Grenada.↩
- See Documents 179 and 180.↩
- For more information about multilateral and U.S. bilateral economic assistance to Jamaica, see Documents 179 and 180.↩
- Habib visited Georgetown June 19–21.↩
- On October 21, the Government of Trinidad and Tobago signed an agreement with Tenneco and People’s Gas to build an LNG plant. (Telegram 3185 from Port of Spain, October 25; National Archives, RG 59, Central Foreign Policy File, D770392–0727)↩
- Leeward Islands Air Transport and British West Indies Airlines.↩
- McIntyre resigned in August. A successor, Kurleigh King of Barbados, was not elected until November 1978.↩
- Article 8 of the OAS Charter barred nations that had boundary disputes with OAS member states from joining. In his June 14 address to the OAS General Assembly, Vance proposed eliminating the article. For the text of his address, see the Department of State Bulletin, July 18, 1977, pp. 69–72.↩