198. Memorandum From Secretary of State Shultz to President Reagan1

SUBJECT

  • US-USSR Grain Agreement

As Walt Stoessel informed you in his memorandum of July 21,2 the measures announced by General Jaruzelski on July 21 failed, to any significant degree, to meet the three Allied conditions for removing sanctions on Poland. We will be working closely with our Allies during the next few days to develop a coordinated response to the Polish actions. Thus far, Allied reactions to Jaruzelski’s speech appear generally consistent with our own, and there appears to be a good prospect for maintaining unity on this issue.

In view of your concern for the Polish situation and your desire to avoid a dispute with the Allies on our response to Jaruzelski’s speech, I want to call to your attention the serious problems which would arise should you make a decision on the US-USSR grain agreement, as I understand you currently intend, early next week. As you know, I believe that from the perspective of foreign policy, our interests would be best served by a decision to extend again the existing agreement at current levels. However, in raising this issue, I am not questioning the basic decision; only its timing. Our first meeting with the Allies in NATO to compare our assessments of developments in Poland is scheduled for July 26. By the end of that week, we hope to have completed our consultations.

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As you know from your meetings last month in Europe, the Allies claim to see a contradiction between our continuing grain sales and our sanctions on industrial items which impact negatively on European sales to the USSR. Although the European contention can be refuted, it is a fact which we must take into account in our relations with the Allies. There is a risk that a decision on the grain agreement prior to the completion of our consultations with the Allies could result in Allied decisions to take unilateral steps on Poland. Some sanctions might be lifted, while pressure could develop to reschedule the Polish debt. We would in all likelihood refuse to reschedule, which would create yet another painful public dispute between us, the only beneficiaries of which would be Jaruzelski and the Soviets.

For these reasons, I urge that you postpone a decision on the grain agreement until approximately August 1, by which time we should have completed our consultations with the Allies, thus avoiding risks to Allied unity essential for effective pressure on Poland. I also believe that we should make every effort, when you make your decision, to give the Allies advance notification and explanation.3

  1. Source: Reagan Library, Executive Secretariat, NSC: Country File, USSR (07/21/1982–07/24/1982). Secret.
  2. Scheduled for publication in Foreign Relations, 1981–1988, vol. IX, Poland, 1982–1987.
  3. On July 30, Reagan announced that he was authorizing U.S. officials to seek a one-year extension of the existing grain agreement with the Soviet Union and ruling out the possibility of a new long-term grain agreement in the near term. (Public Papers: Reagan, 1982, vol. II, p. 994)