Foreign Relations of the United States, 1981–1988, Volume XXIV, North Africa

118. Action Memorandum From the Assistant Secretary of State for Near Eastern and South Asian Affairs (Veliotes) to Secretary of State Shultz¹

Washington, October 26, 1982

SUBJECT

• C–130’s for Algeria

ISSUE FOR DECISION

We must decide whether to approve Algerian purchase of eight Lockheed C–130s. This issue has raised the more basic question of how we best conduct our relations with Algeria to generate greater Algerian consideration of US interests.

ESSENTIAL FACTORS

1. We approved the sale of six C–130s to Algeria on August 13, 1981. These planes have been delivered. Algeria then contracted with Lockheed to buy eight more. We have no commitment to Lockheed to license them for export, although Lockheed had apparently assumed we would. The C–130 contract is worth $146 million. The GOA has expressed interest in further Lockheed purchases worth as much as $1 billion and up to 12 Boeing 737, 747, 757 and 767 aircraft. A favorable decision on the C–130 aircraft could therefore convey a positive signal to the Algerians. A negative decision at this stage of the sale would contribute to an even stronger negative message.

2. The Department is agreed that current conditions in Algeria justify an effort on our part to encourage greater consideration of US interests by the Government of Algeria. Opinion is divided, however, on our overall strategy toward Algeria and this sale. Ambassador Walters and S/P believe that though the record is mixed, the overall trend of Algerian behavior continues to oppose US interests. They cite:

— Algeria’s continued collaboration with Libya in support of the Polisario,

— its shipment of arms to Nicaragua,

— its anti-US record at the UN,

— its continued harsh criticism of the US in its government controlled press.

The first sale of C–130s did not alter this fundamental pattern of hostility, and another is unlikely to do so. Though we should not expect one or two deals to work miracles, how can we hope to profit from the overall relationship if we passively accept losses on each transaction? To avoid this, we should use each transaction to impress upon the Algerians that further transactions will require Algeria to demonstrate sensitivity to overall US interests in specific ways.

Ambassador Walters and S/P believe that before we approve the further sale of C–130s, the Algerians should show by an unambiguous gesture that their desire for improved relations reflects a genuine potential for change of policies adverse to US interests. (An appropriate and feasible gesture might be Algerian recognition of the Habre government in Chad or some similar adjustment in Algerian policy. There have been recent disturbing though unsubstantiated reports of Algerian material support for anti-Habre forces; the long range of the C–130s could contribute significantly to such an effort.) Once such a gesture is made, we would approve the sale, making clear at the same time that continued improvements in our bilateral relations will, on our side, reflect Algerian willingness to demonstrate sensitivity to US interests in specific areas of concern. Examples would be: a) moderate their military support for the Polisario to prevent escalations of the Western Sahara war; b) seriously pursue a political settlement of the Western Sahara conflict through direct discussions with Morocco; c) build a record of greater US-Algerian cooperation at the UN; d) encourage a more objective tone in official press coverage of the US.

3. NEA and PM believe that the sale should be approved, as a contribution to our efforts to influence aspects of Algerian foreign policy. They believe that:

— denial of this sale would not provide leverage adequate to induce the GOA to abandon major objectionable elements of its foreign policy;

— substitution of Western for Soviet equipment supports non-alignment and the nationalism which motivates Algerian policy;

— the sale would not be incrementally destabilizing insofar as the Polisario and Morocco are concerned (Algeria uses other means to support the Polisario and CIA believes it wishes to substitute C–130s for its aging Antonov 12s);

— it would serve US commercial interests;

— a soft energy market and Algeria’s increased reliance on gas earnings work in our favor;

— we already have a stake in extant positive facets of Algeria’s foreign policy (Gulf War Mediation; Iranian claims settlements; adherence to “moderate” Fez Arab League Summit approach to Middle East issues, including PLO withdrawal from Beirut; responsiveness to US request for assistance in defusing the Israeli credentials issue in Nairobi and New York);

— it is an error to relate such decisions too directly to GOA performance while Algeria’s leadership is in transition and President Bendjedid is still working to achieve a more consistent, pragmatic GOA policy.

NEA and PM propose that, after a positive decision on C–130s, we seek a sustained political dialogue with the Algerians to explore areas of difference and agreement and create a general understanding that what we can do for Algeria in the future will be affected by the nature of its policies on issues of importance to us. We would reciprocate the stated Algerian desire for improved political relations and proceed in ways which recognize that what we can do to help Algeria is limited in scope and therefore limited in the influence it can bring us. We would note in this connection that one useful step would be a reduction in Algerian public criticism of U.S. policies. We would also recognize that at the outset we will be more interested in the trend we can generate in Algerian policy than its overall balance. Ambassador Walters and S/P note that despite over a year of high-level contacts, including visits by Ambassador Walters as a Presidential emissary, the trend on balance continues to be negative. They believe the dialogue must be more explicitly related to US interests. NEA and PM believe that the balance should only be expected to shift gradually with the evolution of Algeria’s leadership and other relationships.

4. Two additional issues are relevant. First is the effect of the sale on Moroccan security and our relations with Morocco. General Walters and S/P question our selling military equipment which would increase Algeria’s military capability against Morocco. (Embassy Rabat shares this concern.) NEA and PM argue that this limited sale of aircraft which probably will replace obsolete transports will not significantly alter the military situation in the region (an intelligence study reaches this same conclusion). All agree the Government of Morocco will take exception to this sale and perhaps use it to argue for more US military assistance. NEA and PM consider that this is manageable and believe at least some Moroccans will continue to understand our argument (as they did prior to the first sale) that it is in both US and Moroccan interest that US influence with Algeria increase. We should inform Morocco and Tunisia of our decision to sell the aircraft in advance. While we should not give these governments a veto over our decision, we should take their views into account prior to informing Lockheed and the Algerians of the sale. PM believes it is essential to obtain King Hassan’s reaction before moving ahead with the sale.

5. The second issue is Congressional reaction to the sale. General Walters and S/P believe that Congressional leaders will question such a sale to Algeria and see it as inconsistent with our support to Morocco and likely to generate greater Moroccan demands for US assistance. NEA, H and PM believe that there would also be Congressional support and that, given the modest level of the sale, Congressional concern will be manageable. Should we decide to proceed with the sale we would wish to consult in advance with Congressional leadership.

RECOMMENDATIONS

1. That, before we approve the C–130 sale, we insist that the Algerians make an unambiguous gesture (such as, for example, recognition of the Habre government in Chad). When we convey approval we make clear that future improvements will require Algeria to demonstrate sensitivity to overall US interests in specific ways. These might include steps such as those in the examples mentioned in para. 2 above. (S/P and S/AL favor. NEA and PM oppose.)²

2. Alternately, that we agree to the sale of C–130s and initiate a sustained political dialogue designed to make clear that the future of our relations and the things we can do for Algeria will be affected by Algeria’s general readiness to take into consideration US interests. (NEA and PM favor. S/P and S/AL oppose.)³

3. That, if you approve the sale, we inform the Governments of Tunisia and Morocco of our decision and, without giving them a veto, take their views into account prior to informing Lockheed and the Algerians.⁴ That we also consult in advance with Congressional leaders.⁵

1. Source: Reagan Library, George Shultz Papers, Official Memoranda (10/26/1982). Secret. Sent through William Schneider and Eagleburger. Drafted by Sebastian and David Schneider (NEA); cleared by Walters, Raphel, Arthur Keys (S/P), and Stanley Escudero (H). Sebastian initialed for the clearing officials. A stamped notation at the top of the memorandum reads: “GPS.”
2. Shultz did not approve or disapprove the recommendation.
3. Shultz initialed the “Approve” option. A stamp next to his initials reads: “NOV 1 1982.”
4. Shultz initialed the “Approve” option. A stamp next to his initials reads: “NOV 1 1982.”
5. See footnote 4, Document 108.