THE PRESIDENT'S DAILY BRIEF 13 MAY 1971

• Document Type: FOIA
• Collection: President's Daily Brief 1969-1977
• Document Number (FOIA) /ESDN (CREST): 0005992649
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 9
• Document Creation Date: August 14, 2016
• Document Release Date: August 24, 2016
• Publication Date: May 13, 1971

1,
Declassified in Part - Sanitized Copy Approved for Release 2016/07/19 : CIA-RDP79-16-6936A609500170001-4
The President's Daily Brief
13 May 1971
50X1
Declassified in Part - Sanitized Copy Approved for Release 2016/07/19 : CIA-RDP79T00936A009500170001-4
Declassified in Part - Sanitized Copy Approved for Release 2016/07/19 : CIA-RDP79T00936A009500170001-4
FOR THE PRESIDENT ONLY
THE PRESIDENT'S DAILY BRIEF
, 13 May 1971
PRINCIPAL DEVELOPMENTS
Taipei's foreign minister claims his government may
not break ties "automatically" with all states rec-
ognizing Peking. (Page 1)
The monetary crisis is ?creating pressure for reval-
uation of the Japanese yen. (Page 3)
The Soviet economic delegation is trying to get the
US to alter its trade control policy. (Page 4)
EC agricultural ministers are trying to cushion the
impact of floating exchange rates on farmers.
(Page 4)
At Annex we present an evaluation of Hanoi's recent
"peace" initiative in Laos.
FOR THE PRESIDENT ONLY
Declassified in Part - Sanitized Copy Approved for Release 2016/07/19 : CIA-RDP79T00936A009500170001-4
Declassified in Part - Sanitized Copy Approved for Release 2016/07/19: CIA-RDP79T00936?A009500170001-4
FOR THE PRESIDENT ONLY
NATIONALIST CHINA - US -JAPAN
On Tuesday, Foreign Minister Chow told Ambassa-
dor MCConaughy that under certain?very limited?cir-
cumstances Taipei might not feel compelled to break
ties automatically with any state recognizing Peking.
Earlier,(
/Taipei was
willing to study a "dual representation" formula in
the UN--which would permit the seating of both Com-
munist and Nationalist China--as long as such a for-
mula was combined with an Important Question resolu-
tion and preserved the Nationalist Security Council
seat.
These initiatives, which were not put for-
ward as formal governmental positions, ap-
pear to be tactical moves on the part of
more "realistic" Nationalist officials.
Taipei hopes thus to prevent its two major
supporters from moving further in the di-
rection of Peking. Similar remarks have
been made in the past by these and other
Nationalist officials who have indicated
that they were seeking a policy that was
both viable and acceptable to Chiang Kai-
shek.
There is no sign, however, that these pro-
posals or the discussions themselves have
been authorized by Chiang. The Generalis-
simo recently reiterated his determination
to leave the UN if Taipei were unable to
"fulfill its obligations"--a good sign
that his position on this issue remains
adamant. I
lAccording to
Chow, Taipei could maintain ties only if
Peking was not recognized as "sole *legal
government of China," "government of all
Chinese people," or similar phrases; if
Peking's claim to Taiwan was not included
in the formula; and if Taipei continued
to be accepted as the "government of the
Republic of China." This rules out any
formula likely to be acceptable to Peking.
(continued)
1
FOR THE PRESIDENT ONLY
Declassified in Part - Sanitized Copy Approved for Release 2016/07/19 : CIA-RDP79T00936A009500170001-4
50X1
50X1
Declassified in Part - Sanitized Copy Approved for Release 2016/07/19: CIA-RDP79T00936A009500170001-4
FOR THE PRESIDENT ONLY
Moreover, governments willing to recognize
Peking are most unlikely to countenance a
Nationalist presence which would antagonize
the Communists and thereby dissipate any
diplomatic benefit to be derived from rec-
ognition. Relatively few states searching
for a formula to seat both Chinas in the
UN appear willing to fight for Nationalist
retention of the Security Council seat.
FOR THE PRESIDENT ONLY
Declassified in Part - Sanitized Copy Approved for Release 2016/07/19 : CIA-RDP79T00936A009500170001-4
Declassified in Part - Sanitized Copy Approved for Release 2016/07/19: CIA-RDP79T00936A0095-00170001-4
FOR THE PRESIDENT ONLY
JAPAN
The international monetary crisis and the rapid
buildup of Japanese? foreign exchange holdings--over
$2 billion in the past six months--are creating pres-
sure for a revaluation of the yen. Government lead-
ers are reluctant to take this step, however, fearing
unfavorable consequences such as reduced exports,
losses to businesses with large dollar assets, and
voter resentment. They prefer sticking to present
efforts to reduce the payments surplus by removing
highly restrictive import controls.
It is unlikely that merely liberalising
import controls will succeed in slowing
down the reserve buildup in the near fu-
ture. Although the recent monetary de-
velopments have not seriously affected
the yen--because of Japan's tight exchange
controls?the pressure for revaluing is
certain to grow stronger if the present
crisis atmosphere persists. many non-
Japanese observers have long considered
the yen undervalued, giving Japan an un-
fair advantage in export markets. Some
Japanese also would like to see their
currency revalued because this would be
anti-inflationary.
FOR THE PRESIDENT ONLY
Declassified in Part - Sanitized Copy Approved for Release 2016/07/19 : CIA-RDP79T00936A009500170001-4
_
Declassified in Part - Sanitized Copy Approved for Release 2016/07/19 : CIA-RDP79f00936A009500170001-4
FOR THE PRESIDENT ONLY
NOTES
USSR-US: Since its arrival in the US on 5 May,
the SU-inTe-conomic delegation (see The President's
Daily Brief, of 24 April) has been trying to persuade
the US Government to alter its trade control policy
against assisting the Soviet truck industry. It is
talking with firms such as Mack Truck and Swindell-
Dressler about playing major roles in the design and
equipping of the Kama truck complex which, it is
estimated, will eventually cost at least $2 billion.
As an inducement for the US to issue export licenses
for truck technology and equipment, Moscow is offer-
ing to increase its exports of chrome ore. Moreover,
several members of the delegation, including Deputy
Minister of Foreign Trade Komarov, offered in talks
with Commerce Department officials to purchase $1
million worth of consumer goods. The delegation-
will spend the rest of the week in Chicago and Los
Angeles talking to various firms, and is scheduled
to spend Sunday at Disneyland and depart for home
next Wednesday.
European Communities: The agricultural minis-
ters of the European Community (EC) yesterday sanc-
tioned measures to cushion the impact of floating
exchange rates on German and Dutch farm incomes.
The compromise avoids the degree of disruption that
unilateral steps would have caused to the Common
Agricultural Policy. It permits Bonn and The Hague
to protect their markets from cheaper farm imports
and to compensate their farmers for export losses
should the values of the mark and guilder rise more
than 2.5 percent above their parities. If the float-
ing exchange rates stabilize just below this level,
German and Dutch farmers would have an interest in
pressing their governments to return the currencies
to fixed parities.
Communist
China - Pakistan:
Pakistan is seeking a $100-mil-
lion commodity credit from China. This would be over
and above the $200-million commitment China made last
November to Islamabad's five-year plan. Although it
is doubtful that Peking will supply as much additional
aid as the Pakistanis desire; it professes willingness
to play a prominent role in the economic reconstruc-
tion of East Pakistan.
FOR THE PRESIDENT ONLY
Declassified in Part - Sanitized Copy Approved for Release 2016/07/19 : CIA-RDP79T00936A009500170001-4
50X1
50X
Declassified in Part - Sanitized Copy Approved for Release 2016/07/19 : CIA-RDP79f60936A-009500170001-4
FOR THE PRESIDENT ONLY
LAOS
Hanoi has launched another "peace" initiative in
Laos. /
Hanoi was broadcasting a "new proposal" designed to
"speed up" the peaceful settlement of the Lao prob-
lem. This proposal,
is essentially a boiled-down version of the
Communists' statement of 6 March 1970. It demands
an unconditional US bombing halt throughout Laos,
after which both sides would "immediately realize
a cease-fire." The Lao parties would then "immedi-
ately" discuss the formation of a provisional coali-
tion government. Unlike last year's version, this
one explicitly mentions a cease-fire, and, in its
terseness, avoids polemics and any definition of
what might constitute an "acceptable" provisional
coalition government.
/Hanoi's proposal are clearly
North Vietnamese hand-work. The North Vietnamese
may be under some pressure from their tiring Lao
comrades to get the Laos war returned to the back
burner. Nonetheless, the continuing importance
attached to a US bombing halt "throughout" Laos,
suggests that Hanoi is still principally interested
in protecting its assets in the Ho Chi Minh Trail.
Al
FOR THE PRESIDENT ONLY
Declassified in Part - Sanitized Copy Approved for Release 2016/07/19 : CIA-RDP79T00936A009500170001-4
50X
50X
50X
bUA
50X1
50X
Declassified in Part - Sanitized Copy Approved for Release 2016/07/19 : CIA-RDP79T00936A009500170001-4
FOR THE PRESIDENT ONLY
A2
FOR THE PRESIDENT ONLY
Declassified in Part - Sanitized Copy Approved for Release 2016/07/19 : CIA-RDP79T00936A009500170001-4
- ? - ?
Declassified in Part-Sanitized Copy Approved for Release 2016/07/19 : CIA-RDP79T00936A009500170001-4
Top Secret
Declassified in Part - Sanitized Copy Approved for Release 2016/07/19 : CIA-RDP79T00936A009500170001-4