THE PRESIDENT'S DAILY BRIEF 8 MARCH 1974

• Document Type: FOIA
• Collection: President's Daily Brief 1969-1977
• Document Number (FOIA) /ESDN (CREST): 0006007693
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 17
• Document Creation Date: August 14, 2016
• Document Release Date: August 24, 2016
• Publication Date: March 8, 1974

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The President's Daily Brief
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March 8, 1974
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Exempt from general
declassification schedule of E.O. 11652
exemption category 5B(
declassified only on approval of
the Director of Central Intelligence
er,
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FOR THE PRESIDENT ONLY
THE PRESIDENT'S DAILY BRIEF
March 8, 1974
PRINCIPAL DEVELOPMENTS
UK Foreign Secretary Callaghan has told the US Am-
bassador that good relations with the US will be the
"keystone" of British foreign policy, and that Brit-
ain will seek a "better deal" with the EC. (Page 1)
There are,further indications of military prepara-
tions by both Syria and Israel in the Golan Heights;
the. Israelis/
/Say Cairo has violated the disengagement
agreement by moving surface-to-air missile batteries--
they count two--within 30 kilometers of the buffer
zone. (Page 2)
Soviet Foreign Minister
easier time in Damascus
munique marking the end
to paper over important
Gromyko evidently had an
than in Cairo, but the corn-
of his visit apparently had
differences. (Page 4)
A ceasefire on the Iran-Iraq border was arranged
yesterday, after sporadic artillery duels early in
the week grew more intense on Wednesday. (Page
South Vietnam's economy has been in a slump for al-
most two years, and the outlOok is for more of the
same in the,months to come., (Page 6)
The Guatemalan Army is increasingly uneasy over the
massive fraud perpetrated by the government in last
Sunday's. presidential election0 It may be forced
to set up a caretaker government, although President
Arana Would remain in control. (Page 8)
The governor of Argentina's Cordoba Province, whose
ouster by the provincial chief of police touched off
the current crisis, resigned last night. (Page 9)
Gromyko's visit to Cairo this month brought asser-
tions in the Egyptian press that Egypt's performance
in the October war entitles it to deal with the So-
viet Union and the US as an equal. (Page 10)
Notes on EC-Canada, the USSR, and Germany appear on
Page 10.
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UK
Foreign Secretary Callaghan has told the US
ambassador in London that Britain will seek a "better
deal" with the EC. He intends to proceed slowly and
avoid a confrontation. If he succeeds in obtaining
better terms and if the conclusion of these negotia-
tions should coincide with new parliamentary elec-
tions, the government might put the EC membership
issue to the people at the same time.
Callaghan stated that he "did not care
EC tendency toward federalism. He believes
'"alliance of states" is preferable and that
ization like the OECD is a better forum for
tion because it includes Japan, Canada, and
for" the
that an
an organ-
coopera-
the US.
Chancellor of the Exchequer Healey criticized
French activities in the EC and commented that the
UK wants to mend fences in the North Atlantic Commu-
nity and break down a few in the EC. He added that
Labor's policies on the EC generally and on the energy
problem would be more in harmony with those of the
US than had been the case under the previous govern-
ment.
Callaghan observed that the keystone of British
foreign policy would be good relations with the US
but that "Britain will not be a US voice." He favors
putting more muscle in the UN and is considering
sending aminister of cabinet rank to New York as the
British representative.
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ARAB STATES - ISRAEL
There are further indications of military prep-
arations by both Syria and Israel in the Golan Heights
area.
/the Israelis refused to
let a UN mail truck that was en route from Damascus
to Tiberias pass through their lines.
The Israeli refusal suggests that the Israelis
may be making preparations of their own in the area
that they wish to conceal from UN observers.
Various reports have been received that the Syr-
ians are concentrating units near the Israeli salient
in preparation for an attack on Israeli positions.
rc air o is
violating the disengagement agreement by moving
surface-to-air missile batteries to locations less
than 30 kilometers from the UN buffer zone.
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The allegations by the Israelis cannot be con-
firmed at this time. At the very least, they reflect
Tel Aviv's suspicion that the Egyptians may be at-
tempting to strengthen their positions in the same
manner as they did following the 1970 cease-fire.
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USSR-SYRIA
Soviet Foreign Minister Gromyko evidently had
an easier time in Damascus than in Cairo, but the
communique marking the end of his Syrian visit indi-
cates a compromise designed to paper over important
differences.
The absence from the communique of any specific
endorsement of the Geneva peace conference apparently
reflects Syria's reluctance to go to Geneva until it
has a clear Israeli commitment to withdraw.from all
occupied territory. Moscow has been urging Damascus
to participate in the Geneva talks, and is clearly
irritated that the Syrians have agreed to conduct
disengagement talks with the Israelis in Washington.
The communique suggests that the Syrians refused to
give Gromyko any assurances about the US role as an
intermediary.
The Soviets and Syrians agreed that failure to
move toward a settlement risks a "new explosion."
This intimation of new hostilities, however, was ac-
companied by a reference to "effective means" for
liberating occupied territory. Moscow may interpret
this as ruling out high-risk military actions in the
Golan Heights.
The phrasing of the communique lends credence
to reports that Syria is dissatisfied with the extent
and terms of Soviet military aid. The Soviets agreed
only to "mutually advantageous" military cooperation
with Syria.
Despite their differences, both countries prob-
ably regard Gromyko's visit as a positive achieve-
ment. Moscow obviously wanted to break Secretary
Kissinger's monopoly on Middle East diplomacy. The
Syrians probably welcomed the chance to balance the
Secretary's visit with two short stops by Gromyko
and to indicate that good ties with Moscow remain a
cardinal point in their diplomacy.
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Iraq?Iran: Forces on Border
SAUDI ARABIA
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IRAN-IRAQ
A cease-fire on the Iraq-Iran border was ar-
ranged on Thursday by Baathist leader Saddam Husayn
al-Tikriti and the new Iranian ambassador in Baghdad,
according to an Iranian official. Tehran radio re-
ported yesterday that fighting had ended and that the
cease-fire was holding.
Clashes have occurred along a 100-mile stretch
of the border from Qasr-e Shirin to Mehran. After
sporadic artillery duels early in the week, fighting
increased on Wednesday and may have prompted the
cease-fire move.
Each side claims the other started the fighting.
Tehran officially protested to Baghdad and the UN,
and Iraq issued a statement through its chief of
staff charging Iran with aggression. Even as the
fighting was in progress, the UN was moving to imple-
ment last week's Security Council consensus statement,
which called for a report on the border situation by
an independent observer. Secretary General Waldheim
asked the Mexican ambassador to Bonn, Luis Weckmann,
to undertake an on-the-spot study. If Tehran and
Baghdad approve of Waldheim's choice, Weckmann will
take up the task shortly.
The military build-up that began during the bor-
der clashes in early February continued until the
cease-fire was arranged.
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SOUTH VIETNAM
South Vietnam's economy has been in a slump for
almost two years, and the outlook is for more of the
same in the months to come. Economic difficulties
are now President Thieu's most serious internal prob-
lem, and continued deterioration could well hand the
Communists an exploitable issue.
Thieu has made a number of changes in economic
policy-making positions in recent months in an effort
to bring in men who are more energetic. The govern-
ment meanwhile is leaning toward more direct controls,
but no clear-cut economic policies have emerged.
South Vietnam's economic problems--declining
real aid, stagnation of industrial production, rapid
inflation, and the sharp reduction in US spending--
have affected urban areas and persons on fixed in-
comes most of all. The US Embassy in Saigon esti-
mates that unemployment may now be on the order of
1 million people--about 15 percent of the labor force.
Wages are failing to keep up with the rising cost
of living. This is particularly true of government
employees, both civilian and military, who account
for more than one fifth of the labor force. Despite
a 25-percent pay hike last year, the real wages of
government employees are only two thirds of what
they were a year ago.
At the moment, after a good harvest, agricul-
ture is relatively strong. This performance is un-
likely to be sustained. While farmers will probably
still be able to meet their own needs, buyers may
find it increasingly difficult to purchase rice in
the delta for shipment to Saigon and the rice-
deficit provinces farther north.
World prices for goods purchased abroad by
South Vietnam rose last year by an average of 25
percent. For the same amount of imports this year,
including the major ones--fertilizer, rice, wheat,
and petroleum products--Saigon would have to pay
another 25 percent more. South Vietnamese exports
are expected to bring in only about $100 million
this year.
(continued)
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The US Embassy believes that South Vietnam will
need supplemental aid this year. At currently antic-
ipated levels of foreign aid, the economic outlook
for 1974 is similar to that of 1973--low domestic
and foreign investment, little or no growth in pro-
duction, widening inequalities in income, growing
unemployment, and continued deferral of reconstruc-
tion and development. Each increase ?in consumer
prices that is not accompanied by a gain in income
for the working classes is likely to increase the
prospects for political unrest, which has been virtu-
ally non-existent within the non-Communist majority
in recent years.
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GUATEMALA
The Guatemalan Army is increasingly uneasy over
the massive fraud perpetrated by the government in
last Sunday's presidential election
The top general, Defense Minister Rubio, is on
record as saying that the military should guarantee
the constitutional process.
The army may be forced to act. It might, with
Arana's approval, take power and install General
Rubio as a caretaker chief of state for an indefinite
period. Arana would, in effect, retain control.
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critical. If demonstrations can be kept under con-
trol, the situation will probably stabilize and Lau-
gerud will be able to assume power next July.
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ARGENTINA
The Argentine Government last night announced
the formal resignation of the Cordoba governor whose
ouster by the provincial police chief more than a
week ago touched off a crisis that has rocked the
province ever since.
The ex-governor's resignation should help end
the impasse on federal intervention in Cordoba. It
has been held up so far by the government's inability
to obtain in the federal Chamber of Deputies the two-
thirds majority vote required to treat President
Peron's intervention proposal out of turn.
The federal government's allowing the ex-governor
to resign "with honor" was one of several stipulations
that a non-Peronist party had been demanding as its
price for voting with the Peronists on this issue.
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C-class guided-missile submarine
V-class attack submarine
555389 3-74 CIA
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NOTES
Egypt: Soviet Foreign Minister Gromyko's visit
to Egypt this month brought about an outpouring of
praise in the Egyptian press for friendship with the
USSR. It also brought assertions, however, that Egypt's
performance in the October war entitles it to deal
with the Soviet Union and the US as an equal. An ed-
itor said that the gov- 25X1
ernment must guard against granting "special status"
to either the US or USSR, and that in Egypt's eyes
both relationships have equal significance. Moscow,
using its propaganda apparatus, has already made
clear its objection to the notion that its status in
Egypt has diminished.
EC-Canada: Ottawa and the EC Nine apparently
are preparing a declaration to define the principles
and goals of the EC-Canada relationship. Canada is
drafting a text, and the French are drafting an EC
position paper. Canada has attached great importance
to staking out a relationship with the EC that is sep-
arate from that of the US. Last fall, French Foreign
Minister Jobert suggested that Canada insist on its
own declaration rather than settle for a separate
reference to Canada in an American-European declara-
tion.. West German Foreign Minister Scheel, during
a visit to Ottawa last September, agreed in principle
to support a separate Canada-EC declaration. Infor-
mal discussions have 'been under, way since that time.
USSR: Two Soviet nuclear-powered submarines--
one a V-class attack and the other a C-class guided-
missile unit--were sighted in the Indian Ocean on
This is the first time such Submarines
have been sent to the Indian Ocean. The Soviet sur-
face force there was recently upgraded by the addi-
tion of a Kresta II class guided-missile cruiser--
the first time a modern surface warship of this class
has been in the Indian Ocean.
Germany: Negotiators agreed to a protocol for
exchanging representatives yesterday, and press re-
ports speculate that Bonn may approve the document
as early as March 13. No date has been set for es-
tablishing formal ties, but the two sides were opti-
mistic earlier that missions could be established
before the end of June. Bonn apparently had its
way on representing West Berlin in East Germany.
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Top Secret
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