THE PRESIDENT'S DAILY BRIEF 1 FEBRUARY 1975

• Document Type: FOIA
• Collection: President's Daily Brief 1969-1977
• Document Number (FOIA) /ESDN (CREST): 0006007931
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 10
• Document Creation Date: August 14, 2016
• Document Release Date: August 24, 2016
• Publication Date: February 1, 1975

Declassified in Part - Sanitized Copy Approved for Release 2016/07/15 : CIA-RDP79T00936A012400010049-6
The President's Daily Brief
February 1, 1975
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Exempt from general
declassification schedule of ED. 11652
exemption category., 5B(15.121.13)
declassified only on approval of
the Director of Central Intelligence
tr.
Declassified in Part - Sanitized Copy Approved for Release 2016/07/15 : CIA-RDP79T00936A012400010049-6
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FOR THE PRESIDENT ONLY
February 1, 1975
' Table of Contents
Iran: Tehran is blaming Western oil companies for
reduced oil exports, but much of the cutback
is attributable to the high prices being
sought by the government's own oil company.
(Page 1)
Latin America: Many Latin Americans think inter-
American relations are in a state of crisis
and hope that Secretary Kissinger's trip will
lead to better understanding. (Page 2)
France: The cabinet change yesterday does not
portend a major policy shift. (Page 4)
China: Peking is conserving foreign exchange in
the face of its large trade deficit with the
West. (Page 5)
Notes: Ethiopia; Portugal (Page 6)
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I RAN
Tehran is blaming private Western
oil companies for the reduction of Iran's
oil exports. A good share of the cut-
back, however, must be attributed to
lower sales by the government's National
Iranian Oil Company, which is asking
unrealistically high prices for the oil
it sells.
Officials in Tehran and .the controlled Iranian
press claim that a decline in demand by the major
Western oil companies is responsible for a drop in
oil exports, Iran's estimated oil .output and ex-!
ports in January .are about 10 percent--or 500,000.
barrels per day--lower than the 1974 average.
? Iran probably is engaged, however, in a delib-
erate effort to reduce its output and may well en--
courage similar efforts by other Middle East pro-
ducers, in hopes .of eliminating the oversupply of
oil in the. world market and the :downward pressure
on oil prices. The Shah has opposed any price re-
ductions, and has indicated his willingness to join
other producers in restricting output in the face
of what he terms a collective effort on the part of
consuming countries to force down the price of oil.
Iranian officials, taking note of the possible_
reduction of about $2 billion in this year's oil
revenues, have indicated that Iran will consequently
have to reduce its foreign aid. Even with reduced
oil earnings, Iran would have a significant ability.
to continue making large loans in 19.75. It there-
fore seems likely that Tehran is. merely trying to
escape criticism from the developing countries for
its policy of limiting aid-related credits in favor
of more remunerative investments.
Tehran also probably is trying to make the
"Western majors" scapegoats for its lending actions.
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LATIN AMERICA
There is a general feeling through-
out Latin America that US - Latin American
relations are in a crisis and that the
overall view of Latin America in US pol-
icy circles is flawed. Many of the coun-
tries hope that Secretary Kissinger's
projected trip to the area will lead to
better understanding of Latin American
"realities."
Most Latin American governments, having ex-
pected cOncrete results to follow their earlier
conferences with the US Secretary of State, are
largely disillusioned with what they call a lack
of political will on the part of the US to respond
to their needs.
The trade legislation was not a real problem
for many governments, but it provided a symbol
around which Latin Americans could rally and
thereby reassure themselves that they could con-
front the US as a united group. The Latins were
ready to vent their frustration over a wide range
of particular issues, and this has made it easy
for Venezuela to rally hemispheric support in con-
demning the Trade Reform Act.
The Venezuelans, elated at their "diplomatic
triumph" ?in pressing the trade matter, are ener-
getically pursuing the role of regional leader.
President Perez has evidently set an earlier date
for a Latin American and Caribbean summit meeting
than originally planned. He is now inviting his
peers to Caracas in March. The timing is clearly
designed to establish joint positions on as many
of the questions on the OAS General Assembly agenda
as possible before that meeting opens in April.
Postponement of the third meeting of Latin
foreign ministers with Secretary Kissinger, which
had been scheduled for March, has left the ball in
the OAS court. Despite widespread contempt for
the slow, grinding wheels of the organization,
most--probably all--of its members want to preserve
it as a means by which they can maintain lines to
the US even when bilateral relations are sour.
(continued)
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Numerous Latin American spokesmen are in favor of
beefing up the OAS, and various formulas designed
to make it more responsive and flexible are under
study.
The Latin Americans seem determined to suspend
the dialogue with the US until they receive some
satisfaction from Washington on the Trade Reform
Act. So far, none has reacted officially to the
introduction of two bills in the US Congress to
exempt Venezuela and Ecuador from provisions in
the law aimed at OPEC members. While obviously
pleased with this gesture, they will be waiting to
see if the bills are approved by Congress.
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FRANCE
The cabinet shuffle yesterday--the
first since Giscard became president last
June--has been expected for some time and
does not portend a major policy shift.
Outgoing defense minister Souff let has been
widely criticized for his poor handling of recent
unrest among conscripts. A staunch Gaullist, he
was said to oppose many of Giscard's policies, in-
cluding the decision this week to sell military
equipment to Egypt.
? The new defense minister, Yvon Bourges, is
another veteran Gaullist. He was deputy foreign
minister in three cabinets under President de Gaulle
and later became minister of commerce underPresi-
dent Pompidou. _Bourges has. a reputation for being
decisive and efficient.
Bourges will be aided by General Marcel Bi-
geard, who takes a, new post as secretary of state
for defense.. ,The appointment of Bigeard should be
regarded as a-real gesture by Giscard toward the
army. Bigeard is known as a soldier's soldier; he
is one of those rare men in the French army who
came up through the ranks, beginning as a draftee.
Foreign Minister Sauvagnargues, who had been
rumored on the way out, survived this cut.
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CHINA
Peking is imposing tight control
over use of its foreign exchange.
--The China National Machinery Import-Export
Corporation has not been permitted to open a
letter of credit for a $22-million offshore
drilling rig.
--The China Resources Company, a Hong Kong
agency that handles China's trade with Asian
countries
China
does not have the funds to pay for several oil
tankers it had hoped to charter this year.
Over the past several months Peking has taken
a number of steps to conserve foreign exchange in
the face of a large trade deficit with the West.
Hard-currency holdings are not exhausted by any
means, however. China recently purchased 1 million
tons of Australian wheat, after canceling contracts
for US wheat at higher prices. Peking also pur-
chased at least $30 million worth of gold in January.
Since 1965, China has bought gold worth at
least $1 billion at current market prices; this
could be used to meet financial obligations if Pe-
king so desired.
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NOTES
Ethiopian insurgents yesterday attacked gov-
ernment forces in Asmara, the capital of Eritrea
Province.
The ensuing hour-long firefight was the most
serious in over a year. The US naval communica-
tions station in Asmara was caught in the cross-
fire, but no casualties have been reported among
the approximately 110 US personnel there or among
the other 300 Americans in and near the city.
A few Portuguese radicals marched last night
through downtown Lisbon without serious incident,
but the tensions associated with such political
rallies will continue into next week at least.
The Socialist Party has rescheduled its rally
for February 7. If the Communists schedule an-
other counter-demonstration, the Armed Forces Move-
ment may ban all rallies until after the election.
The Communists, meanwhile, have made another at-
tempt to postpone the election, by demanding--and
getting--a commitment from the government to pub-
lish a list of persons ineligible to vote because
of their association with the previous regime.
The Communists will continue such harassments
throughout the election preparations, but the gov-
ernment seems determined to hold the election
sometime in April.
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