THE PRESIDENT'S DAILY BRIEF 13 JANUARY 1977

• Document Type: FOIA
• Collection: President's Daily Brief 1969-1977
• Document Number (FOIA) /ESDN (CREST): 0006466947
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 15
• Document Creation Date: August 14, 2016
• Document Release Date: August 24, 2016
• Publication Date: January 13, 1977

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The President's Daily Brief
January 13, 1977
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Exempt from general
declasufication schedule of E 0 I 1652
exemption category 5B(1),(2.),(3)
declassified only on approval of
the Director of Central Intelligence
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FOR THE PRESIDENT ONLY
January 13, 1977
Table of Contents
OPEC: Demand for Saudi crude has soared, and the success of
Saudi Arabia's effort to hold down the price of oil will
depend on how rapidly production can be expanded. (Page 1)
China-US: The Chinese continue to show concern about what they
believe is insufficient attention to China by the incoming
administration. (Page 2)
Israel: Defense Minister Peres faces some formidable obstacles
in his quest for the Labor Party nomination for prime minis -25X1
ter. (Page 3)
USSR-Syria: The Syrian threat to close
tus to Soviet ships apparently
may well have been an effort by President Asad to demon-
strate his displeasure with Moscow's heavy-handed criticism
of Syrian intervention in Lebanon. (Page 4)
naval facilities at Tar-
Notes: USSR; France; Iran-Pakistan; South Korea; Iran-Oman
(Pages 6, 7, and 8)
At Annex, we discuss the implications of East German actions
since the beginning of the year that seem to be low-keyed
probes of the limits of Allied forbearance on the Berlin
issue and of Allied ability to coordinate a response during
the transition between US administrations.
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OPEC: Success of the
Saudi effort to hold
down the price of oil
will depend to some
extent on how rapidly
production can be ex-
panded.
Demand for Saudi crude
has soared.
Iran's sales dropped
by over 2 million bar-
rels per day in early
January, and Kuwait is
resigned to a level of
production that may
drop to 1 million bar-
rels per day or lower.
Shell Oil alone has requested
direct purchase of an additional
500,000 barrels per day. Many
smaller independent and national
oil companies have submitted or-
ders and rescheduled tankers to
lift more Saudi oil immediately.
Even if Saudi output should not
rise, Iran and Kuwait will have
to absorb a major portion of the
production cuts--3 million barrels
per day or more--that we estimate
OPEC will sustain as companies
unload excess stocks in January
and February. In the past, Saudi
Arabia has absorbed up to one
half of these declines.
25X1
--continued
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CHINA-US: The Chinese
are continuing to show
concern about what they
apparently believe is
insufficient attention
to China by the incom-
ing Carter administra-
tion.
In a recent article in People's
Daily, a group of Foreign Ministry
writers called for talks between
Peking and Washington on the Tai-
wan issue. This public appeal
follows several private remarks
since the US election that suggest
the Chinese fear that the new ad-
ministration will be so preoccupied
with domestic affairs and with
US-Soviet relations that little
attention will be devoted to re-
solving the Taiwan matter--the
chief obstacle to improved Sino-
US relations. Some of these pri-
vate remarks have included hints
of Chinese flexibility on the
Taiwan issue.
The public call seems designed to
convey a positive atmosphere for
negotiations that Peking clearly
hopes will be seriously considered
by the new administration.
The recent article called for re-
solving the dispute between China
and the US "through negotiations
without the use of force," lan-
guage that dates from the 1950s
when the two sides were actively
negotiating a non-use-of-force
agreement for the Taiwan area.
The reference to not using force
was in the context of a possible
Sino-US confrontation over Taiwan
and does not rule out the possi-
bility that China might eventually
resort to military means to "lib-
erate" Taiwan. The article, how-
ever, implied no change in Peking's
basic attitude toward the Taiwan
issue.
--continued
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ISRAEL: Defense Minis-
ter Peres faces some
formidable obstacles
in his quest for the
Labor Party nomination
for prime minister.
Any government headed
by Peres would adopt a
tougher, more independ-
ent line?particularly
in tone--on Middle East
peace negotiations than
one Zed by Rabin.
In announcing the meeting last
week of Chinese liaison office
chief Huang Chen with Secretary
Kissinger and his successor-desig-
nate, Cyrus Vance, Chinese media
pointed approvingly to Vance's
statement that US relations with
China would be "guided" by the
Shanghai communique.
* * *
He will have to overcome the in-
grained opposition of Foreign Min-
ister Allon's faction and of for-
mer prime minister Golda Meir and
the Labor Party bosses who still
hold his bolting the party in 1965
against him. Labor's left-wing
coalition partner, Mapam, also op-
poses Peres and has threatened to
break up its electoral alliance
with Labor unless the Labor Party
adopts a more explicitly dovish
party platform on peace negotia-
tions than Peres favors.
To complicate matters further,
former foreign minister Abba Eban
has also declared his candidacy
in a calculated effort to woo La-
bor Party doves away from Prime
Minister Rabin and, paradoxically,
lock up the nomination for the
more hawkish Peres. Eban, who
holds a long-standing grudge
against Rabin, has already indi-
cated he would be willing to serve
in a Peres cabinet.
Peres, a protege of former defense
minister Dayan, has as his main
base of support the right wing of
the Labor Party. Moreover, in
the past Peres has been more fa-
vorably disposed than Rabin to the
--continued
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USSR-SYRIA: The Syrian
threat to close naval
facilities at Tartus
to Soviet naval ships
may well have been a
demonstration of Presi-
dent Asad's displeasure
with Moscow's heavy-
handed criticism of
Syrian intervention in
Lebanon.
re-establishment of a national
unity coalition government with
Likud, which takes a much harder
line on territorial concessions
and favors the annexation of the
West Bank.
In recent interviews, Peres has
indicated that he favors a resump-
tion of the step-by-step approach
instead of a reconvening of the
Geneva peace talks, which he prob-
ably believes would only end in
stalemate over the issues of Pal-
estinian participation in the ne-
gotiating process and Israeli
withdrawals from the West Bank and
Gaza strip.
Peres has said he prefers a "func-
tional" rather than a territorial
agreement with Jordan over the
West Bank. By this, he means an
arrangement that would allow Jor-
dan to reassert its civil author-
ity over most of the area but per-
mit the Israelis to keep their
armed forces there and to continue
to establish settlements.
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--continued
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The Syrians, unlike the Egyptians,
have never been interested in an
open break with the Soviets and
do not want to jeopardize military
relations. In fact, the Syrians
may be building a little leverage
for additional Soviet military
assistance.
* * *
--continued
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The US embassy in Moscow
has Learned
that in addition to the
publicized explosion in
the Moscow subway on Sat-
urday there were at least
two other blasts in the
city the same day.
French
NOTES 25X1
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the
three explosions, which 25X1
were "definitely" caused by bombs,
represent a potentially serious
challenge to the authorities as 25X1
well as to the overwhelmingly non-
violent Soviet dissident movement.
the explosions 25X1
would be used by the authorities
for serious new moves against dis-
sidence of all kinds.
* * *
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The French government has become
increasingly concerned over its
balance-of-payments deficit, which
totaled roughly $6 billion in 1976,
and probably will remain high this
year.
French industrialists recently
have pressed the government for
measures to stem the rising tide
of imports from countries with low
labor costs./
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Prime Minister Barre so far has
rejected calls for protectionist
trade measures and has instead
opted for more general economic
austerity measures to deal with
France's trade imbalance. The
government does not want to jeop-
ardize the current multilateral
trade negotiations, which it hopes
can be completed by the end of the
year.
* * *
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* * *
South Korean newspapers,
including a government
daily, are urging edi-
torially that Vice Pres-
ident-elect Mondale visit
Seoul at the time of his
coming visit to Japan.
25X1
The papers express regret over the
Vice President-elect's plan to
visit "next door" without also com-
ing to Seoul, in view of the linked
security interests of the US, Japan,
and South Korea. As yet, no gov-
ernment sources in Seoul have made
approaches along these lines to the
US embassy, but the press articles
could presage an official sugges-
tion.
--continued
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