CURRENT INTELLIGENCE WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A003000030001-7
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 53
• Document Creation Date: December 16, 2016
• Document Release Date: March 1, 2005
• Sequence Number: 1
• Publication Date: December 1, 1960
• Content Type: SUMMARY

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C
CURRENT
INTELLIGENCE
WEEKLY
SUMMARY
COPY NO. 72
OCI NO.5491/60
1 December 1960
DOCUMENT NO. -- -S3--
NO CHANCE- iN CLAS3. L'
t- i DECLAS`.SiFliD
CLASS. CHAN' to TO: TS
NEXT REVIEW DATE: AUT
DATEfQ_ W EV1EWER:
OFFICE OF CURRENT INTELLIGENCE
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CENTRAL INTELLIGENCE AGENCY
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THIS MATERIAL CONTAINS INFORMATION AFFECT-
ING THE NATIONAL DEFENSE OF THE UNITED STATES
WITHIN THE MEANING OF THE ESPIONAGE LAWS,
TITLE 18, USC, SECTIONS 793 AND 794, THE TRANSMIS-
SION OR REVELATION OF WHICH IN ANY MANNER TO
AN UNAUTHORIZED PERSON IS PROHIBITED BY LAW.
The Current Intelligence Weekly Summary has been prepared
primarily for the internal use of the Central Intelligence
Agency. It does not represent a complete coverage of all
current situations. Comments and conclusions represent the
immediate appraisal of the Office of Current Intelligence.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
OF IMMEDIATE INTEREST
CONFIDENTIAL
EAST-WEST RELATIONS v?> o>, o e o 0 0, a o o,,, Page 1
High Soviet officials have used recent private con-
versations with Ambassador Thompson to emphasize their
desire for an improvement in US-Soviet relations. These
overtures appear to be part of a concerted effort, which
began last September with Khrushchev's tAlks with Prime
Minister Macmillan, to lay the groundwork for a return to
high-level negotiations after the new US administration
is installed. The gestures take on. added significance
in view of the protracted discussions in Moscow dealing
with Sino-Soviet differences, and suggest that Khrush-
chev continues to disregard Peiping's arguments that
his tactics vis-a-vis the West are detrimental to Chinese
interests. On;disarmament, the Soviet UN delegation is
preparing to submit a formal call fora summit-level
meeting at a special General Assembly session next
spring.
CUBAN AND OTHER MIDDLE AMERICAN DEVELOPMENTS
0 0> e o Page 2
he Guevara's mission to Peiping has obtained a
$60,000,000 line of credit from Communist China, Cuba's
ambassador there presented his credentials on 26 November.
In efforts to expand its free world trade, on which it is
still largely dependent, the Castro regime has suffered
recent setbacks from Japan and Canada. Central America
..continues to be a..target for Cuban subversion, and
Communist and pro-Castro groups are making gains'in
El Salvador, In Haiti, the Duvalier regime faces grow-
ing domestic opposition.
0 o a o. a a o a o o a e o a a o s e e Page 6
De Gaulle's sudden changes in high-level French
administrators in Algeria last week have thrown his
rightist opponents further off balance, but the possi-
bility remains that they may react with violence prior
to the forthcoming referendum. The referendum will
probably be held on 8 January, and Do Gaulle will open
the campaign for a favorable vote on his self-determination
policy when he begins a tour of Algeria on 9 December.
The timing of these moves seems intended to blunt the
Provisional Algerian Government's drive for a UN-
supervised referendum in Algeria.
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PART I (continued)
SITUATION IN LAOS . . . . . . . . . . . . . . . . . . . . Page 7
Vientiane forces and General Phoumi?s troops have
been in contact some 100 miles southeast of the capital,
but the outcome is unclear. Other Vientiane troops have
continued their movement northward for a possible attack
on Ltiang Prabang, which is controlled by a pro-Phoumi
garrison. A National Assembly delegation has agreed
with Phoumi in Savannakhet to convoke an early assembly
session in Luang Prabang aimed at producing a. political
Peiping and Hanoi on 10 December.
settlement. Souvanna Phouma will personally head a
governmett good-will mission now scheduled to leave for
REPUBLIC OF THE CONGO . . . . . . . . . . . . .
. Page 10
Lumumba?s escape from house arrest in Leopoldville
on 27 November foreshadows stepped-up activity by Lumumba
and his followers to gain control in the interior.
Lumumba?s anticipated arrival in Stanleyville prompted
an upsurge in antiwhite sentiment there this week. The
Mobutu government has shown an increasing disposition
to undertake military o erations.against the pro-Lumumba
political stronghold.
PART I I
NOTES AND COMMENTS
M06COW MEETINGS . . . . . . . . . . . . . . . . . . . . . Page 1
As the Moscow conference of world Communist leaders
enters its fourth, and apparently final, week, Soviet and
Chinese leaders continue to express their differences
publicly, and disagreements at the private meetings are
apparent in the strained atmosphere in Moscow,
bitter exchanges between the Russians and the Chinese.
The length of the talks, however, suggests that the
USSR, while unwilling to accept any of the Chinese posi-
tions, is also unwilling to abandon its efforts to work
out a declaration which will maintain a facade of unity.
WEST-- EAST GERMAN INTERZONAL TRADE DEVELOPMENTS .
Bonn has publicly indicated it wants to explore the
possibilities for a new agreement with East Germany on
interzonAl trade. Adenauer?s press chief Von Eckardt
stated on 30 November that new talks would be conditional
on the cessation of East German harassments of Berlin.
. Page 3
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CURRENT INTELLIGENCE WEEKLY SUMMARY
1 December 1960
PART II (continued)
Khrushchev?s promise to supply East Germany with neces-
sary raw materials and goods in 1961 if negotiations with
West Germany fail greatly strengthens Ulbricht?s bargain-
ing position, East German officials are apparently seek-
ing to take advantage of differences among West German
officials concerning the conduct of negotiations and in-
sist that talks must be on a ministerial level and that
West German representatives may not speak for West
Berlin.
7
UNREST IN VENEZUELA . . . . . . . . . . . . . . . . Page 5
The recurrent rioting which began in Caracas on 25
November was promoted by pro-Castro opposition elements
and is probably part of a continuing violent campaign to
unseat President Betaneourt. The rioting may result in
further deterioration of Venezuelan-Cuban relations.
Betancourt, who suspended constitutional guarantees on
28 November and called in the army to assist in re-
establishing order, appears to have the unrest under
control for the present, but Venezuela?s pressing
economic difficulties leave him vulnerable to opposition
attacks,
SOVIET-FINNISH RELATIONS
. Page 6
The communique issued on 24 November at the conclu-
sion of President Kekkonen?s four-day visit to Moscow
reaffirmed Soviet approval of Finnish affiliation with
the European Free Trade Association (EFTA) on condition
that this would not prejudice the further development
of Soviet-Finnish trade. Soviet concessions to Kekkonen
on the EFTA question were probably intended to demon-
strate for the Scandinavian countries the benefits of
Khrushchev's peaceful coexistence policy. The Finns
now will ask the EFTA countries for permission to grant
most-favored-nation treatment to Finnish imports of
Soviet goods.
SOVIET TRADE WITH JAPAN
. . . . . . . . . . . Page 8
The Soviet-Japanese trade talks which began in Moscow
on 12 November are aimed primarily at drawing up plans for
trade in 1961 under the present trade agreements The is-
sue of extending credits to the USSR for financing pur-
chases of Japanese capital equipment apparently has been
settled, and Tokyo is approving such credits on a came-
by-case Oasis. Although actual trade during 1960 ap-
parently will exceed the target of $125,000,000--more
than double the 1959 figure--an excess of imports from
the USSR continues; Japanese officials had hoped to
remedy the imbalance during the first year of the three-
year agreement. Nevertheless, the present trend sug-
gests that Japan eventually may rank with Britain,
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CURRENT INTELLIGENCE WEEKLY SUMMARY
1 ,December 1960
PART I I (continued)
West Germany, and France as a major supplier of
machinery and equipment to the USSR.
USSR CONDUCTS PUBLIC OPINION PULL ON LIVING STANDARDS . Page
The USSR's first public opinion poll was recently
conducted by the Soviet youth newspaper, Komsomolskaya
Pravda. Those polled represented in large measure the
higher income groups and were asked if their standard
of living had been raised. The standard has generally
improved and the answers of the majority were favorable
to the regime; press comments on the results explained
away the derogatory replies.
HUNGARIAN REGIME FACES DIFFICULTIES IN COUNTRYSIDE . . . . Page 11
Serious lags have developed in the fal"..,.agricultural
campaign in Hungary which will cause underfulfillment in
agricultural production plans for this year. Existing
organizational weaknesses of the regime, passive peasant
resistance, and supply problems will be worsened by the
government's recently announced decision to complete
agricultural' collectivization this winter. Anticipated
harvest shortcomings and meat shortages would result in
tion of economic plans.
decreased exports and some disru T
EUROPEAN INTEGRATION DEVELOPMENTS . . . . . . . . . . . Page 12
The political organization of the six-nation European
Economic Community and its relationship to NATO will be
the basic questions at issue in the 5 December meeting in
Paris of the heads of governments of the Common Market
countries. De Gaulle, who inspired the meeting and who
will also meet privately with Adenauer on 4 December, is
expected on both occasions to press his plan for a
European "confederation.,' The other Common Market
leaders seem disposed to make some concessions to the
French President's point of view, but not to the extent
of weakening the Common Market or of endorsing his views
on NATO.
ITALIAN MOVES ON SOUTH TIROL ISSUE .
. Page 13
In mid-November the Italian Government began talks
with Austrian officials on the rights of the German-
speaking minority in northern Italy in a gesture toward
complying with the UN General Assembly's October resolu-
tion. Italian officials hint their readiness to make
limited concessions, presumably by administrative action.
More extensive concessions requiring parliamentary action
might be blocked by rightist opposition.
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CURRENT INTELLIGENCE. WEEKLY SUMMARY
'1 December..1960
PART II (continued)
UNREST INCREASING IN ETHIOPIA .
. . . . . . . Page 15
Emperor. Haile Selassie has shown growing concern over
the unrest within Ethiopia?s military forces, particularly
the Imperial Bodyguard. He has recently ordered transfers
of high-ranking military officers and the arrest of
several young government officials. The dissension ap-
peared on the eve of the Emperor?s present three-week
trip to West Africa and Brazil, during which the country
will be under the nominal control of the weak crown
prince.
BRITAIN AND THE FEDERATION OF RHODESIA AND NYASALAND , . . Page 16
The constitutional review conference for the Federa-
tion of Rhodesia and Nyasaland opens in London on 5
December andIIis expected to be one of the most difficult
in recent years. The sharpest difference between the
African nationalists and the dominant white minority
is over the African demand for acknowlegement of the
right of secession from the Federation. London con-
tinues to promote a multiracial state but in the past
year has tended to favor African aspirations. A
breakdown of the conference would increase the likeli-
hood of violence in the area.
INDONESIA . . . . . . . . . . . . . . . . . . . . . . Page 17
President Sukarno has resumed his efforts to bring
Communists'; into the Indonesian cabinet despite opposition
from the arm
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CURRENT INTELLIGENCE WEEKLY SUMMARY
PATTERNS AND PERSPECTIVES
MOSCOW AND BERLIN . . . . . .. . . . . . . . . . Page 1
The Soviet position on Berlin is essentially the same
as put forward by Khrushchev two years ago. The key to
future Soviet moves lies in the decisions taken in 1955
to gain Western acceptance of the concept of two Germanys.
Within the framework of a policy of limited risks, Moscow
and the East Germans have relied heavily on erosion tac-
tics to weaken the Western position, isolate West Berlin,
and reinforce East German sovereignty. While these tactics
can be expected to continue and to vary in intensity, it
appears from Khrushchev's reluctance to bring about a
showdown that he realizes.the grave dangers in the situa-
tion and prefers a negotiated settlement. If, however,
Soviet efforts to bring about another summit meeting
fail, or if Khrushchev does not obtain his minimum demand
for a change in the city's legal status, Moscow may move
unilaterally and transfer control of access to Berlin to
East -Germany.
THE WORLD SUGAR INDUSTRY . . . . . . . . . . . . . . . . . Page 7
The international sugar industry in recent years has
suffered from overproduction, depressed prices,, and grow-
ing self-sufficiency among countries formerly having a
sugar deficit. This situation has been further clouded
in recent months by instability in the Caribbean area,
the shifting of American sugar purchases to non-Cuban
suppliers, and the emergence of the Communist bloc as
a major buyer. The signatories of the International
Sugar Agreement, which is to be revised next year, will
find it difficult to cope with these shifting trade
patterns. The smaller producers are strongly competing
for Cuba's ,'share of the lucrative American market, despite
the risks of overexpansion.
. . . . . . . . . . . . . . . . Page 12
Although UAR President Nasir has been making some
progress in Syria, his rule there continues to be threatened
by possible uprisings or by an internal coup with outside
support. While f ;il:ure in Syria and its separation from
the UAR would be a devastating blow to his prestige both
at home and abroad, even moderate continued success would
add to his stature.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
1 December 1960
OF IMMEDIATE INTEREST
High Soviet officials have
used recent private conversa-
tions with Ambassador Thompson
to emphasize their desire for
an improvement in US-Soviet re-
lations. In a conversation with
the ambassador; First Deputy
Foreign Minister Kuzneteov ex-
pressed optimism over the pros-
pects for better relations. He
indicated satisfaction with
Senator Kennedy's election but
expressed concern over press
reports that the new US admin-
istration's first step would
be an increase in military ex.-
penditurese He urged the ambas-
sador to endeavor to convince
the President-elect that the
USSR was not seeking to dominate
the world by force or other
means and that both sides must
seek to establish an atmosphere
of trust and confidence.
Presidium member Ignatov
also stated to Thompson his
conviction that th a United
States and the USSR would re-
establish good relations under
the new administration. Other
Soviet officials have also
sought to promote this general
line. The chief of the American
section of the Soviet Foreign
Ministry predicted to Thompson
that bilateral relations would
soon improve. The minister
for higher education made a
similar forecast and called
for broadening the student ex-
change program. The Foreign
Ministry official also hinted
that some move on the release
of the RB-47 crew members
might be forthcoming, pro-
vided the issue could be
settled in the proper "frame-
work "
These overtures are ap-
parently part of a concerted
effort, which began last Sep-
tember with Khrushchev's talks
in New York with Prime Minister
Macmillan, to lay the ground-
work for a return to high-
level negotiations after the
new US administration is in-
stalled.
Such gestures take on add-
ed significance in view of the
protracted discussions in Moscow
dealing with Sino-Soviet differ-
ences and suggest that Khrushchev
continues to disregard Peiping's
arguments that his tactics vis-
a-vis the West are detrimental
to Chinese interests. Khrushchev
apparently is seeking to under-
score his determination to main-
tain his "peaceful coexistence"
strategy and to reject any con-
cessions to Chinese Communist
demands which would imply even
a partial repudiation of his
policy toward the West over the
past three years.
At the UN the Soviet dele-
gation is apparently waiting
for an "opportune moment" to
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CURRENT INTELLIGENCE WEEKLY SUMMARY
1 D6oember 1960
break the current impasse over
various disarmament resolutions
by submitting,a formal call for
the heads of government to at-
tend a special General Assembly
meeting next spring. Thus far,
the Soviet representatives have
withheld the move in order to
use it as a counter to a pos-
sible neutralist proposal to
refer outstanding resolutions
to the UN Disarmament Commis-
sion. The Soviet UN delegation
is also privately attempting to
discourage any move to defer
action on disarmament until
the General Assembly resumes
after a Christmas recess, since
this would undercut the call
for a special session on dis-
armament only.
Moscow probably sees such
a session as a means of estab-
lishing early contact with a new
US administration and antici-
pates that a formal resolution
could gain wide support and
be difficult for the West to
reject. Since Afro-Asian opin-
ion strongly supported the
abortive resolution last Sep-
tember for renewed East-West
contacts, Moscow probably
feels these states would line
up behind a Soviet proposal
for what, in effect, would be
a summit meeting with the West
on disarmament.
At the nuclear test ban
conference, the Soviet delega-
tion has made it clear in
private talks that there will
be no departures from its pres-
ent position on major issues.
As in the disarmament discus-
sions, Moscow's tactics are to
temporize until the new US ad-
ministration has taken office.
Ignatov virtually admitted to
Ambassador Thompson that Mos-
cow would make no serious ef-
fort to reach agreement at
Geneva until after January.
In anticipation of a long re-
cess, the Soviet delegation is
devoting its conference state-
ments to making a record of
alleged Western intransigence.
The chief Soviet delegate told
American officials privately
that it was up to the West to
break the deadlock.
Che Guevara's economic
mission scored an important
success with the large-scale
trade and aid agreements signed
at the conclusion of its two-
week visit to Communist China
on 30 November. Under the agree-
ment--the largest concluded by
Communist China with a non-
bloc country--Peiping will pro-
vide a $60,000,000 interest-
free line of credit to be used
between 1961 and 1965. It will
also import 1,000,000 tons of
Cuban sugar next year, double
the quantity it had agreed to
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CURRENT INTELLIGENCE WEEKLY SUMMARY
buy annually for the next five
years under the agreement signed
last July. The Cuban ambassador
to Peiping, Oscar Pino Santos,
presented his credentials to
Chinese Communist leaders on
26 November. In the numerous
speeches that accompanied this
and Guevara's visit, the al-
leged similarities between re-
cent conditions in China and
present conditions in Cuba--and
in Latin America generally--have
repeatedly been stressed, along
with expressions of eternal
friendship between the Cuban
and Chinese peoples. The first
five officials of the Chinese
Communist Embassy arrived in
Havana on 28 November, and Am-
X1 bassador Shen Chien
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Announcement of the es-
tablishment of diplomatic re-
lations between Cuba and North
Vietnam is likely to come as a
result of the visit to Hanoi
beginning on 28 November by a
member of Guevara's mission,
Subsecretary of Foreign Affairs
Rodriguez Llompart. Guevara,
or part of his mission, may
also visit Ulan Bator.
The Castro regime, however,
suffered at least two setbacks
in the past few days in its
efforts to expand commercial
ties with free world countries,
on which it continues to de-
pend for a number of vital
imports and for markets for
over half its exports. On 25
November it became apparent
that lengthy negotiations with
Japan for the purchase of 50,000
tons of Cuban sugar had fallen
through, largely because the
Japanese found they could pur-
chase sugar elsewhere at a
lower price.
These difficulties are prob-
ably reflected in Cuban efforts
to sell its sugar in other free
world countries. The Sino-So-
viet bloc purchased about 40
percent of Cuba's sugar exports
this year and.next year is com-
mitted to buy some 2,200,000
tons of a crop that normally ex-
ceeds 5,500,000 tons.
The regime has also suf-
fered a setback from Canada,
on which it is counting heavily
for assistance in overcoming
the more critical effects of
the United States export con-
trols, particularly in respect
to spare parts for sugar mills
and oil refineries. A Cuban
effort to establish regular
commercial flights to Canada
as one means of strengthening
trade ties was rebuffed by the
Canadians on 27 November. Ottawa
informed Havana that it was not
now prepared to negotiate..an air
agreement and even refused per-
mission for a single flight by
a plane:the Cubans claimed was.
already loaded with tomatoes
for Canada.
Although the Castro regime
continues its military build-up,
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1 Decembor 1866
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I DECEMBER 1260
speeches by Cuban officials now
imply that the immediate danger
of an "imperialist invasion"
has passed.
Central America
Central America continues
to be a prime target for Cuban
subversion.
sen repres n a ives
to Central America to
determine "in what
form Cuba may help"
and, with reference
to the situations in
Nicaragua and El Sal-
vador,as well as in
Guatemala, to study
the prospects for the
coordination of Cen-
tral American revolu-
tionary movements.
In Honduras bla-
tant pro-Castro propa-
ganda led to strong and
spontaneous outbursts
by leaders of the mod-
erately leftist Villeda
Morales government on
26 November. President
Villeda who often
feels obliged to cater
to the influential pro-Castro
left wing of his Liberal party,
responded angrily to statements
by the pro-Castro Mexican am-
bassador and accused him and
his government of having two
faces in foreign policy--one
designed to curry the United
States' favor and the other to
please Cuba. On the same occa-
sion, Villeda's leftist foreign
minister publicly questioned
the loyalty of Hondurans who
had dedicated that week to the
"defense of Cuba."
In El Salvador, under the
six-man military and civilian
junta, Communists and pro-Castro
groups continue to consolidate
their newly won positions in the
government and in student and
labor organizations.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
officials are Commu-
nists or pro-Commu-
nists. These incum-
bents are preparing
to hold trials of of-
ficials of the ousted
Lemus regime. The
BACKGROUND
Haitian history is marked by alternating periods of dictatorship and
anarchy; the collapse of all authority in 1915 led to 19 years of occupa-
tion by the US Marines. Dr. Francois Duvalier, who became President in
October 1957 after a rigged election and the fall of five governments with-
in a year, has ruled by a mixture of paternalism and terrorism, openly
favoring the black masses against the small mulatto elite. Military power
is fragmented among the army, the police, the presidential guard, and a
civilian militia. Overpopulated Haiti is one of the poorest of Latin
governing junta has
relinquished control over hiring
and firing in the various min-
istries, thus giving free reign
to further pro-Communist ap-
pointments and the purging of
holdovers.
The Communist-dominated
Salvadoran labor federation has
announced that it is proceeding
with plans to organize peasant
committees throughout the counT
try. If the junta permits this,
contrary to the practice of pre
vious governments, the Commu-
nists would have a potent po-
litical weapon. Salvadoran
peasants, a generally depressed
group with real socio-economic
grievances, can easily be manip-
ulated politically.
More than any other develop-
ment, this tactic would probably
strengthen the resolve of anti-
Communists, particularly in the
military, who are giving serious
consideration to staging a coun-
tercoup. These groups probably
recognize that the Communists
could use the peasants to create
an armed militia capable of ef-
fectively challenging any future
effort by anti-Communists to
exert control. The army and
the landowning class have long
feared a peasant uprising such
as occurred in 1932, when a
Communist-led insurrection was
suppressed by the army only after
thousands had been killed.
Haitian President Duvalier
imposed martial law on 22 No-
vember in response to a student
strike he claimed was Commu-
nist-controlled and politically
motivated. He has ordered a
shake-up in the top military
command and has intensified
the repression of the govern-
ment's opponents, ranging from
pro-Communist to pro-clerical
groups. The student strike
has been vitiated, at least
temporarily, by the government's
order closing all schools un-
til early next year.
Although the strike is
believed to have been touched
off by student resentment over
the President's refusal to free
a student leader in jail with-
out charges since last September,
student leaders are apparently
sympathetic to the Castro
regime, and the possibility of
Cuban influence in the strike
cannot be eliminated. The
regime's reaction to the strike
suggests, however, that it is
using it primarily as a pre-
text for another of its peri-
odic moves against the opposi-
tion.
American officials in Port-
au-Prince report speculation
that the government's emphasis
on its charges of Communist in-
volvement in the strike may
have been a further effort by
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.,SECRET
CURRENT INTELLIGENCE WEEKLY SUMMARY
Duvalier to convince the United
States that Haiti has a serious
Communist problem and needs
massive new aid.
The government neverthe-
less faces a serious domestic
problem. Its police excesses
and the alienation of the Roman
Catholic Church following the
summary expulsion of the arch-
bishop--an old opponent of. the ,
President--have intensified and
widened anti-Duvalier feeling,'
Which was already strong in the
capital. Although the regime
appears at the moment to be
controlling the situation,
elements within the government
and the army may seek to
capitalize on the President's
growing unpopularity by at-
tempting to overthrow him.
De Gaulle's sudden changes
in high-level French adminis-
trators in Algeria last week
have thrown his rightist op-
ponents,ftrther off balance,
but the possibility remains that
they may react with violence
prior to the forthcoming refer-
endum. The referendum will
probably be held on 8 January,
and De Gaulle will open-the
campaign for a favaorable vote
on his self-determination policy
when he begins a tour of Algeria
on 9 December. The timing of
these moves seems intended'to
blunt the provisional Algerian
government's (PGAR) drive for
a UN-supervised referendum in
Algeria.
The speed with which Jean
Morin replaced Paul Delouvrier
as French delegate general in
Algeria apparently took right-
ist elements by surprise, but
has reportedly not changed the
dominant belief in Algiers that
insurrectionary action will oc-
cur before the January referen-
dum. Both Morin and Louis
Joxe, the new minister for
Algerian affairs who made a
24-hour visit to Algiers on
28 November, have sought to re-
assure the European settlers by
stressing their opportunity to
vote for Algerian integration
with France in the final Al-
gerian referendum on self-
determination. In France,
Jacques Soustelle has admitted
privately that he is uneasy
about De Gaulle's plans and
fears they would place the
rightist opposition in an
embarrassing position.
As the first step to pre-
pare for the January referendum,
Premier Debre will set forth
De Gaulle's program to the
National Assembly on 7 Decem-
ber. The referendum must be
formally proposed during the
assembly session, which ends
on 16 December. Disregarding
some of his advisers who fear
an assassination attempt, D?
Gaulle wl,ll make a five-day
trip to Algeria beginning about
9 December, but probably will
avoid the rightist hotbeds of
Algiers and Oran. He is to
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make three nationwide tele-
vision appearances in support
of his program prior to the
January referendum.
The Algerian debate is
scheduled to begin in the UN
General Assembly's Political
Committee on 5 December, and
the assembly may vote on it
before recessing on 17 December.
The PGAR is urging the Afro-
Asian bloc to press for a res-
olution calling for a UN-super-
vised referendum in Algeria,
but the French African states
may win support for a moderate
resolution recognizing UN
interest in the problem but
calling for negotiations among
the parties concerned.
Since committee resolutions
require only a simple majority
to pass, the crucial test will
occur during full assembly dis-
cussion--possibly in mid-December
--where a two-thirds majority is
required. The Afro-Asian bloc
has failed for the last two
years to get any UN accord on
Algeria at all, and promoters
of Algerian independence may
therefore be willing to accept
General Phoumi on 28 Novem-
ber launched what he described
as "a general offensive" in the
area south of Pak Ca Dinh, some
100 miles southeast of Vientiane.
He claimed the initial objective
of the operation was to eliminate
outposts held by Vientiane troops
--mainly Captain Kong Le's para-
troopers--south of the Ca Dinh
River. If the opening presented
itself, however, Phoumi planned
a moderate resolution rather
than none.
Meanwhile, the PGAR seems
determined to reject any nego-
tiations, at least until after
the UN debate. It is angered
over De Gaulle's recent rapid
moves, fearing that these may
presage a French attempt to
reach an Algerian solution ig-
noring the rebel government. The
rebels were quick to denounce
the proposed French referendum
as a "unilateral action," and
can be expected to continue their
efforts to strengthen their
international position.
Prime Minister Balewa of
Nigeria, apparently in response
to an appeal from Tunisian
President Bourguiba, decided to
make a personal effort to further
an Algerian settlement during his
just-completed trip to London,
Rome, and Tunis. He was re-
ported to be aware of the great
difficulties of this task, but to
feel that prolongation of the
war brings such a threat of a
Communist takeover in North
Africa that he must do whatever
he can.
to cross the river in an effort
to take the paratroopers' main
position at Pak Ca Dinh.
Fighting thus far appears
to be centered on a paratroop
outpost on the Mekong River,
a few miles southeast of Pak
Ca Dinh. Early reports of the
fighting are conflicting, but
in any event the post still
appears to be in Vientiane hands.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
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L
':4
/ARAVANE .
L
SOUTH
-
Pekse
Casualties thus far have been
light, suggesting no departure
from the ?7characteristic Laotian
distaste for determined fight-
ing.
Other Vientiane forces
continue their movement up the
road from Vientiane toward Luang
Prabang, which Premier Souvanna
Phouma has threatened to take
by force if a negotiated settle-
ment cannot be reached with
Phoumi's Savannakhet group. The
pro-Phoumi garrison has had ample
time to organize its defenses
at the royal capital. Further-
more, the commander of one of
the Vientiane columns slated to
participate in the attack ap-
parently has defected to Phoumi
A seven-man Na-
tional Assembly del-
egation, led by form-
er Premier Tiao Som-
sanith, has just com-
pleted a mission to
Savannakhet, where it
apparently agreed with
Phoumi to convoke a
special assembly ses-
sion in Luang Prabang
aimed at working out
a political settle-
ment. Both Vientiane
and Savannakhet seem
willing to hold such
a session, but for
disparate reasons,
and it is doubtful
that it would produce
Souvanna hopes to use such
a meeting to create a government
of national union, including
representatives of the Pathet
Lao political front, the Neo
Lao Hak Sat (NLHS). Phoumi, on
the other hand, probably hopes
to engineer Souvanna's ouster by
means of a no-confidence vote.
Opinion among the deputies is
believed to be deeply divided,
and the ;.,prospective session may
end in yet another stalemate.
A government good-will
mission, to be led by Souvanna
himself, is scheduled to leave
for Peiping and Hanoi on 10
December. The dispatch of a
good-will mission was one of
SECRET
G
HAMMUUANE'.
Thakheh
Seno
Attopeu VIETNAM
t '.H 4.MP. SSAK - ATTOPEU1
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CURRENT INTELLIGENCE WEEKLY SUMMARY
the main points in the mid-No-
vember accords between Souvanna
and the Pathet Lao. Souvanna
plans to take his minister of
finance along, Fndicating that
various forms of assistance
may be a major topic of dis-
cussion.
Moscow's Role in Laos
Soviet Ambassador Abramov's
offer to the Souvanna govern-
ment on 23 November to supply
Vientiane with food supplies
and gasoline airlifted from
Hanoi was a timely maneuver on
the part of the USSR to iden-
tify Moscow with the neutralist
ambitions of the Souvanna Phouma
regime at a time when the Lao-
tian premier was in urgent need
of bloc assistance. Abramov's
unscheduled flying visit to Vien-
tiane emphasizes the speed with
which Moscow moved in order to
pose as the champion of legiti-
macy in Laos.
According to Souvanna, the
USSR will supply Laos with 250,-
000 gallons of fuel to be flown
to Vientiane via Hanoi. Souvanna
had earlier threatened to turn
to the Soviet Union for such
assistance if the unofficial
Thai blockade of petroleum sup-
plies was not halted. In addi-
tion, milk, flour, sugar, and
other foodstuffs will be sup-
plied as a "good-will gift."
Details of the offer, however,
were not spelled out. Souvanna
later remarked to the American
ambassador in Vientiane that
future supplies may be trucked
in from North Vietnam after a
month or two when the roads are
repaired, suggesting that any
airlift of fuel to Vientiane by
the USSR would be on an emergency
basis only.
On 21 November the Laotian
ambassador in Phnom Penh re-
ported that Vientiane had grant-
ed visas to four Soviet Embassy
personnel who apparently intend
to remain in the Laotian capital
for at least a month. Abramov,
who returned to Phnom Penh on
23 November, told the American
ambassador on 29 November that
be intended to return to Vien-
tiane "within a few days."
First Secretary A. Ratanov ac-
companied Abramov to Vientiane
and reportedly will remain there
about six weeks as charg6. The
establishment of a Soviet pres-
ence in Laos climaxes a four-
year effort on Moscow's part
to exchange, diplomatic mis-
sions.
Soviet long-range objec-
tives in Laos are aimed at en-
couraging neutralist sentiment
within the country in the hope
that Communist political sub-
version will ultimately force
Laos to adopt a more neutral
position. Toward this end, the
USSR has supported the inclusion
of the Communist political front,
the Neo Lao Hak Sat (NLHS),
within a coalition Laotian gov-
ernment.
The Soviet Union has main-
tained that the 1954 Geneva
truce agreements established
the basis for a peaceful settle-
ment in Laos. The USSR and
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CURRENT INTELLIGENCE WEEKLY SUMMARY
1 December 1960
Britain as co-chairmen of the
conference set up in 1954 an
International Control Commission
(ICC) ostensibly to ensure that
the international agreements were
observed. In practice, however,
the ICC served as an effective
device to improve the position
of the Pathet Lao and its po-
litical front, the NL1H:.
The Soviet Government it-
self has made several appeals
for the return of the ICC and
in April 1960 formally urged
the pro-Western Laotian Govern-
ment to "renew its coll,abora+-
tion" with the ICC, which had
not fulfilled one of its primary
,goals--the integration of the
Pathet Lao within the national
community. Britain, as co-chair-
man, responded that its hands
were tied regarding the ICC
because of the Laotian Govern-
ment's opposition to the pres-
ence of the commission. Any
formal request now for the
return of the ICc by the Sou-
vanna ~,roverament would make it
difficult for Britain to main-
tain its objections.
Soviet propaganda hails
the agreement reached between
Souvanna and the Pathet Lao as
a revival of the spirit of the
Vientiane agreements of 1957
which led to the establishment
of a short-lived coalition gov-
ernment. Moscow radio continues
to pinpoint its attack on
American support for the Phoumi
rebel faction and highlights
Souvanna's protest on 21 Novem-
ber again at alleged US inter-
ferenca in Laotian affairs.
Lumumba's escape on 27 No-
vember from house arrest in
Leopoldville and flight to Stan-
leyville, his old political
stronghold in Orientale Province,
foreshadows stepped-up activity
by him and his followers to gain
control of the interior. The
Mobutu interim government is
SECRET
considering taking strong meas-
ures, including military opera-
tions against Stanleyville. An
attempt by Mobutu to move troops
to Orientale Province would
pose the threat of civil war
and probably would be opposed
by the UN Command.
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SUDAN
President Kasa-
vubu, who returned from
New York to a popular
reception in Leopold-
ville on 27 November,
may be preparing a
plan to restore civil
government. Kasavubu's
1 December order ex-
pelling the UAR ambas-
sador is the latest
move by anti-Lumumba
forces to curb the
activities of his Af-
rican allies.
u avu
Kindu
Cqui
eop~ ldv111e Kikwit' Port Fran ` Lusa o
) xl .- ongo o+
~
t iuabourg Dakwan?a.-J Albertville'
kf Luputa
1 DECEMBER 1960
O MILES 900
Elisabethville
st.
FEDERATION OF RHODESIA
AND NYASALAND
Recent information suggests
that Lumumba's supporters in
Stanleyville are presently
seeking aid--possibly including
arms--from one or more Communist
bloc nations.
Lumumba's supporters are
moving to consolidate their con-
trol of Stanleyville Province,
and Lumumba's anticipated ar-
rival has prompted an upsurge
in antiwhite sentiment there.
The UN representative in Stan-
leyville reported that "all
whites" in the city had been
rounded up on 28 November, and
many subjected to beatings.
A projected round-
table conference,
scheduled for early
December, could pro-
vide the means for
agreement on such a
move. Army chief
Mobutu has indicated
that he regards his
"mandate" as extend-
ing only until the end
of 1960, and he may
prove receptive to negotia-
tions leading to the installa-
tion of a new, moderate govern-
ment.
Moscow radio reported with-
out comment Lumumba's departure
for Stanleyville, and continues
routinely to denounce American
"colonialism" and the Western
"puppets," Mobutu, Tshomb6, and
Kasavubu. In the UN Budgetary
Committee meeting on 29 Novem-
ber, the USSR reaffirmed its re-
fusal to pay any part of the es-
timated $66,000,000 which the UN
Congo operation will cost this
year, and demanded that Hammar-
skj old submit proposals for
withdrawing UN military forces.
Soviet delegate Roschin
sought to separate the Congo ex-
penses from the required budgetary
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CURRENT INTELLIGENCE WEEKLY SUMMARY
assessments, asserting that they
should be borne by the countries
which caused the chaotic situa-
tion--Belgium and the Western
powers. Roschin accused the
Congo.
secretary general of jeopardizing
the financial structure of the
UN by "illegally" using funds 25X1
from the regular administrative
budget to maintain troops in the
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NOTES AND COMMENTS
As the Moscow conference
of world Communist leaders
entered its fourth and appar-
ently final week, Soviet and
Chinese leaders continued to
express their differences pub-
licly, and disagreements at the
private meetings are apparent
in the strained atmosphere in
Moscow. The length of the
talks, however, suggests that
the USSR, while unwilling to
crept any of the Chinese posi-
tions, is also unwilling to
abandon its efforts to work
out a declaration::. which will
maintain at least a facade of
unity.
The announcements on 1
December by Moscow and Peiping
that Soviet and Chinese leaders
held warm and friendly talks
t the Kremlin on 30 November
were apparently a step in this
direction as well as an effort
to dispel the air of hostility
which has characterized the
meetings.
Khrushchev's message to
the Chinese leaders thanking
them for their October Revolu-
tion greetings, while stressing
the need for bloc unity, was
significantly cooler than those
of previous years, Roth Peo-
ple's Daily and Pravda in t ae
east -few rte. ays have continued
their editorial. disagreements,
with Peiping emphasizing the
need for continuous "struggle
against' imperialsim-colonialism"
and Moscow warning of the dan-
ger of "dogmatism and sectari-
anism."
The People's Daily edito-
rial for 29 November opened
with Mao's dictum that "nothing
reactionary will topple unless
you strike it down," and Pravda
on the same day hailed Engel'sl
"passionate and uncompromising
struggle for the purity. of the
Marxist teaching agaiinat dog-
matism, sectarianism, and na-
tional narrowimiridsdness in the
revolutionary movement...."
A number of press articles
commemorating the 140th anni-
versary of the birth of Engels
concentrated on the major theme
of the need for bloc unity and
ideological purity. The arti-
cles employed a number of for-
mulas which have clear anti-
Chinese implications. In addition
to its major editorial, Pravda
in a long article referred
Engels' opposition to reformism
and "petit bourgeois ultra-rev-
olutionism, dogmatism, and sec-
tarianism," and quoted directly
his criticism of those who "do
not know how to put living theory
into action." Izvestia on 26
November referred to Engels'
criticism of "left opportunists"
who "poured mud on the whole in-
ternational workers' movement
and its leaders, accusing
everyone and everything of op-
portunism."
These articles apparently
reflect the sharp disagreements
which characterized the private
meetings.
there have been
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CURRENT INTELLIGENCE WEEKLY SUMMARY
1 December 1960
bitter exchanges between the
Soviet and Chinese delegates,
a committee of
26 countries had prepared a
resolution for adoption at the
meeting three weeks before it
started. Since the resolution
was based on Soviet positions,
FF ~: ecause the Chinese felt
that the Soviets were putting
a new interpretation on this
document, the Chinese refused
to accept it.
The Chinese asserted that
their position was right and
that they were determined to
follow it. They insisted: "Let
history be the judge." After
claiming that there can be no
equality if ,the international
Communist movement is directed
by one party, the Chinese sub-
mitted a report which reiterated
views they had expressed at
Bucharest in June 1960 and which
held that the Soviet Union was
destroying international soli-
darity and reinforcing revision-
ism.
L u
Shao-chi gave a four-hour speech
at the conference on 22 Novem-
ber in which he attacked Khru-
shchev personally, as had the
Chinese delegate at the Bucha-
rest conference.
another
committee was formed on 22 No-
vember which includes the Soviet
and Chinese parties and some of
the nonbloc Communist parties.
This committee may have been
formed to draw up a new declara-
tion based on whatever agree-
ments have been reached to date.
The Swiss Communist party
has postponed a politburo meet-
ing which was scheduled for 25
November until 4 December, sug-
gesting that the meetings will
end by the 3rd.
The Chinese apparently have
not been alone in their defi-
F of the Soviet party. 25X1
the parties of four South Amer-
ican countries are supporting
the Chinese thesis in the debate
in Moscow
North Korea and North Vietnam
"are in the Chinese camp."
Propaganda comment from these
two countries, however, reflects
a careful effort to maintain
neutrality in the dispute.
Such a position would be
consistent with Ho Chi Minh's
reported efforts to mediate be-
tween Khrushchev and Mao. Recent
North Korean speeches and edi-
torials reflect considerable
sympathy for Chinese hard-line
oppositon to the United States,
but keep a foot in the Soviet
camp by accepting Soviet views
on the possibility of preventing
war.
The Chinese delegation's
stanchest ally at the Moscow
meeting has been the Albanian
delegation. Reflecting this
strong support from the Alba-
nians, the Chinese leaders, led
by Mao Tse-tung, sent effusive
greetings to Tirana on the oc-
casion of the Albanian regime's
16th anniversary. After praising
the Albanian party for its ded-
ication to Marxist-Leninist
purity, the message says the
Chinese are proud to have such
"unyielding comrades-in-arms"
and deeply appreciate the "enor-
mous" support rendered to them
by the Albanian people.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
In the same mood, Chou En-
Lai told an Albanian anniversary
reception in Peiping on 29 No
vember that it is "particularly
worth pointing out" that the
Albanian people ruthlessly ex-
ploded the shameless plot of US
imperialism and its followers
to slander and isolate China.
He noted that in the past year
"friendship and relations of
mutual help and cooperation"
have been consolidated between
Albania and China, "sharing
each other's weal and woe."
This emphasis
on
the close
alliance of China
and
Albania
was heightened by
the
rare ap-
pearance of Mao at
the
Peiping
celebration. Mao's presence at
the Albanian reception was
given priority in all Peiping
newspapers on 30 November and,
in another gesture of friend-
ship, a commune in the Chinese
capital was renamed the "Peace
Sino-Albanian Friendship People's
Commune." For their part, the
Albanians promised to remain
China's "faithful friend."
The Chou En-lai speech,
Chinese articles and messages
of greeting, and Albanian com-
ment on the anniversary all
stressed Tirana's struggle
against Yugoslav "revisionism."
In sharp contrast, the USSR, in
an Izvestia article greeting
Yugoslavia on its 28 November
national day, was unusually flat-
tering to Belgrade. It pointed
out that the two countries fol-
low identical policies on some
international questions, and
added that the USSR in the future
will strive to develop further
"good relations" with Yugoslavia.
WEST - EAST GERMAN INTERZONAL TRADE DEVELOPMENTS
Bonn has publicly indi-
cated it wants to explore the
possibilities for a new agree-
ment'on interzonal trade. Ade--
nauer's press chief Von Eckardt
stated on 30 November that the
talks would be conditional on
the cessation of East German
harassments on West German trav-
el to and within Berlin. In
a press interview on 12 Novem-
ber, Chancellor Adenauer had
stated that Bonn would be "flex-
ible" on new negotiations, and
suggested that if they were
conducted intelligently, some
advantage for Berlin access
might be achieved.
Bonn's position on the in-
terzonal trade question has gen-
erally been confused and inde-
cisive, with reports of a sharp
disagreement between the Eco-
nomics Ministry and the Foreign
Ministry. Officials of the
Economics Ministry reportedly
favor the quick conclusion of
a new agreement, even if the
East Germans refuse to rescind
the curbs on West German travel
to and within Berlin, as origi-
nally demanded by Bonn. Foreign
Ministry officials, however,
argue that the lack of an agree-
ment will give Bonn a free hand
to retaliate against possible
further East German harassments.
Some officials in Bonn
fear that failure to reach some
understanding with the East
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Germans before the present inter-
zonal trade agreement expires
on 31 December will lead to se-
rious East German interference
with West German civilian access
to the city. The East Germans
claim that since technical ar-
rangements for West German ac-
cess to the city are spelled
out in the 1951 trade agreement,
these provisions will be nulli-
fied when the agreement :formally
expires.
On 17 November Carl Kraut-
wig, a ministerial director in
the West German Economics Minis-
try, met; with East German offi-
cials in an apparent attempt to
sound out the East Germans on a
resumption of negotiations.
Krautwig's "informal talks" may
indicate that Bonn is moving
in the direction of higher level
negotiations with the East Ger-
mans. Previously, all negotia-
tions have been handled by Kurt
Leopold, of the semiofficial .
"Trustee Office" in West Berlin
--a device long used to avoid
recognition of the East German
regime.
Leopold opposes raising the
level of talks and submitted his
resignation.in.protest against
Krautwig's interference, but
later changed his mind. It now
has been announced that he
will handle the new nego-
tiations.
Any change involving higher
level negotiators would be a
significant shift in Bonn's pol-
icy, which in the past has stat-
ed it would regard ministerial-
level talks with the East Ger-
mans as constituting de facto
recognition of the Ulbricht
regime. Although the East Ger-
mans have reportedly stated they
would not seek to publicize the
fact of ministerial-level
negotiations, there is little
chance that negotiations of
this sort could long remain
secret.
East German officials, with
Soviet backing, are attempting
to build up a strong bargaining
position for the Ulbricht regime
in anticipation of negotiations
for a renewal of the interzonal
trade agreement. Following the
line previously set by Ulbricht
and Foreign Trade Ainister Rau
and seeking to take advantage of
differences among West German
officials concerning conduct of
any negotiations, East German
statements are emphasizing that
negotiations with the West Ger-
mans must be on the ministerial
level and declaring that the
West German representatives may
not speak for West Berlin. The
regime meanwhile is intensifying
its propaganda campaign, alleging
that Bonn is intent on sabotaging
German unity by threatening to
break off trade and planning new
measures to impede "normal" trav-
el between East and West Germany.
Khrushchev's promise to
supply East Germany with any
necessary raw materials and goods
in l9dl in the event negotiations
with the West Germans fail great-
ly strengthens the East German
position. Soviet support is also
designed to encourage the East
Germans to maintain their demand
that negotiations must be on the
ministerial level. The commu-
niqud issued on 30 November after
Soviet - East German talks in
Moscow does not, however, indicate
whether the East Germans have had
any success in obtaining promises
of financial aid from the USSR,
which would be needed to replace
certain West German imports
not available in the bloc.
In an apparent effort to prod
the Western powers to induce Bonn
to hasten negotiations, Neues
Deutschland on 27 November im-
plied that the continued operation
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CURRENT INTELLIGENCE WEEKLY SUMMARY
of Western military trains be-
tween West Germany and Berlin
is dependent on the interzonal
trade agreement, since an annex
of the agreement provides for
payment by the West Germans for
the services of East German
engineers and the use of East
German :Locomotives and railroad
facilities by Allied military
trains. This reference which
appears to be intentially
vague and misleading, probably
is also designed to remind the
Western powers of their vul-
nerability to East German pres-
sures on military access and
to suggest that they might be
forced to negotiate with East
Germany for continuation of
military rail traffic.
The regime is continuing
its campaign to undercut or
evade Western restrictions
on the grant of travel
documentation to East Germans
by the Allied Travel Office
in West Berlin. Ulbricht
reportedly has issued orders
that East German personnel,
including trade officials
and correspondents stationed
in Western Europe, will not
be permitted to return to
East Germany for vacations--
even for Christmas--until fur-
ther notice. While this meas-
ure reportedly is designed
to circumvent any refusal
by NATO countries to grant
re-entry visas to such in-
dividuals, it also applies
to East German officials in 25X1
Sweden. East German personnel
reportedly have raised a
strong protest.
The recurrent rioting whicL;
began in Caracas on 25 November
was promoted by pro-Castro oppo-
sition elements and is probably
part of a continuing campaign
of violence to unseat President
Betancourt. The government,
which suspended constitutional
guarantees on 28 November and
called in the army to assist
other security forces, appears
to have the unrest under con
trol. It closed the Communist
daily press and the press of a
Marxist faction involved in the
disturbances and has arrested
a large number of agitators.
Betancourt, who has ex-
pressed his determination to
take strong action against
further agitation, is believed
to have the backing of moderate
political elements, most of the
armed forces, and much of or-
ganized labor.
The recent riots were
touched off by an illegal strike
of telephone workers in the
capital and were effectively
spread there by leftist student
and other groups. The unrest
follows the withdrawal of.the
pro-Castro Democratic Republican
Union (URD) from the three-party
coalition on 17 November and
the serious 19-28 October anti-
government outbreaks, whic$ the
111W seemed to condone. Betan-
court reorganized his cabinet
on 21 November, replacing the
former URD members with in-
dependents. Other incumbents
were reappointed with the ex-
ception of the minister of fi-
nance, who is expected :to ;become
ambassador to the United States.
A substantial portion of
the URD, which dominates the
union responsible for the illegal
strike, now may have allied
openly with the pro-Castro Com-
munist-leftist opposition, thus
augmenting its potential for
provoking unrest. Betancourt's
principal vulnerability to
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CURRENT INTELLIGENCE WEEKLY SUMMARY
1-December 1960
opposition attacks derives from
his economic problems, including
high unemployment, depressed
business conditions, a sizable
budget deficit, a lowering of
business confidence, and a
critical decline of foreign
exchange holdings which led to
the imposition of exchange con-
trols in early November. The
rioting has probably exacerbated
some of these economic diffir
culties and the new finance
minister, pointing to the threat
of pro-Castro groups, has stated
that substantial US aid will be
essential to Betancourt's
survival
The arrest and expulsion
of two Cuban student agitators
in Caracas just prior to the
riots suggests that they may
have been involved in organizing
them. The controlled Cuban
press, increasingly critical of
Betancourt: in recent weeks, re-
newed its strident attacks on
him after the arrests, indicating
that the long-widening rift in 25X1
Cuban-Venezuelan relations may
be approaching an open break.
The, communique' issued on 24
November at the conclusion of
President Kekkonen's four-day
visit to Moscow reaffirmed So-
Viet approval of Finnish affilia-
tion with the European Free Trade
Association (EFTA) on condition
that this would not prejudice
the further development of So-
viet-Finnish trade, which has
long been based on the most-
favored-nation principle. The
1961 trade protocol concluded
at the same time provides for
an increase of 7 to 9 percent
in Soviet-Finnish trade,
When Khrushchev was in Fin-
land in September, Kekkonen
raised the issue of Finnish as-
sociation with EFTA and
Khrushchev indicated that final
agreement ': could be reached dur-
ing Kekkonen's November visit.
Subsequently, Moscow insisted
that not only Finland but all
EFTA members grant the USSR most
favored-nation treatment. It
apparently did not press this
demand in the Moscow talks, how-
ever. The Finnish counselor
told an American Embassy offi-
cial in Moscow that Finland will
ask for a general waiver from
its Western trade partners so
that it can give the USSR the
same trade concessions it will
grant to EFTA members.
The Finns have requested a
ministerial meeting of the Nordic
countries in order to gain their
support; and, despite strong
reservations, the Scandinavians,
particularly the Swedes, will
support Finland vis-a-vis the
other EFTA members in order to
ensure Finland's economic--
and political--ties with the
West.
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CURRENT INTELLIGENCE WEEKLY SUMMARY
1 December 1960
SARENTS
SEA
1"'Pech0nga
a Murmansk
i
~..i/ Prswar
Boundary
\ l
FINLAND Prewar
Boundary
U_$ SR
i r
-K, /A R E L I~ A
tries to follow Finland's neu-
tral course and asserted that
there were no "insurmountable
problems" existing between the
USSR and any of these nations.
The final communique, which
was drafted by the Finns, did
not go beyond the usual endorse-
ment of peaceful coexistence,
complete and general disarmament,
a nuclear test ban, and the need
for keeping Northern Europe "out-
side international tensions and
differences."
The Soviets, however, had
presented four amendments, which
the Finns refused to accept.
First, Moscow requested a clause
calling for keeping Northern
Europe free from atomic weapons,
in line with the campaign to
increase the appeal of the So-
viet "Baltic Sea of Peace" plan.
The Finns also turned down a
Soviet proposal for endorsement
of a special UN General Assembly
session on disarmament next
spring attended by heads of gov-
ernment. In addition, they re-
jected Soviet suggestions that
the commungiue include refer-
ences to the need for a UN re-
organization and references to
the immediate liquidation of the
"vestiges of colonialism."
As a gesture of support for
Kekkonen's policy, Moscow agreed
to reopen negotiations on the
long-standing question of Finnish
use of the Saimaa Canal. The
Soviet Union indicated that it
is prepared to grant a 50-year
lease on the Soviet portion of
the canal, including a strip of
land on each side, a concession
it refused in 1958 when the is-
sue was last raised. It also
offered to lease transshipment
and storage facilities at the
port of Vysotsk near Vyborg.
The Saimaa Canal, which
connects the lake district of
eastern Finland with the Gulf
HELSINKI
CANAL
vyharg LADOGA
- 11
FINLAND {
_.