CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00875R000800020253-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 15
• Document Creation Date: December 19, 2016
• Document Release Date: December 12, 2002
• Sequence Number: 253
• Publication Date: November 10, 1972
• Content Type: BULL

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DIRECTORATE OF
INTELLIGENCE
Central Intelligence Bulletin
DIA, DOS Declassification/Release Instructions on File
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N2 582
10 November 1972
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VIETNAM: Hanoi, Moscow, and Peking register dis-?
satisfaction with Vietnam negotiations. (Page 1)
CHILE: New military cabinet officers challenged
by Allende allies. (Page 4)
Central Intelligence bulletin
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THAILAND-CHINA: Bangkok moving to improve relations.
(Page 5)
EUROPEAN COMMUNITIES: EC may be modifying demands
for preferential access to Mediterranean markets,.
(Page 6)
USSR: Speculators exploiting harvest problems.
Page 7)
HONDURAS: Growing dissatisfaction with Cruz re-
gime. (Page 8)
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EAST GERMANY: Refugee flow triples (Page 9)
CAMBODIA: Government troops finally clear Route 5
(Page 11.)
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VIETNAM: Hanoi, Moscow, and Peking are taking
different tacks in registering their dissatisfaction
with the current state of the Vietnam negotiations,
but all three have avoided positions that might
jeopardize prospects for a settlement.
Of the three, Moscow lets its eagerness for a
settlement show most clearly. Prior to 31 October,
when Hanoi was talking about a deadline for signing
the agreement, Premier Kosygin openly diverged from
the North Vietnamese position by expressing the hope
that the talks would continue. At the same time,
TASS reported Dr. Kissinger's statement that the re-
maining issues are less difficult than those already
settled. Speaking for the Soviet leadership on 6
November, Politburo member Mazurov noted that the
agreement worked out in Paris "was not signed at
the date fixed," but left open the possibility of
further negotiation and called for signing "as soon
as possible."
Moscow's public posture of caution tinged with
hopefulness was also reflected in a remark on 30 Oc-
tober by General Staff Chief Kulikov, who expressed
gratification that the war was winding down and that
remaining problems could now be addressed by non-
military means.
These comments reflect Moscow's assessment
that, at long last, negotiations between Washington
and Hanoi have reached a delicate and critical
stage, and that nothing should be done to jeopardize
prospects for agreement. Over the past year, the
Soviets have come to regard the conflict in Vietnam
more and more as an annoying obstacle in the way of
Moscow's higher priority effort to cultivate rela-
tions with Washington. The North Vietnamese, of
course, have been painfully aware of this, and the
Soviets will be careful to avoid so alienating them
as to leave the field open for increased Chinese
influence in Hanoi. Moscow probably hopes, however,
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that its lukewarm support will help persuade Hanoi
to be more flexible in addressing the issues still
blocking agreement with the US.
The Chinese were slower off the mark with au-
thoritative commentary than the Soviets were, but
the line when it came was markedly stiffer than
Moscow's. Last week; Peking issued four progres-
sively tougher statements backing much of the North
Vietnamese Government statement of 26 October and
attacking Washington's response. The last and by
far the strongest of them appeared in People's
Daily over the signature "Commentator" on 3 Novem-
ber. It charged that Washington was stalling in
order to renegotiate the "basic content" of an
agreement the US already had accepted. The com-
mentary was harsher in tone and focused more
sharpy on Washington's culpability and motives
than anything the Chinese have said about Vietnam
since President Nixon's Peking trip, and the four
statements taken together amount to the clearest
and strongest backing the Chinese have given Hanoi
in months on important issues -f the negotiations.
Peking obviously hoped to improve its standing
with Hanoi vis-a-vis Moscow through these state-
ments. Beyond that, the Chinese also appeared to
be signaling genuine concern that an early settle-
iaent was imperiled. Commentator on 3 November said
flatly that "if the US plan is successful... there
will hardly be any prospect of restoring peace in
Vietnam." Although Peking was careful not to rule
out further. US - North Vietnamese negotiations,
the Commentator article clearly warned that it is
"impermissible" for Washington to disregard the
original agreement ar,i that unless the US attitude
changes, "it is unthinkE:Ljle that a new meeting
would produce cancrete results."
Peking, having made its position clear, has
said nothing directly regarding a settlement in
recent days. The Chinese, however, have tried to
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keep faith with Hanoi by printing and broadcasting
an unusually large volume of Vietnamese Communist
and Western press reports that tend to disparage
Washington and Saigon.
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The Vietnamese Communists themselves have
kept up a drumfire of propaganda castigating the
US for delaying the conclusion of the agreement.
They have, however, studiousl,; avoided saying what
the consequences would be if the US was not im-
mediately forthcoming, and Xuan Thuy in fact made
it clear in an interview last weekend that Hanoi
would be amenable to a further round of negotia-
10 Nov 72 Central Intelligence Bulletin
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CHILE: The military officers who joined the
cabinet last week are already being challenged by
some of President Allende's political allies.
Allende and his opponents both welcomed the
prestige of Army General Prats in the interior min-
istry as guarantor of the truce that ended the ex-
hausting 26-day protest shutdown. Allende's Marxist
backers, however, were less enthusiastic. While
Prats guaranteed there would be no reprisals, So-
cialist Party Secretary-General Altamirano has
called for severe punishment of the strikers, and
Finance Minister Millas apparently approved the
dismissal or transfer of some 50 Central Bank em-
ployees who joined the protest. Furthermore, the
government-dominated distribution network is al-
leged to be withholding goods from some merchants
who closed down.
There are other indications that the Popular
Unity coalition does not intend to return to the
status quo ante after its most serious showdown
with the opposition thus far. Dow Chemical in-
stallations--including a plant already slated for
nationalization--remain in government hands, and
there is little indication that they will be re-
turned or that anti-UP employees will retain their
jobs. This week, workers took over two firms that
also retain some US capital in disputes over wage
readjustments. On 8 November, Allende vubmitted
legislation to establish worker participation in
the management of compa either WbIf ly or par-
tially nationalized.
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THAILAND-CHINA. Bangkok is moving ahead to
improve relations with Peking.
In a recent conversation with the US ambassador,
the Thai Government's deputy director for Financial
Affairs, Prasit Kanchanawat, said that Thailand
would begin trading with China as soon as arrange-
ments for a formal mechanism could be worked out.
Prasit--who headed the Thai delegation to the Canton
Trade Fair last month--indicated that Bangkok pre-
ferred to set up a state trading organization for
Thailand, which he believed would take at least two
tc three months. The Chinese apparently have indi-
cated an interest in purchasing sugar, jute, rubber,
hard wool, and also some rice, if any is available.
For their part, the Thais have indicated an interest
in buying light manufactured items, fruits, and
medicines.
As a further indication of Bangkok's interest
in improving its relations with Peking, Prasit also
tried to sound out US reaction to the possibility
of Thailand moving away from Taiwan along the lines
of the recent Japanese move. F_ I 25X1X4
25X1X4 when Prasit first went to
Peking in August, he was empowered to tell the Chi-
nese that Bangkok would be willing to downgrade its
relations with Taiwan if Peking proved amenable to
improving its relations with Thailand. It is not
clear, however, whether Prasit did indeed make such
a pledge. Although Prasit told the US ambassador
that Thailand felt no need to establish full dip-
lomatic relations with China soon, if and when they
decide to take the step the Thais are not likely to
let the Taiwan issue stand in the way. F -1 25X1
10 Nov 72 Central Intelligence Bt; lletin
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EUROPEAN COMMUNITIES: Because of strong US
pressure, the EC is s owing signE of modifying its
demands for preferential. EC access to Mediterranean
markets.
The EC Council's consideration of a "Mediter-
ranean policy" to guide future association agreements
with countries in the area is still in an early stage,
but US opposition to such "reverse preferences" is
clearly having some effect. Prior to Council dis-
cussion of the subject this week, the new EC members
in particular had called for serious attention to
the '?polttical implications" of the proposed policy.
At the meeting itself, Britain and Germany asked, in
effect, that reverse preferences be generally limited
to the more developed Mediterranean states--some of
which may eventually become full EC members. Al-
though France and Italy still insist on the principle
of reciprocity, the Commission has now suggested
that this be attained in ways other than by tariff
concessions.
Further Council sessions next month will indi-
cate whether or not this week's discussion repre-
sents a "breakthrough" on reverse preferences--as
Commissioner Dahrendorf claims. Although the com-
munity~hopes to have new arrangements in the Medi-
terranean come into force in early 1974, such prob-
lems as defining how the proposed policy will be
applied to each country and agreeing on trade con-
cessions for Mediterranean agricultural products
may require considerable time to resolve. The re-
quests of Greece, Turkey, Malta, Spain, and Israel
to benefit from the EC's general preferential scheme
for less developed countries will apparently not be
acted on until the scope of the Mediterranean policy
becomes clear.
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USSR: Small-time speculators are exploiting
this year's harvest problems ky purchasing produce
in state stores, where prices are fixed, and re-
selling it in collective farm markets, where prices
are free to respond to supply and demand conditions.
According to the Soviet press, a "raid" on
a collective farm market in Kuibyshev discovered
that cabbage purchased from the state store for 6
kopeks a kilo w:;s being sold for 60 kopeks. A
similar investigation in Tbilisi found a factory
worker selling state store potatoes--which cost
10 kopeks a kilo--for 70 kopeks. In Dushanbe,
courts are holding special sessions in the markets
to punish speculators on the spot.
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Both the potato and vegetable crops were ser-
iously affected by last summer's drought. There
have been sporadic shortages and some local restric-
tions on purchases of potatoes and cabbage. In
September, some vegetable prices in the Moscow col-
lective farm market were roughly double the level
of September 1971. In past years the administra-
tors of local free markets have placed price ceil-
ings on produce, but so far this year there have
been no indications that a lid has been placed on
prices. Authorities probably are unwilling to risk
losing any free market supplies in a year of short-
ages. This fall the leadership has taken pains to
reassure the population that adequate food supplies
are available, but panic buying and distribution
roblems have aggravated the supply situation.
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HONDURAS: The commander of the air force has
joined the ranks of those who have long believed
that President Cruz must go.
In a recent conversation with the US defense
attache, Air Force Commander Colonel Soto Cano de-
scribed the 17-month-old Cruz administration as
the worst in the country's history. He noted that
neither major political party supports Cruz, that
financial conditions are deplorable, and that noth-
ing was being done to solve the many social and
economic problems. He implied that the military,
too, had finally realized that it can no longer
continue to buttress the crumbling regime and is
prepared to act.. Soto ,stated that although little
was accomplished under the previous administration
of General Oswaidu Lopez, now chief of the armed
forces, the military has no choice but to back
Lopez' return to power.
Cruz has ,peen recognized as a failure from
the beginning, and most sectors of society have
come to accept--or actively encourage--his over-
throw. Traditional somnolence and procrastination,
however, have worked in Cruz' favor despite a
seemingly endless parade of situations which could
have been used to justify his removal.
The fact that the usually optimistic Soto has
spoken out against Cruz may indicate that the mili-
tary has reached the limits of its patience. Much
depends on the readiness of General Lopez to assume
the presidential sash; if he continues to delay,
the military may seek someone else to lead the
COUP.
10 Nov 72 Central intelligence Bulletin 8
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NOTES
EAST GERMANY: The flow of Eaut German refugees
to West Germany has tripled since the implementation
last June of the Four Dower and inter-German transit
agreements on Berlin. US officials in Berlin state
that through October, 199 refugees reported to West
Berlin authorities and that many others probably
entered West Germany. One of Pankow's pri:icipal
concerns regarding the Berlin accords was that they
would result in a sharp increase in illegal depar-
tures. The continued flight of refugees could
create difficulties in improving East-West German
relations. The East Germans have not vet raised
the issue with Bonn, perhaps because they want to
avoid adding to Brandt's re-election problems.
Pankow has initiated stricter traffic control meas-
ures inside East Germany, but these do not involve
Berlin transit traffic.
Central Intelligence Bulletin
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CAMBODIA: Government forces, led by elite
Khmer t