CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A024200070001-5
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 18
• Document Creation Date: December 15, 2016
• Document Release Date: October 29, 2003
• Sequence Number: 1
• Publication Date: April 13, 1972
• Content Type: REPORT

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DIRECTORATE OF
INTELLIGENCE
Central Intelligence Bulletin
State Department review completed
Secret
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13 April 1973
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No. 0089/73
13 April 1973
Central Intelligence Bulletin
CONTENTS
WORLD TRADE: US trade bill receives generally
favorable comment abroad. (Page 1)
LEBANON-FEDAYEEN: Israeli raid brought before UN
Security Council. (Page 3)
LIBYA-ITALY: Italy providing Libya with ground
forces equipment. (Page 4)
USSR-CHINA: Soviets make public more information
on China's nuclear weapons. (Page 5)
USSR-US: Largest Soviet-American trade deal signed.
(Page 7)
CHINA: The second highest ranking party official
purged in Cultural Revolution has been rehabilitated.
(Page 9)
ITALY: Andreotti facing growing erosion of support.
(Page 10)
URUGUAY: The military and organized labor define
their differences. (Page 11)
YUGOSLAVIA: Defense Minister apparently on the way
out. Page 12)
LAOS: North Vietnamese continue attack. (Page 13)
EC: Disagreement over farm prices. (Page 13)
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BURMA: Rangoon speeds up offshore oil development.
Page 14)
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WORLD TRADE: President Nixon's trade bill has
received generally favorable comment abroad.
Although the Japanese press criticized the
"strong protectionist coloring" of some features of
the bill, the provisions for liberalizing world
trade were welcomed. The press urged Tokyo to ex-
pand its efforts toward liberalization to avoid
giving the US an "excuse" for adopting protectionist
measures against Japan. Some Japanese Government
officials expressed fear that the powers requested
by the President could be used to extract trade and
currency concessions.
Little in the US proposals surprised the Euro-
peans and they are generally pleased that a start
has been made toward a US negotiating mandate for
multilateral bargaining scheduled to begin in Sep-
tember. Press comments on the whole approve of the
"tone" of the President's proposals but, as in Japan,
some commentators have noted the protectionist po-
tential of the legislation and the dangers of a pos-
sible trade war. Considerable uncertainty persists
about how the proposals may be changed by the Con-
gress as well as how the Administration may ulti-
mately use some of the broad powers requested. In
a public statement, the EC Commission again stressed
reciprocity as the guiding rule for the negotiations.
President Pompidou's economic adviser, Jean-Rene
Bernard, has confirmed to the US Embassy that France
will take a hard position in the trade negotiations.
Along with some French press commentators, Bernard
believes the US is out to dismantle the EC's common
agricultural policy and he claims to see no positive
benefits to the US from this "harsh policy toward
the community." The proposed changes in US tax laws
governing subsidiaries operating abroad, meanwhile,
have struck sensitive Belgian and Irish nerves.
(continued)
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Both countries, particularly Ireland, offer generous
incentives to US businesses that make an important
contribution to economic growth.
Officials of the General Agreement on Tariffs
and Trade interpreted the President's proposals as
a favorable sign that the multilateral trade talks
will begin as scheduled in Tokyo next September.
The authority requested by the President, they
noted, would give the US power to negotiate flex-
ibly and co tively.
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C LEBANON-FEDAYEEN: Lebanon brought Israel's
latest raid before the UN Security Council yester-
day, while Beirut remained tense following the
funeral for slain fedayeen leaders.
Schools and business establishments closed in
observance of services for the dead. Large crowds
accompanied the cortege but the procession and
demonstrations throughout the day were generally
orderly. There were, however, some instances of
molesting of Westerners by some of three to four
thousand armed fedayeen participating in the cere-
monies. The mood of the crowd was ugly; they chanted
slogans denigrating the US, the Lebanese Government
and Army. Security forces, however, kept crowds
away from the US Embassy.
President Franjiyah has not yet accepted Prime
Minister Salam's resignation, submitted Tuesday,
and he continues to consult with political leaders
on the formation of a new government.
Lebanon's request yesterday to convene the
Security Council reversed an earlier decision to
go no further than lodge a protest. The move was
apparently prompted by domestic and Arab pressure
for action. In discussions with US officials, the
Lebanese Ambassador said that among new elements
influencing Beirut were Israeli threats of further
commando operations against Lebanon.
The Lebanese claim they seek a resolution that
condemns all parties to terrorism,but it is not
clear how much support for such wording they would
have among the other Arabs. The US mission at the
UN reports that the Egyptians as well as the Soviets
want the US to be forced to use the veto. The
Lebanese permanent representative opened debate
last night by calling for "meaningful action" to
end Israel's "a r ssion" against Lebanon.
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LIBYA-ITALY: Italy may be supplanting the
USSR and Czechoslovakia as a supplier of ground
forces equipment to Libya. Rome has requested
Washington's approval to export a second order of
150 M-113 armored personnel carriers (APCs) to
Libya. The APCs are manufactured in Italy under
US license and cannot be exported to third coun-
tries without US approval. Permission to export
the first 150 APCs was granted last year and most
of them have already been delivered under a July
1972 agreement. The agreement also included self-
propelled artillery, a large number of trucks,
and other equipment.
The USSR and Czechoslovakia have supplied
Libya with almost 300 medium tanks, 350 APCs, and
about 200 artillery pieces since 1970. President
Qadhafi's anti-Communist bent, however, has led
him to seek other sources for arms. No recent ne-
gotiations with either Moscow or Prague for addi-
tional equipment have been noted and deliveries
under previous agreements have been virtually com-
pleted.
Italy's arms sales to Libya may lead to better
relations between the two countries. Rome recently
received US approval to begin deliveries of 27
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*USSR-CHINA: The Soviet regime has been making
more information on China's strategic capabilities
available to at least part of the Soviet public in
recent months.
Speakers at foreign affairs lectures in Lenin-
grad have provided unusually specific details with
respect to Peking's growing nuclear arsenal. The
audiences are usually made up of the party faithful
and other citizens interested in international af-
fairs.
In late January, a public lecturer claimed
that China had acquired a second-strike capability
by putting missiles in silos built into rocks far
from the Soviet border. The speaker implied that
the possibility of eliminating the Chinese missile
threat by a "surgical" strike no longer exists.
Early last month another lecturer stated that
the Chinese have 80 to 100 nuclear warheads and
could deliver these to targets deep within the So-
viet Union. A speaker at a public lecture last
week predicted that China probably will have mis-
siles with ranges of 5,000 to 6,000 kilometers by
1975. He spoke in terms of 40 to 50 missiles, but
it is not clear whether he meant that all had this
range.
Although some lecturers have spoken of the
need to keep in mind the contingency of war with
China, the tone of their remarks on the Chinese
nuclear capability has been matter-of-fact. There
has been no apparent attempt to alarm the audience
or to convey the impression that hostilities are
imminent, or even likely.
The comments from Leningrad may be the first
signs of an effort to accustom the Soviet public
gradually to the notion that China already possesses
a nuclear deterrent, while at the same time placing
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present Chinese capabilities in some perspective.
A description of this kind could also serve as an
indirect answer to those who may have wondered why
the USSR does not simply destroy China's nuclear
capability before it is too late.
'The Director of the Bureau of Intelligence and Re-
search, Department of State, feels that the last
sentence is too speculative and that the audience
being addressed plays no role in Soviet decision
making on such vital questions as nuclear strikes
against China, hence these lectures are simply a
public information exercise.
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USSR-US: Occidental Petroleum has signed an
$8-billion fertilizer exchange contract with the
USSR--the largest Soviet-American trade deal in
history. The agreement covers the sale of super-
phosphate fertilizer to the USSR in return for So-
viet urea and potash. Under the terms of the
20-year contract, Occidental will also build four
ammonia-urea plants in the USSR and will be repaid
with products of the plants. Reports based on
earlier negotiations indicated that the US firm
would provide up to 1 million tons a year of su-
perphosphoric acid used to produce phosphate fer-
tilizer, rather than the finished fertilizer.
The large shortfall in Soviet agricultural
production last year and the chronic shortage of
phosphate fertilizers encouraged the Soviets to
conclude this agreement. Although the USSR ranks
second only to the US in production of phosphate
fertilizers, their poor quality and outmoded as-
sortment drastically reduce the effectiveness of
the Soviet products. In addition, Soviet ferti-
lizers must be used over a sown acreage 70 percent
greater than that in the US; half of the arable
land in the USSR is deficient in phosphorus. A
larger supply of phosphate fertilizer could in-
crease crop yields in the USSR, improve grain
ualit and accelerate the ripening of grain.
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Teng Hsiao-ping
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CHINA: Teng Hsiao-ping, the second highest
ranking party official purged during the Cultural
Revolution, reappeared at a banquet given by Premier
Chou En-lai on 12 April.
Although. Teng was given no party or government
titles, the official Chinese news agency listed him
with two vice-premiers in the government. Teng had
been a vice-premier and has probably been reinstated
in his government post. Peking appears to have
skirted for the moment the more controversial issue
of whether to return Teng to an important party po-
sition.. Teng was formerly secretary-general of the
party and sixth among the party's top leaders until
his fall in December 1966. Another former top party
official, who was also a vice-premier, reappeared
last December with his government title but has not
been seen since.
The decision to rehabilitate Teng may have been
taken last month when important party officials were
reportedly holding a meeting, although Teng's status
has apparently been under discussion for several
years. Since 1968, there have been persistent rumors
that he would be rehabilitated.
With the current leadership unable to agree on
a number of major personnel appointments, the return
of former high-ranking officials may be an attempt
by moderates such as Chou En-lai to push their can-
didates forward. Although Chou has differed with
some of these veteran officials in the past, they
are clearly more acceptable to him than the more
radical newcomers who came to prominence during the
Cultural Revolution.
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ITALY: Prime Minister Andreotti faces growing
erosion of his support.
After repeated defeats in parliament, Andre-
otti, on the eve of his visit to Washington, called
for public votes of confidence. Although the Sen-
ate rejected government-sponsored articles on edu-
cational reform by five votes in secret balloting,
in three public confidence votes Andreotti won by
a slim margin. In contrast to the defections in
the secret balloting, the government parties evi-
dently held together well against a combined oppo-
sition of the neofascist National Right, the Com-
munists, and the Socialists.
Earlier this month, an initiative by Vice Prime
Minister Tanassi's Social Democrats for formal in-
terparty talks about a successor government signaled
spreading dissatisfaction with the Andreotti govern-
ment. The principal issues are economic policy and
Socialist relations with the Italian Communists.
The Republicans, Liberals, and Socialists lay par-
ticular stress on economic issues, principally re-
storing growth and stemming inflation. The Social
Democrats want the Socialists to withdraw from Com-
munist-run local governments. The Christian Demo-
crats emphasize both issues.
Despite unrest and talk of a new government,
political leaders at the moment seem to favor post-
poning action until June on whether or not to return
to a center-left alignment. Early in June a Chris-
tian Democratic party congress will permit assess-
ment of the strength of the eft and right within
the party.
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URUGUAY: The lines between the military and
organized labor are being more clearly drawn.
In a communique issued on 9 April, the armed
forces commanders warned the Communist-controlled
National Convention of Workers (CNT) to end its in-
volvement in politics and to abandon the tactic of
calling disruptive strikes and take-overs of fac-
tories. The document also gave tacit support to
President Bordaberry's plan to submit to Congress
legislation that would strictly regulate organized
labor.
Both Bordaberry and the armed forces command-
ers had several reasons for wanting to get the com-
munique on the record. The President wanted a mil-
itary commitment to support his union bill and a
specific criticism of the CNT for demanding his
resignation. The military chiefs desired to cor-
rect any impression that officers' recent contacts
with labor mean that the armed forces are moving
leftward and to warn the unions that the traditional
rules of the political game will be changed as a
result of the military's assuming a strong role in
the government.
The immediate reaction of the CNT was a fairly
moderate statement playing down the differences be-
tween the military and labor and claiming that the
two institutions should work together against the
common enemy--the "oligarchy." In the long run,
however, serious friction bet een the military and
inevitable.
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YUGOSLAVIA: Defense Minister Ljubicic has
been dismissed from the party watchdog organization
in the military during a general membership rota-
tion. Rumors also indicate that his departure from
the ministry is only a matter of time. His main
political asset in the past has been unflinching
loyalty to Tito, but he may have angered Tito by
making a speech that implied threats against Vienna
last December during a controversy over the Slo-
venian minority in Austria. Ljubicic's remarks
brought a sharp reply from Vienna. A recent ar-
ticle in the party presidium's theoretical journal
indirectly attacked this speech and pointedly re-
minded the military that it should not threaten
Yugoslavia's neighbors.
Tito anticipates that the military will play
a key role in maintaining the stability and effec-
tiveness of the regime after his departure, and he
will want a Defense Minister who is fully trust-
worthy. Likely successors to Ljubicic include
Chief of Staff Stane Potocar and Dzemal Sarac,
secretary of the party's military organization.
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LAOS: North Vietnamese units supported by at
least two tanks continued heavy artillery attacks
on government units near Tha Viang on 12. April.
Some government units have begun to pull back from
forward positions. Poor flying weather is restrict-
ing Lao T-28 support, and heavy ground fire is ham-
pering efforts to evacuate government casualties.
Morale is poor among government troops .and, in the
absence of air support, a general withdrawal from
the Tha Viang area may be imminent. Most govern-
ment leaders are in the royal capital of Luang Pra-
bang for the celebration of the Lao new year and
there has been no official comment on the situation
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at Tha Viang.
EC: The Council of Agricultural Ministers
failecT-to agree on the EC Commission's farm price
recommendations for the 1973/74 marketing year.
The Commission proposes that prices be raised by
modest amounts, which would vary from country to
country. This would re-establish common prices and
eliminate the compensatory taxes and subsidies
prompted by currency shifts among EC countries dur-
ing the past two years. West Germany, whose cur-
rency has appreciated, opposes this proposal because
it does not entail a price gain for German grain
producers. The UK, whose currency has depreciated,
also opposes the proposal because it would cause
excessive price hikes there. Despite these diver-
gent positions, the Agricultural Ministers may be
able to agree on new prices when they meet again
on 16 April. To mollify the Germans, EC Commis-
sioner Lardinois has said privately that he may
recommend slightly higher price increases than have
been proposed to allow a token price boost for Ger-
man grain farmers.
(continued)
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BURMA: Rangoon has decided to speed up its
offshore oil development. German and Japanese gov-
ernmental oil organizations and about 25 private
US companies soon will be invited to bid for ex-
ploration rights. Burma has indicated that in the
initial bidding it will distribute three of 17 off-
shore blocks, one to each nation. The other 14
blocks will be allocated later by Rangoon on the
basis of performance in the initial blocks and the
terms offered. By seeking foreign private invest-
ment in this instance Burma has reversed its normal
policy of requiring that all foreign financing for
development purposes come only from governments.
Rangoon probably hopes that offshore production
eventually will eliminate the need to import petro-
leum, which accounted for 5 percent of total imports
in 1971, and increase export earnings.
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