THE PRESIDENT'S DAILY BRIEF 24 FEBRUARY 1973

• Document Type: FOIA
• Collection: President's Daily Brief 1969-1977
• Document Number (FOIA) /ESDN (CREST): 0005993754
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 11
• Document Creation Date: August 14, 2016
• Document Release Date: August 24, 2016
• Publication Date: February 24, 1973

Declassified in 'Part : Sanitized Copy Approved for Release 2016/06/14 : CIA-RDP79T00936A011500010049-6
The President's Daily Brief
24 February 1973
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Exempt from general
declassification schedule of E.O. I 1652
exemption category 513(1),(2),(3)
declassified only on approval of
the Director of Central Intelligence
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THE PRESIDENT'S DAILY BRIEF
24 February 1973
PRINCIPAL DEVELOPMENTS
The Japanese are preparing to negotiate major eco-
nomic development deals with the USSR, without wait-
ing for a peace treaty. (Page 1)
West German Chancellor Brandt will get his Social
Democratic Party convention to reaffirm faith in
the alliance with the US. (Page 2)
President Thieu has inaugurated a "popular front"
in a first effort to bring South Vietnam's major
political and religious groups into the government
camp. (Page 3)
The North Vietnamese, the Chinese, and the Soviets
have expressed satisfaction with the Laos cease-fire
agreement. (Page 4)
Peru's President Velasco is in serious condition fol-
lowing emergency surgery yesterday. (Page 5)
At Annex, we discuss the effects of the Vietnam set-
tlement on China and the USSR.
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JAPAN-USSR
The Liberal Democratic Party leadership and
Japanese Government bureaucracies have agreed that
economic issues should be negotiated separately
from a Japan-Soviet peace treaty. Moscow's consist-
ent refusal to return the Northern Territories/
/have over-
come Japanese Foreign Ministry desires to use eco-
nomic issues as political levers.
Many problems remain to be resolved be-
fore the Japanese side will actually ini-
tial any agreement, however.(
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WEST GERMANY
At the express wish of Chancellor Brandt-, the
executive board of the Social Democratic Party is
preparing a motion Which affirms that the NATO al-
liance and the Continued military and political
presence of the US in'Europe'is.essential for the
preservation of the balance of power. The motion,
to be presented for adoption at the party's national
congress in April, also states that in order to
maintain the US presence, the German Government must
ensure that European nations do their best for the
common defense.
Brandt, who was disturbed by left-wing crit-
icism of the US after the renewed bombing of North
Vietnam in December, has said that he regards pas-
sage of.the motion a matter of principle. He has
also indicated he is. prepared to use his personal
prestige and power as party chairman and Chancellor
to ensure that the motion is adopted.
Brandtls espousal of this resolution re-
fleets his convictions that Bonn's rela-
tions:with the US should be as friction-
free as possible, and that the Europeans
should do more .to strengthen NATO. On
18 January he.suggested that the Eurogroup
should serve aS 4 forum for such efforts.
Beyond this, however, the motion is Brandt's
first major effort to grapple with an an-
ticipated Left-wing challenge at the April
convention. The left wing of the party is
likely to be cast into considerable dis-
array in deciding whether or how to oppose
Brandt's resolution at the party congress.
The chancellor's stated readiness to put
his prestige on the line should ensure
that moderates and conservatives will
rally to Brandt's side and adopt the mo-
tion.
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SOUTH VIETNAM
President Thieu's new "popular front" held its
public inaugural meeting yesterday in Saigon. The
front brings together a wider range of groups than
previously associated with the government, including
some opposition forces. It is designed to be ad-
visory to the government and may be made part of
Saigon's contingent to the tripartite National Coun-
cil for National Reconciliation and Concord. Gov-
ernment supporters also acknowledge that the front
is intended to improve the government's image at
the Paris conference next week and during Thieu's
coming visit to the US.
The front is Thieu's first direct effort in
several years to bring the country's major political
and religious groups formally into the government
camp. Earlier ,alliances foundered over mutual dis-
trust and the president's unwillingness to give the
politicians any meaningful role in his government.
The role of Thieu's Democracy Party in the new
"popular front" has not been spelled out, but one
front participant claims that party cadre are to
hold all of the key positions.
Reaction to the new front varies from optimism
that it can become an effective counter-force to the
Communists to suspicion that it is only for "show."
The country's most influential opposition, the An
Quang Buddhists, are cautious, Several An Quang
senators attended the organizational meeting, but
the An Quang hierarchy remains uncommitted.
The participating groups will quickly
become restive if the Democracy Party
assumes the most important positions.
The cooperation of several will, depend
on whether Thieu liberalizes his re-
strictive decrees on political parties
and the press, and acts more forcefully
against corruption.
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INDOCHINA
International reaction to the announcement of
a cease-fire in Laos has been positive. North Viet-
namese leaders called the settlement a "success of...
the three Indochinese peoples" and pledged Hanoi's
support for its implementation. Peking's People's
Daily hailed the agreement as a "tremendous victory
for the Lao people." Soviet diplomats in Vientiane
and TASS commentators in Moscow have likewise wel-
comed the agreement.
We did not expect any other reaction.
Both the Soviets and the Chinese, for
reasons of their own, have a strong
interest in keeping the level of con-
flict in Indochina fairly Low. Neither
this settlement, nor the Vietnam agree-
ment, however, will bring any improve-
ment in Sino-Soviet relations. At
Annex, we explore the reasons for such
a judgment.
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NOTES
Peru: President Velasco is in serious condi-
tion following emergency surgery yesterday for an
abdominal aneurysm. The military government he has
headed since its inception in 1968 is capable of
carrying on with a minimum of disruption. Temporary
leadership will be provided by Prime Minister Mercado,
who also holds the posts of minister of war and army
commander. Should Velasco fail to recover, Mercado
almost certainly will be named president by the three
armed services chiefs sitting as the revolutionary
junta. As president, Mercado might be more amenable
to moderating influences than Velasco and would make
changes in the pace and style of the military govern-
ment. We would not expect, however, any lessening
of the armed forces' commitment to domestic change
or to a staunchly independent foreign policy.
International Monetary Developments: The dol-
lar made a modest recovery yesterday in late trading
on European markets, but not enough to offset a
sharp drop during early trading. For the first time
since the devaluation, several European central banks
made,small purchases in the spot market to support'
? the dollar. ? In Japan, the dollar closed slightly
higher, in part because of rumors that Tokyo intends
to slow the issuance of shipbuilding export. licenses.
Meanwhile, gold closed at $84 yesterday on the Lon-
don.market a slight drop from Thursday's closing
price.
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THE VIETNAMESE SETTLEMENT AND SINO-SOVIET RELATIONS
The Vietnam settlement will not bring any im-
provement in Sino-Soviet relations. Rather it will
intensify and spread the competition between Moscow
and Peking not only in Southeast Asia but--more im-
portantly--with the US. The net result will be to
increase US leverage in both Communist capitals.
In Indochina, the policies of the USSR and
China will each be designed to prevent the other
from, gaining a-dominant_position in the region in
the aftermath of the war. Neither can expectto
gaina leading role in Hanoi, which maintained its
independence even when it sorely needed military
aid and had few economic.supporters; Nevertheless,
neither will feel that it can leave the field to
the other,. In their efforts to curb the other's
chances,.both are likely to see advantages ina US
presence in Hanoi;"Izvestiya has already made it
clear that the USSR would welcome the establishment'
of diplomatic relations between the US and the DRV.
In Laos and Cambodia, the Chinese are better
positioned than the Soviets, who can therefore be
expected to back solutions which check the growth
of Chinese influence. In Cambodia this means the
Soviets will support whomever gives most promise
of keeping out Sihanouk. In Laos it may lead the
USSR to align itself behind the North Vietnamese.
Both parties,. however, share an interest, in
keeping the level of local conflict in Indochina
fairly low in the immediate future. They will not,
want, problems in the area to reach proportions
which lead_to new international crises. This gives
them each an interest., in limiting the flow of arms
to the area4including to North Vietnam,
We expect Sino-Soviet competition to heat up
in Southeast Asia. The end of the fighting opens
the' wayfor Chinese diplomatic advances in Thailand,,
Malaysia, and neighboring countries. In response.?
the'. Soviets are reviving their vague proposal for
Asian collective security, which at least' servesto
remindthe Asians that,.if US commitments are
re-
duced, there remains an alternative to. accommodation
with Peking. Moscow may also seek to push India
forward as a counterweight to China.
(continued)
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On the larger world scene, Moscow and Peking
will view the settlement as removing a major ob-
stacle in their bilateral relations with Washington.
Each will also be aware, however, that it must share
this advantage with its rival, and each will be sus-
picious that the other is making better use of it.
The Soviets will conclude from the US-PRC communique
of 22 February that the US and China have moved past
the Taiwan problem and are developing close relations,
despite disclaimers, on an anti-Soviet basis. The
Chinese will worry that, with Vietnam removed from
center stage, projects for Soviet-US cooperation
will now multiply. The result will be to intensify
their struggle for advantage in the greater power
centers of the world--Japan and Europe, but above
all in the United States.
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