THE PRESIDENT'S DAILY BRIEF 22 APRIL 1969

• Document Type: FOIA
• Collection: President's Daily Brief 1969-1977
• Document Number (FOIA) /ESDN (CREST): 0005976736
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 16
• Document Creation Date: August 14, 2016
• Document Release Date: August 24, 2016
• Publication Date: April 22, 1969

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The President's Daily Brief
22 April 1969
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32
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FOR THE PRESIDENT ONLY
23 April 1969
LATE NOTES FOR THE PRESIDENT'S DAILY BRIEF OF
22 APRIL 1969
I, MAJOR PROBLEMS
EUROPE
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MIDDLE EAST
SOVIET AFFAIRS
Support for the chain of student sit-in strikes in Czecho-
slovakia appears to be dwindling and Rude Pravo today charged
that the strikes were interference in the internal affairs
of the Communist Party. (Reuters, 23 Apr)
There is nothing significant to report on Vietnam
II, OTHER IMPORTANT DEVELOPMENTS
PERU
President Velasco's address to the nation last night turned
out to be something less than "momentous." It was defensive
in nature, consisted largely of a general appeal for support,
and introduced no new departures. He expressed the view that
the IPC case was closed although his government was willing to
remain open
fact that a
ington this week to continue the talks.
to a continuing dialogue. He did not refer to the
Peruvian delegation is scheduled to leave for Wash-
KOREA
The North Korean government today issued a statement on
the EC-121 incident. The complete text is not yet in but the
summary would indicate an accusation that the US infiltration
into North Korean air space by a "large-size reconnaissance
plane" was raising a "new war clamor." The statement adds,
2
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"Our counterattack and self-defense measures...are a legitimate
exercise of sovereignty...which fully conforms to international
law." (FBIS 17, 19, 20, 21, etc.)
Preliminary reports indicate that a North Korean guard
post this morning fired an estimated 30 rounds of recoilless
rifle fire and 300 rounds of machine gun fire across the DMZ
at a position manned by troops of the South Korean 7th Division
who returned the fire. The fight lasted 35 minutes and no
casualties were reported.
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MAJOR PROBLEMS
MIDDLE EAST
The Arabs and Israelis are both making it known that
more serious military clashes may be imminent. The Is-
raelis told the embassy in Tel Aviv yesterday that another
terrorist attack on Elat was being readied. Perhaps to build
a case for an "active defense" attack on Iraqi forces in
Jordan, they have also claimed that Iraqi artillery shelled
Israeli targets in Monday's exchange over the Jordanian
border. Jordanian Prime Minister Rifai warned yesterday
that if the Israelis continue to hit civilian targets, Jor-
dan will have to retaliate in kind.
Warnings such as these are not to be taken as predic-
tions of what are essentially unpredictable events. They
are, however, accurate indices of the continuing rise in
Arab-Israeli tensions.
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SOVIET AFFAIRS
The CEMA (Council of Economic Mutual Assistance) sum-
mit meeting to be held tomorrow and Thursday in Moscow will
present a show of unity, but is not likely to accomplish any-
thing of major importance.
Most of the East European countries, all of whom will
be represented by their party and government leaders, feel
that CEMA, as presently organized, is unable to meet their
technological, trade, and monetary requirements, and advo-
cate major changes. Given the acrimonious history of re-
cent CEMA meetings,' no substantive economic agreement is
likely and the best that can be hoped for is a public dis-
play of political solidarity. Thus, serious economic dis-
agreements will be papered over for the sake of public ap-
pearance, and the Soviets may use the occasion to discuss
with their allies the current Czechoslovak situation in the
aftermath of last week's party changes in Prague.
At annex we give some background on CEMA's problems.
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EUROPE
Canada's NATO colleagues are deeply concerned over Ot-
tawa's contemplated force reductions in Europe but hope to
limit their effect. West German Foreign Minister Brandt be-
lieves that Canadian Foreign Minister Sharp and Defense Min-
ister Cadieux both oppose Trudeau's decision and will be look-
ing for arguments at the May Defense Planning Committee (DPC)
meeting for a stretchout or reversal of the prime minister's
action.
The Germans fear the gap left by a Canadian withdrawal
could not be closed and that the decision might lead the US
to reduce its troop commitments in Europe. The Dutch are
also unhappy with the impending Canadian withdrawal and see
little likelihood that West Europeans will be able to take
up the slack.
Both NATO Secretary General Brosio and the Germans are
seeking multilateral efforts, prior to the DPC meeting, to
influence the scope, timing, and character of any force re-
ductions by Canada. Such concerted action might have this
effect, but it will almost certainly not deter Ottawa from
reducing, perhaps substantially, its military forces in
Europe.
VIETNAM
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II. OTHER IMPORTANT DEVELOPMENTS
PERU
The Cerro de Pasco Mining Company fired twelve labor
leaders yesterday after unions at the company's installa-
tions rejected a government order to resume work. Although
the company's action was perfectly legal, it is likely to
provoke an angry response that could spread to other US-
owned companies. Given the current atmosphere in Peru,
the government cannot be expected to go to the aid of US
firms with much vigor.
SOVIET UNION - INDIA
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Meanwhile, the Soviets have requested a long-range agree-
ment for use of Indian port facilities for supply, mainten-
ance, and repair of Soviet ships. Extensive military as-
sistance to India gives the Soviets leverage in pressing
for a port agreement. New Delhi showed no signs, however,
of agreeing to any permanent ties which would compromise
its policy of nonalignment, although ad hoc permission for
individual ships to visit Indian ports will continue to be
granted.
KOREA
Peking yesterday broke its week-old silence over the
shootdown in an official news release attacking Moscow's
"collusion" with the US after the incident. While de-
nouncing the Soviets' assistance and cooperation during
the past week as "active service provided to US imperialism,"
the article cited a "news report" source stating that the
US plane "intruded" into North Korean airspace. The dis-
patch made no mention of who shot down the plane and man-
aged to avoid any direct expression of support for North
Korea's action.
Peking's statement contrasts with its announcement last
year concerning the seizure of the Pueblo which promised
China' "firm support" for Pyongyang's "just stand."
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MA< 11-IL PKLSIDLNI UNLY
THE COUNCIL FOR MUTUAL ECONOMIC ASSISTANCE (CEMA)
CEMA ,was formed in 1949, during_the_petiod when Mos-
cow--in the Stalinist pattern--was forcing heavy industriali-
zation on all the East European countries. Parallel devel-
opment of this sort, without any adaptation to market forces,
fostered inefficient, competitive economies, rather than a
complex of complementary trading partners.
The proper role of CEMA has long, been a subject of dis-
pute--at times acrimonious--among the member countries. For
political reasons,the Soviet Union and Poland believe that
the organization should promote greater economic cohesive-
ness. Czechoslovakia, East Germany, and Hungary are inter-
ested in increased cooperation, but are apprehensive lest
Soviet domination increase. Rumania, at the other end of
the scale, is extremely sensitive to any move that impinges
on its sovereignty. Thus, it is not surprising that CEMA
has been most effective in technical areas of cooperation
among its members--such as the railway freight car pool and
the integrated electric power network--where conflicts of
national interest are minimal.
All the countries rely and will continue to rely on
bilateral barter trade with one another--a major factor in
the inefficiency of their economies. In their bilateral
trade negotiations, the countries run head on into gross
price distortions that result from artificially:sot ptices
which do not reflect costs or scarcity. There is no multi-
lateral medium of exchange to settle trade imbalances. The
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CEMA International Bank for Economic Cooperation pro-
vides only a limited clearing service for trade im-
balances which must still-be settled by bilateral negoti-
ations.
The Soviets have recently engaged in a series of bi-
lateral talks with the East European countries on develop-
ment 'of the five-year trade plans for 1971-75. These plans
will also be considered at length in. CEMA committees.
In its day-to-day work, CEMA has evolved into a service-
type organization, currently housed in a new headquarters
building in Moscow and employing personnel from all member
states. It is a clearing house for administrative, techni-
cal, and financial guidance to its members in their bilateral
trading arrangements with each other. The members have also
not been averse to having CEMA's technical staff wrestle
with such problems as pricing of items, joint investment
projects, and problems of currency convertibility.
CEMA also explores means of achieving the benefits of
large-scale production through cooperation, economies that
are not possible within a single country. .It is obvious,
however, that no CEMA member, including the USSR, will sur-
render control over the development of its economy to an
international authority. Areas where a start toward inte-
gration can be made are indeed limited. They might include
more cooperation in research and development, selected in-
dustrial specialization, and increased enterprise-to-enter-
prise contacts. Multilateral planning probably will continue
to be limited largely to coordination of trade requirements
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specified in the national plans of the individual member
countries.
CEMA members will find it difficult to break out of
the vicious circle of their economic dependence on the USSR.
They must buy the agricultural and industrial materials they
need from the USSR because they cannot sell goods in the
West. Their manufactures will not be able to compete sig-
nificantly in Western markets until major changes are made
in the Communist systems of economic management and unless
specialization greatly increases among the CEMA members.
Trade with the West will probably grow even more slowly
during the 1970s than it has in the last 10 to 15 years.
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