THE PRESIDENT'S DAILY BRIEF 6 NOVEMBER 1974

• Document Type: FOIA
• Collection: President's Daily Brief 1969-1977
• Document Number (FOIA) /ESDN (CREST): 0006007861
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 12
• Document Creation Date: August 14, 2016
• Document Release Date: August 24, 2016
• Publication Date: November 6, 1974

Declassified in- Sanitized Copy Approved for Release 2016/07/15 : CIA-RDP79T00936A012300010038-9
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The President's Daily Brief
November 6, 1974
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Exempt from general
declassification schedule of E.O. 11652
exemption category. 513(1),(21.(3)
declassified only on approval of
the Director of Central Intelligence
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FOR THE PRESIDENT ONLY
November 6, 1974
Table of Contents
USSR-Egypt: Brezhnev reportedly critical of US role,
in Middle East
(Page 1)
Saudi Arabia:
(Page 2)
Israel: Rabin takes firm position against results
of Arab summit, but restates Israel's readiness
to negotiate. (Page 3)
Portugal: Sacking of conservative party headquarters
puts to test government assurances of free elec-
tions. (Page 4)
USSR - Eastern Europe: Soviets about to raise price
for crude oil exports. (Page 5)
Bauxite: Pressure builds for higher export taxes.
(Page 6)
Notes: China; Iran (Page 7)
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USSR-EGYPT
The Soviets have shown an increased willingness
to portray Secretary Kissinger's efforts in the Mid-
dle East as a failure and to urge the Arabs to make
a "collective" effort in Geneva for a Middle East
settlement. The USSR has been calling for the Geneva
forum--where the Soviets would have a larger diplo-
matic role--since early this year and may believe
the Arabs will now be more receptive.
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SAUDI ARABIA
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ISRAEL
Prime Minister Rabin took a firm
line yesterday in formally rejecting
the conclusions of the recent Arab sum-
mit. In a speech before the Knesset,
Rabin ruled out negotiations with the
Palestine Liberation Organization and
warned Arab leaders against any notion
that increased military pressure could
lead to a political solution. The
Knesset later voted to support Rabin's
decision.
Rabin's presentation bore the earmarks of a
holding action pending the arrival of Secretary
Kissinger in Tel Aviv tomorrow. He made no new, pro-
posals, but he did make an effort to avoid any ap-
pearance of hardening in Israel's position, despite
the complications resulting from the Rabat summit.
Rabin said his government is still prepared to nego-
tiate with Egypt, Jordan, and Syria, and to take
some risks, presumably in the nature of territorial
concessions, in seeking a peaceful solution.
The Israelis are still trying to sort out what
practical effect the Rabat summit will have on the
attitude of key Arab countries toward negotiations.
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PORTUGAL
The sacking of the Lisbon head-
quarters of the moderately conserva-
tive Social Democratic Center party
on Monday evening puts to an early
test the government's assurances that
it intends to hold free elections next
March.
A group of some 500 leftists associated with
the Movement for the Reorganization of the Party of
the Proletariat stormed the conservative party's
offices after metropolitan polite had forcibly
blocked their attempts to disrupt a conservative
youth rally. About 40 people reportedly were hos-
pitalized as a result of the earlier confrontation.
The disorders came as no surprise; the leftists
had distributed pamphlets clearly signaling their
intention to provoke a clash. Among the more dis-
turbing aspects of the incident at the party head-
quarters was the refusal of the Armed Forces Move-
ment's police to heed repeated appeals for increased
security protection before the sacking. The handful
of police who were on the scene fled when the left-
ists arrived.
Leaders of the conservative party were to discuss
the incident yesterday with Prime Minister Goncalves.
They want the government to ban the leftist party
responsible, in accordance with new legislation out-
lawing political parties that advocate violence.
The government's response will provide some in-
dication as to whether it genuinely wants to foster
an atmosphere in which all parties will be able to
contest freely for votes in the election in March.
Two rightist parties were suppressed after former
president Spinola's ouster in September. Since then,
the Portuguese Communist Party and the Popular Demo-
cratic Party, with whom the Communists are trying to
form a front, have held large political rallies with-
out incident.
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USSR - EASTERN EUROPE
Moscow is about to decide on pric-
ing policy for Soviet crude oil exports
to its East European allies for the pe-
riod 1976-80. According to a senior
Soviet economist, the price will be
based on the average of world market
prices over a three-year period, ei-
ther 1971-73 or 1972-74.
Usi.ng the period 1972-74 as a base would be
more lucrative for the Soviets, and they seem to be
leaning in that direction. A price increase of this
kind not only would force the East European coun-
tries to pay perhaps twice as much as they do now,
but also would tie them more closely to the Soviet
economy. The Soviets, for their part, would just as
soon have it that way, and are doubtless looking
forward to getting a better return for their oil.
The Soviet economist indicated the arguments
the Soviets will be using to justify the eventual
price hike. He stressed that, because of the three-
year base period formula, East European costs will
still be less than the international market price
for crude oil and that the East European countries
would be guaranteed a fixed quantity Of oil for the,
five years after 1975.
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FOR THE PRESIDENT ONLY
BAUXITE
Pressure for higher bauxite export
taxes continues at ?this week's meeting of
the International Bauxite Association in
Guyana.
Jamaica took the lead in June when it increased
the export tax by 500 percent, to about $12 per-ton,
and linked future increases to US aluminum prices.
Jamaica supplies roughly 40 percent of US bauxite
and alumina imports.
Other Caribbean exporters--accounting for 30
percent of US bauxite and alumina supplies--have
since moved to boost levies. The refusal of the Rey-
nolds Company to pay a retroactive tax imposed by
Guyana has set the stage for the long-expected na-
tionalization of Reynolds properties there.
Except for Guyana, the other Caribbean countries
have moved cautiously in the face of strong resistance
by the aluminum companies. As marginal bauxite sup'.-
pliers, they are vulnerable to company threats to
close down operations.
Company leverage, on the other hand, has been
weakened by tight world bauxite supplies, the long
lead time required to expand production from alter-
native sources, and an unpromising investment climate
elsewhere. Reynolds, for example, has deferred ac-
tion on a large Australian project, mainly because of
government demands for a 51-percent equity share.
Producing countries outside the Caribbean area
will move slowly. Although Australia wants increased
bauxite revenues, the Whitlam government--faced with
rising unemployment--is also under pressure to ease
restrictions on direct foreign investment. In Guinea,
exports to the US from large, newly developed deposits
are only now getting under way, and :additional for-
eign capital is needed.to complete the projects.
Jamaica, meanwhile, has opened the second phase
of negotiations with two of its six foreign aluminum
companies. The Jamaicans are demanding 51-percent
equity participation in the subsidiaries and rever-
sion to the government of unmined concessions. The
government appears willing to ease its previous tax
measures if the companies will make concessions on
the new demands.
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Pipeline Under Construction in Tibet
555807 11-74 CIA
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. Trucks on the Lhasa-Ko-erh-mu Road
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NOTES
China: The Chinese are building the first
petroleum pipeline to Tibet as part of a continuing
effort to improve Tibetan logistics and transporta-
tion.
The southern
terminal will apparently be near Lhasa and the
northern terminal at Ko-erh-mu. from there, the
pipeline could be extended to refineries in the
Tsaidam Basin. Peking is also surveying a projected
rail line linking Lhasa with Lan-chou. A reliable
petroleum supply would heighten Chinese military
capabilities in the region, although extremely rugged
terrain will continue to limit capability for of-
fensive action. Petroleum for Chinese forces in
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be supplied by road.
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Iran: By the end of this year Iran will have
some $9 billion in reserves, giving the Shah a com-
fortable cushion for increased lending and invest-
ment. Oil receipts of some $17 billion will more
than offset Iran's substantial imports of defense
and industrial equipment and other expenses. Iran
probably will prepay about $1.5 billion of its high-
interest debt and disburse an estimated $2 billion
in credits, investments, and advanced payments for
industrial installations.
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Top Secret
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