THE PRESIDENT'S DAILY BRIEF 1 AUGUST 1974

• Document Type: FOIA
• Collection: President's Daily Brief 1969-1977
• Document Number (FOIA) /ESDN (CREST): 0006007780
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 12
• Document Creation Date: August 14, 2016
• Document Release Date: August 24, 2016
• Publication Date: August 1, 1974

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The President's Daily Brief
August 1, 1.974
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Exempt from general
declassification schedule of E.O. 11652
exemption category 5111(1),(2).(3)
declassified only on approval of
the Director of Central Intelligence
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FOR THE PRESIDENT ONLY
THE PRESIDENT'S DAILY BRIEF
August 1, 1974
PRINCIPAL DEVELOPMENTS
Greek
UN outposts
on Cyprus reported several cease-fire violations
yesterday. (Page 1)
China has replaced the Soviet Union as the leading
Communist customer for US exports. (Page 3)
Moscow's midyear economic report indicates a second
straight year of above-average growth. (Page 4)
The Communists were on the verge of overruning a
district capital in northern South Vietnam yesterday,
and three other district capitals remain under heavy
pressure. (Page 5)
Notes on Israel-Egypt and Iran-Afghanistan appear on
Page 6.
FOR THE PRESIDENT ONLY
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BULGARIA
ALBANIA
*Ankara
GREEtE
. CYPRUS
MEDITERRANEAN
LIBYA
Territory controlled
by Turkish forces
Kyrenia
Morphou
Bay
Famagusta
Larnaca
assoi
Akrotin
CYPRUS
Elj UK Sovereign base area
0 10
MILES
556306 8-74
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FOR THE PRESIDENT ONLY
CYPRUS
Greek Prime Minister Karamanlis has publicly
welcomed the cease-fire accord as a "starting point"
for a just solution
^
Karamanlis also expressed concern that
the confrontation was costing Greece over $16 mil-
lion per day. He has since announced demobiliza-
tion of some 200,000 reservists called up for duty.
Turkey views the agreement as a victory for
both its army and its diplomats, and the general
consensus is one of satisfaction that Ankara's
"minimum demands" have been met. The US embassy
in Ankara believes Turkey wants to keep indefi-
nitely?a secure territorial base on Cyprus that
would include a portion of the northern seacoast.
This base would not only improve Turkey's bargain-
ing position in future negotiations, but would
also enable it to threaten a counter-enosis should
efforts be made in the future to link Cyprus with
Greece.
In Cyprus, President Clerides welcomed the
Geneva accord as a step toward peace, but expressed
dismay at the concessions asked of Greek Cypriots.
Turkish Cypriots have already moved their adminis-
tration from Nicosia to Kyrenia, which reportedly
will serve as the "capital" of the Turkish Cypriot
sector. Turkish Cypriot leader Rauf Denktash told
a US-embassy official that a cantonal arrangement
under a federal government might emerge on the is-
land. He foresaw a continuation of the arrangement
for a Greek Cypriot president and a Turkish Cypriot
vice president, but the Turkish canton would enjoy
almost complete autonomy.
In London, Archbishop Makarios gave guarded
approval to the cease-fire agreement.
Last night in the UN Security Council, the
USSR vetoed a draft resolution on the role of the
UN peace-keeping force in Cyprus. Soviet UN dele-
gate Malik, who returned from Moscow during the
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FOR THE PRESIDENT ONLY
session, said he lacked instructions to concur on
any "new function" for UN troops. The veto does
not affect the continuation of the UN force under
its existing mandate, which in June was extended
for six months.
UN outposts reported several cease-fire vio-
lations yesterday northwest of Nicosia. Greek Na-
tional Guard units apparently were forced to with-
draw from Karavas and Lapithos, and a UN patrol
pulled out of Lanarka after Turkish forces began
shelling the town.
In Kyrenia, sniper fire continued periodi-
cally, and Turkish patrols were making house-to-
house searches to eliminate the snipers.
six small lan ing
at Kyrenia late yester-
cra were unloading cargo
day morning.
t
US embassy officials also reported yesterday
that virtually all troops, tanks, and wheeled ve-
hicles previously concentrated around the Turkish
military headquarters at Bogaz have disappeared.
Presumably, the Turks pushed these forces outward
in order to develop the widest possible perimeter
before the UN inspects cease-fire lines.
FOR THE PRESIDENT ONLY
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FOR THE PRESIDENT ONLY
CHINA-US-USSR
China has replaced the Soviet Union as the lead-
ing Communist customer for US exports. During the
first half of this year, the value of US exports to
China was almost $520 million--75 percent of the
value of such exports for all of 1973. Exports to
the USSR for the same six-month period were worth
about $315 million.
If, as expected, the present pattern of Sino-US
trade continues, US sales to China in 1974 will reach
$1 billion. US sales to the USSR this year will prob-
ably fall well short of $1 billion--down from the
record $1.2 billion in 1973--because of a substantial
decrease in US agricultural deliveries.
In contrast, agricultural exports to China have
grown; they account for 80 percent of US sales to
China for the first half of this year. Contracts
for delivery of US agricultural commodities in 1975,
however, are thus far well below this year's level.
Accordingly, prospects for US-China trade next year
are less bright.
FOR THE PRESIDENT ONLY
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FOR THE PRESIDENT ONLY '
USSR
Moscow's midyear economic report was a favor-
able one and included good news for the population.
Judging from the performance for the first six
months, Soviet GNP will increase by about 5.5 per-
cent in 1974. This would be the second straight
year of above-average growth.
Civilian industrial production in the first
half of this year grew by 6.5 percent, compared
with the same period last year; there was a substan-
tial increase in production of energy and machinery.
As for consumer goods, textiles and leather footwear
scarcely met the plan, but production of some highly
prized durables--automobiles, for example--continued
to grow rapidly. The food industry performed well,
with meat production up 12 percent, compared with
the first half of 1973.
The promise of a good year in agriculture ac-
.companies reports of strong industrial performance.
Abundant rainfall has brightened prospects for meet-
ing the 1974 goal of 205.6 million tons of grain.
4
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SOUTH VIETNAM
? Sharp fighting continues in the coastal areas
of the northern provinces of South Vietnam. The
Communists yesterday were on the verge of overrun-
ning Thuong Duc, a district capital in Quang Nam
Province. If it fell, it would be the first dis-
trict seat to be lost by the government in Military
Region 1 since the cease-fire. Three other district
capitals in Quang Nam--Duc Duc, Dai Loc, and Que Son--
remain under heavy pressure.
In Binh Dinh Province, the country's second
largest province in both territory and population,
the Communists have launched attacks on outlying
government outposts, and successfully blocked a six-
mile segment of National Route 1--the major north-
south highway. They have also taken several villages
they have long sought to control in the coastal re-
gion.
The basic situation in the north is fairly typ-
ical of conditions throughout much of South Vietnam.
The government controls the population and food pro-
ducing areas, and the Communists hold large unin-
habited areas in the heavily jungled mountains. The
current fighting is largely for control of the popu-
lated farming areas bordering the Communist zone.
Since the January 1973 cease-fire, ?the government
has steadily extended its control in this marginal
area and has been resettling refugees in the newly
claimed territory.
5
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NOTES
Israel-Egypt:
Iran-Afghanistan: Iran's aid agreement with
Afghanistan, signed last week, opens the door to
project assistance for the Afghans estimated at
from $1.5 billion to over $2 billion and ulti-
mately could lead to a lessening of Kabul's reli-
ance on Moscow for economic aid. The Shah is con-
sidering projects that would tie the Afghan economy
closer to Iran's. These include rail and road
links with Iran, factories that could supply. the
Iranian market, and a joint export development
bank. Moscow's economic program in Afghanistan
has averaged $10-15 million annually for the past
several years.
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