THE PRESIDENT'S DAILY BRIEF 4 JANUARY 1974

• Document Type: FOIA
• Collection: President's Daily Brief 1969-1977
• Document Number (FOIA) /ESDN (CREST): 0006007638
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 11
• Document Creation Date: August 14, 2016
• Document Release Date: August 24, 2016
• Publication Date: January 4, 1974

Declassified in Part - Sanitized Copy Approved for Release 2016/07/19 : CIA-RDP79T00936A011900010028-5
The President's Daily Brief
January 4, 1974
45
Declassified in Part - Sanitized Copy Approved for Release 2016/07/19 : CIA-RDP79T00936A011900010028-5
Declassified in Part - Sanitized Copy Approved for Release 2016/07/19 : CIA-RDP79T00936A011900010028-5
Exempt from general
declassification schedule of E.O. 11652
exemption category 513(1),(2),(3)
declassified only on approval of
the Director of Central Intelligence
Declassified in Part - Sanitized Copy Approved for Release 2016/07/19 : CIA-RDP79T00936A011900010028-5
Declassified in Part- Sanitized Copy Approved for Release 2016/07/19 : CIA-RDP79T00936A011900010028-5
FOR THE PRESIDENT ONLY
THE PRESIDENT'S DAILY BRIEF
January 4, 1974
PRINCIPAL DEVELOPMENTS
Israeli and Egyptian military negotiators made no
progress on Wednesday, but the Israelis' proposals
on "reciprocity" appear more flexible than their
public statements. (Page 1)
The Canadians have indicated that they might boost
their export tax on crude oil enough to bring the
price for Alberta crude in line with prevailing world
prices. (Page 2)
Efforts are being made to promote a meeting between
OPEC and OECD to discuss prices of oil and industrial
goods. (Page 3)
Tokyo and the EC Commission apparently have agreed to
a pattern of trade controls intended to prevent dis-
ruption of European markets by Japanese exports.
(Page 4)
Notes on a Soviet on a
possible Egyptian cabinet shuffle, on the new Spanish
cabinet, and on Japanese - North Vietnamese economic
relations appear on Pages 5 and 6.
25X1
FOR THE PRESIDENT ONLY
Declassified in Part - Sanitized Copy Approved for Release 2016/07/19 : CIA-RDP79T00936A011900010028-5
Declassified in Part - Sanitized Copy Approved for Release 2016/07/19 : CIA-RDP79T00936A011900010028-5
FOR THE PRESIDENT ONLY
EGYPT-ISRAEL
Israeli and Egyptian military negotiators again
failed to resolve their differences over the guide-
lines for disengagement when they met in Geneva on
Wednesday. The two sides meet again today, but UN
General Siilasvuo, the chairman, fears that the at-
mosphere will begin to sour if the negotiators do
not shift from general principles to specific pro-
posals.
The chief obstacle currently centers on Tel
Aviv's demand that any Israeli withdrawal be accom-
panied by'a reciprocal Egyptian concession. F011ow
ing the Egyptian delegate's rejection of this con-
cept at Wednesday's meeting, the Israeli delegate
outlined his government's .definition of "reciproc-
ity.'! Noting that the ,depth of any Israeli with-
drawal east of the: canal would depend on the strength
of' Egyptianforces remaining_on_the east bank, he
insisted that these forces must be thinned. Agree-
ment is also necessary, he said, on exactly how many
divisions and heavy.. weapons. Egyptians will be
permitted to retain.there.
Despite Siilasvuo's pessimism, the Israelis'
proposals appear more flexible than their public
statements. The former. .chief Israeli negotiator
at the Kilometer 101 talks indicated in a newspaper
interview last weekend, for example, that if Israel
withdraws to the east bank the Egyptians should not
be permitted to retain any military forces there.
The Egyptians apparently did not comment on the
Israeli proposals at the meeting on Wednesday, but
at the Kilometer 101 talks they had indicated that
they might accept some thinning of forces.
A possible confrontation over Israeli blocking
of supply convoys to the Egyptian Third Army is be-
ing threatened in the UN. According to UN reports,
the Israelis have not allowed the supply convoys
through for two days, and the Egyptian representa-
tive is threatening to call an emergency meeting of
the Security Council to consider the issue immedi-
ately. Assistant Secretary General Urquhart believes
that an acrimonious Security Council meeting is in
prospect if the convoy is blocked again today.
1
FOR THE PRESIDENT ONLY
Declassified in Part - Sanitized Copy Approved for Release 2016/07/19 : CIA-RDP79T00936A011900010028-5
Declassified in Part - Sanitized Copy Approved for Release 2016/07/19 : CIA-RDP79T00936A011900010028-5
FOR THE PRESIDENT ONLY
INTERNATIONAL OIL
Canadian Energy Minister MacDonald indicated
late last week that Canada's export tax on' crude oil
could triple to $6..50 a barrel by February 1. The.
tax, designed to see that the increase in the price
of Canadian oil accrues to the government rather
than to private companies, was first imposed on'Oc-
tober 1 at 40 cents a barrel, and rose in stages
until reaching $2.20 on January 1. A $6.50 tax
would bring the average US price for Alberta crude
to $10.97 a barrel, in line, with most of the crude
oil in world trade.
An increasing amount of government-owned Oil
from other markets already is being sold at even
higher prices, however./
2
FOR THE PRESIDENT ONLY
Declassified in Part - Sanitized Copy Approved for Release 2016/07/19 : CIA-RDP79T00936A011900010028-5
25X1
Declassified in Part - Sanitized Copy Approved for Release 2016/07/19 : CIA-RDP79T00936A011900010028-5
FOR THE PRESIDENT ONLY
OPEC-OECD
An effort is under way to promote a meeting be-
tween the Organization of Petroleum Exporting Coun-
tries (OPEC) and the Organization for Economic Co-
operation and Development (OECD)--some OECD countries
hoping to halt the spiraling of oil prices, and OPEC
members hoping to obtain more favorable terms for
development and trade.
Britain is reported to be seeking .a positive
response to the Shah of Iran's proposal on December
23 for a meeting between OPEC and OECD. The British
believe a response should be given before next Mon-
day, when OPEC members meet in Geneva to discuss
long-range pricing policies.
Iran's minister of finance suggested to Ambas-
sador Helms on January 2 that the OECD Secretariat
invite OPEC to engage in talks. The minister evi-
dently thus hopes to get around opposition by Iraq
and Kuwait to OPEC's taking any initiative in call-
ing for a conference.
In New Delhi, OPEC Secretary General Khene
called publicly for OECD-OPEC talks aimed at lower-
ing the prices the industrialized countries charge
for their exports. Khene called the oil price rise
a part of the developing world's fight against "eco-
nomic aggression" and said the price of oil would
be lowered if the industrial nations lowered the
cost of their exports.
So far, the response from the OECD members has
been mixed. On December 28, Italy endorsed the idea
of OECD-OPEC talks but said they should not interfere
with members' bilateral arrangements with oil-producing
countries. The French OECD delegate stressed the
need to avoid hasty moves to establish contact with
OPEC. He insisted that the differences in the energy
problems of the US and Europe needed further clarifi-
cation.
3
FOR THE PRESIDENT ONLY
Declassified in Part - Sanitized Copy Approved for Release 2016/07/19 : CIA-RDP79T00936A011900010028-5
Declassified in Part - Sanitized Copy Approved for Release 2016/07/19 : CIA-RDP79T00936A011900010028-5
FOR THE PRESIDENT ONLY
JAPAN-EC
Tokyo and the EC Commission apparently have
agreed to a pattern of trade controls aimed at pre-
venting disruption of European markets by Japanese
exports. Japan will establish export controls, prin-
cipally on electronics products, in return for re-
moval of import controls imposed earlier by Italy
and the Benelux countries.
The EC's willingness to accept Japan's offer to
restrain exports has removed a major irritant in their
relations, but the arrangement agreed upon is only a
temporary expedient. Attempts to conclude an overall
trade agreement between the EC and Japan have failed,
largely because Tokyo opposes certain provisions
aimed at protecting the domestic markets of importing
countries.
The Commission nonetheless wants to improve con-
tacts with Tokyo so as to prevent trade disputes from
hindering broader economic and political contracts.
Commission President Ortoli is scheduled to visit
Tokyo in mid-February.
FOR THE PRESIDENT ONLY
Declassified in Part - Sanitized Copy Approved for Release 2016/07/19 : CIA-RDP79T00936A011900010028-5
Declassified in Part - Sanitized Copy Approved for Release 2016/07/19 : CIA-RDP79T00936A011900010028-5
25X1
25X1
o'N vt,
Declassified in Part - Sanitized Copy Approved for Release 2016/07/19 : CIA-RDP79T00936A011900010028-5
Declassified in Part - Sanitized Copy Approved for Release 2016/07/19 : CIA-RDP79T00936A011900010028-5
FOR THE PRESIDENT ONLY
NOTES
USSR:
Egypt: President Sadat, who currently also
serves as prime minister, has spent several
days discussing a cabinet shuffle
The
most likely candidate for prime minister is Minister
of Economy and Foreign Trade Hijazi, the architect
of Egypt's "nonsocialist" economic policy begun be-
fore the war. This policy, and Hijazi himself, have
been the targets of strong criticism from the USSR.
Foreign Minister Fahmi, who reportedly will remain
in the cabinet, also has been criticized by the So-
viets, who appear to blame him largely for Cairo's
improved ties to Washington.
Spain: The cabinet announced yesterday by
newly appointed Premier Arias gives predominance
to the more moderate elements of Franco's National
Movement. The cabinet includes a number of prag-
matic men who are interested in easing economic
and political restraints to developing closer ties
with NATO and the European Communities. The new
interior minister is a tough law-and-order advocate,
but rightists, including former acting premier
Fernandez-Miranda, were the big losers. Opus Dei,
the Catholic lay organization, also lost out with
the ousting of its last remaining cabinet member,
Foreign Minister Lopez Rado.
(continued)
FOR THE PRESIDENT ONLY
25X1
Declassified in Part - Sanitized Copy Approved for Release 2016/07/19 : CIA-RDP79T00936A011900010028-5
25X1
25X1
25X1
25X1
25X1
Declassified in Part - Sanitized Copy Approved for Release 2016/07/19 : CIA-RDP79T00936A011900010028-5
FOR THE PRESIDENT ONLY
Japan - North Vietnam: The energy crisis is.
beginning to broaden Tokyo's economic relations.
with Hanoi. Japan has contracted to purchase up
to 1.2 million tons of high-quality coal from North
Vietnam over the next two years. This amount equals
Japan's imports from North Vietnam in 1961 and more
than triples those of last year, but still would
satisfy less than one percent of Japan's coal needs.
At the same time, Hanoi has agreed in principle to
accept a team of experts from a Japanese government
corporation to survey undersea oil resources in the
Gulf of Tonkin. Two private Japanese oil companies
have already sent survey missions to North Vietnam,
and a third is reported to be negotiating for par-
ticipation in an oil project.
FOR THE PRESIDENT ONLY
Declassified in Part - Sanitized Copy Approved for Release 2016/07/19 : CIA-RDP79T00936A011900010028-5
Declassified in Part-Sanitized Copy Approved for Release 2016/07/19 : CIA-RDP79T00936A01-1900010028-5
,
Top Secret
Declassified in Part - Sanitized Copy Approved for Release 2016/07/19 : CIA-RDP79T00936A011900010028-5