CABLE TO GENERAL SCOWCROFT FROM DAVID GOMPERT

• Document Type: CREST
• Collection: Library of Congress
• Document Number (FOIA) /ESDN (CREST): LOC-HAK-260-1-1-0
• Release Decision: RIPLIM
• Original Classification: S
• Document Page Count: 5
• Document Creation Date: January 11, 2017
• Document Release Date: December 7, 2009
• Sequence Number: 1
• Publication Date: October 5, 1974
• Content Type: CABLE

No Objection to Declassification in Part 2009/12/07: LOC-HAK-260-1-1-0
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S E C R E T/SENSITIVE 1008482 MAY 74
IMMEDIATE
MAY 10, 1974
HAKTO 68
TO: GENERAL SCOWCROFT
FROM: DAVID GOMPERT
REF: TO HAK 131
1. HAK APPROVES LETTER CONTAINED IN TO HAK 131.
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MAY 1o 6 54 AM "7q
MORI/CDF C03344639 pages
1-2
C03344759 pages 4-5
ON-FILE NSC RELEASE
INSTRUCTIONS APPLY
No Objection to Declassification in Part 2009/12/07: LOC-HAK-260-1-1-0
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No Objection to Declassification in Part 2009/12/07: LOC-HAK-260-1-1-0
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SECRET/SENSITIVE
HAK TO
May 10,
1974
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TO:
GENERAL SCOWCROFT
FROM:
DAVID GOMPERT
REF:
TO HAK 131
1. HAK approves letter contained in TO HAK 131.
SECRET/SENSITIVE
No Objection to Declassification in Part 2009/12/07: LOC-HAK-260-1-1-0
 0No Objection to Declassification in Part 2009/12/07: LOC-HAK-260-1-1-0
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Scowcroft submits for your approval a draft
letter to Casey from the President expressing
his support for EXIM financing of USSR
fertilizer deal.
Approve As amended
No Objection to Declassification in Part 2009/12/07 : LOC-HAK-260-1-1-0
 No Objection to Declassification in Part 2009/12/07: LOC-HAK-260-1-1-0
0 091959 Z MAY 74 ZFF- 1 ZFF- 4 ZYH
FM THE SITUATON ROOM
TO AMEMBASSY CAIRO
ZEM
S E C R E T SENSITIVE EYES ONLY
TO HA K131
DELIVER TO BREMER/RODMAN FOR THE SECRETARY.
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MAY 9 tb 54 PH '74
MAY 9s, 1974
TO: SECRETARY KISSINGER
FROM: BRENT SCOWCROFT
SUBJECT: PROPOSED PRESIDENTIAL LETTER TO CASEY ON USSR FERTILIZER
DEAL
1. WE HAVE BEEN ASKED TO CONCUR IN CIEP PROPOSAL TO PRESIDENT
THAT HE SEND A LETTER TO EXIM BANK PRESIDENT CASEY EXPRESSING HIS
SUPPORT FOR EXIM FINANCING OF USSR FERTILIZER DEAL. TEXT OF PROPOSED
LETTER IS AS FOLLOWS:
QUOTE DEAR MR. CASEY:
PETER FLANIGAN BROUGHT TO MY ATTENTION THAT PORTION
OF YOUR TESTIMONY BEFORE THE SUBCOMMITTEE ON INTERNATIONAL
TRADE OF THE HOUSE BANKING AND CURRENCY COMMITTEE WHICH
DEALS WITH THE EXPORT- IMPORT BANK'S COMMITMENT TO FINANCE
THE SALE OF AMERICAN PRODUCTS WHICH MOULD BE INCORPORATED
INTO A LARGE FERTILIZER COMPLEX IN THE SOVIET UNION.
YOUR TESTIMONY INDICATES THAT A $180 MILLION LOAN FROM
THE BANK WILL RESULT IN THE SALE OF $400 MILLION WORTH OF AMERICAN
EXPORTS FOR THIS COMPLEX, AND WILL TRIGGER THE INVESTMENT OF
SUBSTANTIAL FUNDS AND THE CREATION OF JOBS IN SHIPBUILDING AND
PHOSPHATE DEVELOPMENT IN FLORIDA.
YOU ALSO INDICATE THAT AS A RESULT OF THIS TRANSACTION TWO
NITROGEN FERTILIZERS (AMMONIA AND UREA) WHICH ARE SCARCE IN OUR
COUNTRY WILL BE ACQUIRED WITHOUT A CASH DRAIN ON OUR BALANCE
OF PAYMENTS, IN EXCHANGE FR SUPERPHOSPHORIC ACID, A FERTILIZER
WHICH WE HAVE IN ABUNDANCE AND WHICH WOULD BE PRODUCED IN
FLORIDA AND SHIPPED TO THE SOVIET UNION. THE NITROGEN FERTILIZERS
COMING TO THIS COUNTRY WOULD BE MADE WITH SOVIET NATURAL GAS,
THUS REDUCING THE DRAIN ON OUR OWN NATURAL GAS RESERVES.
I BELIEVE THAT THIS TRANSACTION, RESULTING NOT ONLY IN TRADE
AND BALANCE OF PAYMENTS BENEFITS FOR US BUT ALSO CONTRIBUTING
TO OUR OWN FERTILIZER AND ENERGY NEEDS AS WELL AS TO WORLD FOOD
NEEDS, MAKES EXACTLY THE KIND OF CONTRIBUTION TO THE NATIONAL
INTEREST WHICH I ENVISIONED WHEN I MADE THE DETERMINATION, ON
OCTOBER 18, 1972, THAT IT IS IN THE NATIONAL INTEREST FOR EXIMBANK
TO FINANCE U. S. EXPORTS TO THE SOVIET UNION.
SINCERELY,
No Objection to Declassification in Part 2009/12/07 : LOC-HAK-260-1-1-0 OTE
 2. No Objection to Declassification in Part 2009/12/07 LOC-HAK-260-1-1-0 -T TO MOVE
AD WITH 114E FER IZER DEAL IN LIUMI UI UU ,jiuNAL OPPOSITION TO
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w.C .DITS FOR THE USSWFOR FEAR THAT THIS TRANSACT-1 ON MIGHT
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JE:PARDIZE CONGRESSIONAL ACTION ON THE EXIM AUTHORIZATION BILL.
HOWEVER, CASEY HAS RECENTLY CHANGED HIS POSITION AND NOW FAVORS MOVINVG
AHEAD WITH THE TRANSACTION IN THE BELIEF THAT IT IS ECONOMICALLY
SOUND AND WOULD NOT JE`PARDIZE THE EXIM LEGISLATION.
3. SENATOR STEVENSON HAS SUGGESTED THAT A PRSSIDENTIAL LETTER TO
CASEY SUPPORTING THE FERTILIZER PROJECT AND E;ASIZING ITS ECONOMIC
BENEFITS Fr1R THE UNITED STATES MIGHT CREATE ABETTER UNDERSTANDING
IN THE CONGRESS.
4. I BELIEVE THE FOLLOWING CONSIDERATIONS ARE RELEVANT:
PR 0
--THE PRESIDENTIAL LETTER WOULD BE IN KEEPING WITH ADMINISTRATION
SUPPORT FOR INCREASING, MUTUALLY BENEFICIAL US-USSR TRADE.
--THE FERTILIZER DEAL, WHICH INVOLVES A $180 MILLION CREDIT
WOULD BE THE FIRST MAJOR DEAL (EXCEPTING KAMA RIVER) WITH THE
USSR SINCE THE 1972 TRADE AGREEMENT. PRESIDENTIAL SUPPORT FOR THE
TRANSACTION WILL PUT HIM ON SOLID GROUND IN HIS ECONOMIC TALKS AT
THE MOSCOW SUMMIT EVEN IF THE MFN ISSUE REMAINS UNRESOLVED.
-- IT IS DESIRABLE FOR THE ADMINISTRATION TO TAKE ACTION PROIR
TO THE LATE MAY MEETING OF THE US-USSR JOINT COMMERCIAL COMMISSION
SO THAT SUCH ACTION WILL NOT APPEAR TO RESULT FROM SOVIET PRESSURE
DURING THE COMMISSION MEETING.
--THERE IS EVERY INDICATION THAT THE FERTILIZER DEAL IS IN
THE UNITED STATES ECONOMIC INTERESTS.
CON
-- CONSIDERING THE USSR CREDIT CLIMATE IN THE CONGRESS IT IS
QUESTIONABLE WHETHER THE PRESIDENT SHOULD INVOLVE HIMSELF PERSONALLY
IN THE TACTICAL MANEUVERING ON THE FERTILIZER DEAL, PARTICULARLY
IF THE BENEFITS FOR THE UNITED STATES SHOULD TURN OUT TO BE LESS
THAN EXPECTED.
-- THE ECONOMIC ISSUES ASIDE, THE PRESIDENT MAY BE OPENED
TO FRESH CHARGES FROM THE ANTI-DETENTERS AND THOSE WHO ARE URGING
POSTPONEMENT OF THE MOSCOW SUMMIT THAT HE IS PUSHING AHEAD WITH
MOVES WITH THE SUMMIT IN MIND MERELY TO PLEASE THE SOVIETS, MOVES
THAT MAY NOT RE IN THE U.S. BEST INTERESTS.
5. IN VIEW OF THE CHANGED ASSESSMENT OF THE IMPACT ON THE
EXIM BILL, I RECOMMEND GOING AHEAD WITH THE PRESIDENTIAL
LETTER TO CASEY. THE TIME FACTOR IS VERY TIGHT; EXIM' S PRELIMINARY
CREDIT WILL EXPIRE ON MAY 14. IF YOU AGREE, I WILL ADVISE THE
PRESIDENT THAT YOU APPROVE GOING AHEAD WITH THE LETTER TO CASEY,
APPROVF ---------- DISAPPROV------------
'957
#2369
No Objection to Declassification in Part 2009/12/07: LOC-HAK-260-1-1-0