WEEKLY REVIEW

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00875R001000050001-1
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 33
• Document Creation Date: December 21, 2016
• Document Release Date: April 21, 2009
• Sequence Number: 1
• Publication Date: April 5, 1974
• Content Type: REPORT

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OSB FILE COPY
RETURN TO I H-1107
Weekly Review
State Dept. review
completed.
u op Secret
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Soviet media have begun to send out mixed
signals on the outlook for Soviet-US relations.
The evidence is tentative, but there are signs that
Moscow has some qualms about continuing to
accord detente with Washington, the degree of
pr eminence that has become commonplace over
the past two years or so.
A major article in Pravda on March 30,
marking the third anniversary of the 24th party
congress at which Brezhnev launched his "peace
offensive," gave scant attention to US-Soviet ties.
By contrast, last year's anniversary article placed
considerable stress on the gains achieved in bila-
teral relations.
The recent article did take brief note of the
"extremely important effect" improved US-
Soviet relations have had on International affairs.
The usual references, however, to meetings at the
summit, SALT, and recent progress in bilateral
ties were missing.
In addition, the allusion to the US was fol-
lowed by a reference to the "great complexity"
of the current international situation. This situa-
tion, said Pravda, is marked by the continuing
military preparations of various capitalist coun-
tries and by their counterattacks against Mos-
c,-)w's efforts toward detente.
Last year's Pravda article hailed the "para-
mount international significance" of US-Soviet
relations and praised the results of the May 1972
summit. It listed he major agreements concluded
between General Secretary Brezhnev and P,esi-
dent Nixon, and it expressed optimism over
prospects for SALT.
Last week's Pravda article is not the only
straw in the wind. Earlier this year, the Soviet
Communist Party's theoretical journal
Page
Kominunist gave a similarly perfunctory treat-
ment to relations with Washington. Handling of
this sensitive issue in the Soviet press suggests a
more cautious attitude on Moscow's part, if not a
slackening of enthusiasm on the part of some
Soviet leaders.
The Soviets have already found ways to
demonstrate their displeasure with Washington's
expanded role in the Middle East, with the delay
in granting the USSR most-favored-nation status
in trad3, and with US statements on nuclear tar-
geting. These concerns, together with uncertainty
over the political situation in the US, may have
led the Soviets to pause and take stock of their
own expectations with regard to detente.
This has not prevented Moscow, however,
from trying to counter what Soviet commentators
have called "pessimistic" press accounts of the
outcome of Secretary Kissinger's recent visit to
Moscow.
One commentator said that the Secretary's
visit was a "new contribution" to relations and an
"important step" toward guaranteeing the success
of President Nixon's planned visit to the USSR.
Taking issue with negative We:,tern press assess-
ments of the progress made on SALT during the
recent Moscow talks, the commentator contended
that mutually acceptable solutions are possible
despite the complicated nature of the problem.
The Soviet international affairs weekly, Life
Abroad, went even further, asserting that "an
agreement could be worked out in time for the
planned summit meeting."
A similarly positive portrayal of the Sec-
retary's visit was carried by Tass, which noted
that improvement in US-Soviet ties has allowed
tangible results in several major areas, including
arms control. Refuting allegations about the
"tough" position Moscow adopted on SALT dur-
ing the Secretary's visit, Tass banded these idle
speculation.
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Awaiting transportation
An article in /zvesiiu took much the same
line. It presented a more sober appraisal of the
prospect for progress at SALT, however, pointing
'.o the complicated nature of the problem and the
alleged opposition of the Pentagon.
There is increasing evidence that the Soviets
have decided to cut back significantly on the
number of Jews allowed to emigrate to Israel.
This decision is probably related to the poor
prospects Moscow sees for gaining most-favored-
nation treatment from the US. During the first
three months of 1974, Soviet Jewish emigration
to Israel was about 22 percent less than the same
period last year.
The Soviets contend disingenuously that
there are simply fewer Jews who now wish to
leave the Soviet Union. According to a Moscow
radio commentator, applications for emigration
decreased sharply as a result of the October war
in the Middle Ease, and in January of this year
applications were less than half the number of
January 1973. The commentator claimed that
educated Soviet Jews do not want to give up the
advantages of socialism and are skeptical about
the kind of treatment they would receive in
Israel.
It is becoming clear, however, that the
authorities have deliberately put new bureaucratic
obstacles in the way of prospective emigrants.
These procedures have included greater police
scrutiny of the applicant, the need to submit
character references that go back at least six
months, and a requirement that application forms
be typed.
In practice, a would-be emigrant must now
quit his iob at least six months before applying
for emigration, since upon applying he runs the
risk of being fired and thus receiving a poor
character reference. The requirement that applica-
tion forms be typed is a lesser obstacle, although
it does mean that a prospective emigrant must
secure a permit-required of all private citizens-
to purchase a typewriter, or find some other
method of having the application typed.
Such harassment has doubtless discouraged a
great number of potential applicants but probably
is not the only factor contributing to the decline
in emigration. Despite persistent Soviet prot-
estations that "practically any" citizen may go to
Israel, there have recently been signs that Soviet
authorities are simply refusing exit permits to
large numbers of Jews even after they have
managed to satisfy the bureaucratic requirements.
Moscow's tougher policy can probably be
attributed to the trouble the USSR is having in
getting most-favored-nation treatment from the
US. The message seems to be that if the US
Congress is willing to turn down trade concessions
to Moscow by linking the issue to Soviet emi-
gration policy, the Kremlin is prepared to reverse
this linkage and restrict emigration until most-
favored-nation treatment is granted.
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Egypt: Countering The Critics
President Sadat appears to be growing in-
creasingly concerned that criticism of his foreign
and domestic policies from the Soviets and Arab
radicals will adversely affect the willingness of
other Arab states to continue peace negotiations.
He has begun counter-attacking and, in a major
policy address on April 3, lashed out ai the USSR
for being not the protector of Arab interests it
claims to be, but instead a hindrance to the Arab
cause.
Sadat recited a long history of unfulfilled
Soviet promises of aid and charged that Moscow
had obstructed his efforts over the years to initi-
ate hostiiities by consistently attempting to limit
his focus to diplomatic rather than military
action. At the same time, he implied, Soviet
tactics virtually guaranteed that diplomatic action
would be fruitless. Largely because Moscow
sought to keep the Arabs militarily weak, the US
gained the impression that the Arabs were ineffec-
tive "dead bodies" too weak to bargain with or to
deserve diplomatic intervention to break the
Arab-Israeli impasse.
By emphasizing that the Arabs would still be
in this stagnant situation had he heeded Soviet
opposition to war, Sadat was telling the other
Arabs, particularly Syria, that Moscow is an un-
reliable ally and that dependence on Soviet advice
in the current negotiations will alsc do the Arabs
no good.
In his speech, Sadat also implicitly criticized
the Soviets in treating domestic matters, although
in this case his approach was more in the nature
of a defense of his own policies than a direct
attack on the critics of those policies. Both the
Soviets and radical Arabs have weighed in
strongly against the anti-Nasir propaganda cam-
paign launched in Cairo newspapers two months
ago by overzealous Sadat supporters. Moscow and
the radical Arabs seized on the campaign as
indicative of a general rightward drift in Egypt,
and Sadat is concerned about the impact of their
charges that he is selling our both Nasir's "revolu-
tion" and general Arab interests for the sake of
the US and of his own domestic power position.
Sadat has attempted in recent weeks to
backtrack from the blatant criticism of Nasir by
noting that he shares responsibility for all of
Nasir's policies and is attempting now not to
"destroy Nasir's legacy" but to correct the "nega-
tives" of his predecessor's regime. This oft-re-
peated theme--emphasized again in his speech this
week-reflects some misgivings that Soviet crit-
icism on the issue might strike a responsive chord
among Egyp; fans, as well as other Arabs.
Although Sadat seems to be somewhat
defensive in countering Soviet propaganda on
internal Egyptian affairs, his outspoken attack on
Moscow's war and peace policy may herald
har:Mer attacks in the future on Soviet interests in
Egypt. The speech was preceded by an AI-Aliranr
editorial questioning the continued value of the
Soviet-Egyptian friendship treaty and, although
Sadat himself did not mention the treaty, he laid
the groundwork for a later call for its modifica-
tion if the close relationship with Moscow that it
symbolizes begins to rankle still more. Such a
move would risk Egypt's major source of military
aid, however, and Sadat will have to approach this
issue cautiously.
Moscow, which has not yet responded to
Sadat's speech, announced on Wednesday that it
is sending a new ambassador to Cairo-Vladimir
Polyakov. Although he has less status than his
predecessor, Polyakov is an expert in Middle East
affairs and probably has the primary task of
salvaging whatever is possible of the Soviet-
Egyptian relationship.
Since the October war, Moscow has made
energetic efforts to consolidate its relations with
other Arab states-mainly Syria and Iraq-as
alternative areas of influence. The Soviets will
most likely, however, attempt to maintain their
military aid program in Egypt, where they
undoubtedly want to protect their investment
while waiting hopefully for the balance to again
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give the situation time to cool down, as well as to
assess the effect of its recent measures on
Damascus.
Israel-Syria: The Golan Front
Military Tensions High
A growing sense of crisis developed on the
Golan front this week as shelling between Israeli
and Syrian forces entered its fourth week. Tel
Aviv demonstrated its concern on April 1 by
sending more than 50 fighters over Syria, Leba-
non, and the Mediterranean in a bold display of
air power. The following day, it gave wide public-
ity to its reinforcement of the front in a move
apparently designed both to warn Damascus
against any renewal of offensive action and to
reassure the home front of Israel's military
preparedness. Late in the week, however, Israel
reduced its level of military action, possibly to
j/ Israeli
\,,.,... ?Baniyas battle line
, I Al
Qunaytlrah
ISR\EL
GOLAN
Luke l
Tiberias it
Damascus apparently believes it must main-
tain military pressure on the Golan front to sup-
port its negotiating aims. It may also consider 25X1
that an aggressive posture now will blunt criticise,
of miscalculation by both sides, raising the
growing tension has been to increase the chances 25X1
One result of the prolonged period of
SYi.on.
-Arab battle line
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possibility that a minor incident could lead to a
major outbreak of fighting. Both Syrian and
Israeli forces are in positions from which they
could attack with little or no warning, and either
side might launch a pre-emptive attack if it
believed the other were about to strike.
Negotiations Begin
On the political side, the Syrian delegate to
the Washington disengagement talks, Brigadier
gagement proposal which, according to the Israeli
press, would leave the Israelis still in control of a
part of the salient captured in the October war.
This proposal, which probably represents only
Israel's initial bargaining position, would clearly
be unsatisfactory to the Syrians
he Syrians also want a linkage between an
Israeli commitment to withdraw from all the oc-
cupied territories and any immediate disengage-
ment accord. For their part, the Israelis are in-
sisting on the exchange of POWs prior to any
withdrawal.
During his visit to Washi igton last week,
Israeli Defense Minister Dayan submitted a disen-
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France: Vying to Succeed Pompidou
The first round of elections to select a suc-
cessor to President Pompidou will be held on
April 28 or May 5-earlier than either the Gaull-
ists or their leftist rivals would have preferred.
Gaullist Jacques Chaban-Delmas and Socialist
Francois Mitterrand are the main contenders, but
there will be several other candidates; most will
declare within a week.
The Communists, Socialists, and left Radi-
cals had hoped an election would not occur until
at least next year. They wanted more time to
develop an image of international statesman for
their leader, Socialist Francois Mitterrand, 57.
The leftist alliance also hoped for time to exploit
popular dissatisfaction with the government's fail-
ure to resolve the country's economic problems.
One Socialist leader recently said, "If we believed
in God, we would be in church lighting candles
for Pompidou's health."
The leaders of the leftist alliance are still not
agreed on how to present their candidates. The
Communists want Mitterrand to run as the sole
leftist candidate fearing that one of their own
would do poorly and expose the party's weak
position. Mitterrand, however, wants his allies to
field candidates so he can run on a moderate
platform, rather than be associated with the more
extreme portions of the alliance program. He is
gambling that he will win enough votes on the
first round to make it into the second, where he
hopes to prevail with the additional support of
Communist voters.
The other main candidate, Jacques Chaban-
Dalmas, 58, is a liberal Gaullist and a former
prime minister. At a party congress last Novem-
ber, his Gaullist colleagues indicated that they
would support him as a successor to Pompidou.
The governing coalition-Gaullists, Independent
Republicans, and a small centrist group-is in
some disarray however. One of their major prob-
lems is that Giscard d'Estaing, the leader of the
Independent Republicans, may choose to break
coalition unity and run in the first round.
Giscard, 47, was thought to be Pompidou's favor-
ite, but he faces serious opposition from ortho-
dox Gaullists. Giscard is also hampered by his
patrician image and his association with France's
economic woes as Pompidou's economics and
finance minister.
First-round challenges would also come
from:
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Behind Pompidou; Messmer, Faure,
Giscard d'Estaing
Page
? Pierre Messmer, 58, the lackluster, or-
thodox Gaullist prime minister. Messmer re-
portedly was Pompidou's second choice to
succeed him;
? Jean Lecanuet, 53, leader of one of the
two center union factions. He won 16 percent
of the first ballot in 1965 against De Gaulle.
He may run to avoid having to associate him-
self prematurely with one of the front run-
ners;
? Edgar Faure, 65, the leader of the left-
wing Gaullists and president of the National
Assembly. He sees himself as a compromise
candidate;
? Alain Poher, 64, the centrist who will
act as interim president. In 1969, when he
served in that capacity after De Gaulle's resig-
nation, Poher won 42 percent of the second-
round vote against Pompidou.
Foreign Minister Michel Jobert is now re-
ceiving considerable publicity for his aggressive
foreign policy tactics, but he lacks a politic-I
base-he is not even a member cf any party-
which makes him an unlikely candidate.
No president has been elected in the first
round under the present system. In view of the
many likely candidates, this election probably
will be no exception. Uncommitted voters make
up some 30 percent of the French electorate and
usually determine the outcome. The French con-
stitution provides that the Constitutional Council
must set an election date within 20 to 35 days of
the death of a president. Candidates must file by
April 9 or 16. If no candidate receives an absolute
majority on the first ballot, a second must take
place two weeks later, with the two candidates
who receive the most votes on the first ballot
participating in the run-e`.. The law also allows
the top candidates to withdraw in favor of one of
the first-ballot losers. This can happen when a
candidate is thought more likely to draw wide
second-ballot support. On the second
simple majority elects.
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CHINA: HARD LINE EXPECTED AT UN
Peking is demonstrating the importance it
attaches to the special session of the UN General
Assembly next week by sending the highest rank-
ing Chinese delegation ever to the UN. Vice
Premier Teng Hsiao-ping, a member of the Polit-
buro, will lead the delegation, with Vice Foreign
Minister Chiao Kuan-hua, a veteran at UN meet-
ings, as his deputy.
The special session, which will deal with raw
materials and economic development, affords
China the opportunity again to champion efforts
by the developing countries to control their own
natural resources. The Chinese may also antic-
ipate that they will have an opportunity to dis-
cuss Taiwan and other issues with US officials.
At the session itself, the Chinese almost
certainly will criticize the US and USSR for
"plundering" the economic resources of the
developing countries. The Chinese, for example,
probably will defend the pricing policies of the oil
producing states and seek to blame high oil rites
on the "exploitative" n'ture of capitalism and on
manipulations by the large oil companies. Because
of leftist pressure built up during the current
anti-Confucius, anti-Lin campaign in China, Teng
and Chiao probably will be much more critical of
the international activities of US corporations
than they have been in the recent past.
Increased criticism of US business would be
in line with the more militant note Peking has
been sounding on several foreign policy issues in
recent weeks. Speeches by Premier Chou En-Ii i
have included reminders that China, as a socialise
country, would continue to support revolutionary
causes, and Chou's speech at a banquet on April 1
for visiting Cambodian Communist leader Khieu
Samphan was resolute in its reaffirmation of rev-
olution in the abstract. Increasingly militant
rhetoric on some international issues has been
accompanied by a harder attitude toward Taiwan.
Page 8
Chou seems to be holding firm on other
foreign policy issues hearing on relations with the
West. Western businessmen have encountered few
delays in conducting business with the Chinese,
and the volume r. Chinese imports from the West
continues high despite criticism in the Chinese
media of "over-reliance" on such imports. Despite
the fact that Chou is under pressure-on Taiwan
as well as other issues-there appears to be no
alteration in the substance of Chinese foreign
policy.
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Lao capital after an absence of some 11 years.
Following a brief stopover in Hanoi, the Lao
Communist leader-accompanied by a small
entourage of senior officials-arrived by Pathet
Lao aircraft in Vientiane on April 3. A crowd
estimated at several thousand, including many
students, welcomed the Prince from Sam Neua. In
a prepared statement, ;ouphanolivong struck a
positive note on the prospects for success of the
new government, but he cautioned that on the
basis of past experience-an obvious reference to
the rapid collapse of coalition experiments in
1957 and 1962-obstacles may yet remain in the
search for peace and national reconciliation.
After more than 13 months of hard bargain-
ing, the two Lao sides are ready to form the
nation's third coalition government in nearly 17
years. Prime Minister Souvanna Phouma and his
half-brother, Lao Communist chairman Prince
Souphanouvong, are now expected to present
their new coalition cabinet and advisory political
council to the King for royal investiture on April 5.
The final breakthrough in the protracted
negotiations resulted from private discussions
between Souvanna and Souphanouvong's personal
emissary, Phoumi Vongvichit, who recently re-
turned to Vientiane. The success of this dialogue
paved the way for Souphanouvong's return to the
Souvanna and Souphanouvong proceeded to
the royal capital of Luang Prabang in preparation
for the investiture ceremonies. They are to be
joined there by the entire membership of the
coalition cabinet and advisory political council.
An official roster of the new coalition's
membership has not yet been announced. It
appears, however, that key individuals in Sou-
vanna's present cabinet will continue to occupy
important' portfolios-including defense, interior
and finance-in the coalition cabinet, and that,
for both sides, the new government will be a
reflection of the remarkable staying power of the
Lao ruling elite over more than a decade.
V, 1
Souphan-
ouvong, instead of becoming one of the two
deputy premiers under Prime Minister Souvanna
may assume the chairmanship of the advisory
council which will reportedly sit in Luang Pra-
bang. This would indic?ie that the Pathet Lao
attach considerable importance to the council.
The protocol to the February 1973 peace agree-
ment weights the leadership of the joint council
in favor of the Pathet Lao, makes the council a
policy-recommending body independent of and
co-equal with the coalition cabinet, and gives it
the responsibility for organizing general elections.
Phoumi V;onr25X1
vichit may replace Soupha
prime minister from the left.
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After a long period of obscurity, Khmer
Communist "defense minister" Khieu Samphan is
having his day in the international limelight.
When Samphan arrived in Hanoi on March 28, he
received a warmer welcome than that accorded
Sihanouk earlier on his way back to China from
Laos. The Chinese staged another impressive
reception when Samphan arrived in Peking on
April 1. Samphan's next stop reportedly will be
Pyongyang.
In his major speech in Hanoi, Samphan
emphasized that the only solution in Cambodia
was for the US to end its "aggression" and ter-
minate all forms of support to the Lon Nui gov-
ernment. Samphan asserted that Cambodians
would then be able to settle their own af'fairs. He
did not repeat Sihanouk's recent call for direct
talks with Washington. North Vietr,a;lnese leaders
publicly assured Samph;,n that Hanoi could be
counted on to re der full support to the Khmer
Communists. They also indicated that they would
resist any efforts to press the insurgents into
negotiating.
In Peking, Samphan stuck to his militant line
and again denounced the US and its "lackeys" for
alleged espousal of "sham cease-fire, sham talks,
and sham peace." Premier Chou ' n-lai's public
remarks reflected the cautious torn that has char-
acterized Peking's statements on Cambodia over
the past year. Although Chou made no specific
reference to peace proposals, he implied approval
of a negotiated settlement in Cambodia by citing
the Paris and Vierstie ie cease-fire agreements as
"victories" in Indochina.
From the Khmer Communist viewpoint,
Samphan's visits probably are intended to empha-
size that the Khmer Communists are an inde-
pendent force that must be reckoned with politi-
cally before the fighting in Cambodia can end. In
addition, his trip to Peking has served to identify
the Chinese more closely with the Khmer Com-
munist leadership. The prominence accorded
Samphan also raises questions concerning Siha-
nouk's (political future.
Khmer Communist forces this week ap-
peared intent on following up their recent victory
at Oudong with another at Kampot. They kept up
their pressure against the southwestern provincial
capital, pushing government defenders back
within a mile of the city at several points. Al-
though Phnom Penh has sent more reinforce-
ments to Kampot, the situation there at mid-week
continued to deteriorate.
Closer to Phnom Penh, lead elements of the 25X1
Cambodian Army units participating in the effort
to retake Oudong were still stalled a mile short of
the town.
A Change of Councils
On the political front, President Lon Nol has
scrapped the High Political Council. Ostensibly
the country's ruling body, the council had
become increasingly ineffective due largely to
political frictions among its three members-Lon
Nol, Republican Party head Sirik Matak, and
former chief tf state Cheng Heng. In recognition
of the need to maintain some sort of high-level
advisory body, however, Lon Nol subsequently
es.ablished an "executive council." Besides the
President, the new council consists of Matak,
Prime Minister Long Boret, and Cambodian Army
chief General Fernandez. The inc!usion of the last
two will allow the principal executors of gov-
ernment policy to participate more erfectively in
its formulation. Although Matak is likely to be
pleased at the prospect of having morn responsi-
bility, he is certain to remain sensitive to any
efforts by Lon Nol to impose his will on the
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After nearly six months of mostly lackluster
civilian rule in Bangkok, the first signs of restive-
ness among the Thai military have begun to
appear. Earlier attempts to develop a democratic
system of government have almost invariably
foundered for lack of strong leadership and have
resulted in military coups. From the moment that
Thanom Kittikachorn's military regime collapsed
last October and he was replaced by civilians,
local observers have been speculating as to how
long the military, in control for most of the past
40 years, would allow "democracy" to last this
time.
Krit apparently wishes to rain a
larger political role for the military, perhaps
through the appointment of several top officers
to the cabinet. Krit claims that it is becoming
increasingly difficult to restrain his key troop
comm iders, who are pressing for the reassertion
of a strong military hand in running the country.
For L"9 moment at least, Sanya appears to
have rejected Krit's advice. On March 31 he issued
a statement denying that the government would
resign or that the cabinet would be reshuffled. He
announced, however, that he was bringing four
senior statesmen into the government as advisers
to the prime minister, including former foreign
minister Thanat Khoman : d economist Puai
Ungphakori. Sanya may hope that bringing the
outspoken Than it and the capable Puai into Vie
qovernment will enhance its image, if not its per-
formance, until elections can be held later in tyre
year.
Krit's approach to Sanya-if it indeed took
place-may have been simply a gesture aimed at
keeping the troop commanders in line for the 25X1
time being. Whatever his aims, Krit lacked the
crucial support of the KinS. Krit, who has politi-
cal ambitions of his own, remains skeptical of the
durability of democracy in Thailand.
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Both British and French leaders played to
opinion at home in their presentatirns at this
week's EC Council meetings in Luxembourg. Paris
made a concession only on US trade demands.
The stiff positions of the two may preclude prog-
ress for some time on almost all issues under
consideration by the Nine. Over the next month,
in any case, the attention of all the EC members
is likely to be focused on the French elections.
The initial reactions to Britain's tough tone
in demanding new terms of membership in the EC
have been generally negative, the prevailing senti-
ment being that the implied ultimatum-better
terms or UK withdrawal from the community-is
not conducive to smooth negotiations. Britain's
partners are virtually united against changes in the
basic EC treaties. Concern over a serious clash
between London and its partners is leading some
officials of the Nine, especially from the sma;ler
countries, to urge moderation and a matter-of-
fact approach to Britain's stand. These officials
take some comfort from London's pledge to con-
tinue participation in community business while
renegotiations are under way. They also hope that
Britain's specific requests, when made, will prove
amenable to compromises within existing EC
structures and policies.
Foreign Minister Jobert rioted pointedly,
however, that applicant states had ample opportu-
nity during the negotiations for membership to
make their points of view known, and that it was
necessary for the new members to adapt to com-
munity procedures. Jobert characterized as
generally unacceptable the British intention to
continue to participate in community activities
while reserving the right to refuse further steps
toward integr:.:on that would prejudge the re-
negotiation issues.
Italian Foreign Minister Moro disagreed
entirely with Foreign Secretary Callaghan's state-
ment except for its references to improving rela-
tions with the US, and the Germans called on the
British to relegate national interests to the back-
ground.
Britain and Fr-.ince took up positions at
opposite ends of the spectrum of EC opinion over
the extent to which consultations with the US
should be a regular part of the Nine's political
machinery. Callaghan told his EC colleagues that
the UK would endorse the proposal for EC-Arab
cooperadon if there were a continuous exchange
of information on this project with the US.
France refused to accept this condition, with the
result that the UK reservation on EC-Arab co-
operation remains in force.
The distance between France and the other
eight on a mechanism for consultation with the
US may be less than is implied by their failure to
agree on a procedure, however. The eight agree
that consultations should be neither mandatory
nor institutionalized as an organic part of the EC,
but that they should be considered on a case-by-
case basis. In addition, all EC members stressed
the desirability of reciprocal US action in con-
sulting on matters of common concern. What
principally divides the eight from Paris is the
point in the EC deliberations at which consul-
tations with the US would be in order, with
France hoping to keep the US at arm':. length for
as long as possible.
The EC took positive action only in the field
of trade negotiations with the US. The foreign
ministers-including the French-agreed to
improve the EC's offer of tariff reductions to
compensate for the adverse effects on American
exports of EC enlargement. Even the revised offer
is still likely to fall short of Washington's de-
mands, but it will probably meet the US deadline
of May 1. Paris had insisted last November that
the EC's offer on compensation at that time was 25X1
"final," but apparently softened its position
because of recent US warnings of retalia-
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WESTERN EUROPE: AIRCRAFT TROUBLE
The joint British, West German, and Italian
project to develop a European Multirole Combat
Aircraft (MRCA) continues to enc' unter delays,
rising costs, and technological difficulties. The
project is about six months behind schedule, and
some of the more pessimistic European experts
on the project speculate that the plane will never
get beyond the prototype stage.
Serious problems with the MRCA's engines
have twice delayed plans for its first flight -now
expected to take place in May or June. In Feb-
ruary, British experts reported that most of the
problems had been solved,
over he
ong errn, engine problems plus other difficulties
with thr- airframe and avionics probably will cause
the program to slide as much as two years. A
decision to continue or terminate the program
may rest on the results of this initial flight.
The cost of the airplane already has far
exceeded initial projections. The cost per aircraft
was originally estimated at the equivalent of $2.5
million.
y the time it is scheduled to become
operational-toward tl?.e end of the 1970s-the
price may run as high as $22 million per aircraft.
As a result, the West Germans and the
Italians are seriously considering withdrawing
from the project and have begun seeking aircraft
elsewhere. The UK does not want to cancel the
project, but budgetary constraints may force
London to restrict its participation and reduce
the number of planes it might purchase.
The French suggested in March that the
three participants scrap the project and join
Artist's conception of MRCA
25X1?
France in developing a new low-level, twin-
engined Dassault fighter aircraft which is sched-
uled to be operational around 1980. This aircraft,
like the MRCA, wili have a multirole capability
allowing it to carry out reconnaissance, strike, air
superiority, and interceptor missions. The council
of ministers of the seven-nation Western Euro-
pean Union reportedly will discuss the French
proposal at a future meetinq.
A similar French proposal several years ago
was turned down by the British-West German-
Italian consortium, and it is likely that Paris'
current initiative will be rejected as well. A more
likely alternative is that the countries involved
will purchase less-expensive aircraft tailored for
specific missions; West Germany and Italy have
already expressed interest in this approach. Such
aircra?` could include the US-built A-7 and F-4, as
well as the Lockheed Lancer and the YF 16 and
17, lightweight fighters now under develoo-
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COMMUNISTS SEEKING OIL FOR AID
The USSR and Eastern Europe are seeking
more oil from the Middle East as well as increased
cooperation with the national oil companies in
producing countries. Eastern Europe is increasing
its reliance on Middle Eastern oil-about one
fourth of their imports is scheduled to come from
Iran and the Arab producers this year.
The USSR and Eastern Europe have pro-
vide-] more than $1.4 billion of aid for the devel-
opment of national oil industries in the less-devel-
oped countries-almost half of which went to
India and Iraq. Since 1969, the agreements in-
creasingly stipulate repayment in oil. In February,
Moscow was negotiating a contract with Iraq to
accelerate development of the third and final
stage of the North Rumaila oil field. This year,
Romania extended the only new Communist aid
for oil development-a $37 million credit for
machinery and equipment to Argentina. More-
over, Bucharest and Ecuador jointly announced
plans for Romania to provide, probably on a
commercial basis, technical services to Ecuador's
petroleum sector.
Although still less than 10 percent of total
Soviet - East European aid undertakings in the
Third World, oil development assistance in some
countries has been a critical factor in establishing
national oil industries. This was particularly true
in India, where Communist assistance made pos-
sible 50 percent of New Delhi's crude oil produc-
tion and 60 percent of its refinery capacity. Iran's
natural gas industry was encouraged by Soviet
willingness to take gas, which had been largely
burnt off in the past. Soviet-developed oil fields
and a Czechoslovak-built refinery account for all
of Syria's production capacity.
The Communist countries have given aid to
national oil industries in hopes of assuring a rauar-
anteed oil supply for Eastern Europe, but this is
not succeeding. In January, Iraq stopped oil ship-
ments on Soviet account after Moscow refused to
pay $17 per barrel, the price Baghdad was de-
manding from Western customers. Shipments
under previous agreements apparently have re-
sumed recently. Earlier Soviet plans to obtain as
much as 300,000 barrels per day of Iraqi oil this
year-three times the estimated 1973 level-may
be scaled down. It also is doubtful that the two
parties will agree to long-term deliveries at fixed
prices. East European countries, often agreeing to
pay the higher prices demanded for Middle East
oil, nevertheless also had difficulty in buying oil
this year. Libya, however, may become an im-
portant supplier to Eastern Europe; agreements
signed so far this year call for a doubling of oil
exports.
Yugoslavia
RESTRAINING THE CONSERVATIVES
Senior party leaders are again warning neo-
Stalinist zealots to fall into line with established
party policy or face stern disciplinary measures.
Some of the phrasing revives the question of
Soviet intentions toward Yugoslavia, a rare occur-
rence since Tito's rapprochement with Brezhnev
hit full stride last fall.
The warnings almost certainly reflect an
emerging consensus in the leadership that conserv-
ative elements are using Tito's drive to tighten
party discipline a screen for attacking their
ideological oppo