CENTRAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A017500120001-4
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 14
• Document Creation Date: December 15, 2016
• Document Release Date: August 4, 2003
• Sequence Number: 1
• Publication Date: November 14, 1970
• Content Type: REPORT

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DIRECTORATE OF
INTELLIGENCE
Central Intelligence Bulletin
Secret
0
State Dept. review completed
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No. 0273/70
14 November 1970
Central Intelligence Bulletin
JAPAN-USSR: Tokyo plans to keep pressing Moscow for
the return of the southern Kuril Islands. (Page 1)
THAILAND-JAPAN: The Thais were unsuccessful in
their efforts to reduce trade deficits with Japan.
(Page 2)
PHILIPPINES: Marcos' call for renegotiation of US
base rights was timed to calm domestic criticism.
(Page 3)
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EUROPEAN COMMUN:[TIES: European neutrals are having
difficulty establishing arrangements with the EC.
(Page 5)
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GUATEMALA: Arana's resort to emergency powers is
aimed at crippling the left-wing terrorists. (Page 8)
WEST GERMANY - POLAND: Treaty negotiations (Page 9)
ROMANIA-POLAND: Friendship pact (Page 9)
CHILE: Price controls (Page 10)
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JAPAN-USSR: Tokyo plans to keep pressure on
Moscow for the return of the southern Kuril Islands
despite Soviet insistence that the issue is closed.
According to a high Foreign Office official,
the Japanese Government intends to use Moscow's pro-
test over Japan's recent exploitation of the issue
as a pretext to publicize further Tokyo's demand for
the return of the islands, held by the Soviets since
the end of World War II. In receiving the Soviet
protest, the Foreign Office denied a charge that the
government was "artificially" trying to stir up anti-
Soviet sentiment. The Japanese stated that with the
settlement of the Okinawa problem, Tokyo "naturally"
wanted to settle this issue as well.
The Soviet protest was largely motivated by
anger over Prime Minister Sato's reference to the
"northern territories" issue in his speech at the
UN last month. Soviet officials have warned the
Japanese that relations would be "adversely affected"
if Tokyo persists with its campaign.
Tokyo recognizes that the Soviets are extremely
unlikely to return the islands. The Sato government's
campaign, therefore, is aimed at capitalizing on
growing nationalistic sentiment in Japan, as well as
undercutting opposition charges that the government
is neglecting its responsibilities. The prime minis-
ter recently expressed a desire to go to Moscow to
settle the issue, but only in the improbable event
that the Soviets show illingness to negotiate.
I I-T
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THAILAND-JAPAN: The Thais, in recent talks,
were unsuccessful in their efforts to reduce the
large and growing trade deficit with Japan.
The deficit, which doubled to $300 million dur-
ing 1966-69, accounted for more than half of Thai-
land's total trade imbalance last year. Although
Japanese officials agreed to a Thai-proposed export
target plan for 1970-71 that would increase Japanese
purchases from Thailand, they pointed out that Japa-
nese importers could not be forced to abide by the
plan.
The lack of success in talks with Japan high-
lights the problems the Thais face in moving away
from their traditional rice export base. World de-
mand is slackening because of increasing self-
sufficiency. As a result, rice earnings from sales
to Japan declined nearly 50 percent between 1966-69,
largely offsetting Thai successes in promoting new
markets, particularly those for rubber, tin, and
corn. Exports to Japan have grown by only ten per-
cent since 1965, while imports have grown 44 per-
cent.
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PHILIPPINES: President Marcos' call yesterday
for immediate renegotiation of US military base
rights was timed to calm domestic criticism of his
government's agreement with the. US position in a
jurisdictional dispute.
A Philippine court had tried to make the US
commander of Clark Air Base responsible for the fail-
ure of a US serviceman to return to the Philippines
to face trial for a two-year-old offense. The Phil-
ippine Department of Foreign Affairs on 11 November
came out in support of the US view that this matter
should be settled through diplomatic channels.
The case of the serviceman, who was mistakenly
permitted to leave the Philippines while under sub-
poena from a Philippine court, had become a cause
celebre for Philippine nationalists. The US refusal
to accept a Philippine arrest order for the Clark
commander had prompted adverse press comment and
demonstrations at the US Embassy.
The Philippines has long sought renegotiation
of US military base rights to secure a clearer US
statement of recognition of Philippine sovereignty
over the bases. Marcos made this goal a campaign
promise in his bid for re-election a year ago, but
a succession of domestic problems had forced repeated
postponements. Although Marcos apparently did not
intend to raise the subject until at least mid-1971,
he may have felt constrained to take earlier action
to protect his nationalist credentials in view of
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EUROPEAN COMMUNITIES: The initial presentations
of Austria, Switzerlanc,-and Sweden have highlighted
the difficulty the European neutrals will have in
establishing mutually satisfactory arrangements with
the EC.
At meetings this week in Brussels, the community
heard the views of the three neutrals and stated its
own policy with regard to these countries, which are
not applicants for full membership. Speaking for the
Six, West German Foreign Minister Scheel noted that,
in seeking possible solutions to the problems of these
countries, the EC would want to preserve the decision-
making power of an enlarged community and safeguard
its future development. Furthermore, solutions reached
would have to conform to international obligations
requiring that preferential arrangements lead to the
formation of a customs union or free trade area.
The major problem for the neutrals lies in their
attempt to draw a line between economic integration
and political involvement. All three countries in-
dicated a desire for arrangements going beyond the
elimination of tariff barriers, but they offered no
new ideas on how to pursue such objectives as economic
and monetary union while remaining outside an enlarged
community's own decision-making processes. Sweden,
for example, remains particularly insistent that the
"form" of its participation be settled only after
"substantive" discussions have been completed.
Although no timetable has been set for negotia-
tions with the neutrals, both sides envisage that
arrangements for them will come into force at the
same time as Britain and other applicants are admitted
to membership. The commission will now conduct ex-
ploratory discussions with the neutrals and undoubtedly
try to obtain more definite statements of how they
see their relationship to an enlarged community.
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GUATEMALA: President Arana's resort to emer-
gency powers is aimed at crippling the left-wing
terrorists.
Arana declared a state of siege yesterday after
he and his advisers determined that the violence
could not be controlled through normal legal pro-
cedures. Congress has not acted upon the anti-
subversive law Arana had requested, and he apparently
believed that the continuing wave of murders and
kidnapings required some visible government response.
The government, and Arana personally because of his
tough anti-Communist reputation, have been under
heavy criticism for weakness in the face of this
challenge.
I The government's first moves are in line with
reported plans to move rapidly against both terror-
ists and suspected "intellectual authors of subver-
sion." Security forces have reportedly shot an urban
terrorist chief and have arrested several prominent
persons, including a former police chief and an ex -
minister of foreign affairs who now heads a major
opposition faction.
In the past, the government's unleashing of
clandestine counterterrorist squads has added sig-
nificantly to the level of violence and has cost
many innocent lives. President Arana has reiterated
his intention not to repeat the bloodletting of the
1966-68 period, but the intense pressure on him to
fight fire with fire might become irresistible.
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C WEST GERMANY POLAND: Negotiations for a West
German Polish treaty of reconciliation have been
concluded; formal initialing is now scheduled for
18 November. West German Foreign Minister Scheel is
scheduled to return to Bonn today, but will go to
Warsaw next week to initial the treaty for West
Germany. Sources close to the talks said it was ex-
pected that formal signing of the treaty would be
carried out before Christmas by West German Chancel-
lor Brandt, who will come to Warsaw. The timing of
the announcement: may have been designed to provide
maximum publicity for the Free Democrats, Foreign
Minister Scheel's party, on the eve of the state
elections on 22 November in Bavaria.
ROMANIA-POLAND: Polish party leader Gomulka
and Romanian President Ceausescu signed a new bi-
lateral friendship and alliance pact in Bucharest
on 12 November. The new 20-year treaty, which re-
places the one concluded in 1949, closely follows
the form of the recent Romanian-Soviet treaty. It
provides for all necessary mutual aid, including
military, in the case of attack by "a state or group
of states," but unlike the older treaty, it omits
specific mention of West Germany or any other state.
Before the end of this year Romania is slated to
sign new treaties also with Bulgaria and East Ger-
many, leaving only the Romanian-Hungarian treaty
still to be signed. The completion of these pacts
reflects a gradual improvement in the cool relations
which prevailed between Romania and the other War-
saw Pact countries after Ceausescu denounced their
participation in the invasion of Czechoslovakia in
1968.
(continued)
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CHILE: The Allende government has started
trying to suppress inflation through stricter price
controls. It has annulled certain decrees author-
izing price increases and has forced a roll-back of
some previously uncontrolled prices. This could
also be the first step in a campaign to squeeze
private firms to pay for Allende's promised substan-
tial wage increases and possibly to force some com-
panies to sell out to the government.
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