Foreign Relations of the United States, 1969–1976, Volume XVI, Soviet Union, August 1974–December 1976

108. Memorandum From the Counselor of the Department of State (Sonnenfeldt) to Secretary of State Kissinger¹

Washington, January 4, 1975.

SUBJECT

• Next Steps in Trade Relations with Soviets; Reply to Brezhnev Letter on Trade Bill; Your meeting with Dobrynin, January 6, 1975

1. This package contains a reply to Brezhnev’s recent letter to the President for your review (Tab A). The incoming letter is at Tab B.² If you approve the draft, I will get it typed final and have it sent to Scowcroft for signature.

2. Further, there is a memo from L detailing precisely what has to be done to implement MFN for the Soviet Union and Romania (Tab C).³ As you are aware, under the law there must be an exchange of notes and this in turn would probably have to be the vehicle for taking account of the law’s 18 month provision. L makes three suggestions for formulating this point. I believe the formula in paragraph 1.b. has the most promise.⁴

3. There now also is a question whether the President could satisfy the law’s requirement that in requesting a waiver of Jackson–Vanik the President must report to Congress that “he has received assurances that the emigration practices of the USSR will henceforth lead substantially to the achievement of the objectives of the amendment.” The issue is whether the Gromyko letter of October 26 and other Soviet statements (including the still secret Brezhnev letter of December 25) vitiate your letter to Jackson of October 18. Even if the President chose to take the view that he is still in possession of the pertinent assurances he would run the risk of a formal Soviet statement denying the existence of “assurances,” and of Congressional inquiries as to the basis for his report.

4. A further issue is raised by Brezhnev’s contention that the Soviet Union is relieved of the obligations it took in the various associated trade agreements. (Soviet Embassy officials have begun making similar statements to US journalists.)⁵ This may only apply to Lend-Lease; if so, it is redundant since the Lend-Lease agreement itself relieved the USSR of the requirement to pay the first “Regular Installment” in 1974 and others thereafter if there is no MFN. Presumably, if MFN is extended—and the Soviets accept the terms of it as imposed by the Trade Bill—then they will be required to pay Lend-Lease as long as they retain MFN. If Brezhnev’s statement applies to the articles of the 1972 trade agreement dealing with matters other than MFN, the Soviets, while implementing some of them de facto, were never legally obliged to do so since the agreement never went into effect and would do so only when MFN is extended. Consequently, it would be desirable to determine just what Brezhnev’s assertion was intended to mean. (Incidentally, the proposed reply to Brezhnev does not refer to his seeming repudiation of Soviet obligations. One could ask facetiously whether he meant to say that the USSR would not pay off credits already granted by EXIM.)

5. This package also contains

—a memo from Art Hartman assessing probable Soviet courses of action (Tab D);⁶

—a telegram from Stoessel suggesting you raise with Dobrynin strident Soviet anti-Zionist propaganda in connection with the Trade Bill (Tab E).⁷

6. Dobrynin Meeting⁸

Basically, you should try to determine what the Soviets are up to

—will they proceed with MFN on the basis of what the Trade Bill requires with respect to an exchange of notes and the 18 month caveat?

—will they let the President make the two certifications required in order to use the waiver authority without further public repudiations?

—what, if any, is the meaning of Brezhnev’s repudiation of Soviet obligations?

Secondly, you should correct the slightly inaccurate version of the 300 million dollar EXIM credit grant that has been current: it does not mean $75 million/year but can be extended more rapidly; thereafter the President can ask for more, albeit with Congressional approval.

Third, you might note that if the Soviets elect to decline MFN, reject further EXIM credits, repudiate the Lend-Lease Agreement (as distinct from simply not paying their regular installments, as they are entitled to), repudiate other measures already in effect such as business facilitation—all in order to demonstrate that there is no agreement on emigration, this might lead to additional punitive legislation (e.g., on technology, commercial credits, etc., etc.).

Fourth, you should state our conclusion that on balance it would be best to proceed on the basis we have got, together with a modest rise in emigration, to get ourselves over the present hump. (We cannot delay a waiver request for too long since without it EXIM credits would fall also.)

Finally, you should walk Dobrynin through the procedures enumerated in the L memo at Tab C and try out the 18-month formula (para 1.b. of Tab C) with him.

You may also wish to show him the proposed reply to Brezhnev and get his reaction.

1. Source: National Archives, RG 59, Lot File 81D286, Records of the Office of the Counselor, Box 8, Trade Bill, 1975. Secret; Sensitive; Eyes Only. None of the tabs is attached. An uninitialed copy of the memorandum, including attachments, is ibid., Box 5, Soviet Union, January–March 1975.
2. Printed as Document 104.
3. At Tab C is a copy of a memorandum, December 31, 1974, from Hartman and Aldrich. The original is in National Archives, RG 59, Lot File 81D286, Records of the Office of the Counselor, Box 8, Trade Bill, 1975.
4. The formula in this paragraph reads: “As contemplated by Article 9, the Agreement shall remain in force for three years from the date hereof, except that it is understood that the obligations of the two Governments under this agreement shall be suspended during any period in which either Government does not have domestic legal authority to carry out its obligations thereunder.”
5. In a memorandum to Kissinger on January 3, Sonnenfeldt noted that according to Marilyn Berger and Murrey Marder of The Washington Post: “Dobrynin on December 18 informed you that the Soviets were no longer bound by obligations previously entered into in the trade field, and that the USSR would not accept MFN or credits under conditions stipulated in the Trade Bill; and that these oral remarks thus went beyond the published TASS statement and Gromyko letter.” (National Archives, RG 59, Lot File 81D286, Records of the Counselor of the Department, Box 5, Soviet Union, January–March 1975) Marder reported on this and other matters related to the Soviet position on the Trade Bill in a front-page article in the Post on January 4.
6. Printed as Document 107.
7. At Tab E are telegrams 42 and 106 from Moscow, January 2 and 3, respectively.
8. No record of the meeting between Kissinger and Dobrynin on January 6 has been found.