Office of the Historian

101. Memorandum of Conversation1

Washington, July 23, 1970, 3:15 p.m.

SUBJECT

  • Finnish-Soviet Trade

PARTICIPANTS

  • Finland
    • President Urho Kekkonen
    • Foreign Minister Vaino Leskinen
    • Olavi Munkki, Ambassador to the United States
    • Ambassador Max Jakobson, Permanent Representative to the UN
    • Major General Levo, Aide de Camp to President Kekkonen
    • Dr. Risto Hyvarinen, Director of Political Division, Ministry of Foreign Affairs
    • Mr. Aarno Karhilo, Counselor, Ministry of Foreign Affairs
    • Mr. Paavo Laitinen, Chief of Section, Ministry of Foreign Affairs
    • Mr. Pauli Opas, First Secretary, Finnish Embassy
  • United States
    • The Secretary
    • Val Peterson, U.S. Ambassador to Finland
    • Martin J. Hillenbrand, Assistant Secretary, EUR
    • Margaret J. Tibbetts, Deputy Assistant Secretary, EUR
    • James G. Sampas, EUR/SCAN
    • Captain Erkki Minkkinen, USN, DOD, Interpreter

President Kekkonen reported that, during his July 17–20 visit to Moscow, there had been a lengthy discussion of bilateral economic matters. The Soviet Union had earlier agreed to provide Finland with its first atomic reactor on favorable credit terms. The site of the first reactor is such as to make it desirable to construct the second atomic reactor next to it for reasons of economy. Agreement has now been reached on the purchase of a second Soviet reactor with repayment terms of 20 years at 21/2 percent.

The Secretary asked whether commercial or other reasons motivated the Soviets. President Kekkonen replied that the Finns took the initiative. They did not know whether the Soviets were willing to sell a second reactor on the same terms as the first. An important consideration was the question of fuel.

Another subject discussed in Moscow, President Kekkonen said, was natural gas. Finland has the problem of rapidly increasing fuel consumption. Within the next few years, Finland will require the equivalent of an additional one to four million tons of oil. Finlandʼs balance of payments position would be severely affected if oil had to be purchased. The Soviets have agreed to bring a natural gas pipeline to the border. This will fulfill Finlandʼs energy needs.

One project discussed in Moscow, but not publicly mentioned, President Kekkonen said, was the construction in the Soviet Union by Finland of a large scale pulp and paper plant. If the project goes through, several thousand Finnish workers will be involved. He had discussed the plant with Kosygin earlier and it had been thought the plant would be in Siberia. Its construction near Archangel is now planned.

President Kekkonen explained that Finnish-Soviet trade is on a bilateral basis. Now that Finland is able to buy, the Soviets are unable to deliver. For several years, the Soviets have complained that Finland treats the USSR like an underdeveloped country in that Finland buys raw materials from it and sells it processed goods.

The Secretary asked whether renewal of the 1948 friendship treaty and trade matters were part of a package deal. President Kekkonen responded that the treaty and trade matters were handled at separate levels.

  1. Source: National Archives, RG 59, Central Files 1970–73, POL 7 FIN. Secret. Drafted by Sampas and approved in S on August 6. The meeting took place in the Secretaryʼs office. The memorandum is part 2 of 4. The other parts are ibid.↩