67. Telegram 2565 From the Embassy in Morocco to the Department of State1
2565. Subj: Military Assistance to Morocco.
1. Summary. Met with King today. He in somber mood over problem of reaching agreement on military assistance package. Discussions regarding which have been dragging on for some months. Moroccans concerned about (1) availabilities and lead times for equipment they want, (2) credit terms. Of the two, latter is most acute problem at present. Met with Foreign Minister this evening to explain various credit packages being offered. No decisions taken, but we have work cut out for us. We need all the help we can get.
2. In compliance with my request, I was granted audience with King at 1015 June 6. Meeting took place at Skhirat Palace south of Rabat. I began by explaining, along lines Presidential message, circumstances which had made it necessary for President Nixon to cancel his trip to North Africa. I also repeated the instructions to me, contained in the President’s message to King, about resumption of discussion at an early moment regarding King’s postponed State Visit to America. King [Page 177] replied that he had been very sorry about President’s change in plans. He would have liked very much to welcome him as President in contrast to his previous visits as Vice President and private citizen.
3. He also had other reasons for regretting this change of plans. He had been looking forward to a personal visit with the President in order to bring to a head the negotiations over military supplies and their financing which had been dragging over the last few months. In view of the great USG interest previously expressed in Morocco, difficulties being experienced in reaching agreement were hard to understand.
4. Morocco did not want gifts and was able to pay. But one had to bear in mind that what they were buying was the country’s security, which USG has stated was of interest to it. Military supplies unfortunately are not like investments which eventually produce economic gain. In this light, demands for repayment in seven years and interest rates as high as 14 percent were just too much. The King did not wish to sound suspicious or be indelicate, especially as he was certain I was doing my best, but he was beginning to wonder what the USG’s real intentions were. Slowness of response, small quantities offered, high cost, and high interest rates were not evidence of great friendship.
5. King said country was denuded of defense and needed equipment fast. Surely 80 to 100 tanks were not too much to ask of a country that gave thousands to others. (King had figures on his desk to which he pointed without specification. They were perhaps aid figures from Secretary’s June 4 press conference.)
6. The King said further what he needed was M60 tanks and fast. He had to work with officers who had just come back from Syria. These officers knew very well that “others” had offered comparable equipment to be delivered immediately and under better conditions. These officers, who had worked with and seen the Soviet T64 (not clear whether King meant T62 or T54) in operation, could not understand why the King clung to hope for American equipment, and inferior equipment at that, such as the M48A3.
7. I replied that I understood His Majesty’s concern, but that the delay was caused not merely by US but also by lack of Moroccan response to more favorable earlier offers made in February, immediately after General Partain’s second visit. I further expressed some surprise at King’s remarks about the M60’s. We had looked into the M60 question and found that they would require a three year delay before delivery. I thought that when his Majesty had received General Partain and myself, he had expressed his acceptance of the M48A3. We had of course noted the King’s categoric rejection of the A1.
8. The King pulled back from that point saying the A3 was acceptable if deliveries were fast and the price was right. But he has lost two [Page 178] hundred million dollars in the intervention in Syria and Egypt and this imposed a burden.
9. I then gave explanation of current credit offers, separating the question of $12 million FMS credit from the rest and pointing out that we were in danger of losing even FMS credits with their more favorable interest rate the guarantee provided if Moroccans did not respond quickly.
10. The King, after hearing of the new offer by the Ivor Clark Group on the $12 million FMS credit (9–1/4 percent fixed over 10 years) thought that this might be acceptable and instructed the Foreign Minister, who was present, to meet with me, Col. Sanders (Chief MUSLO) and our Economic Counselor today to go further into this matter.
11. I further explained our supply problem which in part was the result of role which America now playing in Middle East settlement. Everybody now wanted American equipment, while supply situation would eventually improve, for time being I had to go by the lead times which my experts gave me, although they were admittedly pessimistic. I gave it as my purely personal view that greater demands on our supply lines were creating difficulties now but would eventually result in shorter delivery times as factories geared themselves to meet those demands.
12. Met with Minister of Foreign Affairs at 1800 local, accompanied by DCM, Economic Counselor and Chief MUSLO. Foreign Minister had Secretary of State for Finance, Secretary General of Ministry of Defense (Achabar) and Director of Cabinet with him. Discussion lasting one hour devoted entirely to technical details of credit offers. We successfully separated question of $12 million in USG guaranteed FMS credit from purely commercial offers and believe we now have GOM adequately briefed. Tone of meeting friendly, compared to somber mood of meeting with King this morning, but it clear there are several things preoccupying Moroccans:
A. Col. Achabar obviously troubled by change from direct to guaranteed FMS credits being offered this year as opposed to last. Moroccans would be much happier dealing with direct government credit than with private credit, even if guaranteed by USG. While we explained need to resort to private sector to expand credit facilities we could offer in wake extensive commitments of last fall, Achabar bemused by fact that type of credit changed just as Moroccans came to us for more help. He obviously suspects sinister motive.
B. Ministry of Finance representative and Foreign Minister quite properly concerned about rates of interest, grace periods and repayment periods. Current terms seem very stiff to them. We suspect their reaction in part due to fact they reportedly have offer on much easier [Page 179] terms (6.5 percent as opposed to roughly 13.5 percent we offering) from French.
13. It was agreed that Chief MUSLO, who returning to Washington on consultation this weekend, would gather various offers and present them to Minister of Finance Abdelqadr Binslimane, who will be in Washington next week. We will try to get Moroccans pinned down by end of next week or beginning of following week as to whether they accept our $12 million FMS offer. We are going to have hard time, however, for several reasons:
A. We are not offering the equipment originally requested by Moroccans, and, in order to meet their requirements for rapid delivery, will have to provide (we understand informally) tanks which are not even reconditioned but have been taken directly from reserve units.
B. Our credit terms will be considerably stiffer than they can get elsewhere.
C. Moroccans do not understand why we can be so generous in Middle East and not give them more.
14. Comments on situation following in Septel.
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Summary: The Embassy reported on King Hassan’s frustration over the inability to reach agreement on a military assistance package for Morocco.
Source: National Archives, Nixon Presidential Materials, NSC Files, Box 740, Country Files, Africa, Morocco Vol. II. Secret; Immediate; Exdis. Repeated to CINCEUR and SecDef ISA. In telegram 2566 from Morocco, June 6, the Embassy expressed growing concern over the inability to reach agreement on a Moroccan military assistance package. Neumann noted the principal problem was financing and Moroccan dissatisfaction with U.S. terms. He argued a quick resolution was necessary to avoid an adverse impact on U.S.-Moroccan relations. (Ibid.)
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