Office of the Historian

190. Summary of Conclusions of a Presidential Review Committee Meeting1

Washington, April 27, 1979, 3–4:30 p.m.

SUBJECT

  • PRC Meeting on Saudi Arabia

PARTICIPANTS

  • State

    • Secretary Cyrus Vance (chaired)
    • Richard Cooper, Under Secretary for Economic Affairs
    • William Crawford, Deputy Assistant Secretary, Bureau of Near Eastern and South Asian Affairs
    • Ambassador John West

  • Treasury

    • Secretary W. Michael Blumenthal
    • Anthony Solomon, Under Secretary for Monetary Affairs

  • Defense

    • Deputy Secretary Charles Duncan
    • Robert Murray, Deputy Assistant Secretary for Near Eastern, African and South Asian Affairs

  • Energy

    • Secretary James Schlesinger
    • Peter Borre, Deputy Assistant Secretary for International Energy Resources

  • ACDA

    • Barry Blechman, Assistant Director

  • JCS

    • Lt General William Smith

  • DCI

    • Robert Bowie, Director, National Foreign Assessment Center
    • Robert Ames, NIO, Near East and South Asia

  • White House

    • David Aaron

  • NSC

    • Gary Sick
[Page 627]

The purpose of the meeting was to develop a strategy for managing our relations with the Saudis over the coming months in order to obtain as much Saudi support for key issues as we can realistically expect. The group agreed as follows:

1. There was general consensus that the U.S. relationship with Saudi Arabia is undergoing a period of severe strain and will require special attention in the months ahead. (S)

2. On the peace process, we need to resume a dialogue with the Saudi leadership about our own plans and intentions. It will be useful to inform them in advance whenever possible of steps we plan to take, but we cannot expect them to change their position with regard to the next stage of negotiations until some progress has been achieved. An early visit by Ambassador Strauss would be helpful as evidence of our intention to press ahead vigorously.2 (S)

3. Apart from the key issues of peace, security and oil, there are a range of economic issues which are of interest to the Saudis and where we might be able to show progress. These include the Saudi investments in the United States, tax issues affecting ARAMCO, possible restriction of the foreign tax credit, the payment of interest on Saudi funds deposited with the Defense Department, the boycott, and questions relating to development assistance. It was agreed that these issues needed to be examined on an interagency basis in the context of our overall relations with Saudi Arabia. Secretary Blumenthal could then discuss them with the Saudi Minister of Finance, Mohammed Aba al-Khail, probably in Europe, at an early opportunity.3 (S)

4. The President’s decision to request supplemental assistance and credits for Sudan and Oman could be helpful, and the Saudis will be notified of the decision immediately. (S)

5. With regard to the Fahd visit, we should basically let the Saudis determine the appropriate time. We should encourage them to go ahead with the visit, but not apply pressure. A visit in late August or September, after Ramadan, is probably the earliest realistic date for a visit. (S)

6. All agreed that some progress would be necessary on the peace negotiations and/or security issues before we could weigh in seriously with the Saudis on increasing their long-term production capacity. With regard to current production levels, we probably cannot affect their decision to resume production at the previous level of 8.5 million [Page 628] barrels per day. However, we should be prepared to object if their production drops below this level. We should make clear that it is our understanding that they are reducing production in response to the resumption of a substantial level of Iranian exports, and we would anticipate a reconsideration on their part if Iranian production should again drop off. (S)

7. This is not an appropriate time to raise the question of their relations with the Soviets. (S)

  1. Source: Carter Library, National Security Council, Institutional Files, Box 74, PRC 102, 4/27/79, Saudi Arabia. Secret. The meeting took place in the White House Situation Room. The minutes are not attached and were not found. Brzezinski sent the Summary of Conclusions to Carter under a May 1 memorandum recommending that Carter approve it. Carter approved and wrote in the margin: “Zbig—Enumerate for me items of leverage we might exert on S[audi] A[rabia]. J.” The President added: “p.s. Supplication is fruitless.” Tarnoff forwarded two undated Department of State background papers prepared for this meeting, covering a range of U.S.-Saudi issues, to Brzezinski under an April 25 memorandum. These papers are in the National Archives, RG 59, Central Foreign Policy File, P790064–1310. A portion of the paper on oil and other economic issues is printed in Foreign Relations, 1969–1976, vol. XXXVII, Energy Crisis, 1974–1980, Document 202.↩
  2. Carter placed a vertical line in the right-hand margin next to this sentence. Carter had appointed Special Representative for Trade Negotiations Robert S. Strauss to be his Special Representative to the Middle East peace negotiations on April 24.↩
  3. In the right-hand margin next to this paragraph, Carter wrote: “Let me approve first.”↩