PAGE 01 STATE 064993
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ORIGIN EUR-12
INFO OCT-01 ISO-00 /013 R
DRAFTED BY EUR:SOV:SHUMPHREY:EUR/P-SEIDNER:REH
APPROVED BY EUR:SOV:SPOLANSKY
--------------------- 055271
O R 172150Z MAR 76
FM SECSTATE WASHDC
TO AMEMBASSY MOSCOW IMMEDIATE
INFO AMCONSUL LENINGRAD
UNCLAS STATE 064993
E.O. 11652: N/A
TAGS:PFOR, UR, US
SUBJECT: TRANSCRIPT OF PRESS BRIEFING ON POSTPONEMENT
OF JOINT COMMITTEE MEETINGS
REF; MOSCOW 4059
1. AS PER EMBASSY'S REQUEST IN REFERENCED CABLE, FULL
TEXT OF PERTINENT PORTIONS OF DEPARTMENT'S PRESS BRIEFING
TRANSCRIPT RELATING TO OIL NEGOTIATIONS AND MEETING
POSTPONEMENTS FOLLOWS:
DEPARTMENT OF STATE BRIEFING FOR PRESS, RADIO
AND TELEVISION NEWS, TUESDAY, MARCH 16 (ON THE RECORD
UNLESS OTHERWISE NOTED).
MR. FUNSETH: GOOD AFTERNOON, I HAVE A FEW ANNOUNCEMENTS:
I HAVE A STATEMENT, AN ANNOUNCEMENT, I WOULD LIKE TO MAKE
ON US - SOVIET OIL TALKS, THE TEXT OF WHICH MRS. WEYLAND
IS NOW PASSING OUT.
QUOTE SINCE JANUARY 26, US AND SOVIET DELEGATIONS, HEADED
BY UNDER SECRETARY OF STATE CHARLES W. ROBINSON ON THE
US SIDE AND BY DEPUTY MINISTER OF FOREIGN TRADE NIKOLAI
UNCLASSIFIED
PAGE 02 STATE 064993
G. OSIPOV ON THE SOVIET SIDE, HAVE BEEN NEGOTIATING AN
OIL AGREEMENT.
"UNDER THE TERMS OF A LETTER OF INTENT SIGNED LAST OCT
20 BY UNDER SECRETARY ROBINSON AND SOVIET MINISTER OF
FOREIGN TRADE NIKOLAI PATOLICEV, THE ANNUAL SALE OF 10
MILLION TONS OF SOVIET CRUDE OIL AND REFINED PRODUCTS
OVER A FIVE-YEAR PERIOD WAS CONTEMPLATED.
'THE LETTER ALSO ENVISIONED THAT A PORTION OF THE OIL
AND REFINED PRODUCTS WOULD BE TRANSPORTED TO THE UNITED
STATES ON US-FLAG TANKERS WHICH CARRY GRAIN TO THE
SOVIET UNION.
"THE TWO SIDES HAVE NOT YET BEEN ABLE TO AGREE ON A
FORMULA FOR SHIPPING RATES CONSIDERED MUTUALLY BENEFICIAL
TO THEIR ECONOMIC INTERESTS AND HAVE AGREED TO RECESS THE
NEGOTIATIONS IN ORDER TO AFFORD THEIR GOVERNMENTS
FURTHER TIME IN WHICH TO CONSIDER THEIR POSITIONS.
,THEY EXPECT TO RESUME NEGOTIATIONS IN THE NEAR FUTURE.;
Q. BOB, IS THIS BEING RELEASED IN MOSCOW, DO YOU KNOW?
A. I DO NOT KNOW.
Q. AND, CAN I ASK YOU A LOGIC QUESTION, PERHAPS? DO
YOU RELATE THIS IN ANY WAY TO ANY OTHER EVENTS IN US-
SOVIET RELATIONS?
A. NO.
Q. NO?
A. NO.
Q. YOU THINK THIS STANDS ON ITS OWN?
A. RIGHT.
Q. THERE IS NO LINKAGE HERE, IS THERE?
UNCLASSIFIED
PAGE 03 STATE 064993
A. THERE IS NO LINKAGE.
Q. THIS IS NOT A SIGNAL, OR PART OF A SIGNAL TO THE
SOVIETS THAT WE ARE DISTRESSED OVER THEIR BEHAVIOR IN
OTHER PARTS OF THE WORLD?
A. NO. THE RECESS WAS FOR THE REASON STATED.
Q. THE TALKS HAVE COLLAPSED?
A. NO. THEY HAVE RECESSED.
Q. OH.
A. THERE IS A DIFFERENCE.
Q. COULD YOU DESCRIBE IT A BETTER WAY? YOU SAID THEY
HAVEN'T AGREED ON A FORMULA FOR SHIPPING RATES.
A. YES.
Q. HAVE THEY AGREED ON A FORMULA FOR THE PRICE OF OIL?
A. I DO NOT BELIEVE IT WAS EVER CONSIDERED FEASIBLE
THAT WE WOULD ESTABLISH A SPECIFIC PRICE FORMULA BETWEEN
THE GOVERNMENT AGENCIES. THE QUESTION OF THE PRICE OF
ANY OIL IMPORTED BY A US PURCHASER WOULD HAVE BEEN LEFT
TO THE SOVIET EXPORTING COMPANY AND THE US PURCHASER TO
NEGOTIATE.
Q. WAS IT YOUR UNDERSTANDING THAT THEY WANTED TO RETURN
TO THE OPEC PRICE?
A. PARDON ME.
Q. WAS IT YOUR UNDERSTANDING THAT THEY WANTED TO CHARGE
THE OPEC PRICE?
A. I HAVE NOT BEEN BRIEFED ON THE PRICE DISCUSSIONS.
THE PRINCIPAL REASON IS THE FACT THAT WE WERE UNABLE TO
REACH AGREEMENT ON THE SHIPPING RATES.
UNCLASSIFIED
PAGE 04 STATE 064993
Q. THERE IS GENERALLY A FAIRLY STANDARD FORMULA CHARGED
BY CARRIERS ALL AROUND THE WORLD. WHY SHOULD THERE BE
A SPECIAL SHIPPING RATE FORMULATED FOR THIS PARTICULAR
DEAL?
A. IN WORKING OUT AGREED SHIPPING RATES, LARS, I THINK
WHAT WE ARE TRYING TO DO IS TO MAKE POSSIBLE THE PARTI-
CIPATION OF US FLAGSHIPS OF VARIOUS EFFICIENT SIZES
WHICH ARE NOW, OR COULD BE, ENGAGED IN HAULING US GRAIN
TO THE SOVIET UNION. AND WE WERE NOT ABLE TO REACH AN
AGREEMENT ON SHIPPING RATES FOR ALL OF THESE SHIPS. BUT
BECAUSE WE EXPECT TO RESUME NEGOTIATIONS IN THE NEAR
FUTURE, IT IS NOT EASY, OR IT IS NOT POSSIBLE FOR ME, TO
GO INTO TOO MUCH DETAIL OVER THE DIFFERENCES WE HAVE.
Q. YOU SAID AGREEMENT REGARDING SHIPPING RATES FOR
"ALL" OF THESE SHIPS -- AN AGREEMENT WAS REACHED IN
REGARD --
A. ALL EFFICIENT SIZES.
Q. BUT AGREEMENT WAS REACHEDIN REGARD TO RATES FOR
OTHERS? "SOME" SHIPS?
A. I AM NOT ABLE TO GO INTO THAT.
Q. IN OTHER WORDS, THAT DOESN'T APPLY? YOU WEREN'T ABLE
TO REACH --
A. IT IS THE OVERALL PROBLEM THAT WE WERE NOT ABLE TO
RESOLVE.
Q. THESE TALKS SURFACED WHEN THE GRAIN DEALS WERE BEING
MADE PUBLIC, AND THE TWO SEEMED TO BE RELATE;, BY SOME
AMERICAN OFFICIALS, AND CERTAINLY IN THE PUBLIC'S MIND.
IS IT NOW UNRELATED TO GRAIN DEALS WITH THE SOVIET
UNION?
A. NO.
Q. DO THEY OWE US THIS?
UNCLASSIFIED
PAGE 05 STATE 064993
A. PARDON ME?
Q. I SAY, IS THIS UNRELATED TO OUR GRAIN TALKS AT THIS
POINT?
A. YES. THIS IS A SEPARATE NEGOTIATION.
Q. HAS THERE EVER BEEN A RELATIONSHIP, REALLY?
A. I THINK THE RELATIONSHIP WAS THAT INITIALLY THERE
WERE PARALLEL TALKS GOING ON IN MOSCOW, BOTH ON THE
QUESTION OF GRAIN AS WELL AS ON THE QUESTION OF OIL.
Q. SO THEY WERE PARALLEL, BUT NOT NECESSARILY RELATED IN
THE FIRST PLACE?
A. THAT IS RIGHT. THERE IS ANOTHER RELATION IN THAT WE
WERE HOPING, AND WE STILL ARE WORKING ON THE AGREEMENTS,
SO THAT THE SHIPS THAT HAUL THE GRAIN COULD RETURN WITH
OIL, AT LEAST SOME OF THEM.
Q. BOB, WHY DO YOU EXPECT THAT THESE TALKS WILL RESUME
IN THE NEAR FUTURE? I THINK YOU SAID IN THE "VERY NEAR
FUTURE" AS YOU WERE DISCUSSING THIS THING --
Q. IS THE UNITED STATES CONSIDERING CHANGING ITS
POSITION?
A. NO, WE ARE GOING BACK TO BOTH -- AS THE STATEMENT
SAYS -- BOTH DELEGATIONS ARE RETURNING TO THEIR RESPEC-
TIVE GOVERNMENTS TO REVIEW THE NEGOTIATIONS AND THEN BOTH
DELEGATIONS AGREED T;AT THEY WOULD BE RESUMING NEGOTIA-
TIONS.
A. BOB, IS THIS RELATED TO THE CURRENT REASSESSMENT OF
US POLICY CONCERNING US-SOVIET COOPERATION IN A RANGE OF
ISSUES -- ENERGY, HOUSING, ECONOMICS?
A. NO, IT IS NOT.
Q. WELL, WILL YOU TELL US WHAT THE US POLICY IS IN THE
UNCLASSIFIED
PAGE 06 STATE 064993
SLOWDOWN ON THE OTHER RELATIONSHIPS?
A. SPECIFICALLY WHAT?
Q. THE ENERGY CONFERENCE.
A. YOU DO NOT MEAN THE "ENERGY CONFERENCE" YOU MEAN
THE "JOINT ENERGY COMMITTEE MEETING?,
Q. YES.
A. WELL, THAT IS ENTIRELY SEPARATE FROM THE OIL TALKS.
DATES FOR MEETINGS OF THREE BILATERAL COMMISSIONS OR
COMMITTEES HAVE BEEN POSTPONED, OR DATES HAVE NOT BEEN
SET. ONE IS THE JOINT US-SOVIET COMMERCIAL COMMISSION,
THIS YEAR'S MEETING OF THAT COMMISSION HAD NOT AS YET
BEEN SCHEDULED. IT MAY, PERHAPS, BE HELD IN THE SECOND
HALF OF THE YEAR. AS FOR THE OTHER TWO, THE JOINT ENERGY
COMMITTEE -- WE WERE PLANNING TO HAVE THAT IN MID-MARCH,
ABOUT THIS TIME -- AND THEN THERE IS ANOTHER, A THIRD,
BILATERAL COMMITTEE -- THE JOINT COMMITTEE ON HOUSING
AND OTHER CONSTRUCTION-- WE WERE PLANNING TO HAVE THAT
IN MAY. WE HAVE DECIDED TO DELAY THE HOLDINGS OF THE
MEETINGS OF THESE TWO GROUPS. THE REASON WE HAVE DECID-
ED TO --
Q. HOUSING, AND ENERGY?
A. RIGHT. THE FIRST ONE HAD NOT BEEN SCHEDULED -- WE
HAD NOT SCHEDULED AS YET THE DATE FOR THE JOINT US-SOVIET
COMMERCIAL COMMISSION. THE OTHER TWO, WE HAD SOME DATES,
BUT WE HAVE DECIDED TO DELAY THOSE. THE ANSWER TO YOUR
ORIGINAL QUESTION AS TO WHY WE ARE POSTPONING OR DELAYING
THE HOLDING OF THESE MEETINGS -- THE REASON IS THAT IN
THE LIGHT OF THE SITUATION IN ANGOLA, WE FELT WE COULD
NOT CONDUCT OUR BUSINESS WITH THE SOVIET UNION AS USUAL.
Q. WHEN DID THIS --
A. MAY I JUST ADD ANOTHER THOUGHT? THE REASON WE FEEL
THIS WAY IS THAT ACTIONS SUCH AS THOSE OF THE SOVIET
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PAGE 07 STATE 064993
UNION IN ANGOLA, HAVE THEIR PENALTIES. THEREFORE, WE
DECIDED NOT TO PROCEED WITH THE MEETINGS OF THESE THREE
JOINT BODIES.
Q. BOB IF YOU ARE SAYING THAT IT'S A FORM OF PENALIZING
THE SOVIET UNION, AREN'T YOU SAYING THAT THESE AGREEMENTS
ARE TILTED TO THE SOVIETS' BENEFIT IN THE FIRST PLACE?
A. NO, NOT AT ALL.
Q. THEN HOW ARE YOU PENALIZING THEM BY HOLDING BACK
SOMETHING THAT IS MUTUALLY BENEFICIAL? THEN YOU ARE
PENALIZING YOURSELF AND THAT WOULD BE MASOCHISM.
A. I WILL JUST GO BACK TO MY FIRST POINT: BECAUSE OF
THE SOVIET ACTIONS IN ANGOLA, WE JUST DO NOT BELIEVE WE
CAN CONDUCT OUR RELATIONS WITH THE SOVIET UNION AS USUAL--
Q. I UNDERSTOOD YOUR FIRST POINT. I GUESS I DON'T
UNDERSTAND, "HAVE THEIR PENALTIES." WHO IS BEING
PENALIZED?
A. -- IT HAS ITS FALLOUT ON THE WHOLE --
A. WHEN DOES THE --
A. -- THE WHOLE U.S.-SOVIET RELATIONSHIP.
Q. WHEN DID YOU COME TO THIS CONCLUSION?
Q. EXCUSE ME, I DIDN'T QUITE HEAR THAT LAST. "FALLOUT
ON THE"?
A. THE WHOLE U.S.-SOVIET RELATIONSHIP --
Q. HAS THERE BEEN A FALLOUT --
Q. -- HAS THERE BEEN A FALLOUT OF THE U.S.-SOVIET
RELATIONSHIP -- I BELIEVE --
Q. ON THE U.S.-SOVIET --
UNCLASSIFIED
PAGE 08 STATE 064993
A. THE U.S.-SOVIET RELATIONSHIP.
Q. WHEN DID THIS -- WHEN WAS THIS DECISION REACHED,
MR. FUNSETH?
A. I DO NOT HAVE THE DATE OF THE DECISION.
Q. WELL, PERHAPS YOU COULD LOOK INTO THAT?
A. O.K.
Q. BECAUSE AFTER ALL, THE PURPORTED SOVIET ACTIONS IN
ANGOLA WOULD APPEAR TO HAVE REACHED BACK QUITE A WAYS.
A. YES.
Q. SO THE QUESTION WOULD BE: WHICH ACTIONS AND WHEN?
IN OTHER WORDS, WAS IT A CERTAIN LEVEL OF WAR MATERIEL?
WAS IT FERRYING CUBAN TROOPS?
Q. WAS IT WINNING?
A. I WILL CHECK THE DATE OF THE DECISION, DAVID, BUT
REALLY I THINK WE ARE PROBABLY GOING TO LEAVE IT IN THE
GENERAL TERM OF THE SOVIET ACTIONS IN ANGOLA. THEY SENT
A GREAT QUANTITY OF MILITARY EQUIPMENT IN SUPPORT OF THE
CUBAN EXPEDITIONARY FORCE. WE HAVE --
Q. WAS THIS DECISION MADE -- YOU KNOW, THAT WOULD HAVE
BEEN NOVEMBER -- FOR INSTANCE --
A. I AM NOT GOING TO SPECIFY A LEVEL, BUT THE FACT OF THE
MATTER IS THAT THERE WAS A LOT OF SOVIET MILITARY EQUIP-
MENT THAT WENT IN AFTER DECEMBER.
Q. WHAT DO YOU MEAN WHEN YOU ARE NOT GOING TO -- SEND --
Q. BOB, COULD YOU LOOK TOWARD FINDING OUT, AT LEAST A
WEEK, WHEN THIS --
UNCLASSIFIED
PAGE 09 STATE 064993
A. I SAID I WILL LOOK INTO WHEN WE MADE THIS
DECISION. I THINK IT WAS FAIRLY RECENT.
Q. WHO MADE THIS DECISION, AT WHAT LEVEL? WAS THE
PRESIDENT INVOLVED? WAS IT A KISSINGER UNILATERAL
THING? CAN YOU HELP US ON THAT?
A. IT IS AN ADMINISTRATION POSITION, BERNIE. I DO NOT
THINK WE CUSTOMARILY INDICATE WHO MAKES VARIOUS DECISIONS.
A. DOES THIS DECISION ALSO AFFECT THE NEGOTIATIONS ON
SALT?
WE WERE AT THE HEARING THIS MORNING AND THE SECRETARY
GAVE NO INDICATION OF THAT. HE SAID, "WE ARE WAITING
FOR A SOVIET RESPONSE."
A. THAT IS CORRECT.
Q. IF THERE IS A SOVIET RESPONSE, WILL WE TELL THEM WE
ARE NOT READY TO NEGOTIATE?
A. NO.
I THINK I WAS ASKED THIS QUESTION YESTERDAY. WE ARE
STILL WAITING A REPLY FROM THE SOVIET UNION TO OUR LATEST
PROPOSAL. WE DO NOT VIEW THE SOVIET ACTIONS IN ANGOLA
AS OF THE MAGNITUDE WHICH WOULD CAUSE US TO INTERRUPT
THE SALT TALKS.
KEN.
Q. THIS TIMING THING BOTHERS ME SOMEWHAT, BOB. I HAVE
THE FEELING THAT IF IT HADN'T BEEN DISCLOSED IN THE
PAPER THIS MORNING THAT YOU WOULDN'T HAVE ANNOUNCED THIS
TODAY. HOW LONG HAVE YOU BEEN PREPARED TO HAVE MADE
THE STATEMENT IF WE HAD ASKED, FOR INSTANCE?
A. I WOULD NOT HAVE BEEN PREPARED YESTERDAY. I WAS
NOT INFORMED.
UNCLASSIFIED
PAGE 10 STATE 064993
Q. WE ARE TOLD THIS BRIEFING PAPER HAS BEEN AROUND THE
DEPARTMENT FOR A WEEK. IS THAT CORRECT?
A. I DO NOT KNOW THAT.
THE FACT OF THE MATTER WAS THAT EACH OF THESE THREE
BODIES: THE FIRST ONE HAD NOT BEEN SCHEDULED SO THE
TIME HAD NOT BEEN SET. THE SECOND HAD A DATE SOMETIME
IN MARCH AND THE OTHER ONE WAS TENTATIVELY SET FOR MAY.
Q. CAN YOU TELL US WHETHER THIS IS THE LIMIT -- THESE
THREE AFFAIRS?
A. I AM NOT GOING TO SAY.
Q. IN OTHER WORDS, THERE ARE OTHER THINGS GOING ON
BETWEEN THE UNITED STATES AND THE SOVIET UNION, FOR
INSTANCE, THE ATTEMPT TO COMPLETE A TEST BAN TREATY
PACKAGE - IS THAT GOING TO BE AFFECTED?
A. THE ONLY THINGS THAT ARE AFFECTED SO FAR ARE THE
ONES THAT I HAVE MENTIONED TODAY.
Q. CAN YOU DESCRIBE WHAT -- HOW THE DECISION WAS MADE,
TO SAY, TAKE THESE THREE GROUPS AND NOTHING MORE
SIGNIFICANT?
A. NO, I DO NOT THINK THAT I CAN PROVIDE --
A. -- AN EXPLANATION OF THAT.
Q. ARE YOU INCLUDING IN THIS -- YOU SAID IT SORT
OF AMBIGUOUSLY: U.S.-SOVIET COMMERCIAL COMMISSION?
IS THAT DEFINITELY GOING TO BE POSTPONED? HERE WHEN YOU
FIRST SAID ONLY TWO GROUPS --
A. THAT WAS THE FIRST ONE. I SAID THE DATE FOR IT HAD
NOT YET BEEN SCHEDULED. AND I ALSO SAID, I THINK, IT
MAY PERHAPS BE HELD LATER IN THE YEAR.
UNCLASSIFIED
PAGE 11 STATE 064993
Q. YOU DID SAY IT MIGHT HAVE BEEN HELD EARLIER THIS
YEAR.
BUT WHAT ARE YOU SAYING, BOB, IS IT THAT THIS IS LIMITED
TO THESE THREE COMMISSIONS AND ANGOLA? IS OVERALL
POLICY TOWARD THE SOVIET UNION AFFECTED? IS THERE ANY
CHANGE, ANY SHIFT IN THE OVERALL POLICY?
A. I THINK, IN ANSWER TO MURREY'S QUESTION, I SAID THAT
IN LIGHT OF THE SITUATION IN ANGOLA, WE COULD NOT
CONDUCT OUR BUSINESS WITH THE SOVIET UNION AS
USUAL. AND I HAVE INDICATED TODAY THREE DECISIONS
THAT WE HAVE MADE.
Q. BOB, HOW LONG DOES THIS GO ON, NOW?
I MEAN WHEN DO WE FORGIVE THE SOVIETS FOR ANGOLA AND
CONTINUE WITH WHAT USED TO BE THE NORMAL PACE?
A. I AM NOT IN A POSITION TO ANSWER THAT QUESTION.
Q. BOB, DOES THE POLITICAL CAMPAIGN HAVE ANY INFLUENCE
ON THIS?
A. NO.
Q. THE CRITICISM THE PRESIDENT HAS BEEN TAKING FROM
REAGAN AND JACKSON?
A. NO.
Q. THIS HAS NOT AFFECTED THE ADMINISTRATION AT ALL?
A. NO. THE REASON FOR THIS DECISION IS SOVIET ACTION
IN ANGOLA. AND THAT COMES AS NO SURPRISE, OUR FEELINGS
ABOUT THE SOVIET ACTIONS IN ANGOLA ARE WELL KNOWN.
Q. WERE THE SOVIETS INFORMED OF THE REASONS -- OR WHAT
REASONS WERE THE SOVIETS GIVEN?
A. I AM NOT IN A POSITION TO DISCUSS U.S.-SOVIET
UNCLASSIFIED
PAGE 12 STATE 064993
DIPLOMATIC EXCHANGES.
Q. THE U.S. EMBASSY IN MOSCOW, THIS MORNING, GAVE AS
THE REASON FOR THESE POSTPONEMENTS SIMPLY THAT MORE
PREPARATORY WORK WAS REQUIRED.
WAS THAT DONE DELIBERATELY?
A. I AM NOT AWARE OF THE STATEMENT THE EMBASSY MADE
IN MOSCOW.
Q. BOB, THE SECRETARY TESTIFIED FOR TWO AND A HALF
HOURS THIS MORNING BEFORE THE SENATE FOREIGN RELATIONS
COMMITTEE. THERE WAS NOT THE SLIGHTEST INFERENCE OF
ANY SHIFT IN THE U.S. POSITION ON THE SOVIET UNION UP
THERE. IN FACT, HE WAS EXPRESSLY ASKED BY SENATOR CASE
IF THERE WERE NOT SOME MEASURES THE UNITED STATES COULD
TAKE, SUCH AS CUTTING OFF GRAIN OR CUTTING OFF TECHNOLOGY,
OR PUTTING SOME OTHER PRESSURES ON THE SOVIET UNION TO
REGISTER ITS DISPLEASURE WITH THE SOVIET UNION.
THE SECRETA
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