THE PRESIDENT'S DAILY BRIEF 11 JANUARY 1974

• Document Type: FOIA
• Collection: President's Daily Brief 1969-1977
• Document Number (FOIA) /ESDN (CREST): 0006007644
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 11
• Document Creation Date: August 14, 2016
• Document Release Date: August 24, 2016
• Publication Date: January 11, 1974

Declassified in Part - Sanitized Copy Approved for Release 2016/06/22 : CIA-RDP79T0-0936A011900010034-8
The President's Daily Brief
January 11, 1974
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Exempt from general
declassification schedule of E.O. 11652
exemption category 513(1),(2)0)
declassified only on approval of
the Director of Central Intelligence
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FOR THE PRESIDENT ONLY
THE PRESIDENT'S DAILY BRIEF
January 11, 1974
PRINCIPAL DEVELOPMENTS
The British are negotiating with Saudi Arabia for a
long-term supply of crude oil. (Page 1)
Korean President Pak will propose a nonaggression
agreement with North Korea in his coming New. Year's
press conference in an effort to regain the initia-
tive in the North-South dialogue. On the domestic
front, South Korean opposition groups seem determined
to continue pressing for government liberalization.
(Page 2)
In Cambodia, government forces have blunted the ini-
tial Khmer Communist drive against the northwestern
defenses of Phnom Penh. (Page 3)
\China
/Laos. (Page 4)
At the North Atlantic Council meeting of January 9,
the major European allies restated their opposition
to participating in any Multilateral scheme to reduce
theicosts to the US of stationing forces in Europe._
(Page 5)
(Page 6)
Notes On a delay in South, Vietnam's planned operation
in Pleiku Province and on Tokyo's discouragement of
capital outflow appear on Page 6.
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UK - SAUDI ARABIA
A high Foreign Office official has confirmed
?that the British are negotiating with Saudi Arabia
for a long-term supply of crude oil.
He would not reveal the-magnitude of the deal
under discussion, but the US Embassy suggests that
Britain probably will receive at least 200,000 bpd-,
or about .10 percent of its current consumption. The
official contended that the negotiations were at
Saudi rather than British initiative. The British,
who are exploring various ways to meet their long-
term oil needs, are ready, as the official put it,
to "play in every game going." They will attend the
Washington conference on February 11, and if OPEC
asks for -a meeting with oil consumers in .the near
future, they will accept, according to the Foreign
Office official
The British are less concerned about the effects
on other oil-consuming countries of deals they may
make than they are about the penalty at home of
missed opportunities.
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KOREA
President Pak Chong-hui will propose a non-
aggression agreement with North Korea in his coming
New Year's press conference in the hope of regaining
the initiative in the North-South dialogue. Under
consideration for some months, Pak's proposal would
commit both sides to:
--refrain from the use of force;
--adhere to a policy of noninterference in the
internal affairs of the other; and
--respect the 1953 armistice agreement.
Pak has timed his offer to take advantage of a meet-
ing of the vice-chairmen of the Coordinating Committee
scheduled at Panmunjom this month.
The proposal is similar in language to the joint
North-South communique of July 4, 1972, and the North
Most probably will see it as offering no significant
modification of Seoul's.position. Pyongyang does not
want a breakthrough in the stalled negotiations at
this time; this would only ease Pak's current domestic
burdens. The North Koreans may be intrigued, however,
by the.offer.because it could open the door to discus-
sion of issues Pyongyang has been advocating--a North-
South peace treaty, the withdrawal of US forces from
Korea, termination of the UN Command, and various
forms of mutual force reduction in the peninsula.
In any case', Pyongyang is likely to react cautiously,
playing down Pak's proposal initially and taking time
to seek clarification and amplification.
On the South Korean domestic front, opposition
groups seem determined to continue pressing for gov-
ernment liberalization, despite the tough measures
announced this week by President Pak against such
agitation. Leaders of the New Democratic Party in-
tend to challenge Pak's move on legal grounds, and
efforts to collect a million signatures on a peti-
tion for reform reportedly will continue. The pro-
testers run a high risk of arrest and imprisonment.
The government is trying bOth to tighten con-
trol and to put the best face on the situation. It
is suppressing press coverage of the few arrests
made thus far and has begun extensive surveillance
of its critics'. Government spokesmen are stressing
that the new restrictions will apply to a very small
"radical antigovernment" element.
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Phnom Penh
7th Division
Continued fighti
Kompong
201
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over ment
counter attack
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CAMBODIA
Government forces have blunted the initial Khmer
Communist drive against the northwestern defenses of
Phnom Penh. Armor and infantry units are now taking
the fight to insurgent units three to five miles
northwest of the capital's airport, as the army's
1st Division has joined the counterattack. The air-
port is open despite occasional shelling; Phnom Penh
itself continues to be hit by sporadic rocket fire.
With the government concentrating on defense
of the city, the Communists .are focusing new efforts
against units of the 7th Division strung out along
a secondary road west of Route 5. Elements of this
division have been cut off for several days. A
high-ranking Communist defector recently claimed
that defeat of the 7th Division, perhaps the army's
best, was a major insurgent objective.
Action is lighter on other fronts around the
capital, although steady Communist shellings on the
Mekong River's east bank are pinning down government
troops in riverside villages just upstream from
Phnom Penh.
The isolated provincial capital of Takeo is
under increasingly heavy insurgent pressure, and
the government is planning to send in reinforcements.
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CHINA-LAOS
Prime Minister Sou-
vanna Phouma said last week tha.L he expected Peking
to transfer to Lao control much of the road network
upon formation of a coalition government. Chinese
diplomats have long hinted that the status of the
road operation in northern Laos--including relinquish-
ing some portions to Lao control--might change once
a coalition was firmly established.
This projected move appears to serve several
Chinese interests:
--it may enhance China's position with the Lao
Communists relative to that of North Vietnam
and strengthen the Pathet Lao in their nego-
tiations with Vientiane; and
--it underscores Peking's intent to reduce its
presence in northern Laos in compliance with
the Lao cease-fire agreements and signifies
support for a coalition government.
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FOR THE PRESIDENT ONLY
NATO
At the North Atlantic Council meeting on Jan-
uary 9, the major European allies restated their
opposition to participating in any multilateral
scheme to reduce the costs to the US of stationing
forces in _Europe.
--The West Germans have long maintained that
they contribute enough toward easing the US
burden through their bilateral offset agreement
with Washington.
--The British argue that they have an even
greater balance-of-payments problem than the
US.
--France refuses to consider burden-sharing
proposals, on the ground that it is not a mem-
ber of the NATO integrated military command.
There are signs that the allies see in current
economic trends additional reason to resist US pro-
posals. An Italian official, for example, has taken
the line that the recent improvement in the overall
US balance-of-payments position and the fuel crisis
have altered the basic premises on which the US pro-
posals were based. Even NATO Secretary General Luns
suggested during the Council meeting that multi-
lateral burden-sharing negotiations may be overtaken
by economic events.
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FOR THE PRESIDENT ONLY
NOTES
Arab States
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South Vietnam: The government operation to re-
take a border outpost in Pleiku Province, which was
to start on January 9, has been delayed by difficul-
ties in coordinating air support and making changes
in unit assignments. Heavy air strikes are scheduled
for today and the ground assault, involving elements
of two South Vietnamese regiments, for January 14.
Reconnaissance patrols report that the outpost is
lightly defended. Five North Vietnamese battalions
are located farther west, however. The regional
commander, General Toan, has decided for the time
being to move only one regiment from Quang Duc Prov-
ince to serve as a reserve, because the North Viet-
namese Army threat in Quang Duc remains strong.
Japan: Tokyo is discouraging capital outflows
to prevent foreign exchange reserves--which at the
end of 1973 were down to $12.2 billion--from dropping
below $10 billion. Government permission will be
required for purchases of US short-term treasury
bills 'by private individuals, and Japanese security
companies are being admonished not to increase-hold-
ings,of foreign stocks and bonds. Tokyo hopes to
avoid broader. formal sanctions that would openly
conflict with earlier capital liberalization pro-
grams. Japanese purchases of foreign securities
totaled about $1.7 billion in 1973.
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Top Secret
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