WESTERN EUROPE CANADA INTERNATIONAL ORGANIZATIONS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00865A002200050001-3
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 8
• Document Creation Date: December 12, 2016
• Document Release Date: July 18, 2001
• Sequence Number: 1
• Publication Date: November 18, 1975
• Content Type: NOTES

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Secret
NOFORN
J0
0
Western Europe
Canada
International Organizations
Secret
No. 0308-75
November 18, 1975
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Warning Notice
Sensitive Intelligence Sources and Methods Involved
(WNINTEL)
NATIONAL SECURITY INFORMATION
Unauthorized Disclosure Subject to Criminal Sanctions
DISSEMINATION CONTROL ABBREVIATIONS
NOFORN- Not Releasable to Foreign Nationals
NOCONTRACT- Not Releasable to Contractors or
Contractor/Consultants
PROPIN- Caution-Proprietary Information Involved
USIBONLY- USIB Departments Only
ORCON- Dissemination and Extraction of Information
Controlled by Originator
REL... - This Information has been Authorized for
Release to ...
Classified by 010725
Exempt from general declassification schedule
of E.O. 11652, exemption category:
958(1), (2), and (3)
Automatically declassified on:
Date impossible to Determine
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WESTERN EUROPE - CANADA - INTERNATIONAL ORGANIZATIONS
This publication is prepared for regional specialists in the Washington com-
munity by the Western Europe Division, Office of Current Intelligence, with
occasional contributions from other offices within the Directorate of
Intelligence. Comments and queries are welcome. They should be directed to
the authors of the individual articles.
West Germans Apparently Indecisive on Arms
Export Policy . . . . . . . . . . . . . . . .
European Court Advises that the EC Has
Competence over Export Credit Matters . . . . 5
November 18, 1975
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West Germans Apparently Indecisive on Arms Export
Policy
The issue-of relaxing hitherto restrictive West
German regulations on exports of military equipment
remains topical, but Bonn apparently has not yet made
a decision to change its policy.
Last week, delegates to the Social Democratic
Party's convention voted against easing restrictions.
The vote, according to one newspaper, went against
the recommendation of Chancellor Helmut Schmidt.
He probably preferred that the issue not be raised
to avoid restrictions on future options.
West Germany has long maintained a policy that
arms should not be sold to "areas of tension."
Since 1971, West German arms exports have been limited
essentially to other NATO countries, Japan, Australia,
New Zealand, and some neutrals.
In mid-September, however, Siegfried Mann, a state
secretary in the ministry of defense, announced that
the government intended to review its policy with
a view toward easing it. The thrust of Mann's pres-
entation was that various political and economic
pressures have caused the government to reconsider
its position. He cited specifically the slumping
economy, and suggested that greater arms exports would
lead to more jobs. In addition, countries with which
West Germany co-produces weapons--France in particular--
have pressured Bonn to grant export licenses for cer-
tain pieces of military hardware. Mann argued further
that weapons prices will decrease as production
increases, and the Bundeswehr therefore could reap
a price advantage from increased arms exports.
November 18, 1975
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Mann said that a meeting of the West German Security
Council--composed of the Chancellor and foreign, defense,
interior, and economic and finance ministers--would
make the governmental review on September 22.
That meeting, however, was postponed and probably
has never taken place.
Foreign Minister Genscher argued successfully a
the government should delay any decisions on the matter.
Genscher and others in the government presumably be-
lieve that the political problems that could result if
Bonn permitted the sale of arms to the Middle East,
for example, would outweigh any economic advantages.
Defense Minister Leber may also be opposed to
changing Bonn's policy. In a recent interview in the
newsmagazine Der Spiegel, Leber stated that West Germany
will not become a w~ eapons forge."
Chancellor Schmidt's current views are not known.
When he was defense minister, however, Schmidt also
argued against changing Bonn's policy.
Apparently unable to make a decision on this
matter, the West Germans, on Genscher's recommendation,
created a committe of experts to examine under what
conditions Bonn should change its policy. As of early
October, the committee was unable to agree, for example,
on how to define an "area of tension." The experts
also were in a quandary about how West Germany could
permit the sale of tanks, say to Brazil but not to
Iran, or to the Persian Gulf states but not Saudi
Arabia.
Their problems suggest that if Bonn changes its
policy on arms exports, it will be done only after
much soul searching. (SECRET NOFORN/ORCON)
November 18, 1975
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European Court Advises that the EC Has Competence
over Export Credit Matters
The European Court has advised the EC Commission
that the Community--and not member states--has exclusive
jurisdiction in the area of export credit negotiations
and legislation.
The Court's opinion may be used by the Commission
as a test case to assert EC prerogatives. France,
and to a lesser extent Germany and the UK, have always
contested the EC's competence in this vital trade area.
If the Commission succeeds in winning acceptance
of an interpretation of the Court opinion that extends
Community competence to all areas of export finance,
it would have a considerable impact on the conduct of
international negotiations in this field. The impact
of the Court's decision could be felt in negotiations
between the EC, the US and Japan on the proposed
"gentleman's agreement" that would establish guidelines
for granting trade credits to importers. These talks
have been deadlocked since July due to French insistence
on more liberal credit terms.
The EC Commission may now seek a mandate from the
Council to represent the Community in these negotiations;
this would almost surely provoke a political contest
within the Community that may isolate France further
but would also prevent any early conclusion of the
gentlemen's agreement. (CONFIDENTIAL NOFORN)
November 18, 1975
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