SENIOR INTERDEPARTMENTAL GROUP ON INTERNATIONAL ECONOMIC POLICY (SIG-IEP)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP83M00914R000600020046-8
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 5
• Document Creation Date: December 22, 2016
• Document Release Date: May 27, 2009
• Sequence Number: 46
• Publication Date: September 15, 1982
• Content Type: MEMO

STATE
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NATIONAL SECURITY COUNCIL.
WARHINGTQN. D.C. 308?3
UNCLASSIFIED
with CONFIDENTIAL ATTACHMENT.
STAT_
Zx- 617. ~egt ,'Ij f
MEMORANDUM FOR DAVID E.. PICXFORD
Executive Secretary
Department of the Treasury
SUBJECT: Senior Interdepartmental Group on
International Economic Policy- (SIG-IEP)
Attached are comments prepared by the National Security Coulcil
staff on the five discussion papers circulated by the Department
of State for the; September 16..SIG-IEP-meeting on pipeline sanctions.
In the interest of7 time, we are transmitting copies of this
package to the...other members of. the SIG-IEP as noted below.
Michael 0. Wheeler
Staff Secretary
Attachment
cc:-:'The Vice President.
8 The Secretary of State.
D -:The Secretary of -Defense,
The Secretary. of Agriculture
-__The Secretary--of Co rce
' The .Director,.. Office '.of Management and .Budget
-The Attorney General
-__Chairman Council=-of -Economic --Advisors
Assistant?to the President for Policy Development
United States Trade- -Representative
~j Director of Central Intelligence..
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 September 15, 1982
Comments-on State SIG-IEP Papers
Conceptual Transition
CONFIDENTIAL
The repression in Poland is both a tragedy for the Poles which
the Western world cannot disregard and a manifestation of the
repressive nature of the Soviet system which requires an enduring
response from the West. In upcoming discussions with the allies,
the U.S. should. seek to construct unified Western positions
which will both penalize the Soviet Union for their actions in
Poland and establish a new basis for the conduct of East-West
economic relations which protects Western security and economic
interests.
The current Poland-related sanctions against the USSR are ~ar
from ideal, both in their impact on the American business com-
munity and relations with European allies. However, the sanctions
do punish the Soviet Union economically and draw attention to its
egregious behavior in Poland in a significant and necessary way.
The U.S. is willing to replace these sanctions with a set of
equivalent or firmer measures agreed to by all the Western allies
and Japan that not only maintain pressure on the Soviet Union and
Poland but accomplish the fundamental shift to more enduring and
unified East-West economic policies. This new sanctions package
toward the USSR would no longer be entirely tied directly to
eventsin Poland. A portion would be of a short-term nature linked
to events in Poland:. a highly selective-embargo. on any new Soviet
:vpurchases of specific types of oil and. etas equipment: the sanctions
:ail western countries directed ,against Poland.
Equivalent Sanctions Package
The proposed substitute measures would include the following
WATBONAL SECURITY COUNCIL
WASMIMaTC". D.C. 20506
A highly selective embargo on oil and gas equipmenttand
technologies, with-a commitment that preferred suppliers
of,this equipment.=will not~beundercut by other Western
countries..Burden-sharing. should be emphasized in the
selection process as this competitive sector of U.S.
industry should-..not-:-be--unilaterally curtailed.
CONFIDENTIAL"
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Short-term measures limed to events in Poland s
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CONFIDENTIAL
B. Longer-term measures
1. An agreement that Western countries will not commit'
to any incremental deliveries of Soviet gas beyond
the amount presently contracted for and cooperate in
the accelerated development of alternative Western
energy resources, principally Norwegian gas-reserves.
In this connection, we should seek assurances from
Western Europe- thatthey will not-take deliveries
beyond 30 BCM currently envisioned from the first
strand and will not participate in the construction
of,. or purchase of gas from,'a second strand of the
Siberian gas pipeline project.-
2. An agreement that builds on the recent OECD agreements
substantially raising interest rates to the USSR to
achieve a "cap" on officially-backed credits (can only
offset maturing loans), higher downpayments, shortened
maturities and an established framework to monitor
this process.
3. An agreement to.harmonize national licensing procedures
for COCOM and improve the coordination and effectivenas
of international enforcement efforts. Selective "critical"
oil and gas equipment may be added to the COCOM list.
Approach to the Allies
The September 26 meeting of Secretary Shultz with the Quint
foreign ministers is envisioned as an initial exchange of views,
rather than a lengthy bargaining session. We have made it clear
to the Europeans that we expect them to come'to us with proposals.
However, when the discussion turns to U.S. expectations for a
solution of the present. impasse,: Secretary Shultz could "as an,
illustrative example" outline the package described above, and
as an illustrative example, say that in exchange for-this-package.
the United States would be willing to drop the specific. aspects
of the current sanctions package which are most harmful to
European economic interests: the temporary denial orders, the
extraterritorial applications of the oil and gas sanctions, and
..the retroactive application of the oil and gas sanctions. It ,
would be clear that failing an.agreement of this type, the United
States would continue the current package of sanctions and denial
.orders,. and the same.packag.e would remain available, in case there
were any backsliding on any agreement, once completed. The U.S.
and European., sanctions directed against the Polish government
.would remain in force.
Public Affairs Programme
Although it is premature to establish a.public affairs strategy
to address this potential "transition"-in our Poland-related
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. 4W
CONFIDENTIAL
sanctions, it may be useful for illustrative purposes only'
to demonstrate how such a transition could be presented:
-- The recent increased repression in Poland has catalyzed
a fundamental reappraisal of East-West economic relations by
the allies. The events in Poland are symptomatic of the re-
pressive"nature'o'f the Soviet'Uniori and require a more enduring
Western response than embodied in the present sanctions.
-- As a result of high-level consultations with the allies,
it was agreed that the character of our reaction to egregious
Soviet behavior in Poland would be adjusted to reflect the need
for longer-term unified allied positions on East-West economic
relations, although some of our measures will remain tied to
developments in Poland.
of the Atlantic Alliance.
These new measures are consistent with our objectiv4
of advancing reconciliation in Poland and demonstrate the
unwillingness of the West to conduct normal or preferential
trade relations'which'enhance the USSR's ability to sustain its
unprecedented military buildup or aggressive geopolitical behavior
of which Poland is a primary example..
-- These ney measures represent a "victory" for both halves
CONFIDENTIAL
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