MEMORANDUM FROM DICK HELMS ON INTELLIGENCE RESEARCH ON INTERNATIONAL ECONOMIC DEVELOPMENTS

• Document Type: CREST
• Collection: Library of Congress
• Document Number (FOIA) /ESDN (CREST): LOC-HAK-15-1-8-5
• Release Decision: RIPLIM
• Original Classification: S
• Document Page Count: 8
• Document Creation Date: January 11, 2017
• Document Release Date: November 17, 2011
• Sequence Number: 8
• Publication Date: July 14, 1971
• Content Type: MEMO

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MEMORANDUM FOR,
FROM -
SUBJECT:
MORI C05146967 Pgs 1-2,
6-7, 4, 8-10 = T.
1NFOll TION
July 14. 1471
DR. KISSINGER
EfLNEST JOHN TON
Memorandum from Dick Helms on
Intelligence Research on International
Lcoaomic Developments
.Dick Helms (Tab A) has sent you a survey of CIA research studies currently
underway on iut,rnaationaal economic matters. The studies are grouped into
five areas:
-- Middle. East sawed petroleum - implications of the recent Middle East
i.l agreements, trends in Free World oil/energy demands.
i:ast-roost trade - prospects for U,s. trade with Eastern r.urope;
!Western participation in East-West joint ventures; limits to Soviet
use of Western credits.
The increased stress by the Agency on i*tareatioual economic policy is an
excellent idea In view of the increasing numbers of issues related to economic
questions which we will have to face in the future. However, I am somewhat
concerned at the alarmist approach to the problem and specifically to the
reference that "thee U. S. has reached a historic watershed', since its
ecoxeerna,ic capaabilitles are no longer sufficient to carry out the full range
of Its iaaternation al, politico-military policies".
A similar view was contained In Pete Peterson's briefing book on The United
States in the Changing World Economy, which implies that we have been going
downhill economically for twenty years. While it is certainly true that our
relative position is no longer so far ahead of the rest of the world as it was.
this has nevertheless been z. very successful two decades in U. S. economic
history. While policy considerations should certainly reflect the changed
SEGA-ST
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economic enviroameewd, an alarmist reaction to the problems this country
laces will cause ias-cres.ed pressure for action on the Trull and could force
us to act before sufficient analysis has been conducted. I am hopeful
that the recent Peteroon Reevlew Group meeting alerted Peterson to the
daag.r, ahd the fallacy, of an overly gloomy approach to those issues.
SRG&RT
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10 J UL
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MEMORANDUM FOR: Dr. Henry A. Kissinger
Assistant to the President for
National Security Affairs
In view of the increasing need for policy
support on international economic matters, I have
surveyed the research programs underway in this
Agency. I believe you will find the attached a use-
ful statement of the projects completed or planned
during this year. We will, of course, continue to
produce economic intelligence on the USSR,
Communist China, and other nations bearing on
national security policy.
 25X1
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MEMORANDUM
14 June 1971
Intelligence Research on
International Economic Developments
In addition to its normal responsibilities for current intel-
ligence reporting and in-depth analysis of economic developments in
Free World and Communist countries, the Directorate of Intelligence,
through its Office of Economic Research (OER), has allocated an
increasing share of its resources to the analysis and reporting of
international economic affairs. The increased need for intelligence
support for US international economic policy reflects two major
developments. First, is the fact that the United States had reached
an historic watershed since its economic capabilities were no longer
sufficient to carry out the full range of its international political/
military policies. Second, as part of its response to the first
development, the US Government has created institutional arrangements--
the NSC Staff structure and the President's Council on International
Economic Policy--which have a priority need for straightforward
objective intelligence studies of foreign economic affairs which have
a significant effect on the United States and its international competi-
tive position.
On the basis of our own observation, as well as the expressed
interests of those US officials most directly concerned with interna-
tional economic affairs, the Office of Economic Research currently
is focusing on five major problem areas. These are our economic
interface with the evolving
with the oil rich Middle Eastern countries, and our
issues to senior Government officials.
trade relationships with Communist countries.
The attached listing of intelligence production already
completed or scheduled during this calendar year shows that con-
siderable progress has been made. In addition to its intelligence
reporting, the Office of Economic Research has prepared and
presented a large number of briefing papers on key economic
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S U L
1. Western Euro a -- European Community
The evolving European. Community (EC) is becoming a
matter of extreme concern to US policy makers because of such
questions as the effects of preferential trade agreements, the
impact of the Common Agricultural Policy (CAP), and the problems
of United Kingdom accession. Although current EC restrictions
on US exports are not a serious problem, there are areas where
US trade--both in agricultural and manufactured products--could
be badly hurt within a few years. The following list summarizes
the major OER research projects on European Community economic
issues:
The European Community's Preferential March
Trade Agreements (IR 71-4)
An Expanded Common Market -- Economic
Implications for the U. S.
Scandinavia and the EC: Current Economic
Issues
Harmonization of Indirect Taxation in the
EC
Italy's Strength in Foreign Markets
July
July
August
September
Fall 1971
The EC's Automobile Economy Shifts Gears Fall 1971
Problems of Economic Policy Coordination Indefinite
in the EC
Long-Range Trends in Free World Tanker Indefinite
Supply and Demand
Generalized Preference Schemes for the Indefinite
EC Agricultural Policy at the Crossroads
LDCs
-2-
qur"RET
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IV. Middle--East and Petroleum
W
OER has reported extensively over the past 18 months on
international oil developments, particularly as they affect the US
financial position and energy supply. The recent oil revenue settle-
ments with Middle Eastern oil rich nations raise potentially grave
financial implications for the US. By 1975 the Middle Eastern oil nations
will almost certainly have hard currency financial reserves of $25
billion or more. The following studies are intended to give an in-depth
analysis of the implications of these developments.
Some International Financial Implications June
of the Recent Middle East Oil Agreements
Long-Range Trends in Free World Oil./ August
Energy Demand
The growing interest on the part of the US Government in
East-West trade problems and the loosening of Government controls
on trade with Communist China present a continuing need for analysis
of the prospects for East-West trade. In addition to its recent comple-
tion of a major study on East-West trade prospects, the following
projects were designed to provide intelligence support on more specific
aspects of East-West trade:
Probable Effects of Most-Favored-Nation January
Tariff Treatment on Romanian Exports
to the United States (IM 71-8)
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w w
SCET
Short-Term Prospects For US Trade
With Eastern Europe (IM 71-17)
Limits to Soviet Use of Western Credits
.(IM 71-12)
Western Participation In East-West
Cooperative Ventures (IR 71-15)
Recent Developments in COCOM and
Implications for Multilateral Trade
Controls
February
February
May
July
Recent Developments in Soviet Orders July
for Machinery and Equipment from the
Developed West
SECRET
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