DEFENSE BURDENSHARING STUDIES

• Document Type: CREST
• Collection: Library of Congress
• Document Number (FOIA) /ESDN (CREST): LOC-HAK-18-2-13-5
• Release Decision: RIFLIM
• Original Classification: S
• Document Page Count: 4
• Document Creation Date: January 11, 2017
• Document Release Date: January 3, 2011
• Sequence Number: 13
• Publication Date: November 9, 1971
• Content Type: MEMO

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No Objection to Declassification in Full 2013/05/03 : LOC-HAK-18-2-13-5
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NATIONAL SECURITY CUUNCI1w
WASF{ItYGTON, D.C. ZO5D8
1Vovember 9, 1971.
MEMORANDUM FOR
Mr. Jnhn McGinnis, Dept of Treasury
Mr. Deane Hinton, C1EP
Mr. Ronald Spiers, State
MGen John Elder, Jr. , JCS
Mr. Bruce Clarke, CXA
Dr. Gaxdiner L, Tuckex, OSD (SA )
Mr. Kenneth Dam, OMLi
Mr. Herbext Stein, CEA
VAdxr~ John M. Lee, A CDA
Mx. Lawxence S, Eagleburger, OSD (1SA )
SUBJECT: Defense Surdensharing Studies
It has been agreed within the CIEP Coordinating Group far negotiations
on the New Economic Policy abroad that studies identifying options
for longer-team changes a.ri defense burden-sharing arrangements with
our xnajor allies are required and. should. be coordinated by the NSCa
,Part of the negotiating scenario developed assumes some specific
short-term burden-sharing concessions along with, some xneaningful
longer-term negotiations on future burden-sharing arrangements.
'The first study should identify possible projects for early irnprovexnent
of the U.So balance of payments through actions on which vve nnight
reach early agreement with our allies. It should:
-- identify specific actions, indicating the ways and amounts by
which the U, S. balance of payments would be improved and the effects
on the allied defense. pasture;
-- summarize the history, i? any, o? previous considerations and
'negotiations an each option;
-- include cases where assumption of burden sharing arrangements
already in place for some countries might be extended to others, for
exaxxaple on such matters as base z-entals, local taxes, and free. pra-
vision o? utilities.
S~rE~-F~
No Objection to Declassification in Full 2013/05/03 : LOC-HAK-18-2-13-5
 No Objection to Declassification in Full 2013/05/03 : LOC-HAK-18-2-13-5
SECRET
The Department of Defense wi11 prepare this study under the general
direction. of the DPRC Working Group.. It should. be circulated fnr
consideration. by DPRC members by Novezxzber 18 to permit inter-
agency review of specific projects ox approaches which might be raised
in conjunction .with the December NATO ministerial and in a similar
tiz~xa.efram.e with Japan.
The second study should be directed to longer terrra burden-sharing.,
It should cover changes in current arrangexx~ents as well as completely
new arrangements far improving the U, S. balance of payments. Among
the types of arrangements to be considered are multilateral as sum.ption
of U.S. local costs, direct budgetary support, financial measures and
multilateral assumption of the U. S. share in common programs (e. g.
EDIP).
These studies. should be based on a detailed analysis of the balance of
payment costs. of U,S. forces, including,. spending of servicemen and
dependents .and should include projections. for five .years of the effect
of new or modified burden-sharing arrangements.
The Department of Defense will prepare this study under the general
direction of the DPRC Working Group. It should be circulated far
consideration by DPRC members by November 23 to pexxnit interagency
review of principles to be raised in conjunction with the December
..NATO ministerial and in a similar tirneframe with .Japan.
For both studies it should be assumed that the offset agreement with
Germany is concluded, that ,Tapan agrees to double its defense purchases
in the UoS. , and that NATO force improvement in NSDM 133 are made.
The studies should be limited to NATO members and Japan although
actions of these countries in reducing the U. S. balance of payments
burden in other countries should be included.
Actions prixnar.ily involving reduction in U. S. forces in Europe should
not be included. in these studies as they wi11 be considered in connection
with MBFR.
K. Wayne Srriith
Director, Prograxra. Analysis
SECRET
_ No Objection to Declassification in Full 2013/05/03 : LOC-HAK-18-2-13-5
 No Objection to Declassification in Full 2013/05/03 : LOC-HAK-18-2-13-5
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