U.S. Department of State

DEPARTMENT OF STATE
Memorandum of Conversation
SUBJECT: U.S.-Algerian Relations

PARTICIPANTS: Mohammed Yazid, Head of Algerian Delegation Richard C. Pedersen, Counselor Charles W. Bray III, Acting Director, North African Affairs

Copies to: S INR/OD USUN
U S/PC
Amembassy ALGIERS
J WH
D CIA
C AF
S/S NEA

Messers. Pedersen and Bray met with Ambassador Yazid, at his suggestion on instructions from the Foreign Minister, to continue the discussion opened between the Secretary and Foreign Minister Bouteflika on October 10.

Referring to the previous notification that Bray had been designated the point of contact for the GOA in the Department, Yazid said that the contact in the GOA Foreign Ministry would be designated following the conference of Algerian chiefs of mission now taking place in Algiers. Mr. Pedersen said that in making their decision they should know that, depending on the rank of the Algerian designated, we would be prepared to consider the contact on our side at the Deputy Assistant Secretary level. (Yazid made no comment on this.)

Yazid noted that the GOA intended to raise the level of its representation in Washington. He said the decision as to who might head the Algerian Interests Section was not yet taken. In response to Bray's question, Yazid said that if the person were not Counselor Bousselham, it would be someone of at least his seniority.

Mr. Pedersen said that he had heard that Yazid had made a tough speech critical of the U.S. on Viet Nam during the morning. If so its contents would seem to be at variance with the satisfaction expressed by Foreign Minister Bouteflika that the "problem" of Viet Nam was on its way to resolution and his expression of greater understanding of our objective. Mr. Pedersen pointed out that sharp rhetoric on Algeria's side would not make the resolution of our bilateral problems any easier.

Yazid then said that there appeared to be three impediments in U.S.-GOA relations:

(1) The first, as his Foreign Minister had said, was Viet Nam. Yazid expressed the view that this problem appeared to be "fading away". He hoped that with increased confidence between Algeria and the U.S., public and private positions could be as close as possible.

(2) The second problem, he thought, had been Algeria's role in the Maghreb. From his experience in the U.S. he felt that this would be the most important factor in U.S. public opinion. Yazid went into some detail in describing Algerian efforts to achieve an overall detente in the Maghreb. He indicated that now that Algeria's domestic house was in better order President Boumediene felt freer to play an active and constructive role in the Maghreb. He cited the detente between Algeria, Morocco and Tunisia; the Morocco-Mauritania rapprochement; and the defusing of Spanish Sahara as a political issue in North West Africa. He said he hoped that Algeria could be of assistance to the young Libyan government and cited a long, but rather vague, history of GOA-Libyan cooperation. The point was that Algeria was behaving responsibly in North Africa.

(3) The third problem, Yazid said, related to the Middle East. Algeria was less concerned with the state of relations among the "major powers" than it was about the rights and security of the "little people" in the Middle East. Specifically, and in the light of Algeria's own recent history, the GOA was concerned about the right of Palestinians to live in peace and security. The issue of Palestine, as such, should not be overlooked in an eventual settlement. Would it be impossible
for the U.S. to be more "even-handed" in dealing with the issue of Palestine and the Palestinians? Yazid's pitch was not (as Raschid Zeghar's had been in earlier conversations in Washington) for any form of support for Al Fatah or the guerrillas. Pedersen said he thought differences of opinion would undoubtedly continue on this issue, as we felt the main objective had to be establishment of peace in the Middle East for all states in the Middle East area. He inquired whether Algeria would interfere if the UAR or Jordan wished to negotiate a peace. Yazid said not if it affected their own soverign concerns; if they sought to abandon the rights of the Palestinians Algeria would come to their support.

Yazid reiterated what Bouteflika had told the Secretary: that relations between Algeria and the U.S. had never been better than they had been since 1967. He alluded to the rapidly increasing array of mutual economic interests, adding that these were giving the Algerians "options" in their attempts to reduce their dependence on both France and USSR to manageable proportions.

Against this backdrop, Yazid said, he knew we had been troubled by the GOA's nationalization of a small American-owned bus company (five buses) in 1963 and by the fact that the GOA had taken over a house and land in Algeria belonging to an American. Algeria had been unable to compensate for these steps because it would have involved them in heavy compensation for French owned properties.

Referring to the Secretary's inquiry about concrete steps that might be taken to improve relations, Yazid noted a number of financial and other steps were still required in connection with the El Paso agreement and other pending matters. Investment guarantees would be useful in persuading financial interests to put up the capital Algeria would require as a result of the El Paso-SONATRACH agreement. Perhaps the guarantees would also make it easier for the EXIM Bank to finance the sale
of Boeings to Air Algerie. Yazid said he had also heard that some of El Paso's competitors were unhappy thatalternative sources of natural gas would be entering East Coast markets. He assumed these corporations would be making their case before the Federal Power Commission, and the attitude of the State Department might be significant. Yazid hoped the Department of State might use its good offices to help the Algerians along. He said that the GOA would be willing to talk to us about an investment guarantee agreement that would be in harmony with Algerian laws.

Mr. Pedersen said that we would consider this and give them a reply shortly, but pointed out that the conclusion of such an agreement would be prevented by our laws in the absence of diplomatic relations.

Bray said that he had been pleased to hear that the Algerians considered good progress to have been made on the first two numbered points above. He had also been impressed by Yazid's description of the "options" the U.S. had provided Algeria in its dealings with France and the USSR. Bray pointed out that these "options" all appeared to have benefited Algeria more than the U.S.; he could think of no comparable options that had become available to the U.S. in its dealings with Algeria in the past two years. This was a point the Algerians might keep in mind.

Mr. Pedersen added that insofar as the FPC was concerned, it would be interested in assurances as to the long-range reliability of supplies of natural gas from Algeria. Here again the status of relations between Algeria and the U.S. would be an important factor.

Bray said that in his opinion the GOA faced two problems:

(1)The first was its image in the U.S. At the moment, the image was not good. Mr. Pedersen added that many Americans thought that Algeria was too frequently on the same side of issues as the USSR, for example. Bray said that we were glad that the GOA was upgrading its representation in Washington and hoped that the head of the interests section would be assisted by able officers.

(2) There had been progress on Vietnam and in the Maghreb. The GOA should weigh in its own mind, whether - in the context of U.S.-GOA mutual interests - the issue of "Palestine for the Palestinians" outweighed other considerations of importance to the GOA, e.g. access to American capital markets, etc. The decision was one for the GOA to make; we hoped that it was clear, however, that our door was open at any time.

Yazid acknowledged the image problem and said that he would be coming to Washington in the near future to consult with Congress and the Executive Branch "as other lobbyists do". He reiterated that our position on Palestine was important to the GOA since the GOA could identify with guerrilla activities in the light of its own history. (He added that the Fedayeen were the only eastern Arabs who need feel no sense of humiliation, since they are still fighting.)

Mr. Pedersen asked whether Yazid had other concrete steps to suggest. Yazid answered that he was expecting a high level economist to come from Algeria in the near future. He would like to bring him to Washington for discussions. Messers. Pedersen and Bray assured him that all useful doors would be open.

Yazid said that he would be in touch to continue the dialogue, most probably in Washington.