Anexo 4. El Gobierno norteamericano desclasifica sólo parte de su documentación de uso restringido, pero a través de ella se puede comprobar el seguimiento minucioso que sus funcionarios hacen de los distintos grupos de poder que actúan en el régimen de Franco.

the Council of Realm*, or until he himself submits his resignation and it is accepted by the Chief of State, after consultation with the Council of the Realm.

The New Cabinet. Some ministerial changes had been expected as a result of unsatisfactory perfomances by certain members of the old cabinet and the growing frequency of divisions and disagreements among the various factions representing conservatives, Opus Dei "technocrats", and the Catholic Propagandistas. However, the June 11 shakeup was greater than anticipated, with 11 new ministers, 7 hold-overs, and two changes of portfolio.

A surprising development was the ouster of the flamboyant former Foreign Minister, Lopez Bravo. Though criticized -- inter alfa -- for his failure to remove the British from Gibraltar and to obtain a satisfactory revision of the Concordat with the Vatican, he was still thought to have retained the confidence of Franco. He is also reported to have angered Carrero by-passing the then Vice-President on some matters and bringing them directly to the attention of Franco.

The new Foreign Minister, Lopez Rodo, represents the continuation of Opus Dei influence in the new Cabinet. There is, however, speculaton that the increased exposure and travel associated with the post of Foreign Minister may be offset by the loss of proximity to the daily governmental

* The Council has 17 members: 7 ex officio (the President of the Cortes, the senior prelate among members of the Cortes, the senior military officer on active duty, the Chief of the General Staff, and the Presidents of the Supreme Court, Council of State, and Institute of Spain) an 10 elected from among groups represented in the Cortes. The present Councillors are broadly representative of the groups wich make up the regime.

new agreement to determine its consistency with GATT Article XXIV and degree of adjustment of compensation to wich the US might be entitled.

2. With respect to Spain we should continue to take the position that, in assessing compensation or adjustment due, we would view reduction of Spanish duties to the Common External Tariff level as an important contribution. We could point out tat this is an action wich Spain must take eventually, since full membership in the EC will make it necessary. In the case of agricultural items, we would seek the elimination of any discrimination wich might affect products of particular export interest to the US. We should encourage settlement of our difficulties though billateral channels and through negotiations within the framework of the Multilateral Trade Negotiation.

3. Spanish memberships in the EC will also require the dropping of unilateral quantitative restrictions and import licensing requirements. A more immediate reason for the abolition of these restrictions, however, is the recent finding of the IMF that Spain is no longer in a situation of balance of payments disequilibrium and should therefore phase out remaining quantitative restrictions. We should identify those restrictions having the greatests impact on our trade and seek to bring about their rescission.

4. Pending conclusion of a new agreement we will continue to maintain that the current agreement does not comply with GATT Article XXIV and we will be guided by the approved negotiation instruction relating to this agreement.