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act bodily, disaster will result from a failure of will; moral
cupability will be inherent in our foreknowledge.

The political challenge is straightforward: will the nations of
the world cooperate to confront a crisis which is both self-evident
and global in nature? Or will each nation or region or bloc see its
special advantages as a weapon instead of as a contribution? Will we
pool our strengths and progress together, or test our strengths and
sink together?

President Ford has instructed me to declare on behalf of the
United States: We regard our good fortune and strength in the field
of food as a global trust. We recognize the responsibilities we bear
by virtue of our extraordinary productivity, our advanced technology,
and our tradition of assistance. That is why we proposed this conference.
That is why a Secretary of State is giving this address. The United
States will make a major effort to match its capacity to the magnitude
of the challenge. We are convinced that the collective response will
have an important influence on the nature of the world that our
children inherit.

As we move toward the next century the nations assembled here must
begin to fashion a global conception. For we are irreversibly linked
to each other -- by interdependent economies and human aspirations, by
instant communications and nuclear peril. The contemporary agenda of
energy, food and inflation exceeds the capacity of any single government,
or even of a few governments together, to resolve.

All nations -- east and west, north and south -- are linked to a
single economic system. Preoccupation with narrow advantage is fore-
doomed. It is bound to lead to sterile confrontations, undermining the
international cooperation upon which achievement of national objectives
depends. The poorest and weakest nations will suffer most. Discontent
and instabilities will be magnified in all countries. New dangers will
be posed to recent progress in reducing international tensions. But
this need not be our future. There is great opportunity as well as grave
danger in the present crisis. Recognition of our condition can
disenthrall us from outdated conceptions, from institutional inertia, from
sterile rivalries. If we comprehend our reality and act upon it, we can
usher in a period of unprecedented advance with consequences far
transcending the issues before this Conference. We will have built an
international system worthy of the capacities and aspiration of mankind.

## The Food Challenge

We must begin here with the challenge of food. No social system,
ideology or principle of justice can tolerate a world in which the
spiritual and physical potential of hundreds of millions is stunted
from elemental hunger or inadequate nutrition. National pride or regional
suspicions lose any moral and practical justification if they prevent us
from overcoming this scourge.

A generation ago many farmers were self-sufficient; today fuel,
fertilizer, capital and technology are essential for their economic
survival. A generation ago many nations were self-sufficient; today a
good many exporters provide the margin between life and death for many
millions.

Thus food has become a central element of the international economy. A world of energy shortages, rampant inflation, and a weakening trade and monetary system will be a world of food shortages as well. And food shortages in turn sabotage growth and accelerate inflation.

The food problem has two levels -- first, coping with food emergency.
and second, assuring long-term supplies and an adequate standard of

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nutrition for our growing populations.

During the 1950's and 60's global food production grew with great consistency. Per capita output expanded even in the food-deficit nations; the world's total output increased by more than half. But at the precise moment when growing populations and rising expectations made a continuation of this trend essential, a dramatic change occurred: during the past three years, world cereal production has fallen; reserves have dropped to the point where significant crop failure can spell a major disaster.

The longer-term picture is, if anything, starker still. Even today hundreds of millions of people do not eat enough for decent and productive lives. Since increases in production are not evenly distributed, the absolute number of malnourished people are, in fact, probably greater today than ever before except in times of famine. In many parts of the world thirty to fifty percent of the children die before the age of five, millions of them from malnutrition. Many survive only with permanent damage to their intellectual and physical capacities.

World population is projected to double by the end of the century. It is clear that we must meet the food need that this entails. But it is equally clear that population cannot continue indefinitely to double every generation. At some point we will inevitably exceed the earth's capacity to sustain human life. The near as well as the long-term challenges of food have three components:

- There is the problem of production in the face of population trends, maintaining even current inadequate levels of nutrition and food security will require that we produce twice as much food by the end of this century. Adequate nutrition would require 150 per cent more food, or a total annual output of three billions tons of grain.

- There is the problem of distribution. Secretary General Marei estimates that at the present rate of growth of 2½ per cent a year the gap between what the developing countries produce themselves and what they need will rise from 25 million to 85 million tons a year by 1985. For the foreseeable future, food will have to be transferred on a substantial scale from where it is in surplus to where it is in shortage.

- There is the problem of reserves. Protection against the vagaries of weather and disaster urgently requires a food reserve. Our estimate is that as much as 60 million tons over current carryover levels may be required.

In short, we are convinced that the world faces a challenge new in its severity, its pervasiveness, and its global dimension. Our minimum objective of the next quarter century must be to more than double world food production and to improve its quality. To meet this objective the United States proposes to this Conference a comprehensive program of urgent, cooperative world-wide action of five fronts:

- Increasing the production of food exporters;

- Accelerating the production in developing countries;

- Improving means of food distribution and financing;

- Enhancing food quality;

- Ensuring security against food emergencies.

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Let me deal with each of these in turn.

## Increased Production By Food Exporters

A handful of countries, through good fortune and technology, can produce more than they need and thus are able to export. Reliance on this production is certain to grow through the next decade and perhaps beyond. Unless we are to doom the world to chronic famine, the major exporting nations must rapidly expand their potential and seek to ensure the dependable long-term growth of their supplies.

They must begin by adjusting their agricultural policies to a new economic reality. For years these policies were based on the premise that production to full capacity created undesirable surpluses and depressed markets, depriving farmers of incentives to invest and produce. It is now abundantly clear that this is not the problem we face; there is no surplus so long as there is an unmet need. In that sense, no real surplus has ever existed. The problem has always been a collective failure to transfer apparent surpluses to areas of shortages. In current and foreseeable conditions this can surely be accomplished without dampening incentives for production in either area.

The United States has taken sweeping steps to expand its output to the maximum. It already has 167 million acres under grain production alone, an increase of twenty-three million acres from two years ago. In a address to the Congress last month, President Ford asked for a greater effort still; he called upon every American farmer to produce to full capacity. He directed the elimination of all restrictive practices which raise food prices; he assured farmers that he will use present authority and seek additional authority to allocate the fuel and fertilizer they require; and he urged the removal of remaining acreage limitations.

These efforts should be matched by all exporting countries. Maximum production will require a substantial increase in investment. The best land, the most accessible water, and the most obvious improvements are already in use. Last year the United States raised its investment in agriculture by $2.5 billion. The United States Government is launching a systematic survey of additional investment requirements and of ways to ensure that they are met.

A comparable effort by other nations is essential. The United States believes that cooperative action among exporting countries is required to stimulate rational planning and the necessary increases in output. We are prepared to join with other major exporters in a common commitment to raise production, to make the necessary investment, and to begin rebuilding reserves for food security. Immediately following the conclusion of this Conference, the United States proposes to convene a group of major exporters -- an export planning group -- to shape a concrete and coordinated program to achieve these goals.

## Accelerated Production of Developing Countries

The food exporting nations alone will simply not be able to meet the world's basic needs. Ironically but fortunately, it is the nations with the most rapidly growing food deficits which also possess the greatest

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capacity for increased production. They have the largest amounts of unused land and water. While they now have 35 percent more land in grain production than the developed nations, they produce 20 percent less on this land. In short, the largest growth in world food production can -- and must -- take place in the chronic deficit countries.

Yet the gap between supply and demand in these countries is growing, not narrowing. At the current growth rate, the grain supply deficit is estimated to more than triple and reach some 85 million tons by 1985. To cut this gap in half would require accelerating their growth rate from the historically high average of 2½ percent per annum to 3½ percent -- an increase in the rate of growth of 40 percent.

Two key areas need major emphasis to achieve even this minimum goal: new research and new investment.

International and national research programs must be concentrated on the special needs of the chronic food deficit nations and they must be intensified. New technologies must be developed to increase yields and reduce costs, making use of the special features of their labor-intensive, capital-short economies.

On the international plane, we must strengthen and expand the research network linking the less developed countries with research institutions in the industrialized countries and with the existing eight international agricultural research centers. We propose that resources for these centers be more than doubled by 1980. For its part the United States will in the same period triple its own contribution for the international centers, for agricultural research efforts in the less developed countries, and for research by American universities on the agricultural problems of developing nations. The existing Consultative Group on International Agricultural Research can play an important coordinating role in this effort.

The United States is gratified by the progress of two initiatives which we proposed at the Sixth Special Session of the UN General Assembly last April: The International Fertilizer Development Center and the study on the impact of climate change of food supply. The Fertilizer Center opened its doors last month in the United States with funds provided by Canada and the United States: we invite wider participation and pledge its resources to the needs of the developing nations. And the important study on climate and food supply has been taken on by the United Nations World Meteorological Organization.

National as well as international research efforts must be brought to bear. The United States offers to share with developing nations the results of its advanced research. We already have underway a considerable range of promising projects: to increase the protein content of common cereals; to fortify staple foods with inexpensive nutrients; to improve plant fixation of atmospheric nitrogen to reduce the need for costly fertilizers; to develop new low cost, small-scale tools and machines for the world's millions of small farmers.

We also plan a number of new projects. Next year, our space, agriculture and weather agencies will test advanced satellite techniques for surveying and forecasting important food crops. We will begin in North America and then broaden the project to other parts of the world. To supplement the WMO study on climate, we have begun our own analysis of the relationship between climatic patterns and crop yields over a statistically significant period. This is a promising and potentially vital contribution to rational

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planning of global production.

The United States will also make available the results of these projects for other nations.

Finally, President Ford is requesting the National Academy of Sciences, in cooperation with the Department of Agriculture and other governmental agencies, to design a far-reaching food and nutrition research program to mobilize America's talent. It is the President's aim to dedicate America's resources and America's scientific talent to finding new solutions, commensurate both with the magnitude of the human need and the wealth of our scientific capacities.

While we can hope for technological breakthroughs, we cannot count on them. There is no substitute for additional investment in chronic food-deficit countries. New irrigation systems, storage and distribution systems, production facilities for fertilizer, pesticide and seed and agricultural credit institutions are all urgently needed. Much of this can be stimulated and financed locally. But substantial outside resources will be needed for some time to come.

The United States believes that investment should be concentrated in strategic areas, applying existing, and in some cases very simple, technologies to critical variables in the process of food production. Among these are fertilizer, better storage facilities and pesticides.

Modern fertilizer is probably the most critical single input for increasing crop yields; it is also the most dependent on new investment. In our view fertilizer production is an ideal area for collaboration between wealthier and poorer nations, especially combining the technology of the developed countries, the capital and raw materials of the oil producers and the growing needs of the least developed countries. Existing production capacity is inadequate worldwide; new fertilizer industries should be created especially in the developing countries to meet local and regional needs for the long term. This could be done most efficiently on the basis of regional cooperation.

The United States will strongly support such regional efforts. In our investment and assistance programs we will give priority to the building of fertilizer industries and will share our advanced technology.

Another major priority must be to reduce losses from inadequate storage, transport, and pest control. Tragically, as much as 15 percent of a country's food production is often lost after harvesting because of pests that attack grains in substandard storage facilities. Better methods of safe storage must be taught and spread as widely as possible. Existing pesticides must be made more generally available. Many of these techniques are simple and inexpensive; investment in these areas could have a rapid and substantial impact on the world's food supply.

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To plan a coherent investment strategy, the United States proposes the immediate formation of a coordinating group for food production and investment. We recommend that the World Bank join with the Food and Agricultural Organization and the UN Development Program to convene such a group this year. It should bring together representatives from both traditional donors and new financial powers, from multilateral agencies and from developing countries, with the following mandate:

-- To encourage bilateral and international assistance programs to provide the required external resources.

-- To help governments stimulate greater internal resources for agriculture.

-- To promote the most effective uses of new investment by the chronic deficit countries.

The United States has long been a major contributor to agricultural development. We intend to expand this contribution. We have reordered our development assistance priorities to place the central emphasis on food and nutrition programs. We have requested an increase of almost $350 million for them in our current budget. This new emphasis will continue for as long as the need exists.

For all these international measures to be effective, governments must reexamine their overall agricultural policies and practices. Outside countries can assist with technology and the transfer of resources; the setting of priorities properly remains the province of national authorities. In far too many countries, farmers have no incentive to make the investment required for increased production because prices are set at unremunerative levels, because credit in unavailable, or because transportation and distribution facilities are inadequate. Just as the exporting countries must adjust their own policies to new realities, so must developing countries give a higher priority for food production in their development budgets and in their tax, credit and investment policies.

## Improving Food Distribution and Financing

While we must urgently produce more food, the problem of its distribution will remain crucial. Even with maximum foreseeable agricultural growth in the developing countries, their food import requirement is likely to amount to some 40 million tons a year in the mid-1980's, or nearly twice the current level.

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How is the cost of these imports to be met?

The earnings of the developing countries themselves, of course, remain the principal source. The industrialized nations can make a significant contribution simply by improving access to their markets. With the imminent passage of the trade bill, the United States reaffirms its commitment to institute a system of generalized tariff preferences for the developing nations and to pay special attention to their needs in the coming multilateral trade negotiations.

Nevertheless, an expanded flow of food aid will clearly be necessary. During this fiscal year, the United States will increase its food aid contribution, despite the adverse weather conditions which have affected our crops. The American people have a deep and enduring commitment to help feed the starving and the hungry. We will do every thing humanly possible to assure that our future contribution will be responsive to the growing needs.

The responsibility for financing food imports cannot, however, rest with the food exporters alone. Over the next few years in particular, the financing needs of the food-deficit developing countries will simply be too large for either their own limited resources or the traditional food aid donors.

The oil exporters have a special responsibility in this regard. Many of them have income far in excess of that needed to balance their international payments or to finance their economic development. The continuing massive transfer of wealth and the resulting impetus to worldwide inflation have shattered the ability of the developing countries to purchase food, fertilizer and other goods. And the economic crisis has severely reduced the imports of the industrialized countries from the developing nations.

The United States recommends that the traditional donors and the new financial powers participating in the coordinating group for food production and investment make a major effort to provide the food and funds required. They could form a subcommittee on food financing which, as a first task, would negotiate a minimum global quantity of food for whose transfer to food-deficit developing countries over the next three years they are prepared to find the necessary finances.

I have outlined various measures to expand production, to improve the earning capacity of developing countries, to generate new sources of external assistance. But it is not clear that even these measures will be sufficient to meet the longer-term challenge, particularly if our current estimates of the gap by 1985 and beyond prove to be too conservative.

Therefore, ways must be found to move more of the surplus oil revenue into long-term lending or grants to the poorer countries. The United States proposes that the development committee, created at the recent session of the Governors of the International Bank and Monetary Fund,

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be charged with the urgent study of whether existing sources of financing are sufficient to meet the expected import requirements of developing countries. If these sources are not sufficient, new means must be found to supplement them. This must become one of the priority objectives of the countries and institutions that have the major influence in the international monetary system.

## Enhancing Food Quality

Supplies alone do not guarantee man's nutritional requirements. Even in developed countries, with ample supplies, serious health problems are caused by the wrong kinds and amounts of food. In developing countries, the problem is magnified. Not only inadequate distribution but also the rising cost of food domms the poorest and most vulnerable groups -- children and mothers -- to inferior quality as well as insufficient quantity of food. Even with massive gains in food production, the world could still be haunted by the spectre of inadequate nutrition.

First, we must understand the problem better. We know a good deal about the state of global production. But our knowledge of the state of global nutrition is abysmal. Therefore the United States proposes that a global nutrition surveillance system be established by the World Health Organization, the Food and Agricultural Organization and the United Nations International Children's Emergency Fund. Particular attention should be devoted to the special needs of mothers and young children and to responding quickly to local emergencies affecting these particularly vulnerable groups. Nutrition surveying is a field with which the United States has considerable experience; we are ready to share our knowledge and techniques.

Second, we need new methods for combatting malnutrition. The United States invites the WHO, FAO and UNICEF to arrange for an internationally coordinated program in applied nutritional research. Such a program should set priorities, identify the best centers for research, and generate the necessary funding. The United States is willing to contribute $5 million to initiate such a program.

Third, we need to act on problems which are already clear. The United States proposes an immediate campaign against two of the most prevalent and blighting effects of malnutrition: Vitamin A blindness and iron deficiency anemia. The former is responsible for well over half of the millions of cases of blindness in less developed countries; the current food shortages will predictably increase this number. Iron deficiency anemia is responsible for low productivity in many parts of the world.

Just as the world has come close to eradicating smallpox, yellow fever and polio, it can conquer these diseases. There are available new and relatively inexpensive techniques which could have a substantial impact. The United States is ready to cooperate with developing countries and international donors to carry out the necessary programs. We are prepared to contribute $10 million to an international effort.

Finally, we need to reflect our concern for food quality in existing programs. This Conference should devote special attention to food aid programs explicitly designed to fight malnutrition among the most vulnerable groups. The United States will increase funding for such programs by at least $50 million this year.

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## Ensuring Against Food Emergencies

The events of the past few years have brought home the grave vulnerability of mankind to food emergencies caused by crop failures, floods, wars and other disasters. The world has come to depend on a few exporting countries, and particularly the United States, to maintain the necessary reserves. But reserves no longer exist, despite the fact that the United States has removed virtually all of its restrictions on production and our farmers have made an all-out effort to maximize output. A worldwide reserve of as much as 60 million tons of food above present carryover levels may be needed to assure adequate food security.

It is neither prudent nor practical for one or even a few countries to be the world's sole holder of reserves. Nations with a history of radical fluctuations in import requirements have an obligation, both to their own people and to the world community, to participate in a system which shares that responsibility more widely. And exporting countries can no longer afford to be caught by surprise. They must have advance information to plan production and exports.

We commend FAO Director General Boerma for his initiative in the area of reserves. The United States shares his view that a cooperative multilateral system is essential for greatened equity and efficiency. We therefore propose that this Conference organize a Reserves Coordinating Group to negotiate a detailed agreement on an international system of nationally-held grain reserves at the earliest possible time. It should include all the major exporters as well as those whose import needs are likely to be greatest. This group's work should be carried out in close cooperation with other international efforts to improve the world trading system.

An International Reserve System should include the following elements:

- Exchange of information on levels of reserve and working stocks, on crop prospects and on intentions regarding imports or exports;

- Agreement on the size of global reserves required to protect against famine and price fluctuations;

- Sharing of the responsibility for holding reserves;

- Guidelines on the management of national reserves, defining the conditions for adding to reserves and for releasing from them;

- Preference for cooperating countries in the distribution of reserves;

- Procedures for adjustment of targets and settlement of disputes and measures for dealing with non-compliance.

## Agenda For The Future

The challenge before this conference is to translate needs into programs and programs into results. We have no time to lose.

I have set forth a five point platform for joint action:

- To concert the efforts of the major surplus countries to help meet the global demand;

- To expand the capacity of chronic food deficit developing nations for growth and greater self-sufficiency;

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-- To transfer resources and food to meet the gaps which remain;

-- To improve the quality of food to ensure adequate nutrition;

-- To safeguard men and nations from sudden emergencies and the vagaries of weather.

I have outlined the contribution that the United States is prepared to make in national or multilateral programs to achieve each of these goals. And I have proposed three new international groups to strengthen national efforts, coordinate them and give them global focus;

-- The Exporters Planning Group;

-- The Food Production and Investment Coordinating Group;

-- The Reserves Coordinating Group.

A number of suggestions have been made for a central body to fuse our efforts and provide leadership. The United States is openminded about such an institution. We strongly believe, however, that whatever the mechanisms, a unified, concerted and comprehensive approach is an absolute requirement. The American delegation headed by our distinguished Secretary of Agriculture Earl Butz is prepared to begin urgent discussions to implement our proposals. We welcome the suggestions of other nations gathered here. We will work hard and we will work cooperatively.

## Conclusion

Nothing more overwhelms the human spirit, or mocks our values and our dreams, than the desperate struggle for sustenance. No tragedy is more wounding than the look of despair in the eyes of a starving child.

Once famine was considered part of the normal cycle of man's existence, a local or at worst a national tragedy. Now our consciousness is global. Our achievements, our expectations, and our moral convictions have made this issue into a universal political concern.

The profound promise of our era is that for the first time we may have the technical capacity to free mankind from the scourge of hunger. Therefore, today we must proclaim a bold objective -- that within a decade no child will go to bed hungry, that no family will fear for its next day's bread, and that no human being's future and capacities will be stunted by malnutrition.

Our responsibility is clear.

Let the nations gathered here resolve to confront the challenge, not each other.

Let us agree that the scale and severity of the task require a collaborative effort unprecedented in history.

And let us make global cooperation in food a model for our response to other challenges of an interdependent world -- energy, inflation, population, protection of the environment.

William Faulkner expressed the confidence that "man will not merely endure, he will prevail." We live today in a world so complex that even only to endure, man must prevail. Global community is no longer a

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sentimental ideal but a practical necessity. National purposes,
international realities and human needs all summon man to a new test of his
capacity and his morality.

We cannot turn back or turn away.

"Human reason," Thomas Mann wrote, "needs only to will more strongly than fate and it is fate."

* * * * *

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<table><tr><td colspan="2">DISTRIBUTION</td></tr><tr><td>USIS-2</td><td>REDCN NECE FOR GENERAL SCOWCROFT AND NESSEN<br/>RIYADH FOR SECRETARY'S PARTY<br/>E.O. 11652 N/A<br/>TAGS : OVIP (KISSINGER, HENRY A.)<br/>SUBJECT: Arrival Remarks of Secretary Kissinger at Cairo Airport, November 5<br/>ACTION : SECSTATE WASHDC IMMEDIATE</td></tr><tr><td>AMB<br/>DCM<br/>PEC<br/>S/S-10<br/>ADMIN<br/>CHRON</td><td>18/h1<br/>INFO : AMEMBASSY AMMAN<br/>AMEMBASSY ANKARA<br/>AMEMBASSY DANASCUS<br/>AMEMBASSY RIYADH<br/>AMEMBASSY TEL AVIV<br/>UNCLASSIFIED CAIRO 8823<br/>REF : BELGRADE 5505</td></tr><tr><td colspan="2">Remarks of Secretary of State Henry Kissinger on arrival at Cairo International Airport, November 5, 1974: QUOTE Ladies and Gentlemen, I'm on a quick visit to Cairo to see President Sadat and Foreign Minister Fahmy to discuss with them their conclusions in the light of the Rabat Summit as to how further progress can be made towards a successful and lasting peace in the Middle East. The</td></tr></table>

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0 05 1300Z NOV 74 ZFF-6
FM AMEMBASSY ROME
TO RUEHC/SECSTATE WASHDC IMMEDIATE 7932
INFO RUESOR/AMEMBASSY CAIRO IMMEDIATE 0518
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UNCLAS ROME 15305

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FOR THE SECRETARY'S PARTY

E.O. 11652: N/A
TAGS: OVIP (KISSINGER, HENRY A.)
SUBJECT: EXCHANGE OF DINNER TOASTS BETWEEN FOREIGN
MINISTER (AND PREMIER-DESIGNATE) MORO AND SECRETARY
KISSINGER AT VILLA MADAMA, ROME, ON NOVEMBER 5, 1974

NSC FOR GENERAL SCOWCROFT AND NESSEN

1. FOLLOWING IS TRANSLATION OF TOAST BY MINISTER MORO:
QUOTE MR. SECRETARY OF STATE, FIRST OF ALL I WISH TO TELL
YOU HOW HAPPY I AM THAT YOUR PRESENCE IN ROME FOR THE WORLD
FOOD CONFERENCE OFFERED US THE OPPORTUNITY FOR THIS OUR LATEST
MEETING, ALLOWING US TO RESUME THE CONSTRUCTIVE DIALOGUE THAT
WE HAPPILY BEGAN WITH YOU A LITTLE MORE THAN A MONTH AGO IN
WASHINGTON. YOU COME HERE AT THE END OF A LONG TRIP DURING
WHICH YOU STOPPED IN SEVERAL CAPITALS OF EASTERN EUROPE AND
ASIA DISPLAYING THERE YOUR KEEN DIPLOMATIC ACTIVITY FOR
RAPPROACHMENT AMONG PEOPLE'S. AND FROM ROME YOU BEGIN ANOTHER
DELICATE AND DIFFICULT MISSION FOR WHICH WE WISH YOU THE
BEST SUCCESS.

ITALY, BECAUSE OF HER POSITION AT THE CENTER OF THE
MEDITERRANEAN AREA AND OF HER ACTIVE PARTICIPATION IN THE
EUROPEAN COMMUNITY, IS EXTREMELY INTERESTED IN STABILITY AND
HARMONY WITHIN THESE AREAS OF VITAL INTEREST. AND TO THESE
PROBLEMS OTHERS ARE ADDED TODAY, COMPLEX AND SERIOUS PROBLEMS,
CREATED BY THE ECONOMIC CRISIS WHICH HAS HEIGHTENED INTER-
DEPENDENCE AMONG STATES, MAKING CLOSER COOPERATION URGENT.

I CAN REAFFIRM TO YOU, ON THIS OCCASION, THAT ITALY, IN
THE SPIRIT OF THE ATLANTIC DECLARATION OF LAST JUNE -- WHICH
CONFIRMED THE VALIDITY FOR SECURITY AND PEACE OF THE POLITICAL
COURSE OUR TWO COUNTRIES HAVE FOLLOWED FOR A QUARTER CENTURY
AND STRENGTHENED THEIR TRADITIONAL LINKS, - WILL GIVE HER
CONSTRUCTIVE CONTRIBUTION TO ANY EFFORT AIMING AT CONSOLIDATING
AN EQUITABLE AND STABLE INTERNATIONAL ORDER.

FOR THIS PURPOSE, THE EXCHANGE OF VIEWS BETWEEN THE U.S.
AND ITALY ARE VERY USEFUL, AS ALWAYS, AND WE EXPECT TO

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CONTINUE THEM ON THE OCCASION OF OTHER MEETINGS IN THE INTERNATIONAL FORUMS IN WHICH, AS ALLIED AND FRIENDLY COUNTRIES, WE BOTH DEVELOP OUR COMMON ACTION FOR THE SECURITY AND PEACE OF ALL THE WORLD'S PEOPLES.

MR. SECRETARY OF STATE, THE TRIBUTE I WISH TO PAY YOU TODAY STEMS NOT FROM A MATTER OF ETIQUETTE BUT FROM DEEPLY FELT CONVICTION IN PRAISE OF YOUR UNTIRING WORK, YOUR EXCELLENT TENACITY, YOUR CLEAR VISION OF FACTS, YOUR FAR-SIGHTED UNDERSTANDING OF THE CLOSE BUT NOT EXCLUSIVE LINKS WHICH UNITE US AND OTHER PEOPLES TO YOUR GREAT COUNTRY; WE PARTICULARLY VALUE THE CAPACITY AND WILL TO SAFEGUARD AND DEVELOP, THROUGH TURBULENT POLITICAL EVENTS, THE GREAT PRINCIPLES OF FREEDOM AND INDEPENDENCE WHICH UNDERLIE THE BIRTH, THE TASKS AND THE DESTINY OF THE AMERICAN NATION.

WITH THIS HOPE, I AM PLEASED TO RAISE MY GLASS TO THE SUCCESS OF YOUR MISSION, TO YOUR PERSONAL WELL-BEING AND THE WELL-BEING OF THE GRACIOUS MRS. KISSINGER, AND TO THE DEEP FRIENDSHIP WHICH UNITES THE AMERICAN AND ITALIAN PEOPLES. UNQUOTE

SECRETARY KISSINGER: QUOTE

MR. PRIME MINISTER, EXCELLENCIES, LADIES AND GENTLEMEN, IT IS A VERY GREAT PLEASURE FOR ME TO HAVE THIS OPPORTUNITY TO SEE ALL MAY FRIENDS AGAIN ON SUCH A PLEASANT OCCASION. THE FOREIGN MINISTER IS IN THE PROCESS OF SEEING WHETHER A GOVERNMENT CAN BE FORMED AND AFTER HE HAS BEGUN TO EXPLAIN TO ME THE NUANCES AND COMPEXITIES I DON'T KNOW WHY IT IS I THAT IS GOING TO THE MIDDLE EAST. HE SEEMS TO ME MUCH BETTER QUALIFIED TO HANDLE THAT SITUATION. BUT SERIOUSLY I HAVE HAD THE PRIVILEGE OF WORKING FOR MANY YEARS NOW WITH THE FOREIGN MINISTER. AND THE PRINCIPLES OF ATLANTIC SOLIDARITY BASED ON EUROPEAN UNITY HAVE ALWAYS BEEN AT THE BASIS OF HIS FOREIGN POLICY. AND I REMEMBER MANY OCCASIONS WHEN ITALY CONTRIBUTED IMPORTANTLY TO THE SUCCESS OF OUR COMMON EFFORTS, SUCH AS FOR EXAMPLE AT THE WASHINGTON ENERGY CONFERENCE LAST FEBRUARY, AND IN THE CONCLUSION OF THE ATLANTIC DECLARATION TO WHICH THE FOREIGN MINISTER REFERRED.

I RECALL THESE EVENTS BECAUSE NO MATTER WHO IS PRESIDENT OF THE UNITED STATES OR WHAT GOVERNMENT IS IN POWER IN ITALY, THE

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FRIENDSHIP AND SOLIDARITY OF OUR TWO PEOPLES ARE BASIC FACTORS OF INTERNATIONAL POLITICS.

WE CONSIDER OURSELVES PART OF THE SAME FAMILY AND WE SEEK OUR SOLUTIONS NOT ON THE BASIS OF WHAT ONE CAN DO FOR THE OTHER, BUT ON THE BASIS OF WHAT BOTH CAN DO FOR THE COMMON GOOD. WHENEVER I TALK TO ITALIAN LEADERS WE SPEAK FREE OF COMPLEXES AND NEITHER OF US HAS THE NEED TO PROVE ANYTHING TO THE OTHER.

SO IN THE DIFFICULT PERIOD THAT NOW EXISTS IN THE WORLD, AN ECONOMIC CRISIS AND POLITICAL DIFFICULTIES IN MANY COUNTRIES, ONCE AGAIN ITALY AND THE UNITED STATES HAVE A COMMON DESTINY. ONE OF THE MOST IMPORTANT PROBLEMS THAT THE WORLD FACES IS THAT THE NATIONS OF THE WEST WHO AT THE END OF THE SECOND WORLD WAR THROUGH THEIR UNITY ACHIEVED THEIR PROGRESS. ONCE AGAIN MANAGE TO ESTABLISH SOLIDARITY IN THE FACE OF THE CRISIS WHICH WE NOW CONFRONT. AND HAVING DEVELOPED THEIR SOLIDARITY THEY CAN THEN WORK TOGETHER ON THE BASIS OF THE INTERDEPENDENCE OF THE WHOLE WORLD. THIS WILL BE OUR ATTITUDE IN THE UNITED STATES WITH RESPECT TO WORKING WITH ITALY TO OVERCOME PRESENT DIFFICULTIES. AND I KNOW THAT OUR FRIENDSHIP WILL LEAD TO COOPERATION IN THE ATLANTIC WORLD AS WELL AS IN THE WORLD AT LARGE.

I WOULD LIKE TO TAKE THIS OPPORTUNITY TO THANK, ALSO ON BEHALF OF MY WIFE, THE FOREIGN MINISTER FOR THE EXTRAORDINARY CORDIAL RECEPTION THAT WE HAVE HAD HERE. AND TO TELL TO ALL OUR ITALIAN FIREnds THAT HERE WE ALWAYS FEEL AT HOME. WHICH MEANS, TO YOUR SORROW PERHAPS, THAT YOU MAY HAVE TO ATTEND MANY SUCH LUNCHES IN THE MONTHS AHEAD. AND IT IS IN THIS SPIRIT THAT I WOULD LIKE TO PROPOSE A TOAST TO MY FRIEND THE FOREIGN MINISTER AND TO THE FRIENDSHIP OF THE ITALIAN AND THE AMERICAN PEOPLE. UNQUOTE.VOLPE

UNCLASSIFIED

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FORM FS-412(H)
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INDICATE:

☐ COLLECT

☐ CHARGE TO

UNCLASSIFIED

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Department of State

TELEGRAM

American Embassy CAIRO

[Y]

<table><tr><td colspan="2">DISTRIBUTION</td></tr><tr><td>E.O. 11652:</td><td>N/A</td></tr><tr><td>TAGS:</td><td>OVIP (Kissinger, Henry A.)</td></tr><tr><td>SUBJECT:</td><td>Secretary Kissinger's Informal Meeting with Press at Tahrir Palace before Meeting with FONMIN FAHMY, Nov. 6, 1974</td></tr><tr><td>SS-15</td><td>Egyptian</td></tr><tr><td>CHRON</td><td>ACTION: Secstate WASHDC IMMEDIATE<br/>INFO: All Arab Post and TEL AVIV<br/>UNCLASSIFIED CAIRO 8869</td></tr><tr><td colspan="2">SECTO 512</td></tr><tr><td colspan="2">NSCE FOR GENERAL SCOWCROFT AND NESSEN</td></tr><tr><td colspan="2">1. Following is transcript of subject meeting: QUOTE:</td></tr><tr><td>Q:</td><td>How were the talks with the President last night?</td></tr><tr><td>A:</td><td>Very good.</td></tr><tr><td>Q:</td><td>Are you coming back?</td></tr><tr><td>A:</td><td>Not on this visit, but I always come back.</td></tr><tr><td>Q:</td><td>Do you think the situation is more delicate?</td></tr><tr><td>A:</td><td>We have had delicate periods before, but we are hopeful of making progress toward negotiations.</td></tr><tr><td>Q:</td><td>Could you say that you are disappointed after the Rabat Conference?</td></tr></table>

8869

6 Nov. 74 1315

DRAFTED BY:

Anderson

:lcl

CLEARANCES:

Hecklinger

DRAFTING DATE

11/6/74

TEL. EXT.

APPROVED BY:

Anderson

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A: Well, it is a complicated situation.

Q: Did you propose a peace treaty to Jordan on your last trip?

A: Absolutely not. I did not propose any peace treaty on the last trip--specifically not to the Jordanians.

Q: Do you predict any further disengagement?

A: I don't want to predict what exactly will happen; I will talk to Arab leaders and to Israeli leaders to see what we can do to contribute toward progress in the Middle East.

Q: Do you think the Geneva Conference will be resumed?

A: I think it can resume in a way whenever all the parties agree it can make a useful contribution. UNQUOTE.

KISSINGER

UNCLASSIFIED
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2

UNCLASSIFIED

CAIRO 8886

06 NOV 2032

DE RUESOR #8886 3101710
ZNR UUUUU ZZH
O R 061645Z NOV 74
FM AMEMBASSY CAIRO
TO RUEHC/ SECSTATE WASHDC IMMEDIATE 040
INFO RUQMKG/ AMEMBASSY AMMAN 3310
RUQMGW/ AMEMBASSY T RFSUW
RUEHOM/ AMEMBASSY DAMASCUS 400
RUQMYA/ AMEMBASSY RIYADH 008
RUQMAD/ AMEMBASSY TEL AVIV 4150
BT
UNCLAS CAIRO 8886

E.O. 11652: N/A
TAGS: OVIP (KISSINGER, HENRY A.)
SUBJECT: SECRETARY KISSINGER'S DEPARTURE REMARKS AT
CAIRO AIRPORT, NOVEMBER 6, 1974

REF HBELGR P 725 05

FOLLOWING ARE DEPARTURE REMARKS OF SECRETARY KISSINGER AT
CAIRO AIRPORT, NOVEMBER 6, 1974: QUOTE:

QUESTION: DURING THE TALKS WITH THE PRESIDENT, DID YOU
SUBMIT ANY CONCRETE PROPOSALS THIS TIME OR THE TIME BEFORE?

KISSINGER: I HAVE NOT SUBMITTED A COMPLETE PROPOSAL ON EITHER
OF THE TRIPS, EITHER IN OCTOBER OR NOW. I'M HERE TO DISCUSS
IN GENERAL MANNER THE PROCEDURES AND APPROACHES THAT COULD
BE USED. AND I WILL COVER EXACTLY THE SAME SUBJECTS IN
EVERY COUNTRY THAT I VISIT. I WOULD LIKE TO REMIND YOU
ALL THAT IT IS EXACTLY ONE YEAR TODAY THAT I VISITED CAIRO
FOR THE FIRST TIME AND MANY THINGS A HAVE CHANGED SINCE
THEN AND I HOPE THAT BY THIS TIME NEXT YEAR OTHER THINGS
WILL HAVE CHANGED.

QUESTION: 2,2: WAS THERE ANYTHING ON THE DISENGAGEMENTS IN THE SIAI?

KISSINGER: WE HAVE HAD NO CONCRETE DISCUSSIONS ON ANY
SPECIFIC PLAN. UNQUOTE

EILTS

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HERE IN CAIRO?

K - NO.

Q - WHEN ARE YOU GOING TO TAKE UP YOUR TALKS, MR. PRESIDENT?

S - WHEN - WHAT?

Q - WHEN WILL YOU HAVE ANOTHER MEETING WITH DR. KISSINGER?

S - WELL, THIS DEPENDS UPON THE MOMENTUM OF THE PROCESS IN THE NEAR FUTURE.

Q - WOULD YOU EXPECT THAT MOMENTUM TO SLOW DOWN OR CAN YOU GIVE US YOUR EXPRESSION OF WHEN THE NEGOTIATIONS BETWEEN EGYPT AND ISRAEL ON THE NEXT DISENGAGEMENT WILL BEGIN, SIR?

S - WELL, THE MOMENTUM IS CONTINUING AND IT HASN'T BEEN HINDRED AND AS I SAID IN MY STATEMENT, THE EFFORTS OF DR. KISSPWCBOIN THE NEAR FUTURE ARE NEEDED MUCH MORE THAN THEY WERE NEEDED BEFORE.

VOICE: THANK YOU, SIR. UNQUOTE

ACTION: RIYADH: ANDERSON REQUESTS COPIES OF ABOVE TRANSCRIPT BE PROVIDED TO MEMBERS OF PRESS ACCOMPANING SECRETARY.

EILTS

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NNNNVV ESA344BRA613
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TO RUEHC/SECSTATE WASHDC IMMEDIATE 040
INFO RUQMKG/AMEMBASSY AMMAN 3310
RUQMGU/AMEMBASSY ANKARA 282
RUEHDM/AMEMBASSY DAMASCUS 400
RUQMYA/AMEMBASSY RIYADH 008
RUQMAD/AMEMBASSY TEL AVIV 4150
BT
UNCLAS CAIRO 8886

E.O. 11652: N/A

SUBJECT: SECRETARY KISSINGER'S DEPADTUER REMARKS AT CAIRO AIRPORT, NOVEMBER 6, 1974

REF: BELGRADE 5505

QUESTION: WAS THERE ANYTHING ON THE DISENGAGEMENTS IN THE SINAI?

EILTS

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NNNNVV ESA343BRA609
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0 R 061540Z NOV 74
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TO RUQMYA/AMEMBASSY RIYADH NIACT IMMEDIATE 07
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INFO RUQMKG/AMEMBASSY AMMAN NIACT IMMEDIATE 3309
RUQMGU/AMEMBASSY ANKARA 282
RUEHDM/AMEMBASSY DAMASCUS NIACT IMMEDIATE 399
RUQMAD/AMEMBASSY TEL AVIV NIACT IMMEDIATE 4149
BT
UNCLAS CAIRO 8885

NSCR FOR GENERAL SCOWCROFT AND NESSEN

E.O. 11652: /A
TAGS: OVIP (KISSINGER, HENRY A.)
SUBJCT: TRANSCRIPT OF SADAT-KISSINGER PRESS CONFERENCE

REF: BELGRADE 5505

FOLLOWING IS TRANSCRIPT OF PRESS CONFERENCE CONDUCTED BY
PRESIDENT SADAT AND SECRETARY KISSINGER AFTER THEIR
MEETING ON NOVEMBER 6, 1974: QUOT

QUESTION: ARE YOU OPTIMISTIC ABOUT THE TALKS?
SADAT: I HAVE PREPARED A STATEMENT. YOU KNOW I HAVE A
VERY NASTY COLD. I HAVE PREPARED A STATEMENT AND AFTER
THAT.....

Q - MR. PRESIDENT, WOULD YOU SPEAK A BIT LOUDER?
S-WHAT ABOUT MY VOICE WITH THIS COLD?

VOICE: SORRY, I HOPE YOU FEEL BETTER.

S - VERY WELL. I AM GLAD THAT MY FRIEND DR. KISSINGER WAS
ABLE TO COME AND EXCHANGE WITH ME VIEWS AND MEASURES. AS
YOU WELL KNOW, I HAVE THE FULLEST CONFIDENCE IN DR. KISSINGER
AND WE SUPPORT HIS CONTINUING EFFORTS FOR ACHIEVING A LASTING
AND JUST PEACE IN THE MIDDLE EAST. WE BELIEVE THAT THE
UNITED STATES CAN PLAY AN ACTIVE ROLE TOWARDS FURTHER PROGRESS
IN THIS RESPECT AND I WANT TO EMPHASIZE THAT THE DOORS FOR
PROGRESS ARE STILL OPEN.

Q - MR. PRESIDENT, WOULD YOU TELL US IF YOU ARE ATTEMPTING
OR HAVE ATTEMPTED TO BRING ABOUT SOME JIND OF A DIALOGUE
BETWEEN SECRETARY OF STATE KISSINGER AND THE PLO?

S - I LEAVE THIS TO DR. KISSINGER.

KISSINGER: I SIMPLY WANT TO MAKE A GENERAL STATEMENT. THE
TALKS BETWEEN THE PRESIDENT AND MYSELF HAVE BEEN USEFUL AND

UNCLASSIFIED

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CONSTRUCTIVE AS ALWAYS. AS I SAID UPON ARRIVAL AT THE AIRPORT YESTERDAY THE UNITED STATES IS PREPARED TO REMAIN ACTIVELY ENGAGED IN ATTEMPTING TO BRING ABOUT A JUST AND LASTING PEACE IN THIS AREA. I EMPHASIZED ON MANY OCCASIONS OUR VIEWS WHICH CAN BE MOST EFFECTIVELY ACHIEVED BY A STEP-BY-STEP APPROACH. I AM JUST BEGINNING A TRIP THROUGH THE MIDDLE EAST AND WE WILL REMAIN IN ACTIVE AND CLOSE DIPLOMATIC CONTACT WITH ALL OF THE PARTIES TO SEE WHAT POSSIBILITIES EXIST AND TO ENCOURAGE PROGRESS WHEREVER POSSIBILITIES EXIST. I WANT TO THANK THE PRESIDENT FOR RECEIVING ME IN SPITE OF THE FACT THAT HE HAS A VERY BAD COLD.

Q - MR PRESIDENT, I WOULD LIKE TO ASK YOU SIR, WHAT IS YOUR JUDGEMENT AS TO HOW THE RABAT SUMMIT CONFERENCE AFFECTS THE STEP-BY-STEP NEGOTIATION PROCESS IN WHICH EGYPT HAS BEEN ENGAGED WITH THE UNITED STATES?

S - WELL, I CAN'T SEE AT ALL THAT THE RABAT CONFERENCE HAS PUT ANY BLOCK IN THIS. THE RABAT CONFERENCE HAS BEEN MAINLY FOR THE QUESTION OF PALESTINE AND IT WAS INEVITABLE THAT AT SOME TIME THE PALESTINIAN QUESTION IS GOING TO BE TACKLED AS APOLITICAL PROBLEM RATHER THAN A HUMANITARIAN PROBLEM.

Q - DR. KISSINGER, ARE YOU OPTIMISTIC?

K - I BELIEVE THAT PROGRESS IS POSSIBLE END WITH THE COOPERATION OF THE PARTIES WE WILL CONTINUE OUR EFFORTS AND WE BELIEVE THAT PROGRESS IS POSSIBLE.

Q - DOES THAT MEAN DR. KISSINGER THAT IS NOT POSSIBLE AT THE MOMENT?

K 7 NO, WE BELIEVE THAT PROGRESS IS POSSIBLE IN THE MONTHS AHEAD.

Q - MR. PRESIDENT, IS EGYPT READY TO BEGIN DISCUSSIONS WITH ISRAEL ABOUT FURTHER WITHDRAWALS IN THE SINAI WHETHER OR NOT THERE ARE SIMILAR DISCUSSIONS ON THE WEST BANK?

S - WELL, WE SHALL ALWAYS BE IN EGYPT READY TO REGAIN WHATEVER LAND WE CAN.

Q - DR. KISSINGER, LAST TIME YOU THOUGHT THE U.S. WAS CONCERNED BY JORDAN NEGOTIATING WITH ISRAEL AS REGARDS THE WEST BANK. YOU SAID THAT THIS WAS THE U.S. POINT OF VIEW. NOW THAT THE PLO IS GOING TO TAKE THIS ROLE UP, HOW DO YOU THINK THIS CAN BE RESOLVED AS REGARDS TO THE UNITED STATES?

K - WHAT MY VIEW WAS, AND IS, THAT IT WOULD HAVE BEEN THAT IT WILL BE THE BEST SOLUTION AND WE NOW HAVE TO SEE THE IMPACT OF THE RECENT VISIT WITH RESPECT TO THAT PARTICULAR PROBLEM. IN MY OWN POINT OF VIEW IT HAS COMPLICATED MATTERS.

Q - MR. PRESIDENT, CAN YOU TELL US HOW YOUR DISCUSSIONS YESTERDAY WITH MR. ARAFAT AFFECT YOUR DISCUSSIONS WITH DR. KISSINGER?

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S - I DON'T SEE HOW MY DISCUSSIONS WITH ARAFAT YESTERDAY AND WITH DR. KISSINGER YESTERDAY AND TODAY MAKE ANY CONTRADICTIONS. THERE IS NO CONTRADICTION.

Q - DR. KISSINGER, ARE YOU GOING TO MEET MR. YASSER ARAFAT HERE IN CAIRO?

K - NO.

S - WHEN - WHAT?

Q - WOULD YOU EXPECT THAT MOMENTUM TO SLOW DOWN OR CAN YOU GIVE US YOUR EXPECTATION OF WHEN THE NEGOTIATIONS BETWEEN EGYPT AND ISRAEL ON THE NEXT DISENGAGEMENT WILL BEGIN, SIR?

S - WELL, THE MOMENTUM IS CONTINUING AND IT HASN'T BEEN HINDRED AND AS I SAID IN MY STATEMENT, THE EFFORTS OF DR. KISSINGER IN THE NEAR FUTURE ARE NEEDED MUCH MORE THAN THEY WERE NEEDED BEFORE.

ACTION RIYADH: ANDERSON REQUESTS COPIES OF ABOVE TRANSCRIPT BE PROVIDED TO MEMBERS OF PRESS ACCOMPANING SECRETARY.

EILTS

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CRU - 006

STATEMENTS BY SAUDI ARABIAN
FOREIGN MINISTER SAQQAF AND
SECRETARY OF STATE KISSINGER
ON LATTER'S DEPARTURE FROM
RIYADH, NOVEMBER 6, 1974

For. Min. Saqqaf:

It has been customary so far for the Secretary of State to start speaking and to give his impressions of his visit to our country. I feel it my pleasant obligation now to turn the tables on him and start expressing my appreciation for the Secretary's visit if he agrees. Dr. Henry Kissinger's visit was a good one, a useful one and it came at an appropriate time following several activities in the Arab area. For instance, I would mention the Arab Summit Conference which was a big conference. This was an international Arab Summit Conference pertaining to the Arabs, the heads of states, their countries in which they discussed affairs of concern to their respective countries and also discussing world problems and problems of interest to the rest of the world.

This was the nature of that Arab Summit Conference. This Conference was successful, constructive and effective.

It had nothing new that we demanded different from what was the case during the Algiers Conference last year. The attitude we took in Algiers was still the same. Our conviction is still the same, namely that the way followed by Dr. Kissinger is a way that would in the future realize the complete, expeditious Israeli withdrawal based on justice.

-2-

We would never do without his efforts or those of the great country he represents. Our two countries are friends -- the United States of America and the Kingdom of Saudi Arabia. We insist on being friends. We insist on challenging or defying problems and surmounting them. We do not accept that the problems challenge us and beat us. That is why we wish all success to our friend Henry and his mission towards which he expended a lot of energy, a lot of intellect, and what was more important his having put to work without any restraint his deep convictions in bringing about justice. Our policy is the same. We want to see complete withdrawal to the 1967 borders and the return of Arab Jerusalem to its people and the restoration of their legitimate rights to the Palestinian people. I have no new demands. This is what I said even before the Rabat Conference. I am saying this and repeating it simply because we have no new demands.

There is another topic touched upon by my friend Dr. Kissinger, namely that of oil. I repeat that the policy of my King and my Government is still the same as it was, Namely to keep the prices as they are and to try to reach a reduction all be it a symbolic reduction or if we can a greater reduction, and we would be doing this because of our awareness and of the welfare of humanity at large. Finally, I greet our guests, Secretary of State and the colleagues who came with him, and look forward to seeing him in the not too distant future when at least part of these problems we have been discussing will have been solved.

J. F. D.

-3-

Secretary Kissinger:

"I have nothing much to add to what has been so eloquently expressed by my friend the Foreign Minister. We had very good talks, very useful talks with His Majesty, explaining to our friends in the Kingdom the situation as we saw it and our determination, if the parties could cooperate, to move step by step towards a just and lasting peace. I found His Majesty understanding and supportive. With this encouragement the United States will continue its efforts to bring the parties closer together. I hope to make progress towards a just and lasting peace. With respect to the question of oil, I had an opportunity as the Foreign Minister pointed out, to explain the impact of the current prices on international stability. I would like to express our gratification for the statement of the Foreign Minister that the Government of the Kingdom of Saudi Arabia will continue to work for the lowering of prices. The Foreign Minister, who has been a voice for moderation and wisdom in this area, will be coming to the United States next week to the General Assembly and I look forward to continuing our discussions on that occasion. It remains only for me to thank him for all of my colleagues for the characteristic hospitality shown us on this visit to the Kingdom, and we leave determined to strengthen even further the already warm relations between our two countries. Thank you."

UNCLASSIFIED

Department of State

TELEGRAM

072107Z Nov 74

DATE: COLLECT
CHARGE TO:

AMMAN Amconsul JERUSALEM

November 7, 1974

DISTRIBUTION

S/S 15

ACTION:

INFO:

SECSTATE WASHDC      IMMEDIATE

Amembassy AMMAN
Amembassy CAIRO
Amembassy DAMASCUS
Amembassy RABAT
Amembassy TEL AVIV
Amembassy TUNIS
USINT ALGIERS

UNCLASSIFIED JERUSALEM 1974

SECTO 554

DEPARTMENT PASS NSC FOR GENERAL SCOWCROFT AND NESSEN

E.O. 11652: N/A
TAGS: OVIP (Kissinger, Henry A)
SUBJECT: Exchange of remarks between Yigal Allon, Israeli Foreign Minister, and Secretary Kissinger on arrival Ben Gurion Airport, November 7, 1974

1. ALLON: QUOTE: I am delighted to welcome once more Secretary Henry Kissinger on his tireless mission to achieve peace in our area. We consider this as a very important visit of his, particularly that between his last visit and this one, as you all know, General two events took place -- one in the AMM Assembly

APPROVED BY:

USIS:Dhamilton.cd

DRAFTING DATE: 11/7/74
TEL. EXT.

APPROVED BY:

S/S: AMMAN

EARRANCES:

S/FRS: Ambassador Anderson

UNCLASSIFIED

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of the United Nations, which decided to invite representatives of the so-called PLO to address the Assembly; the other one is the Rabat conference which decided that only the so-called PLO will represent the Palestinians in seeking some sort of a solution. As you all know, we think that these two events are counter-productive, very harmful to the effort of achieving peace. Nevertheless, we mustn't get desperate. All those who believe in peace, such as our government in this country—and of course Mr. Kissinger is one of the greatest believers in the necessity and the possibility of peace in this area— we should do our best to see to it that the momentum is not lost and (inaudible) further steps will be studied in order to achieve this great goal. Welcome Mr. Kissinger, the microphone is yours. END QUOTE.

2. KISSINGER: **QUOTE:** Thank you, Yigal. I'm here to discuss with our friends the impact of recent events and the possibilities for joint efforts towards peace.

Since I have been here last, there has been no change in American policy on any of the issues before us. Our friends and we will review all the possibilities. In every Arab capital that I have visited I have said what I shall also repeat here: The United States will make every effort, on a step-by-step basis, to contribute to

UNCLASSIFIED

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FORM P-545(M) No
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(CONTINUED SHEET)

<table><tr><td>UNCLASSIFIED</td></tr></table>

O R 071221Z NOV 74
FM AMEMBASSY AMMAN
TO RUEHC/SECSTATE WASHDC IMMEDIATE 2965
INFO RUEHDM/AMEMBASSY DAMASCUS 295
RRUFHRS/USINT ALGIERS 375
RUESOR/AMEMBASSY CAIRO 3063
RUQMJR/AMCONSUL JERUSALEM 5487
RUD KBT/AMEMBASSY RABAT 399
RUQMAD/AMEMBASSY TEL AVIV 6258
BT
UNCLAS AMMAN 6656

Nov 7 1316'74

DEPARTMENT PASS NSCE FOR GENERAL SCOWCROFT AND NESSEN

E.O. 11652: N/A
TAGS: OVIP (KISSINGER, HENRY A.)
SUBJECT: SECRETARY KISSINGER'S REMARKS, AMMAN INTERNATIONAL AIRPORT, NOVEMBER 7, 1974

1. KISSINGER: QUOTE: I WOULD LIKE TO SAY THAT THE TALKS WE'VE HAD HERE WERE CONDUCTED IN THE WARN, CORDIAL, AND FRIENDLY ATMOSPHERE OF CLOSE COOPERATION THAT HAS ALWAYS CHARACTERIZED THE RELATIONSHIP BETWEEN JORDAN AND THE UNITED STATES. WE REVIEWED RECENT EVENTS IN THE AREA AND I EXPRESSED OUR VIEW THAT I HAVE ALSO EXPRESSED ELSEWHERE: THAT SOME RECENT DECISIONS HAVE COMPLICATED PROBLEMS AND POSSIBILITIES FOR SOLUTION.

2. I HAVE ALSO EXPLAINED THAT THE UNITED STATES WOULD CONTINUE TO
TO MAKE EFFORTS TO BRING ABOUT A JUSTAND LASTING PEACE IN THE
AREA ON THE BASIS OF THE SEP-BY-STEP METHODS WE HAVE BEEN
PERSUING AND THAT WE BELIEVE ARE THE ONLY POSSIBLE ONES. AS FAR
AS OUR RELATIONSHIP TO THE KINGDOM OF JORDAN IS CONCERNED, JORDAN
IS, OF COURSE, AN OLD, VALUED, AND TRUSTED FRIEND AND THAT FRIEND-
SHIP HAS, IF ANYTHING, BEEN STRENGTHENED BY RECENT EVENTS.

3. THE UNITED STATEES CONSIDERS JORDAN A MAJOR FACTOR IN THE AREA
AND IT WILL CONTINUE TO BASE ITS POLICY ON THAT CONVICTION. AND
OUR TALKS HERE HAVE STRENGTHENED THAT RELATIONSHIP. THANK YOU
VERY MUCH. END QUOTE.

4. AFTER THE DEPARTURE OF THE SECRETARY OF STATE, THE JORDANIAN
PRIME MINISTER ZEID RIFAI MADE THE FOLLOWING STATEMENT IN ARABIC.
QUOTE: HIS MAJESTY HAS RE-ITERATED TO THE SECRETARY OF STATE DURING
THE MEETING THAT TOOK PLACE THIS MORNING JORDAN'S ACCEPTANCE OF
ALL RESOLUTIONS OF THE SUMMIT CONFERENCE WHICH TOOK PLACE IN RABAT,
AND JORDAN'S ADHERANCE TO THESE RESOLUTIONS AND ITS PLEDGE TO
BACK THE PALESTINE LIBERATION ORGANIZATION TO DO ITS DUTY AND
RESPONSIBILITIES ON THE NATIONAL AND INTERNATIONAL LEVELS. END
QUOTE.

PICKERING

UNCLASSIFIED

Classification

Department of State

TELEGRAM

CH 1952

NOV 8, 1974

3:00am

INDICATE:

☐ COLLECT

☐ CHARGE TO

E.O. 11652: N/A

TAGS : OVIP (Kissinger, Henry A.)

SUBJECT : Remarks of Yigal Allon and Secretary Kissinger following Meeting at Prime Minister Rabin's Residence Nov 6, 1974

<table><thead><tr><th>DISTRIBUTION</th><th></th></tr></thead><tbody><tr><td>S/S-12</td><td><strong>ACTION:</strong> Seestate WASH DC - IMMEDIATE</td></tr><tr><td>CG</td><td><strong>INFO:</strong> Amembassy AMMAN</td></tr><tr><td>UTC</td><td>Amembassy DAMASCUS</td></tr><tr><td>POL</td><td>Amembassy CAIRO</td></tr><tr><td>AMR</td><td>USINT ALGIERS</td></tr><tr><td>OM</td><td>Amembassy RABAT</td></tr><tr><td>POL</td><td>Amembassy TEL AVIV</td></tr><tr><td>CHRON</td><td>Amembassy TUNIS</td></tr><tr><td></td><td><strong>UNCLASSIFIED JERUSALEM</strong></td></tr><tr><td></td><td><strong>SECTO</strong> 566</td></tr><tr><td></td><td><strong>DEPARTMENT head</strong> NSCE FOR GENERAL SCOWCROFT AND NESSEN</td></tr><tr><td></td><td><ol><li>Allon: Quote: We had as you know a very long talk with Secretary Kissinger at the Prime Minister's house. We listened to a very interesting report of the recent trip of his to the Middle East after the Rabat conference, which we found very interesting; but we need a few more hours to discuss the matters we heard tonight and I don't think we can say any more now. Unquote.</li><li>Kissinger: Quote: I agree with what the Foreign Minister has said. We reviewed the situation in a very friendly atmosphere and we are looking at all the</li></ol></td></tr><tr><td></td><td><strong>ORPORATED BY:</strong><br>USIS:DRHamilton:lee</td></tr><tr><td></td><td><strong>DRAFTING DATE:</strong> 11/8/74</td><td><strong>TEL. EXT:</strong></td><td><strong>APPROVED BY:</strong><br>S/S:REHecklinger</td></tr></tbody></table>

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possibilities that exist after Rabat and we are going
to continue this examination tomorrow and we are
not doing this in any contentious spirit but as
people who are solving common problems and who are
certain to find common approaches. Unquote.

Q.: Has there been any progress between the two
sides and the different views?

Kissinger: Quote: Well, we don't start with such
radically different views so that we are not
negotiating against each other. Unquote.

KISSINGER

UNCLASSIFIED

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FORM 58-61 File
J-48
(CONTINUATION SHEET)

Control 6913

Nov 9, 1974

0030

INDICATE:
☐ COLLECT
☐ CHARGE TO

<table><tr><td colspan="2">DISTRIBUTION</td></tr><tr><td>S/S 15<br>chron</td><td>ACTION: SecState WASHDC IMMEDIATE<br><br>UNCLASSIFIED TUNIS 6913<br>SECTO 607<br><br>DEPT PASS NSCE FOR GEN SCOWCROFT AND NESSEN<br>E.O. 11652: NÉA<br>TAGS: OVIP (Kissinger, Henry A.)<br>SUBJECT: Secvisit Tunis: Secretary Kissinger's Arrival<br>Statement on November 8, 1974<br><br>Transmission of the Secretary's statement follows:<br><br>QUOTE: Ladies and Gentlemen, a little over a year ago I stopped in Tunisia on my first trip to the Middle East. I came here to get the benefit of the views of your President Bourguiba and of all of his associates about how the United States could best proceed to contribute to a just and lasting peace in the Middle East. Since then some progress has been made, and I am again on a trip to find out what the next steps might be and such a journey would not be complete without exchanging ideas with our old friends in Tunisia.</td></tr><tr><td>DRAFTED BY:</td><td>PEB</td></tr><tr><td>SÉS:PEBarbian:wjv</td><td>DRAFTING DATE: 11/8/74</td></tr><tr><td>CLEARANCES:</td><td>APPROVED BY: S/S BARBIAN PEB</td></tr></table>

Ambassador Anderson (SUBS)
PEB for

UNCLASSIFIED
Classification

FORM 03-418(M)
4-68

Department of State
INCOMING
AMEMBASSY TUNIS

TELEGRAM

ACION
S/S 15
CHRON

UNCLASSIFIED

Classification

CONTROL 307

RCD 8 NOV 74 1833

O 081627Z NOV 74
FM AMEMBASSY TEL AVIV
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4511
INFO RUDKKR/AMEMBASSY TUNIS IMMEDIATE ZFF.

RUHFRS/US INT ALGIERS ZFF
RUDKBT/AMEMBASSY RABAT ZFF
RUQMKG/AMEMBASSY AMMAN 7317
RUQMBE/AMEMBASSY BEIRUT 5940
RUESOR/AMEMBASSY CAIRO 4447
RUEHDM/AMEMBASSY DAMASCUS 381
RUQMJR/AMCONSULATE JERUSALEM 5969
RUQMRA/AMEMBASSY JIDDA 968

BT

UNCLAS TEL AVIV 6418

EO 11652: N/A

TAGS: OVIP (KISSINGER, HENRY A)

SUBJ: REMARKS OF FONMIN ALLON AND SEC KISSINGER UPON KISSINGER

DEPARTURE BEN-GURION AIRPORT NOV 8, 1974

DEPARTMENT PASS NSCE FOR GEN SCOWCROFT AND NESSEN

1. KISSINGER: QUOTE. LADIES AND GENTLEMEN, I'VE SAID EARLIER THAT THIS IS MY NINTH OR TEENTH VISIT IN ONE YEAR AND WE ALL NOW KNOW THAT IT FOLLOWS A CERTAIN COURSE. THERE'S ALWAYS, BEFORE I COME, A GREAT DEAL OF SPECULATION ABOUT THE MOMENTOUS CHANGES THAT ARE GOING TO BROUGHT ABOUT IN POLICY AS A RESULT OF MY VISIT AND WHAT NEW PRESSURES MAY BE BROUGHT ON ISRAEL. AND THEN WE MEET AND WE AGREE AND WE PURSUE A COMMON APPROACH AND WE REMAIN ON THE SAME COURSE WHICH IS TO MOVE STEP BY STEP TOWARDS A JUST AND LASTING PEACE IN THE AREA, A PEACE THAT NO PEOPLE CAN WANT MORE AND NO PEOPLE DESERVE MORE THAN THE PEOPLE OF ISRAEL. WE HAVE HAD TWO DAYS OF VERY CORDIAL, VERY FRANK, VERY FRIENDLY TALKS, AND WE AGREED THAT IN THE NEW CONDITIONS THAT HAVE ARISEN IN THESE MONTHS WE NEED TO EXPLORE CAREFULLY WHAT POSSIBLITIES DO EXIST. WE WILL JOINTLY EXPLORE THEM. THE UNITED STATES STANDS READY TO HELP ALL THE PARTIES THAT ARE READY TO MOVE FORWARD AND THE UNITED STATES AS ALWAYS MAINTAINS THE CLOSEST RELATIONS WITH ITS OLD FRIENDS IN ISRAEL. SO THE TALKS HAVE BEEN GOOD. WE KNOW WHERE WE'RE GOING. WE WILL EXPLORE CAREFULLY AND DELIBERATELY. WE WILL STAY IN CLOSE TOUCH WITH EACH OTHER AND WE HAVE HOPE FOR THE FUTURE. THANK YOU. END QUOTE.

UNCLASSIFIED

Classification

FORM FS-412(M)
4-09

[LC]

PRESS

DEPARTMENT OF STATE

November 11, 1974

No. 494

REMARKS OF
THE HONORABLE HENRY A. KISSINGER
SECRETARY OF STATE
AT THE SEVENTH ANNUAL AWARDS PRESENTATION
OF THE AMERICAN FOREIGN SERVICE ASSOCIATION
NOVEMBER 11, 1974

SECRETARY KISSINGER: Tom, distinguished guests, I appreciate this introduction. I think you were somewhat too modest. There are many junior Foreign Service Officers who have managed to discomfit me. (Laughter) I, of course, realize that I am working under a certain handicap in this building, the primary one being that the majority of the Foreign Service Officers are convinced that I could never be working in this building unless I were in my present position. (Laughter) And, therefore, they try to spare me the operational details of my job. They let me make decisions about the plans for the Year 2000 and the plumbing in the basement, but there is a grey area in between which I seem to have trouble reaching.

I have been here for a year now, and I'm beginning to understand the system. For example, a few months ago I was supposed to call a certain Senator on a subject of not overwhelming difficulty, which was embodied in a memorandum having eight endorsements. But lest I miss the point -- which was thought highly probable (Laughter) -- some of the drafters

For further information contact:

PR #494

2

of this memorandum called the Senator and told him what I was going to say. (Laughter) And it's a system that works extraordinarily well; it's a form of psychological warfare.

The other day there was a Senator that I was supposed to call who had already received four phone calls during the day from junior Foreign Service Officers about what I was going to say to him, and told to stand by for my phone call, which never came. I met him at dinner that evening, and he was willing to concede anything if I had only known what it was that I was supposed to say to him.

(Laughter)

The memorandum caught up with me the next morning. I expressed my views on that subject to my dedicated associates, and now I don't get memoranda any more that show the number of endorsements. (Laughter) I dare not hope that the number of endorsements has actually declined, but I am in blissful ignorance about it.

I wanted to make a few remarks about the conduct of foreign policy as I see it at this moment and the role of the Foreign Service in relation to it. We've read a great deal about institutionalizing foreign policy, which, as I understand it, means that whenever I do something that somebody doesn't like it is obvious that I haven't

PR #494

3

institutionalized foreign policy.

But I thought I might talk to you about what the
necessities are as I see them and what I think the
contribution is that the Foreign Service can make.

We are going through one of the greatest changes
in the position of the United States in the world that has
ever occurred in our history. When we conducted foreign
policy in the aftermath of World War II during a period of
extraordinary creativity, we subconsciously drew on our
domestic experience. What we did internationally was really
to implement the New Deal experience of at home. We believed
that stability would result more or less automatically from
closing the gap between expectations and reality. We were
working with democratic governments of similar traditions,
and we were carrying out values which had been built into
our society so much that they came to be taken for granted.

I believe that the decade after World War II was,
without doubt, one of the most creative in American foreign
policy. But it is also clear that in the 1970's we are
living in a much more complicated period. The old assumptions
of implacable hostility by a unified, monolithic communist
bloc threatening the so-called free peoples has disappeared.
The self-assurance with which we thought we could reform the

PR #494

4

governments of all the peoples of the world has also been
shaken, for a variety of reasons, including a very searing
domestic experience. The problem of security which was
hidden by the fact of the atomic monopoly has appeared
to the United States for the first time in its history in
the manner in which other less favored nations had to deal
with it throughout most of their experience. And so we face
the tension between the requirements of security and the
imperative of our values, between the evolution of societies
of different values and the necessity that they will not be
accepted unless they are based on some principle of justice
that people can share.

We have to build this new structure in such a way
that the act of construction doesn't make everything tumble
down. I do not now want to go into a long analysis of the
nature of our foreign policy. I make this point about the
revolutionary change in the nature of our foreign policy
to indicate the responsibilities that I believe the Foreign
Service must carry over the years ahead.

During my first years in Washington there was a
great deal of debate about the relative influence of the
White House as against the State Department. And it is a

PR #494

5

debate that is not new. But it is a debate that really
should never take place because I believe that if this
building does its job any President must want to use it.
And, therefore, the question is, what is the job this
building is supposed to do? What is it that is required
in the present period?

First, let me say that, having worked with the
Foreign Service for a year, there is no doubt in my mind
that there is no group more dedicated, more able, and more
knowledgeable in any department in the Government. On the
contrary, I don't know any department in the Government that
has as dedicated and able a group of people. But the demands
on the Foreign Service have changed.

In earlier periods in which the framework was more
settled, a great emphasis could be put on reporting and the
accurate rendition of conversations that are held by various
Officers in the field. Today -- at least as far as I am
concerned -- reporting is, of course, important, but what
we need more than anything is analysis. The description of
a conversation with somebody that the senior people have
never heard of is almost totally irrelevant or extremely
confusing.

PR #494

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Now, in those parts of the world in which I know the chief actors it is quite sufficient. But you cannot count on the fact that there will be a Secretary of State or a President who knows the chief actors. And, therefore, if you want to help the Seventh Floor, it is absolutely imperative not just to report what people say but to explain what people mean, not just to describe how a situation looks but to try to lay out what the trends are, what can be expected, and to do so not on the basis of some sentimental proclivities but on the basis of a hard-headed -- if necessary, cold-blooded -- analysis of what the various alternatives are that the situation requires.

Now, I must say candidly that in this respect we are not doing as well as we can, not nearly as well as our capabilities would permit us to. And when I speak of institutionalization of foreign policy, what I would like to see, leave behind, is that when a problem reaches this Department automatically the various bureaus take hold of it in a manner that shapes it in relation to foreseeable purposes of real alternatives and predictable consequences.

I have been a veteran of the options process. And I have tended to insist on being given choices in which

PR #494

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lately the Department has developed a higher degree of
skill than before. For the first four years of my
presence in Washington, if I picked Option 2 I was right
98 percent of the time, because there was Option 2, which
was the preferred option; there was Option 1, which was
Option 2 minus a little bit; and then there was Option 3,
which was Option 2 plus a little bit. But I attended a
meeting this morning where the preferred option was always
Option 3, so now I'm in a state of extreme confusion, and
you mustn't do this to me. (Laughter)

But when we speak about options, what I have in
mind is some real options, and not a party line developed
in the bureau after which all the considerable ingenuity
of the Service is put to work to make that view prevail.
I think if the view is correct it can survive being put
in the form of alternatives. And I think if some people
are willing to play the role of Devil's advocate the
preferred view will gain in strength.

I think this is all the more essential because, as
we go ahead into the future, we will face more and more
confusing situations, and there will be an overwhelming
temptation to let one's self be driven by the emotion of
the moment. But the difference between observers and actors

PR #494

8

is that the actors who are responsible for the conduct of
foreign policy do not have the right to let themselves be
driven by emotions. They are responsible not only for the
best thing that can happen but also for the consequences of
failure. They are not conducting foreign policy in order to
implement their personal preference, but to carry out the
national interest in relation to the global interest. And
they have to keep in mind that it isn't self-gratification
that brought them into the Foreign Service but precisely
the notion of service.

Now, I believe that all over the world there are
many -- there are hundreds -- who live by these principles.
And I believe that without the Foreign Service we will not
be able to create a consistent foreign policy. We cannot
base foreign policy on star performers. We cannot rely that
somebody will come along every few years to manipulate events.
What we need is a high average standard of performance that
is carried over through the decades. And that cannot be
done by any President or by any Secretary of State.
That is what I mean by institutionalization of foreign
policy.

I don't mean that every country director attends every meeting in the Secretary's office. But I do mean that

PR #494

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the country directors and the assistant secretaries have a
sense of where they think the nation ought to go, that they
can defend that sense, that if they have a different view
from the Seventh Floor or from the White House that they
possess the intellectual discipline to present it and to
put up a tough fight before they yield if another decision
is made.
I believe we have the makings of it in this
Department, and if I can leave this behind I would consider
it a much more significant achievement than the negotiations
that come and go, and every success of which just creates a
new set of problems.

This is why I am delighted that Tom has asked me
to be here at the Awards Ceremony, some of which, as I
understand it, are being given for dissenting from established
points of view, for which we bear no visible grudges.
(Laughter) But you will notice that I'm not reading the
citations. (Laughter) But I think it is right that awards
are given for dissent. I think that a self-confident
Service must be a Service in which dissent is encouraged.
It should be dissent that is kept within the Service, and
once a decision is made it is carried out with a discipline
which is, I believe, characteristic of the Service.

PR #494

10

But I have enjoyed working with Tom. I have enjoyed working with the Foreign Service Officers. And I think they are getting used to my administrative practice in which the highest attainable praise is the absence of criticism. (Laughter)

Thank you very much.

(Applause)

* * * * * *

THE SECRETARY
OF STATE

Speech

Address by Henry A. Kissinger
Chicago, Illinois

November 14, 1974

Energy Crisis:
Strategy for Cooperative Action

The Problem

A generation ago the Western world faced an historic crisis—the breakdown of international order in the wake of world war. Threatened by economic chaos and political upheaval, the nations of the West built a system of security relations and cooperative institutions that have nourished our safety, our prosperity, and our freedom ever since. A moment of grave crisis was transformed into an act of lasting creativity.

We face another such moment today. The stakes are as high as they were 25 years ago. The challenge to our courage, our vision, and our will is as profound. And our opportunity is as great.

What will be *our* response?

I speak, of course, of the energy crisis. To-
night I want to discuss how the administration
views this problem, what we have been doing
about it, and where we must now go. I will
stress two themes that this government has
emphasized for a year and a half:

First, the problem is grave but it is soluble.

Second, international collaboration, particularly
among the industrial nations of North America,
Western Europe, and Japan is an inescapable
necessity.

The economic facts are stark. By 1973, world-
wide industrial expansion was outstripping
energy supply; the threat of shortages was al-
ready real. Then, without warning, we were
faced first with a political embargo, followed
quickly by massive increases in the price of oil.
In the course of a single year the price of the
world's most strategic commodity was raised
400 percent. The impact has been drastic
and global:

- The industrial nations now face a collective payments deficit of $40 billion, the largest in history, and beyond the experience or capacity of our financial institutions. We suffer simultaneously a slowdown of production and a speedup of an inflation that was already straining the ability of governments to control.

- The nations of the developing world face a collective yearly deficit of $20 billion, over half of which is due to increases in oil prices. The rise in energy costs in fact roughly equals the total flow of external aid. In other words, the new oil bill threatens hopes for progress and advancement and renders problematical the ability to finance even basic human needs such as food.

- The oil producers now enjoy a surplus of $60 billion, far beyond their payments or development needs and manifestly more than they can invest. Enormous unabsorbed surplus revenues now jeopardize the very functioning of the international monetary system.

PR 500

Bureau of Public Affairs • Office of Media Services • Department of State

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(c)

Yet this is only the first year of inflated oil prices. The full brunt of the petrodollar flood is yet to come. If current economic trends continue, we face further and mounting worldwide shortages, unemployment, poverty, and hunger. No nation, East or West, North or South, consumer or producer, will be spared the consequences.

An economic crisis of such magnitude would inevitably produce dangerous political consequences. Mounting inflation and recession—brought on by remote decisions over which consumers have no influence—will fuel the frustration of all whose hopes for economic progress are suddenly and cruelly rebuffed. This is fertile ground for social conflict and political turmoil. Moderate governments and moderate solutions will be under severe attack. Democratic societies could become vulnerable to extremist pressures from right or left to a degree not experienced since the twenties and thirties. The great achievements of this generation in preserving our institutions and constructing an international order will be imperiled.

The destinies of consumers and producers are joined in the same global economic system, on which the progress of both depends. If either attempts to wield economic power aggressively, both run grave risks. Political cooperation, the prerequisite of a thriving international economy, is shattered. New tensions will engulf the world just when the antagonisms of two decades of the cold war have begun to diminish.

The potentially most serious international consequences could occur in relations between North America, Europe, and Japan. If the energy crisis is permitted to continue unchecked, some countries will be tempted to secure unilateral benefit through separate arrangements with producers at the expense of the collaboration that offers the only hope for survival over the long term. Such unilateral arrangements are guaranteed to enshrine inflated prices, dilute the bargaining power of the consumers, and perpetuate the economic burden for all. The political consequences of disarray would be pervasive. Traditional patterns of policy may be abandoned because of dependence on a strategic commodity. Even the hopeful process of easing tensions with our adversaries could suffer because it has always presupposed the political unity of the Atlantic nations and Japan.

## The Need for Consumer Cooperation

This need not be our fate. On the contrary, the energy crisis should summon once again the cooperative effort which sustained the policies of North America, Western Europe, and Japan for a quarter century. The Atlantic nations and Japan have the ability, if we have the will, not only to master the energy crisis but to shape from it a new era of creativity and common progress.

In fact we have no other alternative.

The energy crisis is not a problem of transitional adjustment. Our financial institutions and mechanisms of cooperation were never designed to handle so abrupt and artificially sustained a price rise of so essential a commodity with such massive economic and political ramifications. We face a long-term drain which challenges us to common action or dooms us to perpetual crisis.

The problem will not go away by permitting inflation to proceed to redress the balance between oil producers and producers of other goods. Inflation is the most grotesque kind of adjustment, in which all elements in the domestic structure are upset in an attempt to balance one—the oil bill. In any event, the producers could and would respond by raising prices, thereby accelerating all the political and social dangers I have described.

Nor can consumers finance their oil bill by going into debt to the producers without making their domestic structure hostage to the decisions of others. Already, producers have the power to cause major financial upheavals simply by shifting investment funds from one country to another or even from one institution to another. The political implications are ominous and unpredictable. Those who wield financial power would sooner or later seek to dictate the political terms of the new relationships.

Finally, price reductions will not be brought about by consumer/producer dialogue alone. The price of oil will come down only when objective conditions for a reduction are created and not before. Today the producers are able to manipulate prices at will and with apparent impunity. They are not persuaded by our protestations of damage to our societies and economies, because we have taken scant action

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to defend them ourselves. They are not moved
by our alarms about the health of the Western
world which never included and sometimes
exploited them. And, even if the producers
learn eventually that their long-term interest
requires a cooperative adjustment of the price
structure, it would be foolhardy to count on it
or passively wait for it.

We agree that a consumer/producer dialogue is
essential. But it must be accompanied by the
elaboration of greater consumer solidarity. The
heart of our approach must be collaboration
among the consuming nations. No one else will
do the job for us.

A Strategy for Consumer Cooperation

Consumer cooperation has been the central
element of U.S. policy for the past year and a
half.

In April 1973 the United States warned that
energy was becoming a problem of unprecedented
proportions and that collaboration among the
nations of the West and Japan was essential.
In December of the same year, we proposed a
program of collective action. This led to the
Washington Energy Conference in February 1974,
at which the major consumers established new
machinery for consultation, with a mandate to
create, as soon as possible, institutions for the
pooling of effort, risk, and technology.

In April 1974 and then again this fall before
the U.N. General Assembly, President Ford and
I reiterated the American philosophy that global
cooperation offered the only long-term solution
and that our efforts with fellow consumers were
designed to pave the way for constructive dia-
logue with the producers. In September 1974
we convened a meeting of the Foreign and
Finance Ministers of the United Kingdom, Japan,
the Federal Republic of Germany, France, and
the United States to consider further measures
of consumer cooperation. And last month
President Ford announced a long-term national
policy of conservation and development to
reinforce our international efforts to meet the
energy challenge.

In our view, a concerted consumer strategy has
two basic elements:

First, we must create the objective conditions
necessary to bring about lower oil prices. Since

the industrialized nations are the principal con-
sumers, their actions can have a decisive impact.
Determined national action, reinforced by collec-
tive efforts, can transform the market by reducing
our consumption of oil and accelerating develop-
ment of new sources of energy. Over time this
will create a powerful pressure on prices.

Second, in the interim we must protect the
vitality of our economies. Effective action on
conservation will require months; development
of alternative sources will take years. In the
meantime, we will face two great dangers. One
is the threat of a new embargo. The other is
that our financial system may be unable to
manage chronic deficits and to recycle the huge
flows of oil dollars that producers will invest
each year in our economies. A financial collapse-
or the threat of it—somewhere in the system
could result in restrictive monetary, fiscal, and
trade measures and a downward spiral of income
and jobs.

The consumers have taken two major steps to
safeguard themselves against these dangers by
collaborative action.

One of the results of the Washington Energy
Conference was a new permanent institution for
consumer energy cooperation—the International
Energy Agency[IEA]. This agency will oversee
a comprehensive common effort—in conservation,
cooperative research and development, broad new
action in nuclear enrichment, investment in new
energy supplies, and the elaboration of consumer
positions for the consumer/producer dialogue.

Equally significant is the unprecedented agreement
to share oil supplies among principal consumers
in the event of another crisis. The International
Energy Program that grew out of the Washington
Energy Conference and that we shall formally
adopt next week is an historic step toward consumer
solidarity. It provides a detailed blueprint for
common action should either a general or selective
embargo occur. It is a defensive arrangement,
not a challenge to producers. But producing
countries must know that it expresses the deter-
mination of the consumers to shape their own
future and not to remain vulnerable to out-
side pressures.

The International Energy Agency and the Inter-
national Energy Program are the first fruits of
our efforts. But they are only foundations. We
must now bring our blueprint to life.

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## The Five Action Areas

To carry through the overall design, the consum-
ing countries must act in five interrelated areas.

**First**, we must accelerate our national programs of energy conservation, and we must coordinate them to insure their effectiveness.

**Second**, we must press on with the development of new supplies of oil and alternative sources of energy.

**Third**, we must strengthen economic security—
to protect against oil emergencies and to safeguard
the international financial system.

**Fourth**, we must assist the poor nations whose
hopes and efforts for progress have been cruelly
blunted by the oil price rises of the past year.

**Fifth**, on the basis of consumer solidarity we
should enter a dialogue with the producers to
establish a fair and durable long-term relationship.

Let me deal with each of these points in turn.

## Conservation

Conservation and the development of new
sources of energy are basic to the solution: The
industrialized countries as a whole now import
nearly two-thirds of their oil and over one-third
of their total energy. Over the next decade we
must conserve enough oil and develop sufficient
alternative supplies to reduce these imports to
no more than one-fifth of the total energy con-
sumption. This requires that the industrialized
countries manage the growth of their economies
without increasing the volume of their oil
imports.

The effect of this reduced dependence will be
crucial. If it succeeds, the demand of the
industrialized countries for imported oil will
remain static, while new sources of energy will
become available both inside and outside of
OPEC [Organization of Petroleum Exporting
Countries]. OPEC may attempt to offset
efforts to strengthen conservation and develop
alternative sources by deeper and deeper cuts
in production, reducing the income of producers
who seek greater revenues for their development.
The majority of producers will then see their

interest in expanding supply and seeking a new
equilibrium between supply and demand at a
fair price.

Limiting oil imports into industrial countries to
a roughly constant figure is an extremely
demanding goal requiring discipline for conser-
vation and investment for the development of
new energy sources. The United States, which
now imports a third of its oil and a sixth of
its total energy, will have to become largely
self-sufficient. Specifically we shall set as a
target that we reduce our imports over the next
decade from 7 million barrels a day to no more
than 1 million barrels or less than 2 percent of
our total energy consumption.

Conservation is, of course, the most immediate
road to relief. President Ford has stated that
the United States will reduce oil imports by 1
million barrels per day by the end of 1975—a
15 percent reduction.

But one country's reduction in consumption can
be negated if other major consumers do not
follow suit. Fortunately, other nations have
begun conservation programs of their own.
What is needed now is to relate these programs to
common goals and an overall design. Therefore,
the United States proposes an international agree-
ment to set consumption goals. The United
States is prepared to join an international con-
servation agreement that would lead to systematic
and long-term savings on an equitable basis.

As part of such a program, we propose that by
the end of 1975 the industrialized countries
reduce their consumption of oil by 3 million
barrels a day over what it would be otherwise—
a reduction of approximately 10 percent of the
total imports of the group. This reduction can
be carried out without prejudice to economic
growth and jobs by cutting back on wasteful
and inefficient uses of energy both in personal
consumption and in industry. The United States
is prepared to assume a fair share of the total
reduction.

The principal consumer nations should meet
each year to determine appropriate annual targets.

## Alternative Energy Sources

Conservation measures will be effective to the
extent that they are part of a dynamic program

- 5 -

for the development of alternative energy sources. All countries must make a major shift toward nuclear power, coal, gas, and other sources. If we are to assure substantial amounts of new energy in the 1980's we must start now. If the industrialized nations take the steps which are within their power, they will be able to transform energy shortages into energy surpluses by the 1980's.

Project Independence is the American contribution to this effort. It represents the investment of hundreds of billions of dollars, public and private-dwarfing our moon-landing program and the Manhattan Project, two previous examples of American technology mobilized for a great goal. Project Independence demonstrates that the United States will never permit itself to be held hostage to a strategic commodity.

Project Independence will be complemented by an active policy of supporting cooperative projects with other consumers. The International Energy Agency to be established next week is well designed to launch and coordinate such programs. Plans are already drawn up for joint projects in coal technology and solar energy. The United States is prepared to expand these collective activities substantially to include such fields as uranium enrichment.

The area of controlled thermonuclear fusion is particularly promising for joint ventures for it would make available abundant energy from virtually inexhaustible resources. The United States is prepared to join with other IEA members in a broad program of joint planning, exchange of scientific personnel, shared use of national facilities, and the development of joint facilities to accelerate the advent of fusion power.

Finally, we shall recommend to the IEA that it create a common fund to finance or guarantee investment in promising energy projects, in participating countries and in those ready to cooperate with the IEA on a long-term basis.

## Financial Solidarity

The most serious immediate problem facing the consuming countries is the economic and financial strain resulting from high oil prices. Producer revenues will inevitably be reinvested in the industrialized world; there is no other

outlet. But they will not necessarily flow back to the countries whose balance-of-payments problems are most acute. Thus many countries will remain unable to finance their deficits and all will be vulnerable to massive sudden withdrawals.

The industrialized nations, acting together, can correct this imbalance and reduce their vulnerability. Just as producers are free to choose where they place their funds, so the consumers must be free to redistribute these funds to meet their own needs and those of the developing countries.

Private financial institutions are already deeply involved in this process. To buttress their efforts, central banks are assuring that necessary support is available to the private institutions-particularly since so much of the oil money has been invested in relatively short-term obligations. Private institutions should not bear all the risks indefinitely, however. We cannot afford to test the limits of their capacity.

Therefore, the governments of Western Europe, North America, and Japan should move now to put in place a system of mutual support that will augment and buttress private channels whenever necessary. The United States proposes that a common loan and guarantee facility be created to provide for redistributing up to $25 billion in 1975, and as much again the next year if necessary. The facility will not be a new aid institution to be funded by additional taxes. It will be a mechanism for recycling, at commercial interest rates, funds flowing back to the industrial world from the oil producers. Support from the facility would not be automatic, but contingent on full resort to private financing and on reasonable self-help measures. No country should expect financial assistance that is not moving effectively to lessen its dependence on imported oil.

Such a facility will help assure the stability of the entire financial system and the creditworthiness of participating governments; in the long run it would reduce the need for official financing. If implemented rapidly it would:

- Protect financial institutions from the excessive risks posed by an enormous volume of funds beyond their control or capacity;

- 6 -

(cc)

- Insure that no nation is forced to pursue disruptive and restrictive policies for lack of adequate financing;

- Assure that no consuming country will be compelled to accept financing on intolerable political or economic terms; and

- Enable each participating country to demonstrate to people that efforts and sacrifices are being shared equitably—that the national survival is buttressed by consumer solidarity.

We have already begun discussion of this proposal; it was a principal focus of the meeting of the Finance and Foreign Ministers of the Federal Republic of Germany, the United States, Japan, the United Kingdom, and France in September in Washington.

## The Developing World

The strategy I have outlined here is also essential to ease the serious plight of many developing countries. All consuming nations are in need of relief from excessive oil prices, but the developing world cannot wait for the process to unfold. For them, the oil crisis has already produced an emergency. The oil bill has wiped out the external assistance of the poorer developing countries, halted agricultural and industrial development, and inflated the prices for their most fundamental needs, including food. Unlike the industrial nations, developing countries do not have many options of self-help; their margin for reducing energy consumption is limited; they have little capacity to develop alternative sources.

For both moral and practical reasons, we cannot permit hopes for development to die, or cut ourselves off from the political and economic needs of so great a part of mankind. At the very least, the industrial nations must maintain the present level of their aid to the developing world and take special account of its needs in the multilateral trade negotiations.

We must also look for ways to help in the critical area of food. At the World Food Conference I outlined a strategy for meeting the food and agricultural needs of the least developed countries. The United States is

uniquely equipped to make a contribution in this field and will make a contribution worthy of its special strength.

A major responsibility must rest with those oil producers whose actions aggravated the problems of the developing countries and who because of their new-found wealth now have greatly increased resources for assistance.

But even after all presently available resources have been drawn upon, an unfinanced payment of deficit of between $1 and $2 billion will remain for the 25 or 30 countries most seriously affected by high oil prices. It could grow in 1976.

We need new international mechanisms to meet this deficit. One possibility would be to supplement regular International Monetary Fund (IMF) facilities by the creation of a separate trust fund managed by the IMF to lend at interest rates recipient countries could afford. Funds would be provided by national contributions from interested countries, including especially oil producers. The IMF itself could contribute the profits from IMF gold sales undertaken for this purpose. We urge the Interim Committee of the IMF and the joint IMF/IBRD Development Committee to examine this proposal on an urgent basis.

## Relations With Producers

When the consumers have taken some collective steps toward a durable solution — that is, measures to further conservation and the development of new supplies — and for our interim protection through emergency planning and financial solidarity, the conditions for a constructive dialogue with producers will have been created.

We do not see consumer cooperation as antagonistic to consumer/producer cooperation. Rather, we view it as a necessary prerequisite to a constructive dialogue as do many of the producers themselves who have urged the consumers to curb inflation, conserve energy, and preserve international financial stability.

A dialogue that is not carefully prepared will compound the problems which it is supposed to solve. Until the consumers develop a coherent approach to their own problems, discussions with the producers will only repeat in a multilateral

- 7 -

forum the many bilateral exchanges which are
already taking place. When consumer solidarity
has been developed and there are realistic pros-
pects for significant progress, the United States
is prepared to participate in a consumer/producer
meeting.

The main subject of such a dialogue must in-
evitably be price. Clearly the stability of the
system on which the economic health of even
the producers depends requires a price reduction.
But an equitable solution must also take account
of the producers' need for long-term income
security and economic growth. This we are pre-
pared to discuss sympathetically.

In the meantime the producers must recognize
that further increases in the prices while this
dialogue is being prepared, and when the sys-
tem has not even absorbed the previous price
rises, would be disruptive and dangerous.

On this basis — consumer solidarity in conserva-
tion, the development of alternative supplies
and financial security, producer policies of
restraint and responsibility, and a mutual recog-
nition of interdependence and a long-term com-
mon interest — there can be justifiable hope
that a consumer/producer dialogue will bring
an end to the crisis that has shaken the world
to its economic foundations.

The Next Step

It is now a year and a month since the oil crisis
began. We have made a good beginning, but the
major test is still ahead.

The United States in the immediate future intends
to make further proposals to implement the program
I have outlined.

Next week, we will propose to the new IEA a
specific program for cooperative action in conser-
vation, the development of new supplies, nuclear
enrichment, and the preparation of consumer
positions for the eventual producer/consumer dia-
logue.

Simultaneously, Secretary Simon will spell out
our ideas for financial solidarity in detail, and
our representative at the Group of Ten will present
them to his colleagues.

We will, as well, ask the Chairman of the Interim
Committee of the IMF as well as the new joint
IMF/IBRD Development Committee to consider
an urgent program for concessional assistance to
the poorest countries.

Yesterday, Secretary Morton announced an acceler-
erated program for domestic oil exploration and
exploitation.

President Ford will submit a detailed and compre-
hensive energy program to the new Congress.

Conclusion

Let there be no doubt, the energy problem is
soluble. It will overwhelm us only if we retreat
from its reality. But there can be no solution
without the collective efforts of the nations of
North America, Western Europe, and Japan — the
very nations whose cooperation over the course of
more than two decades has brought prosperity and
peace to the postwar world. Nor in the last analy-
sis can there be a solution without a dialogue with
the producers carried on in a spirit of reconcilia-
tion and compromise.

A great responsibility rests upon America, for
without our dedication and leadership no progress
is possible. This Nation, for many years, has carried
the major responsibility for maintaining the peace,
feeding the hungry, sustaining international economic
growth, and inspiring those who would be free. We
did not seek this heavy burden, and we have often
been tempted to put it down. But we have never
done so, and we cannot afford to do so now —
or the generations that follow us will pay the
price for our self-indulgence.

For more than a decade America has been torn by
war, social and generational turbulence, and con-
stitutional crisis. Yet the most striking lesson
from these events is our fundamental stability and
strength. During our upheavals, we still managed
to ease tensions around the globe. Our people
and our institutions have come through our do-
mestic travails with an extraordinary resiliency.
And now, once again, our leadership in technol-
ogy, agriculture, industry, and communications
has become vital to the world's recovery.

Woodrow Wilson once remarked that "wrapped
up with the liberty of the world is the continuous

- 8 -

perfection of that liberty by the concerted
powers of all civilized peoples." That, in the
last analysis, is what the energy crisis is all about.
For it is our liberty that in the end is at stake
and it is only through the concerted action of
the industrial democracies that it will be
maintained.

The dangers that Woodrow Wilson and his genera-
tion faced were, by today's standards, relatively
simple and straightforward. The dangers we face
now are more subtle and more profound. The
context in which we act is more complex than

even the period following the Second World War.
Then we drew inspiration from stewardship,
now we must find it in partnership. Then
we and our allies were brought together by an
external threat, now we must find it in our devo-
tion to the political and economic institutions of
free peoples working together for a common goal.
Our challenge is to maintain the cooperative spirit
among like-minded nations that has served us
so well for a generation and to prove, as Woodrow
Wilson said in another time and place, that "the
highest and best form of efficiency is the spon-
taneous cooperation of a free people."

DEPARTMENT OF STATE, U.S.A.
WASHINGTON, D.C. 20520

POSTAGE AND FEES PAID
DEPARTMENT OF STATE
STA-501

# The Energy Crisis: Strategy for Cooperative Action

Address by Secretary Kissinger ¹

A generation ago the Western world faced a historic crisis—the breakdown of international order in the wake of world war. Threatened by economic chaos and political upheaval, the nations of the West built a system of security relations and cooperative institutions that have nourished our safety, our prosperity, and our freedom ever since. A moment of grave crisis was transformed into an act of lasting creativity.

What will be our response?

I speak, of course, of the energy crisis. Tonight I want to discuss how the administration views this problem, what we have been doing about it, and where we must now go. I will stress two themes that this government has emphasized for a year and a half:

- First, the problem is grave but it is soluble.

- Second, international collaboration, particularly among the industrial nations of North America, Western Europe, and Japan, is an inescapable necessity.

The economic facts are stark. By 1973, worldwide industrial expansion was outstripping energy supply; the threat of shortages was already real. Then, without warn-

- The industrial nations now face a collective payments deficit of $40 billion, the largest in history and beyond the experience or capacity of our financial institutions. We suffer simultaneously a slowdown of production and a speedup of an inflation that was already straining the ability of governments to control.

¹ Made before a University of Chicago Board of Trustees banquet at Chicago, Ill., on Nov. 14 (text from press release 500).

December 2, 1974

749

The potentially most serious international consequences could occur in relations between North America, Europe, and Japan. If the energy crisis is permitted to continue unchecked, some countries will be tempted to secure unilateral benefit through separate arrangements with producers at the expense of the collaboration that offers the only hope for survival over the long term. Such unilateral arrangements are guaranteed to enshrine inflated prices, dilute the bargaining power of the consumers, and perpetuate the economic burden for all. The political consequences of disarray would be pervasive. Traditional patterns of policy may be abandoned because of dependence on a strategic commodity. Even the hopeful process of easing tensions with our adversaries could suffer, because it has always presupposed the political unity of the Atlantic nations and Japan.

The problem will not go away by permitting inflation to proceed to redress the balance between oil producers and producers of other goods. Inflation is the mostgrotesque kind of adjustment, in which all other elements in the domestic structure are upset in an attempt to balance one—the oil bill. In any event, the producers could and would respond by raising prices, thereby accelerating all the political and social dangers I have described.

Finally, price reductions will not be brought about by consumer-producer dialogue alone. The price of oil will come down only when objective conditions for a reduction are created, and not before. Today the producers are able to manipulate prices at will and with apparent impunity. They are

750

Department of State Bulletin

not persuaded by our protestations of damage to our societies and economies, because we have taken scant action to defend them ourselves. They are not moved by our alarms about the health of the Western world, which never included and sometimes exploited them. And even if the producers learn eventually that their long-term interest requires a cooperative adjustment of the price structure, it would be foolhardy to count on it or passively wait for it.

We agree that a consumer-producer dialogue is essential. But it must be accompanied by the elaboration of greater consumer solidarity. The heart of our approach must be collaboration among the consuming nations. No one else will do the job for us.

## Blueprint for Consumer Cooperation

In April 1973 the United States warned that energy was becoming a problem of unprecedented proportions and that collaboration among the nations of the West and Japan was essential. In December of the same year, we proposed a program of collective action. This led to the Washington Energy Conference in February 1974, at which the major consumers established new machinery for consultation with a mandate to create, as soon as possible, institutions for the pooling of effort, risk, and technology.

In April 1974 and then again this fall before the U.N. General Assembly, President Ford and I reiterated the American philosophy that global cooperation offered the only long-term solution and that our efforts with fellow consumers were designed to pave the way for constructive dialogue with the producers. In September 1974 we convened a meeting of the Foreign and Finance Ministers of the United Kingdom, Japan, the Federal Republic of Germany, France, and the United States to consider further measures of consumer cooperation. And last month President Ford announced a long-term national policy of conservation and

- **First,** we must create the objective conditions necessary to bring about lower oil prices. Since the industrialized nations are the principal consumers, their actions can have a decisive impact. Determined national action, reinforced by collective efforts, can transform the market by reducing our consumption of oil and accelerating development of new sources of energy. Over time this will create a powerful pressure on prices.

- **Second,** in the interim we must protect the vitality of our economies. Effective action on conservation will require months; development of alternative sources will take years. In the meantime, we will face two great dangers. One is the threat of a new embargo. The other is that our financial system may be unable to manage chronic deficits and to recycle the huge flows of oil dollars that producers will invest each year in our economies. A financial collapse—or the threat of it—somewhere in the system could result in restrictive monetary, fiscal, and trade measures and a downward spiral of income and jobs.

One of the results of the Washington Energy Conference was a new permanent institution for consumer energy cooperation —the International Energy Agency (IEA). This agency will oversee a comprehensive common effort—in conservation, cooperative research and development, broad new action in nuclear enrichment, investment in new energy supplies, and the elaboration of consumer positions for the consumer-producer dialogue.

December 2, 1974

751

next week is a historic step toward consumer solidarity. It provides a detailed blueprint for common action should either a general or selective embargo occur. It is a defensive arrangement, not a challenge to producers. But producing countries must know that it expresses the determination of the consumers to shape their own future and not to remain vulnerable to outside pressures.

The International Energy Agency and the International Energy Program are the first fruits of our efforts. But they are only foundations. We must now bring our blueprint to life.

To carry through the overall design, the consuming countries must act in five interrelated areas:

- First, we must accelerate our national programs of energy conservation, and we must coordinate them to insure their effectiveness.

- Second, we must press on with the development of new supplies of oil and alternative sources of energy.

- Third, we must strengthen economic security—to protect against oil emergencies and to safeguard the international financial system.

- Fourth, we must assist the poor nations whose hopes and efforts for progress have been cruelly blunted by the oil price rises of the past year.

- Fifth, on the basis of consumer solidarity we should enter a dialogue with the producers to establish a fair and durable long-term relationship.

## Coordination of Conservation Programs

Conservation and the development of new sources of energy are basic to the solution. The industrialized countries as a whole now import nearly two-thirds of their oil and over one-third of their total energy. Over the next decade, we must conserve enough oil and develop sufficient alternative supplies to reduce these imports to no more than

one-fifth of the total energy consumption. This requires that the industrialized countries manage the growth of their economies without increasing the volume of their oil imports.

The effect of this reduced dependence will be crucial. If it succeeds, the demand of the industrialized countries for imported oil will remain static while new sources of energy will become available both inside and outside of OPEC [Organization of Petroleum Exporting Countries]. OPEC may attempt to offset efforts to strengthen conservation and develop alternative sources by deeper and deeper cuts in production, reducing the income of producers who seek greater revenues for their development. The majority of producers will then see their interest in expanding supply and seeking a new equilibrium between supply and demand at a fair price.

Limiting oil imports into industrial countries to a roughly constant figure is an extremely demanding goal requiring discipline for conservation and investment for the development of new energy sources. The United States, which now imports a third of its oil and a sixth of its total energy, will have to become largely self-sufficient. Specifically, we shall set as a target that we reduce our imports over the next decade from 7 million barrels a day to no more than 1 million barrels, or less than 2 percent of our total energy consumption.

Conservation is of course the most immediate road to relief. President Ford has stated that the United States will reduce oil imports by 1 million barrels per day by the end of 1975—a 15 percent reduction.

But one country's reduction in consumption can be negated if other major consumers do not follow suit. Fortunately, other nations have begun conservation programs of their own. What is needed now is to relate these programs to common goals and an overall design. Therefore, the United States proposes an international agreement to set consumption goals. The United States is prepared to join an international conservation agreement that would lead to systematic and long-term savings on an equitable basis.

752

Department of State Bulletin

As part of such a program, we propose that by the end of 1975 the industrialized countries reduce their consumption of oil by 3 million barrels a day over what it would be otherwise—a reduction of approximately 10 percent of the total imports of the group. This reduction can be carried out without prejudice to economic growth and jobs by cutting back on wasteful and inefficient uses of energy both in personal consumption and in industry. The United States is prepared to assume a fair share of the total reduction.

## Development of Alternative Energy Sources

Conservation measures will be effective to the extent that they are part of a dynamic program for the development of alternative energy sources. All countries must make a major shift toward nuclear power, coal, gas, and other sources. If we are to assure substantial amounts of new energy in the 1980's, we must start now. If the industrialized nations take the steps which are within their power, they will be able to transform energy shortages into energy surpluses by the 1980's.

Project Independence is the American contribution to this effort. It represents the investment of hundreds of billions of dollars, public and private—dwarfing our moon-landing program and the Manhattan Project, two previous examples of American technology mobilized for a great goal. Project Independence demonstrates that the United States will never permit itself to be held hostage to a strategic commodity.

The area of controlled thermonuclear fusion is particularly promising for joint ventures, for it would make available abundant energy from virtually inexhaustible resources. The United States is prepared to join with other IEA members in a broad program of joint planning, exchange of scientific personnel, shared use of national facilities, and the development of joint facilities to accelerate the advent of fusion power.

Finally, we shall recommend to the IEA that it create a common fund to finance or guarantee investment in promising energy projects in participating countries and in those ready to cooperate with the IEA on a long-term basis.

## Financial Solidarity

The most serious immediate problem facing the consuming countries is the economic and financial strain resulting from high oil prices. Producer revenues will inevitably be reinvested in the industrialized world; there is no other outlet. But they will not necessarily flow back to the countries whose balance of payments problems are most acute. Thus many countries will remain unable to finance their deficits and all will be vulnerable to massive sudden withdrawals.

Private financial institutions are already deeply involved in this process. To buttress their efforts, central banks are assuring that necessary support is available to the private institutions, particularly since so much of the oil money has been invested in relatively short-term obligations. Private institutions should not bear all the risks indefinitely, however. We cannot afford to test the limits of their capacity.

Therefore the governments of Western Europe, North America, and Japan should move now to put in place a system of mutual support that will augment and buttress private

December 2, 1974

753

channels whenever necessary. The United
States proposes that a common loan and guar-
antee facility be created to provide for redis-
tributing up to $25 billion in 1975, and as
much again the next year if necessary.

The facility will not be a new aid institu-
tion to be funded by additional taxes. It will
be a mechanism for recycling, at commercial
interest rates, funds flowing back to the in-
dustrial world from the oil producers. Sup-
port from the facility would not be automatic,
but contingent on full resort to private fi-
nancing and on reasonable self-help meas-
ures. No country should expect financial as-
sistance that is not moving effectively to
lessen its dependence on imported oil.

Such a facility will help assure the stability
of the entire financial system and the credit-
worthiness of participating governments; in
the long run it would reduce the need for of-
ficial financing. If implemented rapidly it
would:

-Protect financial institutions from the excessive risks posed by an enormous volume of funds beyond their control or capacity;

-Insure that no nation is forced to pursue disruptive and restrictive policies for lack of adequate financing;

-Assure that no consuming country will
be compelled to accept financing on intolera-
ble political or economic terms; and

-Enable each participating country to
demonstrate to people that efforts and sacri-
fices are being shared equitably—that the
national survival is buttressed by consumer
solidarity.

We have already begun discussion of this
proposal; it was a principal focus of the
meeting of the Foreign and Finance Minis-
ters of the Federal Republic of Germany, the
United States, Japan, the United Kingdom,
and France in September in Washington.

Easing the Plight of Developing Countries

prices, but the developing world cannot wait
for the process to unfold. For them, the oil
crisis has already produced an emergency.
The oil bill has wiped out the external as-
sistance of the poorer developing countries,
halted agricultural and industrial develop-
ment, and inflated the prices for their most
fundamental needs, including food. Unlike the
industrial nations, developing countries do
not have many options of self-help; their
margin for reducing energy consumption is
limited; they have little capacity to develop
alternative sources.

For both moral and practical reasons, we
cannot permit hopes for development to die
or cut ourselves off from the political and
economic needs of so great a part of mankind.
At the very least, the industrial nations must
maintain the present level of their aid to the
developing world and take special account of
its needs in the multilateral trade negotia-
tions.

We must also look for ways to help in
the critical area of food. At the World Food
Conference, I outlined a strategy for meet-
ing the food and agricultural needs of the
least developed countries. The United States
is uniquely equipped to make a contribution
in this field and will make a contribution
worthy of its special strength.

A major responsibility must rest with
those oil producers whose actions aggra-
vated the problems of the developing coun-
tries and who, because of their new-found
wealth, now have greatly increased re-
sources for assistance.

But even after all presently available re-
sources have been drawn upon, an un-
financed payments deficit of between $1 and
$2 billion will remain for the 25 or 30 coun-
tries most seriously affected by high oil
prices. It could grow in 1976.

We need new international mechanisms to
meet this deficit. One possibility would be
to supplement regular International Mone-
tary Fund facilities by the creation of a
separate trust fund managed by the IMF to
lend at interest rates recipient countries
could afford. Funds would be provided by

754

Department of State Bulletin

(L)

national contributions from interested countries, including especially oil producers. The IMF itself could contribute the profits from IMF gold sales undertaken for this purpose. We urge the Interim Committee of the IMF and the joint IMF-IBRD [International Bank for Reconstruction and Development] Development Committee to examine this proposal on an urgent basis.

## Constructive Dialogue With Producers

When the consumers have taken some collective steps toward a durable solution—that is, measures to further conservation and the development of new supplies—and for our interim protection through emergency planning and financial solidarity, the conditions for a constructive dialogue with producers will have been created.

We do not see consumer cooperation as antagonistic to consumer-producer cooperation. Rather we view it as a necessary prerequisite to a constructive dialogue, as do many of the producers themselves, who have urged the consumers to curb inflation, conserve energy, and preserve international financial stability.

A dialogue that is not carefully prepared will compound the problems which it is supposed to solve. Until the consumers develop a coherent approach to their own problems, discussions with the producers will only repeat in a multilateral forum the many bilateral exchanges which are already taking place. When consumer solidarity has been developed and there are realistic prospects for significant progress, the United States is prepared to participate in a consumer-producer meeting.

The main subject of such a dialogue must inevitably be price. Clearly the stability of the system on which the economic health of even the producers depends requires a price reduction. But an equitable solution must also take account of the producers' need for long-term income security and economic growth. This we are prepared to discuss sympathetically.

In the meantime the producers must recognize that further increases in the prices while this dialogue is being prepared and when the system has not even absorbed the previous price rises would be disruptive and dangerous.

On this basis—consumer solidarity in conservation, the development of alternative supplies, and financial security; producer policies of restraint and responsibility; and a mutual recognition of interdependence and a long-term common interest—there can be justifiable hope that a consumer-producer dialogue will bring an end to the crisis that has shaken the world to its economic foundations.

## The Next Step

Next week, we will propose to the new International Energy Agency a specific program for cooperative action in conservation, the development of new supplies, nuclear enrichment, and the preparation of consumer positions for the eventual consumer-producer dialogue.

Simultaneously, Secretary [of the Treasury William E.] Simon will spell out our ideas for financial solidarity in detail, and our representative at the Group of Ten will present them to his colleagues.

We will, as well, ask the Chairman of the Interim Committee of the IMF as well as the new joint IMF-IBRD Development Committee to consider an urgent program for concessional assistance to the poorest countries.

Yesterday, Secretary [of the Interior Rogers C. B.] Morton announced an accelerated program for domestic oil exploration and exploitation.

President Ford will submit a detailed and comprehensive energy program to the new Congress.

December 2, 1974

755

Let there be no doubt, the energy problem is soluble. It will overwhelm us only if we retreat from its reality. But there can be no solution without the collective efforts of the nations of North America, Western Europe, and Japan—the very nations whose cooperation over the course of more than two decades has brought prosperity and peace to the postwar world. Nor, in the last analysis, can there be a solution without a dialogue with the producers carried on in a spirit of reconciliation and compromise.

A great responsibility rests upon America, for without our dedication and leadership no progress is possible. This nation for many years has carried the major responsibility for maintaining the peace, feeding the hungry, sustaining international economic growth, and inspiring those who would be free. We did not seek this heavy burden, and we have often been tempted to put it down. But we have never done so, and we cannot afford to do so now—or the generations that follow us will pay the price for our self-indulgence.

For more than a decade America has been torn by war, social and generational turbulence, and constitutional crisis. Yet the most striking lesson from these events is our fundamental stability and strength. During our upheavals, we still managed to ease tensions around the globe. Our people and our institutions have come through our domestic travails with an extraordinary resiliency.

And now, once again, our leadership in technology, agriculture, industry, and communications has become vital to the world's recovery.

Woodrow Wilson once remarked that "wrapped up with the liberty of the world is the continuous perfection of that liberty by the concerted powers of all civilized people." That, in the last analysis, is what the energy crisis is all about. For it is our liberty that in the end is at stake and it is only through the concerted action of the industrial democracies that it will be maintained.

The dangers that Woodrow Wilson and his generation faced were, by today's standards, relatively simple and straightforward. The dangers we face now are more subtle and more profound. The context in which we act is more complex than even the period following the Second World War. Then we drew inspiration from stewardship; now we must find it in partnership. Then we and our allies were brought together by an external threat, now we must find it in our devotion to the political and economic institutions of free peoples working together for a common goal. Our challenge is to maintain the cooperative spirit among like-minded nations that has served us so well for a generation and to prove, as Woodrow Wilson said in another time and place, that "The highest and best form of efficiency is the spontaneous cooperation of a free people."

756

Department of State Bulletin

FOR IMMEDIATE RELEASE

NOVEMBER 15, 1974

OFFICE OF THE WHITE HOUSE PRESS SECRETARY

THE WHITE HOUSE

PRESS CONFERENCE
OF
HENRY A. KISSINGER,
SECRETARY OF STATE
AND
ASSISTANT TO THE PRESIDENT
FOR NATIONAL SECURITY AFFAIRS

3:02 P.M. EST

MR. NESSEN: Ladies and gentlemen, in response to your request to talk to Dr. Kissinger about the Far East trip, here is Dr. Kissinger. This is all on the record for immediate release, no live broadcast and those are the only rules.

SECRETARY KISSINGER: If I had known there was no live broadcast I wouldn't have come here. (Laughter)

Let me make a few very brief remarks about the purpose of the trip and then I will take your questions on that or any other subject.

You will remember that a visit to Japan by the President was foreseen in a Japanese-American communique last year. It was announced to take place by the end of 1974 and it was reaffirmed on a number of occasions afterwards. It will be an historic event in that it is going to be the first visit by an American President to Japan, reflecting the great importance we attach to the relationship with Japan.

In recent years, our relations with Japan have undergone a series of adjustments brought about by new conditions in the Far East, the growing strength and self-confidence of Japan and the emergence of a pattern of equality. We consider this relationship excellent.

We believe also that the future stability of the Pacific area depends importantly on a close understanding between the United States and Japan and which is symbolized by the visit of the President and by the occasion that this will

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- 2 -

give for full exchanges with Japanese leaders.

The President called in the Japanese Ambassador on the first afternoon of the day that he was sworn in as President. On that occasion, in affirming the continuity of American foreign policy, he also specifically affirmed that he would meet the commitment of his predecessor to visit Japan by the end of 1974.

So, this trip was planned as one of the first acts of President Ford and we consider it essential for the overall design of foreign policy. While being in Japan, we expect to review with the Japanese leaders bilateral relations of Japan and the United States, which, I repeat, we consider excellent, as well as to review the international situation and in order to make certain that we understand each other as to basic principles and objectives.

The visit to Korea is a natural complement to the visit to Japan. We could not be in that area and not visit Korea without raising grave doubts that our commitment to Korea was still what it has traditionally been. The visit to Vladivostok reflects the necessity of the leaders of the two nuclear superpowers to be in frequent touch with each other, a necessity which is particularly acute after a change of Administration in the United States, to enable the two leaders to have an opportunity to exchange views on the whole range of our relationships, on possible difficulties that may arise, but even more importantly, on how to give momentum to the commitment to detente that they have both expressed.

This is the basic purpose of the trip, and now I will be glad to take your questions.

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- 3 -

Q Mr. Secretary, with respect to the difficulties that may arise, before you get into the questions on the trip, I would like to ask what your assessment is of the possibility of an outbreak of warfare in the Middle East now, in view of a spate of reports yesterday and today from the area about possible preemptive Israeli attacks, the unloading of huge amounts of Soviet armaments in Syria, the visits to the Golan Heights and that. Could you give us your opinion?

SECRETARY KISSINGER: Obviously, we have seen these reports, and we are checking into them on an urgent basis. We cannot believe that any of the parties in the Middle East would resort to war under these circumstances.

We cannot believe that any major power would deliberately encourage war in a situation as serious and as potentially explosive as that in the Middle East. The United States would certainly oppose any idea that the problems of the Middle East can be solved by military action and will use its influence with all parties to prevent this from arising. It expects that all other countries that are in a position to do so would exercise a similar restraining influence.

So, we think that these reports are probably -- if they are not exaggerated as to the facts, we do not believe that military actions are imminent.

Q Mr. Secretary, another point on your travels will be Peking this year, and it has been almost a year since you were there before. Do you expect this visit to bring further progress towards normalization of relations or anything of a substantive sort?

SECRETARY KISSINGER: The relationships between the United States and the People's Republic of China are good; and they are progressing in the manner that has been foreseen on our previous visits, including the last one.

Every trip is within the context of promoting the normalization of relationships and to represent a step towards the normalization of relationships. I do not expect any dramatic announcements as a result of this trip, but I expect a continuation of the steady progress that has marked our previous contacts and a further improvement of our relationship.

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Q Mr. Secretary, do you think it is inevitable that Israel is going to have to deal with Mr. Arafat and the PLO in subsequent negotiations now that a certain amount of recognition in stature has been given the organization by Rabat and by the General Assembly, and if so, under what conditions would it be possible for Israel to do this?

SECRETARY KISSINGER: As you know, I expressed the view of the Administration, which has not changed, that the proper negotiation, or the best negotiation for the future of the West Bank was between Jordan and Israel, and the United States had used its influence to bring about such a negotiation.

As to any other parties that might negotiate, this is entirely a decision for Israel and for any of the other parties that may be involved, and it is not a matter on which the United States will give advice as to the conditions in which such negotiations may be appropriate, if indeed it is appropriate.

Q Mr. Secretary, could you give us your appraisal of the Arab and of the Israeli reactions to the fact that more than a month elapsed before General Brown apologized for his remarks at Duke and he was only mildly reprimanded by the President?

SECRETARY KISSINGER: I frankly have no view as to what the Arab or Israeli reaction to this is. It is my understanding that the President expressed his opposition to the views as expressed by General Brown, and this certainly reflects the view of the Administration.

We don't consider this a subject of foreign policy decisions, because, clearly, the Administration's view has been repeatedly enunciated and has been in no way affected by any remarks that were made by any military leader.

Q Mr. Secretary, isn't the President taking a sizeable risk by traveling abroad like this at a time when there is no Vice-President in place?

SECRETARY KISSINGER: You have to remember that the President committed himself to this trip on his first day in office at a time when it was considered inconceivable that a Vice-President would not be confirmed by this time.

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To cancel a trip because a Vice-President hasn't been confirmed would give an impression of domestic instability that would in itself be a foreign policy factor, and, therefore, the President decided to continue with a trip, which we consider extremely important in its own right under conditions which could not be foreseen at the time the decision was made.

Q Mr. Secretary, you said a moment ago that you couldn't believe -- or words to that effect -- that any major power would deliberately encourage war in the Middle East?

SECRETARY KISSINGER: That is correct.

Q I assume you might mean the Soviet Union.
I would like to ask whether you have any information or evi-
dence to indicate that the Soviet Union might be encouraging
war?

SECRETARY KISSINGER: We have no evidence that the Soviet Union is encouraging war, and, as I have said, we are using all our influence with both parties and we are certainly calling to the attention of all other countries the importance of restraint in the Middle East.

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Q Is the Soviet Union using its influence in a positive direction in your opinion, sir?

SECRETARY KISSINGER: This recent flare-up has only come to our attention in the last few hours and it isn't clear to us yet what it means and I would warn against over-exaggerating the imminence of any conflict there. But we are certainly calling it to the attention of the Soviet Union.

Q Mr. Secretary, could you give us a more thorough view of your current appraisal of the Middle East situation as the President and you are about to depart for a considerable period of time? Do you have any special anxiety that there will be a hiatus here during this period when we are now at a stage of seeing considerable reports of imminent action? What is your basic view of the hazard here?

SECRETARY KISSINGER: The President and I met with Secretary Schlesinger this morning and we reviewed contingencies which might arise and mechanisms of how to deal with them if they should arise. I repeat, this is a normal precaution. We do not expect the contingencies to arise. We do not believe that prior to a meeting between the General Secretary and the President the Soviet Union would be encouraging military action in the Middle East and we cannot believe that any of the parties in the Middle East would be so reckless as to engage in military action.

So, while we recognize that certain military precautions have been taken by both sides and while there is always a risk that precautions could get out of hand, we do not think a war is likely. If it should occur, we have made contingency plans for dealing with it. Communications are, of course, very rapid and we would deal with it on that basis.

Q Mr. Secretary, also on the Middle East, does the United States detect any change or moderation in the statements made by Mr. Arafat representing the Palestinians? Does that make any difference as far as the United States is concerned? And also, what are your plans on traveling to the Middle East?

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Q Mr. Secretary, I would like to ask a couple of questions about your oil speech last night. Why did you say, "In the meantime, we will face two great dangers. One is the threat of a new embargo." And secondly, what kind of a response can you expect from other consuming nations when the United States, itself, has not yet come up with a serious program for conservation or developing alternate sources of energy?

SECRETARY Kissinger: With respect to the first question, it is obvious that the possibility of another embargo exists and the emergency program that will be agreed to next week -- that has been agreed to but will be formally adopted next week -- provides for precisely this contingency. We went through an embargo last year and the possibility of an embargo cannot be ignored. Therefore, in order to enable the consuming nations to withstand political pressures, we consider this program is of the first significance.

Secondly, in my speech which I went over carefully with the President before I gave it, we stated the goals that have to be met in order to meet the objectives that were set in the speech, the objectives being to reduce dependence on imported oil, to create a situation in which alternative sources, coupled with conservation restraints and financial solidarity, bring about a reduction in the price of oil.

And in any event, the cooperation among the consumers is essential whether or not the price of oil comes down. In fact, it is even more essential if the price of oil does not come down. The goals that I stated are the Administration goals. The methods by which they are reached, whether they are done by voluntary restraints or by other measures will be reflected in Presidential speeches to the Congress.

In any event, the United States has expressed its readiness in this speech to accept internationally binding consumption restraints and therefore the question of whether or not we are now engaged in them is really irrelevant to the program that has been set forth which we are prepared to undertake on an international basis.

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Q Mr. Secretary, I would like to ask a question about the wisdom and timing of the Far East trip specifically with regard to visiting Prime Minister Tanaka and his problems at home. I would like, if you would, please, to address yourself to the fact that Mr. Tanaka may in fact be a lame duck Prime Minister. Also, if you would address yourself to the fact, please, that President Ford will be visiting Korea where the Government has come under severe criticism for being rather oppressive, contrary to Democratic principles, and if you would, sir, please address yourself to the site of the meeting place in the Soviet Union which is either on or close to disputed territory with the Chinese.

SECRETARY KISSINGER: With respect to the first question, the visit to any country is to the Government and not to any particular individual. We don't express any view as to what difficulties Prime Minister Tanaka may or may not be in, and therefore, I don't accept the basic premise of your question.

But the fact of the matter is that the major figures in Japan with whom we will be dealing, have shown considerable stability in terms of their participation in the Government, and therefore, we believe that whatever may happen in Japan -- and we do not accept that the contingency you foresee is inevitable -- that therefore the trip should go forward.

Secondly, it is clear that the President of the Republic of Korea is being criticized. We did not think that this outweighs the consideration that I have mentioned before, that the failure to visit Korea might be understood as a reduction in the degree of the American commitment to the security of South Korea, which could have serious international consequence.

With respect to the site of the meeting with the Soviet Union, this is a matter that has been discussed and we have received no complaints from the Chinese side.

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Q Mr. Secretary, without disclosing your contingency plans, we have been reading about alleged NSC memos and so forth, foreseeing a possibility that the U.S. might go in this time if there was another Arab-Israeli conflict. Do you foresee any possibility?

SECRETARY KISSINGER: Do I personally foresee any possibility?

Q Yes, of the U.S. going into a Middle East war.

SECRETARY KISSINGER: First of all, I don't foresee a Middle East war. Secondly, I don't confirm that there are any NSC contingency plans for the United States to go into an Arab-Israeli war. The United States' attitude will be what it has been in previous wars, and our attitude is basically to avoid a conflict and to bring it to the most rapid conclusion possible if there should be one, but we believe there is every possibility of avoiding a conflict now and therefore, there is no sense speculating on what we might do.

But it is clear that the United States intentions, unless there should be other outside intervention, would be to confine its role to what it has been.

Q Mr. Secretary, last night in Phoenix, President Ford, in answer to a general question on Middle East policy, mentioned that Israel has been urged to make peace, to reach agreements with Egypt and "other Arab nations." He was pressed on the question of whether the PLO should be recognized and he repeated that Israel should reach agreements with Egypt and "other Arab parties," which left the answer ambiguous and I wish you would clear it up, whether or not we regard the PLO as a nation or a party or in the final analysis, as a negotiating partner, although I recognize what you said earlier that it is an Israeli decision.

SECRETARY KISSINGER: I have to repeat what I said earlier. The United States is not engaged in promoting any particular set of negotiations. I have stated what our view as to the most effective strategy has been and we have not expressed any recommendation to any of the parties with whom they should negotiate.

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Q What are your maximum hopes for a strategic arms achievement at the Vladivostok summit?

SECRETARY KISSINGER: The issue of strategic arms limitation is an extremely complicated one, involving many weapons systems, many technologies and the fact is, as I have pointed out on a number of occasions, that the forces of the two sides have been designed in a different manner, with different characteristics so that comparisons are sometimes difficult.

Therefore, it is very hard to foretell any specific achievement. We believe that progress was made during my talks with General Secretary Brezhnev in Moscow. We think that this progress can be continued in Vladivostok. Whether the progress will lend itself to some formal statement, or whether it will lead to being transferred to the Geneva negotiations, or whether some other method will be chosen and the exchanges will continue, can really not be predicted until there have been some further discussions building on the discussions that took place in Moscow.

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Q Mr. Secretary, in part of your speech last night, in your proposal to cut oil imports, were you just referring to Arab nations or were you also proposing to cut oil imports from Canada?

SECRETARY KISSINGER: I was referring to cutting overall oil imports, not just from the Arab nations.

Q Mr. Secretary, given the position of moral leadership that the United States undertook in convening the World Food Conference, why was the decision reached not to follow the advice of the U. S. delegation and provide an extra million tons of food.

SECRETARY KISSINGER: First of all, as I understand it, this was not a recommendation of the U. S. delegation, but was a recommendation of some members of the U. S. delegation.

But, let me make clear what our position had been with respect to the World Food Conference. We face two problems: the basic problem of world food shortages, which is a structural one, and the immediate, emergency problem of the shortages this year that cannot be dealt with by any structural changes.

The United States believes that no matter what food aid is given this year, structural adjustments in world agriculture policies are essential. This is why we proposed the export planning group of the exporting nations and why we proposed a group to promote the increase in agriculture in the underdeveloped nations, which is one of the most essential elements, and why we proposed a reserve program.

Food aid is one relatively small part of the overall problem. Now, with respect to food aid, we have stated that we will do what is humanly possible in order to give the maximum food aid. The differences in the government concern tactics and not substance.

The difference concerns the question of whether we should announce a specific target before we know what the crop reports are and produce an increase in prices in this country and contribute to the inflation, or whether we should continue to operate on a quarterly basis as we have been on the basis of crop reports and in a manner

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that enables us to make the decisions without having the
undesirable consequences that I described.

As a matter of fact, most of the decisions that
have been taken in the last quarter have been at the high
end of the option, and I personally expect that by the
time that the year is over, we will have increased not only
the dollar amount, but the quantity of the food aid.

But, the President wanted to reserve the option
of looking at it every quarter so that the difference
between those members of the delegation, who ask for a flat
commitment, and the dominant trend in the Administration,
including the view of the President, is really primarily
a matter of how to give food aid without producing
inflationary pressures in this country and, therefore,
maybe endangering the whole food aid problem.

I personally regret that the issue of the World
Food Conference, which really should deal with the structural
problem of food, has been tied up with a one-year allocation
of food aid, which is not going to be decisive in dealing
with the overall issue that we have described.

Q Mr. Secretary, do you believe that there is
any connection at all between the reports that we have been
receiving now about mobilization in the Middle East and the
fact that the President is about to embark on this trip?
Can there be any linkage?

SECRETARY KISSINGER: I consider that extremely
unlikely, and I would have thought that the imminent
meeting of the President with the General Secretary should
have a calming effect on the situation rather than an
accelerated effect.

It must be obvious to the parties concerned that
anyone who wantonly starts a war under these conditions would
be putting himself into a very dubious position inter-
nationally and with its relationship with the United States,
and, obviously, this must be clear to any of the Soviet
leaders whom we do not believe are encouraging the
tensions right now, and we do not believe that a conflict
is imminent.

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Q It is not possible, you think, that, rightly or wrongly, that other powers might perceive that the United States in effect is in a weakened condition?

SECRETARY KISSINGER: It would be a very serious miscalculation.

Q May I also ask, do these reports in any way directly contradict assurances you had received, either from the Soviets or others during your Middle East travels?

SECRETARY KISSINGER: I did not have the impression on my Middle East travel that any of the parties were planning imminent military operations.

As far as the Soviets are concerned, it seems to me to go without saying that prior to a meeting between the General Secretary and the President that they should not, and in my belief, are not taking action to exacerbate the situation.

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Q Mr. Secretary, you said you didn't have the impression. Did you have specific assurances in the Middle East about this situation?

SECRETARY KISSINGER: I have stated my view. Certainly all of the parties know that the United States would be opposed, strongly opposed, to the resumption of hostilities.

Q Mr. Secretary, do you expect any major agreements to be signed in Japan or should we consider that trip primarily symbolic?

SECRETARY KISSINGER: I think a trip can be substantive without major agreements being signed. In negotiations with Japan it is very important to permit the Japanese consensus-building to develop and not to expect in a three-day visit to accelerate any particular decision.

We believe that there will not be any major agreement signed, but we nevertheless believe that the trip will be highly substantive.

If I may make one other comment about all these Middle East questions. There is a tendency, if I may say so, to overreact to reports. It was the case after the Rabat Summit. It seems to me to be the case today.

In our judgment we are not in a situation of imminent conflict and I do not think that it contributes to stability go give the impression that we are.

Q Mr. Secretary, there have been reports recently that Egypt is now linking the reopening of the Suez Canal to a further Israeli pullback in Sinai. Yet during the January disengagement agreement, we were told that the canal would be reopened as quickly as possible. Is there a tie-in between the two?

SECRETARY KISSINGER: We have not received any formal communication from the Egyptians to that effect. I have seen statements in the press which allege this, or in which Egyptian officials are quoted as having said this. We would consider this inconsistent with the dis-engagement agreement, but it will be a moot point until the canal clearance is completed, which is not yet the case.

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Q What can you tell us about the likely degree of Japanese acceptance of the plan you outlined last night, and would you expect something to come in Tokyo on that?

SECRETARY KISSINGER: I do not expect that in the period of three days there will be any major decisions taken on a plan that was as embracing as the one that was put forward last night. We undoubtedly will have some discussions on that subject. I think the final decisions will have to be taken in a multilateral framework and not on a bilateral basis between individual countries.

I would expect that progress will be made, not necessarily next week, but in the months ahead, just as progress was made after the Pilgrims speech last year, over a six-month period in implementing both the proposal for an agency and the proposal for an emergency sharing program.

And we believe, since there is really no realistic alternative to the major direction that has been proposed that over a period of months some of the main elements, or many of the main elements of the proposal will be implemented.

We are not putting it forward on a take-it-or-leave-it basis. Within the framework of the general objectives, We are quite openminded as to counter proposals. But we believe this is the direction in which the consuming nations ought to go and we think this is the direction they will go.

THE PRESS: Mr. Secretary, thank you very much.

END

(AT 3:40 P.M. EST)

FOR IMMEDIATE RELEASE

NOVEMBER 15, 1974

THE WHITE HOUSE

3:02 P.M. EST

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SECRETARY KISSINGER: The relationships between the United States and the People's Republic of China are good, and they are progressing in the manner that has been foreseen on our previous visits, including the last one.

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Q I assume you might mean the Soviet Union. I would like to ask whether you have any information or evidence to indicate that the Soviet Union might be encouraging war?

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SECRETARY KISSINGER: With respect to the speech itself, our reading of it is that it called for a state which really did not include the existence of Israel and therefore was dealing with a successor state, and we do not consider this a particularly moderate position.

With respect to my own plans, I have no plans now to go to the Middle East. This could change but as I pointed out before, we think that this is now a period for quiet diplomacy and I do not expect to return to the Middle East in the near future.

Q Before, I noticed you used the past tense in referring to our preference -- "was" -- for negotiations between Israel and Jordan. Do you think in the current situation there is a live possibility of negotiating with Jordan?

SECRETARY KISSINGER: It is my understanding that King Hussein has accepted the decisions of the Rabat Summit to the effect that the PLO should be the principal negotiator on the West Bank and this explains my reference to the past.

Q Mr. Secretary, has the Syrian Government indicated to you, as far as you know, its attitude toward an extension of the U.N. presence on the Golan Heights and whether it has or hasn't, how much of any importance do you attach to its attitude toward that question that will soon be coming up?

SECRETARY KISSINGER: The Syrian Government has not given us a formal answer as to the extension of UNDOF on the Golan Heights, and to the best of my knowledge, I do not believe that they have given a formal answer to anybody. They have, however, indicated on a number of occasions grave doubts about the extension of UNDOF and if one were to quote the statements that they have made, one could construe them as an indication that they probably will not agree to the extension.

It is our view that failure to extend UNDOF would cast doubts on the viability of agreements that may be made in that area and we therefore believe that the extension of UNDOF is important for the continuation of the negotiating process and especially for negotiating prospects that may exist between Syria and Israel and the failure to extend it would undoubtedly contribute to the tension in the area.

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With respect to the site of the meeting with the Soviet Union, this is a matter that has been discussed, and we have received no complaints from the Chinese side.

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As far as the Soviets are concerned, it seems to me to go without saying that prior to a meeting between the General Secretary and the President that they should not, and in my belief, are not taking action, to exacerbate the situation.

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SECRETARY KISSINGER: We have not received any formal communication from the Egyptians to that effect. I have seen statements in the press which allege this, or in which Egyptian officials are quoted as having said this. We would consider this inconsistent with the disengagement agreement, but it will be a moot point until the canal clearance is completed, which is not yet the case.

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