Call Hyland with follow:

1. "With consultation with Israel" must stay in.

2. Phrase on page 32--must stay in.

Hyland will send some stuff over Tues.

FOREIGN AFFAIRS

58 EAST 68TH STREET, NEW YORK, N.Y. 10021 | (212) 734-0400 | TELEX: 239852 CFR UR

WILLIAM G. HYLAND
EDITOR

MAY 5 - 1988

May 5, 1988

Dear Henry and Cy,

Peter and I have gone through the draft incorporating all of your suggestions and doing some further minor editing. The draft as it now stands is virtually ready for the printer, but you will want to go through it very carefully.

I call your attention to the following passages where there may be some need for further refinements.

On p. 4, the last full paragraph, we have slightly rewritten the old sentence which read "and they should not delude themselves." We thought that this was a little condescending to the candidates, whoever they may be and we have rewritten it "they should not be misled".

P. 8, the two middle paragraphs, beginning "What then is the practical consequence ..." and the next paragraph beginning "Our Soviet policy ...". This is now slightly different from the text you saw, which both of you had marked for changes. First, I have added a sentence about Gorbachev's references to "balance of interests." He uses this so much I thought it might be worth noting. Second, we have slightly rewritten the sentence about "Our concern should be foreign policy." We think it reads all right now, but simply want to call your attention to it.

P. 23, the paragraph beginning "We consider ...". It had been proposed to put in a sentence saying we are becoming more and more interdependent "whether we like it or not." Peter and I thought "whether we like it or not" conveyed a sour tone and the sentence reads well without it in any case.

P. 28, the very bottom -- following the phrase "close consultation with all," we have the phrase "coordination with Israel is obviously essential." We have left it mainly to defend against charges that the two authors are too even-handed.

There are some very minor edits throughout. I think none of them bear on substance. There are a few new sentences on Mexico which are noncontroversial, that Henry had proposed.

We are still looking for some statistics on debt but we will supply those.

Finally, and by far most important are the footnotes. A

reader is bound to note that in an article that calls for
bipartisanship and consensus the two authors disagree on some
rather important subjects -- Star Wars, arms control, a Middle
East peace conference, and the contras. These footnotes, of
course, are up to you but I would recommend dropping the first
footnote, which is Henry's alone, and the fifth footnote on the
contras, which is more for the record than future policies.

As for the two major footnotes (2 and 3) on arms
control, SDI, etc., there are obvious differences between the
two of you but I still have a feeling that the strategic and
conventional arms control points are being argued in the
abstract. It is almost certain that there will be no
conventional arms control negotiations before the end of this
year: it is very unlikely that NATO will link them to START.
As for the SDI footnote, that is a different matter because
this is a clear difference on deployment. My problem is that
these footnotes come right on the same page where you are
arguing for consensus (p. 10 of the text). I have no clear
fixes but I think you should be aware that in the printed
version the two footnotes are probably going to be on the same
page and certainly will emphasize differences rather than
accord.

Now for **procedures**. I need this back by no later than
Tuesday noon in order to get it down to the press and to get
back to you the page proofs for one last check. We of course
will be proofreading as well so you don't have to worry about
that. Unfortunately, once it is in page proofs the changes
have to be very small: what you send back on Tuesday will be
very close to the final text.

Peter and I think the draft is in very good shape and we
are now dealing with really very marginal sentences here and
there.

I will send you a memo early next week on the timing of
release. I think we have worked it out so that it will be
released one or two days *after* the summit.

Bill

Galley II. WGH edit PH copyedit authors fixes 5/5 #3110f

Henry A. Kissinger

Cyrus R. Vance

BIPARTISAN OBJECTIVES FOR
AMERICAN FOREIGN POLICY

BIPARTISAN FOREIGN POLICY

We have decided to write this article together because
of our deep belief that the security of free peoples and the
growth of freedom both demand a restoration of bipartisan
consensus in American foreign policy. We disagree on some
policy choices. But we are convinced that the American
national purpose must at some point be fixed. If it is
redefined—or even subject to redefinition—with every change
of administration in Washington, the United States risks
becoming a factor of inconstancy in the world. The national
tendency to oscillate between exaggerated belligerence and
unrealistic expectation will be magnified. Other
nations—friends or adversaries—unable to gear their
policies to American steadiness will go their own way, dooming
the United States to growing irrelevance.

2

We hope the next president will appreciate the value of
continuity in American foreign policy. He should know that the
country has been well served by maintaining principles which
have kept us strong and prosperous for almost half a century
under Republican and Democratic presidents alike.

In this year of political transition, and in a foreign
policy setting where major roles are changing at home and
abroad, we believe it vital to identify several crucial
bipartisan objectives for the next administration, whether it
be Republican or Democratic. In this year's political
campaign, differences of opinion will exist between the
candidates about the best ways to achieve these goals, and
debate will continue past election day over specific policies
and methods of implementation. However, if broad agreement on
central foreign policy objectives can be achieved, the 41st
president of the United States will be able to start his term
with a strong popular mandate for leadership at home and abroad.

_ii_

By the end of this century a number of the pillars on
which the global order was rebuilt after World War II will have
gone or changed significantly. For the United States, our
nuclear monopoly will have disappeared and our relative share
of the world economy will be less than half of what it was
forty years ago. Other countries, playing a variety of roles,

3

CYJ

already have had a major impact on U.S. interests: the
economies of Japan, Western Europe and the "newly
industrializing countries" are obvious examples; several
countries have nuclear weapons capability and others are able
to acquire it quickly. Old East-West security issues persist,
but new issues such as state-sponsored terrorism and
international drug trafficking have become urgent. At the same
time, long-standing problems cannot be ignored: there will be a
continuing need of the poorest countries and peoples for
humanitarian assistance.

A growing list of constraints on American actions also
must be considered: despite our vast military power, our
ability to shape the world unilaterally is increasingly
limited. Even with strong domestic support, an American
president can no longer afford financially to do as much
internationally as was the case in the immediate postwar
period. For many of our staunchest friends, the Soviet threat
to the free world seems diminished, especially with the
accession to power of a reform-minded leadership in the
U.S.S.R. This perception tends to reduce Western dependence on
America's dominant role. Thus the United States is called upon
to exercise new, subtler and more comprehensive forms of
leadership, including playing a major role in defining the
threats to the alliance.

Since 1941, successive generations of Americans have
accepted the global responsibilities thrust on the United
States. It now appears that a growing number of Americans want

4

the United States to be less active internationally than
before. They urge, understandably, that other nations assume
greater risks, responsibilities and financial burdens for the
maintenance of world order and international prosperity. We
understand the frustrations underlying this national mood, and
agree that it must be dealt with constructively in the decades
ahead. But we are also concerned that a desire to be relieved
of some of our international burdens not jeopardize important
American interests and the cause of freedom.

Our nation is on the eve of a new international era. At
a time of political transition it is important to have a
national debate on how and where the United States should spend
its diplomatic, military and economic resources in the decades
ahead. These discussions should involve Americans from a broad
range of occupations, because citizens in all walks of life are
vitally concerned not only about their survival, but about the
shape of the world in which they will live.

At the highest level of our political system, the
Republican and Democratic candidates should describe, not
specific tactical moves, but their visions of America's role in
the world. We hope that they will explain which international
commitments they would reinforce, reduce or reallocate to
others. And they should not be misled: we have undertaken
commitments in pursuit of vital interests---which cannot be
redefined on the basis of transitory fashions.

There are other constraints that have evolved in the
past twenty years: the legislative branch of the government and

5

the press have both become increasingly powerful players in the making and implementation of American foreign policy; their roles are appropriate subjects for public discussion.

~~Widespread understanding of the role of Congress in the making of American foreign policy is essential.~~ The legislative branch has clearly defined constitutional responsibilities in overseeing and funding U.S. foreign and defense policies. Congress must be well informed about the plans and actions of the executive branch and no foreign policy is sustainable if a majority of the Congress, reflecting public opinion, is adamantly opposed. At the same time, Congress should not manage the tactics of American foreign policy nor should it overburden high administration officials with demands for redundant testimony. Surely there are better ways for the executive and legislative branches to consult than having the secretaries of state and defense spend more than a quarter of their time on repetitive congressional testimony.

~~If A relationship of trust is established between the Congress and the White House even with policy differences, a mutual respect and essential complementarity between these two branches of government can be maintained. However, when there is a vacuum in executive branch leadership, or when the Congress overreaches, the result is an attempt to legislate day-to-day foreign policy, thereby subjecting our national interest to the vicissitudes of swings in public mood, shifting Congressional crealizations~~

It is equally desirable to have a better appreciation of the ~~considerable impact of the media on U.S. foreign policy~~

6

decision-making. Some tension will always exist between government which seeks to use the press to make its case and the media which seeks to expose. A more mature relationship is needed on both sides. Most clashes between the media and the government occur when journalists confuse their role with that of governing, or when officials consider favorable press coverage more important than policy results. A measure of restraint and understanding by both sides is essential.

As we define our choices we must consult with and inform our closest allies and friends about the course of our deliberations, urge them to do likewise, and then share our findings. It is essential that we explore with our principal partners the pace and shape of the changes we envisage. Once common decisions are reached—as we believe it is possible to do if we move preemptively and not reactively—we should collectively manage change so as not to disrupt our relations or undermine our publics' confidence in our determination to remain close, albeit on new terms.

Over time we would anticipate that the American role may become less conspicuous in certain areas of the world. We should not, however, underestimate the critical role that the United States must inevitably continue to play. Far into the future, the United States will have the world's largest and most innovative economy, remain one of only two nuclear superpowers, a cultural and intellectual leader, a model democracy and a society that provides exceptionally well for the needs of its citizens. These are considerable strengths.

7

A United States that adjusts to new international realities and develops a broad consensus on its primary interests in the world, will give cause for optimism. Only a combination of domestic ideological extremism, confusion between past and present, internal economic failings, xenophobia or loss of confidence can weaken our central role in world affairs.

__iii__

For purposes of illustration we shall apply the principles we have discussed to some of the major foreign policy issues, beginning with the core issue of relations with the Soviet Union.

**U.S.-Soviet Relations.** The possession of vast nuclear arsenals imposes on the two superpowers a special obligation to maintain world peace. But they are divided by ideological differences and geopolitical rivalry. Yet both have a moral duty to prevent a nuclear holocaust. For our part, we also have an obligation to ensure that the willingness to defend freedom and justice is not impaired by negotiations that raise unrealistic expectations.

Today the emergence of a rejuvenated Soviet leadership has raised new hopes for Soviet-American relations. We have met several times with General Secretary Mikhail Gorbachev; we have spent considerable time with some of his close advisers. We found Gorbachev highly intelligent and fiercely determined

to remedy the failures of the Soviet economy with socialist
remedies. He is persuasive in arguing that he prefers to live
in peace with the West and that he wants to reduce Soviet
defense spending so as to transfer resources into the civilian
economy. At the same time, we have no doubt that Gorbachev is
also firmly committed to defend what he believes are legitimate
Soviet international aims.

What then is the practical consequence of these
observations? What, for example, does Gorbachev mean when he
speaks of a "balance of interests"? And how, precisely, would
he define legitimate Soviet aims?

Our Soviet policy should not be determined by our
partisan politics in the United States, nor by the internal
politics of the Kremlin. Our ultimate concerns must be Soviet
foreign policy and our concept of U.S. national interests.

No American president can base his policies for dealing
with the U.S.S.R. on the presumed intentions of a Soviet
general secretary. We cannot know his deepest motives. We
cannot predict whether his intentions may not radically change
under domestic political pressure. We cannot pretend to
understand the inner workings of the Kremlin well enough to
know whether he will succeed or survive. Even *glasnost* and
*perestroika*, which are intrinsically appealing to the West,
should not by themselves fundamentally alter how we conduct our
relations with the Soviet Union.

There is a historically significant struggle going on in
the Soviet Union between reformers and conservatives in the

9

party and government. But what divides them is, above all, the method of strengthening the Soviet Union. Of course we ~~welcome~~ are pleased at evidence of greater internal freedom in the U.S.S.R. and the increased emigration of minorities. Quite naturally we favor the forces of change but ultimately the West can only marginally affect the outcome of a battle which derives from the internal failures and contradictions of the Soviet system for purposes which are clearly our own.

Up to now the major---almost exclusive---object of East-West negotiations has been arms control negotiations. The purpose of these negotiations has been to contribute to the lessening of East-West tensions, to improve political relations and to ease communications between Washington and Moscow.

Each of us has participated at earlier periods in these negotiations. We agree with the motives underlying them. We continue strongly to support the concept of strategic arms control. At the same time we would warn against putting too much of a burden on arms control and turning it into the sole barometer of the U.S.-Soviet relationship.

The Intermediate-range Nuclear Forces (_inf_) Treaty was the first arms agreement ratified by both countries in more than fifteen years. Because it covered the simplest and most easily separable elements in the arms control agenda and presented manageable verification problems as well, the agreement was reached ~~while maintaining the essential~~ while maintaining the essential strain on the elements of a valid agreement. The political fiber of the Atlantic alliance.

Future agreements with the Soviet Union will be much more difficult to conclude. The Strategic Defense Initiative

10

has helped soften Soviet negotiating positions, but the place
of space defenses in a future arms treaty or in future Western
defense planning is far from clear. While still of concern to
the Soviets, the value of _sdi_ as a bargaining chip for the
United States has declined as domestic opposition and budgetary
objections to the project have grown. This is a good example
of the need to work out a consensus. We both agree that
research in _sdi_ should be continued and gains that have come
out of our _sdi_ programs should be preserved.²

It is imperative that the next phase of arms control
concentrate on conventional forces and weapons in Europe. The
place of conventional arms and force reductions in any future
arms control agreement will be of overriding concern to the
West. We believe that _nato_ must examine its force structure
and arms control plans, in light of potential negotiations.
Neither of us advocates further reductions in short-short
("battlefield") nuclear weapons in Europe without reductions in
Soviet conventional weapons and forces. ③

We do differ on the relationship between new strategic
arms control agreements and potential conventional arms control
negotiations. ³

Unfortunately, the West has not yet done adequate homework on what course is desirable. There are enormous problems of assembling and agreeing on accurate data and the means of reliable verification of conventional forces and equipment. Even before a new administration takes office, the American government should concentrate its best intellectual

11

and scientific resources on the issues surrounding the limitation or reduction of conventional forces; it is clear that any reductions will have to be highly asymmetrical in order to create a stable balance. This factor alone means that conventional arms negotiations are certain to become the most difficult arms control problems for the NATO alliance in the 1990s.

We also believe that the time has come to give much greater emphasis to the political dialogue between the United States and the Soviet Union. At this writing the Soviets have agreed to withdraw their forces from Afghanistan. If carried out in a manner that permits the Afghan people to determine their own fate we consider this a significant development. We also welcome Soviet hints at greater support for a complete withdrawal from Cambodia. Rhetorically the Soviets now embrace "mutual" and "collective" security rather than unilateral advantage. They emphasize "defensive" military strategies and doctrines in discussions with Western officials, and they seem to be more flexible in some discussions over arms control.

Nonetheless, the ultimate test of any government's intentions is not its rhetoric but the concrete positions it adopts at the negotiating table and the specific actions it takes. Thus some of the issues that require a Soviet response are: international cooperation against state-sponsored terrorism; willingness to accept asymmetrical reductions in Soviet conventional forces so as to eliminate their military

advantage in Europe; steps to help end regional conflicts.

Our overall conclusion is that there is a strategic
opportunity for a significant improvement in Soviet-American
relations. The issue is how to take advantage of what may be a
favorable correlation of forces. This requires a concrete
American & Western political program.

What the West should do is to probe actively, with an
open mind, to determine what steps can prudently be taken that
will yield progress in Soviet-American relations and create
opportunities for reconciling vital interests. In this
context, there will be an opportunity for an unprecedented kind
of conversation between the next American president and the
Soviet general secretary early next year. A new chief
executive will be in the White House, and Mikhail Gorbachev
will have completed his first four years in office. He will be
preoccupied with drafting his country's 12th five-year plan,
which will guide the Soviet economy during the early 1990s.
Given their internal problems, and in light of the new balance
of international forces, it is likely that the Soviet
leadership may conclude that it is in their interest to be
open to a serious and continuing dialogue with the United
States in its interest.

Thus, at the outset of their relationship, the new
American president and the Soviet general secretary should
initiate a wide-ranging discussion of where they want
U.S.-Soviet relations to be at the beginning of the next
century and how they propose to contribute to a climate of
international restraint. The modalities of the contacts will

13

have to be decided by the new administration, of course. The
process could be started by trusted representatives of the new
president and the general secretary charged with explaining
what opportunities and limits each of their principals foresees
in the relationship during the period they will both be in
office. A dialogue could set the agenda and tone for further,
more formal meetings of the leaders themselves devoted
primarily to political issues.

Beyond this initial phase, we would favor regular
U.S.-Soviet summits, so that meetings between the two leaders
are not seen as rewards for good behavior or reasons for
concessions or pretexts for signing agreements.

With the accession to power of Gorbachev, interest has
revived in the prospects for Soviet-American economic
relations. There are probably more opportunities for American
commerce with the U.S.S.R., although trade with the West is not
likely to alter significantly the pace and direction of the
Gorbachev reforms. Our businessmen already are exploring what
they see is a potentially growing and more open Soviet market.
We are not worried that expanded economic ties with the
U.S.S.R. may aid in the creation of a serious economic threat.
There seems to us no prospect that the volume of Western trade
and finance could reach such proportions so as to (radically
improve Soviet economic prospects. The modernization goals
that Gorbachev has set will not be fulfilled for decades, by
which time the Western economies also will have grown by even
greater rates.

14

Nonetheless, we should reflect carefully and act cautiously as we shape our trade policy. First, until there is a major breakthrough in political relationships, great care must be taken with respect to technology transfers that would strengthen Soviet military capabilities. The Soviets continue to place the highest priority on acquiring, by whatever means, commercial and militarily sensitive information from the West.

We also hope that Western executives will understand that economic reform in the U.S.S.R. does not automatically mean new business opportunities. Indeed, there will continue to be legal, moral and political constraints, imposed by both sides on economic intercourse. Both of us have had serious doubts about the Jackson-Vanik and Stevenson amendments which made granting most-favored nation status and financing facilities for the U.S.S.R. dependent on Soviet emigration procedures. But new that they are on the岸 only, should be modified only but we should only modify U.S. legislative limitations on trade and investment with the U.S.S.R., even if there is significant change for the better in Soviet emigration policy.

*Atlantic Relations.* Early in his term, the next president will preside over the 40th anniversary of the founding of the Atlantic alliance. _nato_ is one of the most successful treaty arrangements in history. It has preserved the peace in Europe for four decades---the longest such period since the European state system came into being. It connects America with countries of similar cultural heritage. It must remain the keystone of U.S. policy.

15

But conditions have changed vastly since the early days
of _nato_. The U.S. atomic monopoly of 1945 has given way to
nuclear parity with the U.S.S.R.; this situation, as well as
other aspects of East-West relations, has aroused doubts in
some quarters about America's continued commitment to the
defense of Europe. A second important change since the 1940s
has been Europe's economic recovery and the growing importance
of the European Community as an economic and political entity;
this tempts more intense economic competition with the United
States and raises some broader issues in European-American
relations. On both sides of the Atlantic a new generation has
matured which shares neither the sense of danger nor the
emotional commitment to cooperation that characterized _nato_'s
early years. Moreover, the era of more active diplomacy with
the East that involves both U.S. and allied efforts creates new
challenges and risks of competitive, separate approaches to
Moscow.

In sum, the state of the Atlantic alliance encourages a
new impetus in strategy, diplomacy and internal relations.

It is time for _nato_ to redefine its goals and
rededicate itself to new missions. Immediately following the
U.S. elections, the Atlantic partners should begin a broad
reassessment of their mission and plans for the next
decade---perhaps by appointing a group of distinguished
outsiders to submit a report in any case the reassessment
should be completed in no more than 12 months. A revised
alliance structure and force posture should emerge from this

review, as well as clear parameters for conducting the next
round of arms control negotiations with the U.S.S.R.

The United States must make unequivocally clear that _nato_ cannot be defended without sufficient quantities and types of both nuclear and conventional weapons, so as to deter a nuclear adversary that continues to enjoy a conventional superiority in some significant categories. It is disservice to the alliance to engage in periodic speculation about extreme proposals or fanciful notions---such as the complete denuclearization of Europe, the total elimination of all ballistic missiles, pledges against the first use of nuclear weapons or exaggerated claims that _sdi_ will provide an impenetrable shield. As long as some of the utopian visions of a nuclear-free world are not put to rest, they will subvert serious discussions of a common Atlantic strategy and stigmatize the very weapons on which a credible deterrence and effective defense must be based for the foreseeable future.

Europe will inevitably play a greater part and have a
larger voice in the defense of its own territory. This
reflects the reality of Europe's strength. Accordingly, the
relative role of the United States is likely to decline as
consequence, although not its commitment to defend Europe by
all necessary means. Growing intra-European defense
cooperation, possibly in the form of a European defense entity,
should be endorsed. With the European Community moving toward
virtual economic integration by 1992, it is especially
important that a revised structure for the defense of Western

18

strong and vigilant. Politicians may disagree in their
assessments of Mikhail Gorbachev, but not many of the 640
million people in the Atlantic alliance countries want to base
their survival---economically, politically or militarily---on
his goodwill or his fate. The strengths of the Western
alliance derive from our common democratic values and our
abilities to respond, often in concert, when circumstances
change or public attitudes evolve. The West is fully capable
of reorganizing itself and thus emerging better prepared to
continue to defend its freedoms and prosperity.

_iv_

*The World Economy.* America's role in the world has become directly dependent on the strength and performance of the U.S. economy. Foreign policy and economic policy have become increasingly interdependent.

When we served as secretaries of state, only a
relatively small portion of our time was spent on international
economic issues. Our successors do not have this luxury.
Economic strength is today even more central to the way we are
perceived by our friends and potential adversaries. There is
no way that the U.S. political leadership in the world can be
sustained if confidence in the American economy continues to be
undermined by substantial trade and budget deficits.

For these reasons, the weaknesses of the U.S. economy
may be among the most serious and urgent foreign policy

19

challenges to the next president. Convincing economic
discipline, clear and publicly supported long-term economic
strategies, as well as equitable budget reductions, must be
applied quickly if we are to halt the erosion of our
international position.

The primary responsibility of every president is to
defend our national security. Given the range of American
commitments and responsibilities, and given a continuing
challenge to those interests, defense spending will remain a
major budgetary outlay for the indefinite future. It is
increasingly obvious, however, that our military prowess and
even our nuclear capabilities do not contribute to the
struggles for international markets; in this realm
competitiveness, education, judicious government intervention,
as well as price, wage and currency levels determine success.

The impact of the international economy on the daily
lives of all Americans has drawn many more citizens, special
interests, public and private institutions, businesses as well
as elected representatives into seeking to influence U.S.
foreign policy. Great emotion is now attached to discussions
of international trade and financial questions in our political
debates. Our citizens worry that the American standard of
living is directly affected by economic decisions taken in
foreign capitals which are less politically and militarily
powerful than our own. This is not an argument against
maintaining adequate defenses: it is to stress that this
objective must go hand in hand with reducing our budgetary and

20

trade deficits.

In fact, the weaknesses of the American economy threaten to limit the resources available for maintaining our defense, foreign affairs and assistance budgets at adequate levels. Of course, changes in military posture and strategy should be made if assessments of the threat change, negotiations succeed or technological breakthroughs occur. However, major modifications of the American force structure now primarily occur not for these reasons but as a result of budgetary pressures. Such reductions will not produce an abrupt deterioration in our strategic position. Nonetheless, the budget contraction is beginning to complicate vital bilateral political relations and call into question whether the United States will be able to maintain many of its foreign military commitments, including those installations that give U.S. forces the ability to defend our interests, and those of our friends, throughout the world. Dramatic cuts in funds available to assist friends in the developing world are provoking serious political and humanitarian aftershocks in many of the poorer countries as well.

These reductions, including those in the civilian foreign affairs budget, also weaken the morale and performance of those Americans whose task it is to serve our country overseas. In the State Department, posts and positions are being eliminated not because they are redundant but because we cannot afford them. It is absurd that when the national interest dictates the need for emergency assistance of $200

21

million for the Philippines, we are hard pressed to find the money somewhere in our nearly $4-trillion economy.

To sum up: America's ability to influence events abroad and ensure prosperity at home will be determined in large part by how rapidly we get our economic house in order. Fortunately we can still make these decisions ourselves. We must face the fact that our economy and consumption have become so overextended in recent years that the remedies will involve sacrifice and slower growth in our standard of living. If, however, we ignore these economic realities, American influence abroad will decline significantly and our children will pay the price of our inattention and excesses in weakened security and declining competitiveness.

_v_

*Japan.* The stunning economic success and political stability that Japan has achieved have placed it in a privileged but also precarious position. Tokyo is experiencing what can be fairly described as the "problems of success". Its major trading partners want Japan to modify its practices of emphasizing its national efforts above all other priorities. This approach may well have been necessary for Japan during the period of postwar reconstruction, but now it is inappropriate for an economic superpower with global reach and impact. Most Japanese would prefer to leave their international economic and security practices intact, although many political and business

22

leaders in Tokyo understand the need for changes.

There are many shrill and contradictory voices in this
country proffering advice on how Japan should change. Some
regard Japan's $60-billion trade surplus with the United States
as the most urgent problem, and they insist that Japan modify
its trading rules to reduce substantially that imbalance. Some
believe that Japan should concentrate on providing massive
economic and financial assistance to the developing world out
of its substantial foreign exchange surpluses. Still others
are convinced that Japan, which is fast becoming the most
proficient non-nuclear military power in the world, should
relieve the United States of some of our Asian defense burdens
and increase its defense spending substantially above its
present one percent of gnp.

There can be no debate over the importance of
Japanese-American ties. They are based on strong common
interests---strategic and political, as well as economic.
Preserving this relationship is vital to both countries. What
is at issue is how best to proceed, not the value of the
relationship itself. The United States, however, needs a
national strategy for dealing with our Japanese allies, before
we can ask our friends in Tokyo to work with us on
strengthening our partnership.

We should start by recognizing that a root cause of the
trade imbalance is the superior productivity and long-range
planning of Japanese industry. The so-called Japanese problem
is partly a result of superior Japanese competitiveness. The

23

falling dollar has not yet curbed the American taste for Japanese imports, because they are presumed to be of superior quality. In the end, market forces more than governmental intervention will affect the trade deficit. At the same time, Japan needs to accelerate its efforts to stimulate domestic demand and to eliminate unfair discrimination against foreign imports.

We warn against any attempt to deal with the deficit by pressing Japan to step up its defense efforts. Of course, Japan has the right to determine its appropriate security requirements. But the United States can have no interest in urging Japan to go beyond that. Such a course would generate the gravest doubts all over Asia. It might deflect Japan from a greater economic contribution to international stability, through a cooperative effort by all developed countries to infuse capital into the developing world.

We consider it essential that the dialogue with Japan be lifted to a more comprehensive level. Japan will be one of the major powers of the 21st century. We are becoming more and more interdependent. The issue is how to deal with the consequences of interdependency, not how to reverse or change the relationship.

The American-Japanese dialogue must not be confined to mutual harassment and recrimination on an industry-by-industry basis. The two countries should seek to establish overall goals and work toward them. One step would be to establish an overall trade balance the United States would find tolerable;

DRAFT

Kissinger/Vance Foreign Affairs Article

page 9

be encouraged to reach understandings on what both sides would be
allowed to test and develop. It is more productive for the parties to
concentrate on such specifics than to haggle over what was intended by
American and Soviet negotiators in the early 1970's.

The place of conventional arms and force reductions in any
future arms control agreement will be of overriding concern to the
West. It is highly desirable to have some conventional component in
the next arms control package. (3) Unfortunately the West is even less
prepared to develop Alliance positions on conventional issues than on
the nuclear questions. Enormous data and verification problems
present themselves in the conventional area. As soon as possible -
even before a change in Administrations - the American government
should concentrate its best intellectual and scientific resources on
the conventional forces issue, which is certain to become the most
difficult arms control problem for the NATO Alliance in the 1990's.

**Trade** - Although trade with the West is not likely to alter
significantly the pace and direction of the Gorbachev reforms, there
probably will be more opportunities for American commerce with the
U.S.S.R. Our bankers, industrialists and salesmen already are
exploring what they see is a potentially growing and more open Soviet
market. We are not worried that expanded economic ties with the
U.S.S.R. may aid in the creation of a serious economic rival. There

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seems to us no prospect that the volume of Western trade and finance
could reach such proportions so as to radically improve Soviet economic
prospects. The modernization goals that Gorbachev has set will not be
fulfilled for decades by which time the Western economies also will
have grown by even greater rates.

Nonetheless, we should reflect before encouraging our
corporations, banks and government agencies to sweep away all restraint
in trading with the Soviet Union. First, there remain major problems
involved in the transfer of restricted Western technology to the
U.S.S.R. The Soviets continue to place the highest priority on
acquiring, by whatever means, commercial and militarily sensitive
information from the West. Second, we should caution Western
executives that economic reform in the U.S.S.R. is presently more
rhetorical than real and remind them that commerce with "liberalizing"
Socialist countries in the past has not always turned out to be good
business. And finally there are legal and moral constraints on trade
with the U.S.S.R. Neither of us was an enthusiastic supporter of the
Jackson-Vanick or Stevenson amendments which deny MFN and financing
facilities to the U.S.S.R. until there is a substantial relaxation of
Soviet restrictions on emigration. However, now that Soviet visa
issuing practices seem to be under review, we should only modify U.S.
legislative limitations on trade and investment with the U.S.S.R. if
there is a permanent and significant change for the better in Soviet

[L]

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immigration procedures.

**<u>Regional Conflicts</u>** - Once nuclear parity existed between the superpowers, the greatest risks of confrontation between us occurred when differences threatened to become hostilities in third country areas. It is perfectly clear that Mikhail Gorbachev has no intention of reducing the Soviet presence and influence throughout the world even if he describes Moscow's international role more in economic and political and less in military terms. The Soviet challenge to U.S. foreign policy interests remains and it is too early to tell whether Washington and Moscow can successfully cooperate in the resolution of regional conflicts.

In both the Carter and Reagan Administrations the U.S. engaged the Soviet Union in extensive conversations and occasional negotiations on regional conflicts. Little was achieved. American and Soviet interlocutors had authority only to repeat previously stated positions. The negotiators found their briefs buried under weightier bilateral issues. The governments were quick to take unilateral actions in places where they hoped to gain an advantage.

However, if Americans and Soviets seriously discuss their worldwide interests, they could more easily avoid the recriminations over responsibility for regional conflict and diplomatic stalemate. If

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productive, such conversations could weaken the arguments for political
linkage between arms control agreements and the resolution of regional
conflicts. Although the U.S. and U.S.S.R. may not be able to dictate
settlements of regional conflicts without the concurrence of the
directly-affected third parties, bilateral conversations about our
respective interests could well advance the prospects for negotiated
solutions.

Atlantic Relations

Before accelerating our negotiations with Moscow we need
urgently to determine the future of the NATO Alliance and discuss with
our Atlantic partners how to contend with the new Soviet realities. It
would be harmful to our common security for the major Atlantic powers
including the U.S. to respond individually to major Soviet initiatives
without prior NATO consultation and coordination. Dividing and
weakening NATO remains a constant Soviet objective.

NATO governments at their highest levels should deliberate
all of the issues that were mentioned in the previous section on
"U.S.-Soviet Relations." Since NATO was created to respond to a
serious threat posed by the Soviet Union, the Alliance members should
begin by asking themselves how the challenges from the East may, or may
not, be changing. A majority of the voting-age populations in the NATO
countries was born after the Alliance was founded in 1949. These

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younger people have no recollection of NATO's origins and will not accept, nor should they, descriptions of an adversary that are no longer current. Although there will never be total agreement among or within the NATO countries on the character of Soviet objectives, we would not be surprised to find a considerable degree of consensus on Soviet intentions among the Alliance governments.

To relieve any doubts about the American commitment to Western Europe the U.S. should make unequivocally clear that NATO can not be defended without sufficient quantities and types of nuclear weapons so as to deter a nuclear adversary, who enjoys conventional superiority in some areas. It is dangerous to the Alliance for present and former U.S. officials to talk seriously about the potential denuclearization of Europe, the elimination of all ballistic missiles or exaggerated claims that SDI will provide an impenetrable shield. As long as some of the fanciful notions of a nuclear-free world advanced at the Reykjavik summit are not put to the rest, they will subvert serious discussions of a common Atlantic strategy.

Immediately following the U.S. elections, the Atlantic partners should give themselves no more than twelve months to complete a broad reassessment of their mission and plans for the next decade. A revised Alliance structure and force posture should emerge from this review as well as clear parameters for the next rounds of arms control

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It is vital that such a report conclude that Europe will play
a greater part, including financially, and have a larger voice in the
defense of its territory. It should also contain a timetable for
gradual reductions in U.S. contributions - men, money, materiel - to
the defense of Western Europe. Growing intra-European defense
cooperation, possibly in the form of a European defense entity, should
be endorsed, but in a manner consistent with overall Alliance aims.
With the European Community moving toward vertical economic integration
by 1992, it is especially important that a revised structure for the
defense of Western Europe also be in place by then.

As the European component in Atlantic defenses continues to
develop, the U.S. will face an Alliance whose partners feel more equal
and assertive than before. Differences of views within NATO may not be
limited to Alliance strategies toward the Warsaw Pact countries.
Distinctive West European approaches to crises in third areas could
become more common. Increasingly, the Alliance will experience times
where Europeans and Americans go their separate ways. We hope,
nevertheless, that most NATO leaders will understand that deep and
enduring divisions within the Atlantic Community would threaten the
vital interests of each of its members.

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We should not be defensive in discussing openly the need to
reform the Atlantic Alliance. On the contrary. We should be proud
that this free association of democratic nations has served our common
objectives so well. The Alliance can manage change constructively by
anticipating and adjusting in ways that are deliberate, rational and
supported by public opinion. If NATO waits for a crisis - such as
demands for the unilateral withdrawls of American forces from Europe,
differences over how to respond to major Soviet diplomatic or military
moves or a severe economic recession in the West - the Atlantic
framework will change, and for the worse, under the pressure of
unfavorable external events.

What gives us confidence in the future of the Atlantic
Alliance is the widespread acceptance throughout the member countries
that on the whole NATO has worked extremely well. It has provided a
barrier behind which the Western democracies have enjoyed forty years
of peace and economic growth. There is no significant political force
in the West opposed to the existence of NATO. Political parties may
differ on how, when or how much, not on whether to remain strong and
vigilant. Politicians may disagree in their assessments of Mikhail
Gorbachev but not many of the 400 million people in the Alliance
countries want to base their survival - economically, politically or
militarily - on his goodwill or his fate. The strengths of the Western
system of government derive from our common democratic values and our

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abilities to respond, often in concert, when circumstances change or
public attitudes evolve. Unlike totalitarian regimes which resist
reform and crack from internal pressures, the West is fully capable of
reorganizing itself and thus to emerge better prepared to continue to
defend its freedoms and prosperity.

## Japan

The stunning economic success and political stability that
Japan has achieved have placed it in a privileged but also precarious
position. Tokyo is experiencing what can fairly be described as the
"problems of success." It's major trading partners want Japan to
modify practices that were necessary during a period of reconstruction
but which they consider inappropriate for an economic superpower.
Quite understandably most Japanese would prefer to leave their
international economic and security practices intact although many
political and business leaders in Tokyo understand the need for changes.

There are many shrill and contradictory voices in the U.S.
proferring advice on how Japan should change. Some regard its $60
billion trade surplus with the U.S. as the most urgent problem in our
bilateral relations and they insist that Japan must modify its trading
rules so as to reduce substantially that imbalance. Some believe that
Japan should concentrate on providing massive untied economic and

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financial assistance to the developing world out of its substantial
foreign exchange surpluses. Still others are convinced that Japan,
which is fast becoming the third most proficient military power in the
world, should relieve the U.S. of some of our Asian defense burdens and
increase its defense spending substantially above its present 1% of GNP
(U.S. defense spending is 6% of GNP).

The U.S. needs a national strategy for dealing with our
Japanese allies before we can ask our friends in Tokyo to work with us
on strengthening a mutually-advantageous new partnership.

In setting priorities for negotiations with Japan, both of us
oppose a substantial growth in Tokyo's defense role. Present levels of
defense cooperation, between the U.S. and Japan, allowing for
increasing exchanges of military technology, strike us as appropriate.
All of Asia would strongly oppose a greater military role for Japan.
Abdicating American defense responsibilities in the region, and
encouraging Japan to pick up the slack, would severely weaken the
prospects for continuing economic growth and political stability in
most of non-Communist Asia. Regarding Japan's enormous trade
imbalances with the U.S., the trend must be reversed and the deficit
should shrink. However it will be extremely difficult for the U.S. to
cut significantly our negative trade balance with Japan - even if Tokyo
provides the U.S. more access to its domestic market - for at least

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several years: Americans are not reducing their appetites for Japanese imports even as these products become more expensive. Moreover, a dollar worth half its value of two years ago has not made American exports much more attractive to the Japanese. The best way to relieve this difficult problem would be for U.S.-Japanese trade to decline as American companies become more competitive with Japanese firms in foreign markets. Market forces not governmental controls and intervention will likely govern these adjustments. Japan also should continue to take measures that stimulate internal demand and reduce domestic savings as ways to sustain a high rate of economic growth not dependent on increased exports.

If increases in Japan's defense spending are undesirable and our trade imbalance declines the U.S. should then concentrate on working with Japan and others on a cooperative Western effort to infuse capital into selected areas of the developing world. Once the U.S., Western Europe and Japan agree on priorities for debt relief and development assistance, major improvements in the performances and prospects of the developing countries could result.

## The Arab-Israeli Conflict

For the past forty years the U.S. has been the only major power able to engage all of the belligerents in the Arab-Israeli

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disputes. No progress towards peace has ever been achieved between warring Israelis, Egyptians, Jordanians, Syrians, Palestinians and now Lebanese without the personal involvement of an American President and Secretary of State. This influence has led to substantial diplomatic achievements by the Administrations we served. Separating the adversaries geographically, negotiating an effective cease-fire between the major armies and then brokering the peace treaty and diplomatic recognition between Israel and Egypt were important first steps in the direction of a global solution.

Unfortunately the peace process has been stalled for the past decade and the forces of reason and compromise in the area have been weakened. The disasterous Israeli invasion of Lebanon contributed to the disintegration of a central authority and to the rise of religious extremism, violence and foreign influence in that beleaguered nation where several American hostages are now held. The economies of the non-oil producing Arab states - which are among the most moderate - are suffering. A deep political division in Israel over the peace process, the future of the West Bank, Gaza and the Palestinian question paralyzes the political will of that democratic enclave and special friend of the U.S. A fractious Palestinian leadership seems unable to agree on anything except violence against Israel. Moreover, the unprecedented and spontaneous Arab protests against the Israeli presence in the West Bank and Gaza fuel both Arab demands and Israeli

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reprisals.

In the midst of this turmoil and within months of elections in the U.S. and Israel, the Administration has offered a sweeping new peace initiative. At the center of this American proposal is an international conference - an idea favored in some form by all of the heads of government in the area except Prime Minister Shamir of Israel.

(4) Whatever the structure of the negotiations, we agree with the Administration that Israel should not be asked to negotiate with persons presently seeking its destruction or justifying acts of terrorism against its population. The Arab governments should be willing to deal directly with Israel on all outstanding issues and not negotiate through intermediaries.

In the next rounds of peace negotiations - whenever they occur - the U.S. should commit itself to be actively involved at highest levels. If a global peace cannot be achieved, we should propose further incremental steps such as an accord between Israel and Jordan, provided that some representative Palestinians can be persuaded to join the undertaking. If an international conference cannot be convened, the U.S. should proceed with unilateral initiatives. We must be prepared, discretely whenever possible, to state our positions on the issues as well.

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At the same time we should make clear to all of the belligerents that the U.S. supports exchanging territory for peace and the termination of the state of war that exists between states in the area. As a democratic society, Israel cannot govern forever an unwilling and unrepresented Arab population. The only way to guarantee peace in the area is to create a Palestinian entity, preferably federated with Jordan at least during an initial period. Meanwhile, the Arab nations must satisfy Israel's legitimate security demands including those in the presently occupied territories.

What our Israeli friends should realize is that peace will only be more difficult to achieve if we wait. Trends in the area are not favorable to those favoring compromise. The Arab populations governed by Israel are growing in size and militancy. If moderate Arab leaders are overthrown, their successors will take years to recognize the need to negotiate with Israel. Within the U.S. support for Israel may weaken if our public sees more Israeli violence directed against Arab demonstrators. Calls for cuts in military and economic assistance for Israel might grow if the Israeli government appears reluctant to seek a reasonable peace.

It is most unlikely, however, that much can be achieved before American and Israeli voters choose their leaders. Afterwards there will not be much time left to get the process moving. The next Administration should assign several of its best minds and skilled negotiators to this particularly difficult and urgent set of problems.

The Western Hemisphere

It is no longer possible for the U.S. to pretend that we alone
can determine events from within or deter hostile forces from without
in the Western Hemisphere. Since its own independence, the U.S. has
felt a special concern for developments in the New World although there
has been too much American ignorance and arrogance in our policies and
attitudes. The past presence of our missionaries, corporations,
gunboats and sometimes soldiers, in many of these countries are all
part of a difficult heritage for Latins and Americans. Recent troubles
in these relations have made clear that we must deal with the problems
of our region differently from before, and also differently from the
way we defend our interests on other continents. While it may be
necessary to retrench American commitments in more distant places
around the world, it is unthinkable that we should now pay less
attention to the Western Hemisphere.

The most immediate political concerns that we have in the
Western Hemisphere relate to ending the wars in Central America while
strengthening democratic forces and reducing the Soviet and Cuban
influence in the area. Central America provides a conspicuous example
of an area where U.S. policy has suffered because of a lack of
clearcut national objectives that could be publicly debated and

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Congressionally mandated. Confusion remains over whether our principal aim should have been to overthrow the Nicaraguan government, halt Nicaraguan support for insurrections elsewhere in Central America, eliminate the Soviet-Cuban presence and military assistance in Nicaragua or democratize the Sandinista regime. Now the Presidents of five Central American nations have taken on the responsibility for making peace. Whatever the wisdom of American support for the anti-Sandinista contras (5), the U.S. and five Central American nations now should concentrate on implementing the peace plan drafted principally by Costa Rican President Oscar Arias Sanchez.

It remains, nevertheless, very much in U.S. interest to obtain the withdrawal of Cuban and Soviet military advisors from Nicaragua, as well as significant reductions in the armies and armaments in the region especially in Nicaragua, a total ban on Sandinista help to guerillas elsewhere and the internal democratization of Nicaragua.

Is there anything left for the U.S. to do to promote an acceptable peace in the region? A valuable asset that we possess is our ability to discuss such matters with the U.S.S.R. General Secretary Gorbachev has indicated that under some circumstances he might be willing to reduce arms shipments to the Sandinistas. Although his initial proposals were vague, the Soviets appear willing to be

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[L]

engaged on the subject. There is also some evidence that Moscow has urged the Nicaraguan leaders to help make the Arias plan work. We should pursue these issues with Moscow.

The U.S. should commit itself to providing substantial economic assistance to Central America after real peace is assured. It would be preferable for such aid to go primarily to regional development rather than to individual countries. Our task should be to reinforce those institutions that give the Central Americans good reasons to live productively and peacefully together.

The U.S. also should continue to support democratic forces within Nicaragua. Our diplomatic and material aid to those who work for a pluralistic economy and representative political process should be done openly. At the same time, the U.S. should be mindful that, whatever the policies of the Administration and the Congress, some private Americans will want to continue to arm the anti-Sandinista resistance. It is very important that we apply rigorously all American laws governing such activities. U.S. interests have been badly hurt recently by freebooters operating openly in Central America.

If successful, it will have taken a decade to restore peace to Central America. Whatever bitter lessons the Central Americans may have learned in the process, the U.S. should now be in a better

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position to protect its interests in similar circumstances elsewhere in
the developing world. When young men and women despair of being able
to improve their station and live in freedom, they embrace
revoluntary change and help create an environment where governments
alien to a region secure a place by providing military help. In such
instances, preventive diplomacy and preemptive reform can reduce the
risks of extremist political infection and radical contamination. When
confronted with such situations, the U.S. must define its interests
early on and then develop strategies in cooperation with regional
friends that will promote the likelihood of peaceful change and
successor governments compatible with our own.

American Leadership and the World Economy

When we served as Secretaries of State, only a small portion
of our time was spent on international economic issues. This is no
longer possible for our successors. Foreign policy and economic policy
have become increasingly interdependent. Economic strength is central
to the way we are perceived by our friends and potential adversaries.
America's role in the world has become directly contingent on the
strength and performance of the U.S. economy. For these reasons, the
domestic and international weaknesses of the U.S. economy may be among
the most serious and urgent foreign policy challenges to the next
President.

LC

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Other Americans are far more competent than the two of us to debate the merits of solutions to our economic ills, but there is no way that American political leadership in the world can be sustained if confidence in our economy continues to be undermined by substantial trade and budget deficits. Convincing economic discipline, clear and publicly-supported long-term economic strategies, as well as fairly apportioned budget reductions, must be applied quickly if we are to halt the erosion of our international position.

Since an Administration's primary responsibility is to defend our national security, defense spending will remain a major budgetary outlay for the indefinite future. However, our enormous military power, and our nuclear parity with the U.S.S.R., are of little use to us in the struggles for international markets where competitiveness, education, judicious government intervention, as well as price, wage and currency levels determine winning and losing. Unfortunately, our large defense obligations represent costly diversions of scarce resources for our country. There is good evidence that the two nuclear superpowers, whose defense responsibilities far exceed those of others, will become increasingly hard pressed to compete while more innovative and agile economies, freed from the responsibilities of alliance leadership, outperform them.

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all Americans has drawn many more citizens, special interests, public
and private institutions, businesses as well as elected representatives
into the making of U.S. foreign policy. Great emotion is now attached
to discussions of international trade and financial questions in our
political debates. Citizens ask what good it is for us to have enough
nuclear weapons to destroy the planet many times over if we cannot
obtain fair trading practices from friendly governments whose
contributions to their own security are minimal. They worry that the
American standard of living is directly affected by economic decisions
taken in foreign capitals which are less politically and militarily
powerful than our own.

The weaknesses of the American economy also limit the
resources available for maintaining our defense, foreign affairs and
assistance budgets at adequate levels. Changes in military posture and
strategy should be made if threat assessments change, negotiations
succeed or technological breakthroughs occur. However, we now face the
need to modify our force structure primarily for budgetary reasons.
Such reductions will not provoke an abrupt deterioration in our
strategic position. The nuclear balance should continue to insure the
survival of our nation and allies for generations to come.

Nonetheless, the budget contraction is beginning to complicate vital
bilateral political relations and call into question whether the U.S.
will be able to afford maintaining many of the foreign military

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installations that give U.S. forces the ability to defend our interests, and those of our friends, throughout the world. Dramatic cuts in funds available to assist friends in the developing world are provoking serious political and humanitarian after shocks in many of the poorer countries as well.

These reductions, including those in the civilian foreign affairs budget, also weaken the morale and performance of Americans whose task it is to serve our country overseas. In the State Department, posts and positions are being eliminated not because they are redundant but because we cannot afford them. When the national interest dictates the need for emergency assistance of $200 million for the Philippines, we are hard pressed to find the money somewhere in our $3 trillion economy.

America's ability to influence events abroad and insure prosperity at home will be determined in large part by how soon and well we get our own economic house in order. Fortunately we can still make these decisions ourselves without having to accept orders from abroad. Unfortunately, our economy and consumption have become so overextended in recent years that the remedies will involve sacrifice and slower growth in our standard of living. If we ignore these economic realities, American influence abroad will decline significantly and our children will pay the price of our inattention and excesses.

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## Conclusions

By the end of this century many of the pillars on which the global order was rebuilt after World War II will have gone or changed significantly. For the U.S., our nuclear monopoly will have long since disappeared and our relative share of the world economy will be less than half of what it was fifty years ago. Other countries playing a variety of roles already have a major impact on U.S. interests:

- the economies of Japan, Western Europe and the Newly Industrialised Countries

- OPEC and other sources of fossil fuels

- countries with a nuclear weapons capability and those able to acquire it quickly

- states supporting international terrorism

- the poorest countries and peoples who will require humanitarian assistance indefinitely

[L.C.]

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- although capable of destroying the planet and sending military forces anywhere in the world within hours, our ability to shape the world unilaterally is extremely limited.

- even with strong domestic support, an American President can no longer afford financially to do as much internationally as he might want to.

- many of our staunchest friends regard the Soviet threat to the free world as diminished following the decline in the appeal of the Communist ethic and economic system and the accession to power of a reform-minded leadership in the U.S.S.R. Whether this perception is premature or not, it tends to reduce Western dependence on American leadership, especially among the younger generations.

- a growing number of Americans want the U.S. to be less active internationally than before. They insist that other nations assume greater risks, responsibilities and financial burdens for the maintenance of world order and international prosperity.

LC

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* * *

In the past twenty years, the legislative Branch of government and the press have both become powerful players in the making of American foreign policy and their roles are appropriate subjects for public discussion.

Widespread understanding of the role of Congress in the making of American foreign policy is essential. The Legislative Branch has clearly defined constitutional responsibilities in overseeing and funding U.S. foreign and defense policies. Congress must be well informed about the plans and actions of the Executive Branch and no foreign policy is sustainable if a majority of the Congress, reflecting public opinion, is adamantly opposed. At the same time, Congress should not try to micromanage American foreign policy or overburden high Administration officials with demands for redundant testimony. There are better ways for the Executive and Legislative Branches to consult than having the Secretaries of State and Defense spend more than a quarter of their time testifying on the Hill. If a relationship of trust is established between the Congress and the White House, even with policy differences, mutual respect and the essential complementarity that exists between these two branches of government can be maintained. However, when there is a vacuum in Executive Branch credibility or leadership, the Congress tends to legislate foreign

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policy thereby subjecting our national interest to the vicissitudes of
public mood swings.

It is equally desirable to have a better appreciation of the
considerable impact of the media on U.S. foreign policy decision
making. Some tension will always exist between government which seeks
to exploit the press and the media which seeks to expose an
Administraton. There are, however, enough examples of mutually
beneficial relations between journalists and government officials to
believe that the two professions can co-exist constructively. Most
clashes occur between the media and government when journalists confuse
their role with that of governing and officials consider favorable
press coverage more important than policy results. Healthy respect
tinged with skepticism is probably the best natural chemistry possible
between the press and policy makers. However, a responsible press can
make an extremely important contribution to the functioning of our
democracy and the wisdom of our policies.

* * *

We have tried to explain why the U.S. is on the eve of a new
international era and why America cannot continue to conduct
international affairs in the old ways. At a time of political
transition it is important to have a national debate on where the U.S.

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should spend its diplomatic, military and economic resources in the decades ahead. These discussions should involve Americans in all professions because citizens in all walks of life are well informed and vitally concerned about their livelihoods and ultimate survival. At the highest level of our political system, the Republican and Democratic candidates should describe, not specific tactical moves, but their visions of America's role in the world during their presidency. The candidates should explain what international commitments they would reinforce, what they would reduce and what they would try to transfer to others.

As we define our choices we must inform our closest allies and friends about these deliberations, urge them to do likewise and then share our findings. It is essential that we explore with our principal partners the pace and shape of the changes to come. Once common decisions are reached – as we believe it possible to do if we move preemptively and not reactively – we should collectively manage change so as not to disrupt our relations or undermine our publics' confidence in our determination to remain close albeit on different terms.

Over time we would anticipate that American leadership may become less conspicuous in certain areas of the world. We should not, however, underestimate the critical role that the U.S. can continue to play. Far into the future, the U.S. will have the world's largest and

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[L]

page 34

If, therefore, the U.S. can adjust to certain new international realities and develop a broad consensus on our primary interests in the world, we are optimistic about the future. Only a combination of domestic ideological extremism, confusion between past and present, internal economic failings, xenophobia or loss of confidence can weaken our central role in world affairs.

* * *

There is no greater challenge for our next President than that of guiding us through this period of international transition and securing a firm place for the U.S. in a changing configuration of nations. He must focus American resources and energies on areas where more narrowly defined U.S. national interests are at stake. He must not be reluctant to admit that there are important issues, even conflicts, in the world where the U.S. has no role to play because our vital interests are not engaged.

This more restrictive approach to the defense of American

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objectives abroad may be perceived as admitting to a lessening of U.S.
influence worldwide. However, it is essential to realize that our
international standing and national security need not be diminished by
more selective and collaborative international strategies.

The depth and resiliency of the qualities that the U.S. can
bring to its foreign and national security policies should reassure our
allies and ourselves. Often in the past we have overcome great
international challenges thanks to our adaptability and
resourcefulness. The dynamic heterogeneity and individualism inherent
in our society, which can also be the cause of chaos and confusion,
have produced a range of talents - social, scientific and moral - that
remain formidable. Imaginatively analyzing the new realities affecting
America's role in the world should provide the next Administration with
perscriptions for its foreign policies. Through such understanding and
discipline our leaders can guarantee that the future security and
well-being of the American people will be at least as well defended in
the future as they have been in the past.

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Footnotes

(1) HAK believes that we must continue to actively develop SDI because of Soviet research in the field and its potential, if limited, future value to Western defenses. CRV believes that we should continue research and development at a measured pace but is highly doubtful that it will ever be cost-effective militarily or advantageous politically for the U.S. to deploy even elements of an SDI system.

(2) HAK believes that the Administration is justified in claiming that the negotiating record that preceded the conclusion of the Anti-Ballistic Missile Treaty in 1972 allows expanded testing of SDI systems. CRV does not believe that the negotiating record supports the so-called "broad interpretation" of the ABM Treaty.

(3) Nevertheless, CRV could support additional agreements on a 50% reduction on strategic nuclear weapons as well as treaties covering nuclear testing and biological or chemical warfare without some conventional reductions. HAK favors no further arms control treaties unless cuts are made in Soviet conventional weapons or forces. Both CRV and HAK would not advocate reductions in short-short ("battlefield") nuclear

LQ

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weapons without reductions in Soviet conventional weapons and forces.

(4) HAK has serious reservations about an international conference on the Middle East which, he believes, would legitimize a formal Soviet presence in the peace process for the first time. CRV considers that an international conference which could at least provide an umbrella for the first direct negotiations between Israeli and Jordan is desirable.

(5) HAK believes that U.S. backing for the contras has made the Nicaraguan government more willing to reduce its support for leftist guerilla movements elsewhere and to liberalize the country's internal political system. CRV regards the contras as having been a weak and ineffective force that could not win militarily and that was used as the justification for the buildup of a much larger Sandinista military machine and greater aid from the U.S.S.R. than would otherwise have been the case.

FOREIGN AFFAIRS

ROSEMARY HARTMAN
Assistant to the
Managing Editor

July 21, 1988

Dear Dr. Kissinger:

We are pleased to enclose a sheaf of
press clippings referring to your
recent article with Mr. Vance in
Foreign Affairs. We hope these will
be of interest to you.

With best wishes.

/rh
encls.

Hon. Henry A. Kissinger
Kissinger Associates, Inc.
350 Park Avenue, 26th Floor
New York, NY 10022

JUL 25 1988.

The Washington Post

WASHINGTON, D. C.

D. 748,019 SAT. 703,620

SUN. 1,079,109

JUN 9 1988

BURRELLE'S

Michael Kinsley

# The Trade Deficit Is Not the Grocer's Fault

> "The danger is not that the Japanese are genetically programmed to produce more than they consume forever. The danger is ... that they'll start calling in their IOUs."

You know an actress has arrived when she's seen on the arm of a big-shot producer at a trendy restaurant. You know a policy idea has arrived when it's endorsed by Henry Kissinger in Foreign Affairs. In the current issue, Kissinger and Cyrus Vance offer "Bipartisan Objectives for American Foreign Policy," in which they resolve all outstanding foreign policy problems in 23 pages—must reading for anyone who would like an excuse not to read Foreign Affairs anymore.

On the subject of trade with Japan, Kissinger and Vance write: "The American-Japanese dialogue must not be confined to mutual harassment and recrimination on an industry-by-industry basis.... The two countries should ... establish an overall trade balance the United States would find tolerable; within that balance, Japan would have the choice of either reducing its exports or increasing its imports."

This goes by the name "managed trade." The idea is that instead of endless, wearisome attempts to open up Japanese markets to this product or that one, and rather than throwing up protectionist trade barriers of our own, we should cajole or coerce the Japanese into reducing their trade

surplus and let them worry about how.

This notion has been building steam for a while. Liberal economist Lester Thurow endorsed it years ago, Last winter it was advocated in the Harvard Business Review. It is promoted in an influential new book, "Trading Places: How We Allowed Japan to Take the Lead." Lee Iacocca likes it. And now ... Kissinger and stardom.

The theory behind managed trade is that the Japanese mentality dooms traditional free-trade thinking to failure. As Clyde Prestowitz, the former Reagan trade official who wrote "Trading Places," puts it: "The United States and Japan have fundamentally different understandings of the purposes and working of a national economy." The Japanese concentrate on production, not consumption. They're

far less obsessed with increasing their standard of living. They treasure traditional business relationships at all costs, which makes their home market hard for foreigners to crack. Meanwhile, they are ruthlessly organized to capture foreign markets, irrespective of short-term profits.

All of this means that traditional solutions to the trade deficit are futile. The Japanese will always sell us more than they buy from us no matter how good or cheap our products, no matter how skilled our managers, no matter how many formal trade barriers we knock down.

Prestowitz and the others tend to be ambiguous about whether they think we ought to envy the Japanese their alleged economic mentality. Adam Smith's "The Wealth of Nations" was a specific rebuttal to the idea that

a nation prospers by running a huge trade surplus. If the Japanese actually are genetically programmed to hand over $60 billion of real stuff every year, indefinitely, in exchange for nothing but little bits of paper and electronic blips, it's tempting to say, "Go ahead. Make my day."

If we ordered the Japanese to choose between increasing their imports and cutting their exports, there's not much doubt which they'd pick. As Prestowitz describes Japan's economy, the forces that discourage imports are deeply rooted throughout Japanese society, whereas the forces that propel exports are centrally directed. Forced to choose, the Japanese would balance their trade by cutting exports. Today's managed traders are Commodore Perrys in reverse, threatening: "Stop selling to us, or else!"

But a restraint on trade has precisely the same effect whether it is imposed by the buying country or by the selling country. In practice, there is no difference between their proposal and traditional protectionism.

Free-trade theory does not assume reciprocity. It holds that you benefit from your own open borders whether or not the other fellow follows suit. No American is forced to buy Japa-

nese products. We buy them because we wish to. "Managed trade," like ordinary protectionism, would simply deny Americans products they want to buy at prices they wish to pay. It would make our economy less efficient and our citizens less prosperous. That, at any rate, is the case for free trade. You can deny it if you wish, but you can't evade it by talking about "managed trade" and pretending you don't mean protectionism.

The danger is not that the Japanese are genetically programmed to produce more than they consume forever. The danger is the opposite: that they'll start calling in their IOUs. That's why, if we're going to impose any trade rule on the Japanese, we'd be better off requiring them to keep running their $60 billion surplus indefinitely.

The trade deficit is a symptom of our economic dilemma, not a cause. Imagine a family that has run up a huge bill at the grocery store and finally loses patience. "Look," they tell the grocer, "stop extending us credit. Either buy something from us that you don't really want, or stop selling us food." There's no mystery which option the grocer would pick. The mystery is why the family would think its problems were the grocer's fault.

©1988, UFS/The New Republic, Inc.

The Washington Post

JUN 10 1988

BURRELLE'S

Stephen S. Rosenfeld

Perestroika, American-Style

Ronald Reagan's return from a successful summit, coming as Michael Dukakis joins George Bush as his party's sure choice for president, creates a swirl of new and sometimes contradictory currents in the American political debate.

Bush has detached himself from the more sanguine expectations Reagan voiced as the summit ended. But as the serving vice president he has asserted the royal "we" and latched on to the sense of progress and easing conveyed by Reagan's Moscow performance. Bush can and does offer to continue building peace on the Reagan formula of strength and negotiation. The summit hardly answers all questions about his leadership, but it could help offset the considerable tarnishing of his personal foreign affairs credentials that has come about from the linking of his name to the Iran-contra and Noriega affairs.

At the same time, Ronald Reagan has made the world seem safer for a Michael Dukakis. As one who is still working on earning the confidence of a full Democratic spectrum on national security issues, the Massachusetts governor needs all the help

he can get in diminishing the drag imposed by his relative inexperience. Reagan fills part of that need by making the world seem a less turbulent and menacing place, a place in which it's not so risky to entrust foreign affairs to someone whose sensibility on these matters has been cultivated in the relative ease of Massachusetts, not in the Washington pressure cooker.

Even before this summit, events appeared to be shrinking traditional high policy—dealing with Moscow on the big strategic and political questions—as a campaign issue. These questions are permanent and pressing and remain central to governing. But the late Reagan years have produced visible if not conclusive movement toward a political consensus on how to approach them. (See the Kissinger-Vance exercise in bipartisan-ship—a bit like Nancy Reagan and Raisa Gorbachev holding hands—in Foreign Affairs magazine.) George Bush, needless to say, wants none of it: he is reaching to position Dukakis as a reincarnated George McGovern, while Dukakis tries to identify

two Reagans, a good one and a bad one, and to play them against each other.

This is not 1976, when Jimmy Carter offered foreign policy as therapy for a nation that had stumbled perhaps morally as well as politically. Nor is it 1980, when Ronald Reagan offered foreign policy as a means of revival for a nation that had let itself fall into unaccountable weakness.

In 1988 foreign policy is part of the business of a nation that wants to get off the global roller coaster and that has things beyond Soviet-American competition and proxy collision increasingly on its mind. The distraction has been fed by the Gorbachev excitement, and is regarded as regrettable, even dangerous, by those who believe first and only in strength and vigilance. But it is real and purposeful in producing a focus on key domestic connections.

The first of these is drugs, which has somehow suddenly become an establishment foreign policy priority. The drug issue constitutes the sort of nontraditional, nonmilitary, non-East-West, nonideological concern for which liberals, internationalists and proponents of "global interdependence" and

"world order" have been striving to gain attention for 15 or 20 years. There is no broad policy agreement on drugs, but there is a consensus that it requires a new urgency and a new integration of foreign (supply) and domestic (demand) programs. Dukakis has a state record to run on and has been meeting Jesse Jackson's tough competition on this issue. Bush is tied up explaining his administration's multiple lapses on Panama.

The second issue is economic competitiveness in its many aspects. Here a powerful and ironic boost to Americans' own perceptions of their needs has come from Moscow. The challenge of America and Ronald Reagan brought Mikhail Gorbachev to power and gave him the argument and some of the method of his reform, and now the example of Russia and its new leader is helping spur the quest for an American-style perestroika. The common bond is the conviction that, after averting nuclear war, domestic restructuring is the critical national requirement and that the task of foreign policy is to ensure the international conditions in which it can best be pursued.

THE NEW YORK TIMES

6/3/88

2 EX-SECRETARIES
URGE A CONSENSUS

Kissinger and Vance Appeal
for Broad Policy Support
for the Next President

By FOX BUTTERFIELD

In an unusual collaboration by a dip-
lomatic odd couple, Henry A. Kissinger
and Cyrus R. Vance, two former Secre-
taries of State, have issued an appeal
for a "restoration of bipartisan consen-
sus in American foreign policy."

Writing in the current issue of For-
eign Affairs, Mr. Kissinger and Mr.
Vance offer their prescription of the
"national purpose" for the next Presi-
dent. Mr. Kissinger served as Secre-
tary of State under two Republican
Presidents, Richard M. Nixon and Ger-
ald R. Ford. Mr. Vance occupied the
post under a Democrat, Jimmy Carter.

Many of their suggested policies flow
from the mainstream of decision mak-
ing in Washington. But they also offer
some new perspectives.

Because of the huge national budget
and trade deficits and the declining
competitiveness of the American econ-
omy, Mr. Kissinger and Mr. Vance
write, "foreign policy and economic
policy have become increasingly inter-
dependent." Indeed, they argue that
the "weaknesses of the U.S. economy
may be among the most serious and ur-
gent foreign policy challenges to the
next president."

Changes in Their Views

This is far different from when they
headed the State Department, the two
men say. Already, they warn, Amer-
ica's economic troubles have caused
foreign policy problems, including cut-
backs in the number of American diplo-
mats overseas, a drop in the amount of
American foreign aid and the danger
that Washington may not be able to
meet its military commitments.

In the economic realm, Mr. Kissin-
ger and Mr. Vance suggest that the
United States must formulate a new
and more comprehensive "national
strategy" for dealing with Japan.
Americans must not fall into squab-
bling with Japan over individual trade
issues or the size of Tokyo's military
budget, they write.

But the next administration should
seek to "establish an overall trade bal-
ance the United States would find toler-
able." Then within that balance, they
write, "Japan would have the choice of
either reducing its exports or increas-
ing its imports, thus removing the need
for sector-by-sector industrial negotia-
tions."

Mexico's Challenge

Although neither Mr. Kissinger nor
Mr. Vance were known for their inter-
est in Mexico, they say that "Mexico
may well present the most challenging
problems for the United States in the
Western Hemisphere."

Mexico is a particularly difficult for-
eign policy issue, they say, because
"the usual levers of diplomacy, mili-
tary power and international economic
policies" cannot be applied to a
friendly neighbor. Moreover, most of
America's troubles with Mexico in-
volve this country's own domestic
issues: illegal immigration, drugs and
trade.

On the Middle East, the two men po-
litely confine their disagreement to a
footnote, with Mr. Kissinger opposing
the kind of international conference on
the Middle East proposed by the Rea-
gan Administration, and Mr. Vance
favoring it. But both men say the
United States should adopt the policy
that "Israel should not and cannot stay
where it is in the occupied territories."

Both men also lament what they see
as the increasing power of the press in
foreign policy. Some journalists, the
men write, "confuse their role with
that of governing," while some "offi-
cials consider favorable press cover-
age more important than policy re-
sults." While in office, Mr. Kissinger
was an master of the background press
briefing, getting his views into print
while protecting his identity.

ST. LOUIS POST-DISPATCH

ST. LOUIS, MO.
D. & SAT. 308,279
SUN. 511,669

JUN 17 1988

# A New Foreign-Policy Blueprint

In style and thinking, former secretaries of state Henry Kissinger and Cyrus Vance are very different. But in a jointly written article in *Foreign Affairs*, they speak as one on a critical issue now facing America. Their title sums it up: "Bipartisan Objectives For American Foreign Policy."

Mr. Kissinger and Mr. Vance decry the lack of continuity in American foreign policy. They show that for years, our allies — and even enemies — have been whipsawed by America's "tendency to oscillate between exaggerated belligerence and unrealistic expectations." Moreover, with sweeping political, economic and military changes in the world, this lack of consistency could doom America "to growing irrelevance" in the 21st century.

Their argument is more than just a call for a return to a bipartisan foreign policy. Both men want a pragmatic policy that takes a long-term view of the issues.

While "America's role in some areas of the world may become less conspicuous," both men argue that as the "world's largest and most innovative economy... cultural and intellectual leader (and) a model democracy," the United States must remain internationalist in its thinking and actions.

This is not a call for America to resume its role of world policeman, intervening everywhere. Rather, the former secretaries stress the critical role of international cooperation and the redefining and sharing of economic, political and military responsibilities between America and its allies. They argue that among the most important problems will be reshaping the

missions of NATO, defining Japan's new role in the world and forming a more politically mature relationship between the United States and Latin America. Undergirding all of this, they say, must be a revitalized American economy. Failure to do so, they rightly argue, spells disaster.

While both men see the future world as complex and multipolar, America's relations with the Soviet Union remains critical, if not central. But as in other cases, the authors argue for a careful, pragmatic approach: "Our Soviet policy should not be determined by partisan politics in the United States, nor by the internal politics of the Kremlin. Our ultimate concerns must be Soviet foreign policy and our concept of U.S. national interests."

In 1947, *Foreign Affairs* published one of its most famous articles, "The Sources of Soviet Conduct," by "Mr. X" — later identified as George Kennan of the State Department. It argued that for the sake of world peace, the United States had to "contain" Soviet aggression in Europe. Its argument became the underpinning for much of America's postwar foreign policy.

Now, the Kissinger-Vance article spells out a new direction for America in a changing world. While still internationalist, this new policy is based more on cooperation with allies than brute military strength. It also reminds Americans of the critical need for a foreign policy based on consistent, long-term goals and not short-run objectives. Its sophisticated, incisive analysis should be mandatory reading for George Bush and Michael Dukakis.

JUN 15 1988

For the Record

From an article by former secretaries of state Henry Kissinger and Cyrus Vance in Foreign Affairs (Summer 1988):

The legislative branch of the government and the news media have both become increasingly powerful players in the making and implementation of American foreign policy; their roles are appropriate subjects for public discussion.

The legislative branch has clearly defined constitutional responsibilities in overseeing and funding U.S. foreign and defense policies. Congress must be well informed about the plans and actions of the executive branch, and no foreign policy is sustainable if a majority of the Congress, reflecting public opinion, is adamantly opposed. At the same time, Congress should not manage the tactics of American foreign policy nor should it overburden high administration officials with demands for redundant testimony. Surely there are better ways for the executive and legislative branches to consult than having the secretaries of state and defense spend more than a quarter of their time on repetitive congressional testimony....

It is equally desirable to have a better appreciation of the considerable impact of the media on U.S. foreign policy decision-making. Some tension will always exist between government, which seeks to use the press to make its case, and the media, which seeks to obtain more information. A more mature relationship is needed on both sides. Most clashes between the media and the government occur when journalists confuse their role with that of governing, or when officials consider favorable press coverage more important than policy results. A measure of restraint and understanding by both sides is essential.

The Clarion-Ledger
Jackson Daily News
For Mississippians

SAT. 95,095 SUN. 114,552

JUN 19 1988

Consistency
EDITORIAL
E 5061

New policy concepts required

One of the problems with this nation's foreign policy is its inconsistency from administration to administration.

It is critical in these times, when the United States' foreign policy positions affect a more interdependent global community, that consistency be stressed.

In this year of presidential politics, foreign policy issue debates are colored by party affiliation. That's to be expected. But once a new administration is put into place, then partisan politics must be shoved into the background.

The new president, whoever he might be, must ease this nation through a transitional period of new concepts in foreign policy that emphasize long-range planning more than easy-answer, partisan politics.

The case for this new flowing-type foreign policy is made by former Secretaries of State Henry Kissinger and Cyrus Vance in the summer edition of *Foreign Affairs*.

Although both men have differing political views, they recognize the need for a change in post-World War II thought in dealing with world issues. Old solutions no longer are effective because the United States doesn't have singular superpower status anymore.

Not only has U.S. public opinion changed about how foreign policy should be executed, but the world community has evolved during the past 40 years.

On the defensive front, the United States is one of many countries with the capability of destroying an enemy with nuclear weapons. In the economic arena, this country must share more than half of the world economy with other world powers such as Japan.

The United States can cope with these changes by taking a precise approach in the way it deals with other countries.

There are areas such as the Middle East and Central America where vital U.S. interests are at stake. Efforts should be centralized to protect these areas that affect not only foreign affairs, but also U.S. domestic policy.

A consistent philosophy of governing interests overseas combined with a plan of action will strengthen this country. This long-term, unified approach to foreign policy will take discipline on the part of national leaders of both parties, but it is necessary to cope with a changing world.

JERUSALEM POST

NEW YORK, NY
WEEKLY

JUN 18 1988

# The generals and the West Bank

ISRAEL has never been known for its ability to convert brilliant battlefield successes into political-diplomatic gains. But it is precisely this grey area between tactics and grand strategy that Israel is being increasingly called upon to address as it confronts the question of the military importance of the West Bank and the Gaza Strip.

Lately, this issue has been the subject of a spate of quotations, attributed to a variety of retired Israeli generals, in the Israeli and the international press. Some have been associated with the several-month-old Council for Peace and Security to which a few dozen Israeli reserve major generals and brigadier generals belong. The gist of their statements may be summarized as follows: Under certain conditions, Israel's security might be strengthened by a territorial compromise, as compared with a continuation of the current political status quo.

One of the most widely cited examples of this sort of assessment is the view of Brig.-General (res.) Ephraim Sneh, the former head of the Civil Administration in the West Bank, that three Awacs (airborne warning and control system) radar aircraft would provide Israel with better early warning than the current early-warning stations based in the West Bank's mountain ridges.

Another general's assessment was widely quoted out of context in the Israeli press. Former Israeli Air Force Commander Amos Lapidot reportedly stated that "from the standpoint of Israel's defence, the territories have no value." Later he clarified his position in a letter to Prime Minister Shamir, stating that the Israel Air Force still required early warning radar coverage and an air defence capability in the territories. He especially emphasized the importance to the Air Force of the West Bank's air space, the control of which he could not envisage conceding. With these security considerations stated, Lapidot expressed his support of the principle of "territories for peace."

One of the central questions that arises in connection with these various assessments is what is their essential message or political purpose. If the point of the generals is that from the standpoint of Israeli security, territorial compromise is conceivable, then their message is not particularly timely, given the current diplomatic situation in the Middle East.

If King Hussein is in the process of some sort of retreat into the East Bank, leaving the Palestinians to negotiate for themselves, the entire discussion of territorial compromise over the West Bank becomes increasingly a theoretical exercise. A Palestinian mini-state will be even less likely than Hussein to surrender its air space to Israel or grant the IDF an extra-territorial presence on various hilltops or in the Jordan valley.

ONE POLITICAL stance that most of the generals recently quoted did not intend to take has nonetheless been attributed to them: that Israel can get out of the West Bank entirely. Thus the Newsweek story, that quoted Sneh, carried a large sub-heading: "Israeli officers argue the West Bank is a liability." Similiarly, Ha'aretz, on May 31, headed its lead editorial with: "Generals dismiss the security value of the West Bank." There is a considerable difference between agreeing to territorial compromise and agreeing to total withdrawal.

This misinterpretation of the generals' position is particularly damaging to Israeli diplomacy at this time. One little-noticed development during the past few months is the increasing international recognition that Israel may have legitimate strategic interests in the West Bank that ought to be accounted for.

## Dore Gold

Thus, Secretary of State George Shultz last April stated in public that Israel cannot be expected to return to the 1967 borders. This point was picked up by former secretaries of state Henry Kissinger and Cyrus Vance in a bi-partisan policy paper for the next administration, which will be published in Foreign Affairs and was condensed in Newsweek. Kissinger and Vance wrote that "a return to Israel's pre-1967 borders would not be compatible with Israel's survival." They specified that "Gaza and parts of the West Bank, including major Arab cities, should be put under Arab control."

Even Soviet leader Mikhail Gorbachev, while not relating to the need for Arab territorial concessions, nonetheless acknowledged for the first time, at the end of the recent Moscow Summit, that Israeli security requirements will have to be recognized. The misrepresentation of the generals' positions could undermine this new-found readiness to take Israel's strategic and territorial needs into account.

GIVEN these recent statements, especially from the American side, the retired generals have a potentially important role to play despite the hardening of Arab positions. It is particularly important at this time to clarify what precisely are Israel's strategic needs in the West Bank, regardless of political sentiments or ideological proclivities.

Is airborne radar a real alternative to ground-based radar, as Sneh suggests, or do airborne systems suffer from distinct disadvantages as explained by Brig.-General (res.) Aryeh Shalev in his classic study on Israel's security requirements in the West Bank?

In an age of ballistic missiles, is territorial depth less important, as suggested at times by American spokesmen, or will forward-based warning stations be even more necessary for the timely management of anti-tactical ballistic missile defence in the future?

What sorts of compensation should Israel seek for making territorial concessions? Would limitations on the deployment of foreign armies in the East Bank alleviate Israel's loss of depth in areas of the West Bank? While it is possible to argue the territorial question on strategic grounds as easily as it is on ideological grounds, a rough consensus might be possible to ascertain as to what Israel cannot concede.

With the basic outlines of Israel's needs known and established, albeit unoffically, Israel would be placed in a considerably stronger diplomatic position in the peace process in the future. If the U.S., and to a lesser extent the USSR, are becoming increasingly ready to acknowledge that a settlement must take into account Israeli security needs, as well as Palestinian rights, failure to articulate what actually constitute Israel's strategic requirements leaves the international community to only consider the Palestinian side.

With greater public awareness of the Israeli "red lines" in negotiations, certainly its friends in Congress would be in a better position to understand why a particular Arab proposal in the future might not be viewed as serious in Jerusalem. This sort of understanding will be essential as Israel comes under increasing pressures in the future to make concessions in the West Bank.

It may well become apparent that Israel's strategic requirements in the West Bank do not lend themselves to territorial division as currently proposed by the Israeli Labour Party. Alternative models of sovereignty that grant both Arabs and Israelis different degrees of control over all of the West Bank might eventually emerge as the only way of addressing minimal Palestinian rights as well as geographically dispersed Israeli strategic interests.

Such functional compromises, which were once put forward by Moshe Dayan, are not remote from positions advocated by moderate elements in the Likud bloc. But whether the reconsideration of Israel's strategic needs in the West Bank point in the direction of territorial or functional compromises, the debate of the generals over the strategic value of different parts of the territories could elevate the national debate in this country to a discussion of real substance, instead of the exchange of dogmatic tirades that it has tragically become.

*(The writer is director of the U.S. Foreign and Defence Policy project: at the Jaffee Centre for Strategic Studies at Tel Aviv University.)*