UNITED NATIONS ASSOCIATION of the UNITED STATES of AMERICA

Chairman of the Board
The Honorable Arthur J. Goldberg

President
Robert S. Benjamin
Chairman of the Board
United Artists Corporation

Chairman, Executive Committee
Oscar A. De Lima
Chairman of the Board
Roger Smith Hotels Inc.

National Chairman, UN Day
Leonard F. McCollum
Chairman of the Board
Continental Oil Company

Secretary
Miss Ann Lord Strauss
New York, N. Y.

Treasurer
Andrew P. Maloney
Vice President
Bankers Trust Company

Executive Vice President
Porter McKeever

Honorary Chairmen
The Honorable Harry S Truman
The Honorable Dwight D. Eisenhower
The Honorable Ralph J. Bunche
The Honorable Paul G. Hoffman

Honorary President
Herman W. Steinkraus

833 United Nations Plaza, New York, N. Y. 10017

(212) OXford 7-3232

Cable Address UNASAMER

MEMORANDUM

November 27, 1968

TO: Members of the Drafting Committee, Panel on
**Atlantic Relationships, Eastern Europe and the**
**United Nations**

Theodore C. Sorensen (Chairman)
Peter Peterson (Vice-Chairman)
L.J. Legere

Henry Kissinger
Bob Kleiman

FROM: Major-General H. A. Gerhardt

SUBJECT: (a) Comments of the Drafting Committee Members on the Draft Report
(b) Date of Drafting Committee Meeting, December 6

Enclosed are the comments of Messrs. Sorensen, Peterson, Kissinger and Legere to the Draft of the Report which was circulated to you on November 21. The comments are placed opposite the pages of the Draft to which they apply. Bob Kleiman's comments will be put in the mail to the Drafting Committee members shortly.

An article by C. L. Sulzberger, *A New Look at an Old Problem*, which appeared in the Times on October 25, is also enclosed as interesting background for the work of the Drafting Committee.

The Chairman has called a meeting of the Drafting Committee for Friday, December 6, between 6:30 - 9:30 PM. (An earlier beginning time for the meeting would be more convenient for Mr. Peterson. We will check out this possibility.) We will meet at the Harvard Club, 27 West 44th Street, in the North Room.

HAG:ph

Enclosures

Peter Peterson
---

Overall Comments on the Draft
---

1. The report should emphasize that while the Czech crisis makes it necessary to take new measures in strengthening and unifying the West, this is not sufficient. The world is changing, Eastern and Western Europe included, and new approaches must be found for dealing with new sets of problems. This should be emphasized earlier in the report and related to the new attitudes of youth and to the new common environmental and industrial problems which are appearing. (He does not think that youth in the West or in the East will in the future weigh the military factor as heavily as it is now weighed by the older generation. The emphasis will be more on "how you help people").

2. The report should, perhaps earlier than it now does, show that bridge-building takes two sides, It is obvious that the Russians control their side, but the situation calls for new institutions which will engage the two sides in continuous negotiation. In cases where new institutional approaches are developed within the West, they should be designed in such a fashion that they could later include East European participation.

3. In view of the extent of the financial crisis in the West, he feels the report needs a section on that subject with, if possible, a specific proposal such as a new Bretton Woods Conference.

4. He still feels that the report needs a specific proposal which would relate the new attitudes among youth to the common problems of urbanization, environmental pollution and industrial innovation that are appearing in industrialized societies -- both East and West. Perhaps, this could be a new "Atlantic Institute" at the graduate or post-graduate level which would draw selected students from East and West, and where they could come together to get the best of modern research and thinking on these subjects. He has in mind an institute which for these fields would do much the same thing that the Institute for Advanced Studies in the Behavioral Sciences located at Palo Alto does for the behavioral sciences.

5. He believes that the report should contrast more graphically than it now does the enormous resources being put into military defense and the meager resources being devoted to world-wide economic and social development. Some figures of respective magnitudes are essential.

In this respect the report should emphasize that efforts to include the Soviet Union in the aid consortia for India would be only a first step to see if East-West cooperation is possible in the aid-giving field.

[tc]

Comments from Professor Kissinger on the Draft Report

Aside from minor changes which are indicated on the attached
dictated comments from Professor Kissinger, he had three main points:

The first pertains to the statement on page 24 concerning the ratification of the non-proliferation treaty by Germany. He felt that stressing the non-accession of Germany to the non-proliferation treaty was adopting the Soviet position and that it was the Soviets that would create the tensions in Germany. He felt that the intent of the sentence that referred to the controls of the IAEA was unclear and should be redrafted.

The second section dealt with trade and he stated that the draft read very well but he did not have the competence to judge whether the measures were practical and feasible. He stated he was not an expert on trade.

The third point dealt with the general question of assuming that the stationing of forces was a tension-creating condition. In his view difficulties had broken out mainly in places where the forces were not in confrontation and that it was just as plausible to argue that the confrontation of these forces produced stability rather than tension.

Contents

<table><thead><tr><th></th><th>page</th></tr></thead><tbody><tr><td>I. The New Setting: After Czechoslovakia.</td><td>1</td></tr><tr><td>II. Recent Assumptions in European Policy: Have They Been Wrong?</td><td>7</td></tr><tr><td>III. Building the Strength of the West.</td><td>13</td></tr><tr><td>The North Atlantic Alliance.</td><td>13</td></tr><tr><td>A European Caucus in NATO.</td><td>15</td></tr><tr><td>Britain and the Common Market</td><td>17</td></tr><tr><td>Common Approaches to Common Industrial and Environmental Problems.</td><td>18</td></tr><tr><td>The Quality and Character of Consultation in the Alliance.</td><td>19</td></tr><tr><td>IV. Approaches to a European Settlement.</td><td>22</td></tr><tr><td>Past Efforts that have Failed.</td><td>22</td></tr><tr><td>The Search for East-West Common Interests through the United Nations.</td><td>23</td></tr><tr><td>East-West Trade.</td><td>25</td></tr><tr><td>Cooperation in Aid.</td><td>27</td></tr><tr><td>European Security and the German Question.</td><td>29</td></tr><tr><td>A Proposal.</td><td>31</td></tr><tr><td>The United States, the Soviet Union and Europe.</td><td>36</td></tr></tbody></table>

- 1 -

## Legere

Delete entire first page. Substitute the following:

During the first few years after World War II, relationships between the United States and Europe were directed single-mindedly toward the containment of Soviet power. The Truman Doctrine and the initiation of the Marshall Plan in 1947, the creation of NATO two years later, and the beginnings of West European supra-national institutions at the turn into the 1950's all proceeded from U. S. leadership, at U. S. urging, or at least with strong U. S. encouragement. The nations of Western Europe were quite literally dependent on the United States not only for their economic recovery but for their very security from the sharply perceived danger of Soviet military aggression against their territory.

By the late 1950's and increasingly during the 1960's, the sense of common danger which had brought the Atlantic Alliance into being and nurtured it thereafter, had begun to erode. No real progress had been made in resolving the German question. The recovery of Western European economies and the growing disbelief in the likelihood of a Soviet attack had permitted if not fostered a resurgence of national

THE NEW SETTING: AFTER CZECHOSLOVAKIA

In the twenty-four years since the end of World War II, the peace in a divided Europe has been kept by means of an uneasy balance of power.

For a generation, the military strength of the Atlantic Alliance, -- based substantially on the U. S. deterrent force, important progress in the recovery and the economic integration of Western Europe, and significant common interests of the countries of the larger Atlantic area, all have combined to create that Western strength which has made possible this East-West balance of power. The economic and political cooperation of such ancient rivals as France and Germany has been vital to this effort. The moves toward economic integration in Western Europe, while far from complete, have constituted a major achievement of the Twentieth Century.

But even before the recent crisis over Czechoslovakia, the stability of that military and political balance appeared to be threatened by newly emerging forces in Europe.

→ The sense of common danger which brought the Atlantic Alliance into being twenty years ago had begun to erode. No real progress had been made in resolving the German question. The recovery of Western European economies and the growing disbelief in the likelihood of a Soviet attack had permitted, if not fostered, a resurgence of national

In the twenty-four years since the end of World War II, peace in a divided Europe has been kept by means of an uneasy balance of power.

For a generation, the military strength of the Atlantic Alliance, and substantially on the U. S. deterrent force, important progress in the recovery and the economic integration of Western Europe and significant common interests of the countries of the larger Atlantic area have combined to create that Western strength which has made possible an East-West balance of power. The economic and political cooperation of such ancient rivals as France and Germany has been vital to this effort. The moves toward economic integration in Western Europe, although far from complete, have constituted a major achievement of the Twentieth Century.

Even before the recent crisis over Czechoslovakia, the stability that military and political balance appeared to be threatened by newly emerging forces in Europe.

The sense of common danger which brought the Atlantic Alliance to being twenty years ago had begun to erode. No real progress had been made in resolving the German question. The recovery of Western European economies and the growing disbelief in the likelihood that Soviet attack had permitted if not fostered a resurgence of national

- 2 -

[L.C]

## Legere

Delete first six lines. Substitute the following: independence. Although significant economic integration was taking place in the Common Market, this new nationalism and related factors were causing reassessments of earlier beliefs that the geographical proximity and enlightened economic self-interest of Western Europe on nations would inevitably bring about their regional political unification.

Delete from second paragraph "Romania has begun to develop... policy".

Delete last paragraph. "In the years..."

## Kissinger

yes, but must take account that the Czech invasion has almost slowed down this process (referral to "Romania has begun to... in Eastern Europe.")

Peter Peterson

Section I

Page 2: first sentence at the top of the page is rather long.

Page 2 - first full paragraph, next to the last sentence, Beginning "Romania" is a little blunt.

- 2 -

independence. At the same time that important economic integration
was taking place in the Common Market, nationalism, and the growing
world-wide economic and political interests and relationships of these
countries, were defying earlier assessments that their geographical
proximity on a peninsula called Western Europe would in itself be a
significant factor in making for regional political unification.

But if Western Europe was struggling with problems of political
fragmentation, no less could be said for the countries of Eastern Europe.
Some relaxation of East-West tension, a new ferment among youth
and the intellectuals, and pressure for economic and political moderni-
zation, have been spurring a search for national identity -- and
propelling these countries toward a more independent set of world-
wide relationships. Romania has begun to develop her own foreign
policy. A new pragmatism -- a new desire to be done with irrelevant
dogma -- has been astir in Eastern Europe.

Small wonder that Germany, caught in the interface of two
competing ideological systems and two massive military confron-
tations, uncertain as to her political future and anxious to improve her
relationships with her neighbors, should open up her own negotiating
window to the East.

In the years since World War II, there have been many differing
views as to the proper relationship between the United States and Europe.

Legere

Delete first paragraph.

Delete second paragraph and substitute the following:

It was perhaps inevitable that in the light of these developments
differing convictions concerning proper United States-European relationships
should emerge. Some have talked of the need for strong bonds linking elements
of an "Atlantic Community" on both sides of that ocean. Others have believed
it more realistic for the Western Europeans to establish their own
"Third Force", which could play a genuinely independent role and perhaps
make reunification of Germany more likely.

- 3 -

The first approach, based on the Marshall Plan and the economic recovery of Europe, and followed by the measures taken in Greece and Turkey under the Truman Doctrine, was directed to the containment of Soviet power. Following World War II this power had remained implanted in Eastern Europe. With the continuance of the Soviet threat, moves followed for the creation of NATO and the economic and political integration of Western Europe -- including the integration of West Germany into the Western structure.

It was perhaps inevitable that there should be differing convictions as to the proper goal in United States-European relationships. Some have talked of the need for a politically integrated "Atlantic Community". Others have believed it more important and more realistic for the Western Europeans to establish their own "Third Force", which would be in a position to play a more genuinely independent role -- thus hopefully making it more possible to integrate a reunited Germany. Still others have believed the goal should be a stronger economically and politically unified Western Europe, in partnership with the United States.

United States policy makers at different times have emphasized different aspects of these three approaches. No one approach has ever become firm U. S. policy. The failure, however, of both the Europeans and ourselves to develop clearer goals for our relationships

- 3 -

United States policy makers at different times have emphasized different aspects of these three approaches. No one approach has ever become firm U.S. policy. The failure, however, of both the Europeans and ourselves to develop clearer goals for our relationships

- 4 -

## Legere

Substitute for the two full paragraphs the following:

For several years prior to 1968 it was becoming clear that the leadership which the United States assumed after World War II for the security and economic recovery of non-communist Europe was increasingly regarded by the Europeans themselves as not altogether necessary or welcome. Deep involvement in the Vietnam War limited the initiatives the United States could take in the Western alliance and confused its European partners about their place in U. S. world-wide commitments. Congressional suggestions for American troop withdrawal from Europe and increased Soviet naval strength in the Mediterranean added to the profound sense of unease in Western Europe, and queries about new United States initiatives were often met with the suggestion that new moves should wait until *after* Vietnam, or *after* de Gaulle, or *after* the U. S. presidential elections, or *after* U. K. entry into the Common Market.

in the light of rapidly changing settings in both Eastern and Western Europe has led to major ambiguities in U. S. - European relationships.

For several years it has been clear that the leadership which the United States assumed after World War II for the security and economic recovery of non-communist Europe was no longer necessary nor welcome. Deeply engaged in a military struggle in Southeast Asia, the United States found herself limited in the initiatives which she could take in the Western alliance -- and with her European partners confused as to their place in United States world-wide commitments. Congressional suggestions for American troop withdrawal from Europe, a U. S. preoccupation with Vietnam and Southeast Asia, and increased Soviet strength in the Mediterranean have all led to a deep sense of unease in Western Europe.

Yet at the very time that Western Europe has been uncertain of the American commitment, queries about new United States initiatives have met with the response that new moves should wait until after Vietnam, or after de Gaulle, or after the U. S. presidential elections, or after U. K. entry into the Common Market.

There was, therefore, even before the Czech-crisis, a major need for the United States to re-examine its policy toward Europe, both

- 4 -

Yet at the very time that Western Europe has been uncertain of
the American commitment, queries about new United States initiatives
have met with the response that new moves should wait until *after*
Vietnam, or *after* de Gaulle, or *after* the U. S. presidential elections,
or *after* U. K. entry into the Common Market.

There was, therefore, even before the Czech crisis, a major need
for the United States to re-examine its policy toward Europe, both

- 5 -

## Legere

Delete in first sentence "and to consider afresh Europe's place in our global strategy."

## Substitute for second full paragraph:

The fresh look that is required must be both at Europe and at Europe's place in the global context. The tide of rising expectations in the "have not" areas calls in the future for far greater cooperation and coordination in the effective transfer of resources, and such expectations (and frustrations) are not confined to the world's developing areas but include the youth of the industrialized areas -- both West and East as well. They are restless with the dogmas of the past, anti-establishment, and intent on reform.

- 5 -

Eastern and Western, and to consider afresh Europe's place
in our global strategy. But with the invasion of Czechoslovakia
by the Soviet Union and four of its Warsaw Pact allies, the time
has clearly come for a searching reappraisal of U.S. and Western
policy, both toward the East and toward moves to strengthen the
West.

The invasion cut across what many had assumed would continue
to be an orderly course of bilateral bridge-building between
Western and Eastern Europe. The Soviet action has shown the
limitations which they will, at least in the near term, place on
liberalization in the East and on the Western outreach of individual
members of the "socialist commonwealth" in Central Europe. It
has forced the West, and especially the members of NATO, to
reassess priorities in the allocation of their own resources.

The fresh look that is required must be both at Europe and at
Europe's place in the global context. The tide of rising expectations
in the "have not" areas calls in the future for far greater cooperative
North-South effort in the effective transfer of resources. But the
tide of expectation is not confined to the world's developing areas.
There is a rising tide of expectation on the part of the youth of the
industrialized areas -- both West and East. They are restless with
the dogmas of the past, anti-establishment, and intent on reform.

- 5 -

Eastern and Western, and to consider afresh Europe's place
in our global strategy. But with the invasion of Czechoslovakia
by the Soviet Union and four of its Warsaw Pact allies the time
has clearly come for a searching reappraisal of U.S. and Western
policy, both toward the East and toward moves to strengthen the
West.

It is a setting requiring reappraisal and new policies. The
United States cannot count on drifting into better relationships with
Europe -- either East or West.

- 7 -

## Legere

Delete first paragraph.

Substitute the following for paragraphs two, three, and four:

U. S. policy in Europe since World War II has been based on three premises. The first premise has already been mentioned. It is that Western European economic integration would in time lead to substantially greater political unity, and that the resulting Western European economic and political unity (and independence) would be in the U.S. interest.

- 7' -

II

RECENT ASSUMPTIONS IN EUROPEAN POLICY HAVE THEY BEEN WRONG?

Before suggesting new directions for the Atlantic Alliance, and considering the present options for East-West relations in Europe, it would be well to look at several of the assumptions on which recent United States policy toward Europe have been based. What are these assumptions and where have they proved to be wrong?

(A)

The first premise has been that Western European economic integration would in time lead to substantially greater political unity, and that the resulting Western European economic and political unity and independence would be in the United States interest.

Thus, following the massive infusion of United States economic assistance through the Marshall Plan and the development of the European Coal and Steel Community, the Treaty of Rome and the Common Market moved to implement the Monnet dream of eliminating trade and tariff barriers, gradually coalescing the six separate national economies, and binding France and West Germany more deeply in common economic enterprise -- and in the process hoping to build the foundation for political unity. This fitted well with the "containment" philosophy of the period and with the United States

- 7'-

II

# RECENT ASSUMPTIONS IN EUROPEAN POLICY: HAVE THEY BEEN WRONG?

- 8 -

## Legere

Substitute for first full paragraph:

The economic and financial aspects of the integration envisioned by Jean Monnet and other great "Europeans" have been outstandingly successful. On July 1, 1968, eighteen months ahead of the Common Market treaty schedule, all tariffs, quotas and other barriers to trade among its six members were eliminated and a uniform tariff schedule established on imports from the rest of the world. The Common Market has become the world's biggest trader.

Delete second paragraph.

Peter Peterson

Section II

Page 8: Suggests the elimination of the words "and strategic" in the first line of the third full paragraph.

(In the preceding paragraph the word should be "multinational corporation" instead of "multinational cooperation".)

- 8 -

policy of a revitalized European economy which could withstand
the challenge of local communist parties and provide the basis
for political stability.

The economic and financial aspects of the Monnet vision have
been an outstanding success. On July 1, 1968, eighteen months
ahead of the Treaty schedule, all tariffs, quotas and other
barriers to trade among the Six were eliminated and a uniform
tariff schedule was established to apply to imports from the rest
of the world. The Common Market has become the world's biggest
trader.

It is perhaps ironical that this important progress in developing
a larger economic unit in Europe has opened the way for American
 enterprise, with often superior managerial and innovative skills,
and aided by the new instrument of the multinational corporation, to
challenge European industry in a setting still encumbered with out-
moded national restrictions and restraints.

It is the political and strategic components of the Monnet dream, however,
encountered much greater
that have met with the greatest resistance.

Spurred by a belief on the part of many Western European
countries that they had many important interests in common with
--countries outside the Common Market area, by a resurgent nationalism --

- 8 -

It is perhaps ironical that the important progress in developing
a larger economic unit in Europe has opened the way for American
enterprise, with often superior managerial and innovative skills,
and aided by the new instrument of the multinational cooperation, to
challenge European industry in a setting still encumbered with out-
moded national restrictions and restraints.

It is the political and strategic components of the Monnet dream
that have met with the greatest resistance.

Spurred by a belief on the part of many Western European
countries that they had many important interests in common with
countries outside the Common Market area, by a resurgent nationalism --

Legere

Add after Germany in second paragraph, "including specifically
East Germany."

Delete third full paragraph and substitute the following:

The vision of a united Germany, merged into a unified Western Europe
allied with the United States, is dimmed if not dead. It therefore would
appear appropriate to suggest that this _first premise_ of past U. S. policy toward
Europe is also dimmed if not dead.

Delete in last paragraph "and a readiness for immediate response
to a Soviet attack" and "both".

Kissinger

Delete the word "grim" in the seventh line.

- 9 -

especially in Gaullist France -- and by the exclusion of Britain
from the Common Market, the moves for political unity have failed.
Similarly, the belief that, somehow, the binding of West Germany
into an economic and political framework for Western Europe would
set the strategic stage for the ultimate incorporation of a unified
Germany into a Western European economic and political entity,
has proved a grim illusion.

Perhaps the principal lesson of the Soviet response to liberali-
zation in Czechoslovakia is that the military power of the USSR is,
for the foreseeable future, completely at the service of "Soviet-
style socialism" east of the present East-West demarcation line
through Germany. Socialism, Soviet-style, means among other
things firm one-party control and heavy censorship.

The vision of a united Germany, merged into a unified Western
Europe, is dimmed if not dead.

The second premise of United States European policy has been
that a strong military defense posture by the countries of the North
Atlantic area, and a readiness for immediate response to a Soviet
attack, was both fundamental to the security of Western Europe,
and essential if the stage was to be set for an ultimate settlement
in Central Europe.

- 10 -

## Legere

Delete first full paragraph: substitute the following for the second paragraph:

If there is a belief in Europe today that the threat of Soviet attack is no longer serious, it is principally because the effectiveness of NATO provided Western Europe with the opportunity for economic and political revival and has convinced the Soviet leaders that military adventure would indeed invite disaster. While several NATO partners, notably France, have slacked off in recent years from the fulfillment of their Alliance obligations, the Soviet move into Czechoslovakia has charged NATO with a new sense of urgency, virtually assuring that its 20th anniversary in 1969 will be characterized by a new sense of mission rather than by national drop-outs. In the matter of this second premise, therefore, it would appear appropriate to suggest that it remains valid and should continue to help guide U. S. policy until an agreed political arrangement for European security can replace NATO military strength as the basis for preserving the peace in Europe.

Delete sentence bottom of page 10.

## Kissinger

Regarding paragraph two, this belief has lessened with the Czechoslovakian events.

Peter Peterson

## Section II

Page 10 - second line: Feels it is too strong to say that NATO has been an "outstanding success".

Page 10 - fifth line: Can we say that "NATO has been the principal instrument" for facing down the Soviet military threat when the U.S. nuclear deterrent has been such a large component of NATO's strength.

- 10 -

NATO, THROUGH IT HAS UNDERGOED SOME DIFFICULT PERIODS,.
Difficult-as-have-been-some-of-the-periods-through-which-NATO-
has-passed, it-must in general be rated an outstanding success.

Despite de Gaulle's having forced the removal of its headquarters
from France, and France's withdrawal from its integrated command,
REIMHINS
NATO has been the principal instrument for facing down the Soviet
military threat to Western Europe.

AS SOME BELIEVE,
If there is a belief in Europe that that threat is no longer serious
EITHER
AND REAL, IN BERLIN, OR FOR EUROPE WEST OF THE DEMARCATION LINE,
it is principally because NATO'S shield has been effective --
providing Western Europe with the opportunity for economic and
political revival, and convincing the Soviet leaders that military
adventure would indeed invite nuclear disaster. While several
NATO PARTNERS have not maintained their military units at strength,
and while balance of payment problems have caused major difficulties
in recent years in agreements for force financing, the Soviet move
into Czechoslovakia has charged NATO with a new sense of urgency.
It has made certain that its 20th anniversary will be characterized
by a new sense of mission. THERE ARE UNlikely TO BE ANY DROP-OUTS
in 1969.

(c)

A There is a third principal assumption which has in general
characterized United States policy in recent years. The assumption

- 10 -

Difficult as have been some of the periods through which NATO
has passed, it must in general be rated an outstanding success.
Despite de Gaulle's having forced the removal of its headquarters
from France, and France's withdrawal from its integrated command,
NATO has been the principal instrument for facing down the Soviet
military threat to Western Europe.

If there is a belief in Europe that that threat is no longer serious
and real, in Berlin, or for Europe west of the demarcation line,
it is principally because NATO's shield has been effective --
providing Western Europe with the opportunity for economic and
political revival and convincing the Soviet leaders that military
adventure would indeed invite nuclear disaster. While several
NATO partners have not maintained their military units at strength,
and while balance of payment problems have caused major difficulties
in recent years in agreements for force financing, the Soviet move
into Czechoslovakia has charged NATO with a new sense of urgency.
It has made certain that its 20th anniversary will be characterized
by a new sense of mission. There are unlikely to be any drop-outs
in 1969.

- 11 -

## Legere

Substitute for first 13 lines on page 11, the following:

The third premise that has characterized U.S. European policy in recent years is that the developing web of bilateral relationships between West and East Germany, between the other countries of Eastern and Western Europe, and between the United States and the Soviet Union, supplemented by expanded relationship among the larger multilateral institutions, would probably proceed in a generally straight line to liberalization in Eastern Europe and to increased detente between East and West generally. It is now clear that there will be severe limitations on liberalization in Eastern Europe, and that if there is a straight line to detente, it is a line which for Warsaw Pact countries in Central and Eastern Europe will be determined in Moscow.

- 11 -

has appeared in various forms. It is that the developing web of bilateral relationships between West and East Germany, between the other countries of Eastern and Western Europe, and between the United States and the Soviet Union, supplemented with increasing relationships through the larger multilateral institutions, could and probably would proceed in a generally straight line to increased detente, a liberalization in Eastern Europe, and perhaps within a foreseeable time-frame, to a drawing together of the two parts of Europe in a context permitting the reunification of Germany.

It is now clear that in the future there will be strict limitations on liberalization in Eastern Europe, and that if there is a straight line to detente, it is a line which for Warsaw Pact countries in Central Europe will be determined not in their capitals but in Moscow. It would be prudent for the West to assume that the Soviet power that reacted brutally to the Hungarian uprising in 1956, and sharply to Czech developments in 1968, is fully available to defend conservative Soviet-style socialism in Eastern Germany until some quite new and satisfactory agreement is reached on the future of Germany and on a new Central European security system that would need to accompany that agreement.

This does not mean that the trend toward economic pragmatism in Eastern Europe and in the Soviet Union itself will not continue; nor

- 11 -

It is now clear that in the future there will be strict limitations
on liberalization in Eastern Europe, and that if there is a straight
line to detente, it is a line which for Warsaw Pact countries in
Central Europe will be determined not in their capitals but in
Moscow. It would be prudent for the West to assume that the
Soviet power that reacted brutally to the Hungarian uprising in
1956, and sharply to Czech developments in 1968, is fully available
to defend conservative Soviet-style socialism in Eastern Germany
until some quite new and satisfactory agreement is reached on the
future of Germany -- and on a new Central European security system
that would need to accompany that agreement.

- 12 -

## Legere

Delete second line from "It may mean... high level..."

Delete in the first sentence of the first full paragraph "It may also mean" and substitute "And it is conceivable".

Add "at some future time" after "conclude" in the first full paragraph.

Delete last sentence in first full paragraph.

Add the following to that paragraph:

Meanwhile, however, it would be prudent for the West to assume that the Soviet power that reacted brutally to the Hungarian uprising in 1956 and sharply to Czech liberalization in 1968 is fully available to defend conservative Soviet-style socialism in East Germany and elsewhere until some new and satisfactory agreement is reached on the future of Germany -- and on a new Central European security system that would have to accompany that agreement.

This is another way of saying that, though the third premise of recent U. S. European policy may not yet have been proved wholly valid, it should be severely discounted, at least in the period just ahead.

Begin second paragraph with "What this whole review of past premises strongly suggests is that..."

## Kissinger

Regarding the last sentence in the paragraph continued from page 11 he doubts it -- feels a lesson has been learned.

Also has doubts about the latter part of the first full paragraph.

[L.C]

Peter Peterson

## Section II

Page 12: Would like to see the idea worked in that young people of both sides of the Iron Curtain are now in a position to speak to each other.

Page 12: Believes that in this section and in the report as a whole there should be more analysis as to why the build-up in Germany in the context of the general problems of Central Europe, is now posing a set of problems which could trigger off new conflict.

- 12 -

that the assault by intellectuals, youth and the new managerial
class on established but irrelevant dogma will not continue. It may
mean that the tension between liberalization and raw military power
in Eastern Europe will continue at a high level -- or even increase.

It may also mean that the Soviet Union, deeply aware of its own
dilemmas with its allies in Eastern Europe, will conclude that its
own best interests would be served by a new effort to resolve the
German question. If that question is not resolved it could plunge
Europe again into bloody conflict.

The time has come for new assessments and fresh approaches..
The sections which follow suggest several of the measures which...

THAT THE MEASURES OUTLINED HERE AFTER THIS REPORT
the Panel believes, are required for building added strength and a
new sense of common purpose in the West -- and for moving toward
a resolution of several of the principal issues which for over two
decades have caused uncertainty and instability in the heart of
Europe.

- 12 -

The time has come for new assessments and fresh approaches.
The sections which follow suggest several of the measures which
the Panel believes are required for building added strength and a
new sense of common purpose in the West -- and for moving toward
a resolution of several of the principal issues which for over two
decades have caused uncertainty and instability in the heart of
Europe.

- 13 -

## Legere

Substitute the following for the first four paragraphs:

The invasion of Czechoslovakia last August by the Soviet Union and four of its Warsaw Pact allies has upset the European balance of power and compromised progress toward relaxing East-West tensions and resolving the problem of Germany. What can the United States do to offset the adverse effects of the invasion? The Panel believes that the answer lies in a dual approach: new measures to strengthen the West and, at the same time, new efforts to resolve the problems of a divided Germany. We turn first to the measures we believe to be required in the West.

Substitute the following for the last paragraph and add to previous sentence:

The apparent arrangement for the indefinite stationing of Soviet forces on the Czech-West German frontier is one major aspect of the recent crisis which has contributed to renewed NATO cohesion.

Peter Peterson

Page 13, paragraph 4 - In view of the extent of the financial crisis in the West, he feels the report needs a section on that subject with, if possible, a specific proposal such as a new Bretton Woods Conference.

- 13 -

III

BUILDING THE STRENGTH OF THE WEST

The invasion of Czechoslovakia by the Soviet Union and four of its Warsaw Pact allies, and the arrangements for the stationing of Soviet troops on the Czech-West German frontier, has upset the balance of power in Europe.

How can the balance be restored without provoking countermeasures and fuelling a mutual escalation which would only add to the dangers of the military confrontation -- and for the foreseeable future doom any possibility of relaxing tensions and resolving the problem of Germany?

The Panel believes that the course lies in a dual approach -- new measures to strengthen the West and, at the same time, new efforts to resolve the problems of a divided Germany.

The North Atlantic Alliance

The Soviet invasion of Czechoslovakia has already given a new sense of purpose to NATO.

The apparent arrangement for the indefinite stationing of Soviet forces on the Czech-West German frontier is only one of the aspects of the recent crisis which has disturbed the balance in Central Europe.

- 14 -

## Legere

Substitute the following for the first ten lines:

Others are increased uncertainty concerning Soviet intentions and grave misgivings about stability in Soviet decision-making. How is the West to interpret the new "Brezhnev Doctrine" asserting a Soviet right to intervene in the "socialist commonwealth"? Does it include intervention rights in Romania? In Yugoslavia?

Delete balance of paragraph from "The Panel believes ...."

## Kissinger

Regarding first three lines on the page, the decision was quite rational from the Soviet point of view.

About the first paragraph -- almost all of the tension over Germany was caused by the GDR -- usually over Berlin.

A factor of equal importance is the new uncertainty as to Soviet intentions, and uncertainty as to stability in Soviet decision-making.

This, perhaps, is the more difficult aspect to assess. How are we to interpret the new Soviet doctrine of their right to intervene in the "socialist commonwealth"? Does it include intervention rights or even in
in Romania? —In Yugoslavia?

Taken together, the new stationing of forces and the new uncertainties in decision-making have made necessary both the retention

of present United States forces in Europe and the bringing-up-nearer

<table><tr><td>MUCH NEARER</td><td>PREVIOUS</td></tr></table>

to agreed force levels of the military contingents of the other NATO partners. The Panel believes, however, that, moves thus to reinforce NATO's military capabilities should be accompanied by assurances to the East, either in public or in private, that the North Atlantic Council will be used actively-for-consultation-on measures designed to decrease tension over Germany and work toward a new pattern of all-European security. The "message to the East", which cuts following the NATO meeting in June 1968, indicating a continued interest in mutual NATO-Warsaw Pact force reductions, should be re-emphasized as official and continuing NATO policy.

Questions of force levels in NATO have been accompanied in the past, and continue to be beset, by problems of how the forces are to be financed. In view of the serious balance of payment problems, faced

- 14 -

A factor of equal importance is the new uncertainty as to Soviet intentions and uncertainty as to stability in Soviet decision-making. This, perhaps, is the more difficult aspect to assess. How are we to interpret the new Soviet doctrine of their right to intervene in the "socialist commonwealth"? Does it include intervention rights in Romania? In Yugoslavia?

Taken together, the new stationing of forces and the new uncertainties in decision-making have made necessary both the retention of present United States forces in Europe and the bringing up nearer to agreed force levels of the military contingents of the other NATO partners. The Panel believes, however, that moves thus to reinforce NATO's military capabilities should be accompanied by assurances to the East, either in public or in private, that the North Atlantic Council will be used actively for consultation on measures designed to decrease tension over Germany and work toward a new pattern of all-European security. The "message to the East", communicated following the NATO meeting in June 1968, indicating a continued interest in mutual NATO-Warsaw Pact force reductions should be re-emphasized as official and continuing NATO policy.

Questions of force levels in NATO have been accompanied in the past, and continue to be beset, by problems of how the forces are to be financed. In view of the serious balance of payment problems faced

## Legere

Add the following as a new paragraph before "A European Caucus for NATO."

The Panel believes that moves such as those above to reinforce NATO's military capabilities should be accompanied by assurances to the East, either in public or in private, that the North Atlantic Council will be used actively for consultation on measures designed to decrease tension over Germany and work toward a new pattern of all-Europe an security. The "message to the East", communicated following the NATO meeting in June 1968, indicating a continued interest in mutual NATO-Warsaw Pact force reductions, should be re-emphasized as official and continuing NATO policy.

Change title to "Greater European Initiatives in NATO"

Substitute the following for the first paragraph under European Initiatives:

One of President de Gaulle's principal concerns has been the dominant United States role in NATO. This role has been based, of course, on the predominant power of the United States, especially in strategic nuclear weapons for deterrence.

If, as the United States hopes, the nuclear non-proliferation treaty comes into effect, that predominant power position will continue, and for that very reason it would behoove the United States to seek actively ways of helping to promote the self-esteem and sense of responsibility of European NATO members. For example, the United States should make it clear that in principle it would have no objection to a European Supreme Allied Commander in Europe, provided the Deputy Commander was an American in a position to fulfill U.S. statutory requirements on the control of nuclear weapons.

- 15 -

by several of the NATO partners, in particular the United Kingdom—and the United States, the Panel believes that the time has come for a new approach to this problem. In particular, it would propose, that troop unit costs be projected on a four-year basis x with the understanding that, if balance of payment problems prevent the payment of obligated costs in any one year, payment can be deferred for one year. No country would be permitted to fall more than two years behind in its payments, AND TO PREVENT THIS COULD BE ENABLED, Should such a circumstance arise, the defaulting-country would be free to approach the other partners in NATO to arrange a loan covering the necessary payment.

## A European Caucus in NATO

Another important factor. One of de Gaulle's principal concerns has been the dominant United States role in NATO. This role has been based, of course, on the general initiative and power of the United States, and on the nature of the U. S. nuclear deterrent.

The Panel believes that the United States should encourage the development of a European caucus in NATO. The Europeans themselves should determine those issues on which they would attempt to reach a consensus. The United States should continue to be available for discussions on any issue and indeed, as we shall point out later, will need on certain issues such as arms control to take more leadership

- 15 -

by several of the NATO partners, in particular the United Kingdom
and the United States, the Panel believes that the time has come for
a new approach to this problem. In particular it would propose that
troop unit costs be projected on a four-year basis -- with the under-
standing that if balance of payment problems prevent the payment of
obligated costs in any one year, payment can be deferred for one
year. No country would be permitted to fall more than two years behind
in its payments. Should such a circumstance arise, the defaulting
country would be free to approach the other partners in NATO to
arrange a loan covering the necessary payment.

A European Caucus in NATO

The Panel believes that the United States should encourage the
development of a European caucus in NATO. The Europeans them-
selves should determine those issues on which they would attempt to
reach a consensus. The United States should continue to be available
for discussions on any issue and indeed, as we shall point out later,
will need on certain issues such as arms control to take more leadership

- 16 -

## Legere

Delete balance of paragraph after "heretofore" (first line).

Delete second full paragraph.

Substitute the following for the last two paragraphs on page 16 and first 8 lines of page 17:

There is a further possibility that the Panel believes should be explored. The British at various times have considered the possibility of making their own nuclear deterrent available to some instrument of European control, possibly the Western European Union. It is impossible to forecast when such a British offer might serve to strengthen the sense of common interest among the countries of Western Europe, but some of de Gaulle's concern about the availability for the defense of Europe of U.S.-stationed strategic weapons might in part be overcome if it were possible for a European nuclear force to be created which would include British and French contributions. The development of any such force would probably need to be related to moves designed to bring Britain into closer economic and political cooperation with the countries of Western Europe, and the planning for its use would, of course, have to be coordinated with the overall defense planning of NATO.

than it has heretofore. However, for the United States to
encourage the Europeans to develop more of their own initiative in
the NATO framework would be one way to remove some of the
ambiguity which has characterized United States' relationships with
Europe during the past decade.

Such European consultation should lead to the Europeans
strengthening their joint decision-making on matters of defense and
military procurement.

The United States should make it clear that in principle it would
have no objection to a European Commander for NATO, provided
the Deputy Commander was an American in a position to fulfill our
own legislative requirements on the control of nuclear weapons.

The British-at various times have considered the possibility of
making their own nuclear deterrent available to some instrument of
European control, possibly the Western European Union. It is-
impossible at this point to forecast at what time such a British offer
might in fact serve to strengthen the sense of common interest and
concern among the other countries of Western Europe. Some of the
problems which have bothered General de Gaulle with regard to the

- 16 -

The British at various times have considered the possibility of
making their own nuclear deterrent available to some instrument of
European control, possibly the Western European Union. It is
impossible at this point to forecast at what time such a British offer
might in fact serve to strengthen the sense of common interest and
concern among the other countries of Western Europe. Some of the
problems which have bothered General de Gaulle with regard to the

- 17 -

availability for the defense of Europe of U. S. stationed strategic weapons might at least in part be overcome if it were possible for a European Defense Community to be created which would include both British and French nuclear weapons. The development of any such community would need to be related to other moves to bring Britain into closer economic and political cooperation with the countries of Western Europe. The defense planning would also need, of course, to be subordinate to the overall defensive planning of NATO.

## Britain and the Common Market

The Panel believes that sooner or later Britain will be accepted into the Common Market -- along with several of the other applicants now members of the European Free Trade Association. Because of the complicated nature of the economic and financial problems involved, British entry will probably come in stages. There is every reason, therefore, for the first moves to be made promptly.

Since Britain's entry will involve such a complicated set of questions related to Britain's economic relations with the Commonwealth, with the United States and with the developing countries, the United States should encourage the OECD, the International Bank, and the International Monetary Fund to begin studies looking to future financial stability in the Atlantic area, and to the level of resources that could be made

Peter Peterson

Page 18, "Common Approaches to Common..." - He still feels that the report needs a specific proposal which would relate the new attitudes among youth to the common problems of urbanization, environmental pollution and industrial innovation that are appearing in industrialized societies -- both East and West. Perhaps, this could be a new "Atlantic Institute" at the graduate or post-graduate level which would draw selected students from East and West, and where they could come together to get the best of modern research and thinking on these subjects. He has in mind an institute which for these fields would do much the same thing that the Institute for Advanced Studies in the Behavioral Sciences located at Palo Alto does for the behavioral sciences.

- 18 -

available to the developing world under a more rationalized and
integrated pattern of economic cooperation in the North Atlantic area.

ALTHOUGH OTHER
The difficult problems of relationship-between Britain, the other
members of the European Free Trade Association and the Common Market
will take time to resolve,

There are, however, a number of issues of significant common
interest to the countries of the North Atlantic area on which prompt
progress could be made within the framework of intergovernmental
and private institutions.

The first of these is in the area of a greater sharing of management
skills and of the "know-how" of industrial innovation. These are
in which Europeans are presently sensitive but in which
American commercial and industrial skills should be made available
in Europe, in response to European initiative and request. IF AND WHEN

AS the Eastern European economies move toward "market
socialism", and its more responsibility in those areas is placed on
factory managers, this wider sharing of innovative techniques available
in U. S. and Western industry is likely to prove attractive to the new
Eastern managerial group. There is good reason, however, for more
complete sharing in this field to begin within the countries of the-
North Atlantic area.

- 18 -

The difficult problems of relationship between Britain, the other
members of the European Free Trade Association and the Common Market
will take time to resolve.

The first of these is in the area of a greater sharing of management
skills and of the "know-how" of industrial innovation. These are
areas in which Europeans are presently sensitive but in which
American commercial and industrial skills should be made available
in Europe, in response to European initiative and request.

As the Eastern European economies move toward "market
socialism", and as more responsibility in those areas is placed on
factory managers, the wider sharing of innovative techniques available
in U. S. and Western industry is likely to prove attractive to the new
Eastern managerial group. There is good reason, however, for more
complete sharing in this field to begin within the countries of the
North Atlantic area.

- 19 -

## Legere

Line 4 - delete "From the beginning, this". Substitute "It would appear that, from the beginning on such subjects .. "

Line 9 - insert "direct negotiations among" after "by". Delete "more directly."

Line 11 - change title to read "The Character and Quality of Consultation in the Alliance."

Line 18 - delete sentence at end of paragraph - "It is, "

Line 19 - Insert paragraph from page 21. Changing opening to "The Panel therefore suggest," down to conclusion of sub-paragraph 4.

Line 21 - insert "Apart from strictly NATO affairs, the United States has held annual discussions with its allies," etc. Delete "Annual discussions have been held.."

- 19 -

In addition a new set of environmental problems are appearing -- urbanization, environmental pollution, resource depletion and disturbances of ecological balance -- on which experience-sharing could be initiated. From-the-beginning-this-could-be-established work in a framework which included the countries of the North Atlantic area and those of Eastern Europe. An accelerated exchange of experience and research on these problems could be initiated either under United Nations auspices, as Sweden has proposed in the 23rd UN General Assembly, or more directly by the industrialized countries that are facing common problems.

## The Quality and Character of Consultation in the Alliance

Mechanisms for consultation can be important, but the essential consideration is that [on issues which touch the vital interests] of our North Atlantic partners they must feel that the U.S. will consult them promptly, by whatever means and in whatever forum is most appropriate, with a deep perception as to their options and dilemmas, giving them an opportunity for equal understanding of ours. It is the alertness and the quality of the consultation that is important.

Annual discussions have been held in the North Atlantic Council on matters which are before the UN, more than the "western caucus" in the United Nations which, on occasion has been called together for consideration of issues, at (pressing) importance.

- 19 -

In addition a new set of environmental problems are appearing -- urbanization, environmental pollution, resource depletion and disturbances of ecological balance -- on which experience-sharing could be initiated. From the beginning this could be established in a framework which included the countries of the North Atlantic area and those of Eastern Europe. An accelerated exchange of experience and research on these problems could be initiated either under United Nations auspices as Sweden has proposed in the 23rd UN General Assembly, or more directly by the industrialized countries that are facing common problems.

Mechanisms for consultation can be important. But the essential consideration is that on issues which touch the vital interests of our North Atlantic partners they must feel that the U.S. consults them promptly, by whatever means and in whatever forum is most appropriate, with a deep perception as to their options and dilemmas, and with their having an opportunity for equal understanding of ours. It is the alertness and the quality of the consultation that is important.

Annual discussions have been held in the North Atlantic Council on matters which are before the UN. There is also a so-called "western caucus" in the United Nations which on occasion has been called together for consideration of issues of pressing importance.

- 20 -

## Legere

Last paragraph - delete "The sensitive manner in which" and substitute
"How".

Delete "that important segment of arms control recently negotiated in the Eighteen-Nation Disarmament Conference and commended by the UN General Assembly".

## Kissinger

Would strengthen second full paragraph -- must have common position
on doctrine as well as negotiation position.

Peter Peterson

Section III

Page 20 - first full paragraph: Feels the reference in the last two lines to "at the time" is too restrictive.

Believes that one of the important considerations is the level of
people that are involved in making European policy and the sense of
involvement of the President, i. e. President Johnson has made only
one trip to Europe, at the time of Adenauer's funeral. (He did also
make a brief stop-over in Rome enroute back from Australia, to see
the Pope.)

- 20 -

Neither of these devices, however, has led to any substantial concerting of policy. This has been left to more informal consultations at the time issues arose, and to discussions at the beginning of the Assembly between the Secretary of State and such European Foreign Ministers as were present.

While additional time might be devoted at meetings of the North Atlantic Council to consideration of non-European affairs, the Panel believes, in view of the general role of the United Nations in the search for areas of common ground between East and West, efforts should be made to increase the quality of Western consultation at the time important issues are before the United Nations.

As the U.S. and the Soviet Union move into bilateral negotiations in an effort to bring the strategic arms race under control, our partners in the North Atlantic Alliance will need, in particular, both to be kept informed but also to have an opportunity to assist in formulating those aspects of nuclear policy that have a significant Western as against a U.S. component.

The sensitive manner in which these consultations are handled could either facilitate, or it could further complicate, the necessary European adherence to that important segment of arms control recently negotiated in the Eighteen-Nation Disarmament Conference and amended by the UN General Assembly, the Nuclear Non-Proliferation Treaty.

- 21 -

In addition RECOMMENDS that the United States confirm to our European allies our interest in close and continuing consultations with them on the following questions:

Any

1. Basic changes in weapons systems which can significantly change the value and effectiveness of national defense programs and the defensive posture of the Alliance.

2. Research in the armaments industry which would facilitate the development of a European-based weapons system production-capability.

3. Developments in nuclear fuel production which relate to measures for arms control.

3. Any principal new political or military commitments to be undertaken outside the Treaty area.

RECOMMENDS THAT THE PANEL BELIEVES THAT THE NEW ADMINISTRATION, AS ONE OF ITS FIRST MOVES, SHOULD STRESS THE IMPORTANCE WHICH THE UNITED STATES ATTACHES TO ITS RELATIONSHIPS TO EUROPE, AND ITS BELIEF THAT THOSE RELATIONSHIPS CAN BECOME THE FOUNDATION FROM WHICH NEW MOVES CAN BE MADE TO CREATE A MORE STABLE AND MORE LASTING EUROPEAN SECURITY SYSTEM.

- 21 -

In addition the Panel suggests that the United States confirm to our European allies our interest in close and continuing consultation with them on the following questions:

2. Research in the armaments industry which would facilitate the development of a European based weapons system production capability.

4. Any principal new political or military commitments to be undertaken outside the Treaty area.

The Panel believes the new Administration, as one of its first moves, should stress the importance which the United States attaches to its relationships to Europe, and its belief that those relationships can become the foundation from which new moves can be made to create a more stable and more lasting European security system.

- 22 -

## Legere

Change title to "The Search for East-West Common Interests through the United Nations".

Delete from "Past Efforts that have failed" to end of third paragraph --
"to settlement."

Last full paragraph - add "to a European settlement" after approaches.

Delete last sentence on the page.

- 22 -

IV

# APPROACHES TO A EUROPEAN SETTLEMENT

## Past Efforts that have Failed

The past two decades have witnessed a series of efforts to move toward a settlement of the political and related issues left over from World War II.

The War had left the Four Powers -- the United States, the USSR, Britain and France -- with special responsibilities for Germany. Many of the initial efforts to find a way forward were made through the Four Power Council of Foreign Ministers. While several of the initial meetings were tension-reducing, little progress was made on the basic question of the future of a divided Germany.

These approaches were followed by others suggested by one or another of the smaller countries of Eastern or Western Europe. Poland had its Rapacki Plan. Paul Henri-Spaak of Belgium conducted explorations. But the problem of a divided German people, caught between two conflict-ing ideological systems and two massive confrontations of conventional and nuclear weapons, has defied all past efforts to find a principal road to settlement.

More recently the problem has been left largely to direct negotiations between West and East Germany, to bilateral negotiations between other countries of Eastern and Western Europe, to such periodic discussions as the U.S. and the USSR have held on this subject, and to the general effort to find common ground in larger multilateral institutions. DeGaulle was not alone in preferring it this way.

- 22 -

IV

Past Efforts that have Failed

These approaches were followed by others suggested by one or
another of the smaller countries of Eastern or Western Europe. Poland
had its Rapacki Plan. Paul Henri-Spaak of Belgium conducted explorations.
But the problems of a divided German people, caught between two conflict-
ing ideological systems and two massive confrontations of conventional
and nuclear weapons, has defied all past efforts to find a principal road
to settlement.

Recent approaches have been left largely to direct negotiations between West and East Germany, to bilateral negotiations between other countries of Eastern and Western Europe, to such periodic discussions as the U.S. and the USSR have held on this subject, and to the general efforts to find common ground in larger multilateral institutions. DeGaulle was not alone in preferring it this way.

- 23 -

(Lc)

## Legere

Delete title.

Insert "In the last category" before "the United Nations".

Last line: Delete "It is anticipated that the". Substitute
"any forthcoming".

## Kissinger

Paragraph two - doubts if Security Council would get us very far.

- 23 -

The Search for East-West Common Interests Through the United Nations

The United Nations, its political organs, its commissions, and its Specialized Agencies have provided some of the principal means through which the countries of Eastern and Western Europe have explored seriously the extent and character of their common interest. As general East-West tension in Europe has lessened, the voting of both Western and Eastern European countries in United Nations' bodies has become more independent, and with the non-bloc countries such as Sweden, Finland, Ireland, Austria, and Yugoslavia, playing increasingly useful intermediary roles.

The ability of the United States and the Soviet Union (more frequently to concert their policies in the UN Security Council has been both an indication of easement in East-West tension and a contribution to that easement. It was the earlier inability of the Council to carry out the security role projected for it under the UN Charter, which set the stage for the creation of NATO and the more recent greater reliance on the UN General Assembly.

There are two other United Nations or UN related organizations which have had, and could soon have more, impact on East-West relations in Europe.

In addition, the Eighteen-Nation Disarmament Conference, while not established formally by the United Nations, is staffed by the UN, has operated in close harmony with it, and has certain responsibilities for reporting to it. It is anticipated that the negotiations on the control and reduction

- 23 -

The United Nations, its political organs, its commissions, and its Specialized Agencies have provided some of the principal means through which the countries of Eastern and Western Europe have explored seriously the extent and character of their common interest. As general East-West tension in Europe has lessened, the voting of both Western and Eastern European countries in United Nations' bodies has become more independent, with the non-bloc countries such as Sweden, Finland, Ireland, Austria, and Yugoslavia playing increasingly useful intermediary roles.

The ability of the United States and the Soviet Union more frequently to concert their policies in the UN Security Council has been both an indication of easement in East-West tension and a contribution to that easement. It was the earlier inability of the Council to carry out the security role projected for it under the UN Charter, which set the stage for the creation of NATO and the more recent greater reliance on the UN General Assembly.

The Eighteen-Nation Disarmament Conference, while not established formally by the United Nations, is staffed by the UN, has operated in close harmony with it and has certain responsibilities for reporting to it. It is anticipated that the negotiations on the control and reduction

- 24 -

## Legere

Line 2. Delete "These". Add "and".

Line 3. Add "in this field would of course" after "negotiations".

Line 4. Substitute "balance" for "confrontation".

First full paragraph. Delete "The International.... Eastern Europeans."

Insert "The second UN-related organization with the potential for playing a prominent part in East-West negotiations is the International Atomic Energy Agency (IAEA). The East Europeans consider IAEA important,"

## Kissinger

Regarding the first full paragraph -- it should really be the other way around. A distinguished panel should not give the impression that if the enemy denies ratification it would produce tension.

- 24 -

of strategic weapons, to which the U.S. and the USSR have in
principal agreed, will be conducted under ENDC auspices. These
negotiations are likely to have a major bearing on the future
character of the military confrontation in Europe.

The International Atomic Energy Agency has been considered
important by the Eastern Europeans, not because of its achievements
to date, although those are significant, but because of the importance
of the subject with which it deals and because of its anticipated
enlarged role under the Nuclear Non-Proliferation Treaty. This
Treaty was recently negotiated in the Eighteen-Nation Disarmament
Conference, and, after certain modifications, commended by the UN
General Assembly for signature. West Germany's signature, and her
willingness to accept IAEA safeguards under the Treaty, are matters
of central importance to an assessment of tension over Germany
and to the development of East-West relations in Europe.

One of the more useful measures for political exploration and co-
operation was initiated in the United Nations in 1963 by the Romanians.
They introduced a resolution encouraging "actions on the regional level
with a view to improving neighborly relations among European States
having different social and political systems". Sponsored by nine
countries of Eastern and Western Europe (Austria, Belgium, Bulgaria,
Denmark, Finland, Hungary, Romania, Sweden and Yugoslavia) the
resolution was finally passed at the Assembly session in 1965. The
so-called "Group of Nine" has continued to meet, sometimes during

- 24 -

- 25 -

Assembly sessions, to consider matters of mutual concern.

Neither West nor East Germany, of course, are Members of the United Nations -- and thus not a party to much of the political process which has been at work.

West Germany is a full member of all thirteen UN Specialized Agencies, the IAEA, and GATT. East Germany is not represented in any UN commission or agency.

It is essential that several of the UN specialized and related agencies which have provided the most concrete opportunities for cooperative endeavor across the East-West boundary in Europe. In the trade, scientific and cultural fields, relations between several West and East European countries have developed more rapidly than they have between the U.S. and USSR. A new substantive level of diplomatic exchange has been steadily developing in the UN system between East and West Europe, which is separate from the larger context of Soviet-American bipolarity.

## East-West Trade

Perhaps the most important area for current development is East-West trade. Of the three international agencies involved, two are United Nations agencies -- the Economic Commission for Europe (ECE) and the UN Conference for Trade and Development (UNCTAD).

ECE is the one international instrument which is functionally committed to all-European economic integration. It is the international forum in which East-West trade policy can best be developed. It has

- 25 -

It is several of the UN specialized and related agencies which
have provided the most concrete opportunities for cooperative endeavor
across the East-West boundary in Europe. In the trade, scientific and
cultural fields, relations between several West and East European
countries have developed more rapidly than they have between the U.S.
and USSR. A new substantive level of diplomatic exchange has been
steadily developing in the UN system between East and West Europe,
which is separate from the larger context of Soviet-American bipolarity.

## East-West Trade

- 26 -

recently brought together statisticians from both parts of Europe
in an attempt to develop common statistical procedures and standards.
It is now in a position to promote co-production and investment in
Eastern Europe.

UNCTAD is principally a forum for the consideration of North-
South trade policy. The less-developed countries are looking for
increased market opportunities in the developed world -- East and
West. The Panel suggests that one subject with important East-West
trade implications which could be usefully taken up in UNCTAD would
be the mark-up of prices between import and sales price. This has
a
'always been/ significant factor in foreign trade but has become an
increasingly important one in trade with the socialist states.

The third principal international instrument in the East-West trade
field is GATT. Czechoslovakia, Poland and Yugoslavia are members.
While GATT is not a United Nations Agency, and has in the past been
concerned primarily with West-West trade, it is now ready for a much
more prominent role in contractual negotiations in East-West trade.
The Panel believes this new role should be encouraged.

All of these trade instruments would be more effective, if the
United States Congress passes the East-West Trade Bill. The Panel
considers such action a matter of major priority.

The Panel would in addition recommend that the Executive Branch
continue its liberalization of export controls -- exempting only those
items that can be demonstrably shown to augment significantly the war-
making capacity of an Eastern European country. In making this

- 27 -

[L.C.]

## Legere

Add paragraph beginning "As it is now" to preceding paragraph.

Insert "Foreign" in title "Cooperation in <u>Foreign</u> Aid".

Combine last paragraph "The Bank" with preceding paragraph.

- 27 -

determination attention should be paid to the possibilities of trans-
shipment and to the question of whether the receiving country would,
in fact, be able to manufacture the item itself.

As it is now, American businessmen cannot obtain financing from
the Export-Import Bank for trade in non-strategic items with the
Soviet Union and Eastern Europe. And non-strategic goods from
Eastern Europe are subject to the highest tariff in American history.
Short-term U.S. credits should be available to finance trade with
Eastern Europe on the same basis as those for other trade.
Long-term credits would still need to take account of reciprocal measures.

THE AVAILABILITY OF
DETEND ON THE POSSIBILITY OF

Cooperation in Aid

It is unlikely that the Soviet Union will make any early move to
join the World Bank. Bank membership requires membership in the
International Monetary Fund, which in turn requires financial dis-
closures of a type the Soviets are unlikely to accept. It is possible,
however, that Romania might join the Bank and IMF. Other Eastern
European countries might eventually join.

But there is one step toward closer East-West cooperation in the
aid field, and toward closer association of Eastern Europe with the
World Bank, which the Panel recommends.

The Bank has been given the responsibility of organizing the aid
consortia for principal receiving countries. The Panel believes that
the time has come for a Soviet Union and other Eastern European

- 27 -

As it is now, American businessmen cannot obtain financing from
the Export-Import Bank for trade in non-strategic items with the
Soviet Union and Eastern Europe. And non-strategic goods from
Eastern Europe are subject to the highest tariff in American history.
Short-term U.S. credits should be available to finance trade with
Eastern Europe on the same basis as those for other trade. Long-
term credits would still need to take account of reciprocal measures.

Cooperation in Aid

The Bank has been given the responsibility of organizing the aid
consortia for principal receiving countries. The Panel believes that
the time has come for Soviet Union and other Eastern European

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countries to be invited to join in several of these consortia --
beginning with that for India. While competition in aid-giving has
had certain advantages for receiving countries, the Panel believes
that in the long run, a greater measure of cooperation in aid-
planning and aid-giving would benefit both donor and recipient.

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[L.C]

## Legere

Delete page 29.

Substitute the following:

The fields of cooperative activity discussed in the preceding section had led, by the summer of 1968, to a growing sense of common interest among the countries of Eastern and Western Europe. Even so, none of these developments had actually produced any substantially new approaches to a resolution of the problem of Germany and to the establishment of a more stable security system in Central Europe. Then came the invasion of Czechoslovakia, revealing the depth of continuing Soviet anxiety over the unresolved question of the future of Germany. It became clear from the action of the Soviet Union and its four Warsaw Pact co-invaders that the Soviet Union would not

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The fields of cooperative activity discussed in the preceding section have led, prior to the invasion of Czechoslovakia, to an increased sense of common interest between the countries of Eastern and Western Europe. None of these developments, however, neither those in the economic field, those in the field of nuclear non-proliferation and disarmament, nor any increased possibilities for U.S.-Soviet collaboration in the UN Security Council, have thus far resulted in any substantially new approaches to a resolution of the problem of Germany and to the establishment of a more stable security system in Central Europe.

Bilateral negotiations between the countries of Eastern and Western Europe have accelerated, and East and West Germany in their own negotiations have made certain limited progress in the field of trade and in removing some of the barriers that have been in the way of their peoples maintaining closer informal and humanitarian contact.

But the Czech crisis reveals the depth of the continuing Soviet anxiety over the unresolved question of the future of Germany. The necessity in that crisis for the West to seek new assurances regarding the Soviet willingness to preserve the status quo in Berlin is another reminder of the special responsibility of the Four Powers both for that city and for a German settlement.

It is clear from the action of the Soviet Union and four of its Warsaw Pact allies in Czechoslovakia that the Soviet Union will not

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Legere

Second and third full paragraphs grouped into one.

Second full paragraph. Delete "The recent experiences... Germany's future."

Delete last six lines beginning with "To end the division..."

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permit any of the Eastern socialist countries in Central Europe, to enter into bilateral negotiations with West Germany in a manner which the Soviet Union considers to be inimical to its basic strategic interests.

What then is the best way forward? Does it lie with the continuance of bilateral East-West negotiations, supplemented with the effort to find common ground in the larger multilateral agencies?

Useful and important as these approaches are, the Panel does not believe reliance can be placed on measures principally developed *either of* within these two contexts. New measures are required, tailored to the need for a new effort to resolve the question of Germany and to the type of international underwriting that would need to accompany some resolution of that question. The recent experience in Czechoslovakia underscores the need for new approaches to a resolution of the basic question of Germany's future. Neither the *government* will simply nor the international community is likely to drift into some new pattern of stability and security in Central Europe.

To end the division of Germany and Europe on conditions that provide reasonable security to the European peoples will require a long period of reconciliation -- a process which has been interrupted but not, the Panel believes, indefinitely side-tracked by the Czech crisis. The West German Government has renounced the use of force to achieve the reunification of the German people. It is prepared, on-

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permit any of the Eastern socialist countries in Central Europe
to enter into bilateral negotiations with West Germany in a manner which
the Soviet Union considers to be inimical to its basic strategic interests.

Useful and important as these approaches are, the Panel does not
believe reliance can be placed on measures principally developed
within these two contexts. New measures are required, tailored
to the need for a new effort to resolve the question of Germany and
to the type of international underwriting that would need to accompany
some resolution of that question. The recent experience in
Czechoslovakia underscores the need for new approaches to a
resolution of the basic question of Germany's future. Neither the
German people, nor the international community is likely to drift
into some new pattern of stability and security in Central Europe.