3

here at the UN about how serious the U. S. bid was
on saying this was a terribly serious economic question
because as each of the Foreign Ministers arrived,
and right down to Canada, they seemed to have had no
advance preparation by the United States to sound this
alarm, so it began to lead us all to think that maybe we
had set up a very fast one without any --

A. No. I've read that in some newspapers,

The fact of the matter is that if you look at my speech
to The Pilgrims last December, the Washington Energy
Conference, the development of the IEP Program, this
has been part of, I hope, a carefully designed
approach -- which we had always planned to start
about this time after we had agreed on the emergency
sharing program.

Now, there was nothing in particular to prepare
the Canadian Foreign Minister for it. I mean, what was it
we needed to prepare him for?

Q. Well, I thought he might have put a plug
in his speech, or others might have, because you were getting
plenty from the other side.

A. We were getting what?

Q. Plenty from the other side.

A. Considering what we have put forward, we
are getting very little from the other side. I mean, what

4

we're getting from the other side is a minimum. I mean, those of you who were at the dinner tonight with the Arabs can't feel that this was a violent confrontational atmosphere and --

Q Mr. Secretary --

A -- I think the progress that will be made will not be reflected in the speeches from the UN forum. It will be reflected in the concrete work that can be done over the months ahead, and there we are fairly optimistic --

Q Mr. Secretary --

A -- but we have a rather carefully thought-out program. This is not something that was improvised.

Q Do we have a plan --

Q Mr. Secretary, I'd like to go to the Cyprus situation.

Q Wait, Dick. Could we just finish?

A We have an idea of the direction in which we want to go.

Q Do you have an idea of the direction in which we will go?

A I don't want to go to the conference at all.

Q Can we go to the Cyprus situation? You have talked with the Greek Foreign Minister -- Mavros --

Exploring the minds and the positions of the various parties.

Q Mr. Secretary, in the past -- particularly, when it comes to the Middle East -- whenever you have spoken about clarifying positions, you've always found in retrospect that clarifying positions means that you are well on the way towards some kind of a settlement. Should we make this some type of assumption about Greece and Turkey and Cyprus?

A No, I wouldn't.

Q What is the possibility of extending your Middle East trip to, at least, Turkey and Cyprus?

A I'd have to see as we go along.

Q During --

A I don't know. When I said in the past we've been clarifying positions, there were very often long stretches before anything happened.

Q Is there a thousand to one chance that you'll go? (Laughter.)

A When did I say "a thousand to one"?

Q Bernie is the expert on that. I don't know.

A You say a "thousand to one"? I don't want to go into it. When the thing crystallizes, if there's anything to announce, we'll announce it as soon as it's clear. Right now it would be, really,

7
speculation.

Q Sir, do you have any sort of concrete hopes
for this coming visit that you're going to make in the
Middle East? Is there anything that you feel -- any
beginning that you can make there -- any indication
that there is --

A What I want to do on the trip to the
Middle East is to get some more concrete ideas of
how the negotiating process can develop and to put some
content into the negotiating process and get a commitment
from the various parties as to how they would interpret
the process and what some of the substantive content
could be.

Q When you say "concrete," Mr. Secretary,
what do you mean by it?

A Well, the Israelis, for example, have
said publicly that they are thinking of presenting some
concrete ideas when I come there --

Q Yes.

A -- and that is one thing.

Equally, some of the Arab participants are going
to be asked to present more concrete ideas than has here-
tofore been the case. And this, in addition, has to be
related to some process that could emerge out of all
of this.

9

Trouble as soon as he is going to come to Washington for
a few days.

But I must say, in all seriousness, that
everything that's been done could be threatened by
the Eagleton Amendment or a similar-type amendment.
I have the most serious questions whether we could
operate under such restrictions.

Q Has this been hindering negotiations with
the Turks?

A It hasn't passed yet. I mean, it hasn't
passed as an Act of Congress.

Q When you talk of the Eagleton Amendment,
you're talking about aid restrictions?

A Yes.

Q Why do you feel more confident than we
have been led to believe by the public reaction
from the Arabs that you can -- I mean, the oil-producing
countries, I should say -- why do you feel that it's not
as bad as it looks on the surface?

Q As it looks where?

Q On the surface.

A Well, first of all, there are two problems
that you're talking about. One is the issues that are
raised by existing oil prices -- which has nothing to do
with lowering the oil price -- balance of payments, recycling

of funds, the shifting of deposits within the industrialized countries, long-term political effects -- all of this will exist whether or not prices go down. And all of this will have to be addressed, especially if prices do not go down. So to say that the oil producers are reluctant to reduce prices does not change the need for coherent action; it emphasizes it.

Secondly, whether in fact prices can be brought down or not depends on how well we solve the other three or four problems, including conservation.

I have learned from experience that the initial reaction to propositions like this is not a clue to what the final reaction will be. And one purpose, obviously, of these speeches was, at a minimum, to prevent a further rise in prices and to call attention to the seriousness of the problem. And I do not consider these first reactions as reflecting what in fact will happen, assuming that we can bring about the degree of concern that we want to.

Q Are you saying then, Mr. Secretary, that you really have a hope that by doing what you're doing and saying what you're saying that you can persuade the Arab oil producers to bring down their prices?

A We're talking about all OPEC; we're not just talking about all Arabs.

Q I understand that.

11

A No. The first problem is, at a minimum, we have to take whatever measures are made necessary by existing prices. I mean, that problem doesn't go away just because oil producers say, "Concerted action has confrontational aspects." Concerted action is imposed on us because there are some problems. The Italian balance of payments problem -- or, for that matter, the UK balance of payments problem -- can not be remedied by purely national action. There's no conceivable way that can be done.

Q Well, then you're talking about some threat or warning.

A That is not a threat; that is a necessity.

Q Yes.

A From there then -- I mean, the figures that Scotty Reston published the other day -- I mean, those figures are going to be with us and are going to multiply.

Q All right. Then this is a necessity.

A This is a problem that has to be dealt with anyway, no matter who protests. And the second phase -- "Can we bring about a reduction in prices?" -- I hope yes.

Q Then this necessity which you're talking about -- which is not a threat and is not a warning -- this necessity is a situation which you hope to present to the Arab --

12

A This necessity is presented to us and
must be dealt with.

Q How do you deal with this?

A Well, if you deal with it individually
by a series of individual actions of countries,--

Q It's bad.

A You can deal with it only by inflation
or by subsidy from somebody.

Q Yes.

A If you deal with it by concerted action,
you may be able to equalize --

Q So you're seeking concerted action.

A Obviously.

Q This takes us back to Saturday and Sunday,
doesn't it?

A That's right.

Q Sir, have you found in your talks with--

A But not necessarily in the form of a
confrontation with the producers.

Q You want to avoid a confrontation.

A Hopefully.

Q I just wondered whether you found in your
talks with the producers any indication of any possibility
that they might lower prices.

A I have never myself asked a producer to

13

lower prices up to now, because I have not believed the
objective conditions for such an approach have
as yet existed; and I think it's premature. It depends
on certain pre-conditions.

Q What are those pre-conditions? Can you
spell them out?

A Greater cooperation among the consumers.

Q I'm sorry?

A Greater cooperation among the consumers
-- and greater self-discipline among the consumers.

Q Mr. Secretary, you said in your speech last
Monday that what has been taken by political action can
be reversed by political action. Wasn't that an implied
request to lower the prices?

A Yes, that's correct. But that didn't mean
that I expected them to do it in the next two or three
weeks.

Q Mr. Secretary --

A It stated the problem. I felt it necessary
to state the problem as it is. The statement of the
problem is, without any question, correct.

Now, what the result will be -- I mean, the
statement of the problem is incontrovertibly correct.
If you look at the balance of payments, the total foreign

14

investments of the United States acquired over a
century are 65 billion dollars. The holdings
of the OPEC countries as a result of one year's flow
are going to be at least 65 billion dollars.

It is one of the most massive transfers in history,
which is bound to produce massive dislocations. I mean,
that is not something that an Administration invents;
this is a problem. It can not be avoided by saying,
"You've provoked the Arabs" or "You've antagonized
somebody" — nor can it be answered by somebody making a
great speech from a rostrum reminding one of what may
have happened 20 years ago.

All of this is irrelevant to the present
problem. The present problem can not be solved except by
in effect, making the balance of payments worthless.
through inflation or through a series of cooperative
measures one way or the other.

Q Mr. Secretary, what can you do here in
the conversations with the various Foreign Ministers of
these different countries to solve this problem that
you've just described?

A I'm not trying to solve it here talking
to the Foreign Ministers. I have no expectation whatsoever
that what I'm doing here at the General Assembly is going...

15

to have the slightest impact on the problem that I've described. What I tried to do in my speech at the General Assembly was that rather than give the usual pap about "world community" and "common problems" and so forth, to put before the world assembly the issues -- that, if they are not solved, are going to wreck international stability: local conflicts, nuclear proliferation, food, energy, and the general attitude of unrestrained nationalism. That didn't mean that I expected it to be settled at this session.

Q No.

A I expected it to be put before the session as a serious statement of what we will face over a period of five years and to say we better turn to it.

Q But in addition to your speech you are talking to these people individually in a bilateral sense.

A Yes, but wait a minute. There are many different things going on. First, every Secretary of State -- this is a requirement of the United Nations-- the presence here of so many Foreign Ministers produces a large number of bilateral talks, not all of which -- the fewest of which, in fact, this year, are related to my speech. I just add up the number of hours that I've spent last night and today on the Cyprus problem --

16.

Q. Yes.

A. -- which I mentioned in my speech -- and then look over the list of my appointments today -- General Romulo couldn't do much for the energy problem.

Q. No, he couldn't.

A. The Nigerian Foreign Minister couldn't do much.

Q. No.

A. In fact, with him I did talk about it but in a very general way. But just look over my appointments and you'll see that I'm not on a push on the energy problem. If I'm going to push on anything, it's more the Cyprus than the energy problem.

Q. Mr. Secretary, on another problem --

A. Tomorrow I'm going to speak mostly on Middle Eastern problems -- to speak on Middle Eastern problems, unrelated to the energy problem, on seeing the Foreign Minister tomorrow and the day after when I see Allon -- before he addresses me of neglecting Allon. It was going to see him tomorrow, and I had to shift him from tomorrow to the next day.

Tomorrow is going to be almost exclusively Middle East peace. There may be -- Bouteflika is going to sit me on the energy things, but I'm frankly not ready to talk seriously on the energy thing.

(LC)

17

Q How about the Palestinian situation?

A I'm talking Middle East peace.

Q Will you make contact with the Palestinians -- either yourself or your assistants?

A I have no intention of making contact with the Palestinians myself. Our policy has been not to have substantive contact with the Palestinians and to confine our contacts that develop in various capitals at low levels, and we have no intention of changing it.

Q Mr. Secretary, just a minute -- coming back to the oil thing for a moment -- you seem very deeply concerned about the political effects of this massive transfer of funds. Have you detected in your discussions with the oil producers any awareness in this deep concern of yours of the political ramifications of this?

A I have not discussed this problem with the oil producers because I do not believe in idle talk. And at this point it would be idle talk. Now, if you say, "Do they understand the political ramifications?" I'm not convinced that Abu Nabi has thought deeply about the problem that its dollar holdings will create for Spain or Portugal or Italy or any of the other deficit countries. So I --

Q But, in fact, how do you create a situation in which they become aware that their national interest

18
depends on it?

A The only hope is to have the consumers
have a more common approach and for the consumers to
solve some of their own problems.

Q Are the consumers ready to go along
with your argument?

A We'll see. I think it's not excluded.

Q Mr. Secretary, Portugal has just undertaken
a change in government.

Q Mr. Secretary, what?

A I say it's not excluded. There's a change
under consideration. We have already made considerable
progress. I really don't believe that this emergency
sharing program has received the attention it deserves
because -- the Post has done well by it; but I think the
fact that these 12 nations have agreed to automatic
consumption restraints in certain situations and obligatory
sharing up to a fairly substantial percentage of cuts
is a considerable step forward in case of some foreseeable
crisis.

Q Mr. Secretary, on the Portugal question,
do you see the change in government there as a serious
problem for the Western Alliance? Do you see it as for
-- I can't talk: English at this hour -- as leading
toward other problems in other countries, like Italy?

19

(10)

I can omit "at this hour" in my case, not yours. (Laughter.)

Q In these other countries -- does this concern you?

A I think the situation in the entire northern littoral of the Mediterranean is politically, extremely complicated. Obviously, what is happening in Portugal is a constant shift to the left. I mean, every convulsion produces a further articulation of the left and thereby a relative strengthening on the civilian side of the Communist Party-- which is the best organized civilian party--than the military establishment of the -- I don't know what you would call them -- Nasserite, leftist, nationalist -- who are working together with them.

Now, what impact this will have on the already precarious situation in other countries, I don't want to speculate. But if you look at Greece, for example -- I mean, we've talked enough about Italy; but if you look at Greece, the anti-Americanism that has come to the surface there is not caused primarily by the actions we took or didn't take in Cyprus. It is caused, primarily, by the inherent structure of Greek politics

21

Q Well, you stay out of this. (Laughter.)

A We have tried to find a way --

Q Yes.

A -- by which some progress can be made. And that's what I've spent my time on.

Q Right.

A And, more than that, I really don't --

Q You're not encouraged.

Q I would invite you to make an ON THE RECORD statement, or through your spokesman, about what you said about the Eagleton Amendment, because under DEEP BACKGROUND it looks terribly much like, you know, to say "It's understood that this hurts Kissinger's negotiating problem." It would be more direct if you had some strong statement on your own.

A Well, why don't I see whether -- I mean, it doesn't do you any good tonight anyway.

Q No.

A I think I will probably have Bob say something ON THE RECORD tomorrow morning -- which is the earliest you can use it anyway.

Q That's fine.

Q For afternoon papers?

A Look, let us tell you now, OFF THE RECORD, I would like to discuss it again with the President tomorrow morning. I've discussed it last evening with him.

22

I have the impression that he's considering
saying something; and I don't want, this evening, to say
something before he has said something. And, therefore,
I may -- it depends partly on his actions.

Q Mr. Secretary, going back to --

A That's the reason I don't want to
go ON THE RECORD on that. But it is my considered --

Q From the story I read, that amendment that
was passed in the Senate tonight is different in wording
from the House amendment and it's open to various
interpretations -- that it could even be, in fact, a
weaker thing because it would implicate Israel at some
point.

A If this theory is applied, it would certainly
implicate also Israel at some point, but, leaving that
aside, it would present a major problem.

Q It's in the paper.

A Well, I haven't read the paper. It would
give us the problem that we would either interpret
the law in a way that would then lead to endless debate
or that we would take action which would inevitably
reduce the negotiating flexibility -- in fact, the
negotiating influence of the United States -- because

23

law and that sort of thing, whatever became of
your Legal Department study of the Turkish aid
problem? That seems to be one of the things that's
motivating the Eagleton forces.

A. But the Eagleton -- well, I don't
want to speculate on what is motivating various
forces.

Let me tell you exactly what's happened. I've
seen many stories that I personally am holding up the
legal interpretation.

Now, first of all, it is the President who
applies the law. I don't have the authority either to
suspend or apply the law.

Secondly, we made a legal determination --
or it wasn't a "determination"; it was a legal analysis
-- which put before the President the interpretation
that can be given to the law -- the flexibilities he has
both in interpretations and in waivers and the whole gamut
of actions that would be implied by his finding
partial non-compliance with the law -- all of which has
many possibilities.

All of this was put before the Congressional
leadership, together with the actions which we were in
fact taking. And I believe we have the support of the
Congressional leadership. So there has been no attempt to

25

political situations in all of the countries concerned
-- including Greece -- there are certain basic requirements
that I do not think are fully understood by all of the
Congressmen but which I do not want to go into now.

Q You've said this can be demonstrated,
Mr. Secretary.

A Well, it can be demonstrated. It's a
question of judgment.

Q How do you know?

A I could go into much more detail.
We have an overwhelming -- it's not that I'm so under-
employed that I am dying to have an opportunity to
continue what we've started. It is my judgment that a cut-
off of aid to Turkey would be totally counter-
productive.

Now, I may be wrong, but that is my judgment.
But I believe that judgment is shared by every person
with whom I've discussed it and who is familiar with
the negotiations.

Q That statement would be very helpful.

Q Including Mavros.

A Now, come on -- Mavros; what do you want
me to say -- 'Mavros wants military aid given to Turkey?
What a headline that would make!

Q But it would be very helpful, Mr. Secretary,

26

if it could be spelled out.

A Look, it is totally impossible for any Greek politician to express himself on any military aid to Turkey. There are certain military requirements that they have. Navros is out of this; he has nothing to do with my judgment.

Q Mr. Secretary, you have said this several times. I recall the press conference that you gave to us in the press briefing room.

A That's right.

Q Yet why haven't you been able to convince Congress of this? And despite -- I think you have said this publicly two or three times.

A I think I have convinced the Congressional leadership of it.

Q But you still have the Eagleton Amendment.

A I think that has a lot to do with the current domestic situation in America, but I don't want to speculate. I think the Congressional leadership has supported our position.

Q In light of the effect of Jackson's intransigence on the Soviet exigration policy, are you sure this particular policy is going to work today?

A What do you mean? What has been Jackson's

27

intransigence -- if there has been Jackson's
intransigence on the emigration policy?

Q Well, to force agreements on larger numbers.

A Well, that doesn't happen to be the case. The number of Jewish emigrants from the Soviet Union rose from 400 in 1969 to 30,000 in 1972 before Jackson was ever heard of. As a result of our actions, the Soviet Union has never agreed to any specific numbers. Right now, it is at the level of 12,000. And while we are perfectly content--as long as we are ON DEEP BACKGROUND--to let people claim anything they want in order to promote emigration, right now it is at the level of 12,000. And it was as high as 38,000 in 1973, and one could make a much better case for the proposition that so far the pressure has had exactly the opposite result.

Q You gave some credit.

A Yes. I gave some credit because I don't care who gets the credit, for this if we get the result, but there have been no specific numbers. That has never been claimed by us.

Q So you think the fact that having Congress beating you on the head does not help you in negotiations?

A No; I don't say that. I think for Congress

20

to express a view can sometimes be extremely helpful. For Congress to make an obligatory requirement that will have to be applied to the tactics, the Congress knows that there are various variations of Turkish aid cut-offs that we would have agreed to accept.

So we are not saying that no Congressional expression could be helpful; we are saying this particular Congressional expression that makes it obligatory now, or forces us to make it non-obligatory now by a specific finding -- that that is not helpful.

Q Mr. Secretary, can we switch off this and talk about SALT? Because you are going to go to Moscow pretty quick and we haven't seen you since you met with Gromyko, what are we faced with in the way of progress?

A I can't tell yet because I believe that, politically, from a foreign-policy point of view, the conditions for making progress in the next 15 months are good. But that does not yet mean that we can translate this into a concrete proposal that would lead to it -- that would lead to that progress. And it's too early to tell.

Q You mean domestically.

A I will know better in two or three weeks.

There is no disagreement in the Government because we are in the process now of formulating the proposal; and I,

29

frankly, have not yet studied all the
numbers of the various options that exist. And the
reason is not disagreement; the reason is that we are
converting the five-year program into a ten-year program.
But I'll try to meet with you again before the end of
this week.

Q Mr. Secretary, where do you expect to
meet with Senator Javits -- in Washington or in New
York?

A I expect to meet with him in Washington.

Q Not here?

Q What do you judge to be the Soviet attitude
as they watch the entire Western World gripped by this
oil crisis?

A Well, I don't think they can break
their back to solve it for us. (Laughter.)

Q Mr. Secretary, are you going to get a
deal with Jackson?

A I think there is a basis for working
something out.

Q Before the recess?

A We'll have to see. This I don't know.

Q May I ask: -- it may seem almost irrelevant
to these contacts -- do you have any feeling as to the
importance of this war that's blown up, going on between

30

the Kurds and the Iran Government?

A None that I really -- it would be very unfruitful for me to talk about it.

Q Just a point in clarification: When you're talking about the energy, the sharing, and the obligatory outbacks in consumption, are you referring to this thing that Enders has been negotiating?

A Yes.

Q And, in that connection, what somebody is going to do -- that's just ideological?

A Oh, no, no. If you were the President of Algeria, you would certainly like to get the highest prices for oil. So I'm absolutely convinced that even though I don't intend to discuss oil with him, he in his characteristic fashion --

Q Dispassionate. (Laughter.)

A -- will tell me that he is not in complete agreement with it.

Q How then do you come back to him and try to bring this whole thing into focus?

A In good time. I'm not ready to do it now.

Q Is there an agreement --

A I mean, you have to look at this thing six or eight months ahead. We are not --

FM AMEMBASSY TEHRAN
TO RUEHC/SECSTATE WASHDC IMMEDIATE 8849
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RUDKAR/AMEMBASSY BUCHAREST IMMEDIATE 103
RUEHIA/USIA WASHDC IMMEDIATE 4485
BT
UNCLAS SECTION 1 OF 4 TEHRAN 9267

UNCLASSIFIED

DEPT PASS WHITE HOUSE FOR GEN. SCOWCROFT AND NESSEN

BUCHAREST FOR SECRETARY'S PARTY

USIA FOR IPS AND IBS

E.O. 11632; N/A
TAGS: OVIP (KISSINGER, HENRY 4.)
SUBJECT: PRESS CONFERENCE: SECRETARY KISSINGER AND IRANIAN
MINISTER OF FINANCE AND ECONOMY HUSHANG ANSARY

MR. ANSARY: GENTLEMEN, WE HAVE JUST EMERGED FROM A MEETING WITH SECRETARY OF STATE HENRY KISSINGER AND HIS DISTINGUISHED COLLEAGUES. AT THIS MEETING LET ME START BY SAYING WE HAVE EXPRESSED OUR PLEASURE AND PRIVILEGE AT THE OPPORTUNITY TO HAVE THE SECRETARY HERE IN IRAN AND TO DISCUSS MATTERS OF MUTUAL INTEREST, NOT ONLY WITH HIS IMPERIAL MAJESTY THE SHAHANSHAM AS WAS DONE LAST NIGHT, BUT ALSO HERE AT THIS MINISTRY IN CONNECTION WITH THE VARIOUS ASPECTS OF OUR COOPERATION BETWEEN THE UNITED STATES AND IRAN. I TOOK THE OPPORTUNITY AT THE MEETING WITH THE SECRETARY TO EXPRESS OUR GREAT APPRECIATION FOR THE GOOD WORK HE HAS DONE AND IS CONTINUING IN CONNECTION WITH PEACEMAKING EFFORTS IN THE MIDDLE EAST. WE HAVE FOLLOWED HIS ITINERARY VERY CLOSELY AND WE ARE HIGHLY APPRECIATIVE OF HIS PERSONAL CONTRIBUTIONS, WHICH HAVE BEEN GREAT, IN BRINGING ABOUT CONDITIONS TO CREATE PEACE AND STABILITY IN THE AREA, AS WE HAVE ALWAYS FELT IN THIS COUNTRY IT IS HIGH TIME THAT THE PEOPLE OF THE REGION IN THIS PART OF THE WORLD DISENGAGE THEMSELVES FROM THE PROBLEMS OF CONFRONTATION AND INSTEAD EMBARK ON EXTENSIVE PROGRAMS OF ECONOMIC DEVELOPMENT AND SOCIAL REFORM THAT SHOULD BE AIMED AT RISING THE STANDARD OF LIVING AND INSURING WELFARE AND PROSPERITY FOR THE PEOPLE OF THESE COUNTRIES. IN THAT RESPECT, WE HAVE EXPRESSED NOT ONLY OUR APPRECIATION FOR THE GREAT CONTRIBUTIONS OF THE SECRETARY OF STATE, BUT ALSO WISHED HIM CONTINUED SUCCESS IN HIS EFFORTS. MAY I SAY ALSO THAT WE ARE VERY PLEASED THAT CONCURRENT WITH THE VISIT OF THE SECRETARY, AGREEMENT HAS BEEN REACHED ON THE FORMATION OF A JOINT COMMISSION AT MINISTERIAL LEVEL TO OVERSEE AND SUPERVISE THE DEVELOPMENT OF RELATIONS BETWEEN THE COUNTRIES IN MANY AREAS OF SPECIAL INTEREST, INCLUDING POLITICAL AND ECONOMIC, SCIENTIFIC, CULTURAL AND OTHER SUBJECTS OF INTEREST. WE ARE GRATIFIED THAT THE SECRETARY PERSONALLY HAS AGREED TO CO-CHAIR THE COMMISSION, AND WE ARE CERTAIN THAT AS A RESULTS OF THE TALKS THAT WE HAD THIS MORNING, THE COMMISSION SHOULD BE ABLE TO MAKE IMPORTANT CONTRIBUTIONS TO THE DEVELOPMENT OF RELATIONS BETWEEN THE TWO COUNTRIES, A RELATIONSHIP THAT WAS TRADITIONALLY BEEN VERY CLOSE, AND WILL CONTINUE TO BE CLOSE IN THE TAKING ITS INSPIRATION FROM THE WISHES OF HIS IMPERIAL MAJESTY AND THE LEADERS OF YOUR COUNTRY, THE UNITED STATES. WITH THAT BRIEF REMARK, LADIES AND GENTLEMEN, MAY I NOW GIVE YOU THE SECRETARY OF STATE.

UNCLASSIFIED

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MR. KISSINGER: MR. MINISTER, LADIES AND GENTLEMEN, AFTER READING SOME OF THE ACCOUNTS ABOUT THE IRANIAN-AMERICAN RELATIONSHIPS OVER RECENT WEEKS, I THINK IT IS IMPORTANT TO EMPHASIZE THAT I'VE COME HERE TO VISIT OLD AND TRUSTED AND STEADY FRIENDS. ALL OF MY COLLEAGUES AND I HAVE BEEN VERY GRATEFUL FOR THE TRADITIONALLY CORDIAL AND WARM RECEPTION WE HAVE HAD HERE. I HAVE HAD THE PRIVILEGE OF SPENDING OVER TWO HOURS WITH HIS IMPERIAL MAJESTY LAST EVENING AND THIS MORNING THE MINISTER OF FINANCE AND I, AS WELL AS OUR ASSOCIATES, HAD A VERY FULL EXCHANGE ABOUT THE COMMISSION THAT WE HAVE AGREED TO SET UP, BUT A COMMISSION THAT MAKES SENSE ONLY WITHIN THE FRAMEWORK OF COMPATIBLE VIEWS ABOUT THE FUTURE EVOLUTION OF THIS AREA AND OF THE WORLD ECONOMY. SO ALL OUR TALKS HERE HAVE BEEN VERY POSITIVE AND WITH AN ATTITUDE THAT WE SHARE A COMMON DESTINY. I THINK THE COMMUNIQUE SPEAKS FOR ITSELF AND I SEE NO POINT IN REVIEWING IT, BUT IT MAKES CLEAR THAT A CONSIDERABLE AMOUNT OF ATTENTION WAS DEVOTED TO A REVIEW OF THE INTERNATIONAL SITUATION IN WHICH WE ALWAYS BENEFIT FROM HIS MAJESTY'S ADVICE AND PERCEPTIONS, AND ANOTHER IMPORTANT PART OF OUR DISCUSSIONS BOTH LAST EVENING AND THIS MORNING WAS DEVOTED TO THE FUTURE OF THE WORLD AND HOW TO MASTER SOME OF THE CURRENT DISLOCATIONS. WITH RESPECT TO THE RELATED PROBLEMS OF ENERGY, FOOD AND INFLATION, THERE IS A CLEAR RECOGNITION ON BOTH SIDES THAT THE STABILITY AND PROGRESS OF THE INDUSTRIALIZED WORLD AS WELL AS THE DEVELOPMENT OF THE LEAST DEVELOPED PARTS OF THE WORLD ARE ESSENTIAL TO MAINTAINING ALL THAT HAS BEEN ACHIEVED IN THE LAST GENERATION AND EQUALLY ESSENTIAL TO THE FUTURE PEACE AND STABILITY OF THE WHOLE WORLD. IT WAS IN THIS CONTEXT THAT OF THE GENERAL ECONOMIC SET OF RELATIONSHIPS, THAT THE QUESTION OF OIL PRICES WAS DISCUSSED IN A CONSTRUCTIVE AND POSITIVE SPIRIT, AND WITH A SENSE OF HOPEFUL EVOLUTION WITH RESPECT TO THE CONTRIBUTION THAT CAN BE MADE TO THE OBJECTIVE THAT I PREVIOUSLY STATED. OUR IRANIAN FRIENDS HAVE, IN ADDITION, A FULL RECOGNITION OF THE CRUCIAL IMPORTANCE OF THE PROBLEM OF FOOD, AND WE HAVE DISCUSSED SEVERAL METHODS BY WHICH OUR TWO COUNTRIES CAN COOPERATE IN MEETING THE NEEDS OF THE WORLD FOR ADDITIONAL FOOD AND FOR ADDITIONAL RESOURCES TO PRODUCE MORE FOOD. AND FINALLY, WE DISCUSSED IN THIS CONTEXT THE NECESSITY OF MASTERING THE WORLD INFLATION BECAUSE NONE OF THESE PROBLEMS CAN BE DEALT WITH ON AN ISOLATED BASIS. WITHIN THE NEXT MONTH WE WILL SET UP SUB-GROUPS IN VARIOUS FIELDS INCLUDING THOSE THAT HAVE BEEN MENTIONED BY THE MINISTER OF FINANCE AND MYSELF, WHICH HAVE BEEN ASSURED OF THE HIGHEST LEVEL. ATTENTION IN BOTH COUNTRIES CHARGED WITH PREPARING, HOPEFULLY WITHIN SIX MONTHS, MAJOR ADVANCES IN THESE FIELDS FOR ANOTHER MEETING OF THE JOINT COMMISSION, WHICH WE PLAN TO HOLD IN WASHINGTON, THOUGH WE WILL NOT BE ABLE TO MATCH THE HOSPITALITY - AND YOU WILL HAVE TO KEEP IN MIND THAT WE HAVE A SHORTER HISTORY IN WHICH TO LEARN THESE CIVILIZED METHODS. SO, WE ARE VERY PLEASED WITH OUR MEETING HERE AND I WOULD LIKE TO EXPRESS MY APPRECIATION AND TO CONVEY THE GREETINGS OF PRESIDENT FORD, WHO HOPES TO MAKE THE ACQUAINTANCE OF HIS IMPERIAL MAJESTY VERY SOON.

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Q. MR. SECRETARY, WILL YOU TAKE SOME QUESTIONS?

A. YES.

Q. PUT MAYBE OVERLY SIMPLY, THE UNITED STATES FAVORS LOWER OIL PRICES AND IRAN HAS FAVORED HIGHER OIL PRICES. BASED ON YOUR VISIT HERE, DO YOU THINK THERE WILL BE ANY NARROWING OF THE VIEWS ON PRICES?

A. I THINK, OF COURSE, THE STATEMENT OF THE ISSUE, AS YOU YOURSELF SIAD, IS OVERLY SIMPLE. I THINK THAT YOU, OF COURSE, ALL HAVE TO KEEP IN MIND THAT IRAN CANNOT MAKE THESE DECISIONS UNILATERALLY, AND WILL HAVE TO CONSULT ITS PARTNERS IN OPEC ABOUT ANY CONCLUSIONS THAT IT MAY REACH WITH RESPECT TO OIL PRICES. I THINK THE VIEWS WITH RESPECT TO THE LINKED PROBLEMS OF OIL PRICES AND INFLATION HAVE BEEN BROUGHT CLOSER.

1. THE SUGGESTION OF THAT, SIR, IS THAT YOU WOULD HOPE THAT IRAN AT SOME POINT IN THE NEAR FUTURE WOULD USE ITS INFLUENCE IN THE DIRECTION OF LOWERING PRICES. IS THAT CORRECT?

A. WELL, AS I'VE TRIED TO EXPLAIN ON A NUMBER OF OCCASIONS, THE OIL PRICE PROBLEM HAS MANY ASPECTS. WHEN PRICES HAVE BEEN RISING, THERE ARE MANY OTHER THINGS THAT CAN BE DONE OTHER THAN IMMEDIATELY LOWERING THEM. BUT, FIRST OF ALL, SOME OF YOU WILL HAVE AN OPPORTUNITY TO MEET WITH HIS IMPERIAL MAJESTY. SECONDLY, I DO NOT THINK IT WOULD BE APPROPRIATE FOR ME TO GO INTO DETAILS EXCEPT TO SAY THAT WE HAD A CONSTRUCTIVE AND POSITIVE TALK ON THE SUBJECT, AND THAT OUR VIEWS HAVE BEEN BROUGHT CLOSER.

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Q. MR. SECRETARY, ARE YOU HOPEFUL THAT IN THE MEDIUM RUN THAT OIL PRICES MIGHT BE REDUCED?

A. I'M HOPEFUL THAT THE IMPACT OF OIL PRICES ON THE WORLD ECONOMY CAN BE BROUGHT UNDER CONTROL, AND I BELIEVE THAT THIS REQUIRES, ON THE OTHER SIDE, SOME RECOGNITION OF THE IMPACT OF THE INFLATION OF THE WORLD ON THE OIL-PRODUCING COUNTRIES. BUT I THINK IN THAT FRAMEWORK PROGRESS IS POSSIBLE.

Q. BUT IN THE IMMEDIATE FUTURE, DO YOU ANTICIPATE ANY FURTHER RISE IN OIL PRICES, PERHAPS NOT A VERY GREAT ONE, BUT A FURTHER RISE AS A RESULT OF THE OPEC MEETING IN VIENNA?

A. WELL, I THINK WE SHOULD WAIT UNTIL WE SEE WHAT HIS IMPERIAL MAJESTY WILL PROPOSE AT THE OPEC MEETING. OF COURSE, THE HOPE OF THE UNITED STATES IS THAT FURTHER RISES CAN BE AVOIDED.

I. MR. SECRETARY, DID YOU DISCUSS WITH THE SHAM THE PROSPECTS FOR A POSSIBLE MEETING BETWEEN PRODUCERS AND THE CONSUMERS ANYTIME SOON?

A. WELL, YES, WE DISCUSSED THE INITIATIVES THAT HAVE BEEN MADE WITH RESPECT TO MEETINGS OF PRODUCERS AND CONSUMERS. I EXPLAINED TO HIS IMPERIAL MAJESTY THE GENERAL AMERICAN APPROACH TO THE PROBLEM OF THE DIALOGUES. WE, IN ANY EVENT, WILL REMAIN IN CLOSE CONTACT WITH HIS MAJESTY, AS WE TRADITIONALLY DO, TO MAKE SURE THAT WE UNDERSTAND EACH OTHER'S VIEWS. THE UNITED STATES IS NOT OPPOSED TO A DIALOGUE BETWEEN CONSUMERS AND PRODUCERS, AND THE PROBLEM IS TO CONDUCT IT IN SUCH A MANNER THAT IT WILL ACHIEVE THE DESIRED RESULTS FOR BOTH PARTIES.

Q. MR. SECRETARY, ON THE MIDDLE EAST, DID YOU HAVE A CONSIDERABLE DISCUSSION WITH THE SHAM ON THIS ISSUE, AND WOULD YOU TELL US WHETHER THERE IS ANY FUNDAMENTAL DIFFERENCE IN U.S. AND IRANIAN VIEWS?

A. I HAD AN EXTENSIVE DISCUSSION WITH HIS IMPERIAL MAJESTY ON THE MIDDLE EAST, AND BENEFITTED FROM HIS EVALUATION OF THE SITUATION. I BELIEVE THAT, AS HAS BEEN THE CASE IN THE PAST, OUR ANALYSIS IS SUBSTANTIALLY CONGRUENT.

Q. MR. SECRETARY, WHAT IS THE AMERICAN VIEW ON HIS IMPERIAL MAJESTY'S PROPOSAL FOR A FIXED PRICE OF JUST UNDER $10.00?

A. WE ARE NOT, IN PRINCIPLE, OPPOSED TO THE IDEA OF A FIXED PRICE, BUT WE ARE STUDYING IT FURTHER.

Q. MR. SECRETARY, HAS THE QUESTION OF FOOD SUPPLY BEEN LINKED WITH THE QUESTION OF ENERGY SUPPLY?

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A. NO, THE ISSUE OF FOOD SUPPLY HAS NOT BEEN LINKED WITH THE ISSUE OF ENERGY SUPPLY, BUT ON THE OTHER HAND, THERE IS AN INHERENT CONNECTION BETWEEN THE WILLINGNESS OF THE WORLD TO TAKE A GLOBAL VIEW TO ONE PROBLEM AND THE ABILITY OF THE WORLD TO TAKE A GLOBAL VIEW TO THE OTHER PROBLEM. THIS IS NOT A QUESTION OF A CONDITION; THIS IS A QUESTION OF THE APPROACH. WE WILL PROCEED WITH OUR FOOD POLICY WITHOUT REFERENCE TO ANY DECISIONS THAT HAVE BEEN MADE, OR WILL BE MADE. BUT ANY THOUGHT-FUL PERSON MUST RECOGNIZE THAT REALITY ESTABLISHES A CONNECTION BETWEEN THE ABILITY OF THE WORLD TO DEAL GLOBALY WITH ITS PROBLEMS IN VARIOUS FIELD. BUT I WOULD ALSO LIKE TO ADD THAT, AT LEAST AS FAR AS IRAN AND THE UNITED STATES ARE CONCERNED, THIS IS NOT A PROBLEM.

Q. MR. SECRETARY, WHAT IS THE U.S. VIEW ON THE ROLE THAT IRAN SHOULD PLAY IN THE INDIAN OCEAN?

A. WELL, AS YOU KNOW, I'M TRYING TO CURB THE MISSIONARY SPIRIT IN OUR BUREAUCRACY, AND THEREFORE I'M TRYING TO REDUCE OUR NATURAL PROPENSITY OF TELLING OTHER PEOPLE WHAT TO DO, BUT IRAN, BY VIRTUE OF ITS RESOURCES, ITS POLITICAL COHESION, AND ITS PERCEPTION OF ITSELF, CAN PLAY A SIGNIFICANT AND STABLIZING ROLE. IT HAS ALREADY ATTEMPTED TO CONTRIBUT, AND NOT WITHOUT SUCCESS, TO EASING RELATIONS BETWEEN SEVERAL OF ITS NEIGHBORS, AND I BELIEVE THAT THIS IS A ROLE IT CAN CONTINUE TO PLAY. IN THE FIELD OF AGRICULTURE, FOR EXAMPLE, IRAN CAN MAKE A MAJOR CONTRIBUTION TO ENHANCING THE PRODUCTIVITY OF OTHER COUNTRIES IN THE INDIAN OCEAN, AND WE DISCUSSED VARIOUS METHODS BY WHICH OUR TECHNOLOGY AND THE IRANIAN RESOURCES CAN COMBINE TO BRING THIS ABOUT, WHICH WILL BECOME APPARENT DURING AND AFTER THE WORLD FOOD CONFERENCE. SO WE CONSIDER THAT IRAN'S ROLE IN THE INDIAN OCEAN IS A CONSTRUCTIVE ONE, AND ONE WHICH WE TEND TO SUPPORT.

Q. MR. SECRETARY, CAN YOU TELL US WHETHER THE UNITED STATES IS MOVING TOWARDS A RE-ASSESSMENT OF ITS ATTITUDES TOWARD THE PALESTINIAN LIBERATION ORGANIZATION, AND WHETHER THIS SUBJECT CAME UP...

A. I HAVE TO TELL YOU, MR. MINISTER, THIS IS THE PRESS THAT TRAVELS WITH ME THAT NORMALLY SEES ME ON BACKGROUND, AND NOW THEY ARE TRYING TO ASK ON THE RECORD ALL THE QUESTIONS TO WHICH THEY HAVE ALREADY HEARD MY ANSWERS ON BACKGROUND. (LAUGHTER) AS I'VE POINTED OUT TO YOU GENTLEMEN PREVIOUSLY...

MINISTER ANSARY: THEY WERE WONDERING IF YOU'D CHANGED YOUR MIND...

A. NO, THEY WANT TO GET IT ON THE RECORD. AS I POINTED OUT TO YOU GENTLEMEN PREVIOUSLY, I WILL PROBABLY VISIT THE MIDDLE EAST NEXT WEEK IN ORDER TO ASSESS AND TO TALK TO THE PARTICIPANTS AT THE RABAT SUMMIT AND TO OTHER COUNTRIES IN THE AREA THAT FOR OBVIOUS REASONS WERE NOT AT THE RABAT SUMMIT, ABOUT THEIR CONCLUSIONS WITH RESPECT TO RECENT EVENTS. THE UNITED STATES IS NOT, AT THIS MOMENT, UNDERTAKING A RE-ASSESSMENT OF ITS POLICY; AFTER I RETURN FROM THE AREA, NATURALLY, THE PRESIDENT AND HIS SENIOR ADVISORS WILL CONSIDER THE OVERALL SITUATION, BUT I DO NOT EXPECT A CHANGE IN AMERICAN POLICY.

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Q. MR. SECRETARY, FOLLOWING UP ON MR. KOPPEL'S QUESTION ABOUT THE INDIAN OCEAN, DID YOU DISCUSS WITH THE SHAH THE PROSPECT OF AN AMERICAN BASE ON THE ISLAND OF DIEGO GARCIA? COULD YOU TELL US A LITTLE ABOUT THAT?

4. I WILL ANSWER THAT QUESTION, BUT I THINK YOU GENTLEMEN HAVE TO RECOGNIZE THAT I CANNOT IN THIS PRESS CONFERENCE GIVE A FULL ACCOUNT OF A FOUR-HOUR DISCUSSION WITH THE SHAH. WE DID NOT DISCUSS THIS ISSUE, BUT COULD WE HAVE SOME QUESTIONS FROM THE IRANIAN JOURNALISTS PRESENT?

Q. YES, MR. SECRETARY, COULD YOU KINDLY TELL ME IF THERE ARE ANY CHANCE OF IRANIAN INVESTMENT IN AMERICAN COMPANIES, LIKE IRANIAN INVESTMENT IN GERMANY'S KRUPP COMPANY?

4. IT IS NOT AN ISSUE THAT CAME UP DIRECTLY, BUT IT IS THE SORT OF ISSUE THAT WOULD BE ADDRESSED BY THE JOINT COMMISSION. I CAN SAY THAT IN PRINCIPLE WE HAVE NO OBJECTION TO THIS.

Q. MR. SECRETARY, WILL THE WORK OF THE JOINT COMMISSION BE LIMITED TO THE BILATERAL RELATIONS, OR WILL YOU BE DOING THINGS TOGETHER IN TURN?

A. NOW, THE WORK OF THE COMMISSION WILL INCLUDE SUCH PROBLEMS AS POSSIBLE INVESTMENT IN THIRD COUNTRIES, FOR EXAMPLE, AND IT WILL ADDRESS ITSELF, I BELIEVE, ALSO TO WHAT CAN BE CONTRIBUTED THROUGH OUR BILATERAL RELATIONS TO THE REGIONAL DEVELOPMENT IN, FOR EXAMPLE, THE INDIAN OCEAN.

Q. MR. SECRETARY, DID THE QUESTION OF ARMS DELIVERIES TO IRAN COME UP, AND IF SO, IN WHAT CONTEXT?

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A. WELL, AS YOU KNOW, WE HAVE AN ONGOING ARMS RELATIONSHIP WITH IRAN AND ONE OR TWO ISSUES IN CONNECTION WITH THIS CAME UP TANGENTALLY, THERE THERE'S NO POLICY ISSUE THAT REQUIRES A GREAT DEAL OF CONSIDERATION AT THIS MOMENT.

Q. MR. SECRETARY, AT THE OUTSET YOU SAID THAT THE JOINT COMMISSION ONLY MAKES SENSE IN THE LIGHT OF THE COMPATIBLE VIEWS OF THE TWO COUNTRIES ON THE WORLD ECONOMY. DO YOU CONSIDER, AFTER YOUR TALKS, THAT BOTH NATIONS HAVE A COMPATIBLE VIEW NOW ON THE WORLD ECONOMY?

A. I SAID THAT HIS IMPERIAL MAJESTY AND I DISCUSSED HOW ESSENTIAL IT WAS FOR THE INDUSTRIAL NATIONS TO MAINTAIN THEIR STABILITY, THEIR POSSIBILITY FOR PROGRESS, FOR MAINTAINING THE KIND OF EARTH THAT BROUGHT US TO THE PRESENT SITUATION, OR THAT BROUGHT US NOT TO THE PRESENT SITUATION, BUT BROUGHT ABOUT THE EVOLUTION OF THE WHOLE POST-WORLD WAR II PERIOD. AND SECONDLY, ALSO, THE NECESSITY OF HELPING THE LEAST DEVELOPED COUNTRIES. I BELIEVE, WITH RESPECT TO THOSE OBJECTIVES, AND TO THE OBJECTIVES OF BRINGING ABOUT GLOBAL SOLUTIONS TO THE PROBLEMS OF ENERGY, FOOD AND INFLATION, THE OBJECTIVES OF THE UNITED STATES AND IRAN CAN BE SAID TO BE SUBSTANTIALLY COMPATIBLE.

Q. MR. SECRETARY, DOES WHAT YOU HAVE SAID ON OIL PREVIOUSLY MEAN THAT YOU NOW EXPECT IRAN TO SUPPORT EFFORTS TO HOLD THE LINE ON OIL PRICES?

A. I DON'T THINK I SHOULD BE ANY MORE SPECIFIC THAN I HAVE BEEN, AND I THINK THAT YOU WILL JUST HAVE TO WAIT TO SEE WHAT POSITION IRAN WILL TAKE.

Q. MR SECRETARY, NEVERTHELESS, IN SPEAKING OF THE UNITED STATES AND LEAVING IRAN OUT OF IT, YOU SAID THAT THE HOPE OF THE UNITED STATES IS THAT FURTHER RISES CAN BE AVOIDED. WHAT HAPPENS TO OUR HOPE FOR LOWER PRICES?

A. BEFORE YOU CAN HAVE LOWER PRICES, YOU HAVE TO HAVE STABLE PRICES.

Q. MR. SECRETARY, IRAN HAS PROPOSED THIS UNITRY PRICE OF $9.85 IN THE GULF. DO YOU REGARD THIS AS A TRUE WEIGHTED AVERAGE REFLECTING CURRENT RATES IN THE GULF, OR AS AN INCREASE?

A. I WAS WARNED BEFORE I GOT HERE UNDER NO CIRCUMSTANCES TO GET MYSELF INVOLVED IN A DETAILED DISCUSSION OF OIL PRICES, BECAUSE MY IRANIAN COUNTERPART WOULD BE INFINITELY MORE COMPETENT THAN I, AND OVERWHELM ME WITH STATISTICS, SO I'M NOT PREPARED TO GO INTO A DISCUSSION OF WHAT PRICE WOULD BE CONSIDERED THE CORRECT PRICE BY THE UNITED STATES, OR A PRICE FROM WHICH INDEXING MIGHT BE CONSIDERED APPROPRIATE. BUT IT IS ONE OF THE PROBLEMS THAT HAS TO BE DISCUSSED.

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Q. CAN WE ASK, PERHAPS, THE QUESTION FROM MR. ANSARY? HOW WOULD IRAN REGARD AN ARBITRATION OF THE PRESENT OIL PRICE?

A. MINISTER ANSARY: WELL, AS YOU KNOW, HIS IMPERIAL MAJESTY HAS PROPOSED THAT HE WOULD BE PREPARED TO LINK THE PRICE OF OIL WITH THE RATE OF INFLATION IN THE INDUSTRIAL COUNTRIES. ONCE YOU LINK THE TWO TOGETHER, THEY CAN MOVE IN EITHER DIRECTION TOGETHER.

Q. MR. MINISTER, WHEN YOU SAY ONCE YOU LINK THEM TOGETHER THEY CAN MOVE IN EITHER DIRECTION, DO YOU BELIEVE THAT, IN A PERIOD WHEN THERE IS MASSIVE WORLD INFLATION, IT IS REALISTIC TO EXPECT A DOWNWARD TREND IN OIL PRICES LINKED TO A DOWNWARD TREND IN OTHER COMMODITY PRICES?

A. MINISTER ANSARY: I STAND ON MY STATEMENT THAT THE IDEA IS TO LINK THE TWO TOGETHER. ONCE YOU DO THAT, THEY BOTH HAVE THE SAME DESTINY. NOW WHETHER IT'S REALISTIC OR NOT, DEPENDS ON THE APPROACH THAT WE ALL MAKE TO THE PROBLEM TOWARD INFLATION.

Q. MR. ANSARY, I WASN'T CHALLENGING YOUR STATEMENT BY ANY MEANS, SIR, I WAS SEEKING FURTHER AMPLIFICATION OF IT.

A. MINISTER ANSARY: AS YOU KNOW, WE'RE ALL CONCERNED WITH THE RAMPANT INFLATION WITH WHICH THE WORLD HAS BEEN FACED. THIS PROPOSAL WAS MADE INITIALLY BY HIS IMPERIAL MAJESTY IN THE CONTEXT OF HIS DESIRE FOR THE ENTIRE COMMUNITY OF NATIONS TO COOPERATE IN LOWERING THE RATE OF INFLATION, WHICH IS ONLY BENEFICIAL TO THE ENTIRE WORLD COMMUNITY.

Q. MR. MINISTER, DOES IRAN WANT TO MATE THE TWO AT THE PRESENT LEVELS, WHEN THE PRICE OF OIL IS ARTIFICIALLY HIGH, OR WOULD IT BE WILLING TO GO BACK TO SOME PREVIOUS INDEX LEVEL FROM PREVIOUS YEARS?

BY
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A. MINISTER ANSARY: ALL I CAN SAY IS THAT LINKING CAN ONLY TAKE PLACE AT THE TIME YOU TALK ABOUT IT. THERE WAS NO QUESTION OF MAKING THE LINK RETROACTIVE.

Q. MR. SECRETARY, DID YOU AND HIS MAJESTY SPECIFICALLY DISCUSS HIS PLAN FOR INDEXING AND FOR LINKING 20 OR 30 COMMODITIES TO THE PRICE OF OIL, AND IF SO, I ASSUME YOU'RE FAMILIAR WITH THE CRITICISM OF THAT, THAT IT AMOUNTS TO INSTITUTIONALIZING INFLATION, AND DID THAT COME UP?

A. YES, THAT CAME UP AND I WILL HAVE TO STAND ON WHAT I SAID; I CANNOT GO INTO MORE DETAIL ABOUT IT. I REPEAT WHAT I SAID? THAT WHAT WE DISCUSSED WAS WITHIN THE CONTEXT OF CONSIDERING THE IMPACT ON THE WORLD ECONOMY, ESPECIALLY ON THE INDUSTRIALIZED NATIONS AS WELL AS ON THE LEAST-DEVELOPED NATIONS, OF THE ENERGY CRISIS, AS WELL AS THE IMPACT, ON THE PRODUCERS, OF INFLATION. NOW, OBVIOUSLY, IT IS IN NEITHER SIDE'S INTEREST TO BUILD AN INSTITUTIONALIZED SYSTEM THAT ACCENTUATES THE TENDENCIES ON BOTH SIDES. AND SOME MEANS WILL HAVE TO BE FOUND TO TAKE ACCOUNT OF THESE OBJECTIVES AND I LEFT THE MEETING WITH SOME ENCOURAGEMENT THAT AN EVOLUTION IN A CONSTRUCTIVE DIRECTION WAS POSSIBLE. NOW, WHAT FORM THIS WILL TAKE, ONE WILL NOW HAVE TO AWAIT IRAN'S PROPOSALS AT THE OPEC MEETINGS AND OTHER DISCUSSIONS THAT MAY TAKE PLACE.

MINISTER ANSARY: THANK YOU VERY MUCH, MR. SECRETARY. I THINK SINCE THE SECRETARY HAS TO LEAVE FOR THE AIRPORT IMMEDIATELY IN ABOUT FIVE MINUTES FROM NOW, WE'LL CLOSE THE MEETING, AND THANK YOU VERY MUCH.

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DEPARTMENT OF STATE

October 3, 1974

No. 390

EXCHANGE OF TOASTS
BETWEEN.
THE HONORABLE HENRY A. KISSINGER
SECRETARY OF STATE
AND HIS EXCELLENCY ADOLFO MOLINA
FOREIGN MINISTER OF GUATEMALA
AT A LUNCHEON FOR LATIN AMERICAN FOREIGN MINISTERS
AND PERMANENT REPRESENTATIVES TO THE UNITED NATIONS
CENTER FOR INTER-AMERICAN RELATIONS
NEW YORK CITY
OCTOBER 2, 1974

Secretary Kissinger

Excellencies and Friends:

I speak before this group always with considerable hesitation, knowing the high quality of oratory that is assembled in this room and the judgments that will be made on my effort — not to speak of the replies that will be given either while I'm in the room or to the press after we all leave.

We met in this room just about a year ago today, and it isn't often that one attends lunch and one can say it makes a difference in the affairs of nations. But I like to think that the new dialogue, which we started in this room last year, has already made a difference and, if we carry out the promise that it contains, that it will make an even more important difference in the years ahead.

I told you then, and still believe, that relationships in the Western Hemisphere had been too long neglected and that if the United States could not establish a constructive and creative relationship on the basis of equality and mutual respect with its friends to the South, with so many historic ties connected to it, then how can we speak of a world structure or expect to be creative in other parts of the world? The Foreign Minister of Costa Rica replied, and so did the Foreign Minister of Colombia; and out of this developed a series of meetings that we have had since then. I believe that the new dialogue has already removed some misunderstandings; it has already identified some common problems; and it has already created some working groups on science and technology on the multinational corporations, that deal with some of our specific aspirations and with our particular grievances.

But we are only at the very beginning of this process. All of our countries face problems which have become global in nature. We all face the problem of inflation. Some of us are commodity exporters, some of us are commodity importers, and some of us are both. But we all realize that we have become part of an interdependent world community and that none of us — not the United States nor anybody else — can solve these problems by purely national policies. So the question isn't really whether they should be dealt with in a larger forum — about that we have no choice —

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but with what group we should discuss, in what manner and to what purpose. In this respect, as I have said to you in our several meetings over the past year, the United States attaches extraordinary importance to its Western Hemisphere relationships. In Mexico City I used the word which was criticized by one or two of you with great eloquence when I spoke of "community" in the Western Hemisphere. And, in fact, I told my friend, the Foreign Minister of Jamaica, if we could only have excluded the Caribbeans we would have a happy meeting. [Laughter] And as our influence grows, I don't exclude the possibility. [Laughter and applause]

But we do not insist on any particular phrase, in the name of which we work together. We recognize several countries here have attended meetings of the non-aligned, and we realize that all countries here want to pursue foreign policies that reflect their own national interests and their own regional concerns.

What we propose is that those problems which we identify as "common" we should deal with in a spirit of cooperation and on the basis of equality and thereby set an example to many other parts of the world of how problems must be dealt with. Nor is this proposed in any spirit of exclusivity, because eventually the problems I have enumerated can be dealt with only on a global basis.

The United States hopes that in the next year we can translate the dialogue into concrete achievement. We believe that the working groups that already exist can lead to tangible results. We hope, and are quite confident, that our own trade reform act will pass so that the systems of preferences — which we have talked about for too long — can finally be instituted. And beyond this, we are prepared to discuss the political relationships in the Western Hemisphere, the restructuring of the OAS, with an open mind and paying careful heed to the predominant views of our friends in the Western Hemisphere — both within the OAS and at the forthcoming Foreign Ministers Meeting in Argentina.

We will work toward a concrete solution of our common problems. Within the United States, we will make an effort to anchor the Western Hemisphere relationship, not only in the consciousness of our Government but in the hearts of the people. And we believe that all of us have an obligation to contribute to this in our countries as much as we can. I'm glad to say that our new Assistant Secretary of State for Latin American Affairs — Mr. William Rogers — who is here with us, has accepted this position, because he has had a long history of dedication to Western Hemisphere relationships. You have in him a guarantee that what we will do together will not be done by one country for others, nor will it be done in a spirit of bureaucracy but with an attitude of friendship, with a feeling of humanity, and with a hope that what we do here in the Western Hemisphere is of significance not just for us ourselves but for a world that needs a demonstration of how free people working together can master their own future.

It's in this spirit that I would like to propose a toast to progress in the Western Hemisphere and to our close and growing friendship.

[Applause]

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Foreign Minister Molina

Mr. Secretary of State, Your Excellencies, and Ladies and Gentlemen:

It is indeed a great pleasure — coincidentally, because of the fact that Guatemala is at present presiding at the Latin American Group of Nations — that I have been singled out for the specific honor of acting here as spokesman for the Latin American Foreign Ministers as well as for the Latin American Ambassadors to the United Nations to respond to the invitation to this banquet.

In the first place, I should state — and I must state — that I want to thank you for your invitation to share bread and wine here with all of your colleagues in this spirit of friendship with the countries of Latin America and in the spirit of a continuous dialogue.

As was stated one year ago, when we held this meeting that has been referred to here, the dialogue is based on the basis of equality — as has been mentioned by Secretary Kissinger — as well as the principles of dignity of the members of the various countries of our Hemisphere. It is because of this dialogue that started here — that we continued in Bogota; Mexico City; Washington, D.C.; and Atlanta — that we have been able to broach sudden problems in a practical manner with the practicalities that characterize Secretary Kissinger's approach — which can be summarized in use of few words and decisive action — in order to state that we here have a responsibility to deal with the problems of the economic development of our countries, the problems that have been mentioned of transfer of technology, the problems of the transnational corporations, and also other points that are related.

We have a number of study groups that have met both in conferences. We have had working groups that have worked on all of the subjects that have been referred to, as well as some of the others incorporated in the Declaration of Tlatelolco.

It is in this spirit of Tlatelolco that the new dynamics of the relationships in the Hemisphere towards greater economic development have been conducted. This new year of the dialogue is one that brings with it numerous problems, as Secretary Kissinger has suggested, and reflects ominous clouds on the horizon in which the policies of the different countries will have to be defined. We have noted problems, such as the unbalance in the balance of payments that exists between our respective countries and, as has sometimes been also stated by the Secretary at the United Nations, the problems that come forth with diffusion of knowledge — specifically, with reference to nuclear technology — as well as the problems relating to the inflationary spirit which is affecting most countries in the world. The history of the world confirms the fable of Nemesis — one that really rules the destiny of man, one of providing man with the type of abundance that he desires — that he might be led to the type of nuclear technology which could destroy humanity, one in which an excess in the amount of money or funds available could, in fact, engulf humanity in a situation as we conceived it. With respect to the concept of interdependence, this is one that, I would like to point out, has both a positive and negative connotation. It is positive in the sense that the peoples of the world can no longer live in isolation. We all need from one another in order to help ourselves. But it also has a negative side in the sense that problems of the world now affect everybody in the world and, therefore, we need joint solutions.

PR #390

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For the Latin Americans and Latin American countries, the question of economic security is of great importance; and that is why we attach special significance to the charter of duties and obligations of member states in the realm of economic relationships — in order to guarantee our mutual economic security. We find a two-fold problem that we are facing, and this is one that I was specifically facing when I started to address this group. In the first place, I was not informed, or aware, of the points that Secretary Kissinger might bring up in his speech. And, secondly, I am not aware of the points of view that my colleagues in this room share with us.

I believe, therefore, that, in order to fulfill the mission that was specifically assigned to me, I should express to the Secretary of State, on behalf of all of you, our great interest in all of the issues that he has raised. The matters that have been raised here will be studied by our respective governments. They will be considered and reflected upon. And, in the future, we will be able to come to other meetings with specific proposals and recommendations to deal with them.

I believe that I express the gratification that we all share here at the appointment of William Rogers, who has always been — and is considered — a great friend of Latin America.

It is in this context that we want to point to our hopes that we will be able to carry forth in the extraordinary program and tasks that we have set for us and that Secretary Kissinger so well understands in our own Hemisphere — and also the extraordinary hope that we have because we know how well Secretary Kissinger is familiar and aware with the problems that confront all of the countries of the world and the repercussions that those world problems have on the Western Hemisphere.

Finally, I would like to express a great appreciation to you, Mr. Secretary, for the special hospitality, understanding and solidarity that has been reflected here with all our friends of the Western Hemisphere, and I would like to express our hope that we may be able to continue this spirit of friendship and progress amongst our countries.

Thank you very much.

[Applause]

* * * * * * * *

(Q) MR. PRESIDENT, WHAT ARE YOU PREPARED TO GUARANTEE ISRAEL IN EXCANGE FOR A WITHDRAWAL?

(S) WHY AM I ASKED ABOUT GUARANTEES?

(K) *YOU* SAID THE PRESIDENT WOULL BE DELIGHTED TO NEGOTIATE THE WHOLE THING. (GARBLED)

(S) I NEED GUARANTEES LIVE THE ISRAELIS. I MYSELF NEED GUARANTEES.

(Q) MR. PRESIDENT, HOW DO YOU FEEL ABOUT THE RABAT CONFERENCE?

(S) VERY OPTIMISTIC.

((Q) OR, PRESIDENT, DID YOU DISCUSS THE OIL PROBLEM WITH DR. KISSINGER?

(S) THE OIL PROBLEM, WELL IT IS PART OF THE PROBLEM TO DISCUSS, BUT I AM NOT AN OIL PRODUCER.

CNCUOTE
EILTS
BT
#8150

Kissinger - Arrival Statement in Algiers, October 14, 1974

"Let me first make a general statement. This is my third visit to Algiers # within a year and it reflects the very high regard in which President Boumediene is held in the United States. We recognize his leading role among non-aligned and we take his views on international affairs and economic matters with a great deal of seriousness. Therefore, I look forward to benefiting from his wisdom and to bringing him the personal greetings of President Ford. I will also discuss with him our views on international affairs, especially about developments in the Middle East. So, I look forward to my visit here very much."

As I have said earlier in the day in Cairo and Damascus, the purpose of my visit was to determine the trends and possibilities towards a just and lasting peace in the Middle East. I found some positive signs and some positive indications and our aim now will be to give them concrete form, perhaps when I return to the Middle East during November. At that time the leaders of the Arab countries will have had an opportunity to consult with each other at the Summit and elsewhere.

As far as the United States, President Ford has reaffirmed our determination to contribute what we can to the development of peace in the area to the extent that the parties concerned want our contribution and can agree on a course of procedure. Thank you."

Department of State

TELEGRAM

10/432

AMEMBASSY RABAT

ACTION:
POL 3

UNCLASSIFIED ALGIERS 2251

Classification

RECD: 1512257 OCT 74

INFO: Q 151155Z OCT 74
AMB TO RUEHC/SECSTATE WASHDC IMMEDIATE 1255
DCM RUFHMR/AMEMBASSY RABAT IMMEDIATE 2347
RF BT
ECON UNCLASS ALGIERS 2251
DATT
ADRF E.O. 11652: NA
USIS TAGS: OVIP (HENRY A. KISSINGER)
CHRON SUBJ: SECVISIT

POUCH: DEPT PASS WHITE HOUSE FOR GENERAL SCOWCROFT AND NESSEN
CASA
TANG

S/S 15

30 rs

FOLLOWING FULL TEXT SECRETARY'S DEPARTURE STATEMENT ALGIERS:
QUOTE LET ME MAKE A FEW COMMENTS. FIRST OF ALL I WOULD LIKE TO
THANK PRESIDENT BOUMEDIENE AND HIS COLLEAGUES FOR THE VERY WARM
RECEPTION I HAVE RECEIVED HERE. I REVIEWED WITH PRESIDENT
BOUMEDIENE FIRST OF ALL MY IMPRESSIONS OF MY TRIP THROUGH THE
MIDDLE EAST. I TOLD PRESIDENT BOUMEDIENE OF THE UNITED STATE'S
COMMITMENT TO HELP THE PARTIES MAKE PROGRESS TOWARDS A JUST AND
LASTING PEACE OF THEY CAN AGREE AMONG THEMSELVES ON PRINCIPLES
AND PROCEDURES FOR THE NEXT STAGE. I TOLD HIM OF SOME OF THE
POSITIVE TRENDS THAT I FOUND. HIS ADVISE WAS VERY HELPFUL
AND HIS ATTITUDE WAS VERY UNDERSTANDING. I TOLD HIM THAT I
WOULD RETURN TO THE AREA IN NOVEMBER TO ATTEMPT TO GIVE THE
POSITIVE TRENDS A CONCRETE EXPRESSION AFTER THE ARAB
LEADERS HAVE HAD AN OPPORTUNITY TO CONSULT WITH EACH OTHER.
WE ALSO DISCUSSED OUR DIFFERING APPROACHES TO THE QUESTION
OF OIL PRICES. AND WE REVIEWED WAYS AND APPROACHES TO
RECONCILE THESE DIFFERENT POINTS OF VIEW IN
THE MONTHS AHEAD. FINALLY, WE REVIEWED THE STATE OF
BILATERAL ALGERIAN UNITED STATES RELATIONSHIPS. WE
FOUND THAT THEY HAD IMPROVED CONSIDERABLE IN RECENT MONTHS.
WE ARE CONVINCED THAT THEY WILL TAKE A POSITIVE EVOLUTION
IN THE NEAR FUTURE. IT REMAINS FOR ME TO THANK MY ALGERIAN
HOSTS FOR THEIR CHARACTERISTIC HOSPITALITY, TO EXPRESS MY
REGRET THAT MY FRIEND THE FOREIGN MINISTER WAS KEPT IN
NEW YORK BY OTHER DUTIES. BUT THIS GAVE ME THE OPPORTUNITY
TO MEET THE MINISTER OF INTERIOR. THANK YOU. UNQUOTE.
PARKER

10-15-1229Z BA/

UNCLASSIFIED
Classification

FORM FS-412(H)
4-68