PRESS
DEPARTMENT OF STATE

[LC]

March 1, 1975

No. 108

As Prepared for
Delivery

EMBARGOED FOR RELEASE AT 2:00 P.M. (CDT) AND 3:00 P.M. (EDT) SATURDAY,
MARCH 1, 1975. NOT TO BE PREVIOUSLY PUBLISHED, QUOTED FROM, OR USED IN
ANY WAY.

ADDRESS BY
THE HONORABLE HENRY A. KISSINGER
SECRETARY OF STATE
AT THE COMBINED SERVICE CLUB LUNCHEON
SHAMROCK HILTON HOTEL
HOUSTON, TEXAS
MARCH 1, 1975

The United States and Latin America:
The New Opportunity

The foreign policy of the United States has one overriding goal: to help shape a new structure of international relations which promotes cooperation rather than force; negotiation rather than confrontation; and the positive aspirations of peoples rather than the accumulation of arms by nations.

Our relations with the Western Hemisphere are central to this enterprise. The United States and Latin America were born out of the struggle against tyranny. Our peoples are bound not only by geography but by the common heritage of Western civilization. We share a history of mutual support in times of trouble and the promise of a new world of justice, peace, freedom and prosperity. With courage and imagination we now have the opportunity to make inter-American cooperation a pillar of the global community which our era demands.

The discovery of America, more than any other single event, ended the Middle Ages and revolutionized the thought of mankind. It drew man beyond what had come to seem unchangeable, to a new beginning, an escape from the burdens of the past, and from history itself.

A Brazilian epic poem of the seventeenth century described the lure that beckoned the Americas onward:

For further information contact:

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"... to open new paths never trod, never known . . . to push on despite obstacles through every zone. . ."

With the shield of one ocean at our backs and the dream of another one before us, hope was always just a little farther along the river, over the mountains, across the plains and jungles. In the old world a frontier was a limit; in the New World it was an opportunity.

Today's frontiers are not geographical, but frontiers of human need and creativity. To conquer them is even more important than the adventures that shaped our past.

At the heart of our contemporary challenge is a new interdependence, both hemispheric and global. Until recently, Western Hemisphere economic relationships were largely based on the exchange of raw materials from Latin America for finished goods from the United States. Today's interdependence reflects a different balance. The internationalization of production combines technology, labor and capital across national boundaries.

As a result, the Latin American countries now need access to the US market to sell their manufactured goods as well as their traditional exports. And Latin America's markets are becoming as important to our own continued growth as its raw materials -- as indicated by our trade surplus last year of $1.2 billion.

As interdependence has grown within the Hemisphere, so have the Hemisphere's links to other parts of the world. Latin America has developed important trading relationships with other industrial nations and has come to share certain political perspectives with the Third World. The United States prizes its traditional alliances with the industrialized democracies, and maintains important political and economic relationships with many less developed nations around the world. Our generation has had to learn that peace is indivisible; that our national well-being is intimately tied to the well-being of the rest of the globe.

The awareness of past achievement and faith in common purposes led the United States in 1973 to begin a new dialogue with Latin America. We had three objectives:

- To promote with our friends a new spirit of communication tempered by realism, elevated by hope and free of distrust, despair or resentment.

- To find new ways to combine our efforts in the political, economic and social development of the Hemisphere.

- And to recognize that the global dialogue between the developed and less developed nations requires answers that will be difficult to find anywhere if we do not find them in the Western Hemisphere.

For this hemisphere to which men fled to escape from injustice has a special obligation to demonstrate that progress can go hand in hand with

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respect for human dignity, that cooperation among nations is consistent
with respect for national sovereignty, that the most powerful political
force on earth is the voluntary collaboration of free peoples.

Any relationship as long and complex as ours inevitably is haunted by
the bitterness and suspicions of old disputes. We must put these
legacies of our past behind us, for a dialogue dominated by the endless
refrain of old grievances cannot prosper.

Despite temporary interruptions, the United States is prepared to continue the dialogue in a spirit of friendship and conciliation. Next month I will make my first visit to South America as Secretary of State. Next week Assistant Secretary Rogers will visit six countries in the region for preliminary talks.

Let me now outline some of the issues that will face us in these discussions. They include, first, what the United States is prepared to contribute to Western Hemisphere cooperation; second, what we ask of Latin America; and finally what we can do together.

## What We Must Ask of Ourselves

President Ford has asked me to reaffirm our commitment to a new relationship between the United States and Latin America based on the principles of non-intervention, the sovereign equality of nations and mutual respect among partners. Success will require a similar desire and attitude on the part of the other countries of the Hemisphere.

These principles will guide the United States' approach to major issues that have risen between us -- the status of the Panama Canal; the place of Cuba in the Hemisphere; and the various strands of our economic relations.

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The Panama Canal -- Since its opening, the peoples of the world have looked on the Panama Canal as an important lifeline of commerce and international security. It is essential that the Canal remain open to the ships of all nations on fair terms.

In acquiring the rights to build the Canal, the United States was granted exclusive control -- the rights which it would possess and exercise "if it were sovereign" -- over a ten-mile wide strip of Panamanian territory from the Atlantic to the Pacific. In the Canal Zone, we enforce U.S. laws, operate commercial enterprises and control most of the deepwater port facilities that serve Panama.

Over time the nature of the U.S. presence has come to be viewed by the people of Panama -- and indeed by most of the rest of the Hemisphere -- as an infringement upon their national sovereignty and their principal resource -- their country's strategic location.

Clearly both Panama and the United States have vital interests in the Canal. The challenge is to reconcile the security needs of the United States with Panama's national honor and sovereignty. Negotiations on this problem have gone on intermittently for eleven years; in the last year and a half they have moved forward rapidly. We now believe that an agreement on terms fair to all is possible.

We have made progress because each side has recognized the essential needs and constraints of the other. The United States understands that a treaty negotiated in 1903 does not meet the requirements of 1975. We are ready to acknowledge that it is reasonable for Panama to exercise jurisdiction over its territory and to participate in the operation and defense of the Canal. We are prepared to modify arrangements which conflict with Panamanian dignity and self-respect.

In turn we will expect Panama to understand our perspective -- that the efficient, fair and secure operation of the Canal is a vital economic and security interest of the United States; that a new treaty must provide for the operation and defense of the Canal by the United States for an extended period of time; and that a new treaty must protect the legitimate interests of our citizens and property in Panama.

A new treaty based on these principles will make the United States and Panama partners in the operation of the Canal, protect the essential national interests of both, and provide a secure arrangement for the long term.

Serious problems remain to be resolved in the negotiation. But we are confident that they will be overcome if both parties continue

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to display the seriousness and mutual understanding they have shown so far.

The Administration has been consulting with the Congress as our negotiations have proceeded. We will intensify these consultations and discuss in detail the arrangements which we envisage. A new treaty which reflects the advice and consent of the Senate and the full support of the American people will be a concrete and significant demonstration that with good will on both sides cooperative solutions to the problems of the Western Hemisphere are possible

Cuba -- In January 1962 the Organization of American States determined that Cuba had excluded itself from participation in the inter-American community by its military ties to the Soviet Union and its export of revolution in the Hemisphere. A year later the United States imposed its own sanctions. In 1964 the member nations of the OAS agreed collectively under the Rio Treaty of Reciprocal Assistance to sever diplomatic and trade relations with Cuba.

More than a decade has passed. The countries of Latin America have successfully resisted pressure and subversion; nations that in the early Sixties felt most threatened by Cuban revolutionary violence no longer feel the menace so acutely. This situation has generated a reconsideration of the OAS sanctions and raised questions about the future of our own bilateral relations with Cuba.

Last September several Latin American countries proposed a meeting to consider lifting the collective sanctions. We agreed that a consideration of the Cuban issue at a meeting in Quito of the Foreign Ministers of the Americas was appropriate. We determined to remain completely neutral in the debate and abstained in the vote. Our guiding principle then, as now, was to prevent the Cuba issue from dividing us from our Hemispheric neighbors.

A majority voted to lift the collective sanctions. But the Rio Treaty requires a two-thirds vote and the sanctions thus remain formally in force. The United States considers itself bound by the collective will as a matter of international law, and so there can be no change in our bilateral relations with Cuba as long as the OAS mandate remains in force.

Since the Quito meeting, however, several Latin American countries have announced that they are prepared to resume trade with Cuba. Also since the meeting at Quito, all the OAS nations have tentatively agreed that the Rio Treaty should be amended to permit the lifting of sanctions by a majority vote. Several of my Latin American colleagues have suggested that this agreement in principle might be applied to the existing Cuban sanctions. I will be consulting with them with respect to this initiative during my trip to South America with the attitude of finding a generally acceptable solution.

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If the OAS sanctions are eventually repealed, the United States will consider changes in its bilateral relations with Cuba and in its regulations. Our decision will be based on what we consider to be in our own best interests, and will be heavily influenced by the external policies of the Cuban government.

We see no virtue in perpetual antagonism between the United States and Cuba. Our concerns relate above all to Cuba's external policies and military relationships with countries outside the Hemisphere. We have taken some symbolic steps to indicate that we are prepared to move in a new direction if Cuba will. Fundamental change cannot come, however, unless Cuba demonstrates a readiness to assume the mutuality of obligation and regard upon which a new relationship must be founded.

**Economic Relations** -- Old political disputes must not distract us from the long-term challenge of the Hemisphere -- the common effort to improve the lives of our peoples.

The expansion of trade, and the establishment of a new trading equilibrium are vital to economic progress and development in the Hemisphere. As Latin American economies grow, so will opportunities for mutual trade. As our own economy grows, we will be able to buy more semi-processed and manufactured goods from Latin America.

In the next few days the President will take the first step to implement the preference system established by the 1974 Trade Act. We will announce the list of products on which the Administration proposes to eliminate all import tariffs for developing countries for ten years. Latin America, as the most advanced developing region and the one nearest the U.S. market, will be in the best position to take advantage of these preferences. The list will benefit nearly $1 billion worth of Latin American exports.

Among the economic issues affecting Western Hemisphere relations none looms larger than the transnational corporation. The transnational corporation has a demonstrated record of achievement as an efficient -- and indeed indispensable -- source of technology, management skill, and capital for development. At the same time, the transnational character of these corporations raises complex problems of governmental regulation, and has aroused concern in Latin America over the relation of their activities to domestic political and economic priorities.

Most Latin American nations take the position that the laws of the host country are conclusive, and that a foreign investor cannot appeal to his own government for protection. The United States, on the other hand, has insisted on espousing the cause of U.S. investors when they are treated in a way which violates international legal standards. And the Congress has reflected this view in such acts as the Hickenlooper and

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Gonzalez Amendments which cut off aid in the event of nationalization without adequate and timely compensation.

The two legal positions are not easily reconciled. But the United States is prepared to make a serious effort to find a mutually acceptable solution which does not prejudice the principles of either side. A year ago, in Mexico City, at our initiative an inter-American working group was set up to examine the problem.

The United States is prepared in the context of this endeavor:

- to work out a new declaration of principles to govern the treatment of transnational enterprises and for the transfer of technology;

- to develop intergovernmental mechanisms to prevent and resolve investment disputes and the problems between governments that arise from them;

- to fashion new modes of cooperation to deal with conflicts of laws and jurisdiction relating to transnational corporations; and

- to encourage private enterprise to make its vital contributions to Latin America in forms congenial to the economic and political needs of the host countries.

We have, in the past, made significant progress in these areas on a pragmatic, case-by-case basis. We should now seek more general agreement as part of the New Dialogue. The transnational Working Group which was interrupted by the postponement of the Buenos Aires meeting should resume its important work. A mutually acceptable solution would go a long way toward removing trade and investment conflicts from U.S. decisions respecting aid relationships with the host countries.

This is important because Latin American sensitivity to the exercise of economic leverage has been finely honed by history. Experience has also demonstrated that automatic sanctions -- including the 1974 Trade Act's denial of preferences to such OPEC countries as Ecuador and Venezuela, which did not join the oil embargo -- are almost always harmful. Automatic sanctions allow no tactical flexibility. They present other governments with a public ultimatum; by seeming to challenge the recipient's sovereignty, they harden positions, encumber diplomacy and poison the entire relationship.

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The Administration supports the purpose of the various bills which have been introduced into the Congress -- including one by your own Senator Bentsen -- to modify the provisions of the Trade Act which involve Venezuela and Ecuador. And it is prepared to seek the modification of legislation requiring the automatic cut off of aid. But as a matter of political reality a great deal will depend on our ability to work with the nations of Latin America on new approaches which give practical assurance of fair treatment. They must recognize that Congressional sanctions stem from perceived injuries to legitimate interests.

As part of the New Dialogue, the Administration is prepared to develop new principles and practices which may commend themselves to Congress as a better remedy than automatic sanctions.

## What Latin America Can Do

What do we have a right to expect from Latin America?

In the past decade, progress in science, industry, agriculture, and education have done much to transform the Continent. Economic growth has been steady and sometimes spectacular. Political institutions have adapted to new social conditions and national traditions. A new sense of Latin American unity has promoted an awareness of common problems and opportunities.

We welcome the strength and self-confidence that this evolution implies. We have seen new leadership in Latin America and new Latin American leadership in the international arena. Panamanian and Peruvian soldiers serve with the UN peace-keeping forces in the Middle East. Last December the Andean countries, following a Peruvian initiative, pledged themselves to limit the acquisition of offensive weapons -- an initiative we support and encourage. Venezuela has taken the lead in stimulating regional cooperation by offering oil revenues to the Inter-American Bank and the Central American Bank for Economic Integration. Working with Bolivia, Paraguay, and Uruguay, Argentina and Brazil are pooling their technology and resources to harness the vast potential of the River Plate Basin.

However, with these welcome initiatives have come other less hopeful trends.

The United States is concerned by the growing tendency of some Latin American countries to participate in tactics of confrontation between the developing and developed worlds. We accept non-alignment as a necessary, largely positive force. We believe that the developed nations -- and particularly the United States as the most powerful industrial country -- have a special obligation to be sensitive both to the legacy of history and to the imperatives of change.

It is therefore ironic that some nations seek to exact by confrontation what can only be gained through cooperation, and that countries which once chose non-alignment to protect themselves from blocs are now tended to form a rigid bloc of their own. In doing so they obstruct the

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association with the industrialized nations on which their own economic and social progress ultimately depends. Such tactics are particularly inappropriate for the Western Hemisphere where they threaten to repudiate a long tradition of cooperative relations with the United States at the very moment when the United States has dedicated itself to common progress.

As the most developed part of the Third World, Latin American nations will increasingly play roles in both the industrialized and developing sectors of the globe. They have a unique opportunity to foster the mutual accommodation of these groups globally.

To do so there is no better guidepost than the Declaration signed by all Western Hemisphere nations in Mexico City last year: "... peace and progress, in order to be solid and enduring, must always be based on respect for the rights of others and the recognition of reciprocal responsibilities and obligations among developed and developing countries."

The temptation to blame disappointments on the intrigues and excesses of foreigners is as old as nations themselves. Latin America is perennially tempted to define its independence and unity through opposition to the United States.

The Latin American postponement of the Buenos Aires meeting of Foreign Ministers, ostensibly in reaction to the recent US Trade Act, is a case in point. Some Latin American nations chose to read into this legislation a coercive intent which did not exist, and asked for immediate remedies beyond the capacity of our constitutional processes to provide. As a result, the next step in the New Dialogue was delayed just when it was most needed. The nations of America face too many challenges to permit their energies to be expended in such fruitless and artificial confrontations.

We do not expect agreement with all our views, but neither can we accept a new version of paternalism, in which those with obligations have no rights, and those who claim rights accept no obligations. The choice for the United States is not between domination and indifference. The choice for Latin America is not between submission and confrontation.

Instead we should steer between those extremes toward a new equilibrium. After decades of oscillating between moods of euphoria and disillusionment, between charges of hegemony and neglect, it is time for the United States and Latin America to learn to work together, calmly and without confrontation, on the challenges to our common civilization.

The United States does not seek precise reciprocity. We recognize our special obligations as the richest and most powerful nation in the Hemisphere. But experience teaches that international problems cannot be resolved by any one country acting alone -- or by any group of nations acting as an exclusive bloc.

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## What We Must Do Together

With a new attitude, the nations of the Western Hemisphere can dedicate themselves to an agenda for the future. In the coming months, the United States will make proposals for such an agenda and present it to its partners in various forums including the meeting of the OAS General Assembly this spring.

Today I shall confine myself to two critical areas: hemispheric development and food.

**Hemispheric Development** -- In the past decade, Latin America's overall growth rate has exceeded the economic targets of the Alliance for Progress. The region has also made greater progress than any other developing area toward economic integration. The Central American Common Market, the Caribbean Common Market, the Andean Pact, and the Latin American Free Trade Association have begun to translate abstract hopes into realities. Nevertheless, Latin America's relative share of global trade has fallen. And economic progress has been unevenly distributed, both within and among countries.

Some Latin American countries have only recently begun the process of development. As with poor countries everywhere, they require large amounts of concessional assistance. The United States will continue to contribute its share.

The Administration will ask Congress to replenish the US contribution to the Inter-American Development Bank, both concessional funds and ordinary capital. Assuming other nations in the Hemisphere are willing to do their share, we will seek a US contribution as large as the last replenishment, or $1.8 billion.

The proposal will be considered by the House of Representatives Subcommittee whose Chairman is the distinguished Henry B. Gonzalez -- from San Antonio. Coupled with the contribution of $755 million from twelve new members -- the European countries, Japan and Israel -- and a $500 million trust fund established by Venezuela, these fresh resources to the IDB will give a major new impetus to Western Hemisphere development.

But because the poorest countries must have first priority, concessional assistance is available only in limited quantities to a new and growing group of Latin American countries that have reached an intermediate stage of development. They have a diversified industrial sector, a significant consumer class, and an increasing capacity to compete in world markets. Their need for foreign exchange is growing.

Therefore, they require greater access to the markets of the developed countries, for exports are the chief source of their external funds. To this end, the Trade Act and the multilateral trade negotiations in Geneva are of great significance. As we have pledged in our New Dialogue, we will, in these negotiations, work in close collaboration with the countries of the Western Hemisphere.

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But these countries also need investment capital. Significant amounts of capital continue to flow to the intermediate countries from the United States private sector through investment and from commercial bank lending. But these countries could also benefit substantially from improved access to capital markets.

While the United States long-term bond capital market is the world's largest, few developing countries have been able to borrow successfully in it.

To ease this problem, the United States has taken the initiative for a study by the IMF and World Bank Development Committee, of ways to promote the increased use of capital markets by developing countries. These will be neither aid programs nor recycling devices, but will facilitate independent access to such markets. The United States is prepared to explore ways in which it can be helpful to those Latin American countries with higher levels of income and credit standing to move toward self-reliance.

The countries of Latin America, regardless of their stage of development, are vulnerable to violent swings in the prices of their exports of raw materials. There is no more critical issue of economic relations in the Hemisphere today than commodities policy.

This issue has been extremely divisive in the Hemisphere -- partly because our attitude has been ambiguous. So let there be no doubt about our views any longer. We strongly favor a world trading system which meets the economic needs of both consumers and producers. Universal producer or unilateral consumer actions must not determine the equilibrium. A dialogue between them on commodity issues is therefore essential. A range of rich possibilities exists that can make our new interdependence a vehicle for more rapid and more equitable global development.

The time has come for the countries of the Western Hemisphere to consider together how commodity issues should be resolved. The United States pledges a serious effort to find a constructive solution which does justice to the concerns of all parties.

Food -- Let me turn now to a subject which must command our cooperative efforts -- food, man's most basic need.

Latin America matches the United States as a potential food surplus region. Yet over the past 15 years, Latin American agricultural production has barely kept pace with population. In an area rich in productive land, malnutrition is rife. Most Latin American countries are net food importers. We believe that with a concerted new effort, agricultural production can exceed population growth; adequate nutrition for all can be achieved in this century; and Latin America can become a major food exporter.

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The immediate need is to improve food production. The U.S. proposes the establishment of a Hemisphere Agricultural Consultative Group under the Inter-American Development Bank. Its goal should be to generate annual production increases in the range of 3-1/2 to 4 percent, to be achieved through:

- new investment in regional and national agricultural programs;

- integration of agricultural research efforts throughout the Hemisphere;

- adoption of improved national food and nutrition programs.

The consultative group should also recommend urgent steps to reduce the waste and spoilage now consuming between 20 and 40 percent of total Latin American food output.

Agricultural research is a central element in attaining adequate nutrition for all. But too often research is unrelated to local needs and efforts elsewhere.

To make research more adequately serve local needs, we will assist the international research centers in Mexico, Colombia, and Peru to extend their projects and programs to other countries in the Hemisphere through closer collaboration with national research institutions.

To foster better exchange of agricultural research information, we propose that a new center be established for Latin America, under the auspices of the Hemisphere Consultative Group, and linked to the Agricultural Information Exchange Center of the Smithsonian Institute in the United States.

The United States is prepared to join with other countries and institutions to finance the local extension efforts of the international research centers and the information exchange center.

Finally, we propose that the U.S. and Latin America jointly establish and finance research centers in nutrition and food technology; that a new generation of Latin American agriculturalists be trained through internships and research in these centers as well as in government and private laboratories and institutions in both continents.

## The Human Dimension

Our immediate economic, political, and technological imperatives must not lead us to neglect the human foundations of our common progress, including the free exchange of ideas and the priceless cultural heritage we share.

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The discovery of America rekindled a belief in mankind's perfectibility. Our struggles for independence were among the first modern assertions of the fundamental rights of man. No part of the globe has shown a greater commitment to democratic principles. The free flow of ideas is one of the most powerful forces for both liberty and progress. Drawing on this resource, can we now fashion a common vision of the future? What will life in the Americas be like in the next century? The scientists, scholars and professionals of our countries should be exchanging ideas on the implications of current trends in such areas as education, health and social change. Our governments should stimulate the OAS to mobilize the best minds and institutions of the Hemisphere in new programs to define our common future.

Last year in Mexico City, I described our objectives in this Hemisphere as follows:

"Our common impulse ... is to fulfill the promise of America as a continent which beckoned men to fulfill what was best in them.

"Our common reality is the recognition of our diversity.

"Our common task is to forge our historical and geographical links into shared purpose and endeavor."

The United States continues to seek a genuine dialogue with its neighbors on all levels: multilaterally and bilaterally, within or outside the OAS, with subregional groups or individual states.

The dream of hope that has lifted the Americas for almost five centuries must be revitalized by our generation. We are entering another new world as strange and challenging as that found by the first settlers on America's shores. With imagination, we can build in this Hemisphere the model of that larger world community which must be our ultimate goal.

As Victor Hugo once wrote, "The main highway lies open. May America travel it, and the world will follow."

* * * * * * *

PRESS
DEPARTMENT OF STATE

March 4, 1974

No. 83

#13

PRESS CONFERENCE BY
THE HONORABLE HENRY A. KISSINGER
SECRETARY OF STATE
NATO HEADQUARTERS, BRUSSELS, BELGIUM

MARCH 4, 1974

**SECRETARY GENERAL LUNS:** Gentlemen, first of all I want just to say that the Secretary of State has a meeting before he leaves rather soon to be in Washington early in the evening tonight, so his time is very short. He has come from Bonn, and I have had the pleasure and the privilege of accompanying him so that we could have very informal and pleasant exchanges of views on various problems. The Secretary of State has now very detailedly briefed in a restricted meeting the NATO Council on the developments in the Middle East and problems which affect the Alliance. I am not here on my part to give you the views of the Secretary of State. We have the great pleasure of having him here, and I will now give him the floor so that he can give you exactly what he would like to say. I would only add that it was a very useful meeting, that the Secretary of State went into all the questions asked, and it was a very lively and pleasant exchange of views.

**SECRETARY KISSINGER:** Mr. Secretary General, Ladies and Gentlemen. I came here at the request of our President to brief the members of the Council, first, about my trip to the Middle East and second, on the general design of our policy in the Middle East so that our allies would understand and be able to express their views with respect to our policy in an area that is of vital concern to them. I also welcomed the opportunity to exchange views with the Secretary General on the plane and explain to him and his colleagues about the evolution of Atlantic relationships which we believe should be even further strengthened and which the United States considers to be the cornerstone of our foreign policy.

I will be glad to take a few questions, but please remember that I have not even had the opportunity yet to report to our President on my trip. Therefore, I will not be very illuminating about the Middle East.

**QUESTION:** Mr. Secretary, is there a complete unity of views between our allies and the United States over our Middle East policy?

**SECRETARY KISSINGER:** I really don't think that I should speak for our allies. My impression — which, of course, the Secretary General can also comment on — was that around the table in the NATO Council there was a considerable unity of views as to the objectives and considerable understanding as to the method. I do not recall that any contrary views were expressed. Am I unfair, Mr. Secretary General?

**SECRETARY GENERAL LUNS:** No, no. You are quite right, but you are too modest about it. There was on the part of all the countries of the Alliance great appreciation for what the United States in the person of

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its Secretary of State has been doing in the Middle East since November last when the first talks started. We have been somewhat encouraged by the prospect of going step by step further in the direction of a peace which will be in the interest of all the members.

**QUESTION:** Are you aware of the fact that the nine Ministers of the European Economic Community have decided to go ahead and conduct preliminary negotiations with 20 Arab countries with the eventual view of holding a formal [inaudible] conference this fall? One, are you aware of this? Two, does this European initiative have American understanding, perhaps even approval? And three, are you planning to see Mr. Scheel as has been advertised this afternoon?

**SECRETARY KISSINGER:** Foreign Minister Scheel, with whom I spent last evening in an extensive review of the situation, has requested that I see him at the German Embassy here in his capacity as Head of the Council of Ministers. On that occasion he wishes to inform me about some decisions taken by the Council of Ministers, but I have not been told with respect to what subjects. Therefore, I believe it would be inappropriate for me to comment on something on which I will hear an explanation in the very near future. I am expecting to see Foreign Minister Scheel at 5:00 at the German Embassy at his request.

**QUESTION:** In the past you have had views about this separate European effort with these Arab oil-producing countries. Is this a question you are dealing with in general at the Foreign Ministers level?

**SECRETARY KISSINGER:** It would be hardly proper for me to comment on something I have not been officially informed of and the content of which I do not know. Our view at the Washington Energy Conference concerned bilateral oil deals between different countries or regions and oil-producing countries. It does not apply to the whole spectrum of positive relationships in which we obviously do not ask for a veto, but I would like to wait for official information before expressing the view on what it is that the European Community may have decided today.

**QUESTION:** Mr. Secretary, is there anything new about the new Atlantic Charter and Mr. Nixon coming here to Brussels?

**SECRETARY KISSINGER:** We are making good progress in the drafting of the NATO Declaration and there will be another meeting in the middle of March of the political directors or their equivalents in which we intend to make progress on the Declaration between the Community and the United States. The tentative plan had always been that if these declarations are satisfactorily concluded, the President might come to Europe to sign them. But we will wait with making the final decision until they are concluded. I can say, however, that with respect to the Atlantic Declaration very good progress has been made and, with respect to the Declaration with the Community, we are quite optimistic.

**QUESTION:** Mr. Secretary, are you counting on Spain signing this new Atlantic Declaration?

**SECRETARY KISSINGER:** Spain is not formally included in the Atlantic Declaration. However, as I explained to the press when I was in Spain a few months ago, the United States is prepared to sign a separate declaration with Spain which will parallel those it signs with the other countries of Europe. We are, in fact, at this moment engaged in an exchange of views with the Spanish Government on this subject, and we are certain that we will achieve a satisfactory answer.

[LC]

PRESS
DEPARTMENT OF STATE

March 6, 1975

No. 116

As Prepared for
Delivery

REMARKS OF
THE HONORABLE HENRY A. KISSINGER
SECRETARY OF STATE
AT A BANQUET GIVEN BY THE LORD MAYOR OF CARDIFF
IN HONOR OF BRITISH FOREIGN SECRETARY JAMES CALLAGHAN

CARDIFF, WALES

MARCH 6, 1975

Coming here from overseas we realize that we stand at the center of a historic civilization. Cardiff and Wales have made seminal contributions to the life of Great Britain and the wider culture of the western world. This is a land of great poetry and song, of economic leadership from the beginning of the industrial age, of social and political idealism. Wales looks out upon the ocean that touches all the western nations. Your ideals and your spirit, which gleam far beyond your shores, have been among the beacons which join those nations into a single civilization.

I have been asked to speak for the assembled guests in extending our congratulations to the two men who have been honored today, James Callaghan and George Thomas. It is difficult to speak for so many and even more difficult to do justice to the achievements of our Right Honorable friends. Today, you have honored them for three decades of distinguished service to you in the House of Commons and as Ministers of the Crown.

I confess that I view their achievements, particularly those of my friend Jim Callaghan, from a perspective different than your own. By conferring the Freedom of the City upon him, you have symbolically welcomed him as a citizen of Cardiff and Wales. But I know him as a citizen of the world, as a statesman who has been my valued colleague in our common search for a more secure peace, a friend on whose word one can always rely, and whose steadiness is a constant source of strength. By supporting Jim Callaghan during his long career in Parliament, Cardiff has given him the opportunity for the broad experience, at home and abroad, that now allows him to speak so effectively for Britain in the world community. Not only Britain but America must be grateful for your trust.

Over the past year, Jim Callaghan and I have been close partners in the effort to cope together with the serious new challenges that face us in the contemporary world. Jim Callaghan's wisdom has invariably been hard-headed and practical. But he has never forgotten that

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immediate solutions must prove barren unless they serve some larger
conception and relate to some deeper human value. Our time needs
strength and realism, but we must never forget that only idealists can
have the strength to prevail and only men of vision can transform
reality.

The cornerstone of all our efforts must be cooperation between Europe
and the United States. For more than a generation, this trans-Atlantic
relationship has sustained our mutual safety and prosperity. And
within that relationship the close tie of Britain and the United States
has had a special place. Statesmen of both parties in both of our
countries have contributed to its construction and have built on it in
successive administrations.

It was Winston Churchill who foresaw, in the darkest hour of World War II, that the alliance of our nations could be a basis for the deliverance of the west from the dangers of tyranny, hardship, and war. "If we are together" he said, "nothing is impossible. If we are divided all will fail. I therefore preach continually the doctrine of the fraternal association of our two peoples, not for any purpose of gaining ... advantages for either of them, ... but for the sake of service to mankind and for the honor that comes to those who faithfully serve great causes."

It was Ernest Bevin, one of the greatest British Foreign Secretaries,
who joined, following the war, with the leaders of the United States to
forge the system of collective security under which we still live.

Today, James Callaghan carries on that proud tradition. Under his
guidance, we may be sure that the association between our peoples will,
as Churchill happily put it, "just keep rolling along," as inexorable as
ever. On a broad range of issues vital to our common security and
progress -- which means in effect the whole spectrum of international
affairs -- our intimate consultation, advice and mutual assistance have
become second nature. And the strength of our association has lent
stability to the growing relationship between America and Europe as a
whole.

And so as I leave tomorrow for the Middle East to seek progress towards a
peace we all seek, I go reinforced by the opportunity to exchange views
over many weeks with the British Government and especially extensive
discussions with the Foreign Secretary. I also go saddened by the know-
ledge that innocent lives have again been sacrificed in the conflict
between Arab and Israeli which has claimed so many lives over the decades.
The terrorist incident in Tel Aviv last night and this morning -- a
random and senseless act -- reminds us once more of the tragic dimensions
of this conflict. Violence does not forward the cause of peace. It
leads to counter-actions in which more lives are lost, the tragedy is
compounded, and the cause of justice which both sides seek is made more
difficult to achieve.

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The peoples of the Middle East have suffered enough. They have earned a surcease from their agony. We shall, therefore, continue our efforts to promote negotiations and further steps toward peace in the Middle East -- because we must, and because the alternative is more travail and tragedy, not only for the peoples concerned, but ultimately for the world.

In the world at large much has changed in the last 35 years. Europe has gained new economic strength. Old reasons for economic solidarity, such as the cold war, have diminished in urgency. New motives, such as economic interdependence, have appeared. New powers, notably Japan, have joined the industrialized world, and new centers of influence, such as the oil producers, have arisen within the developing world. As we seek a new basis for Atlantic relations, we must be more aware of relations with the rest of the world than ever before.

But at a time of change, let us also reaffirm the enduring principles that have guided, and still guide, relations between America and Europe.

-- Our association is based upon a deep community of values and interests. Our strategic interests closely coincide. Our economies are interdependent. Americans, most of whom are the descendants of Europeans, share Europe's commitment to the ideals of freedom, democracy, and a life of opportunity for all our peoples.

-- A major common purpose of our policies is to preserve our civilization from pressures of insecurity or scarcity; to realize the opportunity for freedom and progress and to achieve together a world at peace.

-- Our relationship is based on partnership and friendship. Our inspiration is the need to vindicate man in an age of proliferating technology and to give hope to a world capable of self-destruction.

Jim Callaghan and I have the privilege of serving two nations whose historic partnership has been central to the unity and the progress of the west. Our nations have common purposes that transcend the interests of Britain or America, or Europe. We are the inheritors of a vision of what the unity of the west can mean for the future of all mankind.

Jim Callaghan and I are friends, as our two peoples are friends and we are partners as our two peoples are partners. I repeat to you my thanks for the opportunity to be here today. One understands a man better for seeing what shaped him. I want to extend my deep gratitude to Cardiff and to Wales for having helped make Jim Callaghan the man and the statesman he is.

And I join my voice to yours in commemorating the great honor you have bestowed upon both our Right Honorable friends.

Thank you.

* * * * * * * * * *

PRESS

File

[lc]

DEPARTMENT OF STATE

March 26, 1975

No. 172

#51

SECRETARY OF STATE
WASHINGTON, D.C.

MARCH 26, 1975

[CARRIED LIVE BY ABC, CBS AND NBC RADIO AND TELEVISION NETWORKS]

SECRETARY KISSINGER: I would like to begin with a brief statement concerning the suspension of the Middle East Peace talks:

The step-by-step approach pursued by the United States attempted to separate the Middle East problem into individual and therefore manageable segments. Now that approach has suffered a setback and the Middle East issues have to be dealt with comprehensively, under more difficult circumstances.

A moment of potentially great danger is not the time to assess blame between the parties, or to indulge in recrimination. We need a calm appraisal of the situation and the United States policy best suited to the new conditions.

Let me sum up the United States position:

--With the end of the step-by-step approach, the United States faces a period of more complicated international diplomacy. Consequently, a reassessment of policy is essential. This reassessment has been ordered by the President.

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-- The dangers which produced the need for progress towards peace are still with us. The United States, therefore, is determined to continue the search for peace in the Middle East. It is prepared to go to Geneva, and will be in touch with the Co-Chairman of the Conference -- the USSR -- in the near future.

-- The United States is prepared to consider any other approach acceptable to the parties.

-- The United States remains fully committed to the survival of Israel.

-- The search for peace can be nurtured only in an atmosphere of calm. The parties involved in the Middle East conflict thus have a responsibility to moderate words and deeds, and to refrain from threatening acts.

-- All outside powers have a responsibility to exercise restraint and to follow a course of moderation.

We face a difficult situation in the Middle East and throughout the world. The times demand a renewed sense of national purpose.

We must understand that peace is indivisible. The United States cannot pursue a policy of selective reliability. We cannot abandon friends in one part of the world without jeopardizing the security of friends everywhere.

We cannot master our future except as a united people.

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Our energies should be directed, not at recrimination about the past, but toward a vigorous and constructive search for a lasting peace. And to this, the Administration is dedicated.

Now I'll take questions.

Q Mr. Secretary, with respect to American policy and what you have just said regarding selective reliability: in 1965 the United States equated the defense of South Vietnam with the commitment to NATO.

- Now it appears to be equating the additional aid to South Viet-Nam with regard to the Middle East, and so forth

Do you feel that during the past five years, the policy and the techniques of diplomacy which we have pursued have been wrong? Have the conditions been wrong? Or what has happened?

A As I understand it, you are asking two separate questions:

One is the policy, the relationship between Indochina and other parts of the world.

And the second is whether the policies pursued in the last five years have been wrong.

First, let me talk --

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Q I didn't mean "policies"; I meant "strategies."

A Well, that's a distinction without much difference.

Q In what way?

A Well, if the strategy is wrong -- I don't see how you can have the right strategy and the wrong policy -- or the wrong strategy and the right policy.

So let me answer your question:

With respect to Indochina, we are not equating the intrinsic importance of each part of the world, and we are not saying that every part of the world is strategically as important to the United States as any other part of the world. The problem we face in Indochina today is an elementary question of what kind of a people we are.

For fifteen years, we have been involved in encouraging the people of Viet-Nam to defend themselves against what we conceived as external danger.

In 1973, we negotiated a settlement in which we withdrew our forces and, in return, achieved the release of our prisoners.

This settlement, it is well to recall now, was -- while we were negotiating it -- generally criticized for our holding out for stronger terms. The fact of the matter

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is that now that we have withdrawn our forces and have
obtained the release of our prisoners, there was never any
question that the United States would continue to give
economic and military aid to Viet-Nam. And what we face
now is whether the United States -- not just "will withdraw
its forces", which we achieved -- and not just "will stop
the, or end the loss of American lives" -- but whether it
will deliberately destroy an ally by withholding aid from it
in its moment of extremity.

This is a fundamental question of how we are viewed
by all other people, and it has nothing to do with the
question of whether we should ever have gotten involved there
in the first place.

Now with respect to whether the basic policies have
been correct in the last five years:

That, of course, is a rather sweeping question
which would require an answer that could easily occupy the
better part of this press conference.

With respect to Indochina, I would urge people
to look at the newspapers, and the public debate during the
period that these agreements were being negotiated, to see

(LC)

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what the imperatives were on the Administration in
negotiating these settlements.

And the general conviction was that the
United States had done enough in expending American
lives and that the people of Viet-Nam should have an
opportunity to defend themselves without American support.
There was never any proposition that the United States
should withdraw and cut off aid.

And these agreements were negotiated on the
assumption that there would be -- that the United States
would continue economic and military aid to South Viet-
Nam -- and also, that there would be some possibility
of enforcing the agreements.

And this is the basic problem with the policy
in Viet-Nam.

With respect to other policies, I would rather
answer specific questions.

Yes.

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Q Mr. Secretary, if I may follow up on that question, it appears that the Congress, at least, has felt that the Nixon doctrine has outlived itself, and that now supplies will not be provided as have been committed by the United States in the past. Do you plan to reassess the alternatives, as a result of the demise of the Nixon doctrine, particularly in reference to Viet-Nam, Cambodia, and Thailand?

A We have to face the fact that there are many countries in the world which have no conceivable opportunity to defend themselves without American economic or military assistance. And therefore if it becomes our national policy that countries must at some point be able to rely entirely on their resources, we will have brought about a massive change in the international environment that in time will fundamentally threaten the security of the United States, as well as the security of many of our friends.

The so-called Nixon doctrine was based on the assumption that the United States would help those countries that were prepared to help themselves. If this is no longer true, then we are likely to find a massive shift in the foreign policies of many countries, and a fundamental threat over a period of time to the security of the

(10)

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United States.

Q Mr. Secretary, how serious did you find
in your Middle East negotiations the concern on the Arab,
on the Egyptian and the Israeli sides, the problems you
are facing in getting aid for Indochina? Was this a factor
in the breakdown of the talks?

A I cannot assign any particular cause for
the breakdown of the talks. There is no question that
events in Portugal, Greece, Turkey, and Indochina had an
effect on the conduct of the negotiations. On the part of
our friends, it raised the question of the durability of
our assurances. And since one of our problems was to sub-
stitute American assurances for some physical terrain
features, this was a factor.

On the part of those who were threatening our
friends, there was the feeling that perhaps concessions
were less necessary, because the drift of events was in
any case favorable.

Nevertheless, I think that the major reason for
the breakdown of the negotiations was intrinsic to the
negotiations themselves; but the surrounding circumstances
were certainly not favorable.

Q Mr. Secretary, to pursue the question of

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the interrelationship of Indochina and other portions of
the world, where does the Administration go from here?

It is clearly at loggerheads with the Congress on this
fundamental question. The United States policy, according
to the Administration, apparently is immobilized diplomatically
on Indochina. Is there any way over this barrier except
a constant head-on clash with Congress?

A I don't agree that United States policy
is immobilized over Indochina. There is a philosophical
disagreement which I have attempted to explain earlier.

I have believed ever since I came to Washington
that it is overwhelmingly in our national interest to put
the debate on Indochina behind us.

The Administration has proposed to the Congress
a three-year program for phasing out American military
aid to Viet-Nam, and which would, if the Congress and the
Administration can agree, remove this issue from the yearly
Congressional-Executive battles.

I believe, as I pointed out, that we face a
grave situation. The Administration cannot give up its
convictions simply for the sake of a technical compromise.
But we believe that this three-year program, if the levels
are adequate, might provide an opportunity to get the

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debate behind us.

Q Mr. Secretary, is the reassessment of U.S. policy toward the whole Middle East primarily aimed at prompting Israel to adopt a more relaxed or less intransigent negotiating posture?

A At this moment, there are no negotiations going on, and therefore we would have no concrete proposals to make to Israel, even if Israel asked us what negotiating posture it should adopt.

The assessment of our policy that is now going on is made necessary by the new circumstances. Our policy had been designed, as I pointed out in this statement, to segment the issues into individual elements, to negotiate each element separately, and therefore to permit each party to adjust itself domestically and internationally to a process of a gradual approach towards peace.

Now that this approach has to be abandoned, we face an entirely new situation in which, in all probability, all problems will have to be negotiated simultaneously, and in which, instead of a forum in which Israel deals with one Arab country through the mediation of the United States, the strong probability is that Israel will have to deal

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with all Arab countries in a multilateral forum.

The assessment of our policy is not directed against Israel. It is not designed to induce Israel to alter any particular policy. It is designed to develop a position that the United States can take in order to prevent an increasing radicalization in the area, and an increasing tension, and above all, in order to avoid a war in which inevitably the United States would be involved at least indirectly, given the international circumstances.

Q A very quick follow-up. You and your spokesmen have denied that this reassessment contemplates a cutoff, but I don't think anybody has denied that it might contemplate a reduction. Can you respond to that?

A There is no level of aid right now that has been set for next year's -- for the next year. And therefore the question of a reduction is an entirely academic one.

We have before us an Israeli request of rather large size which at this moment is being staffed on the entirely technical level, and has been staffed on the entirely technical level for weeks.

It has not yet reached either my desk or the

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President's desk. We will make our decisions on aid to Israel on the basis of our national objectives and on the basis of the statement that I made here, that we remain committed to the survival of Israel.

Of course whatever conclusions we come to will be submitted to the Congress, and the Congress can make its independent judgment.

We are not approaching the reassessment with an attitude of cutting aid. And we are approaching it with the attitude of looking at the over-all situation in the Middle East to determine what the best course might be.

Q Mr. Secretary, now that you have written an obituary on step-by-step negotiating, does that mean that you are writing off the possibility of unilateral American action in the Middle East? Are you now going to be walking step-by-step with the Soviet Union? What will be your approach?

A Our approach will be whatever is most likely to lessen the dangers of war and to produce steps towards peace.

As I pointed out in our statement, the United States is prepared to go to Geneva. The United States is prepared also to go along with any other approach that the parties may request of it. So, we are not insistent

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on any particular approach. We will follow whatever approach
is most likely to be effective and is requested by the
parties. The obvious forum that is now open is Geneva,
but we are prepared to look at other approaches.

Q Mr. Secretary, to follow that up, could you
say when you go to Geneva, would it not be likely that the
talks would themselves become segmented into the various
problems, and that would provide an opportunity for the
United States or other parties to play a role in each
individual problem -- Israel-Egypt, Israel-Syria, Israel-
Jordan?

A If that is the turn that the negotiations
take, the United States will be prepared to participate
in it. The United States has no fixed idea on which course
to pursue.

At this moment, we have to consult with the other
parties, and we of course also have to consult now with
the Co-chairman of the Geneva Conference.

The United States will do what is most likely to
reduce the danger of war and to promote peace, and if it
should turn out that separate negotiations develop at
Geneva, the United States will certainly support them.

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Q Mr. Secretary, it seems that --

A Go ahead, and then you.

Q You averted (sic) to difficulties in Portugal, Greece, Turkey and Indochina. One could add the dismemberment of Ethiopia by an Arab coalition, the sell-out of the Kurds, and so on. To what extent do you consider that this --

A An objective question. What do you want me to say, yes? [Laughter.]

Q Would this reflect what Dr. Schlesinger has described as a world-wide perception of American impotence?

A I have pointed out at many press conferences over the years that the central authority of a major country cannot be under persistent attack without ultimately paying a price in foreign policy.

We have gone through the experience of Viet-Nam, through the anguish of Watergate. And I think the cumulative effect of nearly a decade of domestic upheaval is beginning to pay -- to take its toll.

Foreign governments, when they deal with the United States, make a bet in their dealings on the constancy

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of American policy, and on the ability of the United States
to carry through on whatever it is we promise, or fail
to promise, or threaten. And this is one of the big problems
in foreign policy today. It is not a problem of the Congress
at this particular moment, because the Executive also shares
a responsibility for it over a period of a decade.

At this moment, it is senseless to try to assess
the blame. At this moment, the great need is to pull
together and to see whether we can restore a sense of national
purpose. And as far as the Administration is concerned,
we will do our utmost to do this in a cooperative spirit.

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Q Mr. Secretary, it seems to me that part of the national debate over Vietnam has come about because of what might be called the light-at-the-end-of-the-tunnel syndrome. And now you are suggesting that possibly with three more years of aid, the Indochina question could be more satisfactorily resolved. Isn't this just another way of buying yet another slice of time?

A Well, Mr. Koppel, my own personal conviction, about which I have left no question, is that the right way to do it is to vote annually what is necessary. There are some problems in the world that simply have no terminal date. And in Indochina, as long as the North Vietnamese are determined to attack, it is not responsible to say that there is an absolute date in which an end can be achieved. On the other hand -- given the very strong feelings in the Congress, given the cataclysmic, or the very dangerous, impact on the United States' position in the world, of destroying a country where we have lost 50,000 men, where we have fought for ten years, and which we, as a country, projected into this conflict -- we are prepared to go to a three-year program in which, with adequate aid, we believe that there is at least a chance

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that then, with the development of oil resources and
other factors, that this country could be put on a more
self-sustaining basis.

It is our offer, in order to take Vietnam out
of the national debate for this period, and in order
to avoid what we think would be a very grievous blow to
the United States.

Q Sir, in another part of the world, this
is a question about your projected trip to Latin America.
Is it still on, and what is the main purpose of the trip?
And whom do you expect to see there?

A Well, I have planned a trip to Latin
America for the last six months. And as I pointed out
in the speech in Houston a few weeks ago, the United
States attaches great importance to its relationships
with Latin America, with which we have had the longest
uninterrupted tradition of foreign policy in our history,
which is a part of the world which is in a position
somewhere between the less-developed nations and the
advanced nations, and with which we share many cultural and
political traditions. And therefore we believe that
Western Hemisphere policy is a central part of our
overall policy and a test of our relationship to many of the
less-developed countries.

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Now, I am planning to go to -- I will definitely go to Latin America before the meeting of the OAS here in May. So I will definitely go in April. Given the various pressure that exist right now in Washington, I am not in a position to announce the exact date. But we will determine that within the next few days. But it is definite that I will go in April.

I am planning to visit Argentina, Brazil, Peru, Chile and Venezuela. And I plan to visit other Latin American countries later this year.

Q Mr. Secretary, if the Geneva Peace Conference ends in a stalemate, as everybody seems to think it will, how great will the danger of another war in the Middle East be? And in that connection, do you expect Egypt and Syria to allow United Nations troops to remain in the buffer zone between them and Israel?

A Let me take this in two parts. The longer there is a stalemate in the Middle East, the greater the danger of war becomes. The danger of war can best be reduced in the Middle East if all of the parties see a prospect of peace somewhere down the road and some plausible means of attaining it. And this is why we

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pursued the previous approach.

When the United States goes to Geneva, it will not go there with the attitude that it will end in a stalemate, but rather with the attitude of seeing whether this forum can now be turned into an arena for constructive progress. And therefore the United States will go there with a positive attitude and it will ask all parties concerned to go there with a similar attitude, keeping in mind the needs and requirements of everybody.

Was there another part to your question?

Q What do you expect Egypt and Syria to do about the United Nations troops in the buffer zone between them and Israel?

A Well, we believe that the United Nations Emergency Force in Egypt and the United Nations Disengagement Service Force* in Syria were essential components of the disengagement agreements. We hope that the mandates of both of these will be renewed as a contribution to peace and stability in the Middle East, and to permit the process of negotiations to go forward in a tranquil atmosphere

Q Mr. Secretary --

A Mr. Lisagor.

* United Nations Disengagement Observation Force

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Q Inasmuch as we deal with every Communist country in the world, with the exception of Cuba, today, why would we, to use your words, be destroying South Vietnam if it became Communist?

A Well, on that theory we can give up all of our alliances because we would not be destroying any ally if it were overrun by a Communist country. It is not a question of our not dealing with Communist countries. It is a question of countries that obviously have a desire to defend themselves being prevented from defending themselves by an American decision to withhold supplies. And therefore we would be destroying those people who have resisted, whom we have encouraged to resist, by such an action.

Now, I think it is interesting also to point out that, after all, the flood of refugees in Vietnam is going away from the Communist area of control. And even in Cambodia, under conditions that one would have to say are extraordinarily discouraging, somebody is still fighting around Phnom Penh. So that we are here in a position where the United States is forcing people to surrender by withholding supplies.

Q Mr. Secretary, Egypt, according to a

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senior American official, was willing to sign a pledge
not to have recourse to force in the Middle East, that
force was not the way to resolve the conflict in the
Middle East, to refrain from military and paramilitary
activities, and to allow Israel the right to renew any
agreement at the expiration of its one-year term. In
your view, did those concessions by Egypt satisfy the
military side of non-belligerency?

A Well, the issue of non-belligerency is
a complicated legal position, because non-belligerency
is an international status which you cannot approach
simply in components. I don't think any useful purpose
is served for me to give an assessment of the various
negotiating positions. Both sides made a serious effort
and they did not succeed in bridging their differences.

Q Mr. Secretary, what is the impact on
the world-oil situation, and is the United States prepared
to go ahead with the consumer-producer conference? Is
that about to take place? Would you discuss also the impact
of King Faisal's assassination on that situation?

A Of course, it is commonly believed that
tensions in the Middle East do not particularly help the

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world oil situation. The United States has taken
the position that it would conduct its negotiations in the
Middle East independent of any oil pressures. And
American policy will not let itself be affected by oil
pressures. We do not see any developing at this moment.

We believe that the consumer-producer conference
is being conducted in the interests of both sides for
the common benefit, for the interest of a developing and
thriving world economy, which is in the interest of
producers as well as consumers and should not be tied
to the situation in the Middle East. Therefore, we are
proceeding with our preparations for the consumer-producer
conference, and progress is being made in that direction,
and we find it essentially on schedule.

King Faisal ruled a country of extraordinary
importance to the energy picture of the world. And also
due to his extraordinary personality he had a major influence
on all of the Arab countries, being one of the few Arab
leaders with a major influence on both the moderates and
the radical elements in the Arab world. King Faisal
was an element for moderation in the negotiations between
Israel and the Arab countries. And he was a friend of

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the United States. His great personal prestige will
be missed, even though we are convinced that the basic
policies of Saudi Arabia are going to continue.

Q Mr. Secretary, I would like to follow up
on that question about the light at the end of the tunnel
that was raised here earlier by Mr. Koppel. It seemed
to me that your answer to that question really was that
you did, given a three-year program in South Vietnam,
see another light at the end of that tunnel. And I think
the real question that is involved here is whether the
Administration is perceiving reality. I think you have a
problem with the public in this country. We have given
50,000 men. We have given $150 billion. And it has not
saved South Vietnam. You are asking people now to believe
that if you get three more years of help, you, Henry
Kissinger, believe it can be saved. Now, I would like
to know if that is not telling people that you see a light
at the end of the tunnel.

A I am saying that if you do not give enough,
then you are bringing about consequences very similar to
what we are now seeing. Since May last year, South
Vietnam has received only ammunition and fuel. It has
received almost no spare parts and no modern equipment.

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Under those conditions, the demoralization of an army
is inevitable. And therefore, some of the consequences
we now see are not surprising.

I am saying that, as a people, we should not
destroy our allies, and that once we start on that course,
it will have very serious consequences for us in the world.

I have stated that it would be better if we
did it on an annual basis. Given the enormous divisions
that have arisen in this country, for the sake of avoiding
these divisions we are prepared to go the other route.
It is not our first choice. The better course is to do it
by determining each year what is necessary. And in the
nature of things, there are many situations around the
world in which the necessity of assistance depends on
the degree of outside pressure. And if we cannot control
the outside pressure, then our cutting off assistance
means turning these countries over to their enemies.

Mr. Binder.

Q Mr. Secretary, could you give us your
assessment of the events in Portugal, what U.S. policy is
towards Portugal, and whether it might have to change?

A Portugal, of course, is a member of the

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North Atlantic Treaty Organization and has had close
and friendly relationships with the United States. What
seems to be happening in Portugal now is that the Armed
Forces Movement which is substantially dominated by
officers of leftist tendencies has now appointed a new
cabinet in which Communists and parties closely associated
with the Communists have many of the chief portfolios.
This was an evolution that was not unforeseeable over recent
months, and it will, of course, raise questions for the
United States in relationship to its NATO policy and to
its policy with Portugal.

With respect to NATO, this is a matter to be
discussed with all of our allies, and we are in close
contact with them.

With respect to Portugal, the United States
has a tradition of friendly relations with Portugal,
and it does not intend to take the initiative in breaking the
friendly relations. However, we are disquieted by an
evolution in which there is a danger that the democratic
process may become a sham, and in which parties are getting
into dominant position whose interests we would not have
thought were necessarily friendly to the United States.

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Q Mr. Secretary, you said earlier that in 1973, when the Viet-Nam peace accords were negotiated, there was no doubt about continuing U. S. military and economic assistance. What assurances did you have then, in '73, that the Congress would continue this assistance?

A We had no assurances. If you review now the nature of our domestic debate -- say, from 1969 to 1973 -- it was essentially that American involvement in Viet-Nam should be terminated but that the Vietnamese should be given an opportunity to defend themselves; and the entire pressure of the domestic debate was on the withdrawal -- at least, insofar as I became conscious of it -- was on the withdrawal of American participation.

We stated, on the date that the agreement was signed, if you read my press conference of that day, that economic and military aid would continue. And none of this was ever challenged in '73 and '74.

In fact, the debate started this year over appropriating a sum of money that had already been authorized by the Congress; so a question of principle could not possibly have been involved because the authorization was approved

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last year with very little division. There were no assurances, but it seemed to us inherent in the whole posture that we had taken that this would continue.

Q If I could follow up on that, did you give at that time the South Vietnamese Government assurances that this aid would continue?

A We told the South Vietnamese Government -- not a commitment of the United States that aid would continue -- but that, in our judgment, if the South Vietnamese cooperated in permitting us to withdraw our forces and, therefore, to reclaim our prisoners, that in our judgment the Congress would then vote the aid that would be necessary to sustain Viet-Nam economically and militarily. It was not given as an American commitment.

We're not talking here of a legal American commitment; we are talking here of a moral commitment.

Q Mr. Secretary, do you think there will be another Middle East war?

A I think there is always a danger of a Middle East war, as long as the parties have such irreconcilable differences. We do not believe a Middle East war is inevitable. We believe a Middle East war would involve

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the greatest dangers to all of the countries concerned,
as well as serious dangers of great power involvement.
And, therefore, the United States will work with
determination and with confidence to avoid a war and to use
its influence to promote a movement towards peace.

Q Mr. Secretary, sir, did you look at the
record of the assassin of King Faisal? I'm sure you must
have. And did you find, when he was in the United States,
any input or anything that might have contributed to
this action?

A Frankly, I have not looked at the detailed
-- I have just seen a brief summary of the record of
the assassin, but I'm absolutely confident that nobody
in the United States had anything to do with such an action
because we considered King Faisal a good friend of the
United States.

Q Mr. Secretary, can we ask another question
on the step-by-step --

Q Mr. Secretary, why is there such a pre-
sumption in this country at this moment, in newspaper
articles, in the meaning -- in the interpretation -- of the
reassessment of Mideast policy, that Israel, somehow,

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was at fault for the breakdown of the talks and should
somehow be punished by reduction in aid or some other
manner?

A Well, I cannot answer why people make certain assumptions. Many of you were on the plane with me, and you know how I attempted to explain the situation. We -- the Administration has made no assessment of blame, nor will it serve any useful purpose to engage in that now.

Secondly, punishment of a friend cannot be the purpose of a national policy. We now face a new situation. No useful purpose is served by conducting it in a fit of pique or by encouraging even greater tensions in the area. We will make an assessment of the American national interest in relation to our long-term commitments, as well as the necessity of preserving the peace; and our policy will be based entirely on this. And in no sense is any consideration given to punishing any particular country.

Mr. Kalb?

Q Mr. Secretary, in that connection, going back to the step-by-step approach once again, since you started

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this approach, there was an agreement between
Egypt and Israel in January of '74, an agreement between
Syria and Israel in May of '74, an enhancement of the
American diplomatic position in the Middle East, and
one setback. In light of the balance on the pluses and
minuses, why so radical and dramatic a change, a need
for a major reassessment of policy? Why not continue
along the old way, recognizing that there was one setback
but a lot of pluses?

A We, obviously, believe that there were
large pluses. As I made clear before we went on this
trip, it seemed to us that in any event, even if another
step had succeeded, a reassembling of the Geneva Conference
was the most likely next step, because we believed that the
Geneva Conference would then have taken place under
easier circumstances than will now be the case.

We have made the assessment that the step-by-
step approach, as it has been conducted up to now, is not
likely to be able to be continued. And, therefore, we have
to assess where we go from here, under conditions in which
some of the presuppositions are no longer valid. And I don't
consider anything particularly dramatic about assessing

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American policy when it finds itself in a new situation.

Q Mr. Secretary, you have used the word "suspension" to describe the talks, and yet you said that the step-by-step approach is ended. Now, you just said it's not likely to be able to continue. Is there any chance whatsoever that the negotiations between Israel and Egypt on an interim settlement -- that is, another step -- can be revived?

A My impression, from Egyptian public statements, is that this is extremely unlikely. Should, however, the parties request us, against our expectations, to undertake it, we would be prepared to do it. But we are making no effort to urge the parties to do so. We stand ready, if there should be any such request.

Q Mr. Secretary, the question was being raised after your briefing on the Hill --

A Miss Berger, and then you.

Q A question was being raised yesterday after your briefing to Congressmen on the Hill as to who made that decision that the step-by-step approach is now finished. Was it your personal decision? Was it a decision

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of the parties? Could you tell us about how that decision
was reached?

A The Egyptian Foreign Minister announced, on the evening that he announced the suspension of the talks, that the step-by-step approach was now finished and that Egypt would return to Geneva. This is how the decision was reached.

The United States will do whatever it can and whatever the parties agree to, to promote peace in the Middle East; and if the parties should request us to do it, we would be willing to entertain it.

Q Mr. Secretary, would it, in your view, enhance the prospects to go to Geneva if the United States would move beyond the role of intermediary and take a publicly stated position on the substantive issues being negotiated there?

A Well, we have generally refrained from taking a position of our own because we felt that when the peace and security of countries is concerned that they have to make their fundamental decisions. On the few occasions when the issues between them had narrowed sufficiently, the United States took a position.

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Now whether in the evolution of the negotiations
-- at Geneva or elsewhere -- a moment will come when the
United States should take a position of its own, that
remains to be determined. We have not yet made this
decision.

Q. Mr. Secretary, thank you very much for all
of your trouble. I had one more question but I didn't ask
it.

(Whereupon, at 11:48 a.m., the news
conference was concluded.)