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PROCEEDINGS

SECRETARY KISSINGER: I think Gerry Smith is the chairman of this enterprise. So I will say Mr. Chairman and distinguished guests, it is a particular pleasure for me to welcome you here to the Department of State. I have known about the Trilateral Commission since David Rockefeller talked to me about it when he first was approached with respect to it. And I have always believed that what you ladies and gentlemen are doing is central to the structure of a dynamic and peaceful world. The relationship between North America, Europe and Japan is at the core of any positive achievement that we may expect to make.

It is true that negotiations with Communist countries make more spectacular headlines. But despite what I read in the newspapers, I want to assure you that we are aware that the long-term achievements of American foreign policy will be measured, not in the regulation of conflict with our adversaries, but in the creation of new structures with our old friends.

Indeed, I would say that the most difficult problem we face is not to repeat in the relations with our friends the patterns which have first formed these

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close ties. And rather to find new relationships, and new
patterns which reflect the current situation.

Now, I thought that it would be most useful if
the greater part of our time together were devoted to
questions and answers. But in order to get the discussion
started, I wanted to make a few observations on three
problems -- the energy problem, the Mid-East crisis,
and a few very brief comments on the recent agreements
in Vladivostok.

First, our approach to the energy problem.

The basic concern of the administration with
respect to relations with Western Europe and Japan is
to develop a new sense of cohesion, and to arrest the decline
of political confidence which affects so many of the
countries in the advanced industrial world and the disruptive
tendencies which characterize so many of their activities.

We believe that apart from all the technical
issues, the energy problem confronts the advanced industrial
nations with a challenge and with an opportunity -- the
challenge of how to deal with the problems of chronic
balance of payments deficits, of potential energy shortages,
of potential embargoes, and the opportunity to prove that
through cohesive action they can master their fate. And

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our proposals for consumer cooperation are not intended
to produce a confrontation with producers. They are intended
to develop those actions which the consumers would have to
take in any event to put themselves into a position to
master the world in which they live.

Of course we are in favor of a dialogue with the
producers. And indeed the United States is conducting a
dialogue with producers all the time. I would say that our
relations with Iran, Saudi Arabia, Algeria, or any of the
other producers compare favorably with those of any other
country. The question that we confront when we are
asked to engage in a consumer-producer dialogue is what
a multilateral consumer-producer dialogue adds to the very
active consumer-producer dialogue that is in any case going
on.

Now, the United States is prepared to engage in a
consumer-producer dialogue on a multilateral basis, as soon
as there is a sufficient basis for concluding that the
consumer-producer dialogue will not lead to repeating
in a multilateral forum all the disagreements that
characterize the bilateral dialogues that are now going on.

As soon as that circumstance is achieved -- and
we believe it is not so difficult to arrive at it -- we

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will welcome a consumer-producer dialogue.

With respect to the specific proposals we have made, I think you will find when you examine them that many of them, or that many of these areas could be dealt with as effectively or more effectively by the United States on the basis of unilateral action.

We have proposed consumer solidarity, for example, in the financial field -- primarily to emphasize the need of the countries most affected to get some control over their destinies, and some confidence in their future. And from that basis, we believe that a creative dialogue with the producers will be essential. And a creative dialogue with the producers must start from the premise that since both consumers and producers will live in the same world, it is in the self interests of both sides to create long-term conditions in which both can prosper. Just as it is not in the interests of the producers to adopt policies which will lead eventually to the economic ruin of the industrialized countries, so it cannot be in the interests of the consumers to attempt to impose solutions that run counter to the basic sense of justice of the producers.

I will be glad to go into this at greater length in response to your questions.

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With respect to the Middle East, we are engaged
in a rather delicate effort to proceed step by step towards
a solution of as many of the political problems as we can.

I am aware that there are some proposals that
we do jointly with the Soviet Union. And I would like to
make clear that in principle the United States is not opposed
to cooperation with the Soviet Union in the Middle East.
The difficulty so far has been that the Soviet Union has
adopted the position of the radical Arab states, and therefore
we would add nothing to ourselves by attempting to settle
the issue with the Soviet Union, until the Soviet Union
is prepared to take a position which is somewhat distinguishable
from the extreme Arab position.

The United States could, if it wishes to impose
a settlement, do it just as well unilaterally.

Incidentally, I neglected to say in the beginning
that my understanding is that this is an off-the-record
meeting, and that this is the premise under which I spoke
here. The last time I attended an off-the-record -- I
spoke at what I thought was an off-the-record meeting,
we had a minor crisis with European countries for a few
days.

(Laughter)

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But that was speaking to ladies, where I got
carried away with myself.

(Laughter)

But it is clear that no final settlement is possible
in the Middle East which will not involve the participation
of the Soviet Union at some stage. And therefore we face
the question of how far we can carry the process by existing
methods, and at what point we want to move to a more
multilateral forum, and that point will be reached in my
view in the not-too-distant future.

Let me say a final word about the recent discussions
at Vladivostok, and then take your questions.

These preliminary agreements in Vladivostok
have evoked one of the more amazing debates in America
that I have seen. There is the argument that it forces
us to increase our strategic forces, to build them up to the
level that is permitted in the agreement, as if that level
were compulsory. The argument is amazing because the present
Soviet level is some 200 delivery systems above that
permitted by the agreement. And if we are not willing to
build up to the level permitted by the agreement, it is
difficult to see how we would then be willing to build up
to the higher level that the Soviet Union already has reached,

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and the much higher level that the Soviet Union would reach
in the absence of the agreement.

It is said that the United States permitted
the Soviet Union to develop some astronomical figure
of warheads. First of all, that figure is totally wrong.
But leaving it aside, the United States did not permit the
Soviet Union to build anything. The Soviet Union is building
these weapons, and it is building them at a rate of which
even the lowest intelligence estimate is considerably higher
than the level that the agreement permits. And while we do
not consider the level that was agreed to the ideal level --
while we would have preferred a lower level, I think it is
important to keep in mind what our real choices were.

The only way we could have achieved a lower level
is by a substantial increase in our strategic budget,
threatening to drive the Soviet strategic forces into a
position of numerical inferiority. How quickly that would
have succeeded, whether at that point the level of 2400
would have represented a reduction, and therefore met some
abstract consideration -- what other factors would have
supervened, we cannot know.

It seems to us that for thirty years an attempt
has been made to put a ceiling on strategic forces. For
thirty years the military establishments on both sides have

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justified additional expenditures by the argument that the other side was increasing its forces to a point where it might threaten one's own survival. Once a ceiling exists on both total forces and on the most dangerous forces, however temporary, however inadequate that ceiling might be from the point of view of theory, the race for strategic superiority must lose some of its urgency. And from that point, a substantial reduction of strategic forces can be discussed seriously.

If we consider that the agreement has eliminated the divisive elements of the discussion of forward-based systems, of the British and French nuclear forces, and such other items that were summed in the phrase "geographic compensation", we believe that it does mark a very important step forward in the control of the strategic nuclear forces which must be one of the principal objectives of any administration.

Now, I don't think it is useful for me to into other aspects of our policy. I remember when I was at Harvard, nothing used to infuriate me more than officials who would come by and say, in a rather tired manner, that all options had been considered, the best possible course had been chosen, and if the audience only knew approximately as much as they did, they would not take their

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time in asking uninformed questions.

(Laughter)

Well, I would like to tell you ladies and gentlemen
that all options have been considered (Laughter), the
best ones have been chosen (Laughter) and if you only knew
as much as I did --- (Laughter)

And now I will take some questions.

(Applause)

Q Mr. Secretary of State, and ladies and
gentlemen, it falls to me to be the first to thank the
Secretary of State for the great honor he has done us in
inviting us here and speaking to us, and to thank him
for the very great frankness with which he has spoken to
us. He has been extremely refreshing. And I wish all other
Foreign Secretaries in the world were as frank.

May I just say, on the Vladivostok meeting, that
it does seem to me, if I may say so, Mr. Secretary of State,
that you had a very great diplomatic triumph there. You have,
as it seems to me -- though I haven't got a vote here
so I can't be of any use to you -- it seems to me that you
have won the argument that has grown up hands down. And
I must say what you have done and what you have said
finds I know a very great echo in London.

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As you know, the things at the conference which we are engaged in and have been talking were things that you started talking about. And I would like to ask you a question or two about that.

On the question of the unity of the consumer, oil consumer states, it seems to me that -- I think so -- perhaps the Americans have exaggerated somewhat the ease of achieving this. There are very great difficulties, countries that are not playing. And I think if there were a very great crisis or the actual danger of a Middle East war, you would find a great deal more.

But at the moment, if I might put this in the form of a question, would you agree that there is perhaps too much objection at the moment by certain countries to joining in on a consumer association.

And it seems to me, too, that perhaps the pursuit of this at this moment does create in many minds the idea of a confrontation with the OPEC countries. And it seems to me, if you would agree with me, that it really is very, very important to avoid that. I know you have tried to avoid it: and intend to avoid it. But of course, it has to be avoided in fact as well as in desire. And the importance of trying to come to some kind of agreement and cooperation with the OPEC countries seems to me, and

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I think to most of us who have taken part in this conference, has been most important -- particularly in the attempt to associate the OPEC countries with recycling problems, and above all with trying to get them to lend more of their money by one means or another to the third-world countries.

Now, none of these things can be achieved without United States leadership. And the United States must decide what kind of leadership it wishes to give, especially as it knows much more than the rest of us. In fact, it knows everything.

But it seems to me, if I might say so, the point on which we most need your leadership, sir, and your energy and skill which you have shown so well in so many fields, is in the question of the Middle East and the danger of a new war there. It seems to me that this is the absolutely dominating factor, because if there were a new war there, there would be a new boycott and we would be in a frightful problem.

And if I might ask you whether you do not think that we should perhaps concentrate a little more than we have I know you have been trying, of course, to do it -- to prepare for the meeting of a crisis. And it seems to me that if one could shift the balance from the attempt to get

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consumer solidarity to the preparation for a crisis,
that some of the countries which are awkward and difficult,
and even my own might be in certain circumstances, would be
much less difficult if it were a question of meeting a
crisis. And whether then -- if I might say so, although
I wholly agree with your rejection of the idea that the
Russians put forward of American and Russian troops in
the Middle East at that time -- if it were the only alternative
to a war -- I mean a war was on the point of breaking out,
and this were the only alternative -- whether it wouldn't be
worth considering in the new circumstances that the thing
you then rejected I think very wisely, of the idea of
Soviet and United States troops on the ground because there
are no other countries that can do anything in this field.
We all intend to do things. But it is only the United
States and Russia that can in fact do anything real
if there is an imminent danger of war in the Middle East.

Q I wonder if you would repeat the question.

(Laughter)

SECRETARY KISSINGER: You are making it very hard for me to give an irrelevant answer.

(Laughter)

As I understood the question, it was whether

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consumer solidarity might not have some element of confrontati
whatever the desire, whether it might not in fact produce
a confrontation. And whether this particular problem could
not be avoided by concentrating less on consumer solidarity
in the abstract, but by focusing more on specific crises
that might arise in which the consumers might cooperate.

The second part of the question, as I understood it,
was the impact of the Middle East crisis on the energy
problem, or the danger of a new Middle East crisis. And
whether sufficient attention was being paid to avoid the
outbreak of a war. Leading to the final question -- whether
if the only way to avoid a Middle East war were the
introduction of Soviet and American forces, whether the United
States would be prepared to do so.

Is this a fair summing up of the question?

Now, with respect to the first part of the question
it seems to me there are two aspects of consumer cooperation:
consumer cooperation that will have to be undertaken, or
should be undertaken, in any event, and that basically has
relatively little to do with the actions of the producers.
For example, we have developed out of the Washington
Energy Conference the IEA, International Energy Agency,
and the emergency sharing program, which the former dealing

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with certain cooperative efforts in developing alternative
sources of supply; the latter being an attempt to put the
participant countries into a position to withstand partial
embargoes, and to deal more effectively with general embargoes
by a combination of conservation measures and sharing of oil.
Those measures seem to me essential, regardless of any
dialogue with the producers about oil prices. They are
essential for the health and self-confidence of the consumers.
And on this, a substantial agreement has already been achieved.

We would like to build on these measures by
creating a financial safety net which would help deal with
at least the most extreme forms of the balance of payments
difficulties. And we believe that in the first instance
this safety net should be brought about by action among
the advanced industrial consumers. Because we fear that
to introduce the OPEC countries too early into essentially
salvaging the advanced industrial countries will introduce
them into a political dialogue which might disrupt the
existing political relationships.

After the safety net exists, after consumer
cooperation is further developed, we would not object to
OPEC participation in this financial structure.

Thirdly with respect to recycling into the under-

(wc)

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developed world, we believe that this must be a joint
effort of the advanced industrial countries and of OPEC.
And therefore there is no disagreement at all.

Now, those measures seem to us essential, regardless
of how we conduct the dialogue with the producers.

With respect to the dialogue with the producers,
there is really only one issue that remains. We have
agreed to such a dialogue. I repeat -- we are conducting
such a dialogue. I doubt whether any other country is
talking as intensively to Iran, to Saudi Arabia, and to
other oil producing countries as the United States. We have
set up joint commissions with these countries across a
wide range of joint activities, to take care of many of
these pressing concerns.

The key issue, therefore, is not whether there
should be a dialogue, but what should can be achieved in a
multilateral dialogue. And we cannot see how the situation
can be improved if the very countries that refuse to participate
in a consumer cooperation can then act as mediators at a
consumer-producer conference in which there is nothing
even approximating a common position.

We believe that common objectives are relatively
easily attainable. And I repeat, we will be happy to attend

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a consumer-producer conference if a minimum of solidarity can be achieved. And since we see this solidarity being achieved among all countries, except one, as it is, it should not be insurmountable to convince that country of the merit of this course. And if not, we are prepared to continue within the framework of the Washington Energy Conference. And if those nations achieve a sufficiently common position, to go to a producers' meeting.

Now, our experience has been that none of the principal producers with which we are in frequent dialogue has accused us of producing a confrontation. And therefore we have not suffered in the slight est in our relationships with those countries by the policies that we have pursued. Which leads me to believe that it could also be pursued on a multilateral basis.

The biggest danger of confrontation, as you correctly pointed out, is not in the dialogue. The biggest danger of confrontation is inherent in the danger of a Middle East war. That could indeed produce a very difficult problem.

In my position, I really don't think it is helpful to speculate what the United States would be prepared to do in an emergency and as a last resort. We would tend to believe that Soviet Forces once introduced into the Middle

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East under any guise would be extremely difficult to dislodge. And once the Soviet Union had developed an appetite for operating with combat forces far from the epicenter of its power, and on issues not related to the preservation of a Communist regime contiguous to it, might conduct global policies with its conventional forces that we would live to regret.

And therefore I believe we would be extraordinarily reluctant to choose this particular method.

On the other hand, we recognize that another Middle East war would represent the potential of a major catastrophe. And we are now engaged, perhaps less dramatically than earlier this year, but very actively in trying to promote steps to avoid it. But I would have to say this is the biggest problem before us. And I don't want to underrate its danger.

Q Mr. Secretary, on the two points 1, and 3 -- on Number 3 I would just like to reinforce what I think is a general feeling here that aside from all other aspects, it is a tremendous achievement to have reached the stage where there is agreement on the Soviet side that there must be a cap which both of us recognize on the total conventional and atomic weapons. And the additional information, to me, at least, which you gae tonight is further reinforcement

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of that. And I think this is something which all of us
here should be grateful for, in your successful efforts.

Number 1 -- in the case you have given, which I am
sure many of us here all share, the need for closer association
with the producing countries, avoiding the atmosphere of
confrontation, one area in which I may not be adequately
informed -- I have the impression that with most of the
Persian Gulf and other OPEC countries, the United States
does not now have treaties of commerce and friendship
of the kind that have been associated with our relationships
with most other countries with whom we have close and continuing
friendly relationships as a basis for our understandings.
If I am incorrectly informed, I would raise the question
whether this is another area, one that is alongside
the key issues of the moment, but in which there is an
opportunity for the United States to express its genuine
intention to regard the whole area of OPEC countries as
really in a position of equals in the problems the world
faces; whether there isn't an initiative here that the United
States could take which would be of benefit to all of us.

SECRETARY KISSINGER: I will have to look into the
factual question. As you know, we have just -- I assume
you are talking of the smaller principalities along the

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Persian Gulf. As you know, we only established diplomatic relations with most of them within the last two years. And it is true that we have concentrated on establishing the commissions which are our vehicle for the joint effort primarily with Iran, Saudi Arabia and Egypt, which is not of course an OPEC country.

In principle, we are prepared to adopt that method with respect to all of the other oil producing countries. And I take your point that this would be a wise thing to do. Tom, will you look into this -- as long as we are all here.

I think it is a good idea. We simply have not gotten around to it.

Q (Interpreted from French): Mr. Secretary, my poor English is even poorer than my poor French, and therefore I am forced to speak in French. The word "poor" is quite adequate when we talk about the wealth of the Arab language. The Trilateral Commission as a matter of fact has decided to talk Arabic from now on.

May I ask you, Mr. Secretary, just one question.

During the discussion this morning some of us have hesitated on two themes. We have to recycle Arab capital probably through all the underdeveloped countries. But before that, would we not perhaps settle the question

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of peace between Israel and Palestine? Any solution for the recycling of capital may be found, and you have all the bankers here in order to find the solution for it. But any solution (unintelligible). Therefore is not peace between Israel and Palestine a precondition for any settlement of the oil crisis?

SECRETARY KISSINGER: I believe that progress towards a solution of the problem between Israel and its neighbors is an important component of solving the oil crisis. I do not believe that it is necessary to complete the settlement before tackling the oil crisis.

If I may speak very frankly -- I have seen King Faisal eight times in the last year and have developed some competence in theological questions as a result. I find that he presses the issue of Palestine and Jerusalem, strangely enough, with less intensity than some of our European friends. And while he is passionate about it as a theoretical point, I think he has understood and accepted the necessity of moving step by step. And I frankly do not think it wise for outsiders to make the Arabs more impatient than their romantic temper already inclines them to be.

Now, it is necessary that there be clear and constant progress. I also believe that if one attempts to

(c)

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rapidly, there can be an explosion. If one moves too slowly, there can be an explosion. And it won't be easy to find the right means.

My impression is that as long as King Faisal, to use him as an example, believes that progress is being made, even though it is not as rapid as he himself would wish, he will cooperate in solving the oil problem. If he believes there is a stalemate, even more, if he believes that the stalemate is caused by the United States, then the oil problem will become very difficult to solve.

But I do not believe that we can wait with dealing with the recycling problem until the Arab-Israeli issues are all settled, because that may take quite some time.

Q Mr. Secretary, to what extent do you feel hampered in posing the U.S. position among the consumer nations on energy by what you might view as lack of credible conservation policy in the United States? Secondly, on a different question, to what extent is nuclear proliferation outside of the major powers a matter with which we are concerned and how can we deal effectively with that problem?

SECRETARY KISSINGER: With respect to the conservation programs in the United States, as I have pointed out on another occasion, before I gave the speech on behalf of the

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administration in Chicago, the President went over this
speech with me a number of times. And he clearly understood
the domestic implications of the foreign policy proposals.

I am confident that within a measurable time the administration
will make proposals which will represent the domestic
corollary of our international position, or to put it another
way, will take those steps of conservation in the United
States that will give effect and credibility to our
international position.

These problems are being worked on with great
urgency. And I repeat, I am confident that we will have a
credible position within a measurable time.

Now, with respect to nuclear proliferation. We
are extremely concerned about the problem of nuclear
proliferation. Up to now, nuclear weapons have been in the
hands of advanced industrial countries, that have had a
great deal to lose, and at least a somewhat sophisticated
military establishment. And also they have been in the
hands of countries that were not divided by issues of
elemental passion. These conditions will soon not be met
if nuclear weapons spread to more and more countries.

There are essentially two ways we can deal
with the nuclear proliferation issue. One is by bringing

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about a general acceptance of the non-proliferation treaty.
We frankly believe that there are not too many more
candidates for additional signature to the non-proliferation
treaty, though we would welcome it.

Failing this, we are making an effort to bring
about agreed international standards for the export of nuclear
materials. And we are trying to get together a nuclear
exporters conference in order to establish safeguards on
the export of nuclear material, the processing of nuclear
material, and the handling of nuclear reactors. And we are
in the meantime urging all countries to exercise the greatest
restraint in their export policy, and specifically we are
prepared to accept any restraint that any other country is
prepared to accept for itself. We are not asking for a
special position, either for ourselves or other super powers.

What about Egypt?

SECRETARY KISSINGER: A question about the
nuclear reactor to Egypt. With respect to the nuclear
reactor to Egypt, we have proposed safeguards that are
considerably more stringent than the IAEA safeguards. And
in fact, the case of Egypt illustrates the importance of
an exporters' agreement -- because while we are negotiating
these more stringent safeguards, there are two other countries

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that are attempting to compete with us on the basis of less
stringent safeguards. And on that basis nuclear proliferation
will be inevitable.

If we cannot get countries to agree that they will
not compete with each other on the basis of safeguards,
then inevitably there will be a large number of not
adequately safeguarded reactors in the world.

Q What is the relationship between the Non-Pro-
liferation Treaty and the safeguards for export? More demanding

SECRETARY KISSINGER: Well, they are of a slightly
different nature. I think the safeguards that we are
proposing to other exporting countries, and that we are
discussing with them, including the Soviet Union, would
give us a fairly high assurance against proliferation. In
any event, it would delay it by many years.

Q I want to ask, Mr. Secretary of State,
not to forget that monetary matters are not out of your
jurisdiction. I'm afraid Mr. Simon is here. But I hope he
will not be offended.

Tomorrow I have to speak to the gathering from
Japan on inflation and its political implications.
Inflation is so much politically implicated. And since
it is internationally politically implicated, that must

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be within your jurisdiction, which are in charge of
international affairs.

And what I tell tomorrow I would not like to pre-say.
But for example, coming back to the matter of oil, I am
rather for your call for consumer countries to deeply go
into their programs first and to make up their programs
of protests or their negotiating platforms. But Japan is
very much afraid that she should not offend the OPEC
countries So this is not my official saying. But I would
like to ask or even criticize why you take the matter of
recycling oil money so easily. It makes the difficulty be
forgotten. Everybody who feels that recycled money
would come to him would be happy forgetting something of
the difficulties which he should be facing against in
totally remodeling his country's economy or the way of living
of his country. And this is not criticism. But I'm afraid
the terminology -- I hope that the matter of recycling
be studied even after such difficulties to Japan or to
the United Kingdom or Italy, or some of the developing
countries devoid of any meaningful underground resources
or surface resources should face this.

SECRETARY KISSINGER: I think if you study the
American bureaucracy, you will find that any assertions by

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the Department of State of jurisdiction over monetary matters would require us to conduct the next disarmament negotiations with the Treasury Department. (Laughter)

With respect to taking the recycling problem lightly, I don't believe we take it lightly. A great percentage of the money to be recycled comes, of course, to the United States. And we could take several of these measures unilaterally. The reason we are proposing to do it on the basis of the cooperation of the advanced industrial countries is precisely to give them a sense of cooperation and a sense of a shared destiny. And we have in mind especially not the United States and even Japan, or the Federal Republic of Germany, but countries like Italy, that are in chronic deficit, and which, if they had to be bailed out by short-term loans every six months can only get an increasing demoralization of their entire political process.

So our purpose is to deal exactly with the countries that you have mentioned. And also to use this recycling facility, quite honestly, to impose some discipline on their financial behavior.

Finally, about offending other countries. When I was in Japan some Japanese friend said to me they will walk along in our shadow one quarter of a step behind. That

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is fine with us. You can all blame us for being out front.
As long as we understand why it is being done.

We have not found in our experience that the measures
we have proposed have led other countries to tell us that
they were offended by them. And I think if we behave
in an unprovocative fashion, and if we conduct the inevitable
dialogue in a conciliatory and constructive spirit, I believe
that it will be to the benefit of both consumers and
producers.

Why don't I take one more question.

Q May I come back to the previous matter of
the consumer point, which I think was very well taken;
that there should be a minimum understanding among the
consuming countries. I agree with you on that point.
I would like to ask you if this position and the position
I understand is taken by the French government -- there
are many aspects to this, probably -- but the insistence
on having a larger forum involving also the so-called
fourth-world countries. Would you say that these two
positions are completely opposite, or are they not
complementary. And if they are complementary, what are
the minimum agreements you would want to have among the
consumer countries before you would think of working at both

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levels?

SECRETARY KISSINGER: Well, first of all, with
respect to the fourth world, this is simply a factual point
in our experience. Many of the countries of the fourth
world, which are the principal victims of the high oil prices,
tell us privately that they are grateful for our initiatives;
that they cannot tolerate these high prices; but for God's
sake, to keep them out of all international meetings because
they do not wish to express their view towards countries
on whom they finally depend. This is not a decisive point,
but it is a factual point.

Secondly, with respect to the French point of view
and the United States point of view. We are not looking
for a dispute with France. I believe that the two positions
can be made compatible. If France is interested in a serious
producer-consumer dialogue, it should in fact welcome our
willingness (1) to participate, and (2) to arrive at common
positions. What we will not participate in is to be.
straight-men in an international conference where others
use us to maneuver between us and the producers and therefore
create an artificial confrontation. If that is going to be
the case, we will conduct our own bilateral dialogue,
and others can conduct their bilateral dialogue, and we will

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see where we all come out.

We expect, and we are going to Martinique with this attitude of working out with France an arrangement on consumer cooperation, leading rapidly to a producer dialogue, all well within this year. And we believe that this is attainable, and with good will on both sides it must be attainable. And too much is at stake for the industrialized countries to tear themselves apart over tactics of energy policy. And there will be no victors in an internal dispute among the advanced industrialized countries. That will be our attitude in Martinique. And we believe strongly that it is a soluble problem.

Thank you very much.

(Applause)

MR. SMITH: Mr. Secretary, before we leave, may I on behalf of the Trilateral Commission members here thank you very much for your splendid hospitality. I might say that one of troubles recently is that we have had to hold off the number of people who want to join this Commission, which is a very hopeful sign. Just today we lost a Commissioner when he became the Foreign Minister of Japan. And this very same day we have had the splendid occasion to listen to your wisdom,

30

your great hospitality, which will be a high point in the
life of this Commission.

Thank you very much.

(Applause)

(The proceedings adjourned at 11:15 p.m.)

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alternatively on a Dutch or a foreign person or жинжжин institution for the most valuable services rendered in the cause of peace or in the finding of means of countering war.

We - and I am speaking for our Board of Directors - have felt, and feel, that you, Mr. Secretary, in succeeding as you did - under extremely difficult circumstances - in laying the basis for further progress toward a final settlement, are eminently qualified to receive this award.

In your book "A World Restored" you wrote on the role of Austria in the formation of the coalition against Napoleon in the summer of 1813:

"Few diplomatic campaigns demonstrate more clearly that policy is proportion, that its wisdom depends on the relation of its measure to each other, not on the 'cleverness' of individual moves".

I believe, Mr. Secretary, that that passage is entirely applicable to your own achievement of statecraft, for which we are honouring you today.

He who says 'in conclusion, that we, on the board of directors of this Carnegie Foundation, are deeply impressed by what your incomplishability as a result

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In your letter of acceptance you wrote me in July of this year that you hoped to continue to work with undiminished vigor for the achievement of a just and durable peace in that region. Contrary to what is so often cynically said of good intentions, you, Sir, most certainly have realized the purpose you expressed in that letter.

Let me say in concluding that we of the Board of Directors of the Carnegie Foundation are deeply impressed by what you accomplished as a result

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of your well-directed efforts.

Allow me now, Mr. Secretary, to present you
with the visible and tangible token of the prize,
awarded you. END QUOTE.

2. Following is text of Secretary Kissinger's acceptance remarks:

BEGIN QUOTE:

Mr. Foreign Minister, to Excellencies:

I am very moved to receive this award. It honors not an individual but a purpose. Throughout last year, during my efforts on behalf of the United States to contribute to a just and durable peace in the Middle East, it was a source of great pride that with all the difficulties the United States faced at home, it was nevertheless our country which was trusted enough by both sides in the Middle East to be able to contribute to the effort to reconcile peoples whose suffering and courage have earned them a period of respite and a period of conciliation.

In no area of the world is it more difficult to promote a just and lasting peace than in the Middle East. Two great peoples, one that has suffered for millenia by being dispersed and persecuted, and another that has felt deprived of

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part of its territory, have attempted to reconcile, however haltingly and with however much great anguish, their different points of view. Needless to say this is not an easy effort. But, progress has been made.

As far as the United States is concerned and whatever contribution I usefully can make, we will spare no efforts to promote this end. Peace in the Middle East is only part of a larger process. Throughout history statesmen have avowed the goal of peace. But no period has ever had the imperative of ours. There no longer is any alternative to peace. To insist on national advantage, to promote purely regional objectives, must promote over a period of time a <u>conflict which can only end with the destruction of humanity.</u>

So statesmen in our period have no excuse not to strive for peace. They can have no nobler aim than to leave behind them a world safer than that which they found. And, therfore, perhaps they should not be given any award for doing what is necessary. As far as the United States is concerned, we will work <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;together with our friends&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u> to promote a structure of peace that can <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;exist&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>.

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last so that humanity can look back to this
period as the turning point when the long hope and
aspiration for permanent peace was finally achieved.
Thank you very much. "END QUOTE.

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KLM, and I explained to the Secretary why we feel extremely worried about this and why we feel that the American proposals are unacceptable. The Secretary besides has said that the U.S. Government would be prepared to hold any unilateral action until a new round of negotiations would start. So, in effect, I expect that some time in the new year there will be a new round of negotiations. In the meantime, I would not expect any unilateral action on the American side.

6. SECRETARY KISSINGER: This is correct. We discussed a variety of issues including this, and we would like to settle this issue on the basis of the traditional friendship between the Netherlands and United States. So we agreed to resume negotiations early in the new year, and that we would not take any unilateral action until the negotiations have had a chance, and in any event, the Foreign Minister and I will consult before any unilateral actions, if any, are taken; but we are hopeful to be able to avoid it.

7. QUESTION: How about the procedure which is going on now in the Court of Appeals in Washington?

8. SECRETARY KISSINGER: Well, I have to tell you the truth; I am not familiar with all the technical details and we will carry out what I have said here.

9. QUESTION: Can you say what other issues you discussed?

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10. SECRETARY KISSINGER: Oh, yes, we discussed the European Security Conference, some energy problems, a little talk about the European Summit ...

11. FOREIGN MINISTER VAN DER STOEL: The progress of the MBFR negotiations.

12. SECRETARY KISSINGER: Yes.

13. QUESTION: Starfighters?

14. SECRETARY KISSINGER: Starfighters, I'm not an arms salesman. Starfighters, no, as it happens it didn't come up, but I would add that all the discussions were in the spirit of friendship which is characteristic of Dutch/American relations and of my personal relations with the Foreign Minister.

15. QUESTION: Coming back to Atlantic flights, is there any idea for us to believe that maybe you would start discussions on a more international basis and not purely bilateral?

16. SECRETARY KISSINGER: I think we had better leave it as it is. They will certainly start first on a bilateral basis.

KISSINGER

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DECEMBER 16, 1974

OFFICE OF THE WHITE HOUSE PRESS SECRETARY
(Martinique, F.W.I.)

THE WHITE HOUSE

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

MERIDIEN HOTEL

11:45 A.M. (Martinique Time)

MR. NESSEN: We have Dr. Kissinger now for his briefing, and as Mr. Beauchamps told you, this will be followed by the President of the Republic of France.

Dr. Kissinger's briefing is on the record, available for filming and taping. There will be no filing until after the briefing is completed.

Dr. Kissinger.

SECRETARY KISSINGER: Ladies and gentlemen, we have distributed the communique which is substantially self-explanatory. Let me make a few preliminary points.

First, as the President of the Republic said last night in his toast, both sides approached these discussions with the attitude not of who would get the maximum number of concessions from the other, or who would be the victor in the negotiations, because we don't think of each other as antagonists, but as allies.

We looked at the outstanding problems, especially in the field of energy and economics, from the point of view of what was in the mutual benefit, the benefit of Europe and the United States, as well as the benefit of all the interested nations around the world. And therefore, with respect to the energy issue, which was one of the principal problems which was, of course, discussed, I think we achieved the synthesis of the French and American positions which took account of the American conviction that consumer cooperation was essential and the French believed -- which, as a matter of fact, the United States has always shared -- that consumer cooperation must lead rapidly to consumer/producer dialogue.

I would like to add that in addition to the substance of the communique the conversations were conducted in an atmosphere of great cordiality and the relationship of confidence that has grown up between the two Presidents will help facilitate and guarantee the spirit of cooperation which we believe is one of the important results of this conference.

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SECRETARY KISSINGER: As the communique says, the steps should be taken in sequence and the sequence is the one described in the communique; that is to say, there will first be an effort of some urgency to strengthen consumer cooperation in the field of conservation, of developing alternative sources of energy and of setting up new mechanisms for financial solidarity.

Based on progress among the consumers, this will then lead to a preparatory meeting between consumers and producers for which we set a target date for March 1975. Of course it depends on the progress the consumers make among themselves, but the United States will cooperate in bringing about the preparatory conferences and obviously will not use delaying tactics.

I think there is good will on all sides. We can make substantial progress among the consumers and given the urgency of the situation, in fact, we must make substantial progress among the consumers.

After the completion of the preparatory discussions, we have foreseen intensive consultation among the consumers to develop common positions and common attitudes toward the Consumer/Producer Substantive Conference. The preparatory meeting will deal with procedure, agenda, participants, and will not deal with substance.

This is the sequence that the two Presidents have agreed upon, and again, I would like to say that the United States has not considered its views as incompatible with those of France. In fact, at the Washington Energy Conference, we proposed that the consumer cooperation should lead to consumer/producer dialogue and therefore, we welcome the French initiative and I think we can work cooperatively to achieve the common objective.

Q Will France participate in this consumer effort to strengthen solidarity?

SECRETARY KISSINGER: It says existing institutions and agreements. There are a number of factors. France, of course, is not a member of the IEA and we have not asked France to be a member of the IEA. It is my impression that France will work in parallel to the IEA in the same direction.

For example, we have had occasion to point out that the French conservation program is going in the same direction as that of the IEA and in some respects, goes beyond it.

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The institutions or the mechanisms for financial solidarity we had proposed in my speech should be taken in the group of 10 in which France is, of course a member, and therefore, there is no difficulty about French participation in those.

With respect to alternative sources of energy, it may be that they are initially discussed in the IEA, but there is also a role there for European institutions, so we are not concerned with the legal structure.

It is our conviction that France will work parallel to our efforts and we will find the legal formula by which to implement.

Q Mr. Secretary, doesn't that kind of informal arrangement give France the benefit of consumer organization that has already taken place without having any of the responsibilities, for example, in oil sharing?

SECRETARY KISSINGER: No, it is our view that we are concerned with the substance and therefore, how France participates under what legal form is not of decisive concern to us.

As I pointed out, the financial institutions, for example, are not being done in the IEA to begin with. The conservation measures, once they have been agreed upon, do not really require any international party to implement. They can be implemented on a national basis.

I have the impression that we should stop talking about Franco-American relations in terms of confrontation and who is taking advantage of whom but rather in terms of practical cooperation in which the actions of the two parties will be more important than the legal form and that is our attitude and it is our impression that was the French attitude at this meeting.

Q Mr. Secretary, could you please tell us what progress, if any, was made relative to your suggestion in Chicago of the $25 billion fund for the shoring up of those economies that need it in light of the oil shortage?

SECRETARY KISSINGER: We found the attitude of the French President very positive to this idea and we have the impression that France will work with us in the group of ten to implement this idea.

Q How do you account for the French change? All of a sudden you have peace and it is lovely. What caused this after ten years?

SECRETARY KISSINGER: I didn't say there has been a French change. I described the results of this conference and I can only say that both Presidents seem to me to be convinced of the urgent problems facing their countries and facing the industrialized countries and, indeed, facing the whole world.

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And it was a discussion that was not conducted in slogans but in terms of the issues and when you confront the issues, I think certain conclusions are, more or less, inevitable.

I would also say that the manner in which both Presidents conducted the conversations, which was free of dogma on both sides --

Q Free of what?

SECRETARY KISSINGER: D-o-g-m-a. It is a Latin word, not German (Laughter) -- contributed to the result but I don't want to claim any changes.

Q Mr. Secretary, leaving aside the financial side in the group of ten, will the French participation in the conservation side be through the EEC, that is to say, are you contemplating here that the EEC will become an elective member of the IEA?

SECRETARY KISSINGER: This is one possibility. It is not for the United States to prescribe how Europe should organize its energy policy. The United States would certainly have no objection and can see some advantages in a common energy policy on the part of Europe and this, in turn, of course, would permit the EEC to participate as a unit in the IEA.

This is essentially up to the Europeans.

Q Do you think it will happen?

SECRETARY KISSINGER: Let me make a point. Obviously, the spirit of what has been agreed here in Martinique requires that France work in parallel on the same substance as the other principal consumers and we believe that this can be done. This is one device for doing it, but we are prepared to find other consultative devices.

Q Did you get any assurances from the President of France that they would be willing to do this at this meeting?

SECRETARY KISSINGER: That they would be prepared to have a common European energy policy?

Q Or that EEC would join the IEA.

SECRETARY KISSINGER: We did not discuss the legal relationship of France to the IEA. We discussed the substantive relationship of the measures that needed to be taken and as we pointed out, it is our view, and I think it is the common view that certain substantive steps have to be taken in order to make the consumer/producer dialogue useful. And the United States, obviously, will know whether these steps have been taken.

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Q Mr. Secretary, will the March conference be composed of nations outside the major oil producers and also major oil consumers?

SECRETARY KISSINGER: Let me make two points: The March date is a target date. It is not an absolutely fixed date, but we will work seriously to see whether it can be implemented. The original proposal was that it might be tripartite, that is, that some of the less developed consuming countries might also participate. The United States is not opposed to this in principle, or to put it positively, the United States is prepared for this but the exact composition of either the preparatory or the final meeting has not yet been settled. This is one of the issues that has to be settled.

Q Mr. Secretary, can you give us further elaboration on the Mideast discussions? How much of the time was spent talking about the Middle East?

SECRETARY KISSINGER: I think, in the Mideast discussion, the French point of view has been publicly stated and there was a full exchange of the respective points of view. No conclusions were reached or announced. This was mostly in the form of bringing about a fuller comprehension by each side of the views of the other.

Q Mr. Secretary, could you point two things out: What the gold agreement means and also, what was our original request for compensation for the NATO bases?

SECRETARY KISSINGER: What the gold agreement means is this: That there has been a fixed price for the valuation of gold which does not reflect the market price and it means that each country is free to adopt current market prices as the basis for evaluation and therefore, show on its books a value of gold reserves which corresponds more nearly to the market price of gold which is about 3-1/2 to 4 times larger than the fixed price of gold and therefore, reflects more accurately the capacity of the reserves of each country to pay for deficits.

I frankly do not remember what the original figures were. I know the French figure that they first offered us was substantially below $100 million and I am certain the figure we asked for was substantially above and this seemed to us to represent a fair compromise, but I don't remember what the figure was that we originally asked for.

Q What of the apparent French suspicions that the United States is trying to dominate the policies of the industrialized world and dictating its terms?

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SECRETARY KISSINGER: I don't want to comment about French suspicions that were not expressed at the meeting. At the meeting, we discussed how to deal with concrete issues and we reached the results which I have described so that the suspicions that I occasionally read in the French press were not expressed by French officials and I therefore don't feel the need to comment on that.

Q On the gold question, does the agreement you have reached imply also the central banks are free now to buy and sell gold at the market price?

SECRETARY KISSINGER: I don't want to get into technical questions of gold purchases. What it means is that they can value their gold at the market price.

Q It does mean that?

SECRETARY KISSINGER: It goes no further than that.

Q Mr. Secretary, is it the American view that the United States will do this or is it going to be a totally European proposition?

SECRETARY KISSINGER: The valuation?

Q Yes.

SECRETARY KISSINGER: That is up to each country.

Q I asked about the United States. Do you anticipate we will do it?

SECRETARY KISSINGER: I don't have the impression that we will do it in the near future.

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Q Mr. Secretary, is it the American view that a consumer/producer conference would have as a principal goal lower oil prices, and do the French share that view?

SECRETARY KISSINGER: I think everybody agrees that lower oil prices are highly desirable and it is the American view that oil prices should be stabilized at a lower level.

I think we all agree that regardless of what happens to oil prices the impact of the oil prices on the world economy and the means that are necessary to assure the stability of the economies of the industrialized nations, as well as a fair progress for the producer nations must be a subject of a consumer/producer dialogue, but the preparatory meeting is designed precisely to define the agenda as well as the procedures of such a dialogue, so it isn't possible to be conclusive about it at this moment.

Q How is this going to be proposed to a country, like Japan, consumer/producer country conference?

SECRETARY KISSINGER: Well, as you know, we have been in the closest contact with the Government of Japan, and I had extensive conversations with the then Foreign Minister Kimura, which have been reaffirmed by the new Japanese Government. And of course the French Foreign Minister had been in Japan at about the same time that we were there.

So it is my impression that what has been agreed upon here will have the support of the Government of Japan and reflect exactly the idea that the Government of Japan expressed to both of us. And it is also my view, based on conversations with the German Chancellor and with other major consuming nations in the NATO meeting in Brussels, that what was agreed to here will elicit a wide consensus.

Q Dr. Kissinger, in elaboration on the Middle East question, does it appear that there was French acceptance of the United States idea of a step-by-step solution to the Arab-Israeli problem?

SECRETARY KISSINGER: I don't want to speak for France, particularly since the President of the Republic is waiting to appear here.

My impression is that there is no French disagreement with the step-by-step approach, but having a more Cartesian upbringing than we, France may perhaps feel it more necessary than we do to define the terminal point at the outset. I don't think there is any French disagreement with the step-by-step approach if it can be achieved.

Q Mr. Secretary, it says in the communique that there has been accord on many questions. Could you point out the questions upon which there is disagreement?

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FULBRIGHT DINNER

December 16, 1974

-- We are here tonight to honor an American statesman,
and an old friend.

-- Bill Fulbright has been my colleague and mentor
ever since I came to Washington. We have not always
agreed, but I have come to value his opposition
more than I would some other men's support.
For the force of his wisdom and sincerity can
leave no man's views untempered.

-- The man we honor tonight has addressed the
problem of foreign policy in a democracy with as
a
great/profundity -- and success -- as any
American in our history. From the origin of
democracy in Greece down to the present, the
question has been posed whether a government of
the people could muster the vision and resolution
which the conduct of foreign policy requires.

-- It was Pericles, speaking to the Athenians, who first stated our faith that a free people can, through free discussion and free elections, sustain a wiser and a more decisive policy than governments that find their unity in discipline rather than common purpose.

-- Sen. Fulbright has fulfilled this promise triumphantly in our own time. A son of the State of Arkansas, he has represented

its people for a generation.

And at the same time he has been a statesman who could look beyond our own country to see, as clearly as any man, the emerging challenges for our policy abroad.

-- He was an architect, after 1946, of a postwar international system built on the need for Western unity in the face of a monolithic Communist threat. But he also perceived sooner

-3-

than others that the cold war order must give way
to a more pluralist and tolerant system in which
neither great power would try to remold the world
in its own image. His voice was among the first
to define ideas which have become pillars of our
policy today -- detente with the Soviet Union and
China, more limited American involvement in Indochina,
an even-handed approach to settlement in the
Middle East. Before the word was used, he was a
prophet of the interdependence that has become our
current condition.

-- His views were often unpopular when first
advanced, but because he voiced them, opinion came
to terms more rapidly with the reality he perceived.

He has exercised his leadership, not to exalt his
own position, but to bring his followers abreast of
his own understanding. He has earned a
leader's highest praise in a democracy, which is that he

has been the educator of a free people.

-- But in addition to honoring the service and leadership of a masterful American statesman, we also are here to mark an achievement singular in its significance for our time. For as the members of the Board of Foreign Scholarships attest by their presence we honor this evening a career which has been translated into an institution.

-- There is a biography of Senator Fulbright subtitled "A Public Philosopher". And in his book, The Public Philosophy, Walter Lippmann noted that if we are to attempt to avoid disaster we must deal with what Lippmann called "the pictures in people's heads"-- the man-made environment in which ideas become realities.

--In an age when the technologies of communication are improving faster than man's ability to assimilate their consequences, and at a time when the multiplication of differing perspectives and

predispositions complicate the achievement of global
consensus, Bill Fulbright conceived a program
brilliant in its simplicity and essential for
our future. He recognized that the dramatically
accelerating pace of interaction among peoples
and institutions would not necessarily lead to
increased understanding or cooperation. He
foresaw that interaction, unguided by intelligent and humane
direction and concern, had the
potential to bring increased tension and
hostility rather than less.

-- The Fulbright exchange was an expansive
concept founded upon a global vision. It has
grown to meet new realities. A program which
once promoted the solidarity of West now sustains
exchanges between the United States and 122
countries around the globe. It expressed, it helps us to

master, the growing interdependence of the world.

--Personally, it is difficult for me to accept that Sen. Fulbright will now be leaving the Senate.

He has suffered the ultimate fate of every politician, which is to leave the office he has made his own.

But I will continue to rely on his wise counsel as much in the future as I have in the past.

Bill Fulbright's wisdom will not be lost to this nation.

-- As Pericles once said to the Athenians, great leaders find "the grandest of all sepulchers . . . is the minds of men, where their glory remains fresh to stir to speech or action as the occasion comes by. For the whole earth is the sepulcher of famous men; and their story is not graven only on stone over their native earth, but lives on far away, without visible symbol, woven into the

stuff of other men's lives."

Bill, we are confident you will

go on to new achievements.

But your deeds are already woven into the fabric
of our lives, into our policy, into our way of
perceiving the world. And the Fulbright Program will
live as the visible symbol of your gift to mankind.
We will always be grateful.

On behalf of the past and present members
of the Board of Foreign Scholarships, it is now
my honor and pleasure to present you with this
scroll of appreciation.

2

MR. AUCHINCLOSS: Mr. Secretary, we thought we would look at this as sort of a year-end review, coming as it does in what will be our last issue of 1974. And we would be interested in knowing what, to you, looking back this year, has been the greatest satisfaction, and the greatest disappointment in the conduct of American foreign policy.

SECRETARY KISSINGER: Well, you know, strangely enough, the greatest satisfaction was that we have managed the transition without a disaster. I mean I can cite specific events, which gave me a greater thrill. Of course, this was a rather heart-breaking period. But I was extremely worried that as one went through this period, when the central authority was in the problem of transition might create weaknesses and create basic problems in the structure of our foreign policy.

I considered that the most satisfying thing.

Of course, I can mention individual events, you know. The greatest thrill I got out of the Syrian disengagement.

But I am trying to think of events of lasting significance.

3

MR. VAN VOORST: Did that transition slow down the
development of any policies? Was there a hiatus in which
you could not really function very well because of the
transition problem?

SECRETARY KISSINGER: I would say from July to
October was a period in which we could not act with
decisiveness.

MR. AUCHINCLOSS: Did you ever see what you
thought were signals that this weakness in the central
government was being exploited overseas?

SECRETARY KISSINGER: I knew that when you have
a change of administration -- this has absolutely nothing
to do with the merits or demerits of the individual --
when you have a change of administration -- this was true
in every change I have seen -- the problem wasn't that it
was exploited in the sense of threats. The problem was
that for a foreign leader to make a commitment to the United
States involves, one, a judgment on the merits of proposals,
and secondly, a domestic political commitment. Because
whatever he thinks of the merits of our position, if we
cannot carry through our side of it, he loses his own
domestic credibility. So every negotiation was getting
more and more difficult because it involved the question

4

of whether we could in fact carry out what we were
negotiating.

Secondly, we were not in a position to press
matters that might involve serious domestic disputes.
And I think this affected to some extent the summit in
Moscow in July. But it affected many other things in
more intangible ways.

You know, when you discuss foreign policy journalistically, which is what you have to do, there is always a tendency to look at it in terms of black and white, or in terms of at what point did a certain thing happen. In fact, most of the major foreign policy decisions with which I am familiar depend on an accumulation of nuances. And it is never very easy to say what set of nuances brought about a qualitative change. I think this is the situation in which we were, say, from about July until October or so, when we started getting momentum again.

MR. KLEIN: How do you rank the SALT agreement
in Vladivostok in achievements, in the list of achievements
for this past year?

SECRETARY KISSINGER: Very high, and of more
permanent significance than perhaps anything else that
was achieved. The various disengagement agreements were

(id)

5

dramatic and important, because they reversed a trend
of a slide towards another outbreak of a war and may
have set the stage for making some important progress. But
I think in terms of permanent achievement, the Second SALT
Agreement I would rank almost at the top. And I think
it will be seen like that historically.

MR. VAN VOORST: How do you account for all
the criticism of it, then, in the beginning?

SECRETARY KISSINGER: Well, I think we have a
difficult domestic situation right now. I think there
many people who remember, or they think they remember that
foreign policy was used to achieve certain domestic effects
in '71 or '72. I am not saying I agree with this. But
I think it is in the back of some people's minds.

Secondly, there is a general atmosphere of
disillusionment with government.

Thirdly, there is a basic problem right now that there is no clear constituency as of this moment. The liberal intellectual community, which used to lead American foreign policy, was alienated for a variety of reasons from the Nixon administration, and therefore from all administrations for a while. And I think we didn't present it in a very good way.

CLO

6

I was in Tokyo. Many of the people who came back didn't really know a great deal about all the nuances. We didn't have the aide memoir set, so we wanted to hold up explaining it.

Now, what is the significance of this agreement?

The nature of the nuclear age is the escalation of strategic arms based on the expectation of what the other side is doing.

Secondly, the claims that are then made by each side in order to justify what they are doing, in anticipation of what the other side is doing, that cycle should be effectively broken by this agreement.

From the point of view of overkill, it doesn't make any difference whether the level is 2400, 2200, 2000 or 1800.

One has to get one's priorities right. The first objective was to get that cycle of a self-fulfilling prophesy interrupted. I think that has been substantially achieved. Once that becomes implemented and becomes built into the planning of both sides, I think the negotiations on reductions will be relatively simple.

MR. KLEIN: Do you see those negotiations for reductions taking place before the ten-year period is over?

(lc)

7

SECRETARY KISSINGER: Yes. In fact, we have fixed that in the aide memoir. A number of people have said that the reductions were supposed to start after 1980. The announcement in fact said no later than '80, '81, negotiations should start for reductions after 1985. We have eliminated that from the aide memoir. So it is quite clear that negotiations can start as soon as possible and can take effect as soon as they are agreed to.

MR. VAN VOORST: But even the friendly critics, people interested in our arms control, have a couple of substantive objections to it.

SECRETARY KISSINGER: Like what?

MR. VAN VOORST: (a), the question of whether in fact the MIRV levels permit a counter-force capability; and (b), whether in fact this isn't almost a free hand for the Pentagon to begin new construction programs.

SECRETARY KISSINGER: Well, it depends on what you compare this with. The agreement has to be compared with what would have happened in the absence of an agreement -- not with what a theoretical model is that one might want.

All our intelligence estimates indicate that in the absence of an agreement, Soviet MIRV levels would be substantially higher than they are under the agreement, as

8

well as Soviet total levels, which in turn would have
triggered another series of moves by us.

The so-called new construction programs are
the minimum construction programs that may have been planned,
but they would certainly have been accelerated and expanded
if the Soviet Union had in fact produced up to the level
that our intelligence estimates thought they could, and not
only could, but would. I am talking now about the medium
intelligence estimate. I am not talking about the high
intelligence estimate. You know, they make three -- low,
medium and high. Both of the levels are below the low
intelligence estimate, and substantially below the medium
intelligence estimate.

Now, on counter-force strategy.

Fixed land-based missiles were going to be
vulnerable in the 1980s. And even the estimates that I
saw were that anything above 400 Soviet MIRVed land-based
missiles would produce a counter-force capability. Four
hundred was totally unattainable, because the Soviet Union
rejected in July a proposal for substantially more than
400, for a five-year period.

Now, there is a myth that is beginning to develop,

9

which is that in July we made a proposal of more severe
limitations on MIRVs, and that this for some curious reason
was abandoned between July and December.

Well, this simply is not true. We made a proposal
first of all for a five-year agreement. If you double
the number that we proposed for the five-year agreement,
for a ten-year agreement, you would have a higher number
than the one we settled on. So therefore that just is not
correct. Even the number we proposed in July was above
the level of what the Pentagon would consider a counter-
force capability. But when you talk of counter-force, you
talk counter-force against fixed land-based missiles, which
in my judgment, no matter what you do, are going to
become vulnerable in the 1980s.

MR. KLEIN: Perhaps we should move on to another
question relating to East-West detente.

SECRETARY KISSINGER: How about throw-weight?
Don't you want to talk a little bit about throw-weight?

Go ahead.

MR. KLEIN: We could. But we have so much ground
to cover.

SECRETARY KISSINGER: I'm joking. I don't think
most people know what throw-weight is.

MR. KLEIN: I think you are right.

(CLC)

10

The Russians came out with a statement today that at least could be interpreted as very negative about the provisions of the trade bill.

SECRETARY KISSINGER: Yes.

MR. KLEIN: Insofar as their statement that they are not going to make any guarantees about emigration, Jewish emigration from the Soviet Union.

Does this concern you?

SECRETARY KISSINGER: Yes, it concerns me. Certainly there is no one in town who has not heard me warn about this for years and months.

I should just review the record.

Without saying anything, without making any claims for it, we have managed to increase Jewish emigration from 400 to 35,000 before any of this agitation started. We had managed to get a list of hardship cases, in which over half of the hardships cases were dealt with. We never claimed it; we never took credit for it. We never said this is a result of detente. We just permitted it to happen. Not just permitted it to happen -- we just encouraged it to happen.

We have warned constantly not to make this an issue of state-to-state relations, because we were afraid it would

(ic)

11

lead to a formal confrontation.

We acquiesced when statements were made by some of the participants in the negotiations which implied that the Soviet Union had yielded to pressure, because we thought the result was more important to us.

The fact of the matter is that the major issue of the negotiations was how we could find a form of words which would meet the needs of some of the people with whom we were negotiating for public documents, without claiming that they represented a commitment by the Soviet Government. This was the major part of the negotiation -- not with the Soviets. Although there was a negotiation with the Soviets.

I regret that such claims were made of what this proves on how to negotiate with the Soviets and how repeatedly it was said, for example, "If Kissinger said it couldn't be done, now let him go back and renegotiate the Vladivostok agreement, because there he also says it cannot be done."

I was very much afraid this would happen. I tried to ease it by my testimony before the Senate Finance Committee, which is available to you.

Now, I feel that the issue of Jewish emigration is a human problem. There is no legal agreement we can

12

make with the Soviet Union that we can enforce. Whether
the Soviet Union permits emigration depends on the importance
they attach to our relationship and, therefore, on the whole
context of the East-West relationship.

If we can maintain a commitment to detente in the
Soviet Union, and if we make clear that this is somewhat
related to the emigration question, we have a chance. But
what we have had is, first, excessive claims, or at least
substantial claims. Then, what I frankly had not
noticed is that the Ex-Im Bank bill has been encumbered
with many amendments that to all practical purposes
it is impossible to make loans of any substantial size
to the Soviet Union. There is a limit of $300 million
for four years, which is $75 million a year. Any energy-
related loan has to be approved by Congress, opening up
the possibility of more restrictive amendments. Since
loans were more important to the Soviet Union than MFN,
and since they are worse off now, after three years of
detente, and even after increased Jewish emigration, with
respect to loans, than they were to begin with, when
there was no restriction, I think we have here a combination
of circumstances that have brought this result.

Now, I do not believe that this need be conclusive.

(10)

13

And I think the original conditions, where we can use our
influence, still obtain.

But one cannot simply keep saying that the Soviets
must pay something for detente, and then not have anything
in the detente for them on our side.

MR. AUCHINCLOSS: Do you see any signs that detente
has led the Soviet Union to play a more positive role in
the Middle East?

SECRETARY KISSINGER: I think the Middle East is
a very complicated issue for them and for us.

I do not believe the argument that the Soviet Union
produced the 1973 war. On the other hand, the Soviet Union
has not been prepared to risk its relationship to the Arabs,
or to some of the Arab states, for the sake of Middle East
tranquillity. And what it proves is that detente does
not mean that the Soviet Union and we have become collaborator
but that we are partly rivals, partly ideologically
incompatible, and partly edging towards cooperation. But
the Middle East has been an area where cooperation has been
far from satisfactory.

MR. VAN VOORST: Do you think in your talks with
the Soviets since that war you both recognize the intrinsic
dangers, that detente may help a little bit the next time

14

around?

SECRETARY KISSINGER: Well, one difficulty has been that there have been several participants in the Middle East conflict who did not want an extremely active Soviet role. This was one inhibiting feature. The second is that a cooperative effort with the Soviet Union depends on the actual positions the Soviet Union takes. If the Soviet Union takes positions which are identical with one of the parties, then we are better off dealing with those parties. What do we then gain by dealing with the Soviet Union to have them tell us what, for example, Syria and Iraq think? We are better off dealing with Syria and even Iraq directly.

So an active mediating role would depend if both sides are willing to look at the problem with whatever degree of objectivity they can muster. If not, we are better off dealing separately. And I know there are some proposals that we should deal cooperatively with the Soviet Union on. But cooperatively with the Soviet Union now would mean endorsing some of the extreme demands, that we have been offered no other basis.

MR. VAN VOORST: Couldn't we arrange a much more cooperative arrangement with the Soviets?

SECRETARY KISSINGER: If we can, we are prepared to

15

do it. If the Soviet Union is prepared to look at the
situation from a general point of view, we are prepared
to do it. We have certainly not endorsed every Israeli
proposal.

MR. KLEIN: What about the Palestine Liberation
Organization, which has recently been recognized as a major
force in the area? What would be the necessary condition
before the PLO and Israel, for instance, could sit down
together and talk?

SECRETARY KISSINGER: It is impossible for the United
States to recommend negotiation with the PLO until the PLO
accepts the existence of Israel as a legitimate state. As
long as the PLO proposals enviage, in one form or another,
the destruction of Israel, we don't see much hope for
negotiation.

MR. KLEIN: There have been many slips of the
tongue, or supposed slips of the tongue, by a number of
American officials, suggesting that Israel should begin
to negotiate with the PLO. These have all been retracted.
But there have been so many --

SECRETARY KISSINGER: There have never been from me.
You know, it is possible sometimes to speak generally
without meaning exactly what has been said. But what I have

16

said to you on the PLO is the United States policy and will
be maintained.

MR. AUCHINCLOSS: What do you think is the next step towards trying to secure a Mid-East peace?

SECRETARY KISSINGER: Well, we have been favoring a step-by-step approach because of our fear -- of our concern -- let's not use the word "fear" -- that if all issues are lumped together, then an explosion is almost inevitable; that they become increasingly intractable. And that none of the parties would be able to make concessions, and it leads to a set of unilateral demands.

We have favored a negotiation between Hussein and Israel, which unfortunately, just as it was beginning to get under way, or at least had been agreed to, was prevented by the Rabat conference.

MR. KLEIN: We were taken by surprise by Rabat.

SECRETARY KISSINGER: We were not taken by surprise by the Rabat conference. We thought that that was a very probable outcome. The only other outcome we could envisage was a stalemate, in which nobody would be designated as the negotiator. We were not taken by surprise by Rabat.

There were many reasons why Rabat went the way it did, into which I don't want to go now. But be that as it

17

may, there is of course a possibility for an Egyptian-Israel
negotiation. I don't know what other possibilities exist.

MR. VAN VOORST: Do you share the concern of many people now who feel that things seem to be getting out of hand; that both sides are hardening positions with a lot of public statements?

SECRETARY KISSINGER: Well, I have been out through
several Mid-East negotiations, and they run a fever cycle.
There is a great deal of excessive talk on both sides, by
both sides posturing themselves vis-a-vis their public to
prove that they have been tough, unyielding, and didn't make
any concessions. We are now in the relatively early phases
of these exchanges. I am not pessimistic. I think there
is a chance.

MR. VAN VOORST: These statements don't really bother you?

SECRETARY KISSINGER: Well, yes, the statements bother me. And I could have done without some of the statements that came from both Israel and Egypt in the last week. But the question is do they make a negotiation impossible. Obviously, as a result of the Rabat decision, as a result of the general increasing complexity of the domestic situation of almost all of the participants, negotiations are

18

more difficult now than they were a year ago. The stakes have
also become somewhat higher. But I believe that progress
is possible. We have to do it now by different methods than
we did last year. It isn't so important now and not even
possible now to do it in quite so dramatic a way. But I
think negotiations are still possible. If I compare where
we are now with where we were at various stages during the
Syrian negotiations, I think it looks less desperate by far
than it did then.

MR. KLEIN: Are you going to de-emphasize shuttle
diplomacy?

SECRETARY KISSINGER: I think there was a time for
shuttle diplomacy, and there is a time for quiet diplomacy.
I cannot accept the principle that whenever there is something
to be settled, that the Secretary of State must go to the
area and stake his personal prestige and the prestige of the
highest administration official dealing with foreign policy
on the conduct of the negotiation. I don't think that is a
healthy situation. And therefore, while I don't exclude
that in a concluding phase, or in a critical phase, I might
go into the area for three or four days. But I must not
be used as everybody's security blanket, or maybe everybody's
fall-guy.

(10)

19

MR. VAN VOORST: You have expressed optimism that the negotiations can continue, even after hearing Alon's position. Have you had any response from the Egyptians yet?

SECRETARY KISSINGER: I maintain an optimistic attitude, even after hearing all the exchanges in which I have been involved. I don't want to go into any individual one.

MR. AUCHINCLOSS: Do you think there can be any --

SECRETARY KISSINGER: I don't say it cannot fail. I say it has a chance of succeeding.

MR. AUCHINCLOSS: Do you think there can be any further progress before Brezhnev goes to Egypt in January?

SECRETARY KISSINGER: I think it would be a grave mistake for the United States to gear its own policies, sense of urgency, or whatever, to the travels of the General Secretary of the Soviet Party. Because otherwise we will be given deadlines all the time by his visits. We will negotiate as rapidly as we can. The art of these negotiations is to make sure that all of the parties feel that their essential interests were safeguarded, and that their dignity was respected. And we don't want to get into the business of imposing settlements or of getting ahead of the parties.

20

So our pace will be set, not by Brezhnev, but by how
rapidly the parties come towards each other.

MR. VAN VOORST: But concretely, the trip of
Brezhnev really reinjects the Soviets into this whole equation.
doesn't it?

SECRETARY KISSINGER: That is up to the Soviets and
to the Egyptians.

MR. AUCHINCLOSS: The resupply of Israel in military
equipment, both during and after the 1973 war, seems to have
stripped the American military establishment to some degree
of its materiel. Does this suggest that the U.S. will
have a difficult time resupplying Israel in any war of extension?

SECRETARY KISSINGER: Well, I understand from
Schlesinger that these stories about stripping the American
military establishment are vastly overstated. And I understand that production in many of the essential categories is
being stepped up. I don't think there is any physical
incapacity to do what is necessary.

MR. KLEIN: Some people say that it would perhaps
be in Israel's advantage to find an excuse to launch a pre-
emptive strike, because it would break the bond, whatever
bond exists, between the Arab countries and the United States

(lc)

21

that you have laboriously built up over these many months,
throw the Arabs completely back into the camp of the
Soviet Union, trigger another oil embargo, which would
pressure Europe, bring enormous pressure to bear on Europe,
which in turn would bring pressure to bear on the United
States.

SECRETARY KISSINGER: Well, I have heard the
theory. But why should that be in Israel's interest?

MR. KLEIN: Because finally the United States
would have no choice but to side with the Israelis,
thereby polarizing the area.

SECRETARY KISSINGER: But the pressure of the
Europeans would be against Israel, not for Israel.

MR. KLEIN: True. But wouldn't the United States
finally resist that pressure? Wouldn't it have to resist
that pressure?

SECRETARY KISSINGER: I have heard that theory --
not quite pushed to the extreme to which you have.

Based on my talks with Israeli leaders, I do not
believe that any responsible Israeli leader operates on
this assumption, because when a war starts, if you start
a war, that may start events of incalculable consequences.
And while some of the events might happen the way you

22

described, they also could take a different form. And above all, they could take a different form if extended over a long period of time.

I think the responsible people in Israel realize that improved American relationship with Arab countries, or with some of the Arab countries, is also in the interest of Israel, because it enables us to be a moderating influence on Israel. It doesn't mean that it wasn't a more convenient world when the Middle East was polarized. But the Israeli leaders with whom I am dealing I think are genuinely interested in moving towards peace. It is a very complicated problem, how to do it. Their margin of survival is so much narrower than ours, that it is hard for Americans to understand the concern Israelis must have. But I do not believe that any Israeli leader would deliberately engage in such a reckless course.

MR. KLEIN: That margin of survival raises another question, which I think is now in the minds of many people around the world, which is, geopolitically given the oil weapon that the Arabs now have, and its impact on the west, and how that affects western support finally of Israel, can Israel expect to survive?

SECRETARY KISSINGER: I think the survival of

(lc)

23

Israel is essential. I don't think that the United
States, and finally Europe, will negotiate about the survival
of Israel. I think this would be an act of such
extraordinary cynicism that the world would be morally
mortgaged and in fact practically mortgaged if it ever
happened. But it won't happen.

MR. VAN VOORST: In your list of pluses and minuses
for the year, we have not touched on energy yet.

SECRETARY KISSINGER: I don't want this printed --
but Golda Meir said to the President, "Some people said
we should be sacrificed for oil. I have two reasons I
am against it. One, it won't work; and secondly, I don't
like to be sacrificed."

MR. KLEIN: That was off the record.

MR. VAN VOORST: Turning to energy policy -- when
you look back on this year, and look at the pluses and
minuses --

SECRETARY KISSINGER: I think next to SALT I
would consider the most lasting achievement to be the
energy policy that we started. I think the Washington
Energy Conference, the International Energy Agency, the
Emergency Sharing Program, and the measures which now
under the impact of the agreement in Martinique will

almost certainly follow, I think may be the beginning,
not just of enabling the West to deal with, or the
industrialized countries to deal with the energy problem,
but the beginning of a restructuring of the advanced
industrial countries to make their structure more relevant
to the problems with which they now have to deal, more
relevant than a purely defense one.

MR. AUCHINCLOSS: Could you amplify that a little
bit? What sorts of structure are you referring to?

SECRETARY KISSINGER: The structure that emerged
in the immediate post-war period was essentially geared
to military defense. Some of the difficulties that emerged
in the sixties and early seventies as a result of the
emergence of a European unity and great self-confidence,
and the emergence of Japan, were that the military organizati
and the political and economic organization got out of phase
with each other, and that it was difficult to bring them
back into phase by purely military arrangements. This is what
I attempted to say in my Year of Europe speech, which was a
little premature from that point of view, but many of
whose basic principles are now being accepted. I mean it is
an interesting commentary that in April 1973 many of our
friends were highly critical about the attempt to link

25

economic, political and military considerations. At the
last NATO meeting, they insisted that without a full
discussion of economic considerations there was no basis
for common defense. And it was the Europeans who insisted
on it, and not we.

Now the problem of how the advanced industrialized
nations can give effect to the realities of inter-dependence
is one of the most serious problems of our time; in the field
of energy, in the field of food, and, I suspect, in the field
of the whole nature of the economic policies.

I think the energy effort hopefully is going to be
the first step in an increasing effort in this marriage.

MR. KLEIN: Is American policy still, or was it
ever, to so organize the consuming west and industrialized
nations so that ultimately we could negotiate a reduction of
oil prices from the producers?

SECRETARY KISSINGER: We would like to create the maximum incentives for a reduction of prices, and, failing that, the maximum capacity to withstand the high prices. I think the two things are related.

If we have effective conservation measures,
if we develop alternative sources of energy, if, as seems
to be happening more and more, the pockets of oil are

(LC)

26

discovered, the balance between supply and demand must change. And while I have heard statements that the producers can always keep up with us by cutting production, when you talk about a thirty-three percent cut in production, and how to distribute this over countries, many of which need the revenue for their development programs, they will find this increasingly difficult to implement. Theoretically it is possible. If on top of it we have measures of financial solidarity, we can reduce the effect of the balance of payments deficits, and if we have an emergency sharing program, all of which I think will be in effect within months -- the emergency sharing program is already in effect -- it reduces the capacity of these countries to use embargoes for political effect.

MR. KLEIN: But many of President Ford's advisors have been urging him to take stringent conservation measures, and he has resisted so far.

SECRETARY KISSINGER: I am convinced that within a month the President will announce a program that will give effect to what I have stated. When I made the speech in Chicago, he went over it several times. He was fully aware of the domestic consequences of our international position. He wanted to give voluntary restraints a chance

(ie)

27

to operate. But I am confident that there will be an
adequate program.

MR. VAN VOORST: You have just seen Giscard and
you saw Schmidt earlier. What is your feeling of what their
motivation is now, if they in fact are going to be more
cooperative in these international structures? Are they
really frightened to death of what is going on in Europe
and the world?

SECRETARY KISSINGER: I think that is right. I
think they are concerned.

MR. VAN VOORST: Giscard, obviously, from the reports,
came to Martinique relatively cooperative. Schmidt is
very concerned, as expressed here, with what is happening.

SECRETARY KISSINGER: I think there are a number of
factors. I think all of these countries are convinced that
without a greater interaction of their economic policies,
there would be an economic disaster for everybody. And
everybody realizes that they cannot deal with the economic
policies alone.

Secondly, there is a growing realization that the
political demoralization of the industrialized countries
must be arrested. And in turn it can be arrested only
if their governments can be seen to be coping with the

problems that confront them. And that again will drive
some more in the direction of interdependence.

Right now it is really boring to discuss what
formula of consultation would be adequate, because the
necessities that are imposed on us by the energy crisis
would produce their own formula.

MR. AUCHINCLOSS: Do you think the American public
is prepared for some of the consequences of the degree
of cooperation you are talking about? I mean ultimately
the cooperation agreements call upon the industrialized
country in the best shape to help the one in the worst shape.

SECRETARY KISSINGER: All I can say is this. It
is the absolute duty of leaders to tell the people what
they believe is required. You can make your life easier
by not putting tough choices to the public. Then when the
inevitable catastrophe occurs, you have lost not only
credibility, but legitimacy. So I don't think we really have
every choice. I think the administration will have to tell
the public what is needed. I think this is basically a
healthy society, and I think there will be support. But
even if the worst happened and there were not support,
it still would not dispense us of the obligation to put
forward what we think is needed.

(w)

29

MR. VAN VOORST: Is Western Europe also basically healthy? You have expressed some concern about certain countries.

MR. AUCHINCLOSS: Portugal, for example.

SECRETARY KISSINGER: I think in many western European countries there is a well-recognized political crisis. I don't want to go into individual countries.

MR. KLEIN: If all else should fail, oil prices were not reduced, and the West did not organize itself in the way to cope with the financial problem, would the United States consider military intervention in the Middle East to secure oil at prices that we can afford?

SECRETARY KISSINGER: I don't think that would be a cause for military action.

MR. KLEIN: You don't think that the financial bankruptcy of the West would be a casus belli?

SECRETARY KISSINGER: I don't think financial bankruptcy of the West is unavoidable by other means. I think we will find other solutions.

MR. KLEIN: That doesn't answer the question, with all due respect.

SECRETARY KISSINGER: Well, what we would do if there were no other way of avoiding financial bankruptcy

30

and the whole collapse of the western structure, I cannot speculate on that -- because I am convinced that we won't reach that point.

MR. VAN VOORST: And the visit of the Constellation in the Persian Gulf wasn't meant --

SECRETARY KISSINGER: If you observed the situation, you will find that we have had an aircraft carrier in the Persian Gulf for two-thirds of the time since the October War.

MR. VAN VOORST: Can we come back to your specific question. Mr. Secretary, you have mentioned specific countries occasionally with which you are concerned, and particularly the possibility of Communist take-overs in some of the governments on the southern coast. Is there anything we can do? How serious is it going to be?

SECRETARY KISSINGER: Well, you know, it is obvious that for a Secretary of State it is not possible to comment in an on-the-record interview about the domestic situation of countries with which he has to deal. But as you know, we have announced a program of stepped-up economic aid for Portugal, to indicate our interest in the survival and fostering of democratic institutions there.

MR. AUCHINCLOSS: I would like to pick up on

31

Ambassador Scali's speech to the UN the week before last.

MR. KLEIN: May I ask another oil-related question --
unless this is oil-related.

MR. AUCHINCLOSS: No. Go ahead.

MR. KLEIN: I would like to ask a question regarding
again the oil price. An Assistant Secretary, Mr. Enders,
was quoted at a recent seminar as proposing the possibility
of an $11-per-barrel oil price, as something that would
help stimulate --

SECRETARY KISSINGER: Did he give that figure?

MR. KLEIN: I believe he did -- floor price. But
there is a great deal of talk that if the price of oil --

SECRETARY KISSINGER: Go ahead. It's a good
question.

MR. KLEIN: Because there has been a great deal of
speculation that was fueled by Enders that we were toying
around with the idea of trying to maintain a floor price under
oil to stimulate private investment in --

SECRETARY KISSINGER: But there is a difference
between a floor price -- first of all, as to Enders, there
is no governmental decision on that issue. And I really
answered that question at a press conference in Brussels
last week.

(c)

32

MR. KLEIN: Yes. You said he was speaking academically
in an academic environment, or something.

SECRETARY KISSINGER: But then I explained in greater detail what the problem of the floor price is. The discussion on floor price in the government right now has not yet been resolved.

Secondly, there is no sense setting a floor price at current levels. This would be cooperating with the OPEC countries.

So the problem of floor price has two aspects.
One, if you make heavy investments in alternative sources, and if as a result the price breaks, do you want to give the countries that have now produced a need for the alternative sources the opportunity to bankrupt them by dropping the price below where it is economically feasible. The other aspect is, can you give the countries that have produced high prices an opportunity to lower them by guaranteeing them a lower price for a longer period of time than would otherwise be the case.

These are the arguments roughly that are behind the
floor price issue.

But in any event, they require that the floor
price be set substantially below the current oil prices,

(lc)

33

though maybe above the prices that are foreseeable if all
the alternative sources and all the new discoveries of
energy come on stream simultaneously.

MR. AUCHINCLOSS: But a price substantially below
the current oil price would still be enough to encourage
production --

SECRETARY KISSINGER: Substantially below the
current price, but still high enough to encourage alternative
production.

MR. KLEIN: Are you in favor of a floor price?

SECRETARY KISSINGER: I can't give a check-list
of my recommendations, because if they are not accepted,
then I lose stature. But -- well, I don't want to go into
it.

MR. AUCHINCLOSS: Let me turn to Ambassador Scali
and the third world in the United Nations.

What concrete steps might the United States and the
western countries take to try to induce the third world
countries to pursue a more realistic course in the United
Nations?

SECRETARY KISSINGER: Well, I think the third
world countries have to accept the fact that they too live
in an interdependent world, and that they cannot both insist

34

on cooperation from the advanced industrial countries
and constant warfare -- economic or political -- against
the advanced industrial countries. The spirit of cooperation
has to be mutual. To some extent there are going to be
conflicts. That is unavoidable. But if you have a
group of 77 nations that automatically vote as a group,
regardless of the merits of the issue, then the United
Tations becomes a test of strength, and then the web
of cooperation on which the development of these countries
ultimately depends will be severely strained.

And I must say that in future sessions of the United
Nations we will look more carefully at the degree of
mutuality in the positions of the countries with which we
are dealing.

MR. KLEIN: Could you just repeat the end of that?
In future sessions of the United Nations --

(At this point, the tape recorder gave out, but
the shorthand reporter didn't.)

SECRETARY KISSINGER: We will look more carefully
at the degree of reciprocity and mutuality in the actions
of various nations.

MR. AUCHINCLOSS: Was the decision reported this
morning of the United States not to join that group devoted

35

to aid to the poorer countries intended in part as a
signal to the countries?

SECRETARY KISSINGER: It was part of the reason.

MR. KLEIN: Can you conceive of an issue in which
the tyranny of the majority continues to work at the
United Nations, in which the United States might decide
to at least temporarily suspend itself from cooperating
with the United Nations?

SECRETARY KISSINGER: I can conceive that if an
issue is too outrageously decided, that we would suspend
ourselves in relation to that issue. But it is hard to
answer this question in the abstract.

MR. VAN VOORST: You are thinking of one specific
case -- if they were trying to suspend Israel, for example?

SECRETARY KISSINGER: Well, let's not raise any
specific issue.

MR. KLEIN: On another question of reciprocity,
our detente or rapproachment with the People's Republic of
China seems to have been stalled. And I wonder --

SECRETARY KISSINGER: Well, this is the constant
position of Newsweek magazine. But it is not our position.

MR. KLEIN: I'm sorry to interrupt. Most of the
scholars whom we talked to --

36

SECRETARY KISSINGER: But the scholars are confusing two things, if I may say so. The scholars are confusing their access to the People's Republic of China with our diplomatic relations with the People's Republic of China.

I was told when I was in China that there was one fellow who wanted to do a linguistics study in some part of the People's Republic and who turned into a passionate advocate of immediate normalization so that he could do his linguistics study.

I believe that on the level of diplomatic relations, bilateral relations between the two countries, that relations are essentially on course. I found that essentially confirmed by my visit to the People's Republic. It is a relationship of practical necessity, in which two countries have made a decision to cooperate for limited objectives with each other. I think that policy is on course. Now, there are some others that may not be. But I don't accept the proposition that our policy is stalled.

MR. VAN VOORST: Mike Mansfield came back, though, saying --

SECRETARY KISSINGER: Is he back?

MR. VAN VOORST: He was telling people, when he

37

was out, that Chinese officials were expressing to him
concern on the slow pace of the development.

SECRETARY KISSINGER: Well, but what I read in our cables was he said some Chinese officials were expressing concern to him, but that on the whole the relationship was going along, on course. Well, I will have to get the direct and correct quote. That with the expected ups and downs it was adequate. That is what I understood him to say in the cable that I saw.

In any event, if you ask a Chinese official - I mean I will not want it printed - if you ask a Chinese official is he satisfied with noramlization, of course he is not satisfied with normalization.

Our problem is quite different.

And this is all not to be used, but for your guidance.

All these gimmicks, about a liaison office in
Taipei, embassy in Peking, consultate in Taipei, the
embassy in Peking -- that is easy. That we can do tomorrow
morning. Anybody can get that done. I don't know what
the exact mix would be. I do not, for example, believe
that the exchange of liaison office for embassy is possible,
because of the symbolism of putting Taipei on the same

(lc)

38.

level as the PRC had been here. But something probably of that nature is workable.

For us the big problem is whether we agree that we are totally indifferent to the military occupation of Formosa. In the present state of the Middle East, in the potential precarious position of Berlin, for the United States to say that there is some price for which it will sell out, or turn over people with whom it has been closely associated for twenty-five years to a purely military solution seems to me an extremely dangerous course. Particularly compared to what are we going to get for it.
I don't notice that our lisiaon office has less access in Peking than embassies have. And therefore, I make a distinction between the diplomatic contacts and bilateral international relations and the normalization process. We know the price we have to pay for normalization. We have chosen not to pay it up to now. We don't see the enormous benefit that we would get in return for it.
And given our total international responsibilities, it seems to us an extremely excessive price to pay.

Now, this is not to be used.

MR. VAN VOORST: Although you told it to the committee this morning, I gather.

39

SECRETARY KISSINGER: Yes. Well, I thought this
was an executive session.

MR. VAN VOORST: But in practical terms --

SECRETARY KISSINGER: We have ten more minutes.

MR. KLEIN: Perhaps we should move on to --

MR. AUCHINCLOSS: Let me ask one quick question on
Cuba.

SECRETARY KISSINGER: How about will I resign next
week.

MR. VAN VOORST: That is the last five minutes,
Mr. Secretary.

Just one brief question, to try to flesh in
something on China. What have been the practical effects
of the normalization or all of your trips to China?

SECRETARY KISSINGER: The practical effects of
our trips to China have been that the Chinese understood
the nature of our foreign policy. We are not spectacularly
surprised that they pursue a policy of their own which
in its objective tendency is not unhelpful, although
that is not their intent.

MR. KLEIN: You have a question on Cuba?

MR. AUCHINCLOSS: Yes. Do you think that it is
reasonable to think that in the course of the next year we

(c)

40

might move towards a normalization of relations with Cuba?

MR. VAN VOORST: As Sol Linowitz suggested in his visit this week?

SECRETARY KISSINGER: Well, when we have the Cuban policy to announce, we won't do it through a private citizen. What I said to Sol Linowitz is that we were prepared to accept a two-thirds vote of the OAS, and that we have been led to believe by responses of this meeting that this two-thirds vote had been assured. We found ourselves suddenly in the position where we were asked to produce votes for a resolution which we could not possibly sponsor, given the history of our involvement in the sanctions. I pointed out to Sol Linowitz that there will be another occasion in a less structured meeting in Buenos Aires to discuss the Cuban issue, where the necessity of producing votes is less intense, and where one can then chart the course on a hemisphere basis more effectively.

I think the debate, or the discussion in the hemisphere system on Cuba has been open. It was not ended in Quito. And I think there will be some evolution during the next year.

MR. VAN VOORST: With fifty percent of the American population willing to accept ties, what is our hang-up at this late date -- the pros and cons?

41

SECRETARY KISSINGER: We are open-minded on the subject.

MR. AUCHINCLOSS: Sounds like you rather wish that they had gotten that two-thirds majoriy in Quito.

SECRETARY KISSINGER: We certainly did nothing to prevent it.

MR. VAN VOORST: Didn't do anything to help, either.

SECRETARY KISSINGER: Look, we went there on the assumption -- we were told prior to it that the two-thirds vote had been assured. If you look at the history of our relationship, the history of the sanctions question, for the United States to organize the end of the sanctions at a meeting that was called on the basis that the Latin Americans wanted to take their decision themselves was too cynical an act.

MR. AUCHINCLOSS: Why don't we turn to some of the more general questions.

Could you tell us something about the differences of working for the two Presidents you have now worked for -- President Nixon and President Ford?

SECRETARY KISSINGER: Well, this is never a good question to which you can give a satisfactory answer, you know. Historically I may be able to do it. There is the obvious

42

difference of personalities, with which you are familiar.
President Nixon was a much more complicated man. President
Ford is much more direct. President Ford uses regular
procedures, more strictly. President Nixon had more
experience in foreign policy before he came into office.
But I don't really think it is a fair question -- a
question to which I can give a satisfactory answer.

MR. VAN VOORST: Let's ask perhaps a different
question. How do you evaluate your own situation now at the
end of the year? How has it evolved?

SECRETARY KISSINGER: I have an extremely --
first of all you can obviously expect me to say this,
obviously it is true. I have an extremely close personal
relationship with President Ford.

MR. VAN VOORST: I was thinking in broader terms.
That is, you have had some flaps on wire taps, and you have
had fights with Congress.

SECRETARY KISSINER: Look --

MR. VAN VOORST: Ups and downs.

SECRETARY KISSINGER: I will have to put the wire
tap problem aside, because this was connected with the whole
Watergate episode, and it had this Kafkaesque quality --
that five years after an event, to reconstruct a situation

43

that was so complex, and which had so many wheels within
wheels, was extremely difficult.

I think the problems with Congress were due to two
factors. One -- that during the period of President
Nixon's crisis, I may have been over-protected from
congressional criticism, because many of the Senators and
Congressmen felt that -- instinctively felt the danger
to foreign policy, which I also felt, and believed that they
had to preserve one area of our national policy from
partisan controversy. So it was inevitable that after that
restraint was removed, that I would rejoin the human race
and be exposed to the normal criticisms of Secretaries
of State.

Secondly, that criticism developed in a period
right after the pardon of President Nixon, when people were
running for office, in a period of enormous emotional
uncertainty.

I have the impression -- I have spent a great deal
of time with Congress in the last few weeks, and I have
the impression, not that I am immune to criticism, which
would not be healthy, but that there is a solid relationship.
We worked out the Greek-Turkish aid problem, I think in
a cooperative spirit.