DR. HENRY A. KISSINGER'S

Address To

The Economic Club of New York

September 29, 1977

Mr. Chairman, Gentlemen, Ladies and Gentlemen when I was invited to address the Economic Club I accepted eagerly because I thought it would be a new experience for you to hear my views on economics. They have been used as an argument against universal suffrage. Then I learned that what you wanted to hear was my views on the Panama Canal. I would like to congratulate the Economic Club for representing so many points of view here tonight on this platform. You have every point of view on the Treaty from A to B. I know this is considered a non-partisan forum and so I as the last Republican Secretary of State am very moved to be able to appear with my friend Sol Linowitz, but I am sure that my friend if he can survive it, Jim Buckley will be eager to tell you that my appearance alone is a bi-partisan gesture. I would like to explain to you why I have decided to support the ratification of the treaties so ably negotiated by Ambassador Linowitz.

First of all I believe that the fundamental change that American foreign policy faced in the late 60's was that henceforth the United States would have to conduct foreign policy not episodically but on a permanent basis. And a foreign policy based on some conception of permanent national interest. We can no longer have delusions that / final solutions to all problems or that we can engage ourselves or withdraw at our own choice. We need a conception of our role in the world that does not change with every

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administration. And that is not perceived as a personal ideosyncracy
because if the United States changes its policy every four or eight years
no matter who is right it is bound to be or bound to become a destabilizing
element in international affairs. Now Sol Linowitz is in a much better
position to explain to you all the details of the Treaties. But it is
a fundamental fact that since 1964 four successive Presidents representing
both political parties have concluded that a new Treaty relationship was
important for the long term security and foreign policy interests of the
United States. All four presidents have engaged in negotiations based on
the conviction that a modernized relationship embodying shared commitment
and responsibility would best assure our basic interest in continuing access
to an efficiently run non-discriminatory secure canal. All four presidents
have felt strongly that the present 1903 treaty does not adequately assure
that interest. They have come to this conviction because these treaties
are not regarded by any country in the western hemisphere as having been
freely negotiated. The Panamanian side was represented by a Frenchman with
a letter of authorization that I think it might be better not to test in an
international court. So the fundamental arrangement, whatever its original
validity, is perceived by most countries as representing an American imposition,
and therefore to reject these treaties would in effect say that the United
States will rest its position in the canal on superior force. Of course
we will be able to do that. And of course we will be able to defend the
canal against whatever the results of such a decision would be. The question
is whether the cost to the United States is worth it. If we can assure our
fundamental interest in the canal by other means our fundamental interest
in the canal is to have free non-discriminatory and neutral access that is
guaranteed by an international instrument, and that is assured by a treaty

of neutrality. I believe that the two treaties negotiated by Ambassadors Linowitz and Bunker achieved this fundamental American objective. Not only is there a legal obligation for free non-discriminatory expeditious and neutral passage there are specific provisions that define what is meant by this. And Article 4 of the Treaty of Neutrality gives the United States the right to guaranty that these provisions are observed.

So that these agreements for a period of 23 years maintain the significant elements of the present directory, after the year 2000 the United States will continue to have the right to guaranty the canal's neutrality and impartial access to it. In other words, I believe that these negotiations have brought to a successful conclusion what four presidents over a period of 13 years have decided was in the American national interest. Of course there is the question whether these treaties will in fact be observed. And whether in making these treaties we do not get ourselves on a sliperative slope in which no sooner are these treaties ratified that they will be challenged. As happened for example in the case of the Suez Canal. I would say that the possibility that these treaties may be challenged can not be discounted. But I would argue that if we have to defend our rights in Panama we are infinitely better off internationally to defend them in the name of a 1977 Treaty freely negotiated and signed in the presence of heads of government of almost all the western hemisphere states, than to defend a 1903 treaty whose validity would be challenged by almost all of the countries in the western hemisphere. I would argue that the new arrangement improves our political capabilities to insist on our rights

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for 23 years it will not affect our military capabilities to vindicate
those rights. And after the year 2000 we must have enough confidence that
the American president will be understanding enough of the fundamental
national interests in neutral passage to use the right that the treaties
give him if there is a real challenge to this security. But I would
argue the case for the treaty beyond the immediate issue of Panama. These
treaties are not a favor we do to Panama because vis-a-vis Panama we can
rest our case on whatever predicate we want. Of course Panama cannot take
the canal away from us. My basic concern when I was in office and when
I supported the negotiations that now came to fruition, was my concern
that the failure to make progress on the Panama issue would poison our
entire western hemisphere relationships. If these treaties are rejected
it would be difficult for our best friends in the hemisphere to support us.

After the signing ceremony one of the presidents of one of the
larger countries invited me to call on him. And I said to him if these
treaties are not ratified you of course will probably criticize us. He
said Yes but that's not the problem. The problem is that nobody in our
country will be able to support you. And that there will be no public
opinion which would be willing to go along with the United States in
defense of the consequences of a refusal to modernize the canal relationship.
Rejection of the treaties would poison our relationship with all the
countries in Latin America on other issues. And leave us for the first
time in our history facing the unanimous hostility of all the nations to
the south of us in our own hemisphere. Now I am not arguing that every

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country would have urged us to make such a treaty privately. There are
many countries in Latin America that would be quite content with the
present situation. The fact is however that not one leader of any
Latin American country has been able to say this publicly. This
indicates that the canal can become and would become a rallying point
for all anti-American sentiment. I'm not saying that if these treaties
are ratified we all automatically have a brilliant relationship within
the western hemisphere. There will be strong anti-american forces in any
event. But failure to ratify these agreements would provide a focal point
for all of the anti-United States feelings. And it would lead to a gradual
disintegration of our relationship in many countries, even where the leaders
deep down in their hearts would not feel very passionately one way or the
other. In other words, a creative western hemisphere policy would become
extremely difficult if not impossible, under conditions of not ratifying
these treaties. I understand the reluctance and concern of opponents of
the treaties. Many members of congress to whom I have spoken tell me
that they are tired of constant American withdrawals around the world. But
this is not the issue. on which to make a stand. I agree with the sentiment
that for a decade, at least, America has been flagulating itself. And has
suffered unnecessary setbacks. Nobody can know this better than those
who were in office during the tradgedies of Viet Nam and others in Africa
and the Mediterranean. But I repeat, on Panama there is no viable alternative.
It is not a question of giving the canal to Panama, it is a question of the
United States ability to distinguish between symbol and reality. To plan
for our future needs and to preserve and in fact enhance our basic interests
in the accessibility, neutrality and security of the canal. Firmest in
defense in essential national interests is vital to any nation, but unreasoning
adherence to the status quo has never been the test of an effective foreign
policy. A nation assures its international position by understanding clearly

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what its interests are and by taking timely and effective action to
safeguard those interests. We have often acted on this principle. At
the end of World War II we embarked on a number of new initiatives that
constituted a dramatic change from the course we had followed in the past.
We did so because we realized that the new circumstances of the post-war
era called for new responses. I firmly believe that the new Panama canal
treaty should be viewed in the same light. They are a step forward over
what has existed before. They present the congress and the people of this
country with an opportunity to modernize an outdated arrangement that has
itself become a threat to the interests it was designed to protect.

I would like to stress a final point. These treaties represent
the most important and serious international undertaking presented to the
congress by the administration of President Carter. A defeat of the
Panama Canal Treaties would weaken the president's national authority at
the beginning of his term. It would jeopardize our entire western hemisphere
realationships. The undermining of presidential authority after all we've
been through would be demonstration of a fundamental weakness and a grave
responsibility for the congress to assume. I feel this all the more
strongly because in my opinion we have every reason to consider that the
new treaties are to our advantage. Therefore I took advantage of this
invitation to express my conviction that even though the Administration
had sometimes implied the creativity, moral insight and history began
together on January 20th, that on this event history began before January 20th
and all those concerned with the national interests of the United States
should support the initiative of the new treaty. Thank you very much.

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Question and Answer Period - Questions: Lawrence Spivak (LS)
Peter Peterson (PP)

Answers: Dr. Kissinger (HAK)

LS: Dr. Kissinger, Nigh Beven, a British so called statesman once said "that in foreign affairs there are no moralities there are only interests." Now without either endorsing that cynical statement what are our vital interests in the canal?

HAK: I believe that the United States has a vital substantive and an important symbolic interest in the canal. Our substantive interest is not the arrangement by which the canal is now operated, our substantive interest is to make certain that we have free unimpeded and neutral access through the canal. These interests need now be protected by a new arrangement because the present arrangement would, over a period of time, so consume our energy in international furor, on the ground, and in western hemisphere relationships that it would be counter-productive. Our symbolic interests is to make these adjustments before we are under such massive pressure that what we do will look as being imposed on us by necessity. And if/once the Panama ... Right now there is no question that we are making this arrangement free of physical pressure and on the bais of a statesmanlike assessment of the long term risks and benefits. Ten years from now after an extensive political and maybe military struggle a similar arrangement might be taken as a significant American retreat. Therefore

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for both of these reasons, I believe that we can safeguard our
vital substantive and symbolic interests in the Canal.

LS: You once said in a speech that morality without security is ineffectual and that security without morality is empty. Now we've had this treaty since 1903, we don't seem to have had a great deal of trouble. There may have been dissatisfaction, an occasional riot, but we've had it for 74 years now and it has worked fairly well. Now why do you want to enter into a new relationship that you're not sure of.

HAK: Well - I am glad to support the treaty but I should be asked why I want to enter into a new relationship - it was

LS: I speak of you on a bi-partisan basis.

HAK: Well - I think that every President, every President, and every Secretary of State since 1964 in assessing the pressures that he saw developing and weighing our interests in a creative western hemisphere relationship against the costs of maintaining the present relationship. All of these senior officials have come to the same conclusion, that if we can get a new relationship that would guarantee free unimpeded access through the canal, we would be better off than with the existing relationship. And they came to this view precisely because they did not want for the demonstration to be made that the price could be very high. In foreign policy the difficulty is that when the scope for action is great the facts are often at a minimum. When the

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facts are in, it is too late to be creative. Once a guerrilla war has started, once embassies start getting burned in Latin America; once industries start getting nationalized — all — and once Panama has become a rallying point for all anti-American sentiment throughout the hemisphere — so that even our best friends and even those who don't much care about Panama can't withstand it anymore — then indeed it may be too late for this agreement to have an impact. And I repeat I'm not predicting that we will not have major problems in Latin America anyway, I want to deprive our opponents there of one focal point around which to rally all our critics. And all of those who wish us ill.

LS: One last question before I turn it over to Dr. Peterson.

You negotiated I think for some four years or so —

HAK: Did you say Dr. Peterson?

PP: I can't stand this — laughing

HAK: There must be something in which I retain an advantage over my own —

LS: Mr. Kissinger — — why has this matter become suddenly so urgent. You say that four presidents have negotiated and failed to come forward with the treaty, why has there been so little success now? Why has this matter now become so urgent?

HAK: Its actually not correct to say that there has been so little success up to now. There has been a progression in the negotiations of these treaties. We ~~inherited~~ inherited when we came into office some

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work that had been done in the Johnson administration. It was
advanced by the Nixon and Ford administrations and it had
reached a point where the essential interests of the United
States had been protected. Then Ambassador Linowitz and
Ambassador Bunker achieved the important addition of Article 4
of the neutrality treaty which gives us the right to guarantee
unilaterally even after the year 2000 the free access to the
canal. And for us now not to proceed when all our essential
objectives have been achieved and when the document that Mr.

Linowitz had negotiated was 90% done in previous administrations —
so that — no I'm just trying to say there was no untoward haste —
there was last year some maybe some untoward slowness due to
unfortunate political developments in this country — but this is
a question that can be asked whenever a treaty is concluded. Why
didn't you wait another year or two — it had gone

LS: No I asked why did you take so long?

HAK: We took so long because it was an extraordinarily complicated
negotiation having to do with the disposition of geography, legal
status of Americans, the transfer of police and other functions and
because the Panamanians for a long time were not prepared to grant
us or to agree to what we considered our absolutely essential
conditions. On the other hand those having been met I also believe
there is also no longer any reason not to complete the agreement.

LS: Pete ''

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PP: Murray thank you. I might say I'm relieved that you referred only to my academic credentials. If you had made some reference to my obviously superior sex appeal (laughter) whatever equaminity that he has remained would have quickly been lost here on the stage and that would have been embarrassing to all of us.

Henry - you've recently characterized yourself publicly as being notoriously humble, I believe it was. In that spirit I don't know whether to refer to you as Mr. Secretary or Your Excellency as you used to prefer. But you and I used to talk about constructive ambiguity that was present in many international understandings that are necessary for domestic political consumption. And on August 19 the chief negotiator at home in Panama said publicly that the treaty did not give the United States the right to intervene. Now we can understand him wanting to say that at home. But is the right to guarantee neutrality as the treaty provides but not the right to intervene some acceptable constructive ambiguity or does it represent a serious substantive difference in view. And can you imagine a practical solution to this? That is something that would reassure the senate and the American people and still be politically acceptable within Panama?

HAK: Secretary Vance and the President have both stated as have former Secretary Rusk and I, that we read Article 4 to mean that we have the unilateral right to guarantee the unimpeded access and neutrality of the canal as it is defined in the treaty in great detail even after the year 2000. I would consider it perfectly appropriate for the senate of the United States to express its support for that view of the

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President and the Secretary of State, and to make certain
that its understanding is communicated to Panama. So that
there can be no misunderstanding on that issue. Our
negotiators, President, our Secretary of State and all of
us who have dealt with these treaties, interpret them, feel
they can be interpreted only one possible way. And anything
that our congress would do to make this interpretation unambiguous
would not be a reservation nor a derogation of the negotiation
it would simply solidify what is in our judgment the correct
interpretation of the crucial clause in article 4.

LS: Dr. Kissinger ' there is one thing that has puzzled me about this whole question of Article 4. Why is it so necessary for us to guarantee free access and neutrality. In case of war do we want that canal to be neutral. Do we want to allow other peoples warships through.

HAK: In the case of war I think we ought to face the following facts.
If we cannot keep hostile ships from reaching the canal being
able to <u>waiver</u> <u>the</u> <u>right</u> <u>to</u> <u>pass</u> <u>through</u> <u>the</u> <u>canal</u> <u>being</u>
<u>able to wave</u> a paper at them that keeps them
<u>out of the canal</u> will not be

LS: In short what you are saying is that we ought to be moral up to a point.

HAK: I'm saying that in case of war XXXXXXXXXXXX obviously the security
interests of the United States would dominate and we would attempt
to destroy hostile navies at sea. And the mere fact that they
wish to go through the Panama canal would not preclude us from
destroying them. I interpret Article 4 to give us the opportunity
to keep other countries from blocking the canal in order to
blackmail us. Or to engage in any discriminatory measures in

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- in perhaps not in wartime. I think in wartime our ability to protect the canal depends on our ability to control the seas. Which is exactly the situation today.

LS: Pete, Dr. Kissinger has about two more minutes XXXXX until he is leaving at 9:15, so you go ahead.

HAK: Make it 9:08 I can't give an answer in two minutes, I can't place a verb in two minutes.

LS: Give him a good long question too.

PP: And I can't ask a question in less than four, so we're in trouble. Henry - in June of this year four distinguished retired military men, Admirals Carney, Anderson, Burke and Moore, wrote to the president of the United States to express their concern over this treaty. I quote "contrary to what we read about the declining XXXXXX strategic and economic value of the campaign the truth is that the waterway is as important if not more so to the United States than ever. The Panama enables the canal enables the United States to transfer its naval forces and commercial units from ocean to ocean. This capability is increasingly important now and in view of the reduced size of the United States Atlantic and Pacific fleets. As commander in chief you will find the ownership and sovereign control of the canal indispensable during periods of tension and conflict." Could you comment on that statement?

HAK: I would say first of all that I have never argued that we XXXXX can afford to make such an arrangement. Because the canal is no longer

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important. The canal remains important and free access to
it must be assured. I do not believe that the present
arrangements are necessary to assure free access. On the
contrary I believe that over a period of time, the present
arrangements could become an obstacle. And could cost us
out of proportion to what it would take to maintain them,
all the more so if you remember that the present arrangements,
in any event, stay in effect for 23 years or until the year
2000. On the other hand, there are other military witnesses,
there are some chiefs of naval operations, including one whom
I can never bring myself to mention favorably. Who have
nevertheless supported this threat. And then I must —
it is an important fact that the joint chiefs of staff, and
the secretary of defense, but all the military chiefs have
testified before the foreign relations committee on behalf of
the treaty. They are under duress, and that therefore they
do not express their opinion. Those of you who have served
in Washington know that if the joint chiefs of staff are
unhappy with a decision, they are a million ways this fact
becomes known and I've experienced all of them —

There would be innumerable leaks and stores to that effect
nobody believes for instance that the air force was happy
with the B 1 decision. So in this case there are no not only
have all the military chiefs supported the agreement there have
been no leaks rumours planted questions with congressional
committees and all the million ways in which the military could
make their views known. And before I express my support I asked
for the opportunity to have the private talk with Gen Brown and
Gen Jones which whom I had worked closely — and not always in

in perfect agreement and a fact which to my distress became
rapidly known in Washington. And they assured me that they
were fully behind these treaties and they have done so and
repeated this before the congressional committee. So I would
say that I agree with the four distinguished naval officers you
have mentioned that the canal remains important I simply believe
that the present arrangements are not the best way to preserve
the security of the canal. Even though whether or not the
threaty is ratified we will be strong enough to defend our
rights in the canal. But the treaties are a better way of doing
it.

LS: Dr. Kissinger may I ask you one last question?

HAK: You won't get an answer but go ahead. Go ahead ask me the question.

LS: Well then the question will answer itself you'll have to answer it.

AP
The most recent poll taken by the AP indicated that only 29% of those polled favored ratification. Of the Panama canal treaty. Almost 50% opposed it, now in a democracy don't you think that makes our representatives in the Senate should be guided by the fact that so few citizens favor ratification. d

HAK: Well I think

LS: Then you can go.

HAK: It is right now public opinion is definitely against it - there has been - it will be necessary for the president and members of his administration to make a public to make a major effort of education and its also incumbent on leaders of this country as represented in this room to do what they can if they agree with what I have said here to bring this to carry this message. With respect to the senators - Burke at the turn of the 19th century wrote a very reflective essay about the obligation of an elected

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representative. Whether he should register simply the opinions
of his constituencies or whether he was elected on the kxxxx basis
of his judgement and would be held accountable by his constituency
over a period of time for his judgement. Even if he did something
that was temporarily unpopular. Now this is easy for a professor
to lecture elected officials on. But this is one of those issues.
in which I believe that public opinion has not yet fully understood
all the implications in terms of our western hemisphere relationships
and in which I have great sympathy for the senators who have to
make this decision and where I must say that they deserve compassion
and as much support as informed leaders of this community can give
them.