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# KISSINGER ON OIL, FOOD, AND TRADE

Today's economic problems can be solved only through international action

"It became clear," Secretary of State Henry Kissinger told BUSINESS WEEK last week in a long interview on U. S. international economic policy, "that almost every economic policy had profound foreign policy implications." That simple statement explains the radical shift that has taken place in U. S. policymaking apparatus. Kissinger, whose forte has always been power politics, is now forced to spend more and more time on matters of natural resources, financing, and trade. Within the past 18 months, the U. S. National Security Council has taken over the lead role in international economics.

Since the outbreak of the October war in 1973, with the resultant oil embargo against the U. S. and the Netherlands, economic problems have dominated the foreign-policy makers' agenda. Kissinger, the strong man of Nixon's second-term Cabinet and now of the Ford Administration, has taken over the mantle of international economic leadership.

**The stakes.** Kissinger's approach is to implant detailed specific economic ideas into the greater fabric of international relations. Exuding complete confidence in himself, he has rejected the idea of the U. S. solving these problems alone. Instead, he offers proposals that need international cooperation and coordination for implementation. His philosophy, borrowed from Franklin D. Roosevelt, is that governments have to show their people that they are trying to solve the real economic problems, even if a complete solution is not possible.

Like the great statesmen before him, Kissinger is a victim as well as beneficiary of current circumstances. The most intriguing is the total lack of leadership in every country at the level of head of state. There are no strong governments anywhere. The Western world seems to be floating without power or rudder on a sea filled with destructive events. Kissinger's proposals are intended to restore the sense that the Western world is capable of determining its own fate. He wants to establish systems that are ready to cope with emergencies, instead of grappling with each one catch-as-catch-can.

Probably the strongest criticism of Kissinger's economic policies is that all of them will take at least two or three years to bring about the desired results. There is a reason-

able question whether the Western world can tolerate the high price of oil or double-digit inflation for so long, or whether the underdeveloped world will accept the ravages of starvation for that long.

His approach is visible in his answers to today's most pressing international economic problems:

* **High oil prices.** The Western world's most urgent economic problem is the quadrupling of oil prices over the past year. This has slowed the economies of industrialized countries to recession levels, and created gigantic financial deficits for every country except West Germany. Committed to a substantial reduction in oil prices, Kissinger has elected to achieve this the slow way by unified action of the consuming countries.

* **Coordination of economic policies.** In his April, 1973, "Year of Europe" speech, Kissinger first advocated coordination of economic policies. But a recalcitrant Europe refused to go along with his proposal. In the economic boom of 1973, Europeans had little taste for what looked like the start of a new U. S. hegemony in Europe. Today, worldwide recession and inflation, caused mainly by oil prices, have moderated that opposition. Leaders in Europe have finally recognized that national policies are totally inadequate for dealing with economic problems.

* **Food.** Kissinger's proposals for solving the world food shortage, introduced at the U. N. meeting in Rome, have been the victim, in his eyes, of domestic politics. The truth is that the U. S. alone cannot supply enough food to end the shortage, so a worldwide systematic approach is required.

* **East-West trade.** Kissinger sees a hardening of Soviet-U. S. relations if the Congress continues to dictate in detail all the terms of the relationship. The limitation on credits, imposed by Congress in the trade bill last month, takes away negotiating leverage the U. S. government needs.

As an economic-policy maker, Kissinger offers no new theory or radical insights. Yet he does not think about fiscal policy and monetary policy the way economists do. His greatest contribution may be the idea that today's economic problems can be solved only through international coordination. He is not the first person to think this way; but he may be the first with sufficient skill and reputation to make it happen.

Kissinger: An eye on Franklin Roosevelt

DCS Enterprises

66 BUSINESS WEEK: January 13, 1975

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"When a seed processor tries moving from a geographically limited market to regional distribution," Walker says, "it takes several years of encouraging a few farmers to try a seed variety before a sizable number will make a commitment to a new brand."

The problem grows even larger in foreign markets. U.S. seed exports grew from $63.8-million in 1970 to $87.8-million in 1973, a 38% jump. But this is still only 4% of the industry's total sales. "Foreign markets are opening slowly but they are extremely attractive," states D. Kenneth Christensen, chairman of Northrup, King & Co., the third largest U.S seed company.

Still, the greatest growth potential for seed producers is in the U.S. Corn acreage here will increase by 5% to 80.5-million acres in 1975 and most of this land will be planted with hybrid seed. Because of the genetic properties of hybrids, farmers must purchase new seed each spring from the company that owns the "parents" of the strain. If they plant seed saved from last year's crop, they will get smaller yields.

Of greater importance is the recent emergence of hybrid wheat strains after 10 years of research. Until these were first marketed last year, seed companies sold little wheat seed; usually it was traded among farmers. But hybrids increase productivity enough to offset the additional 25% that they typically cost. And the potential market is huge. Expensive hybrids last year were used on only 4% of the land committed to wheat farming.

This year, Dekalb plans to sell 225,000 units (100-lb. bags) of hybrid wheat, up from 45,000 last year. And Funk will introduce its hybrid wheat strain in 1976. "There are 100-million acres of wheat planted," says consultant Teweles, "and hybridization is moving into this market for the first time."

But meeting demand this year and next will be tough. Seed supplies are down about 4%. "There is no question but that we'll be putting some of our customers on allocation," says Funk's Walker. Normally, the industry has a 25% carryover of seed from one season to the next. But the 1974 drought made an inventory buildup impossible. So, says Dekalb's Roberts, "We'll be selling right down to the end of the pipeline."

The real crunch could come in 1976 if growing weather this year is not perfect. The seed industry tries to maintain a two-year supply of hybrid foundation seed—the parents of the strain—but the 1974 season cut that to less than a one-year inventory. That could limit production of new hybrid seeds for 1976. The result would be increased seed costs, higher animal feed prices, and more expensive food. ■

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**Until recently it was the U. S. position that the energy crisis could be solved only by an immediate and substantial reduction in the price of imported oil. Why has that policy changed?**

I would disagree with the word immediate. It has been the U. S. position that the energy crisis cannot be fundamentally changed without a substantial reduction in the price of oil. This remains our view. It is also our view that the prospects for an immediate reduction in oil prices are poor. I have always had the most serious doubts that an immediate reduction in oil prices could be achieved because I did not see the incentives for the oil producers to do this in the absence of consumer solidarity. A reduction in energy prices is important. It must be achieved and we must organize ourselves to bring it about as rapidly as possible.

**Why was it impossible to reduce the price of oil immediately?**

Because in the absence of consumer solidarity, pressures required to bring oil prices down would create a political crisis of the first magnitude. And this would tempt other consuming countries to simply step into the vacuum created by the U. S., and would therefore not be effective.

**Can you describe the kind of political problems that would develop without consumer solidarity?**

The only chance to bring oil prices down immediately would be massive political warfare against countries like Saudi Arabia and Iran to make them risk their political stability and maybe their security if they did not cooperate. That is too high a price to pay even for an immediate reduction in oil prices.

If you bring about an overthrow of the existing system in Saudi Arabia and a Khadaffi takes over, or if you break Iran's image of being capable of resisting outside pressures, you're going to open up political trends that could defeat your economic objectives. Economic pressures or incentives, on the other hand, take time to organize, and cannot be effective without consumer solidarity. Moreover, if we had created the political crisis that I described, we would almost certainly have had to do it against the opposition of Europe, Japan and the Soviet Union.

**In your University of Chicago speech, you said: "The price of oil will come down only where objective conditions for a reduction are created and not before." What are those objective conditions?**

The objective conditions depend upon a number of factors: One, a degree of consumer solidarity that makes the consumers less vulnerable to the threat of embargo and to the dangers of financial collapse. Second, a systematic effort at energy conservation of sufficient magnitude to impose difficult choices on the producing countries. Third, institutions of financial solidarity so that individual countries are not so obsessed by their sense of impotence that they are prepared to negotiate on the producers' terms. Fourth, and most important, to bring in alternative sources of energy as rapidly as possible so that the combination of new discoveries of oil, new oil-producing countries, and new sources of energy create a supply situation in which it will be increasingly difficult for the cartel to operate. We think the beginning of this will occur within two to three years.

**Over the past year the oil producers have been able to cut back production as demand has declined. Doesn't that indicate that conservation alone will not break the oil cartel?**

Yes, but there's a limit beyond which that cannot go.

Many producers are dependent on their revenues for economic development. Countries that can cut production most painlessly are those that are simply piling up balances. Countries that need oil revenues for their economic development, like Algeria, Iran, and Venezuela, do not have an unlimited capacity to cut their production. If the production of these countries is cut by any significant percentage, their whole economic development plan will be in severe jeopardy. Therefore, the problem of distributing the cuts is going to become more and more severe. I understand that Libya has already had to take a disproportionate amount of the reductions, which it can do because it has really no means of spending all its income. In the absence of an Arab-Israeli explosion, Saudi Arabia's incentive to cut production indefinitely is limited for political reasons. Other countries will have less and less of an economic incentive to cut production. As the number of OPEC countries increases and as alternative sources come in, I think these cuts will grow increasingly difficult to distribute.

**Are the conservation goals to cut something like 3-million bbl. a day in 1975 enough?**

I think 3-million bbl. a day will be enough, plus alternative sources, plus an increase in later years. We have to continue this conservation over the years.

**Are the Europeans accepting your proposal for a 1-million-bbl. a-day cut by the U. S. and a 2-million-bbl.-a-day cut by the other consumers? Or are they pressing for a more equal distribution?**

We have to announce our conservation plans morecretely before we will have an effective negotiating position with the Europeans. I believe that the major objective of our strategy can be implemented, and the desire of some European countries for a consumer-producer conference can be used to accelerate consumer cooperation. We will not go

Saudi Arabia will not be the
leader in the reduction of
prices

to a consumer-producer conference without prior agreement on consumer cooperation.

**Are there any political pressures the U. S. can bring to bear on the oil cartel?**

A country of the magnitude of the U. S. is never without political recourse. Certainly countries will have to think twice about raising their prices because it would certainly involve some political cost. But I don't want to go into this very deeply.

**Businessmen ask why we haven't been able to exploit King Faisal's fear of communism to help lower prices?**

We have a delicate problem there. It is to maintain the relationship of friendship that they have felt for us, yet make clear the consequences of these prices on the structure of the West and of the non-Communist world.

I think we will find that Saudi Arabia will not be the

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leader in the reduction of prices, but that it will not be an
impediment to a reduction if enough momentum can be
created in the Arab world—indeed it will be discretely en-
couraging.

The Saudi government has performed the enormously
skillful act of surviving in a leadership position in an in-
creasingly radical Arab world. It is doing that by carefully
balancing itself among the various factions and acting as a
resultant of a relation of forces, and never getting too far
out ahead. Therefore, I never for a moment believed, nor do
I believe today, that the lead in cutting prices will be taken
by Saudi Arabia. On the other hand, the Saudis will happily
support a cut in prices proposed by others. The Saudis have
no interest in keeping up prices. They don't know what to do
with their income today.

But all along it has seemed that the Saudis have taken the lead in saying they want to get the price of oil down and that has never happened. In fact, the joke is we can't take another cut in oil prices from the Saudis because we can't afford it.

I think that's true. I have always assessed the Saudi
statements in the context of their positioning themselves in
a general constellation of forces. In my opinion, they will
not take the lead. But they will not oppose it.

Who is likely to take the lead—or what producer nations?

It is my opinion that a reduction in prices cannot come
from Iran alone, though its voice is important, given the
powerful personality of the Shah.

One of the principal
objectives in our energy
policy is to restore among the
industrialized countries
some sense that they can
master their own fate

Among the Arab countries, Algeria is important, Kuwait
could be important; Syria, even though it's not an OPEC
country, has a moral influence for political reasons. But it
will not come, in my view, from Saudi Arabia.

Do you think something could happen in the Arab-Israeli situ-
ation that could result in a reduction in oil prices?

Not really, I think that if the situation deteriorates there
could be a reduction in supply. I don't believe it is wise for
us to try to sell the Israeli concessions for a reduction in oil
prices, because this would create the basis for pressures in
the opposite direction during a stalemate. Everytime the
OPEC countries want something from us politically, they
could threaten to raise the prices again.

So there's nothing tied to the Jerusalem problem or the refugee
problem that would have anything to do with the price of oil?

No, it has never been raised.

Many bankers claim that all the schemes for recycling oil

money—including the one you suggested in the University of Chicago speech—are only Band-Aids because each scheme piles bad debt on top of good. Most of the countries have no way of ever repaying the loans. Do you see how the $25-billion fund you proposed would be repaid?

We have two problems. We have an economic problem,
and we have a political problem. The political problem is
that the whole Western world, with the exception perhaps
of the U. S., is suffering from political malaise, from inner
uncertainty, and from a lack of direction. This also affects
economic conditions, because it means that you have no set-
tled expectations for the future and therefore a lowered
willingness to take risks. One of the principal objectives of
our energy policy is to restore among the industrialized
countries some sense that they can master their own fate.
And even if this would involve some questionable debts,
these are debts that have to be met somehow. It would be
enormously important for the general cohesion of the in-
dustrialized world and for its capacity to deal with the fu-
ture, that they are dealt with systematically and not as the
outgrowth of some crisis. Moreover, one way of disciplining
some of the industrial countries is by the conditions that
are attached to the funds that might be available.

Where would this $25-billion come from?

The U.S., the Federal Republic of Germany, small sums
from other countries.

But the U. S. and West Germany would bear the brunt?

That's probably true. But you have to look at it as a guar-
tantee rather than as a debt.

Will this require Congressional approval?

I'm told we could actually do it by borrowing, and not
require Congressional approval. However, we have decided
that in undertaking even potential obligations of this mag-
nitude we had better seek some Congressional concurrence.

How long will it take this program to really get rolling?

We will not go to a producers-consumer conference with-
out having this program well established. If we don't have
consumer solidarity, we're better off conducting bilateral
negotiations with the producers. However, I think that
within the next three months—by the end of March cer-
tainly—the major elements of our program will be in place.

Who in the government will have the job of getting these ele-
ments in place?

Our new Under Secretary for Economic Affairs, Charles
Robinson; Tom Enders [Assistant Secretary of State for
economic and business affairs]. Of course, the Treasury
Dept. has a vital role. Secretary [William E.] Simon has
been intimately associated with the entire program. We
have a committee dealing with the international implica-
tions of the oil crisis. It is composed of myself, Simon, Jack
Bennet [Under Secretary of Treasury], Robinson, Robert
Ingersoll [Deputy Secretary of State], Arthur Burns [chair-
man of the Federal Reserve Board]. And the committee un-
der Rogers Morton [Secretary of the Interior] links domes-
tic and international policy.

Have you had any discussion with the Soviets about what their
position would be if there were a confrontation between the oil
cartel and the Western consumer governments?

68 BUSINESS WEEK: January 13, 1975

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[LC]

No, and I think it would be a very foolish question to ask them.

**Do you know if the Arabs are using their petrodollars to force a favorable resolution of the Arab-Israeli conflict?**

I don't think they've done it up to now. If we don't have consumer solidarity, that may happen eventually.

**There was some concern last month about the British pound.**

I've seen these reports. They were denied. It is certainly an option they have. And that is one reason we are so determined to create institutions of financial solidarity; because if you have these institutions, then that sort of pressure will not be possible. The producers could not take on one currency then.

**Is it possible that we may have to engage in an emergency financial bail-out of Italy or Britain before the financial facility is in place?**

Very possibly, in this sense, the proposed facility merely institutionalizes what will have to happen anyway, because if present trends continue, there will have to be a bail-out sooner or later. But it makes a lot of difference whether you bail somebody out in an emergency, and therefore enhance the sense of vulnerability and create conditions for a new emergency. Or whether having perceived the emergency, you can convey to the public that there is a structure that makes it possible to master your fate and to deal with difficulties institutionally.

**How do you rate the chances for another Arab-Israeli war in the spring?**

In the absence of a political settlement, there is always the danger of another Arab-Israeli war. On the other hand, war is talked about much too loosely. Both sides lost grievously in the last war. Neither side really won. I think the readiness of either side to go to war is often exaggerated. I also believe that there is some possibility of political progress before the spring.

**Then you don't anticipate the possibility of another oil embargo soon?**

Not unless there is a war.

**Well, what about after the spring?**

I don't anticipate an oil embargo in the absence of war. I am not even sure of an oil embargo in the event of a war. It would now be a much more serious decision than it was the last time. We're now engaged in rather delicate negotiations, and these still show promise, so why speculate about their failure while they're still in train?

**The Shah of Iran has indicated that in the next war he would be on the side of the Arabs. Does this represent to you a shifting of forces over there?**

I would have to analyze exactly what he said. In the past, the Shah maintained a rather neutral position. What he means by being on the side of the Arabs I would have to understand a little better. But obviously the trends in the Moslem world are in the direction of greater solidarity.

**Have the Israelis indicated to you a willingness to give back the oil lands in the Sinai they captured in the 1967 war?**

I don't want to go into the details of any specific ideas the

Israelis may have suggested, but they have indicated their willingness to make some further territorial withdrawals.

**One of the things we also hear from businessmen is that in the long run the only answer to the oil cartel is some sort of military action. Have you considered military action on oil?**

Military action on oil prices?

**Yes.**

A very dangerous course. We should have learned from Vietnam that it is easier to get into a war than to get out of it. I am not saying that there's no circumstance where we

> The industrialized nations suffer in general from the illusion that talk is a substitute for substance

would not use force. But it is one thing to use it in the case of a dispute over price, it's another where there's some actual strangulation of the industrialized world.

**Do you worry about what the Soviets would do in the Middle East if there were any military action against the cartel?**

I don't think this is a good thing to speculate about. Any President who would resort to military action in the Middle East without worrying what the Soviets would do would have to be reckless. The question is to what extent he would let himself be deterred by it. But you cannot say you would not consider what the Soviets would do. I want to make clear, however, that the use of force would be considered only in the gravest emergency.

**What do you expect is going to be achieved in the first meeting between the consumers and the producers?**

The industrialized nations suffer in general from the illusion that talk is a substitute for substance. And what *might* happen is used as an excuse for not doing what *can* happen. What can happen at a consumer-producer meeting depends entirely upon whether the consumers manage to bring about concrete cooperation and whether they can concert common positions *before* the conference. In the absence of these two conditions, the consumer-producer conference will not take place with our participation. If it did take place, it would only repeat in a multilateral forum the bilateral dialogues that are already going on.

There is too much talk to the effect that there is no consumer-producer dialogue now. There's plenty of dialogue. We talk to *all* of the producers. We have excellent relations with Iran and Saudi Arabia. The Europeans are talking to the producers; the Japanese are talking to the producers.

We do not suffer from the absence of dialogue, it is from the absence of a systematic approach, the lack of a clear direction in which to go. If you don't have a systematic coordinated approach, then a consumer-producer conference can only repeat in a multilateral forum under worse circumstances than what is already going on bilaterally. So you

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ought to ask me the question again in about two months when we're further down the road.

But I want to make absolutely clear that the U. S. is willing to have this conference. It is, in fact, eager to have a consumer-producer dialogue. In our original proposals to the Washington energy conference in February, we argued that consumer cooperation must lead as soon as possible to a consumer-producer dialogue. At that time, we envisaged it for the fall of 1974. But we also want the dialogue to be serious and concrete.

It must deal with the problem of recycling. It must deal with the problem of the less-developed countries. It must deal with the problem of price over a period of time. In terms of the producers, we can consider some assurance of long-term development for them. But all this requires some very careful preparation.

**Does President Giscard d'Estaing now share our views as to how the consumer-producer conference should go forward?**

It's my impression that he shares it. Of course he has to speak for himself. But he can be under no misapprehension of our view of the matter.

**Many people have felt that the U. N. meeting on population in Bucharest last summer and the meeting on food in Rome were unsuccessful because there were too many countries represented at them. Will this problem plague the oil meetings too?**

None of the organizing countries have yet decided how many countries to invite, and in what manner to conduct the negotiations. Personally, I would favor a rather small negotiating group, but we will not make an issue of it. A lot of countries will favor this in theory until they come to the problem of whom to invite and whom to exclude, so the tendency will be toward expanding the membership. In general, I would say the larger the membership the more unwieldy the procedures are likely to be and the more difficult it will be to achieve a consensus.

All West European
economies, with the
exception of the Federal
Republic of Germany, are
going to be in [some] trouble
within the next 18 months

We worked hard to make the world food conference a success. I think that the proposals we made in Rome will probably be the basis of food policy for some time to come. Our basic point was that there already exists a large global food deficit that is certain to grow. The gaps cannot be closed by the U. S. alone or even primarily. Whether our food aid is 4-million tons or 3-million tons is important for moral and humanitarian reasons; it is not decisive in dealing with the world food deficit which is already approaching 25-million tons and which can grow to 80-million tons in 10 years.

What we need is a systematic effort to increase world food production, especially in the less-developed countries,

to have the exporting countries organize themselves so that they know where to put their efforts, and to improve world food distribution and financing. That was the major thrust of our ideas.

In addition, we're willing to give the maximum food aid that our economy can stand. But food aid by the U. S. cannot be decisive. It's a pity that it turned out to be the principal issue in the public debate. What happened after the conference in terms of setting up food reserves, exporters groups, and so forth actually indicates that progress is being made. The conference was quite successful but the focus of some of the domestic debate was off-center.

**What policy do you think the world has to adopt to ensure that countries have access to raw materials?**

Last year, at the special session of the [U. N.] General Assembly, I pointed out that we are facing a substantial change in world economic patterns. In the past, even the very recent past, almost all producing countries were afraid of surpluses. We're now in a period in which the idea of surpluses will seem a relic of a golden era. The pressures of population, industrialization, and increasing interdependence of the world economy imposes on us some form of rational planning and interaction. I proposed a systematic study of world resources, of raw materials, to obtain a systematic estimate of what we will be up against, even with good will, over the next decade or so. I believe that we need the sort of coherent approach that is now being attempted in the field of energy; it will either be imposed on us or we will have to take the lead in developing it in other fields, including food. One of our efforts at the Rome food conference was to show how a constructive approach might work in contrast to a restrictive cartel approach of the energy producers.

**Do you think there will be any legislation in the U. S. because the food situation, in which our position is analogous to that of the OPEC countries, is an explosive political question domestically?**

We're going to face a problem. We have to come to an understanding with the Congress about the proper relationship between the executive and the legislative functions. What Congress should legislate and what should be left to executive discretion. The attempt to prescribe every detail of policy by Congressional action can, over a period of time, so stultify flexibility that you have no negotiating room left. We recognize that the Congress must exercise ultimate policy control. But what is meant by that, how much detail, is what we intend to discuss very seriously with the Congressional leadership when it reassembles. I would hope that the Congress would keep in mind that we need some flexibility.

Now, back to your question on the issue how can we allocate food for abroad and yet not drive food prices up too high in this country. That's a tough problem. We have to make decisions on that periodically in the light of crop reports, in the light of sustainable prices. Suppose we put on export controls that drove the prices down domestically, then we would also have a problem.

We have to be prepared to pay some domestic price for our international position. If Japan were suddenly cut off from major imports of American agricultural goods, you would almost certainly have a dramatic reorientation of Japanese political life. That would have profound economic consequences for us also over a period of time. They may

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BUSINESS WEEK: January 13, 1975 73

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not be measurable today, they certainly are not fully dem-
onstrable, but the consequences are certain. On the other
hand, if you undermine your domestic position totally in the
sense that the American public thinks the high food prices
are largely due to foreign sales, then you have another un-
manageable problem. On the whole, the U. S. is a healthy
society, so that the national leadership, if it explains its po-
sition properly, has a good chance of carrying the day.

*How long do you think the economies of Italy, the United Kingdom, and France can go without serious trouble because of the strains imposed by the oil deficits?*

All West European economies, with the exception of the Federal Republic of Germany, are going to be in more or less serious trouble within the next 18 months. Which is another reason for striving for a much closer coordination of economic policies.

*Can this economic trouble lead to political trouble?*

Without any question. Every government is judged not
only by its performance but whether it is believed to be try-
ing to master the real problems before it will erode. F. D.
Roosevelt could go along for several years without a great
improvement in the economic conditions because the public
believed he was dealing with the problems. The danger of
purely national policies is that they are patently inadequate
for dealing with economic problems—especially in Europe—
and, as the sense of impotence magnifies, the whole political
base will erode.

As it is, the Communist vote in Italy, and to some extent
in France, has remained constant regardless of economic
conditions. A substantial proportion of the population has
felt sufficiently disaffected with the system, even when the
system was performing well, that they voted Communist in
order to keep pressure on. As the Communist vote grows,
the flexibility of the political system diminishes. Economic
decline in Europe would therefore have serious political con-
sequences.

*There appears to be a rise in enthusiasm for the far right, too, a feeling that what is needed is an authoritative man that can cope with these labor problems, these inflation problems, etc.*

If you have a major economic crisis, the emergence of au-
thoritarian governments of the left or the right is a distinct
possibility.

*In Europe, the charge is made that you have sold out Western civilization for 18 months of peace in the Middle East. Why do Europeans feel this hostility toward the U. S. and toward you?*

Well, of course, I'd like to know who these Europeans
are—for my own education. What would they have had us
do?

*They're talking about military action.*

The fact of the matter is that the governments they rep-
resent systematically opposed every move we made in the
Middle East; every strong action that was taken in the
Middle East was taken by the U. S. Had we taken military
action in the Middle East, we would have faced violent op-
position from their own governments.

Our difficulty in the Middle East is caused in part by our
inability to organize cooperation even for nonmilitary ac-
tion. The efforts the Administration made diplomatically to
lift the oil embargo reduced, at least for a time, the dangers

in the Middle East. It gave everyone a breathing space. We
gave up nothing. Except the possibility of military action,
which was a chimerical idea.

When we went on a military alert for one day, we were
accused of having done it for political reasons. Was it con-
ceivable that in the middle of Watergate the U. S. would
take military action? And for what purpose?

Why are the Europeans so hostile to the U. S.?

I think they suffer from an enormous feeling of insecur-
ity. They recognize that their safety depends on the U. S.,
their economic well-being depends on the U. S., and they
know that we're essentially right in what we're doing. So
the sense of impotence, the inability to do domestically
what they know to be right, produces a certain peevishness
that always stops just short of policy actions. No foreign
minister ever says this.

*Even though the trade bill has been passed, do you think the economic difficulties here in the U. S. and abroad will make it possible to reduce tariffs and nontariff barriers?*

I think it is essential that we go into these trade negotia-
tions with the attitude of creating a new international
trading system. It is the only hope we have of avoiding the

political consequences we talked about earlier. If we begin
to draw into ourselves, we will cause a loss of confidence.
We must act as if these problems can be overcome. Maybe
they can't be, but they will never be licked if we do not
build a new international economic environment with some
conviction.

*Will Congress' restrictions on Export-import Bank credits have any impact on trade with the Soviet Union or detente?*

The Congressional restrictions have deprived the U. S. of
important and maybe fundamental leverage. The Soviet
Union was much more interested in credits than it was in
trade because, for the next four or five years, it will have
very little to give in reciprocal trade.

And this is one of those examples I had in mind before. If
the Congress cannot trust the executive enough to use its
credit authority with discretion, then Congress will not be
able to deal with the problem by the sort of restrictions it
put on—aimed at depriving the credit authority granted by
Congress of any effective meaning.

Three-hundred-million dollars over a period of four years
is simply not enough to use as a bargaining chip with a ma-
jor country. It has no significant impact on its economy and
therefore it is the surest guarantee it will be wasted.

For two years, against the opposition of most news-
papers, we refused to extend credit to the Soviet Union un-
til there was an amelioration of its foreign policy conduct.
You remember various Congressional amendments were in-

74 BUSINESS WEEK: January 13, 1975

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troduced urging us to liberalize trade. The corollary of this was if there was more moderate Soviet conduct, trade and credits could open up. I believe that the recent Soviet statements on Jewish emigration have been caused, in part, by Soviet disappointment with the credit restrictions.

But beyond that, a President who has only $300-million of credit flexibility over four years is forced in a crisis more and more to rely on diplomatic or military pressure. He has no other cards. The economic card has been effectively removed from his hand.

**We were intrigued by the timing of the Soviet statement; it came when the trade bill was still in conference.**

I think the Soviets wanted to make clear ahead of time what their attitude was so later they could not be accused of having doublecrossed us.

**Do you think that Soviet disappointment over credits will cause a hardening of their position on emigration of Jews?**

If these trends continue in the U. S., you can expect a general hardening of the Soviet position across the board over a period of time. They will not go back to the cold war in one day. But there are many things the Soviet Union could do that would make our position much more complicated. What could happen in Europe, in the Middle East, in Southeast Asia if the Soviet Union pursued a policy of maximizing our difficulties? Most of the criticism leveled at the Soviet Union these days is that they are not solving our dif-

> It is essential that we go into . . . trade negotiations with the attitude of creating a new international trading system

ficulties, not that they are exacerbating them. I think the restrictions on Ex-Im credits will have an unfortunate effect on U. S.-Soviet relations.

**Do you see any way that the countries of the world can better coordinate their economic and financial policies?**

One interesting feature of our recent discussions with both the Europeans and Japanese has been this emphasis on the need for economic coordination. In April, 1973, in my "Year of Europe" speech, I proposed the coordination of economic policies and of energy policies. At that time, the proposal was generally resisted on the grounds that we were trying to produce a linkage where the obligations had never run to economic matters. In all the recent meetings of the President with heads of government, and in all the meetings I have had with foreign ministers, our allies and friends have absolutely insisted that we coordinate economic policies. So you have had a 180-degree turn in one year.

How you, in fact, coordinate policies is yet an unsolved problem; but it must be solved. Otherwise, we will have a succession of beggar-thy-neighbor policies and countries trying to take a free ride on the actions of their partners.

**Do you believe we have to go beyond what is done at the Organization for Economic Cooperation & Development?**

I don't know whether we need new structures, but I think we need new approaches to existing structures. I haven't thought through whether we need new structures.

In the next 10 years, you will have coordinated fiscal policy, including ours. I am not saying they have to be identical, but they have to be coordinated.

We have greater latitude than the others because we can do much on our own. The others can't. But it is an important aspect of leadership to exercise our freedom of action with restraint and to let others participate in decisions affecting their future.

**Is there any chance of coordinating better U. S. international economic policy, particularly since the Council for International Economic Policy seems to be losing its power?**

You can't look at policies of a government in terms of organizational mechanisms. The CIEP was created at a time when the National Security Council was essentially divorced from economic policies. Then it became clear that every economic policy had profound foreign policy implications and really required political inspiration and leadership to make it effective. You could never implement the energy policy as a purely economic matter; it has been a foreign policy matter from the beginning.

When that happens, the issue tends to be pulled back into the orbit of the National Security Council. What you have had is a greater foreign policy involvement in economic policy decisions.

On the other hand, I think the relations between the State Dept. and Treasury have never been better, despite the occasional disagreements that surface in the newspapers. You expect disagreements. The issue is not whether there are disagreements but how they are settled. And they are always settled in a constructive positive way.

On energy, we have a group which I described before of Arthur Burns, Simon, myself, Robinson, and a few others who meet regularly to set the basic strategy in the international field. Whether we meet as the Council for International Economic Policy or the National Security Council, the group has essentially the same membership.

**Should there be additional legislation to protect U. S. industry from ownership by Arab oil money? If so, what shape should the legislation take?**

We are now studying the ways that oil-producers' money could be invested in the U. S. and what we should protect against. We haven't come to any conclusions, because if you get a manageable minority interest, that would be in our interest. If you get actual control over strategic industries, then you have to determine how that control would be exercised before you know how to avoid it. There are some industrial segments we would not want to be dominated by potentially hostile investors. Since we haven't completed the study, I can't give you a conclusive answer. By the middle of January we will have concluded the study.

**Do you think a request for legislation will be the result of that study?**

It may be a request for some sort of a board to monitor foreign investment, and the board would formulate some proposal. I am not sure about the shape of the proposal, but we need a systematic monitoring.

76 BUSINESS WEEK: January 13, 1975

INTERNATIONAL ECONOMICS

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[LC]

# The Secretary of State

## Interview

Business Week Issue of

January 13, 1975

Bureau of Public Affairs

Office of Media Services

### MAJOR TOPICS: Energy, Food, Mideast, Trade

**QUESTION:** Until recently it was the U.S. position that the energy crisis could be solved only by an immediate and substantial reduction in the price of imported oil. Why has that policy changed?

**SECRETARY KISSINGER:** I would disagree with the word immediate. It has been the U.S. position that the energy crisis cannot be fundamentally changed without a substantial reduction in the price of oil. This remains our view. It is also our view that the prospects for an immediate reduction in oil prices are poor. I have always had the most serious doubts that an immediate reduction in oil prices could be achieved because I did not see the incentives for the oil producers to do this in the absence of consumer solidarity. A reduction in energy prices is important. It must be achieved, and we must organize ourselves to bring it about as rapidly as possible.

**Q:** Why was it impossible to reduce the price of oil immediately?

**A:** Because in the absence of consumer solidarity, pressures required to bring oil prices down would create a political crisis of the first magnitude. And this would tempt other consuming countries simply stepping into the vacuum created by the United States and would therefore not be effective.

**Q:** Can you describe the kind of political problems that would develop without consumer solidarity?

**A:** The only chance to bring oil prices down immediately would be massive political warfare against countries like Saudi Arabia and Iran to make them risk their political stability and maybe their security if they did not cooperate. That is too high a price to pay even for an immediate reduction in oil prices.

If you bring about an overthrow of the existing system in Saudi Arabia and a Qadhafi [Col. Mu'ammar al-Qadhafi, Chairman, Libyan Revolutionary Command

Council] takes over or if you break Iran's image of being capable of resisting outside pressures, you're going to open up political trends which could defeat your economic objectives. Economic pressures or incentives, on the other hand, take time to organize and cannot be effective without consumer solidarity. Moreover, if we had created the political crisis that I described, we would almost certainly have had to do it against the opposition of Europe, Japan, and the Soviet Union.

**Q:** In your University of Chicago speech [Nov. 14, 1974], you said, "The price of oil will come down only when objective conditions for a reduction are created and not before." What are these objective conditions and when do you think they will be achieved?

**A:** The objective conditions depend upon a number of factors: one, a degree of consumer solidarity that makes the consumers less vulnerable to the threat of embargo and to the dangers of financial collapse. Secondly, a systematic effort at energy conservation of sufficient magnitude to impose difficult choices on the producing countries. Thirdly, institutions of financial solidarity so that individual countries are not so obsessed by their sense of impotence that they are prepared to negotiate on the producers' terms. Fourth, and most important, to bring in alternative sources of energy as rapidly as possible so that that combination of new discoveries of oil, new oil-producing countries, and new sources of energy creates a supply situation in which it will be increasingly difficult for the cartel to operate. We think the beginning of this will occur within two to three years.

**Q:** Over the past year the oil producers have been able to cut back production as demand has declined. Doesn't that indicate that conservation alone will not break the oil cartel?

PR 2

2

A: Yes, but there's a limit beyond which that cannot go. Many producers are dependent on their revenues for economic development. Countries which can cut production most painlessly are those that are simply piling up balances. Countries that need oil revenues for their economic development like Algeria, Iran, and Venezuela do not have an unlimited capacity to cut their production. If the production of these countries is cut by any significant percentage, their whole economic development plan will be in severe jeopardy. Therefore the problem of distributing the cuts is going to become more and more severe. I understand that Libya has already had to take a disproportionate amount of the reductions which it can do because it has really no means of spending all its income. In the absence of an Arab-Israeli explosion, Saudi Arabia's incentive to cut production indefinitely is limited for political reasons. Other countries will have less and less of an economic incentive to cut production. As the number of OPEC [Organization of Petroleum Exporting Countries] countries increases and as alternative sources come in, I think these cuts will grow increasingly difficult to distribute.

> "A reduction in energy prices is important. It must be achieved and we must organize ourselves to bring it about as rapidly as possible."

Q: Are the conservation goals to cut something like 3 million barrels a day in 1975 enough?

A: I think 3 million barrels a day will be enough, plus alternative sources, plus an increase in later years. We have to continue this conservation over the years.

Q: Are the Europeans accepting your proposal for a 1 million-barrel-a-day cut by the United States and a 2 million-barrel-a-day cut by the other consumers? Or are they pressing for a more equal distribution?

A: We have to announce our conservation plans more concretely before we will have an effective negotiating position with the Europeans. I believe that the major objective of our strategy can be implemented, and the desire of some European countries for a consumer-producer conference can be used to accelerate consumer cooperation. We will not go to a consumer-producer conference without prior agreement on consumer cooperation.

Q: Are there any political pressures the United States can bring to bear on the oil cartel?

A: A country of the magnitude of the United States is never without political recourse. Certainly countries will have to think twice about raising their prices because it would certainly involve some political cost. But I don't want to go into this very deeply.

Q: Businessmen ask why we haven't been able to exploit [Saudi Arabian] King Faisal's fear of commu-nism to help lower prices?

A: We have a delicate problem there. It is to main-tain the relationship of friendship that they have felt for us, yet make clear the consequences of these prices on the structure of the West and of the non-Communist world. I think we will find that Saudi Arabia will not be the leader in the reduction of prices but that it will not be an impediment to a reduction if enough momentum can be created in the Arab world—indeed it will be discreetly encouraging.

The Saudi Government has performed the enormously skillful act of surviving in a leadership position in an increasingly radical Arab world. It is doing that by care-fully balancing itself among the various factions and acting as a resultant of a relation of forces and never getting too far out ahead. Therefore I never for a moment believed, nor do I believe today, that the lead in cutting prices will be taken by Saudi Arabia. On the other hand, the Saudis will happily support a cut in prices proposed by others. The Saudis have no interest in keeping up prices. They don't know what to do with their income today.

Q: But all along it has seemed that the Saudis have taken the lead in saying they want to get the price of oil down and that has never happened. In fact the joke is we can't take another cut in oil prices from the Saudis because we can't afford it.

A: I think that's true. I have always assessed the Saudi statements in the context of their positioning themselves in a general constellation of forces. In my opinion they will not take the lead. But they will not oppose it.

Q: Who is likely to take the lead or what producer nations?

A: It is my opinion that a reduction in prices cannot come from Iran alone though its voice is important given the powerful personality of the Shah. Among the Arab countries Algeria is important; Kuwait could be important; Syria, even though it's not an OPEC country, has a moral influence for political reasons. But it will not come, in my view, from Saudi Arabia.

Q: Do you think there is something that could happen in the Arab-Israeli situation that could result in a reduction in oil prices?

A: Not really. I think that if the situation deteriorates there could be a reduction in supply. I don't believe it is wise for us to try to sell the Israeli concessions for a reduction in oil prices because this would create the basis for pressures in the opposite direction during a stalemate. Every time the OPEC countries want something from us politically, they could threaten to raise the prices again.

3

Q: So there's nothing tied to the Jerusalem problem or the refugee problem that would have anything to do with the price of oil?

A: No, it has never been raised.

Q: Many bankers claim that all the schemes for re-cycling oil money—including the one you suggested in the University of Chicago speech—are only bandaids because each scheme piles bad debt on top of good. Most of the countries have no way to ever repay the loans. Do you see how the $25 billion fund you proposed would be repaid?

A: We have two problems. We have an economic problem and we have a political problem. The political problem is that the whole Western World, with the exception perhaps of the United States, is suffering from political malaise, from inner uncertainty and a lack of direction. This also affects economic conditions because it means that you have no settled expectations for the future and therefore a lowered willingness to take risks. One of the principal objectives of our energy policy is to restore among the industrialized countries some sense that they can master their own fate. And even if this would involve some questionable debts, these are debts that have to be met somehow. It would be enormously important for the general cohesion of the industrialized world and for its capacity to deal with the future that they are dealt with systematically and not as the out-growth of some crisis. Moreover one way of disciplining some of the industrial countries is by the conditions that are attached to the funds that might be available.

Q: Where would this $25 billion come from?

A: The United States, the Federal Republic of Germany, small sums from other countries.

Q: But the United States and West Germany would bear the brunt?

A: That's probably true. But you have to look at it as a guarantee rather than as a debt.

Q: Will this require congressional approval?

A: I'm told that we could actually do it by borrowing and not require congressional approval. However, we have decided that in undertaking even potential obligations of this magnitude we'd better seek some congressional concurrence.

Q: How long will it take this program to really get rolling?

A: We will not go to a producer-consumer conference without having this program well established. If we don't have consumer solidarity we're better off conducting bilateral negotiations with the producers. However, I think that within the next three months—by the end of March certainly—the major elements of our program will be in place.

Q: Who will have the job of getting these elements in place?

A: Our new Under Secretary for Economic Affairs Mr. [Charles W.] Robinson, Tom Enders [Assistant Secretary of State for Economic and Business Affairs].

Of course the Treasury Department has a vital role. Secretary [of the Treasury William E.] Simon has been intimately associated with the entire program. We have a committee dealing with the international implications of the oil crisis. It is composed of myself, Simon, [Under Secretary of the Treasury for Monetary Affairs Jack F.] Bennett, Robinson, [Deputy Secretary of State Robert S.] Ingersoll, [Chairman of the Federal Reserve Board Arthur F.] Burns. Another committee under Secretary [of the Interior Rogers C.B.] Morton links domestic and international policy.

Q: Have you had any discussion with the Soviets about what their position would be if there were a confrontation between the oil cartel and the Western consumer governments?

A: No, and I think it would be a very foolish question to ask them.

Q: Do you know if the Arabs are using their petro-dollars to force a favorable resolution of the Arab-Israeli conflict?

A: I don't think they've done it up to now. If we don't have consumer solidarity that may happen eventually.

Q: There was some concern last month about the British pound.

A: I've seen these reports. They were denied. It is certainly an option they have. And it is one reason why we are so determined to create institutions of financial solidarity, because if you have these institutions then that sort of pressure will not be possible. The producers could not take on one currency then.

> "One of the principal objectives of our energy policy is to restore among the industrialized countries some sense that they can master their own fate."

Q: Is it possible that we may have to engage in an emergency financial bailout of Italy or Britain before the financial facility is in place?

A: Very possibly. In this sense, the proposed facility merely institutionalizes what will have to happen anyway, because if present trends continue there will have to be a bailout sooner or later. But it makes a lot of difference whether you bail somebody out in an emergency, and therefore enhance the sense of vulnerability and create conditions for a new emergency, or whether having perceived the emergency you can convey to the public that there is a structure that makes it possible to master your fate and to deal with difficulties institutionally.

Q: How do you rate the chances for another 'Arab-Israeli war in the spring?

4

A: In the absence of a political settlement there is always the danger of another Arab-Israeli war. On the other hand, war is talked about much too loosely. Both sides lost grievously in the last war. Neither side really won. I think the readiness of either side to go to war is often exaggerated. I also believe that there is some possibility of political progress before the spring.

Q: Then you don't anticipate the possibility of another oil embargo soon?

A: No, unless there is a war.

Q: Well, what about after the spring?

A: I don't anticipate an oil embargo in the absence of war. I am not even sure of an oil embargo in the event of a war. It would now be a much more serious decision than it was the last time. We're now engaged in rather delicate negotiations, and these still show promise so why speculate about their failure while they're still in train?

Q: The Shah of Iran has indicated that in the next war he'd be on the side of the Arabs. Does this represent to you a shifting of forces over there?

A: I would have to analyze exactly what he said. In the past the Shah maintained a rather neutral position. What he means by being on the side of the Arabs I would have to understand a little better. But obviously the trends in the Moslem world are in the direction of greater solidarity.

Q: Have the Israelis indicated to you a willingness to give back the oil lands in the Sinai they captured in the 1967 war?

A: I don't want to go into the details of any specific ideas the Israelis may have suggested, but the Israelis have indicated their willingness to make some further territorial withdrawals.

> "We should have learned from Viet-Nam that it is easier to get into a war than to get out of it."

Q: One of the things we also hear from businessmen is that in the long run the only answer to the oil cartel is some sort of military action. Have you considered military action on oil?

A: Military action on oil prices?

Q: Yes.

A: A very dangerous course. We should have learned from Viet-Nam that it is easier to get into a war than to get out of it. I am not saying that there's no circumstance where we would not use force. But it is one thing to use it in the case of a dispute over price, it's another where there is some actual strangulation of the industrialized world.

Q: Do you worry about what the Soviets would do in the Middle East if there were any military action against the cartel?

A: I don't think this is a good thing to speculate about. Any president who would resort to military action in the Middle East without worrying what the Soviets would do would have to be reckless. The question is to what extent he would let himself be deterred by it. But you cannot say you would not consider what the Soviets would do. I want to make clear, however, that the use of force would be considered only in the gravest emergency.

Q: What do you expect is going to be achieved in the first meeting between the consumers and the producers?

A: The industrialized nations suffer in general from the illusion that talk is a substitute for substance. And what might happen is used as an excuse for not doing what can happen. What can happen at a consumer-producer meeting depends entirely upon whether the consumers manage to bring about concrete cooperation and whether they can concert common positions before the conference. In the absence of these two conditions the consumer-producer conference will not take place with our participation. If it did take place it would only repeat in a multilateral forum the bilateral dialogues that are already going on.

There is too much talk to the effect that there is no consumer-producer dialogue now. There's plenty of dialogue. We talk to all of the producers. We have excellent relations with Iran and Saudi Arabia. The Europeans are talking to the producers; the Japanese are talking to the producers.

We do not suffer from the absence of dialogue but from the absence of a systematic approach, the lack of a clear direction in which to go. If you don't have a systematic coordinated approach, then a consumer-producer conference can only repeat in a multilateral forum under worse circumstances what is already going on bilaterally. So you ought to ask me the question again in about two months when we're further down the road.

But I want to make absolutely clear that the United States is willing to have this conference. It is in fact eager to have a consumer-producer dialogue. In our original proposals to the Washington Energy Conference in February we argued that consumer cooperation must lead as soon as possible to a consumer-producer dialogue. At that time we envisaged it for the fall of 1974. But we also want the dialogue to be serious and concrete. It must deal with the problem of recycling. It must deal with the problem of the less developed countries. It must deal with the problem of price over a period of time. In terms of the producers we can consider some assurance of long-term developments for them. But all this requires some very careful preparation.

Q: Does President Giscard d'Estaing now share our views as to how the consumer-producer conference should go forward?

A: It's my impression that he shares it. Of course he has to speak for himself. But he can be under no misapprehension of our view of the matter.

[c]

5

Q: Many people have felt that the U.N. meeting on population in Bucharest last summer and the meeting on food in Rome were unsuccessful because there were too many countries represented at them. Will this problem plague the oil meetings too?

A: None of the organizing countries have yet decided how many countries to invite and in what manner to conduct the negotiations. Personally I would favor a rather small negotiating group, but we will not make an issue of it. A lot of countries will favor this in theory until they come to the problem of whom to invite and whom to exclude, so the tendency will be toward expanding the membership. In general I would say the larger the membership the more unwieldy the procedures are likely to be and the more difficult it will be to achieve a consensus.

We worked hard to make the World Food Conference a success. I think that the proposals we made in Rome will probably be the basis of food policy for some time to come. Our basic point was that there already exists a large global food deficit which is certain to grow. The gap cannot be closed by the United States alone or even primarily. Whether our food aid is 4 million tons or 3 million tons is important for moral and humanitarian reasons; it is not decisive in dealing with the world food deficit which is already approaching 25 million tons and which can grow to 80 million tons in 10 years.

What we need is a systematic effort to increase world food production, especially in the less developed countries, to have the exporting countries organize themselves so that they know where to put their efforts, and to improve world food distribution and financing. That was the major thrust of our ideas. In addition, we're willing to give the maximum food aid that our economy can stand. But food aid by the United States cannot be decisive. It's a pity that it turned out to be the principal issue in the public debate. What happened after the conference in terms of setting up food reserves, exporters groups, and so forth, actually indicates that progress is being made. The conference was quite successful but the focus of some of the domestic debate was off-center.

Q: What policy do you think the world has to adopt for making sure countries have access to raw materials?

A: Last year at the special session of the General Assembly, I pointed out that we are facing a substantial change in world economic patterns. In the past, even the very recent past, almost all producing countries were afraid of surpluses. We're now in a period in which the idea of surpluses will seem a relic of a golden era. The pressures of population, industrialization, and increasing interdependence of the world economy impose on us some form of rational planning and interaction. I proposed a systematic study of world resources, of raw materials, to obtain a systematic estimate of what we will be up against, even with good will, over a period of the next decade or so. I believe that we need the sort of coherent approach which is now being attempted in the field of energy; it will either be imposed on us or we will

have to take the lead in developing it in other fields including food. One of our efforts at the Rome food conference was to show how a constructive approach might work in contrast to a restrictive cartel approach of the energy producers.

Q: Do you think there will be any legislation in the United States because the food situation, in which we have the position of the OPEC countries, is an explosive political question domestically?

A: We're going to face a problem. We have to come to an understanding with the Congress about the proper relationship between the executive and the legislative functions-what Congress should legislate and what should be left to executive discretion. The attempt to prescribe every detail of policy by congressional action can, over a period of time, so stultify flexibility that you have no negotiating room left at all. We recognize that the Congress must exercise ultimate policy control. But what is meant by that, how much detail, is what we intend to discuss very seriously with the congressional leadership when it reassembles. I would hope that the Congress would keep in mind that we need some flexibility.

Now, back to your question of how we can allocate food for use abroad and yet not drive food prices up too high in this country. That's a tough problem. We have to make decisions on that periodically in the light of crop reports, in the light of sustainable prices. Suppose we put on export controls that drove the prices down domestically, then we would also have a problem. We have to be prepared to pay some domestic price for our international position. If Japan were suddenly cut off from major imports of American agricultural goods, you would almost certainly have a dramatic reorientation of Japanese political life. That would have profound economic consequences for us also over a period of time. They may not be measurable today, they certainly are not fully demonstrable, but the consequences are certain. On the other hand, if you undermine your domestic position totally in the sense that the American public thinks the high food prices are largely due to foreign sales, then you have another unmanageable problem. On the whole the United States is a healthy society, so that the national leadership, if it explains its position properly, has a good chance of carrying the day.

Q: How long do you think the economies of Italy, the United Kingdom, and France can go without serious trouble because of the strains imposed by the oil deficits?

A: All West European economies, with the exception of the Federal Republic of Germany, are going to be in more or less serious trouble within the next 18 months. Which is another reason for striving for a much closer coordination of economic policies.

Q: Can this economic trouble lead to political trouble?

A: Without any question. Every government is judged not only by its performance but whether it is believed to be trying to master the real problems before

6

it. F.D. Roosevelt could go along for several years without a great improvement in the economic conditions because the public believed he was dealing with the problems. The danger of purely national policies is that they are patently inadequate for dealing with economic problems-especially in Europe-and as the sense of impotence magnifies, the whole political base will erode.

As it is, the Communist vote in Italy, and to some extent in France, has remained constant regardless of economic conditions. A substantial proportion of the population has felt sufficiently disaffected with the system, even when the system was performing well, that they voted Communist in order to keep pressure on. As the Communist vote grows, the flexibility of the political system diminishes. Economic decline in Europe would therefore have serious political consequences.

Q: There appears to be a rise in enthusiasm for the far right, too, a feeling that what is needed is an authoritative man that can cope with these labor problems, these inflation problems, etc.

A: If you have a major economic crisis, the emergence of authoritarian governments of the left or the right is a distinct possibility.

> "What we need is a systematic effort to increase world food production...to have the exporting countries organize themselves...and to improve world food distribution and financing."

Q: In Europe, the charge is made that you have sold out Western civilization for 18 months of peace in the Middle East. Why do Europeans feel this hostility toward the United States and toward you?

A: Well, of course I'd like to know who these Europeans are-for my own education. What would they have had us do?

Q: They're talking about military action.

A: The fact of the matter is that the governments they represent systematically opposed every move we made in the Middle East; every strong action that was taken in the Middle East was taken by the United States. Had we taken military action in the Middle East we would have faced violent opposition from their own governments.

The difficulty in the Middle East is caused in part by our inability to organize cooperation even for nonmilitary action. The efforts this administration made diplomatically to lift the oil embargo reduced, at least for a time, the dangers in the Middle East. It gave everyone a breathing space. We gave up nothing-except the possibility of military action, which was a chimerical idea. When we went on a military alert for one day, we were accused of having done it for political reasons. Was it conceivable that in the middle of Watergate the United States take military action? And for what purpose?

Why are the Europeans so hostile to the United States?...I think they suffer from an enormous feeling of insecurity. They recognize that their safety depends on the United States, their economic well-being depends on the United States; and they know that we're essentially right in what we're doing. So the sense of impotence, the inability to do domestically what they know to be right, produces a certain peevishness which always stops just short of policy actions. No foreign minister ever says this.

Q: Even though the trade bill has been passed, do you think the economic difficulties here in the United States and abroad will make it possible to reduce tariffs and nontariff barriers?

A: I think it is essential that we go into these trade negotiations with the attitude of creating a new international trading system. It is the only hope we have of avoiding the political consequences we talked about earlier. If we begin to draw into ourselves, we will cause a loss of confidence. We must act as if these problems can be overcome. Maybe they can't be, but they will never be licked if we do not build a new international economic environment with some conviction.

Q: Will Congress's restrictions on Export-Import Bank credits have any impact on trade with the Soviet Union or detente?

A: The congressional restrictions have deprived the United States of important, and maybe fundamental, leverage. The Soviet Union was much more interested in credits than it was in trade, because for the next four or five years it will have very little to give in reciprocal trade.

And this is one of those examples I had in mind before. If the Congress cannot trust the executive enough to use its credit authority with discretion, then Congress will not be able to deal with the problem by the sort of restrictions it put on-aimed at depriving the credit authority granted by Congress of any effective meaning. $300 million over a period of four years is simply not enough to use as a bargaining chip with a major country. It has no significant impact on its economy, and therefore it is the surest guarantee it will be wasted.

For two years, against the opposition of most newspapers, we refused to extend credit to the Soviet Union until there was an amelioration of its foreign policy conduct. You remember various congressional amendments were introduced urging us to liberalize trade. The corollary of this was if there was more moderate Soviet conduct, trade and credits could open up. I believe that the recent Soviet statements on Jewish emigration have been caused, in part, by Soviet disappointment with the credit restrictions. But beyond that, a President who has only $300 million of credit flexibility over four years is forced in a crisis more and more to rely on diplomatic or military pressures. He has no other cards. The economic card has been effectively removed from his hand.

Q: We were intrigued by the timing of the Soviet statement; it came when the trade bill was still in conference.

7

A: I think the Soviets wanted to make clear ahead of time what their attitude was so later they could not be accused of having doublecrossed us.

Q: Do you think that Soviet disappointment over credits will cause a hardening of their position on emigration of Jews?

A: If these trends continue in the United States, you can expect a general hardening of the Soviet position across the board over a period of time. They will not go back to the cold war in one day. But there are many things the Soviet Union could do that would make our position much more complicated. What could happen in Europe, in the Middle East, in Southeast Asia, if the Soviet Union pursued a policy of maximizing our difficulties? Most of the criticism leveled at the Soviet Union these days is that they are not solving our difficulties, not that they are exacerbating them. I think the restrictions on Ex-Im credits will have an unfortunate affect on U.S.-Soviet relations.

Q: Do you see any way that the countries of the world can better coordinate their economic and financial policies?

A: One interesting feature of our recent discussions with both the Europeans and Japanese has been this emphasis on the need for economic coordination. In April 1973, in my "Year of Europe" speech, I proposed the coordination of economic policies and of energy policies. At that time, the proposal was generally resisted on the grounds that we were trying to produce a linkage where the obligations had never run to economic matters. In all the recent meetings of the President with heads of government, and all the meetings I have had with foreign ministers, our allies and friends have absolutely insisted that we coordinate economic policies. So you have had a 180-degree turn in one year.

How you in fact coordinate policies is yet an unsolved problem; but it must be solved. Otherwise, we will have a succession of beggar-thy-neighbor policies and countries trying to take a free ride on the actions of their partners.

Q: Do you believe we have to go beyond what is done at the Organization for Economic Cooperation and Development?

A: I don't know if we need new structures, but I think we need new approaches to existing structures. I haven't thought through whether we need new structures.

In the next 10 years you will have coordinated fiscal policy, including ours. I am not saying they have to be identical, but they have to be coordinated.

Q: Is there any chance of coordinating better U.S. international economic policy, particularly since the Council on International Economic Policy seems to be losing its power?

A: You can't look at policies of a government in terms of organizational mechanisms. The Council on International Economic Policy was created at a time when the National Security Council was essentially divorced from economic policies. Then it became clear that every economic policy had profound foreign policy implications and really required political inspiration and leadership to make it effective. You could never implement the energy policy as a purely economic matter; it has been a foreign policy matter from the beginning. When that happens, the issue tends to be pulled back into the orbit of the National Security Council. What you have had is a greater foreign policy involvement in economic policy decisions.

On the other hand, I think the relations between the State Department and Treasury have never been better, despite the occasional disagreements that surface in the newspapers. You expect disagreements. The issue is not whether there are disagreements but how they are settled. And they are always settled in a constructive, positive way.

On energy we have a group which I described before of Arthur Burns, Simon, myself, Robinson, and a few others who meet regularly to set the basic strategy in the international field. Whether we meet as the Council on International Economic Policy or as the National Security Council, the group has essentially the same membership.

> "The pressures of population, industrialization, and increasing interdependence of the world economy impose on us some form of rational planning and interaction."

Q: Should there be additional legislation to protect U.S. industry from ownership by Arab oil money? If so, what shape should the legislation take?

A: We are now studying the ways that oil producers' money could be invested in the United States and what we should protect against. We haven't come to any conclusions because if you get a manageable minority interest, that would be in our interest. If you get actual control over strategic industries, then you have to determine how that control would be exercised before you know how to avoid it. There are some industrial segments we would not want to be dominated by potentially hostile investors. Since we haven't completed the study, I can't give you a conclusive answer. By the middle of January we will have concluded the study.

Q: Do you think a request for legislation will be the result of that study?

A: It may be a request for some sort of a board to monitor foreign investment, and the board would formulate some proposal. I am not sure about the shape of the proposal, but we need a systematic monitoring.

The Secretary
of State

Press Conference

SOVIETS REJECT
TRADE AGREEMENT

Washington, D.C.

January 14, 1975

Bureau of Public Affairs

Office of Media Services

SECRETARY KISSINGER: Ladies and gentlemen, I am sorry to get you all together at this hour. We had originally agreed with the Soviet Government to make a statement, which I am about to read, on Thursday. But there have been a number of inquiries this afternoon which led us to believe that there might be stories that were based on inadequate information, and perhaps based on misunderstandings. And in order to avoid exacerbating the situation, and in an already rather delicate moment, we asked the Soviet Embassy whether we might release the statement this evening.

So I will now read the agreed statement of which the Soviet Government is aware, and we will have copies for you when you leave. Now the text of the statement is as follows:

(BEGIN TEXT) Since the President signed the Trade Act on January 3, [1975] we have been in touch with the Soviet Government concerning the steps necessary to bring the 1972 U.S.-Soviet Trade Agreement into force.

Article 9 of that agreement provides for an exchange of written notices of acceptance, following which the agreement, including reciprocal extension of nondiscriminatory tariff treatment [most-favored-nation (MFN)] would enter into force. In accordance with the recently enacted Trade Act, prior to this exchange of written notices, the President would transmit to the Congress a number of documents, including the 1972 agreement, the proposed written notices, a formal proclamation extending MFN to the U.S.S.R., and a statement of reasons for the 1972 agreement. Either House of Congress would then have had 90 legislative days to veto the agreement.

In addition to these procedures, the President would also take certain steps, pursuant to the Trade Act, to waive the applicability of the Jackson-Vanik Amendment. These steps would include a report to the Congress

stating that the waiver will substantially promote the objectives of the amendment and that the President has received assurances that the emigration practices of the U.S.S.R. will henceforth lead substantially to the achievement of the objectives of the amendment.

It was our intention to include in the required exchange of written notices with the Soviet Government language required by the provisions of the Trade Act that would have made clear that the duration of 3 years referred to in the 1972 Trade Agreement with the U.S.S.R. was subject to continued legal authority to carry out our obligations. This caveat was necessitated by the fact that the waiver of the Jackson-Vanik Amendment would be applicable only for an initial period of 18 months, with provision for renewal thereafter.

The Soviet Government has now informed us that it cannot accept a trading relationship based on the legislation recently enacted in this country. It considers this legislation as contravening both the 1972 Trade Agreement, which had called for an unconditional elimination of discriminatory trade restrictions, and the principle of noninterference in domestic affairs. The Soviet Government states that it does not intend to accept a trade status that is discriminatory and subject to political conditions and, accordingly, that it will not put into force the 1972 Trade Agreement.

Finally, the Soviet Government informed us that if statements were made by the United States in the terms required by the Trade Act concerning assurances by the Soviet Government regarding matters it considers within its domestic jurisdiction, such statements would be repudiated by the Soviet Government.

In view of these developments, we have concluded that the 1972 Trade Agreement cannot be brought into force at this time and that the President will therefore not take the steps required for this purpose by the Trade Act. The

PR 13/46

President does not plan at this time to exercise the waiver authority.

The Administration regrets this turn of events. It has regarded and continues to regard an orderly and mutually beneficial trade relationship with the Soviet Union as an important element in the overall improvement of relations. It will, of course, continue to pursue all available avenues for such an improvement, including efforts to obtain legislation that will permit normal trading relationships.

(END TEXT)

Now, since undoubtedly a number of you will raise questions, and some of you have already raised questions about the implications of this for our political relationships with the Soviet Union, let me make a few observations:

The problem of peace in the nuclear age must be of paramount concern for both nuclear powers. The question of bringing about a more stable international environment depends importantly on improved relations between the United States and the Soviet Union. This essentially bipartisan effort will be continued by this Administration.

We have no reason to believe that the rejection of the provisions of the Trade Bill has implications beyond those that have been communicated to us. It goes without saying that should it herald a period of intensified pressure the United States would resist with great determination and as a united people. We do not expect that to happen, however, and as far as the United States is concerned we will continue to pursue the policy of relaxation of tensions and of improving, or seeking to improve, relationships leading toward a stable peace.

As far as our domestic debate is concerned, we see no point in reviewing the debate of recent months. We want to make clear that there was no disagreement as to objectives. We differed with some of the members of Congress about the methods to achieve these objectives—these disagreements are now part of a legislative history.

As far as the Administration is concerned, it will pursue the objectives that I have outlined, in a spirit of cooperation with the Congress.

And when I have testified before the Senate Foreign Relations Committee on Friday [January 17], I will seek their advice as to the steps that, in their judgment, might be desirable in promoting the cause and the purposes which we all share.

And now I will be glad to answer your questions.

**Q:** Mr. Secretary, going to your last remarks, are you suggesting that Congress is at fault in great part for what has happened, and if that is what you are suggesting, why did you and Congress equally engage in this exchange of letters which seem to tell the American people that those assurances had been received?

**A:** I think that all of you can review the public statements that I have made over the years of this debate expressing our judgment as to the likely consequences of this course.

You will also recall that in my testimony before the Senate Finance Committee on December 3 [1974], I stated explicitly that if any claim were made that this was a government-to-government transaction, and if any

assertions were made that assurances had been extended, that those would be repudiated by the Soviet Government.

I believe that there were a number of reasons that led to the Soviet decision. The purpose of my remarks was not to put the blame anywhere, but in order to put the debate behind us and to turn us toward the future.

**Q:** Mr. Secretary, what are some of those reasons, do you think, that led the Soviets to this move?

**A:** I believe, as I have already stated publicly, that since the exchange of letters there have been many public statements that were difficult for the Soviet Union to accept. And the decision with respect to the Export-Import Bank ceiling was undoubtedly an important factor in leading to this turn of events.

**Q:** Mr. Secretary, can you tell us what you think this means for the future of emigration of people from the Soviet Union, especially Jews?

**A:** We have been given no official communication.

**Q:** Do you think the number will go down?

**A:** I would not want to speculate. The United States has made clear before that we favored the widest possible emigration, and we did so privately. And, for a time, not ineffectively.

**Q:** Mr. Secretary, right now, do you have any reason to believe that the Soviet Union is or will begin to apply intensive pressure in any particular region of the world?

**A:** We have no reason to suppose so. I simply stated this to make clear what our attitude would be if this should happen. I also want to make clear that the United States will pursue a policy of relaxation of tensions, that the political premises of our policy of detente remain in full force, and that we are prepared to consult with the Congress to see how the objectives of the Trade Bill can be applied to the Soviet Union under conditions that are perhaps more acceptable.

**Q:** Mr. Secretary, would you care to characterize the Soviet letter of rejection?

**A:** I think it was factual.

**Q:** When was it received, sir?

**A:** It was received on Friday [January 10, 1975], and the further discussions with respect to it were concluded yesterday.

**Q:** Do you think this reflects any change within the Soviet leadership? Do you think that there is a change, of which this is one result?

**A:** We have no evidence whatever to that effect.

**Q:** Mr. Secretary, after the Vladivostok meeting [November 23-24, 1974] voices were raised in Congress saying that since it has been proved possible to be tough with the Russians on the Trade Bill, that we should therefore go back and renegotiate the Vladivostok agreement and get lower ceilings with them. Do you think that sort of public statement had any impact?

**A:** Well, I don't want to go into individual public statements. I tried to point out on several occasions the limits of what a superpower can accept. And you may

remember that I warned in a press conference about the
impact on detente of such a debate with respect to
Vladivostok.

Q: Mr. Secretary, do you expect now that the visit of Mr. Brezhnev [Leonid I. Brezhnev, General Secretary of the Central Committee of the Communist Party] to this country might be put into question?

A: I have absolutely no reason to suppose this. All the communications we have received from the Soviet Government seem to suggest that the political orientation is unchanged. And we will conduct our policy until we receive evidence to the contrary on the basis of carrying forward the policy of detente.

Q: Mr. Secretary, the Lend-Lease Agreement, as I recall it, said that the Soviet Union did not have to make any further payments after this year if it did not receive most-favored-nation. So can we assume that that means the Soviet Union will also not be paying any further Lend-Lease payments? And that in turn raises the question of, should they still be entitled to any credits at all?

A: Well, with respect to the Lend-Lease, we have not sorted out specifically from what obligations the Soviet Union would be relieved. But I think your interpretation of the agreement is a reasonable one.

As you know, the granting of new credits has been linked to the implementation of the MFN, and therefore your second question is really moot, because no new credits can be extended under the existing legislation.

Q: Mr. Secretary, how did the Soviet Union first communicate with you that they intended to do this?

A: Well, after the passage of the Trade Act and the Ex-Im [Export-Import Bank] legislation, the Soviet Union made clear in a number of ways, including public comments, its displeasure with the legislation. But it did not communicate with us formally. After the Trade Act was signed, we informed the Soviet Union of the precise steps that would have to be taken under the Trade Act to implement the Trade Agreement and to put into effect the waiver provisions of the Jackson-Vanik Amendment.

In response to these provisions, which made it impossible for us to apply the waiver without some Soviet action, the Soviet Union informed us that they would not participate in these actions. These actions specifically were that the Trade Agreement would have to be amended to run not for a period of 3 years, but to provide for the fact that it might lapse after 18 months in case MFN were not extended. And we had to have assurances that we could make statements with respect to Soviet emigration practices, or rather assurances that we had been given with respect to emigration practices, which they would not repudiate.

Now, as I have pointed out on many occasions, the assurances which we had received—and you may have seen stories that we had resisted the word "assurance" throughout our discussions with the Congress—that the information we had received concerned the application of Soviet law and the implementation of Soviet practices. And as I had made clear on December 3, any assurances concerning the Soviet Government were bound to be rejected, and they have been.

Q: Mr. Secretary, in view of the fact that many officials in this government have expressed concern that the Soviet Union is not getting enough out of detente—and one of its main purposes in having a detente with the United States was in improving its trade, getting technology, getting credits from the United States—can you tell us on what you base your optimism that the other aspects of detente can continue?

A: I stated that the communications that we have so far received have indicated that the Soviet Union wishes this political relationship to continue. We have no other evidence. And we will, of course, base our own conclusions on the actions of the Soviet Government and not on the note.

Q: Mr. Secretary, evidently publicity and congressional debate had a great deal to do with the Soviet decision. Does this raise the question whether a democracy like ours can pursue openly a detente policy with the Soviet Union, or must it be pursued in secret and risk failure if the public is brought into it?

A: Well, I really do not think any useful purpose would be served by speculating on all the causes of the present state of affairs.

I believe that any foreign policy of the United States that is not based on public support, and above all on congressional support, will not have a firm foundation. At the same time, there is the problem of the degree to which this control is exercised and in what detail. And this is a matter that will require constant adjustment and discussion between the Executive and the Congress.

I repeat: we shared the objective of those with whose tactics we disagree, and we do not think that these tactics were in any sense improper or unreasonable.

Q: Mr. Secretary, do you see any link between the Soviet action that you are discussing and recent reports that Mr. Brezhnev has been under criticism at home for his detente approach?

A: Well, all I know about those stories is what I read in the newspapers. And we have to base our policies on the actions and communications of the Soviet Government. And therefore, I don't want to speculate on the internal position of various Soviet leaders.

Q: Mr. Secretary, do you expect the Soviets to reduce their purchases of American products to further give evidence of this displeasure?

A: I have not stated that there is Soviet displeasure with the United States. I stated that the Soviet Union objected to certain legislative provisions. I have no evidence one way or the other about what Soviet commercial practices will be henceforth, and it is quite possible that they have not made a decision.

Q: Mr. Secretary, would you characterize it as being accurate to say that during the months of negotiations with the Senators, you had information from the Soviets to the effect that you could negotiate in good faith with the Senators on these specific emigration issues, but over the past few weeks the Soviet Union has changed its policy whereby it no longer can stand by the information that it had given to you during those months of negotiations?

A: The reason the negotiations with the Senators took so long was our concern to make sure that we would communicate nothing that we could not back up. The Soviet Union gave us certain descriptions of their domestic practices, which we attempted to communicate as accurately as we could. Obviously those who were concerned with promoting emigration attempted to make these descriptions as precise and as detailed as possible. And that is perfectly understandable.

I think what may have happened is, when the Soviet Union looked at the totality of what it had to gain from this trading relationship as against the intrusions in its domestic affairs, it drew the balance sheet of which we have the result today. But they have never disavowed the assurances or the statements in my letter.

Q: Mr. Secretary, you say that there is no reason to believe that there are implications beyond this. However, was not one of the incentives that we used in relations with the Soviet Union the trade incentive, to that extent linkage. And to that extent is there not some implication?

A: It would be my judgment that the interest in the preservation of peace must be equally shared by both sides. I have stated the Administration position in many statements before the Congress, in which I pointed out that it is our view, and it remains our view, that it is desirable to establish the maximum degree of links between the two countries in order to create the greatest incentive for the preservation of stable relationships.

We are prepared to continue exploring these possibilities. And we are certain that the Congress will deal with

us in a conciliatory and constructive manner. So we look at this as an interruption and not as a final step.

Q: Mr. Secretary, I'm a little confused about exactly what happened. Administration officials had said when the Trade Bill passed that they could live with it. You were asked at one point whether you would recommend vetoing of the Ex-Im Bank legislation, and you didn't answer it directly, and the President signed it. Did you have any idea that this was coming? Couldn't you have taken a step like vetoing the Ex-Im Bank to have prevented this?

A: Well, we are faced with a situation in which there were differences of view as to what the traffic would bear. I don't believe that anybody reading my statements over the years can have any question about what my view was and my statements are on the public record. And there was disagreement as to the validity of this.

For the United States to veto legislation which made credits available to American business for trading with the whole world—because of an unsatisfactory limitation with respect to the Soviet Union at the end of a prolonged period of negotiation—was a decision which the President felt he could not take, and it is a decision with which I agreed. It came down to a fine judgment. It would not have changed the basic problem, anyway, because with the Ex-Im legislation vetoed, the Soviet Union would have had no reason to put into effect the trade provisions in any event. So we were faced with a very difficult choice. In one case they would get $300 million; in the other case they could get nothing.

THE PRESS: Thank you, Mr. Secretary.

DEPARTMENT OF STATE, U.S.A.
WASHINGTON, D.C. 20520

POSTAGE AND FEES PAID
DEPARTMENT OF STATE
STA-501

THIRD CLASS
BULK RT.

PRESS
DEPARTMENT OF STATE

[LC]

January 14, 1975

No. 13

#46

PRESS BRIEFING BY
THE HONORABLE HENRY A. KISSINGER
SECRETARY OF STATE
STATE DEPARTMENT BRIEFING ROOM

JANUARY 14, 1975

PR #13

2

as follows:

(BEGIN TEXT) Since the President signed the Trade Act on January 3, we have been in touch with the Soviet Government concerning the steps necessary to bring the 1972 US - Soviet Trade Agreement into force.

- Article 9 of that Agreement provides for an exchange of written notices of acceptance, following which the Agreement, including reciprocal extension of non-discriminatory tariff treatment (MFN) would enter into force. In accordance with the recently enacted Trade Act, prior to this exchange of written notices, the President would transmit to the Congress a number of documents, including the 1972 Agreement, the proposed written notices, a formal proclamation extending MFN to the USSR and a statement of reasons for the 1972 agreement. Either House of Congress would then have had ninety legislative days to veto the Agreement.

PR #13

3

that the emigration practices of the USSR will henceforth
lead substantially to the achievement of the objectives of
the amendment.

It was our intention to include in the required
exchange of written notices with the Soviet Government
language, required by the provisions of the Trade Act,
that would have made clear that the duration of three years
referred to in the 1972 Trade Agreement with the USSR
was subject to continued legal authority to carry out
our obligations.

This caveat was
necessitated by the fact that the waiver of the Jackson-
Vanik amendment would be applicable only for an initial
period of 18 months, with provision for renewal
thereafter.

The Soviet Government has now informed us that
it cannot accept a trading relationship based on the legis-
lation recently enacted in this country. It considers
this legislation as contravening both the 1972 Trade Agreement
which had called for an unconditional elimination of
discriminatory trade restrictions, and the principle of non-
interference in domestic affairs. The Soviet Government
states that it does not intend to accept a trade status that

PR #13

4

Finally, the Soviet Government informed us that
if statements were made by the United States, in the terms
required by the Trade Act, concerning assurances by the
Soviet Government regarding matters it considers within its
domestic jurisdiction, such statements would be repudiated
by the Soviet Government.

In view of these developments, we have concluded
to the 1972 Trade Agreement cannot be brought into force at this
time and that the President will therefore not take the
steps required for this purpose by the Trade Act. The President
does not plan at this time to exercise the waiver authority.

(END TEXT)

PR #13

5

We have no reason to believe that the rejection of the provisions of the Trade Bill has implications beyond those that have been communicated to us. It goes without saying—that should it herald a period of intensified pressure—that the United States would resist with great determination, and as a united people. We do not expect that to happen, however, and as far as the United States is concerned, we will continue to pursue the policy of relaxation of tensions, and of improving or seeking to improve relationships, leading towards a stable peace.

PR #13

6

As far as our domestic debate is concerned, we see no point in reviewing the debate of recent months. We want to make clear that there was no disagreement as to objectives. We differed with some of the Members of Congress about the methods to achieve these objectives -- these disagreements are now part of a legislative history.

And when I have testified before the Senate Foreign Relations Committee on Friday, I will seek their advice as to the steps that in their judgment might be desirable in promoting the cause and the purposes which we all share.

[Continued on page B 1]

PR #13

7

Q Mr. Secretary, going to your last remarks, are you suggesting that Congress is at fault in great part for what has happened, and if that is what you are suggesting, why did you and Congress equally engage in this exchange of letters which seem to tell the American people that those assurances had been received?

SECRETARY KISSINGER: I think that all of you can review the public statements that I have made over the years of this debate expressing our judgment as to the likely consequences of this course.

You will also recall that in my testimony before the Senate Finance Committee on December 3, I stated explicitly that if any claim were made that this was a government-to-government transaction, and if any assertions were made that assurances had been extended, that those would be repudiated by the Soviet Government.

I believe that there were a number of reasons that led to the Soviet decision. The purpose of my remarks was not to put the blame anywhere, but in order to put the debate behind us and to turn us towards the future.

(LCJ)

PR #13

8

Q Mr. Secretary, what are some of those reasons do you think that led the Soviets to this move?

SECRETARY KISSINGER: I believe, as I have already stated publicly, that since the exchange of letters, there have been many public statements that were difficult for the Soviet Union to accept. And the decision with respect to the Ex-Im Bank ceiling was undoubtedly an important factor in leading to this turn of events.

Q Mr. Secretary, can you tell us what you think this means for the future of emigration of people from the Soviet Union, especially Jews?

SECRETARY KISSINGER: We have been given no official communication.

Q Do you think the number will go down?

SECRETARY KISSINGER: I would not want to speculate. The United States has made clear before that we favored the widest possible emigration, and we did so privately. And, for a time, not ineffectively.

Q Mr. Secretary, right now, do you have any reason to believe that the Soviet Union is or will begin to apply intensive pressure in any particular region of the world?

PR #13

9

SECRETARY KISSINGER: We have no reason to suppose so. I simply stated this to make clear what our attitude would be if this should happen. I also want to make clear that the United States will pursue a policy of relaxation of tensions, that the political premises of our policy of detente remain in full force, and that we are prepared to consult with the Congress to see how the objectives of the Trade Bill can be applied to the Soviet Union under conditions that are perhaps more acceptable.

Q Mr. Secretary, would you care to characterize the Soviet letter of rejection?

SECRETARY KISSINGER: I think it was factual.

Q When was it received, sir?

SECRETARY KISSINGER: It was received on Friday, and the further discussions with respect to it were concluded yesterday.

Q Do you think this reflects any change within the Soviet leadership? Do you think that there is a change of which this is one result?

SECRETARY KISSINGER: We have no evidence whatever to that effect.

PR #13

10

Q Mr. Secretary, after the Vladivostok meeting voices were raised in Congress saying that since it has been proved possible to be tough with the Russians on the Trade Bill, that we should therefore go back and renegotiate the Vladivostok agreement, and get lower ceilings with them. Do you think that sort of public statement had any impact?

SECRETARY KISSINGER: Well, I don't want to go into individual public statements. I tried to point out on several occasions the limits of what a super-power can accept. And you may remember that I warned in a press conference about the impact on detente of such a debate with respect to Vladivostok.

Q Mr. Secretary, do you expect now that the visit of Mr. Brezhnev to this country might be put into question?

SECRETARY KISSINGER: I have absolutely no reason to suppose this. All the communications we have received from the Soviet Government seem to suggest that the political orientation is unchanged. And we will conduct our policy until we receive evidence to the contrary on the basis of carrying forward the policy of detente.

PR #13

11

Q Mr. Secretary, the Lend-Lease Agreement, as I recall it, said that the Soviet Union did not have to make any further payments after this year if it did not receive most-favored-nation. So can we assume that that means the Soviet Union will also not be paying any further Lend-Lease payments. And that in turn raises the question of should they still be entitled to any credits at all?

SECRETARY KISSINGER: Well, with respect to the Lend-Lease, we have not sorted out specifically from what obligations the Soviet Union would be relieved. But I think your interpretation of the agreement is a reasonable one.

Q Mr. Secretary, how did the Soviet Union first communicate with you that they intended to do this?

SECRETARY KISSINGER: Well, after the passage of the Trade Act and the Ex-Im legislation, the Soviet Union made clear in a number of ways, including public comments, its displeasure with the legislation. But it

PR #13

12

did not communicate with us formally. After the Trade
Act was signed, we informed the Soviet Union of the precise
steps that would have to be taken under the Trade Act
to implement the Trade Agreement and to put into
effect the waiver provisions of the Jackson-Vanik amendment.

In response to these provisions, which made it impossible
for us to apply the waiver without some Soviet action,
the Soviet Union informed us that they would not participate
in these actions. These actions specifically were that
the Trade Agreement would have to be amended to run
not for a period of three years, but to provide for the
fact that it might lapse after eighteen months in case
MFN were not extended. And we had to have assurances
that we could make statements with respect to Soviet
emigration practices, or rather assurances that we had
been given with respect to emigration practices, which
they would not repudiate.

Now, as I have pointed out on many occasions,
the assurances which we had received -- and you may
have seen stories that we had resisted the word
"assurance" throughout our discussions with the Congress --
that the information we had received concerned the
application of Soviet law and the implementation of

PR #13

13

Q Mr. Secretary, in view of the fact that many officials in this government have expressed concern that the Soviet Union is not getting enough out of detente, and one of its main purposes in having a detente with the United States was in improving its trade, getting technology, getting credits from the United States, can you tell us on what you base your optimism that the other aspects of detente can continue?

SECRETARY KISSINGER: I stated that the communications that we have so far received have indicated that the Soviet Union wishes this political relationship to continue. We have no other evidence. And we will, of course, base our own conclusions on the actions of the Soviet Government and not on the note.

Q Mr. Secretary, evidently publicity and Congressional debate had a great deal to do with the Soviet decision. Does this raise the question whether a democracy like ours can pursue openly a detente policy with the Soviet Union, or must it be pursued in secret and risk failure if the public is brought into it?

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SECRETARY KISSINGER: Well, I really do not think any useful purpose would be served by speculating on all the causes of the present state of affairs.

- I believe that any foreign policy of the United States that is not based on public support and above all on Congressional support will not have a firm foundation. At the same time, there is the problem of the degree to which this control is exercised and in what detail. And this is a matter that will require constant adjustment and discussion between the Executive and the Congress.

I repeat -- we shared the objective of those with whose tactics we disagree, and we do not think that these tactics were in any sense improper or unreasonable.

Q Mr. Secretary, do you see any link between the Soviet action that you are discussing and recent reports that Mr. Brezhnev has been under criticism at home for his detente approach?

SECRETARY KISSINGER: Well, all I know about those stories is what I read in the newspapers. And we have to base our policies on the actions and communications of the Soviet Government. And therefore, I don't want to speculate on the internal position of various Soviet leaders.

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Q Mr. Secretary, do you expect the Soviets to reduce their purchases of American products to further give evidence of this displeasure?

SECRETARY KISSINGER: I have not stated that there is Soviet displeasure with the United States. I stated that the Soviet Union objected to certain legislative provisions. I have no evidence one way or the other about what Soviet commercial practices will be henceforth, and it is quite possible that they have not made a decision.

Q Mr. Secretary, would you characterize it as being accurate to say that during the months of negotiations with the Senators, you had information from the Soviets to the effect that you could negotiate in good faith with the Senators on these specific emigration issues, but over the past few weeks the Soviet Union has changed its policy whereby it no longer can stand by the information that it had given to you during those months of negotiations?

SECRETARY KISSINGER: The reason the negotiations with the Senators took so long was our concern to make sure that we would communicate nothing that we could not back up. The Soviet Union gave us certain descriptions of their domestic practices, which we

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I think what may have happened is when the
Soviet Union looked at the totality of what it had to
gain from this trading relationship as against the
intrusions in its domestic affairs, it drew the balance
sheet of which we have the result today. But they
have never disavowed the assurances or the statements
in my letter.

Q Mr. Secretary, you say that there is no
reason to believe that there are implications beyond this.
However, was not one of the incentives that we used in
relations with the Soviet Union the trade incentive,
to that extent linkage. And to that extent is there not
some implication?

SECRETARY KISSINGER: It would be my judgment
that the interest in the preservation of peace must be
equally shared by both sides. I have stated the
Administration position in many statements before the
Congress, in which I pointed out that it is our view,

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and it remains our view that it is desirable to establish
the maximum degree of links between the two countries
in order to create the greatest incentive for the
preservation of stable relationships.

We are prepared to continue exploring these
possibilities. And we are certain that the Congress
will deal with us in a conciliatory and constructive
manner. So we look at this as an interruption, and not
as a final step.

Q Mr. Secretary, I'm a little confused about
exactly what happened. Administration officials had
said when the Trade Bill passed that they could live
with it. You were asked at one point whether you would
recommend vetoing of the Ex-Im Bank legislation, and
you didn't answer it directly, and the President signed
it. Did you have any idea that this was coming?
Couldn't you have taken a step like vetoing the Ex-Im
Bank to have prevented this?

SECRETARY KISSINGER: Well, we are faced
with a situation in which there were differences
of view as to what the traffic would bear. I don't
believe that anybody reading my statements over the
years can have any question about what my view was

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For the United States to veto legislation
which made credits available to American business
for trading with the whole world -- because of an
unsatisfactory limitation with respect to the Soviet
Union at the end of a prolonged period of negotiation --
was a decision which the President felt he could not
take, and it is a decision with which I agreed. It came
down to a fine judgment. It would not have changed the
basic problem, anyway, because with the Ex-Im
legislation vetoed, the Soviet Union would have had
no reason to put into effect the trade provisions in
any event. So we were faced with a very difficult
choice. In one case they would get $300 million;
in the other case they could get nothing.

Q Thank you, Mr. Secretary.

(Whereupon at 7:00 p.m. the briefing was
concluded.)

The Secretary
of State

Interview

Washington, D.C.

January 16, 1975

Bureau of Public Affairs

Office of Media Services

For "Bill Moyers' Journal: International
Report," Public Broadcasting Service

**MR. MOYERS:** Mr. Secretary, I was thinking coming down here of a conversation we had when you were teaching at Harvard in 1968, 6 months before you came to the White House. You had a very reasonably clear view, a map of the world in your mind at that time, a world based on the stability brought about by the main powers. I am wondering what that map is like in your mind now of the world.

**SECRETARY KISSINGER:** Well, I thought at the time—and I still do—that you cannot have a peaceful world without most of the countries, and preferably all of the countries, feeling that they have a share in it. This means that those countries that have the greatest capacity to determine peace or war—that is, the five major centers—be reasonably agreed on the general outlines of what that peace should be like. But at the same time, one of the central facts of our period is that more than a hundred nations have come into being in the last 15 years, and they, too, must be central participants in this process. So that for the first time in history foreign policy has become truly global and therefore truly complicated.

**Q:** What about the flow of wealth to countries in the Middle East? Hasn't that upset considerably the equilibrium that you thought would be possible between the five centers of power?

**A:** Well, the world that we all knew in 1968, when you and I talked, is extraordinarily different today. At that time we had the rigid hostility between the Communist world and the non-Communist world. At that time Communist China, the People's Republic of China, was outside the mainstream of events. And at that time, you are quite right, the oil-producing countries were not major factors. The change in influence of the oil-producing countries—the flow of resources to the oil-producing countries in the last 2 years in a way that was unexpected and is unprecedented—is a major change in the international situation to which we are still in the process of attempting to adjust.

**Q:** All of these changes brought to mind something you once wrote. You said "statesmen know the future, they feel it in their bones, but they are incapable of proving the truth of their vision." And I am wondering, what are your bones telling you now about the future, with all of these new forces at work?

**A:** Well, I feel we are at a watershed. We are at a period which in retrospect is either going to be seen as a period of extraordinary creativity or a period when really the international order came apart—politically, economically, and morally.

I believe that with all the dislocations we now experience, there also exists an extraordinary opportunity to form for the first time in history a truly global society, carried by the principle of interdependence. And if we act wisely and with vision, I think we can look back to all this turmoil as the birth pangs of a more creative and better system. If we miss the opportunity, I think there is going to be chaos.

**Kissinger:** "...you cannot have a peaceful world without most of the countries and preferably all of the countries feeling that they have a share in it."

**Q:** But at the same time the opportunity exists, as you yourself have said, the political problem is that the Western World—and this is a direct quote of yours—is suffering from inner uncertainty and a sense of misdirection. What is causing that inner uncertainty? Is it external, is it internal, or is it simply we don't know what we really want to do?

**A:** Bill, I think you are quite right. The aspect of contemporary life that worries me most is the lack of

PR 16

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purpose and direction of so much of the Western World. There are many reasons for this. The European countries have had to adjust in this century to two World Wars, to an enormous change in their position, to a dramatic-really social-revolution in all of them. And now, to the process of European unification.

The new countries are just beginning to develop a coherent picture of the international world, having spent most of their energies gaining independence.

And in the United States, we have had a traumatic decade—the assassination of a President and his brother, the Viet-Nam war, the Watergate period.

So we have this great opportunity, at a moment when the self-confidence in the whole Western World has been severely shaken.

On the other hand, as far as the United States at least is concerned, I believe we are a healthy country, and I believe we are capable of dealing with the problem that I have described, creatively.

**Q:** But you also used a "perhaps" in that statement. You said that every country in the Western World is suffering from inner uncertainty with the exception perhaps of the United States. And I am wondering why you brought in the "perhaps."

**A:** Because no country can go through what the United States has gone through without suffering, on the one hand, some damage but also gaining in wisdom. I think it is the process of growing up to learn one's limits and derive from that a consciousness of what is possible within these limits.

Through the greater part of our history we felt absolutely secure. In the postwar period we emerged from a victorious war with tremendous resources. Now the last decade has taught America that we cannot do everything and that we cannot achieve things simply by wishing them intensely.

On the other hand, while that has been a difficult experience for us, it also should have given us a new sense of perspective. So I used the word "perhaps" because our reaction to these experiences will determine how we will master the future.

But I am really quite confident that if we act in concert, and if we regain, as I think we can and must, our national consensus, that we can do what is necessary.

**Q:** In the postwar world, the consensus between Europe and America was built around a common defense against a mutual danger. That has disappeared. The defense structure is very weak in the West at the moment, and a new factor, the economic imperative, has arisen. Europe and Japan are much more dependent, for example, on Middle Eastern oil than we are. Doesn't that make them less dependable as members of this new consensus?

**A:** I would not, Bill, agree that the defense is weak. Actually, we have had considerable success in building a quite strong defensive system between us and Europe and between us and Japan—especially between us and Europe. The difficulty is that the perception of the threat has

diminished and so many new problems have arisen that simply a common defense is not enough by itself to provide the cement of unity.

You pointed out the economic problem. It is an interesting fact that in April 1973 [before the annual meeting of the Associated Press editors at New York on April 23] I called for the economic unity of the industrialized countries. At that time this was rejected as carrying the alliance much too far. Today every one of our friends insists that we coordinate our economic policies because they recognize that their prosperity depends on our economic programs.

Now, the problem of relations to the oil producers, for example, has in Europe and in Japan evoked a much greater sense of vulnerability than in the United States, because it is based on fact.

> Moyers: "You said 'statesmen know the future, they feel it in their bones, but they are incapable of proving the truth of their vision.' And I am wondering, what are your bones telling you now about the future, with all of these new forces at work?"

**Q:** Wouldn't we be worried if we were in their position?

**A:** Absolutely. I am not criticizing either the Europeans or the Japanese for their reaction. We have attempted to create in them a sense that together with us we can master the energy problem. And in all the discussions of conservation, recycling, alternative sources of energy, financial solidarity, there are many technical solutions. We have always chosen the one that in our judgment has the greatest potential, to give our friends a sense that they can master their fate, and to overcome the danger of impotence which is a threat at one and the same time to their international, as well as to their domestic, position. This process is not yet completed. And as we go through it, there are many ups and downs.

On the other hand, we have to remember it is only one year since the Washington Energy Conference [February 1974] has been called—less than a year. In that time, an International Energy Agency has been created, a conservation program has been agreed to, emergency sharing has been developed for the contingency of new embargoes.

I am absolutely confident that within a very short time—a matter of weeks—we will have agreed on financial solidarity. And within a month we will make proposals on how to develop alternative resources.

One of the problems is that each country is so concerned with its domestic politics that these very important events are coming to pass in a very undramatic manner,

LLO

3

and in a way that does not galvanize the sort of support that the Marshall Plan did. But the achievements, in my view, have not been inconsiderable and may be in retrospect seen as the most significant events of this period.

**Q:** Is it conceivable to expect Europe and Japan to go with us on our Middle Eastern policy, when they have to get most of their oil from the OPEC [Organization of Petroleum Exporting Countries] countries, and we do not?

**A:** I think it is not only conceivable—I think it is above all in their own interests. Because we have to understand what is our Middle East policy. Our Middle East policy is to enable Europe and Japan to put themselves into the maximum position of invulnerability toward outside pressures but at the same time to engage in a dialogue with the producers, to give effect to the principle of interdependence on a global basis.

We recognize—in fact, we were the first to advance the proposition—that the oil producers must have a sense that the arrangements that are made are not only just but are likely to be long-lasting.

We have pursued a dialogue with the producers on the most intensive basis. We have set up commissions with Iran and Saudi Arabia, and we have very close relationships in economic discussions with Algeria and other countries in which we are trying to relate our technical know-how to their resources, and in which we are attempting to demonstrate that jointly we can progress to the benefit of all of mankind.

Now, we are prepared later this year—as soon as some common positions have been developed with the consumers, on the basis of the discussions we had with the French President at Martinique [President Valery Giscard d'Estaing, December 14-16, 1974]—to have a multilateral talk between consumers and producers. And therefore, our vision of what should happen is a cooperative arrangement between consumers and producers. And I believe that it is in the interests of Europe and Japan to participate in this, and their actions indicate that they believe that, too.

> Kissinger: "I believe that with all the dislocations we now experience, there also exists an extraordinary opportunity to form for the first time in history a truly global society carried by the principle of interdependence. And if we act wisely and with vision, I think we can look back to all this turmoil as the birth pangs of a more creative and better system. If we miss the opportunity, I think there is going to be chaos."

**Q:** Does your concept of interdependence stop with the regional interdependence of the industrial world—the industrial consumers—or do you go far enough to include the global interdependence that comes from the billion people in the southern half of the globe who feel excluded from the discussions that are going on with the oil-producing countries?

**A:** Well, first, our idea includes, as an essential component, the billion people in the southern half of the globe. And again, if I may remind you, at the Washington Energy Conference we made clear that the cooperation among the consumers should be followed by immediate talks, first with the consuming less-developed countries and then with the producing countries. So the idea of a consumer-producer dialogue was first advanced by us. But we are happy to go along with the French proposal, if and when, which we believe will be fairly soon, the essential prerequisites have been met.

But obviously a world in which the vast majority of mankind does not feel that its interests and purposes are recognized cannot be a stable world. And therefore we have continually supported foreign aid. We have this week put before the Finance Ministers of the International Monetary Fund that is meeting here the importance of creating a special trust fund for the less-developed countries that have been hard-hit by rising oil prices. And we believe that they must be an essential part of the community I am talking about.

**Q:** Our foreign aid program, which you raised, has been about constant the last few years, and therefore in real dollars is down.

**A:** I agree.

**Q:** We—almost virtually alone among the industrial nations—have not helped the underdeveloped world with its manufactured goods on our tariff policy. A lot of the food that we are giving right now is going into political areas, strategical areas, rather than humanitarian areas. The Brazilians and Indians say we are excluding them from the definition of "consumer." And the impression you get from talking to representatives of the developing world is that they really do not agree that we are very conscious of their consideration and needs.

**A:** Well, I think quite honestly there is a difference between what they say publicly and what they say privately.

It is a fact that in many of the less-developed countries it is politically not unhelpful to seem to be at least aloof from the most powerful country in the world and to give the impression that one is not dominated by this colossus. And therefore the rhetoric of many of these countries is much more strident than the reality of their foreign policy.

Now, it is true that the American people have been disillusioned by some of their experiences in international affairs. And inevitably during a recession it is difficult to mobilize public support for a very large foreign aid program. And these are obstacles with which we contend.

Now, with respect to the tariff preferences. More restrictions were put on them by the Congress than we

4

thought wise. And some of the penalties that were at-
tached to particular groupings affected countries-like
Ecuador-which really are members of the oil-producing
cartel by courtesy only-or countries like Venezuela, with
which we have a long tradition of Western Hemisphere
solidarity. And we have regretted these particular limita-
tions. In addition there have been restrictions on certain
products about which Brazil and India complain that
affect these countries unfavorably.

We have indicated that after we have had an opportuni-
ty to study it, we would bring to the attention of the
Congress the special inequities that have been caused by
this legislation.

On the other hand, I cannot accept your statement
that this legislation does not permit additional access of
industrial goods. For example, Mexico, which yesterday
pointed out some of the inequities to us, nevertheless
benefits to the extent of $350 million of its products in
the U.S. market by the new trade act. And I am sure a
similar study could be made for Brazil and India and other
countries.

So while we don't think the trade act went as far as we
should have wished, I think it went generally in the right
direction. And we are determined to work with Congress
to improve it.

But your question suggests a more fundamental prob-
lem. Many of these new countries-this doesn't apply to
the Latin American countries-but many of the new coun-
tries formed their identity in opposition to the industrial
countries, and they are caught in a dilemma. Their rheto-
ric is a rhetoric of confrontation. The reality is a reality
of interdependence. And we have seen in the United
Nations and elsewhere that the rhetoric doesn't always
match the necessities. And one of the problems of inter-
national order is to bring them closer together.

Kissinger: "...obviously a world in
which the vast majority of mankind
does not feel that its interests and
purposes are recognized cannot be a
stable world."

Q: One of the issues they point to, for example, is the fact that the oil-producing countries have recently allocated some $2 billion in aid to these 40 or so poor countries in the world. That is roughly the amount of the increase in the price these countries are paying for oil. They are paying us about a billion dollars more for food and fertilizer. And yet we have not adjusted our assistance to them to compensate for this. So they say they are being driven into a "tyranny of the majority" by turning to the OPEC countries for the kind of assistance that interdependence makes necessary.

A: Well, I don't think it is correct that we are not

adjusting. For example, our PL 480 program, which is
our food contribution, is on the order of about $1.5
billion, or almost that large. And we have opted, after all
the discussions, for the highest proposal that was made,
or substantially the highest proposal. I also don't agree
with you that we are giving most of our food aid for
strategic purposes.

Q: I didn't say "most." I didn't mean to say "most."
I mean a substantial amount.

A: We are giving some in countries in which political relationships are of importance to us. And it stands to reason that when a country has a vital resource, that it keep in mind the degree of friendship that other countries show for it before it distributes this resource, essentially on a grant basis.

But the vast majority—the considerable majority—of our food aid goes for humanitarian purposes. And even in those countries where political considerations are involved, those are still countries with a very real and acute food shortage.

Q: You said recently that we have to be prepared to
pay some domestic price for our international position.
More food aid is going to mean increased prices at home.
And I am wondering what are some of the other prices
you anticipate Americans are going to have to be paying
because of this international position.

A: Well, I think first of all we have to understand
that what seems to be a domestic price in the long term
is the best investment we can make, because if the United
States lives in a hostile world, the United States lives in a
depressed world, then inevitably, given our dependence on
the raw materials of the world and given our essential
interest in peace, in the long term we will suffer.

We have to recognize domestically, first of all, that
foreign aid programs, as they are now being developed,
are in our interests. Secondly, that in developing such
programs as financial solidarity and conservation of energy,
even though they are painful, they are absolutely essential
for the United States to be able to play a major role
internationally and to master its domestic problems. And
of course we have to be prepared to pay the price for
national security.

Q: In Europe recently I found some feeling of concern that the emphasis on interdependence—and because of the economic and energy crisis in particular—is going to bring an alignment of the old rich, the industrial nations, against the new rich, the oil nations and commodity nations, at the exclusion of the poor. And if I hear you correctly, you are saying we cannot let that happen.

A: Well, first of all we are not talking of an alliance
of the old rich against the new rich, because we are
seeking cooperation between the old rich and the new
rich. Both need each other. And neither can really
prosper or indeed survive except in an atmosphere of
cooperation. And it seems to us that the old rich and
the new rich must cooperate in helping the poor part of
the world.

5

Take the problem of food, which you mentioned. There is no way the United States can feed the rest of the world. And from some points of view, the level of our food aid has mostly a symbolic significance, because the ultimate solution to the food problem depends on raising the productivity of the less-developed countries. This requires fertilizer, help in distribution, and similar projects. This in turn can only be done through the co-operation of the technical know-how of the old rich with the new resources of the new rich. And we will, within the next 2 months, make a very concrete proposal of how all of this can be put together to increase drastically the food production in the poor part of the world.

**Q:** What about the psychological adjustment that all of this is causing us to make? Does it disturb you that a handful of Arab sheiks in a sense have so much new power and so much dominance on the world scene?

**A:** It is a new fact to which we all have to adjust, including the oil-producing countries. But I think that on the whole everybody is trying to deal with these long-range problems in a cooperative spirit, although of course obviously the level of experience in dealing with global problems differs between various nations.

**Q:** Is our specific purpose of our policy toward the oil-producing countries to arrest the flow of wealth to them?

**A:** No. Our concern is that the flow of wealth, which is inevitable, is channeled in such a way that it does not disrupt the international—the well-being of all the rest of the world.

If you take countries like Iran, for example, or Algeria, that use most of their wealth for their own development—which means in effect that they are spending the energy income in the industrialized part of the world—this is not a basically disruptive effect. It has certain dislocations. But I think this is not basically disruptive.

What presents a particular problem is in those areas where the balances accumulate and where the investment of large sums, or the shifting around of large sums, can produce economic crises that are not necessarily intended. This makes the problem of finding financial institutions which can handle these tremendous sums—$60 billion in 1 year, which is more than our total foreign investment over a hundred years, just to give one a sense of the magnitude—to have those sums invested in a way that does not produce economic chaos.

**Q:** What are the consequences if we don't find those international monetary structures?

**A:** Well, I think the consequences will be rampant inflation, the potential economic collapse of some of the weaker nations; and the long-term backlash, economically, will be on the oil producers as well as on the consumers. But I am confident we will find the institutions, and I think you will find that the discussions of the Finance Ministers taking place this week, are making very substantial progress in developing these financial institutions.

**Q:** Some people have said that we are on the edge of a global economic crisis akin to that of the 1930's. I know you were just a boy in the 1930's, but that part of your life you remember quite well. Do you see similarities?

**A:** I didn't understand too much about economics at that time; I was better versed in football than economics. But I think there are similarities in the sense that when you are faced with economic difficulties you have the choice of retreating into yourself or trying to find a global solution. Retreating into yourself is a defensive attitude, which over a period of time accelerates all the difficulties that led you to do it in the first place.

I think our necessity is to find a global solution. It is our necessity, and our opportunity. And in many ways we are on the way to doing it. Although with all the debates that are going on, this is not always apparent.

Kissinger: "...if the United States lives in a hostile world, the United States lives in a depressed world, then inevitably, given our dependence on the raw materials of the world and given our essential interest in peace, in the long term we will suffer."

**Q:** Isn't what is happening in the Middle East, and particularly the flow of wealth to the Middle Eastern oil-producing countries, simply an adjustment of history? Isn't it a rhythm of history? Wasn't it natural that when they finally got control of their own oil production they would use it for their own benefits?

**A:** That was inevitable. I don't know whether it was inevitable that God would place the oil in exactly those places.

**Q:** Or that He would place the Arabs there?

**A:** But once it was placed there, it was inevitable that sooner or later these trends would develop. And we are not fighting these trends.

**Q:** But the price was kept down for four decades by Western control of the production of oil. That is gone.

**A:** Well, I don't want to speculate about what kept the price down, because it could happen that the price will go down again. This depended on the relationship of supply and demand in a very important way. The oil resources of the Middle East were so vast compared to the energy requirements of the world that that kept the price down. It was only in the last decade—when I came to Washington in 1969 people were still talking about oil surplus, and they were still talking about how to restrict the importation of foreign oil lest the prices go down even more. It is only in the last 6 years that there has been such a dramatic increase in the energy requirements that

6

the opportunity for raising the prices existed. I believe
that before then there was—it was roughly in balance be-
tween supply and demand.

Q: You talk about the solidarity of consumers in
dealing with and negotiating with the oil-producing
countries. What will that solidarity produce? What
economic pressure, Mr. Secretary, do we have on the
Arabs?

A: I don't think it is a question of economic pressure. I think there are two possibilities. Right now every consumer—or every group of consumers—has its own dialogue going on with the producers. It is not that there is no dialogue going on: There is a European dialogue with the Arabs; there is an American dialogue going on with both Arab countries and with Iran. The question is whether a multilateral conference—that is to say, getting all consumers together with all of the producers—how that can advance matters. In our view it can advance matters only if the consumers do not repeat at such a conference all the disagreements that they already have. I believe that in such a conference, if both sides are well prepared, one should address the question of long-term supply. That is to give the oil producers an assurance that they will have a market for a fairly long future.

There has to be some discussion about price. There
has to be some discussion about international facilities,
both for the benefit of the poor countries, and to make
sure that the investments are channeled in such a way
that they do not produce economic crisis.

We are working hard on all of these issues. And we
believe all of them are soluble in a constructive manner.

Q: And you don't believe that pressure is the way?

A: I do not believe that pressure will—that in such a
negotiation—that such a negotiation can be based upon
pressure. But each side, obviously, has to be aware of
its own interests and has to defend its own interests in a
reasonable manner. We don't blame the producers for
doing it, and they cannot blame the consumers for doing
it. But the attitude must be cooperative, conciliatory,
and looking for a long-term solution.

Q: Do you think the oil-producing countries have an
interest in that kind of negotiation, dialogue?

A: I believe that the vast majority of them do.

Q: Well, if pressure isn't that important a part of the
scenario, I need to ask you what did you have in mind
when you gave that interview to Business Week [January
13, 1975 issue] and talked about the possible strangu-
lation of the West? What was going through your mind at
just that minute?

A: Well, first of all, the sentence that has attracted so
much attention is too frequently taken totally out of
context, and it was part of a very long interview in which
I put forward essentially the conception that I have devel-
oped here; that is to say, of a cooperative relationship
between the consumers and producers. In addition, I
made clear that political and economic warfare, or mili-

tary action, is totally inappropriate for the solution of oil
prices, recycling problems, etc. The contingency, and the
only contingency, to which I addressed myself was an
absolutely hypothetical case in which the actual strangu-
lation of the entire industrialized world was being
attempted—in other words, in which the confrontation
was started by the producers.

I have said repeatedly, and I want to say now, I do not
believe that such an event is going to happen. I was
speaking hypothetically about an extreme situation. It
would have to be provoked by other countries. I think it
is self-evident that the United States cannot permit itself
to be strangled. But I also do not believe that this will
really be attempted. And therefore we were talking about
a hypothetical case that all our efforts are attempting to
avoid and that we are confident we can avoid. We were
not talking, as is so loosely said, about the seizure of oil
fields. That is not our intention. That is not our policy.

Moyers: "In Europe recently I found some feeling of concern that the emphasis on interdependence... is going to bring an alignment of the old rich, the industrial nations, against the new rich, the oil nations and commodity nations, at the exclusion of the poor. And if I hear you correctly, you are saying we cannot let that happen."

Q: What intrigues so many people, it seems to me,
was that a few days before you had given a similar inter-
view to Newsweek [December 30, 1974 issue] and much
the same thing has been said with no particular alarm.
Then a few days later a similar statement is made and it
is seized upon. And some of us thought perhaps you had
calculated between the first interview and the second
interview to be more precise in some kind of message.

A: I was astonished when this was seized upon. We
were not the ones who spread it. I think there are many
people who have spread this around, frankly, in order to
sow some dispute between us and the oil producers.

Our whole policy toward the producers has been based
on an effort of achieving cooperation. We have spent
tremendous efforts to promote peace in the Middle East
precisely to avoid confrontations. We were talking about
a very extreme case, about which only the most irrespon-
sible elements among producers are even speaking, and it
is not our policy to use military force to settle any of
the issues that we are now talking about.

Q: But neither, if I understand your philosophical
view of diplomacy, can a power ever rule out any contin-
gency.

7

A: Well, no nation can announce that it will let itself be strangled without reacting. And I find it very difficult to see what it is that people are objecting to. We are saying the United States will not permit itself or its allies to be strangled. Somebody else would have to make the first move to attempt the strangulation. It isn't being attempted now.

Q: Well, I was in Europe about the time and some of them almost came out of their skins, because depending as they do on Middle East oil and with our troops on their soil, they could see a confrontation between us and the oil-producing countries that would have them the innocent bystander and victim. That is why they seized upon it.

A: I find it difficult to understand how they would want to announce "please strangle us." We did not say— and I repeat here—that any of the issues that are now under discussion fall into this category. There would have to be an overt move of an extremely drastic, dramatic, and aggressive nature before this contingency could ever by considered.

Q: Who, Mr. Secretary, has a stake in division between us and the oil-producing countries?

A: Oh, I think there are many forces, and I don't want to speculate on that.

Kissinger: "...we are seeking cooperation between the old rich and the new rich. Both need each other. And neither can really prosper or indeed survive except in an atmosphere of cooperation."

Q: Let me ask you this. I am curious, not about how you see a possible final solution in the Middle East, but by what in history and in your own philosophy makes you believe that people who have fought so bitterly over so long a period of time can ever settle a conflict like that peaceably?

A: If you are in my position, you often find yourself in a situation where, as a historian you would say the problem is insoluble; and yet as a statesman you have absolutely no choice except to attempt to settle it. Because what is the alternative? If we say there is no solution, then another war is guaranteed. Then the confrontation between oil producers and consumers, that it is our policy to attempt to avoid, will be magnified—the risk of this will be magnified. The danger of a confrontation between the Soviet Union and the United States will be increased. And therefore, with all the difficulties and with all the anguish that is involved, we must make a major effort to move step-by-step toward a solution. And some progress has already been made that most people

thought was difficult. And we find ourselves often in a situation, and many national leaders do, where, if you attempt something new there is no historical precedent for it, and you have to go on an uncharted road.

Q: You never announce that you are giving up hope.

A: Not only can you not announce you are giving up hope, you must not give up hope. You must believe in what you are doing.

Q: Is our step-by-step diplomacy on the Middle East on track?

A: Our step-by-step diplomacy is facing increasing difficulties. As one would expect, as you make progress you get to the more difficult circumstances. I believe we have an opportunity. I believe that progress can be made. And I expect that over the next months progress will be made.

Q: In the ultimate extremity of war, wouldn't the level of violence be increased by the sale of arms we have made to the Arabs and the arms we have shipped to Israel? Aren't we in a sense guaranteeing that any war—

A: Well, none of the states that are likely—none of the Arab states likely to fight in a war have received American arms. The sale of arms to Israel is necessitated by the fact that the Arab countries are receiving substantial supplies from the Soviet Union and because the security of Israel has been an American objective in all American administrations since the end of World War II.

Q: There is some confusion out there as to whether or not you have systematically excluded the Soviets from playing a peacekeeping role in the Middle East and whether, if you have, this is to our advantage. Is it possible to have a solution there that does not involve the Soviets?

A: A final solution must involve the Soviet Union. And it has never been part of our policy to exclude the Soviet Union from a final solution. The individual steps that have been taken have required—have been based on the methods which we judge most effective, and at the request of all of the parties. We have proceeded in the manner in which we have, but we have always kept the Soviet Union generally informed of what we were doing.

Q: Is there any evidence that under the general rubric of detente the Soviets have been playing adversary politics in the Middle East?

A: I think the Soviet Union has not been exceptionally helpful, but it has also not been exceptionally obstructive. And I do not believe it is correct to say they have been playing adversary politics.

Q: On the word "detente," I wish you would define it for us.

A: Well, the problem of detente is often put as if the United States were making concessions to the Soviet Union in order to achieve peace. Basically the problem of detente—the necessity of detente—is produced by the fact that nuclear war in this period is going to involve a catastrophe for all of humanity. When the decision of

8

peace and war involves the survival of tens of millions of people, you are no longer playing power politics in the traditional sense. And for this reason, every American President in the postwar period, no matter how different their background, no matter what their party, has sooner or later been driven to making the problem of peace the central preoccupation of his foreign policy. This is the case also obviously in this Administration.

We would like to leave a legacy of having made the world safer than when we found it, as must every Administration. To conduct confrontation politics, where the stakes are going to be determined by nuclear weapons, is the height of irresponsibility. This is what we mean by detente. We have sought systematically to improve political relations, to increase trade relations in order to produce a maximum number of links between us and the Soviet Union, and to create a cooperative environment to reduce the dangers of war.

**Q:** But in the 20 years immediately after World War II there was nuclear peace, one could say. Every Secretary of State has said, "That is my objective...not to have a nuclear war." What are the special reasons for detente as a systematic policy? What have we got from it, beyond nuclear peace?

**A:** What we have got from detente is, first of all, the situation in Europe is more peaceful than it has ever been. As late as the Kennedy Administration, in the 1960's, there was a massive confrontation over Berlin between the United States and the Soviet Union. Throughout the sixties there was a confrontation between the United States and the Soviet Union over the question of nuclear arms, over the question of the ultimate shape of the European arrangements, and over the whole evolution of world policy.

In the last 3 years, European issues have been substantially—if not settled—I think substantially eased. In all parts of the world, except the Middle East, the United States and the Soviet Union have pursued substantially compatible, and in some cases cooperative, policies. A trade relationship has developed for the first time that would give both countries an incentive, and especially the Soviet Union an incentive, to conduct moderate foreign policies. And most importantly, two major steps have been taken to arrest the nuclear arms race. For the first time, agreed ceilings exist to reduce the danger—to eliminate the danger, in fact, or at any rate substantially reduce it—that both sides will be raising or conducting an arms race out of fear of what the other side will do.

I think these are major steps forward which must be built upon and which I am confident will be built on, no matter who is President in this country.

**Q:** I would like to come back in just a moment to the Vladivostok agreement. But before we leave detente, we seem to be leaving it on very precarious legs, with the announcement this week [January 14, 1975], if trade is important, that the Soviet Union was not going to fulfill the recent agreement on trade.

**A:** Well, I don't think it is correct to say that the Soviet Union will not fulfill the recent agreement on trade. Unfortunately the Congress has seen fit to pass legislation that imposed on the Soviet Union special conditions which were not foreseeable when the trade agreement was negotiated in 1972 and which the Soviet Union considers an interference in its domestic affairs.

We warned against this legislation for 2 years. We went along with it with the utmost reluctance. And I think that this event proves that it is absolutely essential for Congress and the Executive to work out a common understanding of what is possible in foreign policy and what can be subject to legislation, and what must be subject to other forms of congressional advice and consent.

> Kissinger: "There is no way the United States can feed the rest of the world. And from some points of view, the level of our food aid has mostly a symbolic significance, because the ultimate solution to the food problem depends on raising the productivity of the less-developed countries."

**Q:** Did Congress kill the agreement by imposing too strict a limitation?

**A:** I don't want to assess blame. I believe that the legislative restrictions, coupled with the restriction on Ex-Im [Export-Import Bank] credits, had the effect of causing the Soviet Union to reject the agreement. We shared the objectives of those in Congress who were pushing this legislation. We differed with them as to tactics and as to the suitability of enshrining these objectives in legislation. We were prepared to make them part of our executive negotiations, and we had in fact brought about an emigration of 35,000 before this legislative attempt was made, and the emigration now is lower than this.

But I repeat, as I said yesterday, that we will go back to the Congress with the attitude that both sides should learn from this experience and with the recognition that as a coequal partner they must have an important part in shaping American foreign policy.

**Q:** Is detente on precarious legs as a result of the events this week?

**A:** I think detente has had a setback. But I think the imperative that I described earlier—of preventing nuclear war, which in turn requires political understanding—will enable us to move forward again and we will immediately begin consultations with the Congress of how the legislative and executive branches can cooperate in implementing this.

9

Q: What is the proper relationship between Congress and the conduct of foreign policy? If I were a member of Congress, I would be very wary, after the Bay of Pigs and after the Gulf of Tonkin resolution, of giving the Administration a blank check.

A: I think the Congress is absolutely correct in insisting on legislative oversight over the conduct of foreign policy. And I would say that no President or Secretary of State, if he is wise, would ask for a blank check, because the responsibility is too great and in a democracy a major foreign policy requires public support. You cannot have public support if you do not have congressional support. So it is in our interests to work in close partnership with Congress.

What we have to work out with Congress is the degree of oversight that a body that after all contains over 550 members—or over 500 members—can properly exercise. I think on the major directions of policy, congressional oversight, even expressed in legislative restrictions, is essential. We disagree with those in the Congress who want to cut off or limit aid to Viet-Nam, but we do not challenge that this is a legitimate exercise of congressional supervision.

The difficulties arise when the Congress attempts to legislate the details of diplomatic negotiations, such as on the trade bill, on Vladivostok, and other matters. There we have to work out, not a blank check, but an understanding by which Congress can exercise its participation by means other than forming legislation.

Q: You raised the Vladivostok agreement [communique signed November 24, 1974] that puts a ceiling on the number of launchers and MIRV'd [multiple independently-targetable reentry vehicle] missiles that both the Soviet Union and the United States can have. The question being raised is, what you have done is to escalate the equilibrium, the military equilibrium, at what appears to many people to be an unnecessarily high level. Why couldn't we just stop?

A: Well, I would say that the people who say "unnecessarily high" have never negotiated with the Soviet Union. The level at which that has been set is 200 delivery vehicles below what the Soviet Union already has. And therefore, I find it difficult to understand how they can say it was escalated.

If we were willing to live with our present forces when the Soviet Union had 2,600 missiles and bombers, then we should be able to live with our present forces when the Soviet Union will have under the agreement only 2,400 missiles and bombers. So there is nothing in the agreement that forces us to build up. And there is something in the agreement that forces the Soviet Union to reduce. Whether we build up or not is a strategic decision which we would have to make in any event and which would face us much more acutely under conditions of an arms race. So we put a ceiling on the Soviet arms deployment below its present level, and therefore it enables us to consider our ceilings with less pressure than would be the case otherwise.

Secondly, once a ceiling exists, both military establishments can plan without the fear that the other one will drive the race through the ceiling, which is one of these self-fulfilling prophecies which has fueled the arms race.

Thirdly, once you have ceilings established, the problem of reductions will become much easier. The reason reductions are so difficult now is when both sides are building up, you never know against what yardsticks to plan your reductions. And I am confident that if the Vladivostok agreement is completed, it will be seen as one of the turning points in the history of the post-World War II arms race.

> Kissinger: "I think the Congress is absolutely correct in insisting on legislative oversight over the conduct of foreign policy. And I would say that no President or Secretary of State, if he is wise, would ask for a blank check, because the responsibility is too great and in a democracy a major foreign policy requires public support. You cannot have public support if you do not have congressional support."

Q: What is the next step?

A: The next step is to complete the Vladivostok agreement, on which only a general understanding exists up to now. Once that is completed, we will immediately turn to negotiations on the reduction of armaments—

Q: The reduction of the ceilings?

A: The reduction of the ceilings, both of MIRVs and of total numbers, and actually I believe this will be an easier negotiation than the one which we have just concluded at Vladivostok, because it is going to be difficult to prove that, when you already have an enormous capacity to devastate humanity, a few hundred extra missiles make so much difference.

Q: The Vladivostok agreement would run until 1985. Is it possible that reductions in the ceilings could begin many years before that?

A: In the aide memoire that has been exchanged between us and the Soviet Union, it has been agreed that reduction in—that the negotiations on reductions can start immediately upon the completion of the other agreement. They can start at any time before. They must start no later than 1980, but they can start at any time before then.

Q: To set aside the figures for a moment, and put it in the way that laymen ask me, why do we keep on? This is going to mean, even if it does have a ceiling, more money for defense—we are going ahead with—

10

A: Excuse me. The agreement doesn't mean more money for defense. More money for defense was inherent in the arms race. The question that the agreement poses is whether more should be spent on top of what was already planned. I do not believe that the agreement will make it easier to reduce the spending.

Q: Do you see any end in the foreseeable future to the arms race, both nuclear and conventional?

A: One of my overwhelming preoccupations has been to put an end to the arms race. And the reason I have been such a strong supporter of the SALT [Strategic Arms Limitation Talks] negotiations is to turn down the arms race. And I believe that the Vladivostok agreement will permit over the 10 years-will lead to reductions that could involve substantial savings. And that will be our principal objective.

Q: You wrote once, "An excessively pragmatic policy will be empty of vision and humanity. America cannot be true to itself without moral purpose."

One of the chief criticisms of your tenure as Secretary of State in the last several years has been that we have been long on expediency and pragmatism, and it may have helped us strategically, but we have been short on humanity-the invasion of Cambodia, the bombing of Hanoi at Christmas, the tilting in favor of Pakistan, the maintenance of a constant level of foreign assistance, our preference for a change in the Allende government [Salvador Allende of Chile]. These all add up, your critics say, to an excessively pragmatic policy, devoid of humanity and vision.

A: Any statesman faces the problem of relating morality to what is possible. As long as the United States was absolutely secure, behind two great oceans, it could afford the luxury of moral pronouncements divorced from the reality of the world in which other countries have to make the decisions, or to make an important part of the decisions, which determine whether you can implement them.

I still agree with the statement that I made some years ago. A purely pragmatic policy is unsuited to the American character, and in any event leads to paralysis. An excessively moralistic policy would be totally devoid of contacts with reality and would lead to empty posturing.

In foreign policy, you always face difficult choices. And you always face the problem that, when you make your decision, you do not know the outcome. So your moral convictions are necessary to give you the strength to make the difficult choices when you have no assurance of success.

Now, the particular events which you mentioned, one could go into-it would be impossible to do justice to it in the limited time we have. Several of them had to do with the conduct of the war in Viet-Nam. And there really the criticism is between those who wanted to end it more or less at any price, and those who believed that it was essential to end it in a manner that the American people did not feel that all these efforts had only led to a turning over by the United States of people [South Viet-

namese] who had depended on it to outside invaders.

It is an issue that we will not settle in this debate. But this was our judgment from which the various military moves flowed.

On the issue of how to vindicate human rights in foreign countries, I think we have never denied their importance. We have, however, always claimed that we could achieve our objectives more effectively, quietly, without making it a confrontation. This is why we never made anything of the fact that between 1969 and 1973 we increased Jewish emigration from the Soviet Union from 400 to 35,000 without ever announcing it. And I believe when all the facts are out, it will turn out that a substantial number of the releases from Chilean prisons were negotiated by the United States without ever making anything of it, not because we did not believe in these human rights, but because we believed it would facilitate the objective of implementing these human rights if we did not make an issue of it. So some of it concerns methods toward agreed objectives.

Moyers: "Do you see any end in the foreseeable future to the arms race, both nuclear and conventional?"

Q: I think what concerns a lot of people is that we are liable in our search for stability to be linked with strong authoritative, unrepresentative governments at the expense of open and more liberal governments. You say that is a necessity sometimes?

A: I think it is very difficult to make an abstract pronouncement on that. Ideally we should be able to achieve our objective by working with governments whose basic values we support. But just as during World War II we became allies of Stalin, even though his values were quite different from ours, so in some concrete situations we occasionally find ourselves under the necessity of choosing whether we want to achieve important objectives with governments of whose domestic policies we do not approve, or whether we sacrifice those interests.

Sometimes we can make the wrong choice. But it is important to recognize that it is a difficult choice. Everybody in his own life knows that the difficult issues are those when two desirable objectives clash, or two undesirable objectives clash, and you have to choose the less undesirable. It is not a black and white problem.

I understand the criticism that is being made. But I think the critics should understand that the day-to-day conduct of foreign policy is more complex than can be encapsulated in a slogan.

Q: Finally, you have talked about stable structures of peace, and you have talked about institutionalizing the conduct of foreign policy. But if you are not the Secre-

11

tary of State for life, what will you leave behind, and
what do you care the most about?

A: Well, what I would care most about is to leave behind a world which is organically safer than the one I found. By organically safer, I mean that has a structure which is not dependent on constant juggling and on tours-de-force for maintaining the peace. But just as in the period from 1945 to 1950 it can be said that the United States constructed an international system that had many

> Kissinger: "One of my overwhelming preoccupations has been to put an end to the arms race....I believe that the Vladivostok agreement...will lead to reductions that could involve substantial savings. And that will be our principal objective."

permanent features, as permanent features go in foreign policy—say a decade is a permanent feature in foreign policy—so it would be desirable to leave behind something that does not depend on the constant management of crisis to survive.

And within this Department, I would like to leave behind an attitude and a group of people committed to such a vision, so that succeeding Presidents can be confident that there is a group of dedicated, experienced, and able men that can implement a policy of peace and stability and progress. I think we have the personnel in this Department to do it.

And when I say I want to institutionalize it, I don't mean lines on an organization chart. I mean a group of people that already exist, that work to the full extent of their capabilities. And this is why sometimes I drive them so hard.

MR. MOYERS: Thank you, Mr. Secretary.

## THEMES AND QUESTIONS FOR MOYERS
### INTERVIEW WITH HAK 1/16/75

**Introduction:** The purpose of the series -- the first on American television devoted to international issues -- is "to keep before a caring audience in this country (and elsewhere) the idea of an inter-dependent world" -- Bill Moyers 10/17/74. It is highly appropriate in this opening program at the start of the last quarter of the century to explore this idea with the Secretary of State, who has talked more about interdependence in his major public statements than any other leading statesman.

### I. Nature of world

**A. HAK Views:** In recent years, political, economic, social interdependence - and military developments have increased the interdependence of nations and peoples - meaning greater mutuality of concerns. But this has not been fully appreciated by (1) others, especially Europeans and Arabs; or (2) American public.

### B. Themes

1. Does increasing interdependence mean a diminished American role in world affairs in the last quarter century as compared to the second quarter (1950-1975)?

2. Change from bipolar world (1950s) to pentagonal world system (late 1960s to early 1970s) to "interdependence" (1975-?).

3. The "common problems" facing new (and unexpected) administrations in U.S., Japan, U.K., France and Germany (15 of 16 NATO countries?).

### C. Questions

1. What is the real meaning of the interdependence to which you keep referring and is there a trend towards greater interdependence in the next decades? (If answer omits reference to food, energy, resources, population, inflation/ recession, economic development, oceans, etc. -- supplemental questions would be useful. NB: There is still no specific U.S. population policy; no specific new U.S. food and commitments at or since November Rome Conference.)

2. Does interdependence make obsolete the pentagonal balance to which you often referred during the Nixon Administration?

3. Does interdependence render increasingly outmoded concepts of "sovereign rights," resource independence projects?

2.

4. Will it require coordination of national governments' policies, especially fiscal and economic, in coming years as you suggested in your *Business Week* interview? Are the U.S. Government -- and American people -- prepared for this?

5. Is it true that no two governments in the world today coordinate fully their anti-recession or anti-inflation policies? What are the most useful instruments for coordination -- bilateral, OECD, UN? NB: In the *Business Week* interview, HAK made a little noted but significant statement: "In the next ten years you'd have coordinated fiscal policies, including ours."

6. Almost all of the major western countries had unexpected changes of administration in 1974. Is there a common threat to explain this? What are the common problems facing the new governments? Why are all of them facing apparent loss of confidence at home as reflected in the opinion polls?

## II. Nature of American role in world

A. **HAK Views:** U.S. must continue to play a leadership role, as it has done since 1945. Allies encouraged to share in leadership obligations (Nixon Doctrine), but their response has been limited; vis-a-vis allies, U.S. role is stronger in last 1-2 years.

B. **Themes**

1. Changing nature of U.S. role

2. Acceptance of that role and cooperation by friends

C. **Questions**

1. Are we witnessing decline in U.S. role? Are more and more events happening outside U.S. control (e.g. PLO decision at Rabat)?

2. How would you compare America's obligations in the world today as compared with the 1950s and 1960s?

3. What is the nature of American "power" nowadays? How can it be brought to bear to attain America's purposes?

4. What is the appropriate role of military force in our foreign policy? Of covert action against foreign governments? Of clandestine intelligence-gathering?

5. To what degree should U.S. foreign policy reflect American ideals of social justice (Chile, Greece, USSR Jewish emigration)

3.

6. How do you reconcile such aspirations with respect for national sovereignies?

7. Your emphasis has been on stability and order as an overriding objective of U.S. foreign policy. Do you agree with the view that this tends to:

-- give our foreign policy an anti-revolutionary, pro-status-quo direction;

-- thus put us on the side of authoritarian governments which give the appearance of stability; and

-- sometimes works against our aims by preferring the semblance of stability to the possibility of change (e.g. Greece, Portugal, Latin America).

### III. U.S. relations with its adversaries - USSR and China

A. **HAK View:** Our objectives are to (a) increase adversaries stake in peace and stability; (b) build up a network of mutual vested interests between institutions, bureaucracies, individuals.

B. **Themes**

Nature of detente; Soviet objectives - have they changed?

Opposition to detente in US (Jackson? Jewish community?

labor?)

C. **Questions**

1. Can USSR (and China), autarchic as they are, be components of an interdependent world? Can they conceive of themselves as beneficiaries of it?

2. Do they share a genuine interest in:

-- political stability;

-- a functioning international monetary structure;

-- averting world famine?

3. <u>Or</u> will not ideology and great power aspirations lead them to prefer disorder, civil conflicts, breakdown of monetary system?

4. More specifically, in the Near East, how can you reconcile our continued cooperative policy with the Soviets with their

-- inconsistent attitude toward a Middle East settlement

-- support of the extremist elements such as the PIO and of

4.

-- rearming of Arab states.

5. Also specifically on the Middle East, is what appears to be our policy of excluding the Soviets from a Near East role compatible with our aim of a permanent settlement? In other words, can we expect Moscow to support a Middle East settlement in the preparation of which it does not play as large a role as the U.S.?

6. Why did the Soviets agree at Vladivostock to strategic equality and to set aside the issue of our nuclear strength in Europe?

## IV. Relations with European allies (and Japan)

A. **HAK View:** Europeans feel resentment at (a) their dependence on U.S. militantly and economically; (b) shift of power since war away from them -- to U.S. and Russia on one hand and to some of former colonial countries on other. This sense of impotence impedes cooperation with U.S.

B. **Themes**

Why is HAK reputed to feel that dealing with adversaries is easier than with friends?

What will it take to arrive at a common concept for U.S.-European cooperation? U.S.-Japan cooperation?

C. **Questions**

1. After meetings with Schmidt and Giscard that seemed to bring the U.S. and its allies closer to common concepts on energy and international monetary problems, what explains your attack (in *Business Week* interview) on European policies and attitudes?

2. Does U.S.-West European unity of action require an external threat -- Soviet might in the 1940s and 1950s; oil producers' black-mail power and fear of recession today?

3. If present economic difficulties lead to political instability in European countries, can you foresee a situation where, to restore political stability, strong leftist or even communist elements should be invited to share national power?

4. Old and new industrial societies have much more to learn from each other than they now do about the handling of "common problems" usually thought of as domestic but actually quite

5.

similar to problems elsewhere and their solutions -- quality of life, urban amenities, anti-crime measures, etc. Isn't there room for more systematic sharing of experience in these areas -- similar to the Marshall Plan?

5. European and Japanese leaders will be interviewed in coming editions of the Journal and may comment on some of the Secretary's remarks of today. Does HAK have any specific questions he would particularly like to see such statesmen discuss with American audiences? (Would you be willing to consider an appearance at the end of the series to comment on the perspectives of others? a live satellite dialogue with other leaders?)

V. Relations with Developing Countries - "Third" and "Fourth" Worlds - U.N.

A. **HAK Views:** "Real" resources moving toward some developing countries; colonialism-rooted resentments tend to blind many of these countries to how interdependency affects them and to the fact that economic health of industrialized countries is in their interest; food supply (U.S. strength) and supply of basic mineral commodities two sides of same coin; industrial-consumer world should align their policies fully *before* starting serious negotiations with oil producing countries.

B. **Themes**

-- How interdependence affects these countries (new oil rich as well as resource poor)

- confrontationist or cooperative strategy on part of industrial countries

- how "strong" are they really.

C. **Questions**

1. Do you see a shift in power toward the developing countries, especially the new oil-rich nations and other countries rich in scarce raw materials?

2. Is it a realistic goal to try to achieve complete unity of purpose with other oil consuming countries -- with far greater dependencies on imports than ourselves -- before opening a multi-

6.

lateral dialogue with the oil producing states?

3. Until such a dialogue is opened, will we really know the intent of OPEC countries towards investment in the West, towards developing countries, towards the various recycling and lending proposals put forward in the west to date?

4. How do you feel about Arab investments in the country in non-strategic industries?

5. How should we react to the developing countries' dominance of the U.N. system? Why hasn't the U.S. suggested institutional changes to make the U.N. a more effective body?

## VI. Executive-Legislative relationship and foreign policy

A. **HAK Views:** Sees it as central problem of management of U.S. foreign policy in 1975; how to reconcile executive's need for flexibility with Congress's growing proclivity to fix limitations on foreign policies in legislation (e.g. Vietnam, EximBank restrictions, Turkish aid cutoff); HAK wants to stress his determination to seek a cooperative approach.

B. **Themes**

-- Differences between nature of executive power in foreign and domestic field. In which is it more constrained?

-- Inability (and past reluctance) of Congress to concentrate systematically on foreign policy issues.

-- Anticipated tussle between Ford, unused to executive leadership and unfamiliar with foreign policy, and Congress, anxious to score political points in foreign policy.

-- appropriate allocation of presidential time to international affairs, particularly in difficult times domestically.

C. **Questions**

1. How do you reconcile Executive's need for flexibility in dealings abroad with Legislature's proclivity to limit such flexibility by fuller reassertion of constitutional powers?

2. Can you rebuild congressional (and public) confidence in the executive (Vietnam, Watergate, CIA)?

7.

(LC)

3. Do you believe Congress wants to diminish U.S. role in the world, focus on domestic issues (recession)?

4. Are there instances where congressional assessment of what is possible abroad has proven more accurate than executive's? Example: Soviet concessions on Jewish emigration? Could this be so in the case of Turkish invasion of Cyprus?

5. What is the proper allocation of presidential time to international affairs? Under Ford -- 50%?; Under Nixon -- 75%? Isn't there a constant temptation for presidents to become increasingly involved in the "glamour" of global events and to shortchange hard and intractable domestic problems?

## VII. Public support for foreign policy

### Questions:

1. Do you think Americans understand how U.S. relationships with other countries impact on their domestic and daily economic and political issues?

2. Do you believe that liberal intellectuals, whose views so altered by Vietnam war, will support

- an internationalist foreign policy?

- a military intervention in the Middle East?

3. How important is public support on specific issues at various levels -

  * Vietnam - Active

  * SALT - Limited Group

  * Chile - More Limited Group

  * Taiwan - No Interest

4. How should Executive react when public opinion does manifest itself on a specific issue -

- Greece & Turkish aid cutoff

5. How do you judge a democracy's (America's) capacity to sustain an internationalist foreign policy over the long run?

6. American foreign policy before your time was sometimes charged (by HAK and others) with being too moralistic. Since you have participated

8.

in formulating it, the charge has been made that it is too pragmatic,
too calculating, too much Realpolitik.

What role if any should moral and ethical considerations play in U.S.
foreign policy?

6. What role should the media play in world awareness? (Note: 1-2% "international programming" average at present.) Education?

VIII. The Secretary of State

1. For the second year in a row, opinion polls show that you are the most admired man in America. Does that make your foreign policy job easier or harder?

2. Hans Morgenthau attributes your success to a unique and innate gift to transform yourself into a sincere advocate of other statesmen's positions and thus to function as a truly honest broker. Is this how you see your role in international negotiations?

3. Many questions have been raised about whether agreements achieved by the individual efforts alone -- by "Super K" -- can endure. Is such personalized diplomacy good for a country?

4. Former Secretaries of State have complained of their inability to devote sufficient time to long-range enduring issues between occasional speeches, because of the demands of current issues. Is this a frustration you have shared? Is there anything that can be done about it?

5. When you were appointed Secretary of State you spoke frequently of the importance of institutionalizing new foreign policy approaches. What progress have you made towards this end?

PRESS
DEPARTMENT OF STATE

January 24, 1975

No. 27

As Prepared for Delivery

EMBARGOED FOR RELEASE AT 4:00 P.M. E.S.T. FRIDAY, JANUARY 24, 1975.

NOT TO BE PREVIOUSLY PUBLISHED, QUOTED FROM OR USED IN ANY WAY.

ADDRESS BY
THE HONORABLE HENRY A. KISSINGER
SECRETARY OF STATE
BEFORE THE LOS ANGELES WORLD AFFAIRS COUNCIL
CENTURY PLAZA HOTEL
LOS ANGELES, CALIFORNIA

JANUARY 24, 1975

[1:00 P.M. P.S.T., 4:00 P.M. E.S.T.]

A NEW NATIONAL PARTNERSHIP

A half-century ago Winston Churchill, in his book _The World Crisis_, observed that in happier times it was the custom for statesmen to "rejoice in that protecting Providence which had preserved us through so many dangers and brought us at last into a secure and prosperous age." But "little did they know," Churchill wrote, "that the worst perils had still to be encountered, and the greatest triumphs had yet to be won."

The same may be said of our age. We are at the end of three decades of a foreign policy which on the whole brought peace and prosperity to the world and which was conducted by administrations of both our major parties. Inevitably there were failures, but they were dwarfed by the long-term accomplishments.

Now we are entering a new era. Old international patterns are crumbling; old slogans are uninstructive; old solutions are unavailing. The world has become interdependent in economics, in communications, in human aspirations. No one nation, no one part of the world can prosper or be secure in isolation.

For America, involvement in world affairs is no longer an act of choice but the expression of a reality. When weapons span continents in minutes, our security is bound up with world security. When our factories and farms and our financial strength are so closely linked with other countries and peoples, our prosperity is tied to world

For further information contact:

(L)

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PR #27

prosperity. The first truly world crisis is that which we face now.
It requires the first truly global solutions.

The world stands uneasily poised between unprecedented chaos and the opportunity for unparalleled creativity. The next few years will determine whether interdependence will foster common progress or common disaster. Our generation has the opportunity to shape a new cooperative international system; if we fail to act with vision we will condemn ourselves to mounting domestic and international crises.

Had we a choice, America would not have selected this moment to be so challenged. We have endured enough in the past decade to have earned a respite: assassinations, racial and generational turbulence, a divisive war, the fall of one President and the resignation of another.

Nor are the other great democracies better prepared. Adjusting to a loss of power and influence, assailed by recession and inflation, they too feel their domestic burdens weighing down their capacity to act boldly.

But no nation can choose the timing of its fate. The tides of history take no account of the fatigue of the helmsman. Posterity will reward not the difficulty of the challenge, only the adequacy of the response,

For the United States, the present situation is laced with irony. A decade of upheaval has taught us the limitations of our power. Experience and maturity have dispelled any illusion that we could shape events as we pleased. Long after other nations, we have acquired a sense of tragedy. Yet our people and our institutions have emerged from our trials with a resilience that is the envy of other nations, who know -- even when we forget -- that America's strength is unique and American leadership indispensable. In the face of all vicissitudes, our nation continues to be the standardbearer of political freedom, economic and social progress, and humanitarian concern -- as it has for 200 years.

Thirty years ago America, after centuries of isolation, found within itself unimagined capacities of statesmanship and creativity. Men of both parties and many persuasions -- like Truman and Eisenhower, Vandenberg and Marshall, Acheson and Dulles -- built a national consensus for responsible American leadership in the world.

Their work helped fashion the economic recovery of Europe and Japan and stabilized the post-war world in a period of international tension. These were the indispensable foundations on which, in recent years, we have been able to regularize relations with our adversaries and chart new dimensions of cooperation with our allies.

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To marshal our energies for the challenge of interdependence requires a return to fundamentals. It was a confident --perhaps even brash-- America that launched its post-war labors. It was an America essentially united on ultimate goals that took on the task of restoring order from the chaos of war. Three decades of global exertions and the war in Viet-Nam have gravely weakened this sense of common purpose We have no more urgent task than to rediscover it.

Only in this way can we give effect to the root reality of our age which President Ford described in his State of the Union address: "At no time in our peacetime history has the state of the nation depended more heavily on the state of the world. And seldom, if ever, has the state of the world depended more heavily on the state of our nation."

Let me turn, then, to an examination of the issues before us in international affairs: our traditional agenda of peace and war, the new issues of interdependence and the need for a partnership between the Executive and Legislative branches of our Government.

## THE TRADITIONAL AGENDA OF PEACE AND WAR

The traditional issues of peace and war addressed by the post-war generation will require our continuing effort, for we live in a world of political turmoil and proliferating nuclear technology.

Our foreign policy is built upon the bedrock of solidarity with our allies. Geography, history, economic ties, shared heritage and common political values bind us closely together. The stability of the post-war world -- and our recent progress in improving our relations with our adversaries -- have crucially depended on the strength and constancy of our alliances. Today, in a new era of challenge and opportunity, we naturally turn first to our friends to seek cooperative solutions to new global issues such as energy. This is why we have sought to strengthen our ties with our Atlantic partners and Japan and have begun a new dialogue in the Western Hemisphere.

The second major traditional effort of our foreign policy has been to fashion more stable relations with our adversaries.

There can be no peaceful international order without a constructive relationship between the United States and the Soviet Union -- the two nations with the power to destroy mankind.

The moral antagonism between our two systems cannot be ignored; it is at the heart of the problem. Nevertheless, we have succeeded in reducing tensions and in beginning to lay the basis for a more cooperative future. The agreements limiting strategic arms, the Berlin agreement, the significant easing of tensions across the heart of Europe, the growing network of cooperative bilateral relations with the Soviet Union -- these mark an undeniable improvement over the situation just a few years ago.

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The recent Vladivostok accord envisages another agreement placing a long-term ceiling on the principal strategic weapons of both sides. For the first time in the nuclear age, the strategic planning of each side will take place in the context of stable and therefore more reassuring assumptions about the programs of the other side instead of being driven by fear or self-fulfilling projections. The stage will be set for negotiations aimed at reducing the strategic arsenals of both sides. We shall turn to that task as soon as we have transformed the Vladivostok principles into a completed agreement.

The course of improving U.S.-Soviet relations will not always be easy, as the recent Soviet rejection of our trade legislation has demonstrated. It must, nevertheless, be pursued with conviction despite disappointments and obstacles. In the nuclear age there is no alternative to peaceful coexistence.

Just as we have recognized that a stable international environment demands a more productive relationship with the Soviet Union, so we have learned that there can be no real assurance of a peaceful world so long as one-quarter of the world's people are excluded from the family of nations. We have, therefore, ended a generation of estrangement and confrontation with the People's Republic of China and sought to develop a new relationship in keeping with the principles of the Shanghai Communique. Progress in our bilateral relations has opened useful channels of communication and reduced regional and global tensions. Our new and growing relationship with the People's Republic of China is now an accepted and enduring feature of the world scene.

A third traditional element of our foreign policy has been the effort to resolve conflicts without war. In a world of 150 nations, many chronic disputes and tensions continue to spawn human suffering and dangers to peace. It has always been America's policy to offer our help to promote peaceful settlement, and to separate local disputes from big-power rivalry. In the Middle East, in Cyprus, in Indo-China, in South Asia, on urgent multilateral issues such as nuclear proliferation, the United States stands ready to serve the cause of peace.

## THE NEW AGENDA OF INTERDEPENDENCE

Progress in dealing with our traditional agenda is no longer enough. A new and unprecedented kind of issue has emerged. The problems of energy, resources, environment, population, the uses of space and the seas, now rank with the questions of military security, ideology and territorial rivalry which have traditionally made up the diplomatic agenda.

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With hindsight, there is little difficulty in identifying the moments in history when humanity broke from old ways and moved in a new direction. But for those living through such times it is usually difficult to see events as more than a series of unrelated crises. How often has man been able to perceive the ultimate significance of events occuring during his lifetime? How many times has he been able to summon the will to shape rather than submit to destiny?

The nuclear age permanently changed America's conviction that our security was assured behind two broad oceans. Now the crises of energy and food foreshadow an equally dramatic recognition that the very basis of America's strength -- its economic vitality -- is inextricably tied to the world's economic well-being.

Urgent issues illustrate the reality of interdependence:

- The industrial nations built a generation of prosperity on imported fuel at sustainable prices. Now we confront a cartel that can manipulate the supply and price of oil almost at will, threatening jobs, output and stability.

- We and a few other countries have achieved immense productivity in agriculture. Now we see the survival and well-being of much of humanity threatened because world food production has not kept pace with population growth.

- For thirty years we and the industrial countries achieved steady economic growth. Now the economies of all industrialized countries are simultaneously afflicted by inflation and recession, and no nation can solve the problem alone.

Yet the interdependence that earlier fostered our prosperity and now threatens our decline can usher in a new period of progress if we perceive our common interest and act boldly to serve it. It requires a new level of political wisdom, a new standard of responsibility, and a new vigor of diplomacy.

Clearly, the energy crisis is the most pressing issue on the new agenda. In the American view, a permanent solution is possible based on the following principles:

**The first imperative is solidarity among the major consumers.** Alone, no consuming country, except possibly the United States, can defend itself against an oil embargo or a withdrawal of oil money. Alone, no country, except perhaps the United States, can invest enough to develop new energy sources for self-sufficiency. But if the United States acted alone, it would doom the other industrialized nations to economic stagnation and political weakness; this would soon undermine our own

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economic well-being. Only by collective action can the consuming countries free their economies from excessive dependence on imported oil and their political life from a sense of impotence.

We have made important progress since the Washington Energy Conference met less than a year ago. Last November, the United States and 15 other countries signed an unprecedented agreement to assist each other in the event of a new oil emergency. That agreement commits each nation to build an emergency stock of oil; in case of a new embargo, each will cut its consumption by the same percentage, and available oil will be shared. Thus, selective pressure would be blunted and an embargo against one would be an embargo against all.

Equally important, we have moved dramatically toward financial solidarity. Only last week, the major consuming nations agreed to create a solidarity fund of $25 billion - less than two months after it was first proposed by the United States. Through the creation of this fund, the industrial nations have gained significant protection against shifts, withdrawals, or cutoffs of funds from the petrodollar earners. The industrial countries will now be able to off-set financial shifts of oil producer funds by loans to each other from the $25 billion mutual insurance fund. The United States considers this rapid and decisive decision for the creation of the solidarity fund to be of the greatest political and economic significance.

**The second imperative is a major reduction in consumer dependence on imported oil.**

The safety nets of sharing and financial guarantees are important for the short term. But our long-term security requires a determined and concerted effort to reduce energy consumption -- on the highways and in our homes, in the very style of our lives. Equally important will be a speed-up in the development of alternative energy sources, such as nuclear power, coal, oil shale, the oil of the outer continental shelf, Alaska, the North Sea, and elsewhere.

Cooperative action among the consumer nations will reinforce our own efforts in this country. The International Energy Agency, created last year, and other countries acting in parallel with it, such as France, are responding to the crisis with substantial conservation programs of their own. And the United States will shortly propose to the IEA a large-scale collective program to develop alternative energy sources through price and other incentives to investors and through joint research and development.

Such policies will be costly and complex; some will be unpleasant and politically unpopular. But we face a choice: either we act now, and decisively, to ensure national self-sufficiency in energy by 1985, or we remain prey to economic disruption and to an increasing loss of control over our future.

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This, bluntly, is the meaning of President Ford's energy program which he laid before the Congress in his State of the Union message.

The third imperative is an eventual dialogue between consumers and producers.

Ultimately the energy problem must be solved through cooperation between consumers and producers. The United States, as a matter of evident necessity, seeks such a dialogue in a spirit of good will and of conciliation. But just as the producers are free to concert and discuss among themselves, so too are the consumers.

A principal purpose of consumer cooperation will be to prepare substantive positions for a producer dialogue to ensure that it will be fruitful. The consumer nations should neither petition nor threaten. They should be prepared to discuss the whole range of issues of interdependence: assured supplies, a fair return to the producers of a depleting resource, security of investment, the relationship between oil and the state of the world economy. Over the long term, producers and consumers, developed and developing nations, all depend on the same global economic system for the realization of their aspirations. It is this system which is now in jeopardy and therefore the well being of all nations is threatened. We must -- together -- and in a cooperative spirit -- restore the vitality of the world economy in the interests of all mankind.

Though we are far from having overcome the energy crisis, the outlines of a solution are discernible. The right course is clear, progress is being made, and success is well within our capacity. Indeed the energy crisis which accelerated the economic difficulties of the industrial democracies can become the vehicle by which they reclaim control over their future and shape a more cooperative world.

At a time when the industrial world calls for a sense of global responsibility from the producers of raw materials, it has an obligation to demonstrate a similar sense of responsibility with respect to its own surplus commodities.

Nowhere is this more urgent than in the case of food. A handful of countries, led by the United States, produce most of the world's surplus food. Meanwhile in other parts of the globe, hundreds of millions do not eat enough for decent and productive lives. In many areas, up to 50% of the children die before the age of five, millions of them from malnutrition. And, according to present projections, the world's food deficit could rise from the current 25 million tons to 85 million tons by 1985.

The current situation, and the even more foreboding future, is inconsistent with international stability, disruptive of cooperative global relationships and totally repugnant to our moral values.

For these reasons the United States called for the World Food Conference which met in Rome last November. It was clear to us -- as we emphasized at the Conference -- that no one nation could possibly

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produce enough to make up the world's food deficit and that
a comprehensive international effort was required on 6 fronts:

-- to expand food production in exporting countries and to coordinate their agricultural policies so that their capacity is used fully and well;

-- to expand massively food production in the developing countries;

-- to develop better means of food distribution and financing;

-- to improve not just the quantity but also the quality of food which the poorest and most vulnerable groups receive;

-- to ensure against emergencies through an international system of global food reserves;

-- to augment the food aid of the U. S. and other surplus countries until food production in developing countries increases.

In the next two months the United States will make further proposals to implement this program and we will substantially increase our own food assistance.

However, food aid is essentially an emergency measure.

There is no chance of meeting a 85 million ton deficit without the rapid application of technology and capital to the expansion of food production where it is most needed, in the developing world.

Other surplus producers, the industrialized nations and the oil producers must join in this enterprise.

Energy and food are only two of the most urgent issues. At stake is a restructuring of the world economy -- in commodities, trade, monetary relations and investment. Politically, if we succeed, it means the shaping of a new international order. For the industrial democracies, it involves regaining their economic health and the sense that their future is in their own hands; for the producing and developing nations, it holds the promise of a stable long-term economic relationship that can ensure mutual progress for the remainder of the century.

## THE NEED FOR NATIONAL UNITY

The agenda of war and peace, fuel and food places a great responsibility upon America. The urgency of our challenges, the magnitude of the effort required and the impact which our actions will have on our entire society -- all require an exceptional degree of public understanding and the effective participation and support of Congress.

Our foreign policy has been most effective when it reflected broad non-partisan support. Close collaboration between the Executive and Legislative branches ensured the success of the historic post-war American initiatives and sustained our foreign policy for two decades thereafter. More recently, during the harrowing time of Watergate,

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the spirit of responsible bipartisanship insulated our foreign policy
from the trauma of domestic institutional crisis. For this, the
nation owes the Congress a profound debt of gratitude.

A spirit of non-partisan cooperation is even more essential today. The bitterness that has marked so much of our national dialogue for over a decade no longer has reason or place. Public debate once again must find its ultimate limit in a general recognition that we are engaged in a common enterprise.

To appeal for renewed nonpartisan cooperation in foreign policy reflects not a preference but a national necessity. Foreign nations must deal with our government as an entity, not as a complex of divided institutions. They must be able to count on our maintaining both our national will and our specific undertakings. If they misjudge either, they may be tempted into irresponsibility or grow reluctant to link their destiny to ours. If our divisions lead to a failure of policy, it is the country which will suffer, not one group or one party or one Administration. If our cooperation promotes success, it is the nation which will benefit.

In his first address to Congress President Ford pledged his Administra-
tion to the principle of communication, conciliation, compromise and
cooperation. In that spirit, and on behalf of the President, I invite
the Congress to a new national partnership in the conduct of our
foreign policy. Together with new conceptions of foreign policy, we
must define new principles of Executive-Legislative relations --
principles which reconcile the unmistakable claims of Congressional
supervision and the urgent requirements of purposeful American world
leadership.

The Administration will make every effort to meet Congressional concerns. We will dedicate ourselves to strengthening the mutual sense of trust with the Congress. We do not ask for a blank check. We take seriously the view that over the past decade there often has been a breakdown of communication between the Executive and Legislative branches.

We have made major efforts to consult the Congress and to keep it informed.

As Secretary of State, confirmed by the Senate, I have considered this
a principal responsibility of my office. Therefore, in less than 16
months in office I have testified 37 times before Congressional
committees, and have consulted even more frequently with individual
members and groups.

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Nevertheless, we recognize that a new partnership requires a willingness to explore new approaches. Specifically, the Administration will strive to evoke the advice and consent of the Congress in its broadest sense. We know that Congressional support presupposes that both houses are kept informed of the Administration's premises and purposes as well as of the facts on which its decisions are based. In the process, the Administration will seek the views of as many members of Congress concerned with a particular issue as possible. In short, the Administration will strongly support the effort of the Congress to meet its Constitutional obligations with wisdom and imagination.

Beyond the general requirement of advice and consent, the role of legislation and appropriations in defining the basic directions of policy is traditional. The Administration may disagree with a particular decision; we may argue vigorously for a different course, as we have, for example, concerning the necessity of adequate aid to support the self-defense of allies in Indo-China. But we welcome the indispensable contribution of Congress to the general direction of national policy.

At the same time, it is important to recognize that the Legislative process -- deliberation, debate and statutory law -- is much less well-suited to the detailed supervision of the day-to-day conduct of diplomacy. Legal prescriptions, by their very nature, lose sight of the sense of nuance and the feeling for the interrelationship of issues on which foreign policy success or failure so often depends. This is why the conduct of negotiations has always been preeminently an Executive responsibility, though the national commitments which a completed agreement entails must necessarily have legislative and public support.

The growing tendency of the Congress to legislate in detail the day-to-day or week-to-week conduct of our foreign affairs raises grave issues. American policy -- given the wide range of our interests and responsibilities -- must be a coherent and a purposeful whole. The way we act in our relations with one country almost inevitably affects our relationship with others. To single out individual countries for special legislative attention has unintended but inevitable consequences, and risks unraveling the entire fabric of our foreign policy.

Paradoxically the President and the Congress share the same immediate objectives on most of the issues that have recently become sources of dispute. Too often, differences as to tactics have defeated the very purposes that both branches meant to serve, because the legislative sanctions were too public or too drastic or too undiscriminating. Our inability to implement the trade agreement with the Soviet Union is a case in point; another is the impact of restrictions on aid to Turkey on our efforts both to advance the Cyprus peace negotiations and to safeguard our wider security interests in the Eastern Mediterranean; yet another is the damage to our Western Hemisphere relations, specifically in Ecuador and Venezuela, caused by an amendment designed to withhold special tariff preferences from OPEC countries.

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In fairness it must be pointed out that Congressmen and Senators must represent the particular views of their constituencies. All reflect an electorate impatient with foreign turmoil and insistent that international responsibilities be shared more equitably. In a period of domestic recession the case for foreign aid becomes increasingly difficult to make. And yet the reality of interdependence links our destiny ever more closely with the rest of the world.

It is therefore understandable that one of the issues on which the Congress and the Executive branch have recently divided is the degree to which foreign aid cut-offs -- military or economic -- can be used to bring about changes in the policies of other nations. Whether foreign aid should be used as an instrument of pressure depends on the way foreign aid is conceived. The Administration is convinced that foreign aid to be viable must serve American national interests above all, including the broad interest we have in a stable world. If an important American interest is served by the aid relationship, it is a wise investment; if not, our resources are being squandered, even if we have no specific grievances against the recipient. For moral and practical reasons, we must recognize that a challenge to the recipient's sovereignty tends to generate reactions that far transcend the merit of most of the issues in dispute. Instead of influencing conduct in ways we desire, cutting aid is likely to harden positions. The very leverage we need is almost always lost. Our bilateral political relationship is impaired, usually for no commensurable benefit. And other friends and allies begin to question whether we understand our own national interest and whether we can be a reliable, longer-term partner.

These issues have little to do with the age-old tension between morality and expediency. Foreign policy, by its nature, must combine a desire to achieve the ideal with a recognition of what is practical. The fact of sovereignty implies compromise and each compromise involves an element of pragmatism. On the other hand, a purely expedient policy will lack all roots and become the prisoner of events. The difficult choices are not between principle and expediency, but between two objectives both of which are good, or between courses of action both of which are difficult or dangerous. To achieve a fruitful balance is the central dilemma of foreign policy.

The effort to strengthen Executive-Legislative bonds is complicated by the new character of the Congress. New principles of participation and organization are taking hold. The number of Congressmen and Senators concerned with foreign policy issues has expanded beyond the traditional committees. Traditional procedures -- focused as they are on the Congressional leadership and the committees -- may no longer prove adequate to the desires of an increasingly individualistic membership.

As the range of consultation expands, the problem of confidentiality increases. Confidentiality in negotiations facilitates compromise; it must not be considered by the Congress as a cloak of deception; it must not be used by the Executive to avoid its responsibilities to the Congress.

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PR #27

Some of these problems are inherent in the system of checks and balances by which we have thrived. The separation of powers produces a healthy and potentially creative tension between the Executive and the Legislative branches of Government. Partnership should not seek to make either branch a rubber stamp for the other. But if old patterns of Executive-Legislative relations are in flux, now is the time for both branches to concert to fashion new principles and practices of collaboration. The Administration stands ready to join with the Congress in devising procedures appropriate to the need for a truly national and long-range foreign policy. We would welcome Congressional suggestions through whatever device the Congress may choose, and we will respond in the same spirit.

In the meantime, the Administration will strive to achieve a national consensus through close consultation, the non-partisan conduct of foreign policy and restraint in the exercise of executive authority.

The problem of achieving a new national partnership is difficult. I am confident that working together, the Executive and the Congress will solve it and thereby enhance the vitality of our democratic institutions and the purposefulness of our foreign policy.

## CONCLUSION

In 1947, when another moment of crisis summoned us to consensus and creation, a member of the Senate recalled Lincoln's words to the Congress: "The dogmas of the quiet past are inadequate to the stormy present. The occasion is piled high with difficulty, and we must rise with the occasion. As our case is new, so we must think anew and act anew. We must disenthrall ourselves, and then we shall save our country."

We have learned more than once that this century demands much of America. And now we are challenged once again, "to think anew and act anew" so that we may help ourselves and the world find the way to a time of hope. Let us resolve to move forward together, transforming challenge into opportunity and opportunity into achievement.

No genuine democracy can or should obtain total unanimity. But we can strive for a consensus about our national goals and chart a common course. If we act with large spirit, history could record this as a time of great creativity, and the last quarter of this century could be remembered as that period when mankind fashioned the first truly global community.

++++++

[L]

# The Secretary of State

## Speech

Los Angeles

January 24, 1975

Bureau of Public Affairs

Office of Media Services

### A NEW NATIONAL PARTNERSHIP

A half-century ago Winston Churchill, in his book *The World Crisis*, observed that in happier times it was the custom for statesmen to “rejoice in that protecting Providence which had preserved us through so many dangers and brought us at last into a secure and prosperous age.” But “little did they know,” Churchill wrote, “that the worst perils had still to be encountered, and the greatest triumphs had yet to be won.”

The same may be said of our age. We are at the end of three decades of a foreign policy which, on the whole, brought peace and prosperity to the world and which was conducted by Administrations of both our major parties. Inevitably there were failures, but they were dwarfed by the long-term accomplishments.

Now we are entering a new era. Old international patterns are crumbling; old slogans are uninstructive; old solutions are unavailing. The world has become interdependent in economics, in communications, in human aspirations. No one nation, no one part of the world, can prosper or be secure in isolation.

For America, involvement in world affairs is no longer an act of choice but the expression of a reality. When weapons span continents in minutes, our security is bound up with world security. When our factories and farms and our financial strength are so closely linked with other countries and peoples, our prosperity is tied to world prosperity. The first truly world crisis is that which we face now. It requires the first truly global solutions.

The world stands uneasily poised between un-

Had we a choice, America would not have selected this moment to be so challenged. We have endured enough in the past decade to have earned a respite-assassinations, racial and generational turbulence, a divisive war, the fall of one President, and the resignation of another.

But no nation can choose the timing of its fate. The tides of history take no account of the fatigue of the helmsman. Posterity will reward not the difficulty of the challenge, only the adequacy of the response.

For the United States, the present situation is laced with irony. A decade of upheaval has taught us the limitations of our power. Experience and maturity have dispelled any illusion that we could shape events as we pleased. Long after other nations, we have acquired a sense of tragedy. Yet our people and our institutions have emerged from our trials with a resilience that is the envy of other nations, who know-even when we forget-that America's strength is unique and American leadership indispensable. In the

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face of all vicissitudes, our Nation continues to be the standard bearer of political freedom, economic and social progress, and humanitarian concern—as it has for 200 years.

Thirty years ago America, after centuries of isolation, found within itself unimagined capacities of statesmanship and creativity. Men of both parties and many persuasions—like Truman and Eisenhower, Vandenberg and Marshall, Acheson and Dulles—built a national consensus for responsible American leadership in the world.

Their work helped fashion the economic recovery of Europe and Japan and stabilized the postwar world in a period of international tension. These were the indispensable foundations on which, in recent years, we have been able to regularize relations with our adversaries and chart new dimensions of cooperation with our allies.

To marshal our energies for the challenge of interdependence requires a return to fundamentals. It was a confident—perhaps even brash—America that launched its postwar labors. It was an America essentially united on ultimate goals that took on the task of restoring order from the chaos of war. Three decades of global exertions and the war in Viet-Nam have gravely weakened this sense of common purpose. We have no more urgent task than to rediscover it.

Only in this way can we give effect to the root reality of our age which President Ford described in his State of the Union address [January 15, 1975]: "At no time in our peace-time history has the state of the Nation depended more heavily on the state of the world. And seldom, if ever, has the state of the world depended more heavily on the state of our Nation."

Let me turn, then, to an examination of the issues before us in international affairs—our traditional agenda of peace and war, the new issues of interdependence, and the need for a partnership between the executive and legislative branches of our Government.

The traditional issues of peace and war addressed by the postwar generation will require our continuing effort, for we live in a world of political turmoil and proliferating nuclear technology.

Our foreign policy is built upon the bedrock of solidarity with our allies. Geography, history, economic ties, shared heritage, and common

political values bind us closely together. The stability of the postwar world—and our recent progress in improving our relations with our adversaries—have crucially depended on the strength and constancy of our alliances. Today, in a new era of challenge and opportunity, we naturally turn first to our friends to seek cooperative solutions to new global issues such as energy. This is why we have sought to strengthen our ties with our Atlantic partners and Japan and have begun a new dialogue in the Western Hemisphere.

The second major traditional effort of our foreign policy has been to fashion more stable relations with our adversaries. There can be no peaceful international order without a constructive relationship between the United States and the Soviet Union—the two nations with the power to destroy mankind.

The moral antagonism between our two systems cannot be ignored; it is at the heart of the problem. Nevertheless, we have succeeded in reducing tensions and in beginning to lay the basis for a more cooperative future. The agreements limiting strategic arms, the Berlin agreement, the significant easing of tensions across the heart of Europe, the growing network of cooperative bilateral relations with the Soviet Union—these mark an undeniable improvement over the situation just a few years ago.

The recent Vladivostok accord [November 24, 1974] envisages another agreement placing a long-term ceiling on the principal strategic weapons of both sides. For the first time in the nuclear age, the strategic planning of each side will take place in the context of stable and, therefore, more reassuring assumptions about the programs of the other side instead of being driven by fear or self-fulfilling projections. The stage will be set for negotiations aimed at reducing the strategic arsenals of both sides. We shall turn to that task as soon as we have transformed the Vladivostok principles into a completed agreement.

[LJ]

3

learned that there can be no real assurance of a
peaceful world so long as one-quarter of the
world's people are excluded from the family of
nations. We have, therefore, ended a generation
of estrangement and confrontation with the
People's Republic of China and sought to develop
a new relationship in keeping with the principles
of the Shanghai communique [February 27, 1972].
Progress in our bilateral relations has opened
useful channels of communication and reduced
regional and global tensions. Our new and grow-
ing relationship with the People's Republic of
China is now an accepted and enduring feature
of the world scene.

A third traditional element of our foreign
policy has been the effort to resolve conflicts
without war. In a world of 150 nations, many
chronic disputes and tensions continue to spawn
human suffering and dangers to peace. It has
always been America's policy to offer our help
to promote peaceful settlement and to separate
local disputes from big-power rivalry. In the
Middle East, in Cyprus, in Indochina, in South
Asia, on urgent multilateral issues such as nuclear
proliferation, the United States stands ready to
serve the cause of peace.

Progress in dealing with our traditional agenda
is no longer enough. A new and unprecedented
kind of issue has emerged. The problems of
energy, resources, environment, population, the
uses of space and the seas, now rank with the
questions of military security, ideology, and
territorial rivalry which have traditionally made
up the diplomatic agenda.

With hindsight, there is little difficulty in
identifying the moments in history when human-
ity broke from old ways and moved in a new
direction. But for those living through such
times it is usually difficult to see events as more
than a series of unrelated crises. How often has
man been able to perceive the ultimate signifi-
cance of events occuring during his lifetime?
How many times has he been able to summon
the will to shape rather than submit to destiny?

The nuclear age permanently changed America's
conviction that our security was assured behind
two broad oceans. Now the crises of energy
and food foreshadow an equally dramatic recog-
nition that the very basis of America's strength—
its economic vitality—is inextricably tied to the
world's economic well-being.

Urgent issues illustrate the reality of interde-
pendence:

* The industrial nations built a generation of prosperity on imported fuel at sustainable prices. Now we confront a cartel that can manipulate the supply and price of oil almost at will—threatening jobs, output, and stability.

* We and a few other countries have achieved immense productivity in agriculture. Now we see the survival and well-being of much of humanity threatened because world food production has not kept pace with population growth.

* For 30 years we and the industrial countries achieved steady economic growth. Now the economies of all industrialized countries are simultaneously afflicted by inflation and recession, and no nation can solve the problem alone.

Yet the interdependence that earlier fostered
our prosperity and now threatens our decline
can usher in a new period of progress if we
perceive our common interest and act boldly to
serve it. It requires a new level of political wis-
dom, a new standard of responsibility, and a new
vigor of diplomacy.

**The first imperative is solidarity among the major consumers.** Alone, no consuming country, except possibly the United States, can defend itself against an oil embargo or a withdrawal of oil money. Alone, no country, except perhaps the United States, can invest enough to develop new energy sources for self-sufficiency. But if the United States acted alone, it would doom the other industrialized nations to economic stagnation and political weakness; this would soon undermine our own economic well-being. Only by collective action can the consuming countries free their economies from excessive dependence on imported oil and their political life from a sense of impotence.

We have made important progress since the
Washington Energy Conference met less than a
year ago. Last November, the United States and
15 other countries signed an unprecedented agree-
ment to assist each other in the event of a new
oil emergency. That agreement commits each
nation to build an emergency stock of oil; in
case of a new embargo, each will cut its consump-
tion by the same percentage and available oil will
be shared. Thus, selective pressure would be

4

blunted, and an embargo against one would be an embargo against all.

Equally important, we have moved dramatically toward financial solidarity. Only last week, the major consuming nations agreed to create a solidarity fund of $25 billion—less than 2 months after it was first proposed by the United States. Through the creation of this fund, the industrial nations have gained significant protection against shifts, withdrawals, or cutoffs of funds from the petrodollar earners. The industrial countries will now be able to offset financial shifts of oil-producer funds by loans to each other from the $25 billion mutual insurance fund. The United States considers this rapid and decisive decision for the creation of the solidarity fund to be of the greatest political and economic significance.

The second imperative is a major reduction in consumer dependence on imported oil. The safety nets of sharing and financial guarantees are important for the short-term. But our long-term security requires a determined and concerted effort to reduce energy consumption—on the highways and in our homes, in the very style of our lives. Equally important will be a speed-up in the development of alternative energy sources, such as nuclear power, coal, oil shale, the oil of the outer continental shelf, Alaska, the North Sea, and elsewhere.

Cooperative action among the consumer nations will reinforce our own efforts in this country. The International Energy Agency [IEA], created last year, and other countries acting in parallel with it, such as France, are responding to the crisis with substantial conservation programs of their own. And the United States will shortly propose to the IEA a large-scale collective program to develop alternative energy sources through price and other incentives to investors and through joint research and development.

Such policies will be costly and complex; some will be unpleasant and politically unpopular. But we face a choice: Either we act now—and decisively—to insure national self-sufficiency in energy by 1985, or we remain prey to economic disruption and to an increasing loss of control over our future.

A principal purpose of consumer cooperation will be to prepare substantive positions for a producer dialogue to insure that it will be fruitful. The consumer nations should neither petition nor threaten. They should be prepared to discuss the whole range of issues of interdependence—assured supplies, a fair return to the producers of a depleting resource, security of investment, the relationship between oil and the state of the world economy. Over the long term producers and consumers, developed and developing nations, all depend on the same global economic system for the realization of their aspirations. It is this system which is now in jeopardy and therefore the well-being of all nations is threatened. We must—together and in a cooperative spirit—restore the vitality of the world economy in the interests of all mankind.

Nowhere is this more urgent than in the case of food. A handful of countries, led by the United States, produce most of the world's surplus food. Meanwhile in other parts of the globe, hundreds of millions do not eat enough for decent and productive lives. In many areas, up to 50 percent of the children die before the age of 5, millions of them from malnutrition. And, according to present projections, the world's food deficit could rise from the current 25 million tons to 85 million tons by 1985.

The current situation, and the even more foreboding future, is inconsistent with international stability, disruptive of cooperative global relationships, and totally repugnant to our moral values.

5

last November. It was clear to us—as we emphasized at the conference—that no one nation could possibly produce enough to make up the world's food deficit and that a comprehensive international effort was required on six fronts:

* To expand food production in exporting countries and to coordinate their agricultural policies so that their capacity is used fully and well;

* To expand massively food production in the developing countries;

* To develop better means of food distribution and financing;

* To improve not just the quantity but also the quality of food which the poorest and most vulnerable groups receive;

* To insure against emergencies through an international system of global food reserves;

* To augment the food aid of the United States and other surplus countries until food production in developing countries increases.

In the next 2 months the United States will make further proposals to implement this program, and we will substantially increase our own food assistance.

However, food aid is essentially an emergency measure. There is no chance of meeting an 85-million-ton deficit without the rapid application of technology and capital to the expansion of food production where it is most needed—in the developing world. Other surplus producers, the industrialized nations, and the oil producers must join in this enterprise.

Energy and food are only two of the most urgent issues. At stake is a restructuring of the world economy—in commodities, trade, monetary relations, and investment. Politically, if we succeed, it means the shaping of a new international order. For the industrial democracies, it involves regaining their economic health and the sense that their future is in their own hands; for the producing and developing nations, it holds the promise of a stable long-term economic relationship that can insure mutual progress for the remainder of the century.

The agenda of war and peace, fuel and food, places a great responsibility upon America. The urgency of our challenges, the magnitude of the effort required, and the impact which our actions will have on our entire society—all require an

Our foreign policy has been most effective when it reflected broad nonpartisan support. Close collaboration between the executive and legislative branches insured the success of the historic postwar American initiatives and sustained our foreign policy for two decades thereafter. More recently, during the harrowing time of Watergate, the spirit of responsible bipartisanship insulated our foreign policy from the trauma of domestic institutional crisis. For this, the Nation owes the Congress a profound debt of gratitude.

A spirit of nonpartisan cooperation is even more essential today. The bitterness that has marked so much of our national dialogue for over a decade no longer has reason or place. Public debate once again must find its ultimate limit in a general recognition that we are engaged in a common enterprise.

To appeal for renewed nonpartisan cooperation in foreign policy reflects not a preference but a national necessity. Foreign nations must deal with our Government as an entity, not as a complex of divided institutions. They must be able to count on our maintaining both our national will and our specific undertakings. If they misjudge either, they may be tempted into irreponsibility or grow reluctant to link their destiny to ours. If our divisions lead to a failure of policy, it is the country which will suffer, not one group or one party or one Administration. If our cooperation promotes success, it is the Nation which will benefit.

In his first address to Congress [August 12, 1974] President Ford pledged his Administration to the principle of communication, conciliation, compromise, and cooperation. In that spirit, and on behalf of the President, I invite the Congress to a new national partnership in the conduct of our foreign policy. Together with new concepts of foreign policy, we must define new principles of executive-legislative relations—principles which reconcile the unmistakable claims of congressional supervision and the urgent requirements of purposeful American world leadership.

The Administration will make every effort to meet congressional concerns. We will dedicate ourselves to strengthening the mutual sense of trust with the Congress. We do not ask for a blank check. We take seriously the view that over the past decade there often has been a breakdown of communication between the executive and legislative branches.

6

We have made major efforts to consult the
Congress and to keep it informed. As Secretary
of State, confirmed by the Senate, I have consid-
ered this a principal responsibility of my office.
Therefore, in less than 16 months in office I
have testified 37 times before congressional com-
mittees and have consulted even more frequently
with individual members and groups.

Nevertheless, we recognize that a new partner-
ship requires a willingness to explore new ap-
proaches. Specifically, the Administration will
strive to evoke the advice and consent of the
Congress in its broadest sense. We know that
congressional support presupposes that both
Houses are kept informed of the Administration's
premises and purposes as well as of the facts on
which its decisions are based. In the process, the
Administration will seek the views of as many
Members of Congress concerned with a particular
issue as possible. In short, the Administration
will strongly support the effort of the Congress
to meet its constitutional obligations with wisdom
and imagination.

Beyond the general requirement of advice and
consent, the role of legislation and appropriations
in defining the basic directions of policy is tradi-
tional. The Administration may disagree with a
particular decision; we may argue vigorously for a
different course, as we have, for example, concern-
ing the necessity of adequate aid to support the
self-defense of allies in Indochina. But we wel-
come the indispensable contribution of Congress
to the general direction of national policy.

At the same time, it is important to recognize
that the legislative process—deliberation, debate,
and statutory law—is much less well-suited to the
detailed supervision of the day-to-day conduct of
diplomacy. Legal prescriptions, by their very
nature, lose sight of the sense of nuance and the
feeling for the interrelationship of issues on which
foreign policy success or failure so often depends.
This is why the conduct of negotiations has al-
ways been preeminently an executive responsibil-
ity, though the national commitments which a
completed agreement entails must necessarily
have legislative and public support.

The growing tendency of the Congress to legis-
late in detail the day-to-day or week-to-week
conduct of our foreign affairs raises grave issues.
American policy—given the wide range of our
interests and responsibilities—must be a coherent
and a purposeful whole. The way we act in our
relations with one country almost inevitably
affects our relationship with others. To single

out individual countries for special legislative
attention has unintended but inevitable conse-
quences and risks unravelling the entire fabric of
our foreign policy.

Paradoxically the President and the Congress
share the same immediate objectives on most of
the issues that have recently become sources of
dispute. Too often, differences as to tactics have
defeated the very purposes that both branches
meant to serve, because the legislative sanctions
were too public or too drastic or too undiscrim-
inating. Our inability to implement the trade
agreement with the Soviet Union is a case in
point; another is the impact of restrictions on aid
to Turkey on our efforts both to advance the
Cyprus peace negotiations and to safeguard our
wider security interests in the Eastern Mediterra-
nean; yet another is the damage to our Western
Hemisphere relations, specifically in Ecuador and
Venezuela, caused by an amendment designed to
withhold special tariff preferences from OPEC
[Organization of Petroleum Exporting Countries]
countries.

In fairness it must be pointed out that Congress-
men and Senators must represent the particular
views of their constituencies. All reflect an
electorate impatient with foreign turmoil and
insistent that international responsibilities be
shared more equitably. In a period of domestic
recession the case for foreign aid becomes increas-
ingly difficult to make. And yet the reality of
interdependence links our destiny ever more
closely with the rest of the world.

It is therefore understandable that one of the
issues on which the Congress and the executive
branch have recently divided is the degree to
which foreign aid cut-offs—military or economic—
can be used to bring about changes in the policies
of other nations. Whether foreign aid should be
used as an instrument of pressure depends on the
way foreign aid is conceived. The Administration
is convinced that foreign aid to be viable must
serve American national interests above all, in-
cluding the broad interest we have in a stable
world. If an important American interest is
served by the aid relationship, it is a wise invest-
ment; if not, our resources are being squandered,
even if we have no specific grievances against the
recipient. For moral and practical reasons, we
must recognize that a challenge to the recipient's
sovereignty tends to generate reactions that far
transcend the merit of most of the issues in
dispute. Instead of influencing conduct in ways
we desire, cutting aid is likely to harden positions.

7

These issues have little to do with the age-old tension between morality and expediency. Foreign policy, by its nature, must combine a desire to achieve the ideal with a recognition of what is practical. The fact of sovereignty implies compromise and each compromise involves an element of pragmatism. On the other hand, a purely expeditious policy will lack all roots and become the prisoner of events. The difficult choices are not between principle and expediency but between two objectives both of which are good, or between courses of action both of which are difficult or dangerous. To achieve a fruitful balance is the central dilemma of foreign policy.

The effort to strengthen executive-legislative bonds is complicated by the new character of the Congress. New principles of participation and organization are taking hold. The number of Congressmen and Senators concerned with foreign policy issues has expanded beyond the traditional committees. Traditional procedures—focused as they are on the congressional leadership and the committees—may no longer prove adequate to the desires of an increasingly individualistic membership.

As the range of consultation expands, the problem of confidentiality increases. Confidentiality in negotiations facilitates compromise; it must not be considered by the Congress as a cloak of deception; it must not be used by the executive to avoid its responsibilities to the Congress.

Some of these problems are inherent in the system of checks and balances by which we have thrived. The separation of powers produces a healthy and potentially creative tension between the executive and the legislative branches of Government. Partnership should not seek to make either branch a rubber stamp for the other. But if old patterns of executive-legislative relations are in flux, now is the time for both branches

to concert to fashion new principles and practices of collaboration. The Administration stands ready to join with the Congress in devising procedures appropriate to the need for a truly national and long-range foreign policy. We would welcome congressional suggestions through whatever device the Congress may choose, and we will respond in the same spirit.

In the meantime, the Administration will strive to achieve a national consensus through close consultation, the nonpartisan conduct of foreign policy, and restraint in the exercise of executive authority.

The problem of achieving a new national partnership is difficult. I am confident that working together, the executive and the Congress will solve it and thereby enhance the vitality of our democratic institutions and the purposefulness of our foreign policy.

## CONCLUSION

In 1947, when another moment of crisis summoned us to consensus and creation, a Member of the Senate recalled Lincoln's words to the Congress: "The dogmas of the quiet past are inadequate to the stormy present. The occasion is piled high with difficulty, and we must rise with the occasion. As our case is new, so we must think anew and act anew. We must disenthrall ourselves, and then we shall save our country."

We have learned more than once that this century demands much of America. And now we are challenged once again "to think anew and act anew" so that we may help ourselves and the world find the way to a time of hope. Let us resolve to move forward together, transforming challenge into opportunity and opportunity into achievement.

DEPARTMENT OF STATE

TRANSCRIPT OF PRESS, RADIO AND TELEVISION NEWS BRIEFING

FRIDAY, JANUARY 24, 1975, 12:15 P.M.

MR. McCLOSKEY: You have had a chance, I hope, to run through the Secretary's speech. And it is embargoed for four p.m.

Now, let me, if I may, ON BACKGROUND, draw some focus to what the Secretary's effort is here.

There are three main themes in the speech. One, that the world faces major and unprecedented challenges, and that these require a strong American role. This relates to the matter of increasing interdependence, but is also mindful of the singular and individual weight of this country. Two, that it is his hope that this country should see this period, not as one of despair, despite problems that we face, but an opportunity for great creativity. Now, to do this, is the third theme I would mention, will require a new sense of unity and common purpose here at home, and most importantly what we might call a new national partnership between the executive branch and the Congress.

2

Frankly, what the Secretary is seeking to do is
to get across to his audience and through you to the
American people what he and the President strongly
believe. That is, not to become overwhelmed by
disappointments, those that we have experienced nationally
and internationally. And that there is the residual
strength, provided there is the national will, to turn
matters that sometimes appear as crises into bold
conceptions, and in a very deliberate effort to speak in a
conciliatory way to lay this foundation for a new period
of cooperation between the Congress and the executive.

You will see that he does note some recent
actions in the Congress that have, in his view,
hampered our foreign policy efforts, but in a way that
recognizes the concerns of the Congress. But it is his
strong belief that with the new President, and indeed
a new Congress, equally importantly, with matters like
the trauma of Vietnam and Watergate behind us, is all
the more reason for national reconciliation and a sense
of common enterprise among all.

Now, let me touch on the speech specifically.

During the first half of the speech, he
addresses himself to a number of the more critical issues,

3

those that are on, I can say, the traditional agenda
of American diplomacy -- for example, arms control --
these new global issues of energy and food. Now, he has
talked about these issues, I am well aware, in other
speeches, statements, press conferences. But in this
speech, he has attempted to lay them in a context of this
need for a new partnership between the executive and
legislative branches.

In the second half of the speech, then, it speaks
specifically to that hope for a new relationship.

Returning, if I may, to the first half, he
returns for a moment to history, to note that the development
of a national consensus at the close of World War II
made it possible to create an international system
which assured the economic recovery of Europe and Japan,
and almost thirty years of relative stability in the world.

He points out that these traditional issues, which
were the agenda of diplomacy since the war, will continue
to require attention, and that attention will be given
to them with a view to maintaining the solidarity of
alliance policy efforts. Secondly, the desire for more --
not only a desire for but a continuation of increased
stable relations with adversaries. And three, to work with

4

others to seek an end to local conflicts in a way that
will insulate them from enlargement by big power rivalries.

On the new questions, again illustrated by energy
and food, that we will require a renewed national effort,
and that the future of this country will be determined by
how well we respond.

And on the theme of interdependence, he points out
that global problems cannot be resolved by the actions
of one or only a few of the states.

Now, I think he makes a point which was often
missed in recent months, and that is that substantial progress
towards meeting the energy crisis has already been made.
And that it is more than just noteworthy that all of this
has occurred in less than a year -- having in mind that
when the Energy Conference was opened here last February,
I think it fair to say that the hopes that cooperative
endeavors could be achieved looked somewhat dim. And
he mentions in the speech that there is now agreement on
creating this $25 billion safety net.

Now, on energy and on food, he attempts to
describe what further steps are needed by way of
a national and international effort. He provides a

5

framework for how he hopes to see food problems alleviated, if not resolved. And that these new challenges again cannot be met by individual action, even though the United States might be in a better position than other countries in the world to solve in its national interest some of these problems.

Returning to the hope of a sense of national purpose and that the executive and legislative branches can form a new partnership, he stresses an obvious theme, that that must be based on trust and a sense of common endeavor.

And I thought it might be worth pointing out that in his testimony on his confirmation hearings, in August, I guess it was of 1973 -- September of '73, he promised that he would make personally every effort to enhance, improve and hope to sustain a cooperative relationship with the Congress. In the speech he mentions the number of times that he has testified before committees. And there is in fact a greater number of meetings that he has had with individuals or small groups informally, with Congressmen and Senators.

I think that it is fair to say that the Secretary here is taking a major initiative in suggesting

6

that the Congress consider what steps may be necessary to
establish the new partnership which we hope can be achieved.

He has already met with three separate groups
of new members of Congress and new Senators. I think
that is a further mark of his earnest. And all in the hope
that amicable relationships, but most importantly, productive
endeavors can be joined between the executive and the
Congress.

Now, he does, in the latter part of the speech,
refer to some recent problems. But I want to emphasize,
as he does, that it is not a matter of assigning blame,
but that these are or were actions that have made it
difficult to carry out what at least in concept were
policy objectives shared by the administration and the
Congress.

7

Well, I think that that is a fair summary of
the speech and his hope in making it, and certainly we
hope that the response by the Members of Congress will
be in the same spirit that motivated the Secretary making
this speech.

Q Bob, I am always a little bothered about
this relationship between the Executive and Congress.
When he talks about new approaches, do the new approaches
that he has in mind go as far as any constitutional amendments
or anything like that. And I realize that is an extreme
question, but I wanted to define the perimeter thing.

I assume from what is said after that he is
talking about intensified consultations and so forth.
But he talks about confidentiality and the need for that,
at the same time that he acknowledges that the individual
Congressman must represent the particular views of his
constituents, and their constituents are not always
entirely rational because a democracy is not entirely tidy.

So without trying to be critical, this question
of new approaches I don't understand.

MR. McCLOSKEY: I perfectly understand it,
Stu. I assure you that the Secretary does not have
in his mind proposing constitutional changes as a

8

device or a means of improving a relationship that already
has a pretty firm basis in the constitution. No. More
in a sense that this can be done informally, and not
necessarily in a structured way.

For example, if, on the matter of Cyprus,
groups of -- and it could be mixed, between Congress
and Senators who have a particular interest because
of the committee that one or more might serve on,
or because of a constituent interest, would meet
informally to discuss their respective points of view
before any legislative action is taken. And at the same
time while the administration is in the throes of what
it thinks it might have to do, or decisions that it might
be faced with. So I think it is more of an informal
but enlarged process of consultation that we are more
than willing to participate in.

Q The Secretary says in the speech, "I invite
the Congress to a new national partnership." You stress
this point, too, in your presentation. Does this mean
that he expects Congress to come forward with some
concrete proposals? Does this exclude the administration
to make the initiative?

A No, it doesn't exclude the administration at all.

9

But I can tell you that in one conversation that I participated in with him recently, the one member of the Congress there said that he had some ideas himself that he had thought about over the years and that he would like to discuss -- in this instance, he said with me. I'd be the link then with the Secretary.

But, no -- it doesn't preclude our suggesting from time to time that we might meet on this or that subject here or on the Hill.

Q Bob, what did he do about this --

Q Bob, he talked about new principles here. And once before, when the Secretary spoke about principles, he started codifying various relationships; And I wondered: Does he have in mind some formalization of a relationship? And, (2), a procedural question: In case the Secretary departs from his text, and in case he takes questions from the floor, will we be able to be informed of that?

A Well, first, no. He doesn't have in mind any codification of principles which would be immutable. The word there is used in a much more generic sense.

So far as Long Angeles is concerned, as I

10

understood it, there would be no questions from the
floor.

Now, departures from the text I always have to
allow for; and we have people there who will cover it--

Q Bob --

Q Will we be informed?

A -- for us. And if there's anything noteworthy
why, we'll get it to your attention.

Q Bob --

Q Will there be any attempt made to repeal
or modify or supersede the Church-Case Amendment, the
War Powers Act, or the end-use restrictions on military
aid?

A Well, that's a rather big order; I don't
know.

I don't expect that kind of initiative -- no.
But where particular legislation bears on a policy
that we're seeking to carry out, obviously it comes
up for some discussion. But I don't suspect that we're
proposing changes in those particular pieces of legis-
lation.

11

Q The I raised that is because he refers to the Cyprus situation, which was not a recent legislative interference but a question of existing law on the end use of military aid. And I just wonder if he regards that existing law without regard to the Cyprus-Turkey dispute as being unnecessarily restrictive on this freedom of action.

A If he has that in mind, it is not something that I'm aware of; and I'd be inclined to doubt that.

Q Bob --

Q Bob, on page 8, he says that the U. S. will make further proposals to implement food programs to overcome the food deficit in the world; and he pledges that we will substantially increase our own food assistance.

And then he goes on, in the next paragraph, to talk about other surplus producers, industrialized nations, and oil producers joined in this enterprise. Does he have a specific program? Is there something that requires Congressional approval in this connection, or is this more of a hope than an actuality?

12

A Well, on food, we are getting close to the time when the President will make a decision on the so-called options that have been presented to him. And it is our expectation that the President will come down, I would say, on the high side.

I think the Secretary has already averted to this in the Moyers interview. And that, if it proves to be the case, will be a fairly substantial increase, as I understand it, from, say, last year -- something on the order of one-third.

Q Are you talking in terms of money or in terms of actual programs?

A I'm talking in terms of money, which of course means food. And, further, our general agricultural assistance to less developed countries has been or will be increased in the coming year -- and that there are to be discussions to begin in London -- I'm frank to tell you I'm not clear, presently, who entirely participates -- this with a view to mounting an effort to increase reserves in various countries so that they in turn might be available on a cooperative basis to the more needy countries.

13

Q Bob --

Q Can I? I'm troubled by this whole atmosphere -- something about this presentation in his speech. What's different, Bob, between this speech and the testimony you alluded to before the Congress where he pledged cooperation and conciliation and everything? What is different in this speech that we can expect any change? Why should Congress listen to this now any more than they listened to it before?

A You're implying that they didn't listen to it before?

Q Well, apparently. He seems to imply it, because there's this breakdown in communication that he talks about, in the day-to-day interference -- or the word here used -- in the conduct of foreign policy.

Q Can I add to that question? In effect, what is new, from the Administration point of view? What is new about the partnership?

He seems to be saying, "We'll keep on doing the same things, but you should stop interfering now." I think that's the impression.

Q That they really would get in our way.

14

A Well now, no. I would have to submit
that that would be an unfair reading -- and, certainly,
of the intention that the Secretary has in mind here.

Remember, or recall, that in a press
conference some several months ago, he said -- and
there is an implied reference to it here -- that for
the period of something on the order of two years,
during the trauma of Watergate, that the foreign policy
of the United States was not subjected to the more
careful scrutiny which it has been undergoing in the
months since the change of Administration, the resigna-
tion of the President, and he expresses
some appreciation for that in the period of the national
dissent in the country; but that it should have been
expected that the Congress would begin to scrutinize
foreign policy -- increasingly.

And that's a fair role for the Congress. And
in doing it, we see that certain things happened, that
he refers to in this speech.

Now, he is saying that with an increased effort
that we will make, we hope that it will be possible to

15

enjoy more concert between ourselves and more
amicability and more sense of purpose if we can work closer
together so that the Congress doesn't feel that the
Administration is trying to hamstring its legitimate
role in foreign policy and that the Administration
should have some assurance that where policy objectives
are agreeable with the Congress that this ought to be a
productive relationship.

I don't know how anyone can seriously question
the intention that he puts forward here, particularly
in the light of what has happened over the last several
months.

Q Bob, may I join this --

A I must emphasize that this is a genuine and
sincere effort.

Now, obviously, I'm a bit of an advocate here;
but I can give you my word that this is a genuine effort.

Q Yes; but, Bob --

Q May I follow that up, please?

Q Is there anything here that he is not
doing or hasn't been doing, essentially? I mean, as he
said, "What's different?"

16

A First, what is different is that there
will be much more consultation with the Committees,
with the individual members, and those who form themselves
into small groups to create a much more or a greater
understanding between ourselves on our objectives
so that neither side becomes frustrated by the actions
of the other and that it needn't be that kind of a
relationship.

Q Bob --

Q But, Bob, this small group structure
that you've come back to several times -- doesn't
the Secretary have any qualms about this type of
approach, in light of the small group that has been
charted with overseeing CIA, for instance?

What I'm trying to say, and probably was saying
badly: Isn't it antithecal to a democratic process
and to a full Congressional partnership to rely on, you
know, what some people might call "Pappa knows best"
or "Pappa and the three of us over there who are wise
enough to understand what we're trying to do"?

A Barry, I'm sorry; you're misreading what
I had in mind.

17

Q The "small groups" is what I'd like you to define for me.

A All right. The small groups is what I was attempting to say. And I didn't mean to emphasize the small group as exclusive of other, more traditional, ways of consultation.

Keep in mind that there is, by our judgment, a greater number -- there are more Congressmen today coming into the Congress, whether they are on the Foreign Affairs or Foreign Relations Committees of the two Houses, who have a greater interest in foreign policy.

Now, obviously, it is not possible, given the large numbers -- 500 or more -- to have individual consultation with each and every one of the members. However, we want to go beyond the traditional procedures -- which involved, by and large, formal testimony before Committees -- to meet and discuss informally with those greater numbers who are now interested in foreign policy. And it's for them to decide how they would like to organize these kind of things.

I hope that clarified this point.

Q And, certainly, no decrease -- and, in fact,

18

an increase, of the public statement of foreign policy
by State Department officials; right?

A Well, I think that this is inherently
involved; and I'm getting the point (laughter) --
although we could conduct a seminar on that.

Q No -- excuse me. I mean with Congress.

A With Congress.

Q What I'm saying is that, presumably,
Congress represents the public and the public's interest
in foreign policy -- and whether it likes tying
emigration to MFN, and whether it likes a ceiling
on export-import -- and to, you know, dig out a couple
of old barons over there to really understand what's really
at stake and talk to them privately may be not exactly
the way to do things.

A Look, it should be obvious to you that
where in the past it was possible for Administrations
in the foreign policy area to deal with the so-called
leadership --

Q Yes.

A -- that that probably is no longer going to be
an effective way to conduct consultations beyond

19

testimony before Comittees -- that now there is a
larger and more diverse group of members in both
Houses who are going to want to become, at least,
informed -- even if they don't have a particular
Congressional responsibility in foreign policy. And
we will make a maximum effort to meet that interest.

Q. Bob, if you'll forgive me though, I think there's a more central point; and the fly in the ointment that you seem to be alluding to, and that the Secretary is alluding to, seems to be a willingness to consult on the strategic, "if you'll leave us alone on the tactical."

Would that be an unfair conclusion to draw?

A. It's a little too much shorthand to sum up the effort that the Secretary is making here in the speech.

He says we are not asking for a blank check.
Now, if he says that, it doesn't seem to me that one can
then say, "He's asking that we be left to run all of
the tactics in all of the foreign policy process" --
which was implied, I think, by what you said.

So the answer is "No. That is not a fair
description of what it is he's trying to convey here."

20

Q Yes; but my problem, Bob -- and it goes back to the Secretary's speech -- is that he concedes that there has been general agreement in the past on what I suppose might be called the strategic areas of foreign policy -- agreement between the Executive Branch and Congress -- and those items that he selects out as being the prime

[Cont'd on pg. B-1.]

B 1

... examples of disagreement seemed to fall into the tactical area. And I don't see, to go back to Ken's original question, what's new. I don't see where there is really any opportunity for changing that. There still may be agreement on the border base, on the strategic, on the overall foreign policy -- but what do you do about the disagreement when it comes right down to the legislation itself, when it comes right down to the tactical moves?

A Well, he acknowledges that where there is disagreement:

(a) there will be disagreement. We will argue different courses of action, and we must both, then, be guided by the outcome. This is only a fair proposition, it seems to me.

But I really, am quite disappointed to have you in effect, conclude that there is nothing new in what he is attempting to say here, by way of trying to develop a better relationship with the Congress.

Q Bob, on this new partnership --

A -- that, I must say, is disappointing.

Q Bob, on this new partnership, could I just follow on this point, Dave.

Q Well I'm making the same point. Maybe what

B 2

I'm asking, Bob, is there any room here for the Secretary
to, with good grace -- and maybe that's the wrong word,
he always uses good grace -- but is there any room for the
Secretary to bow before the will of Congress, in what Ted
describes as tactical effort?

For instance, Congress made it clear it didn't
want 1.4 or even 1 billion dollars on military aid to Viet-
Nam -- they wanted $700 million. Congress -- now the
Executive is going back and saying, you are wrong, we need
the extra $300 million.

For want of a better word, it seemed like the
State Department tried very hard to subvert Congressional
will on the Turkish Aid question, and ended up with extra
legislation to try and demand behavior by the State Department.
Is there going to be a chanbe in that kind of an approach
to exceed -- in fact, execute the will of Congress in this
effort, rather than try and go beyond it?

A First, I must say, Ken, that there is
implied in what you say, the notion that there is nothing but
an ulterior motive behind what the Secretary is trying to
say. When you talk about "subverting the will of the
Congress" on the question of Turkish Aid -- I think that is
unfair, to put it mildly.

We haven't subverted the will of the Congress.

B 3

The will of the Congress is there in the language of the
Amendment, which says, as you know -- and I don't need to
repeat the terms of it.

The fact that the Congress cut the request for the
appropriation for Viet-Nam, is not an unprecedented matter
nor is it an unprecedented matter that any administration
would go back to request supplemental assistance. It did
it in the case of Israel in 1973, at the end of 1973.
Now I can't believe that anyone here would say that that
was an attempt to subvert the will of the Congress, any
more than it is to suggest that we are subverting the will
of the Congress if we go back for a supplemental on assist-
ance to Viet-Nam.

If we make the judgment that this additional
assistance is required, I think the Administration has the
Constitutional right to go back to the Congress to request
it.

Now, whether the Administration obtains it, is
another matter.

Q Let me follow on, if I may, please.

Now on the so-called "new partnership" the premise,
it seems to me, is that there is a certain amount of
mistrust and suspicion in the Congress regarding the

B 4

United States foreign policy, and that what the Secretary
is saying is that he wants to overcome this.

I would like to ask if the Secretary would
consider it in critical, or controversial areas, of taking
Congressmen along with him in a negotiation, as has been
done by some other governments -- taking parliamentarians
along, for instance -- the Germans to Moscow when they were
negotiating in 1970 -- whether that kind of involvement
would be acceptable.

And second, when you mentioned the three groups
of new Congressmen that the Secretary has said -- perhaps
it might be helpful if you could name the dates and the
sizes of those groups and the general themes that were
discussed.

A David, I wouldn't rule out that we would
have more increased Congressional representation in the
conduct of our international conferences, and matters like
that. Indeed, that's not an unprecedented matter.

Q You did it on the Mexico trip.

A Well I was thinking of that one, and of
another one in the time that Henry Kissinger has been
Secretary of State -- so I certainly allow that as an open

B 5

possibility.

With respect to the new members of the Congress
and his meeting with them -- there were two sessions last
week, and I'll have to check the day -- the nights -- I was
there; and then there was the third one on Tuesday night
of this week.

All of the new Members of the House and the
new Members of the Senate were invited, so we are talking
about something on the order of 110 -- and they were broken
into three, respectively equal groups.

Q: Bob, there seems to be running through what you are saying here today in the speech, and Bill Moyer's interview -- the general kind of note of optimism on the part of the Secretary that despite the number of setbacks, all is not lost and we can still go ahead on this.

If you, in your new job, would look ahead a few
weeks, do you anticipate that an Administration effort to
try to remove some of the restrictive amendments to the
Trade Bill, to try to on the OPEC restrictions, to try to
get that undone by Congress -- does this public airing
in any way signal a new effort by the Administration, apart
from the rhetoric here, in the practical terms, to try to

B 6

undo some of the damage, regardless of who was at fault.

A Well, it seems pretty clear to me, although I don't know precisely what is to happen, that something in a renewed way has to be undertaken with respect to the Trade Bill and the restrictions against the Soviet Union.

And again, where ever they affect the OPEC countries -- so that I am inclined to think: Yes, an effort is to be made.

Now, how precisely that will be done, I don't think has been thought through -- and I think that is a pretty fair accounting of the way the Secretary left it with the Foreign Relations Committee, just the other day.

Q Bob --

A Let me go back to this question, if I may, about the genuineness of the effort here.

It's -- one has to consider that, supposing the Administration had retreated into a period where it was simply going to conduct an adversary relationship with the Congress, because of the disappointments it suffered over the legislation that affected certain foreign policy objectives in the recent months.

B 7

Now if we had done that, the Secretary wouldn't
be out making the kind of speech he's making today -- so
it seems rather obvious to me that, taken at face value
the effort is here.

Now you will be able to judge, yourselves, as
will Members of the Congress over the coming months,
whether we are succeeding.

But whether we succeed, still leaves open the
question as to whether we tried -- and I assure you we
are going to try.

Q Bob, on that question of whether you succeed,
is it the Secretary's feeling that this new relationship
can be achieved before the next Presidential elections?

A Bernie, I must say, for all of the questions
I thought might arise, I didn't consider that one, and I
don't know that it has occurred to the Secretary.
Certainly, it is not a matter that has been discussed
while the speech was being drafted.

Q Well let me -- can I just follow this up?

A Well let me say this; that it just seems to me
-- and I think this is fair to say of the Secretary --
that this ought to now become a way of life between

B8

whatever administration is in office, and whatever
majority happens to be in the Congress at any given time
I think that the issues before the country -- I think the mood of
the country -- I think the concerns of the country scream
for this kind of consensus between the branches of the
Government, and just as a private citizen, it would seem
to me that this is something that all of the people are
reaching for, across the country and in matters that
affect all of their affairs.

[Continued on page B 9]

1

B 9

Q Bob, on a question of specific foreign policy, perhaps this would help us pin down this kind of partnership you are trying to describe.

In the last few months it has become more apparent to more people that the United States is pinning down various areas in the Persian Gulf where it can have base rights or whatever. There are people in Congress who are not particularly happy about this. A couple of weeks ago for the first time Oman got arms. Certainly I'm sure Congress was informed about this.

But my question is where does Congress come in in the formation of policy so that you don't get a lot of people saying, "We're very unhappy with this kind of involvement, why don't we do something about it, let's have hearings on it," and it immediately becomes an adversary relationship? Where does this new partnership differ, or would it differ, do you suppose, from what has been going on?

A Let me give you an example. Since I have begun conducting the negotiations with the Governments of Spain and Portugal I have been on the Hill something on the order of a dozen times to report to mostly Senators but in a few of those instances members of the House Foreign Affairs Committee where we are, what seemed to me to be the objectives

B 10

of the governments with whom we're negotiating, what our
purposes are, and, most importantly, what are their views.

I met with two Senators individually yesterday
afternoon on this very matter. Now, we have not reached
a conclusion in these negotiations. I now know the views
of at least some important members of the Foreign Relations
Committee and the Foreign Affairs Committee. Now, if I can
do that, others around here are going to be doing it, most
importantly including the Secretary of State.

Q Are you saying that he would be willing to
draw members of the Congress more actively into policy
making rather than simply consulting afterwards?

A I'm sure there is going to be more consultation
with committees and members of the Congress as we proceed
along the track toward decisions that are going to have to
be taken so that we can take into account the views of the
members of the Congress.

Now, you must keep in mind that there is a certain
Constitutional role that any administration must reserve to
itself, just as the Congress reserves certain Constitutional
roles for itself.

Q A question about the timing of this speech.
Why did the Secretary decide to give it today? And apparently
a number of Congressional actions over the past few months have

B 11

led to his giving the speech today. But what specific
actions that have taken place recently could you pinpoint
as being the primary causes for the delivery of this speech
today?

I have in mind --

A One of the important considerations was the
new Congress.

Secondly, and I guess equally importantly, is the
new Administration, a President who just came from the
Congress.

And thirdly, are the differences that we have
encountered between ourselves over the last several months.

The fact that it happened on January 24 is not
all that monumental. It could have been one day or the other.
But the Secretary had been committed to that forum for
several weeks.

Q In other words, the topic of the speech was
decided several weeks ago?

A In general, the Secretary had in mind several
weeks ago this as one topic of a couple of speeches he hopes
to make in this period.

Q Did he make basically the same pitch to the
new members of Congress?

4

B 12

A Basically, yes.

Q Bob, doesn't this whole speech, the whole approach, lead people to believe in what you are being disappointed in, that it calls for less open discussion with the American people and the Congress of the major issues in secret rather than less secretive discussions?

I'm talking here on page 10, for example, that the legislative sanctions were too public or too drastic or too undiscriminating. What is he talking about? What is this innuendo that the Secretary is bringing into Los Angeles for the American public to understand and for you to brief us on?

A Next question.

Q Well, this calls for an answer, Bob. Why did he bring in this section right here at this time -- too discriminating, too public, too drastic? What is he talking about, what part of the legislation or the legislative process? Why can't we get an answer to that?

A Next question.

Q Well, I repeat, Bob, for the third time, why can't we get an answer to this question? Why is this brought into it?

Q Thank you, Bob.

(The background briefing was terminated at 1:03 p.m.)

PRESS
DEPARTMENT OF STATE

No. 35

#47

PRESS CONFERENCE BY
THE HONORABLE HENRY A. KISSINGER
SECRETARY OF STATE
JANUARY 28, 1975

SECRETARY KISSINGER: We will go right into questions. Stuart.

Q Mr. Secretary, this question deals with the decision of the Government of Argentina to postpone, cancel or otherwise delay the proposed March Meeting of Foreign Ministers, and their explanation that it's due to the rigidity and lack of equity on the part of the U.S. Trade Bill towards Ecuador and Venezuela. I have two questions on it:

One is, do you think this is a totality of the reasons, or do you think that Cuba figures in it to some extent?

And the second question is whether in view of this you feel that your effort to begin a new dialogue has really suffered a severe setback?

SECRETARY KISSINGER: With respect to the postponement of the meeting in Argentina, I have been in very close contact with Foreign Minister Vignes and with other of my colleagues in the Western Hemisphere.

Their reason seems to me, as stated, their

PR #35

2

objection to the provision in the Trade Act which includes
Ecuador and Venezuela in the ban on generalized preferences.
And as you know, that is because they are members of OPEC.

Now I stated the Administration position on this
yesterday. I testified against this provision when the
Trade Act was being considered.

The President, in signing the Trade Act, had this
provision in mind when he pointed out that not all of the
provisions were agreeable to the Administration.

The State Department issued a statement sometime
afterwards, pointing out that it thought the application of
this provision to Venezuela and Ecuador was too rigid.

Nevertheless, we believe that even though we
disagree with the action of the Congress, we believe that
the action of those two governments in refusing to come to
the Buenos Aires meeting was unjustified. They knew very
well that, according to our Constitutional processes, no
relief could be given until we have had an opportunity for
full consultation with the Congress. And they knew also
that we would consult with the Congress and that we had
reason to believe that the Congress would be sympathetic
to our views.

PR #35

A 3

Now, moreover, even though we objected to some
of the provisions of the Trade Bill with respect to Latin
America, it is important to keep in mind that $750 million
in Latin American exports are going to enter the United
States duty free under the provisions of the Trade Act
and that whatever inequities existed could have been worked
out.

And as I pointed out yesterday, as part of the
new dialogue, the United States has declared that it would
not use pressure with respect to its neighbors in the Western
Hemisphere -- but it is also inappropriate that our neighbors
should attempt to use pressure against the United States.

Now with respect to your specific question:

Cuba had absolutely nothing to do with this, because we had
had full consultations on how to handle the issue of Cuba
with our Western Hemisphere neighbors, and a substantial
concensus was emerging on how the issue of Cuba sanctions
could be handled at the Buenos Aires meeting, and there had
been no dispute with respect to that.

Do I believe that the new dialogue is in jeopardy?

As with respect to the setback that was suffered by
detente, the postponement of the Buenos Aires meeting

PR #35

4

is obviously not to be desired.

On the other hand, any foreign policy to be
effective must reflect the mutual interests of all parties.

The United States believes very strongly that a
strengthening of Western Hemisphere ties is in the interest
of all of the countries in the Western Hemisphere.
We have been prepared, and remain prepared, to make
strengthened hemisphere relations one of the cardinal
aspects of our foreign policy. And we are convinced that
the mutuality of interests and the long tradition of
cooperation in the Western Hemisphere will overcome this
temporary difficulty. And we look forward to working
very closely with our friends in the Western Hemisphere
and strengthening our relationship.

Q Mr. Secretary, you have been quoted in the
newspaper recently as having grave doubts about the long
term power of survival of American society. Did you say
that, and do you believe it?

A I stated -- I don't know what this particular
story refers to-- that I believe that all of Western Democracies
at the present are suffering from a crisis of authority.

PR #35

A 5

And I believe that it is very difficult to conduct
policy when governments are unwilling to make short term
sacrifices -- unwilling or unable -- for the long term
benefit. So I believe, as a historian and as an analyst,
that there is this problem.

I believe at the same time, as somebody in
a position of responsibility, that these problems are
solvable, and that we can solve them. And therefore, I am
confident in our ability to overcome our difficulties.
But I don't think that this has to take the form of denying
that difficulties exist.

Q Mr. Secretary--with regard to the sudden
Soviet cancellation of the '72 Trade Pact -- do you
intend to lead a new effort to try
to get the restrictions, the Congressional restrictions
that encumbered that Trade Act that led to the cancellation,
removed in the coming weeks or months?

A I continue to believe in the principles that
were reflected in the Trade Agreement in 1972, that could
not be carried out. I think now that we should assess the
situation in the light of the Soviet refusal to accept some
of the provisions in the legislation that was passed by the

PR #35

6

Congress.

We will then, in some weeks, begin consultation
with the Congress as to the appropriate steps to be taken
so that the next time we put forward trade legislation
it will be on the basis of some consensus between the
Administration and the Congress, in order to avoid some of
the difficulties that arose previously.

Q -- in order to get the Jackson . . .
Amendment removed . . . ?

A I think the particular methods that should
be used and how to deal with the objections should be
worked out in consultation between the Administration and
those leaders of the Congress that have a particular interest
in this issue.

Q Mr. Secretary, what do you mean when you
say you believe the western democracies are suffering from
a crisis of authority? Do you mean that their central
governments are not strong enough, or that the leaders aren't
strong enough? I don't know exactly what you mean by that
"crisis of authority."

SECRETARY KISSINGER: We haven't had a crisis

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7

resulting from public statements by me in quite awhile.

[Laughter.]

In at least two weeks. (Laughter.)

I am saying the problem for any society is,
first, whether it is able to recognize the problems it is
facing. Secondly, whether it is willing to deal with
these problems on the basis of long range decisions.

At the time the problems can be mastered,
it is never possible to prove that an action is, in fact,
necessary, and you always face one set of conjectures
with another set of conjectures.

So what is needed is a consensus in the leader-
ship and between the leadership and the parliament that
enables the government, or the society, to act with
confidence and with some long range mission. I think this
is a problem in many countries today, and it has many
causes. Part of the cause is the complexity of the issues
which makes it very difficult to subject them to the sort
of debate that was easier when one dealt with much more
simple problems.

It's often been remarked that on such issues as
the Defense Budget, it is very difficult for the layman

FR #35

8

to form an opinion on the basis of the facts that he
can absorb, even if they are all available to him. So
this is a problem.

It is a problem, however, and I repeat --
which is solvable -- it is a problem which I attempted
to address last week when I called for new cooperation
between the Administration and the Congress.

It is not a problem to be solved by confrontation.

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9

Q Mr. Secretary, considering the difficulty of this phase of the Middle East negotiations, and now looking back at the reaction to your remarks, do you think it was a mistake to leave open the possibility of American military intervention in the Middle East oil fields in the gravest of emergencies?

SECRETARY KISSINGER: Well, I think what I said and the way it was interpreted were not always identical. I believe that what I said was true and it was necessary. It is irrelevant to the issues which we now confront. And I have repeatedly stated that the United States will deal with the issues of energy on the basis of a dialogue with the producers and with an attitude of conciliation and cooperation.

The contingency to which I referred, as I pointed out previously, could arise only if warfare were originated against the United States. And I don't foresee this.

Q Mr. Secretary, could you bring us up to date on the diplomatic situation in the Middle East? Specifically, what are your travel plans? Secondly, do you think it's possible to reconcile Egypt's desire for further regaining of territory--in particular the passes and the oil fields which President Sadat referred to -- with Israel's desire

PR #35

10

for further political acceptance by the Arabs?

SECRETARY KISSINGER: First, I think you all recognize that we are dealing in the Middle East with an enormously delicate problem affecting the relations between Israel and its neighbors, the relations of Israel's neighbors to each other, and the relationship of outside powers to the whole area. And in this extremely complex and very dangerous situation, it is necessary for us to move with care and, hopefully, with some thoughtfulness.

My plans are within the next few weeks -- and the precise date has not yet been set, but I hope to be able to announce it early next week -- to go within the next few weeks on an exploratory trip to the Middle East. It will not be a trip designed to settle anything or to generate a shuttle diplomacy. It will be designed to have first-hand talks with all of the major participants-- all of the Arab countries that I previously visited-- as well as Israel--in order to see what the real possibilities of a solution might be.

I personally believe that the two interests--which you correctly defined--of Egypt for the return of some territory and of Israel for some progress towards peace, can be reconciled. And I believe also that the alternative to reconciling it will be serious for all of the parties

PR #35

11

concerned.

Q Mr. Secretary, in your references earlier to a crisis of authority in the West, some members of Congress, of course, would say that there is a crisis of accountability that has caused the difficulty in the conduct of foreign affairs. How do you reconcile these two problems?

And, if you would, I would like to direct your attention particularly to the on-going state of U.S.-Soviet relations. After the current problem we have on trade, we have the additional larger problem in many respects coming up on SALT negotiations. Now, you face these two problems, authority and accountability.

SECRETARY KISSINGER: I think you are absolutely right, Murrey. Any democracy faces the problem of how to reconcile the need for authority with the requirements of accountability. You need authority because foreign countries can only deal with a government. They cannot, and should not, begin to lobby in the legislative process of a society. And, therefore, the ability to conduct foreign policy depends on the expectation of other countries of the degree to which one's commitments can be carried out and one's word means anything.

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12

On the other hand, obviously in a democracy there must be full accountability. I have attempted to be understanding of this problem. As I pointed out previously, I have testified 38 times before Congressional committees in sixteen months in office and have met nearly a hundred times with other Congressional groups on an informal basis.

At the same time, I recognize that the necessity of presenting a united front to foreign countries may impose additional requirements of consultation, and I am prepared to undertake them, and so is the entire Administration.

Now, with respect to the SALT Agreement, we shall brief the relevant Congressional committees of the essential features of our plans. I think we have to come to some understanding with the Congress about the necessity on the one hand of keeping the Congress properly informed and, on the other hand, of not having every detail of the negotiation become subject to public controversy because that would freeze the negotiating process and would lead to rigidity.

So all I can say is I'm aware of the problem. I'm not saying it should be solved by giving the Executive discretion. I think it requires self-restraint on both the Executive's part and the Congress' part.

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13

Q I would like to pursue that one bit. On the question of accountability you are obviously facing -- the Administration is facing -- not a Congressional desire to grant greater authority for the conduct of secret diplomacy, but, on the contrary, a demand for greater openness and increasing restrictiveness on secret diplomacy.

Now, is this not one of the fundamental problems here, that while you referred, for example, to having testified 38 times, most of that testimony was in closed session? Don't you feel some need here to be more responsive to the public discussion of foreign policy, which you have referred to in the past but it appears to have diminished?

SECRETARY KISSINGER: Well, Murrey, unfortunately, I don't have the statistics here of the number of public speeches I have given and the number of press conferences I've held. And it seems that criticism modulates between not being sufficiently available to the press and seducing the press. But be that as it may, I recognize the need for public accountability as well as Congressional accountability. I believe, at the same time, that it is necessary for everyone interested in accountability also to recognize the limits of the detail to which this can take place at particular stages of negotiations. We will do the maximum that we think is consistent with the national interest. And

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14

we will interpret this very widely. And we are open to
suggestions as to how the public presentation can be
improved. But I think it is necessary for everybody
concerned with the problem of public accountability,
as well as everyone concerned with the question of
authority, to look again at the limits to which they should
push their claims.

Q Mr. Secretary, there is a public impression
that the Administration accepted the conditions of the
Jackson amendment, however reluctantly. I would like to
ask you whether, if you had anticipated the Soviet reaction
to the Trade Bill, whether you would have advised the
President not to sign it?

SECRETARY KISSINGER: I don't want to go into a
debate about every detail of the negotiations that led to
the so-called compromise. And once matters had reached this
point where it became necessary, we were already at a very
narrow margin. I don't want to review all these events
because we should look into the future -- because there is
no purpose being served.

Would I have recommended to the President that he
not sign it? That's very hard to know. One has to remember
that it was believed that the Trade Bill was in the essential

PR #35

15

interests of the United States and in the essential interests
of a more open trading system among all of the industrialized
countries, as well as giving special benefits to the
developing countries in the special preference system. And,
therefore, to recommend the President to veto this because
there were aspects of it in the granting of MFN to the Soviet
Union would have been a very heavy responsibility.

As it turned out, I believed that, while it would

be a close call, the agreement that was made with

Senator Jackson would probably stick. And, therefore, I

agree with those who say that it was entered into in good

faith by all of the parties. So the issue never arose.

Q Mr. Secretary, in your speech in Los Angeles
you referred to your dissatisfaction with legislative
restrictions on foreign policy. Does this dissatisfaction
lead you to attempt to try to repeal or modify the Church-
Case Amendment or the War Powers Act? Or, more importantly,
the restrictions on the end use of military aid?

SECRETARY KISSINGER: Now, let's get the distinctions
clear. First of all, let me make one point with respect to
what Murrey said previously.

The issue isn't secret diplomacy. Some diplomacy
has to be secret and some of it has to be open. And I think

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16

that balance can be established.

Now, with respect to legislative restrictions, I made a distinction between two categories of legislative restrictions: those that attempt to set main lines of policy, such as the Church-Case Amendment. With those the Administration can agree or disagree, but it cannot challenge the right of the Congress to set the main lines of the policy by legislation.

The second is the attempt to write into law detailed prescriptions, country-by-country, for specific measures. That, we believe, will generally have consequences that are out of proportion to the objectives that are sought to be obtained. Those we deplore, and those we will attempt to resist.

Now, if the Congress passes a law on the main direction of a policy with which we disagree, we may ask them to change it. The two cases you have mentioned, even though they were passed at the time over Administration objection, at least the first one, we will not ask them to reverse.

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Q Mr. Secretary, the thing that troubles me about that is, do you, and I think you do, and why do you is really the question, put Jackson-Vanik in the second category and not in the first? Didn't Jackson-Vanik indeed represent a national attitude about freedom and democracy, etc., and not really some tinkering with day-to-day minor details?

SECRETARY KISSINGER: I'm glad that you already answered the first of your two questions --

Q -- I think you do put it in Category Two.

SECRETARY KISSINGER: When we get these press conferences back on a more frequent basis, I guess we will get two-thirds of the questions answered by those who put them.

On the Jackson-Vanik -- I don't think I want to insist, on a theoretical point, on whether it is in the first category or in the second category. On the Jackson-Vanik amendment, the Administration always supported the objectives of the Jackson-Vanik Amendment. And the Administration, before the Jackson-Vanik Amendment was ever introduced, had managed to bring about an increase in emigration from an average of 400 to a level of about

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38,000 a year. So there was no dispute whatever between the
Administration and the supporters of Jackson-Vanik about
basic values and basic objectives. The Administration
consistently maintained that the method of a legislative
prescription in this case was not the appropriate method
and might backfire.

Now, whether that was because it was in the second
category that I pointed out or in the first category, I
don't really want to insist upon. Nor do I want to challenge
the right of the Congress to pass such an action.

And finally, I really don't think much purpose
is served by prolonging the debate over the past--of how
we got to this point--because we did try to work together
with the Congress on a good-faith basis, once it had
embarked on a course which we considered unwise, to try
to resolve the ensuing difficulty.

If we go back on the trade legislation, we will
try to achieve the objectives which we share with the
Congress by methods that may be more appropriate to
the objective. We will not give up --

Q -- Mr. Secretary, can you tell us how you
estimate the prospects of a summit meeting with regard
to the CSCE Conference, and what significance a summit

PR #35

19

could have for detente, East-West detente?

SECRETARY KISSINGER: Well, I believe that the European Security Conference is making good progress. The issues -- as you know, they are discussing them in various categories called "baskets"-- and the issues in most of these categories are beginning to be resolved. There are some unresolved issues with respect to general principles and some unresolved issues with respect to human contacts. But progress has been made in all of these categories.

I believe, therefore, that if the Conference is concluded along the lines that are now foreseeable, that a summit conclusion is highly probable. I believe that a successful outcome of the European Security Conference would contribute to detente.

Q Mr. Secretary, next week, February 5, is the deadline by which time the Administration has to report progress on Cyprus. What kind of report do you think you will be able to give to Congress by that date? Otherwise aid to Turkey is cut off.

SECRETARY KISSINGER: I can only stress what I have said previously. The United States gives aid to Turkey, not as a favor to Turkey, but in the interests of western

PR #35

20

security. And I think anybody looking at a map and
analyzing foreseeable trouble spots must recognize this.

Therefore, the Administration is opposed to the
cut-off of aid to Turkey, regardless of what progress
may be made in the negotiations.

Secondly, the Administration favors rapid progress
in the negotiations over Cyprus and has supported this
progress. And I believe that all of the parties, including
the Greek side, and especially the Greek side, would have
to agree that the United States has made major efforts.

I believe that some progress is possible and will
be made--can be made before February 5. And we will be
in touch with the Congress, either late this week or early
next week. And I have stayed in very close contact with
those members of the Congress and the Senate that have had
a particular interest in this question, to keep them
informed of the state of the negotiations.

So by the end of this week -- as you know, the
parties now meet twice a week in Nicosia-- and by the
end of this week, after their second meeting this week,
I will be in touch with the parties, and we will discuss
that with the Congress.

Q Mr. Secretary, Senator Robert Byrd said this

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21

morning the leaders of both parties in Congress have told
President Ford that it will be difficult, if not impossible,
to get more aid to South Viet-Nam. Where does that leave
the situation?

SECRETARY KISSINGER: Well, let us make clear what
it is we have asked for. And let me express the hope that
what we are asking for doesn't rekindle the entire
debate on Vietnam, because that is emphatically not involved.

Last year the Administration asked for $1.4 billion
for military aid to Viet-Nam. The Congress authorized
$1 billion. It appropriated $700 million. We are asking
the Congress to appropriate the $300 million difference
between what it had already authorized and what it actually
appropriated in the light of the stepped-up military
operations in Viet-Nam.

This is not an issue of principle of whether
or not we should be in Viet-Nam. The issue is whether
any case at all can be made for giving inadequate aid
to Viet-Nam. And we believe there can be no case for
a deliberate decision to give less than the adequate aid
and aid that the Congress had already authorized to be given,
so that it could not have been even an issue of principle
for the Congress.

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22

Q Mr. Secretary, on the Middle East, several months ago you said you wouldn't be returning to the Middle East unless you were fairly sure that your presence there would lead to an agreement. You are now saying that you are going back there on an exploratory mission. Why have you changed your tactics?

SECRETARY KISSINGER: I have changed my tactic at the request of all of the parties, and based on the belief that the urgency of the situation requires that this step be taken. I have also pointed out in this press conference that I am hopeful that progress can be made. And I am going there with that attitude.

Q Mr. Secretary, with respect to your saying that it serves no useful purpose to go over the Jackson-Vanik Amendment, it has become an issue in Washington to apportion some blame on this issue. Now, this has ramifications for U.S. relations with the Soviet Union because some people say the Soviet Union reneged. It has ramifications for your dealing with Congress, because some people feel you have blamed Congress. Because of that problem, could you deal with this a little further and talk to us about the situation?

PR #35

c-23

SECRETARY KISSINGER: No,

I stated my view, and the Administration's view, with
respect to the amendment in two public testimonies before
the Congress, in which I pointed out why we were opposed,
not to the objectives -- I want to repeat that -- but to
the methods. I don't think any purpose is served in
trying to apportion blame now. I agree with those who
say that the discussions between the Congress and the
Administration were conducted in good faith by both sides.
At this point, we should address the question of where
we go in the future, and not how we got where we are.

Q Mr. Secretary, could you give us your assessment
of the situation in Indochina, particularly Viet-Nam,
two years after the agreement which you labored over, and what
went wrong?

SECRETARY KISSINGER: I think if you remember
the intense discussions that were going on in the United
States during the negotiation of the agreement, you will
recall that the overwhelming objective that was attempted
to be served was to disengage American military forces from
Indochina and to return our prisoners from North Viet-Nam.

Under the conditions that we then confronted -- which
was an increasing domestic debate on this issue -- those

PR #35

(24)

were the principal objectives that could be achieved.
The alternative, namely, to impose a different kind of
solution, would have required a more prolonged military
operation by the United States.

Secondly, what has gone wrong, if anything has
gone wrong, is that it was the belief of those who signed
the agreement--certainly a belief that was encouraged
by the United States, as well as by the public debate
here--that the objection in the United States was not to
our supporting a government that was trying to defend
itself by its own efforts. Our national objection
was to the presence of American forces in Viet-nam.

Now, the military situation in Viet-nam was reasonably
good until last June. At that point, we had to impose
cuts -- no new equipment could be sent, and only
inadequate ammunition. This brought about a reduction
in the ammunition expenditure by the Vietnamese Army.
This in turn led to an increase in casualties, to a loss
of mobility, and therefore to a deterioration in the
military situation.

All that we have ever said was that the settlement
would put South Viet-nam in a position where it had a chance

PR #35

25

to defend itself. That chance exists. That chance
depends on adequate American assistance. And that is the
chance we are asking for.

Q Mr. Secretary, I have a question I would like
to follow up on your first reply on the Middle East. In
that reply, you said that you believe the Egyptian desire
for additional territory in Sinai, together with the
Israeli desire for specific political concessions, can be
reconciled. I understand that you probably don't want
to get into the specific demands that Israel is asking
from Egypt. But perhaps you can give us some general
criteria for what types of political acts Egypt may offer
to Israel that would satisfy Israel. And the second
part of the question is -- the questioner had specifically
referred to the oil fields and the passes -- were you
referring to those specific points as possibly being
reconciled?

SECRETARY KISSINGER: I think all of you have to
accept the fact that I cannot possibly go into the
details of the negotiation before I have gone to the
Middle East. And therefore, with all due respect, I
cannot possibly answer this question.

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26

Q Mr. Secretary, along this line, but not asking you to go into any details of the negotiations, in your discussions with the Arab countries in the Middle East, have you found any evidence that the Arab world is prepared to accept the existence of Israel?

SECRETARY KISSINGER: It is my impression that there is an increasing willingness to accept the existence of Israel as part of the process of peace, yes.

Q Mr. Secretary, one of the areas where detente has never worked very well is in Southeast Asia. During the course of the time when detente was running relatively smoothly, did you ever try to make it clear to the Soviets that responsible behavior in the form of limiting military supplies--which tend to wind up in South Viet-nam, and fuel the war there--would not be acceptable? In other words, have you tried to work out that end of the equation?

SECRETARY KISSINGER: First of all, it is an interesting question to determine what you mean by the phrase "is not acceptable." The answer to your question depends on what is it we would do if the Soviet Union ignores us. And if you look at the catalogue of things that is available for us to do under present circumstances

PR #35

27

in the way of either retaliation or of benefits, you
will find that it is not an infinitely large one.

The answer to your question is, yes, we have
raised this issue, both with the Soviet Union and with
the People's Republic of China. And I think the efficacy
of it cannot be determined by determining whether supplies
have stopped all together, but has to be seen in relation
to how much more might have been done, and then to assess
it in relationship to that.

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28

Q Mr. Secretary, do you plan to travel to Latin America during the month of February?

A I plan -- I don't think I have announced it, as some of my colleagues seem to have announced -- I do plan to travel to Latin America, certainly before the OAS Meeting here in April. The exact date I would like to work out after my trip to the Middle East has been more firmly settled. But I want to say now that I place great stress on our relationship with Latin America and that I will go at the earliest opportunity that I can do justice to this visit.

Q Could you tell us about your meeting with the former President this weekend? Specifically, could you tell us if you discussed with him his cooperating in any way with the current investigations into the CIA operation?

A I did not discuss with the former President anything whatever having to do with any investigation now being conducted in Washington, and specifically not that investigation. It was a general review of the international situation and personal talk. It had no specific

PR #35

29

mission. But it seemed to me that a man who has
appointed me to two senior positions in the Government
deserved the courtesy of a visit when I was that close.

Stewart?

Q Well, this is just tying up a loose end.
But when you were responding to Mr. Freed's question
about the illness which afflicts some of the democratic
countries, you said it was easier to get a consensus between
the Executive and the Parliament when problems were
simpler.

A That's right.

Q In answering Mr. Marder's question
about accountability, you harked back to the -- I think
it was the Chicago speech, or possibly Los Angeles --
in which you said you promised wider consultation
but with increased confidentiality -- which seems
rather paradoxical to me, although I'm willing to believe
you can do it. (Laughter). But there's one more element,
and I'm wondering if that element is not what is missing
from what you told Mr. Freed about in the answer to his
question -- and that is that problems now are not as simple

PR #35

30

as they were at the time of Senator Vandenberg
and the bipartisan foreign policy. And how do you get
around the complexity of these problems in your
accountability?

A Look, I'm not trying to score points here now. I'm trying to call attention to a very serious problem, and a problem that if as societies we do not solve, it will not be a victory for an Administration or a victory for the countries. It will be a defeat for everything we stand for -- everything we are trying to achieve.

I did not say I want more consultation and
more confidentiality. I listed a whole set of problems that
are very real problems.

One is how you can have Congressional control
without legislative restriction. I, frankly, do not know
the answer exactly to this.

Q That is what I wanted to know.

A That is one problem -- how you can have
Congressional control without the Congress necessarily
passing laws.

PR #35

The second problem is how you can have
increased consultation and, at the same time, on key
issues, maintain increased confidentiality.

Now, I have to say that recently I have
been briefing some key members of the Congress on some
of the key aspects of the Cyprus negotiation; and
there have been no leaks whatsoever, and I consider
this a very important achievement -- I don't want to
imply that there have been leaks previously.

And what I wanted to do in my speech was to
call attention to what really may become a major problem
for this country and, because so much depends
on this country, a major problem for all free countries.

I did not mean to blame anybody. I don't
think it does any good to aim for victories by either
branch. I think we have to explore a serious solution
-- to which I confess I do not know all the answers.

Q That was what prompted my question.

Q Mr. Secretary, there has been concern
expressed in Congress about the build-up of various

PR #35

32

countries in the Persian Gulf and of American arms going to these countries. There were expressions of concern about arms going to Oman when they had not gone before and a feeling that war could break out at any time, once these countries build up enough, without enough reason for war to break out, and that the United States has taken a major role in this.

Could you talk about our interest in the Persian Gulf and why the United States is doing what it's doing?

A Well, in determining whether the United States is unnecessarily giving arms or determining the wisdom of American arms policy in the area, one has to ask a number of questions.

First, what is the security concern of the countries involved? That is to say, do they perceive that they face a real threat?

The second question is: Is this security concern well founded?

Thirdly, does the United States have any relationship to that security concern?

Fourthly, what would happen if the United States

PR #35

033

did not supply the arms?

And I think each of these arms programs has to be assessed in relation to these or similar questions. And I think you will find -- or, at least, I hope you would find -- that we could answer, in the overwhelming majority of the cases, these questions in a positive sense -- that is to say that there is a security problem which these countries feel; that often the security problem is caused by a neighbor supported by Soviet or other Communist arms; that, therefore, if the country did not receive the arms, it would be subject to this neighbor or else it would get these arms from other sources.

And these are the principles we are trying to apply in our arms sales, especially in an area as the Persian Gulf, in which we have, after all, a very major strategic interest.

Q Mr. Secretary, can you outline some of the main topics which you think will be discussed when Mr. Wilson comes here -- and, particularly, can you say whether the issue of the Persian Gulf will be discussed?

PR #35

34

A Well, as you know, our relationship
with the Government of the United Kingdom is extremely
close; and we keep each other informed about our major
foreign policy initiatives and our major approach
to international affairs in the frankest possible way.

One result is that there is rarely a very set
agenda for the meetings -- or, rather the agenda is
the world situation broken down into its constituent
elements. Therefore, it is reasonable to assume that
the Middle East -- including the Persian Gulf --
will play a significant role in the discussions with
Prime Minister Wilson.

I don't know whether the Persian Gulf
will be specially singled out. These discussions are usually
rather unstructured, but they're extremely frank; and we
will put our entire views before Prime Minister Wilson.

Q Thank you very much, Mr. Secretary.

(Whereupon, at 12:52 p.m., the press conference
was concluded.)

Remarks of Secretary Kissinger to
House Republican Dinner Guests of the President

Friday, January 31, 1975

(6:47 - 7:00 p.m.)

Mr. President, Gentlemen:

I welcome the opportunity to respond to concerns which have
been expressed in recent days as to how the President's comprehensive
energy program is going to work. The proposals before you constitute
a total energy program. Each element in this program is an integral
part of the whole. And this evening I would like to elaborate how the
international aspects of it impact on the domestic elements and influence
the ultimate outcome. I believe strongly that should the Congress move
to take away the President's authority to implement key international
elements of the program, it would have a disastrous impact on our
foreign policy.

To begin with it is important to realize how we have reached
our present position. In 1950 the United States imported no significant
amount of its energy requirements. By 1960 our reliance on foreign
sources had grown to 18% of our requirements. By 1975 we were
importing 35% of our needs and it is estimated that by 1985, foreign
sources would account for 50% of our needs. In October 1973 the Arab
countries imposed the oil embargo and the members of OPEC raised
crude oil prices by 400%. The combination of these actions resulted in

2

a 1% decrease in our gross national product and the loss of more
than 500,000 jobs. These effects translated further to between 4 and 5%
increase in inflation. These direct results of actions abroad demonstrate
the integral connection between the international side of energy policy and
domestic policies.

Beyond these very severe economic effects, it is important
to understand how our political relationships are affected. The disruption
that has occurred in the world economy has had a profound impact on
the stability of every industrialized democracy in Europe and Asia.
These countries, whose reliance on foreign sources is far greater than
ours and who are much more imperiled by the threat of further price
rises, are unable individually to take actions which will effect an overall
solution. Nor do these governments have the strength within their own
countries to take the kind of strong measures that are necessary to
moderate the controlling position now held by the oil producing countries.
Because of our dominant position among consumer countries and our
key position in influencing the future of the market, these countries
look to us for leadership. There is no question but that determined
action by the United States to reverse current trends will have a decisive
effect in leading the other industrialized democracies toward responsible
positions in their domestic policies as well as in their foreign policies.

3

Apart from the importance of strong United States leadership as key in establishing unity and strength among consumer countries, we must also consider what long-term policies are required which affect our fundamental security interests. Looking toward our long-term interests and those of the world economy, the United States convened the Washington Energy Conference in February of last year. At that conference we were successful in reaching consensus on safeguard measures and on emergency sharing concepts which would protect consumer countries against a recurrence of an oil embargo. Since that time, we have gone on to propose a financial solidarity program to protect industrialized economies against sudden transfers by producer countries of their huge and rapidly accruing wealth.

Looking toward the longer term, we believe it is essential to establish an agreed conservation program and to move quickly into the development of alternative sources of energy to reduce our reliance on oil. Once we have demonstrated our ability to cooperate in these conservation and alternative source measures, we are prepared to engage in a consumer/producer dialogue. Without conservation, the control of OPEC over the rest of the world will increase. To the extent that the wealth of OPEC countries continues to increase, does their ability to influence the policies and stability of all of the consumer countries. We face the very definite risk of having the policies of these countries mortgaged

4

to governments who have no concern either over the welfare of the
governments. There
in industrialized states
or the stability and continuity of these governments. There
would be a very clear weakening of the industrial societies. Beyond
our efforts to demonstrate the ability of consumer countries to
cooperate in reaching consensus on common policies, we must establish
an incentive for producer countries to reduce oil prices. Otherwise,
by the late 1970s we will face the risk that the political survival of
industrialized societies will depend on the very uncertain and ~~primitive~~
political sensitivities.
policies of the producer nations. We must take charge of our destiny
before our dependency becomes too great and before the OPEC countries
become sufficiently organized to establish one-sided control. As I have
mentioned, no single industrialized society holds a significant enough
position in the market to act without us. No policy of any other single
country can succeed without our cooperation. The United States consumes
50% of the energy output of the world. Conversely, unless the United
States takes positive action in the form of a comprehensive plan, there
can be no hope of the industrialized world achieving a solution to our
problem.

It has been asked: Why are conservation measures necessary?
First, we have a moral responsibility. Within the next three years we
must prepare ourselves for the possibility of a dramatic cut in production

5

or a major increase in prices. We in the United States have an
obligation to demonstrate our ability to reverse the trend toward
dependence on OPEC countries and thereby influence the producers
to moderate their policies away from disruptive price increases or
production cutbacks. If we adopt serious conservation programs, the
only way that OPEC can maintain current prices is to cut production.
At the beginning, production cutbacks will be relatively painless. Over
time, however, as the industrialized countries reduce their consumption,
pressure builds on the oil producers to cut their prices. Today some
producers are already operating at only 25% of capacity. If we are
successful in achieving a major reduction in consumption, the pressure
on oil producers will become much greater and incentives for price
reductions will mount. Whether these policies will succeed in breaking
current prices is unclear at this time. It is too early to tell. At least
we will surely abate the threat of further price increases.

## Alternative Sources

While I will not this evening go into great detail on our proposals
for developing alternative sources, next week we will be discussing with
other industrialized countries what we have in mind. Through the
International Energy Agency, we will promote a vigorous program to
achieve financial solidarity, serious conservation measures and a

6

major program to develop alternative sources. Once we have
demonstrated our ability to adopt cooperative policies in these areas,
we will move to establish a consumer/producer dialogue.

Now I believe it is important to understand that the President
did not sit down one day and say we are going to have a conservation
program. These proposals represent the culmination of months of
examination and analysis designed to achieve objectives domestically
and internationally that will serve the United States' interests both now
and over the long-term.

This morning I mentioned to the President how ironic it was
to be reading in the _Washington Post_ exactly what the Japanese were
telling us during the President's visit last fall. This was that they had
no hope of being able to implement difficult policies domestically until
the United States exercised leadership and example in demonstrating
its ability to make the hard decisions and sacrifices that are called for.
Now with our leadership it becomes possible for them to do it. Next
week at the meeting of the International Energy Agency, we will ask them
to do what we are doing now and we stand a much better chance of their
being able to achieve support for these policies at home. Together with
our plans for energy sharing, for financial solidarity, conservation and
development of alternative sources, we can then enter a dialogue with
the OPEC countries.

7

Therefore, I cannot urge too strongly that the Congress
consider very carefully its actions at the precise moment at which
we are moving to establish a critical leadership to which there is no
alternative in the international community. To deny the President
authority to go forward with this program at a time when our efforts
to achieve commitment to a comprehensive program by all the other
industrialized countries would produce a disastrous effect in the
international community. We are asking Americans to conserve to
move us toward independence but more importantly, to demonstrate
discipline and a position of leadership for the other consumer nations.
Only in this way can we expect them to be able to follow with similar
policies in their countries. Precipitate action by the Congress holds
the very great danger of depriving us of critical negotiating leverage.
The result will affect not only the United States but the rest of the
industrialized world. Our ability to act at this time is crucial in creating
a perception among other countries of our strength and leadership and
establishing their confidence in us. This perception, not only among
consumer countries but among the OPEC nations, will be key to our ability
to move in the months ahead in restoring a degree of stability to the
international economy and to the strength of all other industrialized
countries.