- 2 -

PR #24

**SECRETARY KISSINGER:** I have never said there would be a full agreement while I am here. We are not on any particular schedule. Our schedule is what is needed for the peace of the world. We will have to work very seriously. We have never said we would complete it here.

**QUESTION:** Mr. Secretary, you like numbers and you often do percentages of what the outcome of certain negotiations will be. Will you take a risk on this one?

**SECRETARY KISSINGER:** I do not want to make any indication -- give any indication. We have made some progress and the question is how much more can be made while I am here. Some progress has already been made.

**THE PRESS:** Thank you, Mr. Secretary.

* * * * *

PRESS
DEPARTMENT OF STATE

[LC]

January 23, 1976

No. 25

PC 84

PRESS CONFERENCE
BY
THE HONORABLE HENRY A. KISSINGER
SECRETARY OF STATE
NATO HEADQUARTERS
BRUSSELS, BELGIUM
JANUARY 23, 1976

**SECRETARY KISSINGER:** Before we start, I would like to say that this is the last time I will be here while Ambassador Bruce is representing the United States. He is one of the great men in American diplomacy. We will miss him enormously here but, even though he periodically threatens to retire, we will press him into service for something or other when we can catch him unaware. Now we will go to your questions.

**QUESTION:** Mr. Secretary, there are reports that you have come back from Moscow with a Russian suggestion for lowering the Vladivostok ceiling by some amount and I wonder if you could confirm that and expand on it?

**SECRETARY KISSINGER:** I cannot go into the details of the negotiations here. The possibility in certain contexts together with other arrangements of lowering the ceiling was discussed, but I would like to stress that this is in the context of agreement on several other issues and I cannot go any further into it.

**QUESTION:** Mr. Secretary, what are the major unresolved issues now holding up agreement?

**SECRETARY KISSINGER:** First of all, as I said at the Moscow airport, a number of issues were resolved and were passed on to Geneva for technical implementation. Progress of some significance was made on other issues and some other issues still remain to be resolved. The general category of problems connected with BACKFIRE and certain aspects of cruise missiles still requires further study, though progress has been made with respect to some aspects of it.

**QUESTION:** Mr. Secretary, did you discuss the Middle East this time also -- as a whole or in particular because of the Lebanese problem?

**SECRETARY KISSINGER:** There was a general discussion of the Middle East primarily as it relates to the peace process in the Middle East. I hope you realize that these discussions are supposed to be confidential. (Laughter)

**QUESTION:** (inaudible)

For further information contact:

-2-

PR 25

**SECRETARY KISSINGER:** To ask NATO to intervene in Lebanon? That suggestion was not made in Moscow. (Laughter)

**QUESTION:** On the question of a visit by Mr. Brezhnev to Washington or to the United States, in your opinion, if there is a satisfactory agreement on SALT matters and also if Angola is in a very unsatisfactory condition from the United States' point of view, do you still envisage a Brezhnev visit?

**SECRETARY KISSINGER:** This is a doubly hypothetical question. We do not assume that Angola must remain in an unsatisfactory state as far as the United States is concerned in a general sense. We have always made clear that our relationship with the Soviet Union depends on restraint in other areas and I have stated publicly on a number of occasions that if any country does not exercise restraint in one area it could set off a process of action and reaction that can only undermine international stability and the prospects of a U.S.-Soviet rapprochement. As of now, we are planning, if a satisfactory agreement is reached, to invite the General Secretary to the United States. This is the plan on which we have been operating.

**QUESTION:** Mr. Secretary, I would like to ask you two questions. Are you going to sign or conclude tomorrow in Madrid the Hispano-American Agreement concerning American bases in Spain and how much money is involved? The second question is this one: in the Presidential election in the United States, if the Republicans win, do you plan to resign as Secretary of State?

**SECRETARY KISSINGER:** What do you think I am going to do if the Democrats win? (Laughter) With respect to the first question, we have been negotiating with Spain an agreement of cooperation which includes the bases, but extends to other areas as well and I am hopeful that we may be able to sign it on the occasion of my visit to Spain tomorrow. The exact amount that is involved I think we should leave for the occasion of my visit to Spain since some details still have to be worked out. With respect to your second question, I am grateful that you give me so much time -- until the end of this year. The usual question I am asked in the United States is what I intend to do next month. (Laughter)

**QUESTION:** Mr. Secretary, to follow up on the first part of that question, this agreement with Spain has been described as a defense treaty. Is that an accurate description?

**SECRETARY KISSINGER:** No, it is not an accurate description. It is not a defense treaty. It is a treaty of cooperation. We will probably submit it to the Senate in treaty form, but it is not a mutual defense treaty.

**QUESTION:** Would you give us your appraisal of the current state of U. S. detente relationships -- what you have learned as a result of your meeting and your current assessment?

**SECRETARY KISSINGER:** Our impression is that the Soviet leaders are interested in continuing the detente relationship; and to strengthen it. We believe that the negotiations, with respect to strategic arms limitations, made a positive contribution to that end. At the same time we have repeatedly expressed our view that Soviet and Cuban actions in Angola are not helpful to the detente relationship. So, I would have to call attention to both the pluses and the minuses.

**QUESTION:** Mr. Secretary, during the course of the meeting this afternoon, sir, did you ask the allies to make any approaches, diplomatic steps or any other actions to affect the course of events in Angola?

-3-

PR 25

**SECRETARY KISSINGER:** No. Most of the time this afternoon was spent on my giving my evaluation to my colleagues and the Ambassadors here of my meetings in Moscow. I also gave them the American evaluation of the situation in Angola. We made no request for any particular step and the meeting was not in that context. While we are talking about this afternoon's meeting, I would like to express my appreciation that all but two of my colleagues came here and thereby gave us an opportunity to underscore the great importance we attach to political cooperation within the NATO alliance and the close relationship that in fact exists.

**QUESTION:** Mr. Secretary, is it your expectation that a SALT agreement could be reached with the Soviet Union this year?

**SECRETARY KISSINGER:** I believe that a SALT agreement with the Soviet Union this year is possible.

**QUESTION:** Mr. Secretary, is it possible that the new Soviet proposal to reduce the Vladivostok ceiling might serve as a way of breaking the deadlock over the CRUISE-BACKFIRE bomber dilemma?

**SECRETARY KISSINGER:** I would like to make clear that the prospect of reduction is in the context of several other elements of the agreement and it may or may not be included in the final agreement. We will now study carefully the specific Soviet proposals to see whether they lend themselves to adaptation or a response that can bridge the remaining differences.

**QUESTION:** Mr. Secretary, did you get a forewarning of the possible Soviet answer to NATO's proposal tabled in Vienna last December for the troop reductions in the center of Europe?

**SECRETARY KISSINGER:** I think I got some indication of what the answer is likely to be and I conveyed it to my colleagues who, of course, never reveal what does on inside the NATO Council meeting room.

**QUESTION:** A positive answer or a negative one?

**SECRETARY KISSINGER:** Well, I don't think I should discuss it. At any rate it will be given to us in a few days.

**QUESTION:** Mr. Secretary General, (sic) did you have the impression in Moscow --

**SECRETARY KISSINGER:** You are giving me too high a title. (Laughter)

**QUESTION:** Did you have the impression in Moscow that the countries of the Warsaw Pact are aware of having taken a lead in the field of armaments? If they are aware of this, why do you think that they continue to arm themselves so rapidly? [Question asked in French]

**SECRETARY KISSINGER:** This is not a subject that was discussed but it is my impression that in the Communist world the level of sophistication has not yet been reached where people believe that an accretion of power is not politically useful, and therefore they continue to increase their arms. And we have an obligation to match it.

**QUESTION:** Mr. Secretary, what is your opinion about the meeting which is going to take place in Paris tomorrow and the day after tomorrow among Socialists in the Mediterranean area and which is going probably to close the links between Communists and Socialists in the Mediterranean area of Europe?

-4-

PR 25

**SECRETARY KISSINGER:** Well, I do not want to be offensive, but I did not realize there was such a meeting going on. They did not ask my opinion before they called the meeting which wounds me deeply. (Laughter)
Therefore, I do not know exactly what is planned for the discussion. I have trouble enough dealing with states without getting involved with political parties.

**QUESTION:** Mr. Secretary, did you have the occasion today to have any separate talks with the Turkish Foreign Minister?

**SECRETARY KISSINGER:** I had a brief talk with the Turkish Foreign Minister and I emphasized to him again the strong American interest in a rapid and equitable solution of the Cyprus problem and he expressed his own views on the subject. Of course, we shall meet again in Washington on February 11.

**QUESTION:** What are you planning to do this evening, please? (Laughter)

**SECRETARY KISSINGER:** That subject is still under discussion. (Laughter)

* * * *

Mr. Minister, Ladies and Gentlemen:

The United States is very pleased by the completion of
these important negotiations today through the signatures
which the Minister of Foreign Affairs and I have just
placed on the Treaty of Friendship and Cooperation between
Spain and the United States.

I regard the completion of this Treaty as an event of
great importance. The Treaty covers a wide range of
relations between our two countries. It does not relate
to defense matters only but rather the totality of our
relations in many diverse fields. It reflects the strong
desire of both countries for a closer friendship and a
wider and more enriched cooperation. For its part, the
United States will pursue the objectives of the Treaty
with great earnestness.

Today's event comes at a moment when Spain is undergoing
the excitement, the inspiration and the challenge of a
new era. It is my hope that this Treaty will be seen as
a clear sign of our moral support for Spain at this
particular time. This country faces the delicate task of

striking a balance between evolution and stability as it
moves forward on the new course which is being charted.
I have the greatest confidence that the proud and
dynamic people of Spain will successfully meet
the tasks which lie ahead and that Spain will increasingly
enter on the mainstream of those values which link the
Western world in a common course.

It is my conviction that this Treaty of Friendship
and Cooperation will give added strength to our historic
bilateral ties and will also contribute to the deepening
of Spain's role in Western Europe.

Spain can be sure that in the United States she has a
close friend and confident supporter.

TOAST

Mr. Foreign Ministry, Excellencies, and distinguished guests :

The delights of Spanish hospitality as well as the needs of policy drew me to come to Spain. It is a great personal pleasure to be here.

The treaty we have negotiated and signed today is, I believe, a milestone in the relationship of both our countries.

The tenacity that made Spain great was made vividly evident to us, Mr. Foreign Minister, in the negotiation of this treaty. Your predecessor, Senor Cortina, was a tough negotiator, and it was fitting and gracious of you to pay tribute to him. You carried --and I must add, with equal tenacity -- on the negotiation with equal skill, and the successful outcome owes much to your dedication as well.

With your warm hospitality, Mr. Foreign Minister, have come warm words of welcome, spoken with a clarity and grace rare in our days. I greatly appreciate these words. I know they represent

- 2 -

the sincere aspirations of both countries to deepen
and strengthen a relationship that is rooted both
in mutual national interest and in the human ties to
which my own nation, celebrating its Bicentennial,
owes so much of its heritage.

I must say to our Spanish friends that your
Foreign Minister is a remarkable asset. He
explains Spain's aspirations and foreign policy
with equal eloquence in French, German and English.
Our colleagues tell me something even more notable
about your Foreign Minister. No matter what
language he is speaking, his foreign policy is the
same. This is truly remarkable.

The Foreign Minister has before him a great
task; he has set out to level the Pyrennees. In
demolishing the myth that Europe begins at the
Pyrennees, making them a simple, though magni-
ficent, mountain-range, the Spanish will have done
the rest of Europe, as well as Spain, a signal
service.

-3-

His Majesty, King Juan Carlos I, in his inaugural message from the throne, made clear the philosophical necessity of this effort. It is true, as he said, that the idea of Europe would be incomplete without Spain, that the Spanish are Europeans and that the Spanish and the other Europeans should draw the necessary conclusions from this fact. My Government recognizes this and supports Spain's efforts to make it a reality. For indeed the Spanish share with the rest of Western civilization the common heritage of respect for human dignity.

Benjamin Franklin once said: "...God grant that not only the love of liberty, but a thorough knowledge of the rights of men, may pervade all nations of the earth, so that a philosopher may set his foot anywhere on its surface and say this is my country!"

Therefore, the United States supports Spain's progress, out of the simple understanding that we are

- 4 -

all part of a wider Atlantic Community, one based
on a community of interests and shared ideals that
must be preserved and protected, lest the chaos that
is abroad in the world engulf our own societies.

The diversity of western culture -- and the
Spanish heritage is one of the principal founts of
culture in the western world -- enriches our lives.
But historical truths and present challenges require
us to enhance the commonality of our aspirations
and institutions. In so doing we preserve for those
who come after us the values and the achievements
of western civilization, under which our singular
national identities can flourish.

Mr. Foreign Minister, I congratulate you on
the clarity and consistency of the vision of Spain's
interests which you have set forth in public and in
private. It takes a great effort of will and com-
passion to "bind up the wounds", in Abraham
Lincoln's phrase, and in time reunite a people in

- 5 -

prosperity and political consensus so that they may
pursue in tranquility their private and public
interests.

That spirit, looking toward "an effective con-
sensus of national concord", in the words of His
Majesty, is much in evidence, and it has called
forth hope and praise in the other nations of Europe
as well as in my own country. What Spain does is
up to Spain. Others should not interfere. The
United States -- and I speak for President Ford,
the American Government and the American
people -- supports your King, his government and
his people in the endeavor to lead Spain on a path of
political and social development, with new ties to
the rest of Europe and the Atlantic Community that
give full sweep to the talents and the aspirations of
the Spanish people.

I know these tasks will not be easy. We are
confident that you will have the wisdom -- and

- 6 -

will be given the understanding -- to find a
Spanish road to full integration with Europe and
the Atlantic Community for the benefit of Spain and
the western world.

In this context, the work that we are com-
pleting this weekend takes on a wider meaning.
It fortifies and enriches a bilateral relationship
that takes on its greatest importance as a major
linkage among two nations of the Atlantic Community.
I think that it will be quite obvious to all that
through this treaty the interests of Spain have
been enhanced in the forging of a balanced
relationship of benefit to both nations. This
treaty is an earnest of my country's support for
the path upon which Spain has embarked.

Therefore, Mr. Foreign Minister, I am
extremely grateful to you this evening. I would

PRESS
DEPARTMENT OF STATE

[LC]

January 26, 1976

№ 30

TOAST GIVEN BY
THE HONORABLE HENRY A. KISSINGER
SECRETARY OF STATE
AT DINNER HOSTED BY
FOREIGN MINISTER JOSE MARIA AREILZA
IN HIS HONOR

JANUARY 24, 1976

Mr. Foreign Minister, Excellencies, and Distinguished Guests: The delights of Spanish hospitality as well as the needs of policy drew me to come to Spain. It is a great personal pleasure to be here.

The tenacity that made Spain great was made vividly evident to us, Mr. Foreign Minister, in the negotiation of this treaty. Your predecessor, Senor Cortina, was a tough negotiator, and it was fitting and gracious of you to pay tribute to him. You carried on the negotiation with equal skill, and I must add, with equal tenacity and the successful outcome owes much to your dedication.

With your warm hospitality, Mr. Foreign Minister, have come warm words of welcome, spoken with a clarity and grace rare in our days. I greatly appreciate these words. I know they represent the sincere aspirations of both countries to deepen and strengthen a relationship that is rooted both in mutual national interest and in the human ties to which my own nation, celebrating its bicentennial, owes so much of its heritage.

I must say to our Spanish friends that your Foreign Minister is a remarkable asset. He explains Spain's aspirations and foreign policy with equal eloquence in French, German and English. Our colleagues tell me something even more notable about your Foreign Minister. No matter what language he is speaking, his foreign policy is the same. This is truly remarkable. The Foreign Minister has before him a great task; he has set out to level the Pyrenees. In demolishing the myth that Europe begins at the Pyrenees, making them a simple, though magnificent, mountain range, the Spanish will have done the rest of Europe, as well as Spain, a signal service.

His Majesty, King Juan Carlos I, in his inaugural message from the throne, made clear the philosophical necessity of this effort. It is true, as he said, that the idea of Europe would be incomplete without Spain, that the Spanish are Europeans and that the Spanish and the other Europeans should draw the necessary conclusions from this fact. My government

PR #30

Date:

-2-

recognizes this and supports Spain's efforts to make it a reality, for
Indeed the Spanish share with the rest of western civilization the
common heritage of respect for human dignity.

Benjamin Franklin once said: "...God grant that not only the love of
liberty, but a thorough knowledge of the rights of men, may pervade all
nations of the earth, so that a philosopher may set his foot anywhere on
its surface and say 'this is my country'."

Therefore, the United States supports Spain's progress, out of the simple
understanding that we are all part of a wider Atlantic community, one
based on a community of interests and shared ideals that must be
preserved and protected, lest the chaos that is abroad in the world
engulf our own societies.

The diversity of western culture -- and the Spanish heritage is one of
the principal counts of culture in the western world -- enriches our
lives. But historical truths and present challenges require us to enhance
the commonality of our aspirations and institutions. In so doing we
preserve for those who come after us the values and the achievements of
western civilization, under which our singular national identities can
flourish.

Mr. Foreign Minister, I congratulate you on the clarity and consistency
of the vision of Spain's interests which you have set forth in public and
in private. It takes a great effort of will and compassion to "bind up
the wounds", in Abraham Lincoln's phrase, and in time reunite a people
in prosperity and political consensus so that they may pursue in
tranquility their private and public interests.

That spirit, looking toward "an effective consensus of national concord",
in the words of His Majesty, is much in evidence, and it has called forth
hope and praise in the other nations of Europe as well as in my own
country. What Spain does is up to Spain. Others should not interfere.
The United States -- and I speak for President Ford, the American
Government and the American people -- supports your King, his Government
and his people in the endeavor to lead Spain on a path of political and
social development, with new ties to the rest of Europe and the Atlantic
community that give full sweep to the talents and the aspirations of the
Spanish people.

I know these tasks will not be easy. We are confident that you will have
the wisdom -- and will be given the understanding -- to find a Spanish
road to full integration with Europe and the Atlantic community for the
benefit of Spain and the western world.

In this context, the work that we are completing this weekend takes on a
wider meaning. It fortifies and enriches a bilateral relationship that
takes on its greatest importance as a major linkage among two nations of
the Atlantic community. I think that it will be quite obvious to all that
through this treaty the interests of Spain have been enhanced in the
forgoing of a balanced relationship of benefit to both nations. This
treaty is in earnest of my country's support for the path upon which
Spain has embarked.

[LC]

PRESS
DEPARTMENT OF STATE

Date:
January 26, 1976

No. 29

#85

PRESS CONFERENCE BY
THE HONORABLE HENRY A. KISSINGER
SECRETARY OF STATE
AND HIS EXCELLENCY JOSE MARIA DE AREILZA
MINISTER OF FOREIGN AFFAIRS OF SPAIN
AT THE CONCLUSION OF THE SIGNING OF THE
TREATY OF FRIENDSHIP AND COOPERATION
MADRID, SPAIN
JANUARY 24, 1976

FOREIGN MINISTER AREILZA

Only a few moments ago, Mr. Kissinger, Secretary of State of the United
States of America, and myself signed a Treaty of Friendship and Coopera-
tion between the United States and Spain.

I think it is very important for us to consider this Treaty as a capital
step along the way of a new formal cooperation between our two countries.
Then, I believe that this is capital not only because it inaugurates the
coming of a new era to our relations, but also because in the 200 years
since its independence, the United States has only signed six treaties.
This is now the seventh; and, I believe, this is the most significant of
all. I believe also that this Treaty is significant in the sense that
the time of isolation is over. I believe that it has become necessary
for all countries to become linked with the remaining members of the
international community, and I think that it has become necessary to
strengthen the ties that link countries to the utmost both in the formal
aspects and as regards contacts. This, I think, has been the object
which we have finally achieved after so many months of negotiations.

I think this Treaty is also important because it underlines the true main
characteristics which, in my mind, are prevalent in the relation between
our two countries. Alongside, I think it underlines the will of the
joint pursuit of cooperation, and in order to obtain the defense of the
values which are common to us, and also because it reflects the balance
which has finally been achieved.

Now ladies and gentlemen, I would finally like to thank you for your
presence in this historical palace of Santa Cruz and to welcome Mr.
Kissinger to this house once again.

Mr. Kissinger, after this short statement on my part, will make another
statement after which there will be time for all of you to pose as many
questions as you want, both to Mr. Kissinger and to myself. I must,
however, underline one thing. Due to the very tight schedule of the
Secretary of State, it will become necessary at a given moment to put an
end to this press conference, and I will indicate when the end is near
so you can see that the questions are finally going to be the last ones.
Thank you.

PR #29

-2-

SECRETARY KISSINGER

Date

I regard the completion of this Treaty as an event of great importance. The Treaty covers a wide range of relations between our two countries. It does not relate to defense matters only but rather to the totality of our relations in many diverse fields. It reflects the strong desire of both countries for a closer friendship and a wider and more enriched cooperation. For its part, the United States will pursue the objectives of the Treaty with great earnestness.

Today's event comes at a moment when Spain is undergoing the excitement, the inspiration and the challenge of a new era. It is my hope that this Treaty will be seen as a clear sign of our moral support for Spain at this particular time. This country faces the delicate task of striking a balance between evolution and stability as it moves forward on the new course which is being charted. I have the greatest confidence that the proud and dynamic people of Spain will successfully meet the tasks which lie ahead and that Spain will increasingly enter the mainstream of those values which link the Western world in a common cause.

**QUESTION:** Mr. Secretary, when do you expect NATO will be ready to accept Spain as a member?

**SECRETARY KISSINGER:** Before I answer any questions, I would like to tell the Foreign Minister that in the splendid Spanish hospitality that we have experienced here, I must only deplore that our correspondents that travel with me must now insist that press conferences in Washington be held in a hall of similar dignity and of similar artistic value. After 400 years more of history we may find such a hall, that the privilege of towering over our correspondents is one that is well worth waiting for.

The United States has supported and will, of course, increasingly support the participation of Spain in NATO. The rapidity with which this objective can be achieved depends in part upon the evolution that I have described in my statement and in which the United States will give sympathetic encouragement.

**QUESTION:** Why is this agreement, which always has been an Executive Agreement in the past, now in a treaty form?

**SECRETARY KISSINGER:** This Treaty in terms of subject matter is of wider scope and greater formality than the previous Executive Agreements and it therefore symbolizes the firmness with which we consider these ties. And we believe, also, that the Legislative Branch should be given an oppor-

PR #29

-3-

tunity to reflect this formality in a more solemn form of treaty ratification which our constitution provides.

**QUESTION:** Will the United States have the right to use the bases here in the event of hostilities in the Middle East?

**SECRETARY KISSINGER:** We have not, in negotiating this Treaty, spelled out particular contingencies in which these bases can be used nor have we negotiated particular restrictions. Therefore, this is not a matter which is ripe for discussion today.

**QUESTION:** Mr. Secretary, during your stay in Brussels, have you had an opportunity to discuss with your colleagues in the Atlantic Council the content of this Treaty and, if so, what has been the reaction of your allies regarding possible Spanish participation in their efforts?

**SECRETARY KISSINGER:** On this occasion the purpose of my visit to Brussels was to brief my colleagues about my visit to Moscow and not primarily to discuss the subject of Spain's participation in NATO. We have informed our allies at various stages of our negotiations, and we have also informed them of the final conclusion of the Treaty. But we have not had a formal discussion about Spain's participation since the conclusion of this Treaty.

**QUESTION:** Once the Treaty is ratified, what will be the difference in practice between the US response to an attack on Spain and the US response to an attack on a NATO ally?

**SECRETARY KISSINGER:** The American reaction to an attack on a friendly country always has two components: a legal component and a moral and political component. That is to say, it depends on what our legal obligation is and also on the importance we attach to the relationship and to the country. It is clear that the legal obligation inherent in this Treaty is not of the same order as the legal obligation in the NATO Treaty. But it is also clear that the political importance that we attach to our relationship with Spain is reflected in this Treaty and would be a major factor in our decisions, whatever the legal obligations.

**QUESTION:** In view of the situation at present in Angola and of the black reaction about it, is NATO still to be considered interesting for newcomers such as Spain or can we view the fisheries agreement with the Soviet Union as a kind of balance?

**FOREIGN MINISTER AREILZA:** I must say that we have never asked for entrance into NATO; but whatever the decision is, when it comes it will be a question to be decided by the Government at that time, according to the best interests of Spain. But I must also add that before this Treaty, with other Executive Agreements that we have had so far, we have been linked to the largest and most important member of NATO; and therefore this can be interpreted as a counterpart to the strategic interest and as our contribution to the strategic interest of the whole Western defense system.

Now if you are asking me about whether we are interested in joining NATO or not, I must answer you that we are interested because I understand that NATO is equivalent to the strategic and military infrastructure which underlines the European Economic Community, of which we would like to become members. And to finish, I would only like to add that I don't believe that fish, even though it is fresh fish, should constitute a counter balance of military strategy.

PR #29

-4-

**QUESTION:** I would like to address a question to Secretary Kissinger and that is, what are the reasons that have led you to change the reaching of an Executive Agreement in the sense of making it a treaty and also to ask both governments what are the reasons that provide an increased significance and importance and enrichment to what just a few months ago appeared to be at variance?

No.

**SECRETARY KISSINGER:** I have already explained our reason for submitting it to the Senate as a treaty, which is to reflect the increased formality and range of the relationship which has been designed in the background. The reason on the American side why we have proceeded in this fashion after extended negotiations is that in the new period that Spain is entering and in the evolution that we are encouraging, we want to reflect the sympathy and moral support of the United States.

**QUESTION:** Mr. Secretary, doesn't this Treaty indirectly link Spain with NATO via the United States even though Spain is obviously not a member of NATO?

**SECRETARY KISSINGER:** The Treaty provides a mechanism through the Council that is being formed to promote the coordination between the US-Spanish effort and the NATO effort. It therefore provides a means of coordination which, of course, each individual NATO country will have to decide for itself as far as the organization as a whole is concerned. But it does reflect the importance that the United States attaches to the role of Spain in the defense of the Atlantic area.

**QUESTION:** Mr. Secretary, is the Treaty somehow related to the [garbled]?

**SECRETARY KISSINGER:** The Treaty was signed today, and it is completed and it stands on its own feet. As far as the United States is concerned, I have indicated our support for the political evolution that is beginning to take place here that will, we hope, increasingly link Spain to those human and political values on which the unity of the West has relied; and we are attempting with this Treaty to indicate our moral support for these efforts.

**QUESTION:** [Garbled]

**SECRETARY KISSINGER:** The talks with the Spanish leaders are still in progress. The United States' view as to the direction of this evolution is clear. The pace of the evolution depends on conditions which the Spanish Government, in which we have confidence, is in a better position to judge than we are.

**QUESTION:** Mr. Minister, recently the President of the Spanish Government, Mr. Arias Navarro, has revealed to both Americans and Spaniards that the bases in Spain are considered a part of the infrastructure of NATO, the deterrent power of NATO, and he qualified the situation as both illogical and unjust. How long do you think this situation is going to continue?

**FOREIGN MINISTER AREILZA:** I believe that the situation has finished today. And I say this because in the Treaty that we have signed there is for the first time a clause which makes a reference to the organic link between both countries which is one of the primary objectives to be reached by both the United States and Spain. Therefore I think that for the first time the existence of such a link is recognized along with the logical necessity to end a situation that President Arias qualified as unjust and illogical.

PR #29

-5-

**QUESTION:** Mr. Secretary, has the possible trip of President Ford to Spain during this year been discussed today? And if not, do you think it will be interesting?

**SECRETARY KISSINGER:** The close ties between Spain and the United States always make it interesting for an American President to visit Spain. Of course, President Ford this year is engaged in many preoccupying domestic activities. But I am sure he would sympathetically consider an invitation for 1977. And in the meantime, we look forward to welcoming His Majesty the King to the United States during this year.

**QUESTION:** What would be the meaning both for the United States and Spain on the fact that Rota would no longer be a base for nuclear submarines in 1979?

**FOREIGN MINISTER AREILZA:** It has the meaning that it has been a Spanish petition, specifically made to the United States, which has been accepted by the United States even with the risk that involves its strategic mechanism. I believe that this is now specified in the Treaty; it is a petition that was made beforehand and has finally been granted.

**SECRETARY KISSINGER:** If I could dare say that the United States accepted the Spanish request because also by 1979 the range of the missiles carried on American submarines will be of a nature that the significance of the forward base will become much less.

* * * * *

[LC]

PRESS
DEPARTMENT OF STATE

January 26, 1976

No. 28

STATEMENTS BY
THE HONORABLE HENRY A. KISSINGER
SECRETARY OF STATE
AND
FOREIGN MINISTER JOSE MARIA AREILZA
UPON ARRIVAL
BARAJAS AIRPORT, MADRID
JANUARY 24, 1976

**Secretary Kissinger:** Mr. Foreign Minister: It is a particular pleasure for me to visit Spain on this occasion. And we can underline the community of interests that exists between Spain and the United States and when we can take an important step towards bringing Spain closer to the Atlantic community and to the European community.

Spain, which has contributed so much to the western civilization, must in our view be an integral part of all western relationships.

And the United States is happy that on this occasion today, we can participate in this process. I look forward to my conversations with His Majesty, with the Prime Minister, and of course, with the Foreign Minister, where we will be discussing the hopeful evolution that we all expect for Spain and in the relationship between Spain and its traditional friends. Thank you very much.

**Foreign Minister Areilza:** Mr. Secretary: It is a great pleasure for me to meet you at the Madrid airport, where you have been a number of times during the last two years.

Your presence here has a particular meaning because it underlines the profound friendship and the feelings of fair cooperation existing between our two countries.

The Spanish Government, and the whole of Spain, are happy to have you among us. And they expect that this afternoon, in an act that I venture to describe as historic, we shall sign our names at the bottom of a document that underlines the essential friendship and cooperation between our two countries.

That is all, Mr. Secretary.

* * * * * * * *

SECRETARY'S LUNCH FOR PRIME MINISTER RABIN
AND MRS. RABIN

Tuesday, January 27, 1976

Mr. Prime Minister -- Mrs. Rabin -- Leah and Yitzhak -- Distinguished Guests.

It is a great personal as well as official pleasure for me to welcome you back as old friends to Washington.

On such occasions, it is impossible not to give in to the temptation to reminisce. What comes immediately to my mind are memories of the last time we saw each other. It was at the end of twelve arduous days of shuttling between Jerusalem and Alexandria. As had happened countless times before, the evening began with the Israeli and American negotiating teams seated around the table in the Prime Minister's office. This time, however, we had before us the task of completing many remaining details to meet the deadline we had set for ourselves of initialing the Sinai Agreement the next day in

-2-

Jerusalem and Alexandria.

If anyone thinks that negotiations between friends are easy, he does not know the unique quality of American-Israeli friendship. Before we had finished, the sounds of a new day could be heard and soon the light of dawn was coming through the windows of the Prime Minister's office. We completed our work about 6:00 AM on what was, appropriately, Labor Day in the United States.

No one can go through such an intense period of personal association, arriving finally at agreement in the end, without establishing bonds of memory, and new depths of respect that endure far beyond the event itself.

It has been almost five months since that night, Mr. Prime Minister, and you are now here as the guest of President Ford -- not only to review all that has been accomplished under his and your leadership in the search for peace in the Middle East but also to

-3-

look for ways of continuing that search.

As we pause today in our work, I want to pay special tribute to our honored guest, the Prime Minister of Israel. It strikes me as especially fitting in this Bicentennial Year that your arrival in the United States was in Philadelphia where the Declaration of Independence was proclaimed. Its author, Thomas Jefferson, remarked in his first Inaugural Address that "Sometimes it is said that man cannot be trusted with the government of himself. Can he, then, be trusted with the government of others? Or have we found angels in the forms of kings to govern him? Let history answer this question."

You, Mr. Prime Minister, have demonstrated the gift of governing, which requires, among many attributes, courage, pragmatism and foresight. Your commitment to a negotiated peace in the Middle East is an example of these qualities. We

-4-

all know how difficult these negotiations have been
and will continue to be. Nevertheless, the courage
and determination of the leaders concerned to avert
the sufferings of another war enabled the achievement,
since the 1973 war, of the two Sinai agreements and the
Israeli-Syrian Disengagement Agreement.

Mr. Prime Minister, as you know, the
commitment of the United States to the existence and
security of Israel has remained a cornerstone of the
foreign policy of every Administration since Israel's
inception. We remain equally committed to a
negotiating process based on U. N. Security Council
Resolutions 242 and 338 leading to a just and lasting
peace in the Middle East. We have made amply
clear in the Council in recent days our determination
to preserve this framework for negotiations with its
delicate balance of rights and duties of all parties to
the dispute.

-5-

We must now make equally clear our
determination to breathe new life into that framework,
so that the process of negotiations can go forward in
the months ahead. We have learned from bitter
experience -- in 1967 and again in 1973 -- the costs
of stalemate. The agony of another war to the
world, but above all to the intrepid people of Israel --
however it ended -- would be infinitely greater than
the agonies of the decisions and compromises which
lie ahead. It is clear that Israel cannot make peace
at any price, but it is equally clear that peace
cannot be achieved without a price and without risks.
This applies equally to all parties and would-be
parties to the negotiations. All must make sacrifices,
and all must believe at the end that their vital
aspirations have at least in part been met on terms
that they can feel are honorable.

The momentum of the peacemaking process
must be continued and, if possible, accelerated.

-6-

Mr. Prime Minister, you and the leaders of Israel's neighboring states, have been given the unique opportunity of encouraging the moderate forces of reason to take further concrete steps toward peace before it is too late. If reason prevails, the peoples of the Middle East will share the opportunity to pursue their goals of life in an atmosphere of peace, security and human dignity.

Ladies and gentlemen, I ask you to join me in a toast to our honored visitors, Prime Minister Rabin and Mrs. Rabin, to the friendship of Israel and the United States, and to a just and lasting peace in the Middle East.

PRESS
DEPARTMENT OF STATE

[LC]

January 27, 1976

No. 34

EXCHANGE OF TOASTS
BETWEEN
THE HONORABLE HENRY A. KISSINGER
SECRETARY OF STATE
AND THE HONORABLE YITZHAK RABIN
PRIME MINISTER OF ISRAEL
AT A LUNCHEON IN THE PRIME MINISTER'S HONOR
THE DEPARTMENT OF STATE

JANUARY 27, 1976

SECRETARY KISSINGER: Mr. Prime Minister,
Mrs. Rabin, Distinguished Guests:

It is a great pleasure to welcome the Rabins,
who are all old friends of ours, back to Washington.
We have worked together for so long that when an Israeli
party arrives here we meet old friends of many circumstances.
For example, we could immediately identify all the security
officers that took care of us.

(Laughter)

And Nancy was looking for the security officer
who could open coke bottles with his teeth, which will
show you of the way we get intimidated when we visit
Israel.

(Laughter)

2

And Mrs. Rabin mumbles to me, "the quality of
the security." I haven't been defended by any security
officer with his teeth in Israel yet.

(Laughter)

There are also so many members of the Israeli
press here that I have a real dilemma because I have a
friend who hates flying, and he says that when a stewardess
comes out of the pilot's compartment with a serious face
he is convinced they are going to crash and that she can't
even give the impression that things are going well; but
when she comes out smiling, then he's in a real panic
because then he is absolutely convinced that things are
desperate and that she has been instructed to cheer them up.

(Laughter) So what can I say about our meetings?

(Laughter)

The truth is that the Prime Minister and his
friends here have worked together for a long time. I
spent many hours with the Prime Minister when he was
Ambassador here in discussing not only the problems of
Israel in the Middle East but the relationship of the
international situation to the prospects of peace. And
when our other Israeli friends are here, it is a different
relationship than we have with any other country because

PR #34

3

we know each other so well and we have talked together
so much that we can afford occasionally this or that
disagreement. And sometimes because it is a family quarrel
it takes on an intensity that is exaggerated.

I want to emphasize right away that there are
no quarrels going on at this moment and that I am talking
about the past and not the present, although having given
that assurance I am positive that I have created many more
doubts.

(Laughter)

But the fact of the matter is that no people can
want peace more desperately than a country that has never
known a state of peace in its entire history and that has
had to fight wars at almost intervals of five years. So
that the issue of whether there should be peace doesn't
need to be discussed between us.

How to achieve peace in a situation of enormous
complexity and how to balance the territorial changes,
which are tangible, against the commitments to peace,
which are intangible, that is a problem that requires
great imagination and great dedication. And when one
looks at the legacy of a generation of distrust and at
the influence of outside powers whose intentions are not

PR #34

4

always benign, then we know, both of us, that we have a
complex and long-term issue before us.

Now, our friend the Prime Minister is here
this time when there isn't any immediate crisis, when there
isn't a particular negotiation on which we must achieve
a specific result. He is here to discuss with us how we
imagine the evolution towards peace in the Middle East,
how we can reach an objective on which we both agree. And
we can talk in a relaxed atmosphere because we have the
capacity for decision.

The United States made clear last night that it
will not accept changes in the framework of negotiations
that prejudge the outcome. We will not participate or
encourage a negotiating process in which as an entrance
price into negotiations the fundamental issues should
already be determined by groups of countries that are not
parties to the negotiation.

Now that we have made clear what we will not
encourage, we can talk in a freer atmosphere about what
can happen in the years ahead. I think the talks this
morning were conducted in a very friendly atmosphere, and
I am confident that this visit will be extremely helpful
to both of our countries and to the long-term prospects

PR #34

5

for peace in the Middle East.

The United States is committed to the security and survival of Israel. The United States will work with Israel on joint policies to maintain the security and to achieve a lasting peace in the Middle East. It is in this spirit that we welcome the Rabins here in the consciousness that for all Americans it is a question of moral necessity to make certain that whatever happens, this democracy in the Middle East that shares our values will be secured and maintained.

So I would like to propose a toast to the Prime Minister and Mrs. Rabin and to the lasting friendship between Israel and the United States.

(Applause)

PRIME MINISTER RABIN: Mr. Secretary, Mrs. Kissinger, Distinguished Guests:

I would like to thank the Secretary and Mrs. Kissinger in the name of my wife and myself for this pleasant gathering and for the good meal. I have not spent since I have taken this post as a Prime Minister so many days in the United States as the Secretary spent in Israel; therefore, I can't pretend that I know all the

PR #34

6

details that come with such a visit. But I would like
also to open my remarks by saying something personally
to the Secretary.

As he said, I believe that we have learned to
know each other. When I served here as the Israeli
Ambassador and after that, even though from time to time
we have had some differences of opinion but I believe that
we have no doubt whatsoever in the way that he conducted
the policy of this Government in his capacity at the White
House and now as Secretary of State in the real efforts
that he has made to bring about more stability in the
efforts to create better conditions for peace for all
peoples in the area. And for that I would like to thank
you, Mr. Secretary.

As you have said, there is something which
cannot be always explained when it comes to the relations of
the greatest democracy with the only democracy in the Middle
East. It has started many years ago, and it has been
developed to the kind of relations that we, as a small
country, are very proud of. And I believe that the
cooperation between our two countries has contributed to
the stability in the area and to the encouragement of the
prospects of peace. I believe that what has been done in

PR #34

7

the last year was an outcome of an effort, even though
there were ups and downs through '75 but toward the end
the results proved to be the right ones.

Still, the Arab-Israeli conflict is a very
complicated one, and it is not so easy to offer simple
formulas how to solve it. Sometimes it looks simpler than
it is. From our point of view, we, as the Secretary said,
have never entertained one day of peace. We have experienced
many wars. And, therefore, please understand our sensitivity
when it comes to our capability to be able to defend ourselves
by ourselves.

Please understand the amount of suspicion that
might seem to people from the outside a little bit
exaggerated when we have to exchange words for something
tangible, which is territories, not as real estate but as
defensive lines that make our capability to defend ourselves
better. But I can assure you, Mr. Secretary, and all those
who are here that for the sake of a real peace, Israel will
not shrink from any risks, will take upon itself many
concessions, but one will be sure that the purpose is a
real peace.

PR #34

8

I believe that the way that the talks have been conducted through the years of cooperation between our two countries and especially today, I believe that this is the way to conduct talks when the common goal is the same -- to achieve peace. But at the same time, as long as peace has not been achieved, to be in a position that those who want to exploit the tension in the area will not be able to pursue a policy of war with a hope of success.

I believe everywhere in the world you can't achieve peace but from the standpoint of strength. It is a struggle between totalitarian concepts and democratic way of life. And in coping with totalitarian concepts, democracies have to try their best to reach agreements and understandings. But it can't be done from the standpoint of weakness. I don't want to apply to anything except when it comes to our problem. And I know one thing for sure, with a weak Israel no one will negotiate, and only a strong Israel is a help for peace.

I would like to pray and hope that there will be continuation of the present understanding, continuation of the common effort to achieve peace, and continuation of the effort as long as peace has not been achieved, to be able to overcome the differences whenever they come up.

The Secretary
of State

Statement

January 29, 1976

Washington, D.C.

Bureau of Public Affairs

Office of Media Services

IMPLICATIONS OF ANGOLA FOR FUTURE U.S. FOREIGN POLICY

*The following is a statement by Secretary Kissinger before the Senate Subcommittee on African Affairs of the Foreign Relations Committee.*

I appear before you not to score debating points in an abstract contest over executive-legislative prerogative. What faces us is a congressional decision of potentially grave magnitude taken after the executive branch had complied with all legal requirements for the kind of operation involved in Angola and after eight congressional committees had been briefed over twenty times without foreshadowing any opposition in principle. The issue is not "victory" of one branch over another. The issue is what constitutes a victory for the national interest.

I welcome this opportunity to explain the global significance of what is now happening in Angola, the events that have brought us to this point, the U.S. objectives, and the major consequences which can result if we fail to pursue those objectives.

The Soviet Union's massive and unprecedented intervention in the internal affairs of Africa—with nearly $200 million of arms and its military technicians and advisers, with 11,000 Cuban combat troops, and with substantial sea and airlift and naval cover in adjacent waters—is a matter of urgent concern. Not only are the interests of the countries directly affected at stake but also the interests of all nations in preserving

global stability—which is the precondition for all else mankind aspires to accomplish.

In recent years the United States has sought to help build a new international order less tied to the traditional patterns of power balances. It was the United States which took the initiative in seeking to resolve the most dangerous problems of our time by negotiation and cooperation rather than by force of arms. It was we who saw that the historical necessity of this period required a more stable relationship between the two nations that possess the capacity to destroy civilization. We have sought—and with some successes—to build more constructive relations with the U.S.S.R. across a broad range: to contain strategic arms; to institutionalize cooperation in economic, scientific, and cultural fields; to reduce tensions in areas where our vital interests impinge on one another; and to avoid destabilizing confrontations in peripheral areas of the globe—such as Angola.

The classical pattern of accumulating marginal advantages must be overcome, and mankind must build more constructive patterns if catastrophe is to be avoided. No one has been more dedicated than the President and I to working for these principles.

But our efforts have been founded upon one fundamental reality: Peace requires a sense of security and security depends upon some form of equilibrium between the great powers. And that equilibrium is impossible unless the United States

PR 40

2

remains both strong and determined to use its strength when required. This is our historic responsibility, for no other nation has the capacity to act in this way. While constantly seeking opportunities for conciliation, we need to demonstrate to potential adversaries that cooperation is the only rational alternative. Any other course will encourage the trends it seeks to accommodate; a challenge not met today will tempt far more dangerous crises tomorrow.

If a continent such as Africa, only recently freed from external oppression, can be made the arena for great power ambitions, if immense quantities of arms can affect far-off events, if large expeditionary forces can be transported at will to dominate virtually helpless peoples-then all we have hoped for in building a more stable and rational international order is in jeopardy.

The effort of the Soviet Union and Cuba to take unilateral advantage of a turbulent local situation where they have never had any historic interests is a willful, direct assault upon the recent constructive trends in U.S.-Soviet relations and our efforts to improve relations with Cuba. It is an attempt to take advantage of our continuing domestic division and self-torment. Those who have acted so recklessly must be made to see that their conduct is unacceptable.

## Impact of Developments in Angola

The history of the postwar period should give us pause. Military aggression-direct or indirect- has frequently been successfully dealt with but never in the absence of a local balance of forces. U.S. policy in Angola has sought to help friends achieve this balance. Angola represents the first time since the aftermath of World War II that the Soviets have moved militarily at long distances to impose a regime of their choice. It is the first time that the United States has failed to respond to Soviet military moves outside their immediate orbit. And it is the first time that Congress has halted the executive's action while it was in the process of meeting this kind of threat.

Thus to claim that Angola is not an important country or that the United States has no important interests there begs the principal question. The objectives which the United States has sought in Angola have not been aimed at defending, or acquiring, intrinsic interests in that country. We are not opposing any particular faction. We could

develop constructive relations with any Angolan government that derives from the will of the people. We have never been involved militarily in Angola. We are not so involved now. We do not seek to be so involved in the future.

Our objective is clear and simple: to help those African countries and those groups within Angola that would resist external aggression by providing them with needed financial support. Those who we seek to assist are our friends; they share our hopes for negotiated solutions and for African self-determination. They played a larger role than the MPLA [Popular Movement for the Liberation of Angola] in striving toward Angolan independence.

But our deeper concern is for global stability. If the United States is seen to emasculate itself in the face of massive, unprecedented Soviet and Cuban intervention, what will be the perception of leaders around the world as they make decisions concerning their future security?

Will they feel they can proceed to develop their nations in an international climate which fosters cooperation and self-determination? How will they adjust their conduct in the context of such events? And what conclusion will an unopposed superpower draw when the next opportunity for intervention beckons?

America's modest direct strategic and economic interests in Angola are not the central issue. The question is whether America still maintains the resolve to act responsibility as a great power-prepared to face a challenge when it arises, knowing that preventive action now may make unnecessary a more costly response later.

Let there be no mistake about it-the culprits in the tragedy that is now unfolding in Angola are the Soviet Union and its client state, Cuba. But I must note with some sadness that by its actions, the Congress has deprived the President of indispensable flexibility in formulating a foreign policy which we believe to be in our national interest. And Congress has ignored the crucial truth that a stable relationship with the Soviet Union, based on mutual restraint will be achieved only if Soviet lack of restraint carries the risk of counteraction. The consequences may well be far-reaching and substantially more painful than the course we have recommended. When one great power attempts to obtain special positions of influence based on mili-

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3

tary interventions, the other power is sooner or
later bound to act to offset this advantage in some
other place or manner. This will inevitably lead to
a chain of action and reaction typical of other
historic eras in which great powers maneuvered for
advantage, only to find themselves sooner or later
embroiled in a major crisis, and often in open con-
flict.

It is precisely this pattern that must be
broken—and that we wanted to break until
stopped—if a lasting easing of tensions is to be
achieved. And if it is not broken now we will face
harder choices and higher costs in the future.

It is in this context that we have framed our
goals in Angola. Simply put, we wish to see:

* A cease-fire, ending the tragic bloodshed in that country;

* Withdrawal of outside forces—Soviet, Cuban, and South African;

* Cessation of foreign military involvement; and

* Negotiations among the Angolan factions.

We are prepared to accept any solution that
emerges from African efforts. And we are ready to
offer economic assistance to the people of Angola
when a legitimate government is established there.

We have consistently advocated such a govern-
ment representing all three factions in Angola. We
have never opposed participation by the Soviet-
backed MPLA. What we do oppose is the massive
Soviet and Cuban intervention and their expressed
aim of denying the other two groups any part in
governing the country. Our overriding goal has
been to assure that Africans shape their own
destiny and that traditional colonialism not be re-
placed by a more modern version.

For the United States to be found wanting as
a credible friend—precisely at a time when mod-
erate African states have clearly and repeatedly
expressed their hope that America provide the
necessary balance to the Soviet Union and Cuba—
will have a major impact on those countries on the
continent of Africa which resisted all pressures and
stuck by their position even after the Senate cut
off aid; on our allies in other parts of the world
who look to us for security; on other countries
that seek ties with us primarily because they see us
as the guardian of international equilibrium.

Record of Events in Angola

Let me briefly recount the course of events
that has led us to this point.

In 1961 the United States declared its support for self-determination in Portugal's African territories. At the time, the National Front for the Liberation of Angola [FNLA] was a leading force in the struggle for Angolan independence. Looking to the future, we sought to develop a relationship with the FNLA through providing it some financial, nonmilitary assistance. The U.S.S.R. had already established links with the Popular Movement for the Liberation of Angola [MPLA] through the Portuguese Communist Party. The MPLA began military action against the Portuguese in the mid-1960's. The National Union for the Total Independence of Angola [UNITA], an offshoot of the FNLA, also began to fight on a small scale in the late 1960's. Although these various uncoordinated insurgency efforts caused considerable difficulties for Portugal, they posed no serious military threat to the dominance of Portuguese military forces in Angola.

However, the overthrow of the Portuguese
Government in April 1974 and the growing
strength of the Portuguese Communist Party
apparently convinced Moscow that a "revolution-
ary situation" was developing in Angola. The
Soviet Union began to exploit this situation in the
fall of 1974 through shipments of some arms and
equipment to the MPLA. The United States re-
ceived requests for support from other Angolan
elements at that same time but turned them down.

The prospect of an independent Angola was
clouded by the intense rivalry of the FNLA,
MPLA, and UNITA which had developed over the
years. Concerned about the three factions' failure
to end their bitter quarrel, leaders of other African
countries prevailed upon them to come together
with Portugal and seek agreement. This effort led
to the Alvor accord of January 1975. Under its
terms a transitional coalition government was to be
established and charged with preparing for a peace-
ful turnover of power by integrating the military
forces of the three movements, writing a consti-
tution, and organizing an election to take place
before independence, scheduled for November 11,
1975.

This was the moment, when Portugal was
trying to organize a peaceful transition to
independence, for the exercise of restraint by all

4

outside parties. But the U.S.S.R. and Portuguese Communists decided to put the MPLA in power in Angola through stepped-up shipments of arms. With this kind of encouragement, the MPLA had little incentive to fulfill the terms of the Alvor accord, which would have prevented it from dominating any future coalition government.

It is no coincidence that major violence broke out in March 1975 when large shipments of Soviet arms began to arrive—thousands of infantry weapons, machine guns, bazookas, and rockets. On March 23 the first of repeated military clashes between the MPLA and FNLA occurred. They increased in frequency in April, May, and June, when deliveries of Communist arms and equipment, including mortars and armored vehicles, escalated by air and sea. In May the MPLA forced the FNLA out of the areas north and east of Luanda and, in June, took effective control of Cabinda. On July 9 all-out civil war began when the MPLA attacked the FNLA and UNITA, driving both organizations out of Luanda, thereby ending the short-lived coalition government. By mid-July the military situation radically favored the MPLA.

As the military position of the FNLA and UNITA deteriorated, the Governments of Zaire and Zambia grew more and more concerned about the implications for their own security. Those two countries turned to the United States for assistance in preventing the Soviet Union and Cuba from imposing a solution in Angola, becoming a dominant influence in south-central Africa, and threatening the stability of the area.

It was at this point that President Ford decided to respond to requests for help and to provide military assistance to the FNLA and UNITA forces through neighboring black African countries.

In August intelligence reports indicated the presence of Soviet and Cuban military advisers, trainers, and troops, including the first Cuban combat troops. If statements by Cuban leaders are to be believed, a large Cuban military training program began in Angola in June, and Cuban advisers were probably there before then. By September the MPLA offensive had forced UNITA out of several major central and southern Angolan cities. It controlled most of the coastline except for a strip in the far north, much of the south, and a wide belt running from Luanda to the Zaire border in the east.

In early September the poorly equipped UNITA forces turned in desperation to South Africa for assistance against the MPLA, which was overrunning UNITA'S ethnic areas in the south. South Africa responded by sending in military equipment and some military personnel—without consultation with the United States.

The UNITA forces launched a successful counteroffensive which swept the MPLA out of the southern and most of the central part of Angola. In the north the FNLA also made significant advances. By Independence Day–November 11—the MPLA controlled only the former colonial capital of Luanda and a narrow belt across north-central Angola.

In October massive increases in Soviet and Cuban military assistance began to arrive. More Cuban troops were ferried to Angola. Cuba inaugurated its own airlift of troops in late October. And the MPLA declared itself the Government of Angola, in violation of the Alvor accord.

In the hope of halting a dangerously escalating situation, the United States—using the leverage provided by our financial support—undertook a wide range of diplomatic activity pointing toward a summit of the Organization for African Unity [OAU] scheduled for January 1976. Starting in October we made several overtures to the Soviet Union, expressing our concern over the scale and purpose of their intervention. We offered to use our influence to bring about the cessation of foreign military assistance and to encourage an African solution if they would do the same. Their responses were evasive but not totally negative.

We began to voice our concerns and our limited objectives publicly. Beginning with a speech in Detroit on November 24, we pointed out that Soviet continuation of an interventionist policy must inevitably threaten our other relationships and that our sole objective was an African resolution of an African problem.

The Administration undertook a new series of congressional consultations on the extent of our help to the Angolan factions resisting Soviet and Cuban aggression. I briefed the NATO [North Atlantic Treaty Organization] Foreign Ministers and obtained significant understanding and support. Our diplomatic efforts with foreign governments—especially African governments—culminated with a mission by Assistant Secretary [of State for African Affairs William E.] Schaufele to

(Lc)

5

five African countries and the dispatch of letters from President Ford to 32 African heads of state, as well as the Secretary General of the OAU [William Eteki Mboumoua of Cameroon], stating America's policy.

Throughout this period the U.S. principles for a solution to the Angolan treaty were unambiguous and straightforward:

* Angola is an African problem and should be left to Africans to solve;

* Foreign military involvement only escalates and prolongs the warfare there and should be ended;

* OAU efforts to promote a cease-fire should be supported;

* The United States pursues no unilateral interests in Angola and is exclusively concerned with seeing the people of that country live in peace, independence, and well-being; and

* Angola should be insulated from great power conflict.

Our diplomacy was effective so long as we maintained the leverage of a possible military balance. African determination to oppose Soviet and Cuban intervention was becoming more and more evident. On December 9 President Ford made a formal proposal to the Soviet Government through their Ambassador. Indeed, it appeared as if the Soviet Union had begun to take stock. They halted their airlift from December 9 until December 24.

By mid-December we were hopeful that the OAU would provide a framework for eliminating the interference of outside powers by calling for an end to their intervention. At that point, the impact of our domestic debate overwhelmed the possibilities of diplomacy. After the Senate vote to block any further aid to Angola, the Cubans more than doubled their forces, and Soviet military aid was resumed on an even larger scale. The scope of Soviet-Cuban intervention increased drastically; the cooperativeness of Soviet diplomacy declined.

The weight of Soviet aid and advisers and the massive Cuban expeditionary force began to tip the scales of battle in December. By this point most of the effective fighting for the MPLA was being done by Cubans. It was clear that the U.S.S.R., Cuba, and the MPLA hoped to achieve a decisive military victory on the eve of the Organization of African

Unity's extraordinary summit conference in Addis Ababa a few weeks ago. Yet notwithstanding their reverses, the FNLA/UNITA forces still controlled about 70 percent of the territory and 70 percent of the population of Angola at the time of the conference. An OAU reconciliation commission, which had met earlier in 1975, took the position that none of the movements should be recognized as the government of Angola. The commission called for a cease-fire and the formation of a government of national unity. Thus, those governments who recognized the MPLA were in violation of a decision of the OAU.

At the January OAU summit 22 members of the OAU advocated recognition of the MPLA and condemnation of South Africa. But they were opposed, in an unusual demonstration of solidarity, by 22 other members who held out for a more balanced resolution, one that would include the following points:

* An immediate cease-fire;

* Condemnation of South Africa and immediate withdrawal of all South African forces;

* Withdrawal of all foreign forces;

* An end to the supply of arms to all factions; and

* Reconciliation of all factions with the aim of establishing a government of national unity.

The United States regarded this program as reasonable and responsive to the facts of the situation. But the Soviet Union and Cuba urged MPLA supporters to refuse to accept this solution. The summit ended in impasse.

## The U.S. Position

This then is the significance of Angola and the record to date. In elaborating further the U.S. position, I want to respond directly to some of the issues raised in the current debate.

Our principal objective has been to respond to an unprecedented application of Soviet power achieved in part through the expeditionary force of a client state.

During 1975 the Soviet Union is estimated to have contributed nearly $200 million worth of military assistance to Angola. This equals the entire amount of all military aid from all sources to sub-Saharan Africa in 1974.

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Soviet arms have included infantry weapons, machine guns, bazookas, mortars and recoilless rifles, armored personnel carriers, heavy artillery, light and medium tanks, truck-mounted multitube rocket launchers, helicopters, and light aircraft. There are unconfirmed reports that the Soviet Union will provide the MPLA with MIG-21 aircraft to be piloted by Cubans.

A total of at least 46 flights of Soviet heavy and medium military transports have ferried Soviet military equipment from the U.S.S.R. to Luanda and Congo-Brazzaville, while a steady stream of Soviet and Cuban aircraft has continued to bring Cuban troops across the Atlantic. Soviet naval involvements, clearly related to the Angolan event, have continued in West African waters for several weeks.

The implications of Cuba's unprecedented and massive intervention cannot be ignored. It is a geopolitical event of considerable significance. For the first time, Cuba has sent an expeditionary force to another nation on another continent. About 11,000 Cuban military personnel have been sent to Angola. If allowed to proceed unchecked, this blatant power play cannot but carry with it far-reaching implications—including the impact it will have on the attitudes and future conduct of the nations of this hemisphere. Indeed, friend and foe alike cannot fail to contrast the sending of a large Cuban expeditionary force with our apparent inability to provide even indirect financial assistance. The failure of the United States to respond effectively will be regarded in many parts of the world as an indication of our future determination to counter similar Communist interventions.

We have been asked why we do not respond with other pressures on the Soviet Union.

The first answer is that many of the links the Administration has tried to forge—such as trade and credit, which would have provided incentives for restraint and levers for penalties—have been precluded by earlier congressional actions. But two other instruments have been suggested: wheat sales and the Strategic Arms Limitation Talks. A moratorium was placed on wheat sales for four months in 1975. To use this device every three months is to blunt it permanently. Above all, economic measures take too much time to affect a fast-moving situation like Angola; any longer term

impact would be of little use to those immediately threatened. We should also ponder whether we want to return to the situation, now prevented by the grain agreement, in which the U.S.S.R. can capriciously enter and leave the U.S. grain trade.

As for the Strategic Arms Limitation Talks, we have never considered these to be a favor which we grant to the Soviet Union, to be turned on and off according to the ebb and flow of our relations. The fact is that limiting the growth of nuclear arsenals is an overriding global problem that must be dealt with urgently for our own sake and for the sake of world peace.

Still, we have made clear that a continuation of actions like those in Angola must threaten the entire web of Soviet-U.S. relations. In this sense both negotiations and the overall relationship are in long-term jeopardy unless restraint is exercised. But there is no substitute for a local balance; indirect pressures can succeed only if rapid local victories are foreclosed.

Have we really thought through the implications of our decisions? Do we really want the world to conclude that if the Soviet Union chooses to intervene in a massive way, and if Cuban or other troops are used as an expeditionary force, the United States will not be able to muster the unity or resolve to provide even financial assistance to those who are threatened? Can those faced with such a threat without hope of assistance from us be expected to resist? Do we want our potential adversaries to conclude that, in the event of future challenges, America's internal divisions are likely to deprive us of even minimal leverage over developments of global significance?

**Our second objective is to help our friends in black Africa who oppose Soviet and Cuban intervention.**

Only in recent years has Africa become free of great power rivalry; it must not once again become an arena in which the ambitions of outside forces are pursued. We have sought with our African friends to maintain a local balance of power so there can be no imposed solution that would deprive the Angolan people of the right to determine their own destiny.

We are told that we need not concern ourselves because, in the final analysis and at some indefinite date in the future, African nationalism

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will reassert itself and drive out foreign influence. Even were this to prove true, it still ignores the fact that governments under pressure will be forced to yield whenever a threat develops. Those who are threatened cannot afford to wait—they must decide whether to resist or to adjust. Advice which counsels patience and confidence in the verdict of history is a mockery to those who are concerned for the fate of their country today. History rarely helps those who do not help themselves.

Some charge that we have acted in collusion with South Africa. This is untrue. We had no fore-knowledge of South Africa's intentions and in no way cooperated with it militarily. Nor do we view South African intervention more benevolently than we do the intervention of other outside powers. Indeed, we have formally proposed that the removal of outside forces begin with those of South Africa and have asked—in vain—for an indication of how soon thereafter Soviet and Cuban forces would be withdrawn.

It is also claimed that because of our support for the side which later felt itself compelled to seek the aid of South Africa, we have lost influence in black Africa. One cannot generalize so easily about the perceptions of the African people as the firm stand at Addis Ababa of 22 OAU members against OAU recognition of the MPLA should demonstrate. Behind this stand, which coincided with the U.S. position, was awareness that the MPLA represented only a minority of Angolans and also a genuine apprehension over Soviet and Cuban, as well as South African, intervention. Indeed it is our inability to support our African friends that will cost us influence in Africa.

We are firmly convinced that, had there been no outside interference initiated by the Soviet Union, the Africans would have found their own solution. No single movement would have been strong enough to take over. The resulting solution would have been more representative of the people of Angola than a government imposed by an outside power and representing only a minority faction.

The outcome in Angola will have repercussions throughout Africa. The confidence of countries neighboring Angola—Zambia and Zaire—as well as other African countries, in the will and power of the United States, will be severely shaken

if they see that the Soviet Union and Cuba are unopposed in their attempt to impose a regime of their choice on Angola. They and others elsewhere may well adjust their policies to what they consider to be the forces of the future.

The means we have chosen have been limited and explained to Congress.

Our immediate objective was to provide leverage for diplomatic efforts to bring about a just and peaceful solution. They were not conceived unilaterally by the United States; they represented support to friends who requested our financial assistance.

We chose covert means because we wanted to keep our visibility to a minimum; we wanted the greatest possible opportunity for an African solution. We felt that overt assistance would elaborate a formal doctrine justifying great power intervention—aside from the technical issues such as in what budgetary category this aid should be given and how it could be reconciled with legislative restrictions against the transfer of U.S. arms by recipients. The Angola situation is of a type in which diplomacy without leverage is impotent, yet direct military confrontation would involve unnecessary risks. Thus it is precisely one of those grey areas where covert methods are crucial if we are to have any prospect of influencing certain events of potentially global importance.

We chose a covert form of response with the greatest reluctance. But in doing so, we were determined to adhere to the highest standard of executive-legislative consultation. Eight congressional committees were briefed on 24 separate occasions. We sought in these briefings to determine the wishes of Congress. While we do not claim that every member approved our actions, we had no indication of basic opposition.

Between July and December 1975 we discussed the Angolan situation on numerous occasions with members of the foreign relations committees and the appropriations committees of both Houses and the committees of both Houses that have CIA oversight responsibilities. The two committees investigating CIA activities—the Church Committee and the Pike Committee—were also briefed. Altogether more than two dozen Senators, about 150 Congressmen, and over 100 staff members of both Houses were informed. I am

8

attaching to my statement a list of all the briefings
carried out [not attached].

Where are we now?

We are told that by providing money and
arms in Angola we are duplicating the mistakes we
made in Viet-Nam. Such an argument confuses the
expenditure of tens of millions of dollars with the
commitment of U.S. troops. If we accept such a
gross distortion of history—if we accept the claim
that we can no longer do anything to aid our
friends abroad because we will inevitably do too
much—then the tragedy of Viet-Nam will indeed
be monumental. We will have lost all ability to
respond to anything less than direct and substantial
challenge. And having lost that ability we will
eventually discover that by failing to respond at an
early stage, our ultimate response will have to be
greater and the stakes will be higher. If we do not
exercise our responsibilities to maintain the inter-
national balance, if Congress and the executive are
unable to act in concert when vital national
interests are affected, then world security may well
be seriously undermined.

Many of the members of this committee have
expressed their general support for our policy of
easing tensions with the Soviet Union. We in the
executive branch are grateful for that support. But
this process cannot be divided into those segments
which the Soviets will honor and those which we
will allow them to ignore. What the United States
does when confronted with a challenge like Angola
can be of great significance in shaping our future
relationship with the Soviet Union. A demonstra-
tion of a lack of resolve could lead the Soviets to a
great miscalculation, thereby plunging us into a
major confrontation which neither of us wants.
Credibility determines, to a great degree, what a
nation can accomplish without a resort to force.
And as credibility is reduced, the eventual need to
resort to force increases. And in the end, we are all
the losers.

The United States must make it clear that
Angola sets no precedent; this type of action will
not be tolerated elsewhere. This must be demon-
strated by both the executive and the Congress—in
our national interest and in the interest of world
peace.

To the Soviet Union and to Cuba, the
Administration says: We will continue to make our
case to the American public. We will not tolerate
wanton disregard for the interests of others and for
the cause of world peace.

To the American people, the Administration
says: The time has come to put aside self-
accusation, division, and guilt. Our own country's
safety and the progress of mankind depend cru-
cially upon a united and determined America.
Today, as throughout our 200 years, the world
looks to us to stand up for what is right. By virtue
of our strength and values we are leaders in the
defense of freedom: Without us there can be
neither security nor progress.

To the Congress, the Administration says: Whatever our past disagreements let the Congress and the executive now resolve to shape a cooperative relationship that will enable the United States to play a responsible international role. Both branches will have to do their share in restoring the kind of nonpartisan support that has served our foreign policy so well in the past. On the issue of Angola, the Administration is now seriously considering overt financial aid and we will soon be consulting with the Congress on this possibility. But whatever that decision, let us work together with an appreciation of the larger interests involved and with a sense of national responsibility. A united America cannot be ignored by our adversaries: Together we will preserve the independence of those who face the prospect of oppression; together we will hearten the friends of liberty and peace everywhere.

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

POSTAGE AND FEES PAID
DEPARTMENT OF STATE
STA-501

PRESS
DEPARTMENT OF STATE

January 29, 1976

AS PREPARED FOR DELIVERY

No. 40

TESTIMONY OF
THE HONORABLE HENRY A. KISSINGER
SECRETARY OF STATE
BEFORE THE
SENATE SUBCOMMITTEE ON AFRICA

JANUARY 29, 1976

Mr. Chairman:

I appear before you not to score debating points in an abstract contest over Executive-Legislative prerogative. What faces us is a Congressional decision of potentially grave magnitude taken after the Executive Branch had complied with all legal requirements for the kind of operation involved in Angola and after eight Congressional committees had been briefed over twenty times without foreshadowing any opposition in principle. The issue is not "victory" of one branch over another. The issue is what constitutes a victory for the national interest.

I welcome this opportunity to explain the global significance of what is now happening in Angola, the events that have brought us to this point, the United States' objectives and the major consequences which can result if we fail to pursue those objectives.

The Soviet Union's massive and unprecedented intervention in the internal affairs of Africa -- with nearly two hundred million dollars of arms, and its military technicians and advisors, with 11,000 Cuban combat troops, and with substantial sea and airlift and naval cover in adjacent waters -- is a matter of urgent concern. Not only are the interests of the countries directly affected at stake, but also the interests of all nations in preserving global stability -- which is the precondition for all else mankind aspires to accomplish.

In recent years the United States has sought to help build a new international order less tied to the traditional patterns of power balances. It was the United States which took the initiative in seeking to resolve the most dangerous problems of our time by negotiation and cooperation rather than by force of arms. It was we who saw that the historical necessity of this period required a more stable relationship between the two nations that possess the capacity to destroy civilization. We have sought -- and with some successes -- to build more constructive relations with the USSR across a broad range: to contain strategic arms, to institutionalize cooperation in economic, scientific and cultural fields, to reduce tensions in areas where our vital interests impinge on one another, and to avoid destabilizing confrontations in peripheral areas of the globe -- such as Angola. The classical pattern of accumulating marginal advantages must be overcome and mankind must build more constructive patterns if catastrophe is to be avoided. No one has been more dedicated than the President and I to working for these principles.

But our efforts have been founded upon one fundamental reality: peace requires a sense of security and security depends upon some form of equilibrium between the great powers. And that equilibrium is impossible

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unless the United States remains both strong and determined to use its strength when required. This is our historic responsibility, for no other nation has the capacity to act in this way. While constantly seeking opportunities for conciliation, we need to demonstrate to potential adversaries that cooperation is the only rational alternative. Any other course will encourage the trends it seeks to accommodate; a challenge not met today will tempt far more dangerous crises tomorrow.

If a continent such as Africa, only recently freed from external oppression, can be made the arena for great power ambitions, if immense quantities of arms can affect far-off events, if large expeditionary forces can be transported at will to dominate virtually helpless peoples -- then all we have hoped for in building a more stable and rational international order is in jeopardy.

The effort of the Soviet Union and Cuba to take unilateral advantage of a turbulent local situation where they have never had any historic interests is a willful, direct assault upon the recent constructive trends in U. S.-Soviet relations and our efforts to improve relations with Cuba. It is an attempt to take advantage of our continuing domestic division and self-torment. Those who have acted so recklessly must be made to see that their conduct is unacceptable.

The history of the postwar period should give us pause. Military aggression, direct or indirect, has frequently been successfully dealt with, but never in the absence of a local balance of forces. U. S. policy in Angola has sought to help friends achieve this balance. Angola represents the first time since the aftermath of World War II that the Soviets have moved militarily at long distances to impose a regime of their choice. It is the first time that the U. S. has failed to respond to Soviet military moves outside their immediate orbit. And it is the first time that Congress has halted the Executive's action while it was in the process of meeting this kind of threat.

Thus to claim that Angola is not an important country or that the United States has no important interests there begs the principal question. The objectives which the United States has sought in Angola have not been aimed at defending, or acquiring intrinsic interests in that country. We are not opposing any particular faction. We could develop constructive relations with any Angolan government that derives from the will of the people. We have never been involved militarily in Angola. We are not so involved now. We do not seek to be so involved in the future.

Our objective is clear and simple: to help those African countries and those groups within Angola that would resist external aggression by providing them with needed financial support. Those who we seek to assist are our friends; they share our hopes for negotiated solutions and for African self-determination. They played a larger role than the MPLA in striving toward Angola independence.

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the resolve to act responsibly as a great power -- prepared to face a challenge when it arises, knowing that preventive action now may make unnecessary a more costly response later.

Let there be no mistake about it - the culprits in the tragedy that is now unfolding in Angola are the Soviet Union and its client state, Cuba. But I must note with some sadness that by its actions, the Congress has deprived the President of indispensable flexibility in formulating a foreign policy which we believe to be in our national interest. And Congress has ignored the crucial truth that a stable relationship with the Soviet Union based on mutual restraint will be achieved only if Soviet lack of restraint carries the risk of counteraction. The consequences may well be far-reaching and substantially more painful than the course we have recommended. When one great power attempts to obtain special positions of influence based on military interventions, the other power is sooner or later bound to act to offset this advantage in some other place or manner. This will inevitably lead to a chain of action and reaction typical of other historic eras in which great powers maneuvered for advantage, only to find themselves sooner or later embroiled in a major crisis, and often in open conflict.

It is precisely this pattern that must be broken -- and that we wanted to break until stopped -- if a lasting easing of tensions is to be achieved. And if it is not broken now we will face harder choices and higher costs in the future.

-- a ceasefire, ending the tragic bloodshed in that country;

-- withdrawal of outside forces; Soviet, Cuban, and South African;

-- cessation of foreign military involvement; and

-- negotiations among the Angolan factions.

We have consistently advocated such a government representing all three factions in Angola. We have never opposed participation by the Soviet-backed Popular Movement for the Liberation of Angola, the MPLA. What we do oppose is the massive Soviet and Cuban intervention and their expressed aim of denying the other two groups any part in governing the country. Our overriding goal has been to assure that Africans shape their own destiny and that traditional colonialism not be replaced by a more modern version.

For the U. S. to be found wanting as a credible friend, precisely at a time when moderate African states have clearly and repeatedly expressed their hope that America provide the necessary balance to the Soviet Union and Cuba, will have a major impact on those countries on the continent of Africa which resisted all pressures and stuck by their position even after the Senate cut off aid; on our allies in other parts of the world who look to us for security; on other countries that seek ties with us primarily because they see us as the guardian of international equilibrium.

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The Record of Events in Angola

In 1961, the United States declared its support for self-determination in Portugal's African territories. At the time, the National Front for the Liberation of Angola, FNLA, was a leading force in the struggle for Angolan independence. Looking to the future, we sought to develop a relationship with the FNLA through providing it some financial, non-military assistance.
The USSR had already established links with the Popular Movement for the Liberation of Angola, MPLA, through the Portuguese Communist Party. The MPLA began military action against the Portuguese in the mid-60's. The National Union for the Total Independence of Angola, UNITA, an offshoot of the FNLA, also began to fight on a small scale in the late 1960's.
Although these various uncoordinated insurgency efforts caused considerable difficulties for Portugal, they posed no serious military threat to the dominance of Portuguese military forces in Angola.

However, the overthrow of the Portuguese government in April 1974 and the growing strength of the Portuguese Communist party apparently convinced Moscow that a "revolutionary situation" was developing in Angola. The Soviet Union began to exploit this situation in the fall of 1974 through shipments of some arms and equipment to the MPLA. The United States received requests for support from other Angolan elements at that same time, but turned them down.

The prospect of an independent Angola was clouded by the intense rivalry of the FNLA, MPLA and UNITA which had developed over the years. Concerned about the three factions' failure to end their bitter quarrel, leaders of other African countries prevailed upon them to come together with Portugal and seek agreement. This effort led to the Alvor Accord of January 1975. Under its terms a transitional coalition government was to be established and charged with preparing for a peaceful turnover of power by integrating the military forces of the three movements, writing a constitution and organizing an election to take place before independence, scheduled for November 11, 1975.

This was the moment, when Portugal was trying to organize a peaceful transition to independence, for the exercise of restraint by all outside parties. But the USSR and Portuguese Communists decided to put the MPLA in power in Angola through stepped-up shipments of arms. With this kind of encouragement, the MPLA had little incentive to fulfill the terms of the Alvor Accord which would have prevented it from dominating any future coalition government.

It is no coincidence that major violence broke out in March 1975 when large shipments of Soviet arms began to arrive -- thousands of infantry weapons, machine guns, bazookas and rockets. On March 23 the first of repeated military clashes between the MPLA and FNLA occurred. They increased in frequency in April, May and June, when deliveries of Communist arms and equipment, including mortars and armored vehicles, escalated by air and sea. In May, the MPLA forced the FNLA out of the areas north and east of Luanda and, in June, took effective control of Cabinda. On July 9 all-out civil war began when the MPLA attacked the FNLA and UNITA, driving both organizations out of Luanda, thereby ending the short-lived coalition government. By mid-July the military situation radically favored the MPLA.

As the military position of the FNLA and UNITA deteriorated, the Governments of Zaire and Zambia grew more and more concerned about the implications for their own security. Those two countries turned to the U. S. for assistance

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(L)

It was at this point that President Ford decided to respond to requests for help and to provide military assistance to the FNLA and UNITA forces through neighboring Black African countries.

In August, intelligence reports indicated the presence of Soviet and Cuban military advisers, trainers and troops, including the first Cuban combat troops. If statements by Cuban leaders are to be believed, a large Cuban military training program began in Angola in June, and Cuban advisors were probably there before then. By September, the MPLA offensive had forced UNITA out of several major central and southern Angolan cities. It controlled most of the coastline except for a strip in the far north, much of the south, and a wide belt running from Luanda to the Zaire border in the east.

In early September the poorly equipped UNITA forces turned in desperation to South Africa for assistance against the MPLA, which was overrunning UNITA's ethnic areas in the South. South Africa responded by sending in military equipment, and some military personnel -- without consultation with the United States.

The UNITA forces launched a successful counteroffensive which swept the MPLA out of the southern and most of the central part of Angola. In the north the FNLA also made significant advances. By Independence Day -- November 11 -- the MPLA controlled only the former colonial capital of Luanda and a narrow belt across north-central Angola.

In October massive increases in Soviet and Cuban military assistance began to arrive. More Cuban troops were ferried to Angola. Cuba inaugurated its own airlift of troops in late October. And the MPLA declared itself the Government of Angola, in violation of the Alvor Accord.

In the hope of halting a dangerously escalating situation, the United States -- using the leverage provided by our financial support -- undertook a wide range of diplomatic activity pointing toward a summit of the Organization for African Unity scheduled for January 1976. Starting in October we made several overtures to the Soviet Union, expressing our concern over the scale and purpose of their intervention. We offered to use our influence to bring about the cessation of foreign military assistance and to encourage an African solution if they would do the same. Their responses were evasive but not totally negative.

We began to voice our concerns and our limited objectives publicly. Beginning with a speech in Detroit on November 24 we pointed out that Soviet continuation of an interventionist policy must inevitably threaten our other relationships, and that our sole objective was an African resolution of an African problem. The Administration undertook a new series of Congressional consultations on the extent of our help to the Angolan factions resisting Soviet and Cuban aggression. I briefed the NATO Foreign Ministers and obtained significant understanding and support. Our diplomatic efforts with foreign governments, especially African governments, culminated with a mission by Assistant Secretary Schaufele to five African countries and the despatch of letters from President Ford to 32 African heads of state, as well as the Secretary General of the OAU, stating America's policy.

Throughout this period the U. S. principles for a solution to the Angolan tragedy were unambiguous and straightforward:

-- Angola is an African problem and should be left to Africans to solve;

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-- foreign military involvement only escalates and prolongs the warfare there and should be ended;

-- OAU efforts to promote a ceasefire should be supported;

-- the United States pursues no unilateral interests in Angola and is exclusively concerned with seeing the people of that country live in peace, independence and well-being;

-- Angola should be insulated from great power conflict.

Our diplomacy was effective so long as we maintained the leverage of a possible military balance. African determination to oppose Soviet and Cuban intervention was becoming more and more evident. On December 9, President Ford made a formal proposal to the Soviet Government through their Ambassador. Indeed, it appeared as if the Soviet Union had begun to take stock. They halted their airlift from December 9 until December 24.

By mid-December we were hopeful that the OAU would provide a framework for eliminating the interference of outside powers by calling for an end to their intervention. At that point, the impact of our domestic debate overwhelmed the possibilities of diplomacy. After the Senate vote to block any further aid to Angola, the Cubans more than doubled their forces and Soviet military aid was resumed on an even larger scale. The scope of Soviet-Cuban intervention increased drastically; the cooperativeness of Soviet diplomacy declined.

The weight of Soviet aid and advisors and the massive Cuban expeditionary force began to tip the scales of battle in December. By this point most of the effective fighting for the MPLA was being done by Cubans. It was clear that the USSR, Cuba and the MPLA hoped to achieve a decisive military victory on the eve of the Organization of African Unity's extraordinary Summit Conference in Addis Ababa a few weeks ago. Yet notwithstanding their reverses, the FNLA/UNITA forces still controlled about 70 percent of the territory and 70 percent of the population of Angola at the time of the Conference. An OAU reconciliation commission, which had met earlier in 1975, took the position that none of the movements should be recognized as the Government of Angola. The commission called for a ceasefire and the formation of a government of national unity. Thus, those governments who recognized the MPLA were in violation of a decision of the OAU.

At the January OAU Summit, 22 members of the OAU advocated recognition of the MPLA and condemnation of South Africa. But they were opposed, in an unusual demonstration of solidarity, by 22 other members who held out for a more balanced resolution, one that would include the following points:

1. an immediate ceasefire;

2. condemnation of South Africa and immediate withdrawal of all South African forces;

3. withdrawal of all foreign forces;

4. an end to the supply of arms to all factions; and

5. reconciliation of all factions with the aim of establishing a government of national unity.

The United States regarded this program as reasonable and responsive to the facts of the situation. But the Soviet Union and Cuba urged MPLA supporters to refuse to accept this solution. The Summit ended in impasse.

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## The United States Position

This then is the significance of Angola and the record to date. In elaborating further the U. S. position, I want to respond directly to some of the issues raised in the current debate.

Soviet arms have included infantry weapons, machine guns, bazookas, mortars and recoilless rifles, armored personnel carriers, heavy artillery, light and medium tanks, truck-mounted multitube rocket launchers, helicopters and light aircraft. There are unconfirmed reports that the Soviet Union will provide the MPLA with MIG-21 aircraft to be piloted by Cubans.

A total of at least 46 flights of Soviet heavy and medium military transports have ferried Soviet military equipment from the USSR to Luanda and Congo-Brazzaville, while a steady stream of Soviet and Cuban aircraft has continued to bring Cuban troops across the Atlantic. Soviet naval involvements, clearly related to the Angola event, have continued in West African waters for several weeks.

The implications of Cuba's unprecedented and massive intervention cannot be ignored. It is a geopolitical event of considerable significance. For the first time, Cuba has sent an expeditionary force to another nation on another continent. About 11,000 Cuban military personnel have been sent to Angola. If allowed to proceed unchecked, this blatant power play cannot but carry with it far-reaching implications -- including the impact it will have on the attitudes and future conduct of the nations of this hemisphere. Indeed, friend and foe alike cannot fail to contrast the sending of a large Cuban expeditionary force with our apparent inability to provide even indirect financial assistance. The failure of the United States to respond effectively will be regarded in many parts of the world as an indication of our future determination to counter similar Communist interventions.

The first answer is that many of the links the Administration has tried to forge, such as trade and credit, which would have provided incentives for restraint and levers for penalties have been precluded by earlier Congressional actions. But two other instruments have been suggested: Wheat sales and the Strategic Arms Limitation Talks. A moratorium was placed on wheat sales for four months in 1975. To use this device every three months is to blunt it permanently. Above all, economic measures take too much time to affect a fast-moving situation like Angola; any longer term impact would be of little use to those immediately threatened. We should also ponder whether we want to return to the situation, now prevented by the grain agreement, in which the USSR can capriciously enter and leave the U. S. grain trade.

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Have we really thought through the implications of our decisions? Do we really want the world to conclude that if the Soviet Union chooses to intervene in a massive way, and if Cuban or other troops are used as anexpedientionary force, the United States will not be able to muster the unity or resolve to provide even financial assistance to those who are threatened? Can those faced with such a threat without hope of assistance from us be expected to resist? Do we want our potential adversaries to conclude that, in the event of future challenges America's internal divisions are likely to deprive us of even minimal leverage over developments of global significance?

Our second objective is to help our friends in Black Africa who oppose Soviet and Cuban intervention.

We are told that we need not concern ourselves because in the final analysis and at some indefinite date in the future. African nationalism will reassert itself and drive out foreign influence. Even were this to prove true, it still ignores the fact that governments under pressure will be forced to yield whenever a threat develops. Those who are threatened cannot afford to wait -- they must decide whether to resist or to adjust. Advice which counsels patience and confidence in the verdict of history is a mockery to those who are concerned for the fate of their country today. History rarely helps those who do not help themselves.

Some charge that we have acted in collusion with South Africa. This is untrue. We had no foreknowledge of South Africa's intentions, and in no way cooperated with it militarily. Nor do we view South African intervention more benevolently than we do the intervention of other outside powers. Indeed, we have formally proposed that the removal of outside forces begin with those of South Africa and have asked -- in vain -- for an indication of how soon thereafter Soviet and Cuban forces would be withdrawn.

It is also claimed that because of our support for the side which later felt itself compelled to seek the aid of South Africa, we have lost influence in Black Africa. One cannot generalize so easily about the perceptions of the African people as the firm stand at Addis Ababa of 22 OAU members against OAU recognition of the MPLA should demonstrate. Behind this stand, which coincided with the U. S. position, was awareness that the MPLA represented only a minority of Angolans, and also a genuine apprehension over Soviet and Cuban, as well as South African, intervention. Indeed it is our inability to support our African friends that will cost us influence in Africa.

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The outcome in Angola will have repercussions throughout Africa. The confidence of countries neighboring Angola -- Zambia and Zaire -- as well as other African countries, in the will and power of the U. S. will be severely shaken if they see that the Soviet Union and Cuba are unopposed in their attempt to impose a regime of their choice on Angola. They and others elsewhere may well adjust their policies to what they consider to be the forces of the future.

Our immediate objective was to provide leverage for diplomatic efforts to bring about a just and peaceful solution. They were not conceived uni-laterally by the United States; they represented support to friends who requested our financial assistance.

We chose covert means because we wanted to keep our visibility to a minimum; we wanted the greatest possible opportunity for an African solution. We felt that overt assistance would elaborate a formal doctrine justifying great power intervention -- aside from the technical issues such as in what budgetary category this aid should be given and how it could be reconciled with legislative restrictions against the transfer of U. S. arms by recipients. The Angola situation is of a type in which diplomacy without leverage is impotent, yet direct military confrontation would involve unnecessary risks. Thus it is precisely one of those grey areas where covert methods are crucial if we are to have any prospect of influencing certain events of potentially global importance.

We chose a covert form of response with the greatest reluctance. But in doing so, we were determined to adhere to the highest standard of Executive-Legislative consultation. Eight Congressional Committees were briefed on 24 separate occasions. We sought in these briefings to determine the wishes of Congress. While we do not claim that every member approved our actions, we had no indication of basic opposition.

Between July and December 1975, we discussed the Angolan situation on numerous occasions with members of the Foreign Relations Committees and the Appropriations Committees of both Houses, and the Committees of both Houses that have CIA oversight responsibilities. The two Committees investigating CIA activities -- the Church Committee and the Pike Committee -- were also briefed. Altogether more than two dozen Senators, about 150 Congressmen and over 100 staff members of both Houses were informed. I am attaching to my statement a list of all the briefings carried out.

Mr. Chairman:

Where are we now?

We are told that by providing money and arms in Angola we are duplicating the mistakes we made in Vietnam. Such an argument confuses the expenditure of tens of millions of dollars with the commitment of U. S. troops. If we accept such a gross distortion of history -- if we accept the claim that we can no longer do anything to aid our friends abroad because we will inevitably do too much -- then the tragedy of Vietnam will indeed be monumental. We will have lost all ability to respond to anything less than direct and substantial challenge. And having lost that ability we will eventually discover that by failing to respond at an early stage, our ultimate response will have to be greater, and the stakes will be higher. If we do not exercise our responsibilities to maintain the international balance, if Congress and the Executive are unable to act in concert when vital national interests are affected, then world security may well be seriously undermined.

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PR 40

Many of the members of this committee have expressed their general support for our policy of easing tensions with the Soviet Union. We, in the Executive Branch, are grateful for that support. But this process cannot be divided into those segments which the Soviets will honor, and those which we will allow them to ignore. What the United States does when confronted with a challenge like Angola can be of great significance in shaping our future relationship with the Soviet Union. A demonstration of a lack of resolve could lead the Soviets to a great miscalculation, thereby plunging us into a major confrontation which neither of us wants. Credibility determines, to a great degree, what a nation can accomplish without a resort to force. And as credibility is reduced, the eventual need to resort to force increases. And in the end, we are all the losers.

The United States must make it clear that Angola sets no precedent; this type of action will not be tolerated elsewhere. This must be demonstrated by both the Executive and the Congress -- in our national interest and in the interest of world peace.

To the Soviet Union and to Cuba, the Administration says: we will continue to make our case to the American public. We will not tolerate wanton disregard for the interests of others and for the cause of world peace.

To the American people, the Administration says: the time has come to put aside self-accusation, division, and guilt. Our own country's safety and the progress of mankind depend crucially upon a united and determined America. Today, as throughout our 200 years, the world looks to us to stand up for what is right. By virtue of our strength and values we are leaders in the defense of freedom: without us there can be neither security nor progress.

To the Congress, the Administration says: whatever our past disagreements, let the Congress and the Executive now resolve to shape a cooperative relationship that will enable the United States to play a responsible international role. Both branches will have to do their share in restoring the kind of non-partisan support that has served our foreign policy so well in the past. On the issue of Angola, the Administration is now seriously considering overt financial aid and we will soon be consulting with the Congress on this possibility. But whatever that decision, let us work together with an appreciation of the larger interests involved, and with a sense of national responsibility. A united America cannot be ignored by our adversaries: together we will preserve the independence of those who face the prospect of oppression. Together we will hearten the friends of liberty and peace everywhere.

* * * * *

PR #40

ANGOLA
---
CONGRESSIONAL BRIEFINGS
---
BY THE
EXECUTIVE BRANCH

Following is a list of Congressional briefings which the Executive Branch conducted with committees of Congress, individual members and other Congressional staff persons between July, 1975, and the end of the year:

SENATE:

- 7/25 - Two members of the Foreign Relations Committee and one staff aide briefed by the CIA.

- 7/30 - Three members of the Intelligence Operations Subcommittee of the Appropriations Committee and two staff aides briefed by the CIA.

- 8/4 - Senator Dick Clark (African Affairs Subcommittee Chairman) briefed by the CIA.

- 9/5 - Three members of the Intelligence Operations Subcommittee of the Appropriations Committee and two staff aides briefed by the CIA.

- 9/23 - Four members of the CIA Subcommittee of the Armed Services Committee and two staff aides briefed by the CIA.

- 10/31 - Six members of the Select Committee on Intelligence Operations and twenty staff aides briefed by the CIA.

- 11/6 - Nine members of the Foreign Relations Committee and three staff aides briefed by the CIA.

- 12/1 - Senator Clark briefed by Ingersoll, Schaufele and Mulcahy.

- 12/4 - Ten staff members of various committees briefed by Haverkamp, Andrew and Fugit of AF Bureau.

- 12/8 - Senator Clark briefed by Schaufele as a followup of the 12/1 briefing.

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PR #40

- 12/8 - Two members of the Foreign Relations Committee and one staff aide briefed by the CIA.

-12/12 - Four members of the CIA Subcommittee of the Armed Services Committee and two staff aides briefed by the CIA.

-12/16 - Two members of the Intelligence Operations Subcommittee of the Appropriations Committee and two staff aides briefed by the CIA.

-12/16 - Ten members of the Subcommittee on Foreign Assistance & Economic Policy of the Foreign Relations Committee and several staff aides briefed by the CIA.

-12/16 - Senator Strom Thurmond (Member of CIA Subcommittee of the Armed Services Committee) briefed by the CIA.

HOUSE:

- 7/25 - Three members of the Special Subcommittee on Intelligence of the Armed Services Committee and one staff aide briefed by the CIA.

- 7/29 - Thirteen members of the Defense Subcommittee of the Appropriations Committee and two staff aides briefed by the CIA.

- 7/31 - Six members of the Subcommittee on Oversight of the Foreign Affairs Committee and one staff aide briefed by the CIA.

- 9/8 - Four members of the Special Subcommittee on Intelligence of the Armed Services Committee and one staff member briefed by the CIA.

- 9/4 - Five members of the Subcommittee on Oversight of the Foreign Affairs Committee and one staff aide briefed by the CIA.

- 10/6 - Thirteen members of the Defense Subcommittee of the Appropriations Committee and two staff aides briefed by the CIA.

-10/23 - Eight members of the Select Committee on Intelligence and one staff aide briefed by the CIA.

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PR #40

- 11/5 - Mulcahy testified before the International Resources, Food and Energy Subcommittee of the Foreign Affairs Committee.

- 11/13- Congressman Charles Diggs and nine other Congressmen plus several staff aides informally briefed by Mulcahy.

- 12/9 - Thirteen members of the Defense Subcommittee of the Appropriations Committee and three staff aides briefed by the CIA.

- 12/9 - Seven members of the Subcommittee on Oversight of the Foreign Affairs Committee and one staff aide briefed by the CIA.

- 12/11- Six members of the Subcommittee on Military Affairs (Fascell Subcommittee) briefed by Mulcahy.

- 12/12- Congressman Riegle briefed by Mulcahy.

- 12/12- Five members of the Special Subcommittee on Intelligence of the Armed Services Committee and two staff aides briefed by the CIA.

- 12/15- J. Daniel O'Flaherty, staffer for Congressman Harrington, briefed by Fugit AF/C.

- 12/16- Representative Dale Milford (member of House Select Committee) briefed by the CIA.

- 12/17- Mahon Subcommittee briefed by Colby and Sisco.

- 12/17- Congressman John Burton and others (unknown) briefed by Mulcahy.

- 12/17- Mulcahy appeared before an informal group of twelve Representatives and 35 staff aides.

- 12/17- Congressman Legitt briefed by Colby.

- 12/18- Closed Session of about 100 Representatives briefed by Sisco and Mulcahy.

- 12/19- Members of the Black Caucus briefed by Sisco and Mulcahy.

PRESS
DEPARTMENT OF STATE

January 29, 1976

No. 40

AS PREPARED FOR DELIVERY

JANUARY 29, 1976

Mr. Chairman:

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PR 40

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PR 40

We have consistently advocated such a government representing all three
factions in Angola. We have never opposed participation by the Soviet-
backed Popular Movement for the Liberation of Angola, the MPLA. What we
do oppose is the massive Soviet and Cuban intervention and their expressed
aim of denying the other two groups any part in governing the country.
Our overriding goal has been to assure that Africans shape their own
destiny and that traditional colonialism not be replaced by a more
modern version.

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PR 40

In 1961, the United States declared its support for self-determination in Portugal's African territories. At the time, the National Front for the Liberation of Angola, FNLA, was a leading force in the struggle for Angolan independence. Looking to the future, we sought to develop a relationship with the FNLA through providing it some financial, non-military assistance. The USSR had already established links with the Popular Movement for the Liberation of Angola, MPLA, through the Portuguese Communist Party. The FNLA began military action against the Portuguese in the mid-60's. The National Union for the Total Independence of Angola, UNITA, an offshoot of the FNLA, also began to fight on a small scale in the late 1960's. Although these various uncoordinated insurgency efforts caused considerable difficulties for Portugal, they posed no serious military threat to the dominance of Portuguese military forces in Angola.

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PR 40

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PR 40

By mid-December we were hopeful that the OAU would provide a framework for eliminating the interference of outside powers by calling for an end to their intervention. At that point, the impact of our domestic debate over- whelmed the possibilities of diplomacy. After the Senate vote to block any further aid to Angola, the Cubans more than doubled their forces and Soviet military aid was resumed on an even larger scale. The scope of Soviet-Cuban intervention increased drastically; the cooperativeness of Soviet diplomacy declined.

1. an immediate ceasefire;

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PR 40

## The United States Position

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PR 40

Have we really thought through the implications of our decisions? Do we really want the world to conclude that if the Soviet Union chooses to intervene in a massive way, and if Cuban or other troops are used as an expeditionary force, the United States will not be able to muster the unity or resolve to provide even financial assistance to those who are threatened? Can those faced with such a threat without hope of assistance from us be expected to resist? Do we want our potential adversaries to conclude that, in the event of future challenges America's internal divisions are likely to deprive us of even minimal leverage over developments of global significance?

**Our second objective is to help our friends in Black Africa who oppose Soviet and Cuban intervention.**

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PR 40

Mr. Chairman:

Where are we now?

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PR 40

* * * * *

PR #40

ANGOLA
---
CONGRESSIONAL BRIEFINGS
---
BY THE
---
EXECUTIVE BRANCH

SENATE:

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PR #40

HOUSE:

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PR #40

PEACE, HISTORICALLY A FUNCTION OF OUR MILITARY STRENGTH, IS
INCREASINGLY DEPENDENT AS WELL ON OUR ECONOMIC STRENGTH.

THE TWENTIETH CENTURY REVOLUTION IN TECHNOLOGY,
TRANSPORTATION, COMMUNICATION, AND WORLD ECONOMIC DEVELOPMENT
HAS MULTIPLIED THE PRESSURE POINTS AMONG NATIONS AND THE
POTENTIAL FOR CONFLICT. IT HAS STIRRED A GROUNDSWELL OF
DEMANDS FROM THOSE NATIONS AND PEOPLES THAT HAVE NOT SHARED
FULLY IN THE WORLD'S ECONOMIC PROGRESS. IT HAS INSPIRED
GROWING CONCERN ABOUT ACCESS TO THE WORLD'S NATURAL RESOURCES
AND DISPUTES OVER THE DISTRIBUTION OF THE ECONOMIC BENEFITS
THAT COME FROM THESE RESOURCES. OUR ECONOMIES, INSTITUTIONS,
AND DAILY LIVES ARE VULNERABLE TO THE ECONOMIC POLICIES OF
OTHERS.

AT THE SAME TIME, THE UNITED STATES IS THE WORLD'S MOST
POWERFUL ECONOMY. TOGETHER WITH OUR ALLIES AMONG THE
INDUSTRIAL DEMOCRACIES, WE ARE THE ENGINE OF GLOBAL PROSPERITY,

TECHNOLOGICAL INNOVATION, AND THE BEST HOPE FOR WIDENING
ECONOMIC OPPORTUNITY TO MILLIONS AROUND THE GLOBE. WE
COULD WITHSTAND AN ERA OF INTERNATIONAL ECONOMIC WARFARE
BETTER THAN ANY. BUT OUR HERITAGE AND OUR ASPIRATIONS DEMAND
MORE OF US THAN THE MERE SEARCH FOR SURVIVAL IN A WORLD OF
RESENTMENT AND DESPAIR. INDEED, SUCH A WORLD COULD NOT BUT
ULTIMATELY UNDERMINE THE STABILITY AND PEACE UPON WHICH ALL
ELSE WE SEEK TO DO IN THE WORLD IS BASED. THE PROSPECT FOR
OUR CHILDREN'S WELL BEING AND FOR THE FUTURE OF THE VALUES
WE CHERISH WILL BE DIM UNLESS WE TAKE THE LEAD IN SEEKING A
NEW ERA OF INTERNATIONAL ECONOMIC COOPERATION.

FOREIGN ECONOMIC POLICY IS THUS A CRITICAL ELEMENT IN
OUR OVERALL FOREIGN POLICY AND IN THE PURSUIT OF OUR BROADEST
NATIONAL OBJECTIVES.

AT THE PRESENT TIME WE FACE A SERIES OF ECONOMIC CHALLENGES
THAT MUST BE MET IF WE ARE TO HAVE A STABLE WORLD ORDER:

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-- INFLATION AND RECESSION HAVE SPREAD THROUGHOUT THE WORLD, THREATENING THE WORLD'S TRADING AND FINANCIAL SYSTEM AND THE HEALTH OF OUR SOCIAL INSTITUTIONS. RECOVERY IS NOW UNDERWAY IN MUCH OF THE INDUSTRIAL WORLD.

-- THE STUNNING INCREASE IN THE PRICE OF OIL HAS TRANSFERRED MASSIVE WEALTH TO A SMALL GROUP OF PRODUCER COUNTRIES. IT HAS INTENSIFIED WORLD RECESSION, EXACERBATED WORLD INFLATION, AND CREATED SERIOUS PROBLEMS OF DEBT, FINANCING, AND BALANCE OF PAYMENTS ADJUSTMENT.

-- THE PREMISES OF THE POST-WAR ECONOMIC SYSTEM ARE BEING CHALLENGED BY THE NATIONS OF THE THIRD WORLD IN A VARIETY OF INTERNATIONAL BODIES. THEIR RHETORIC IS OFTEN BITTER AND ACCUSATORY, THEIR TACTICS CONFRONTATIONAL.

WE MUST RESPOND TO THESE CHALLENGES FIRMLY AND CONSTRUC-
TIVELY. THE UNITED STATES MUST PLAY A LEADING ROLE IF OUR
BASIC NATIONAL INTERESTS ARE TO BE PROTECTED. IF WE FAIL
TO TAKE THE LEAD, OUR DESTINY MAY BE DETERMINED MORE BY THE
DRIFT OF EVENTS THAN BY CONSCIOUS DESIGN.

ALONG WITH PURSUIT OF OUR BROADEST FOREIGN POLICY GOALS,
WE HAVE VERY IMPORTANT ECONOMIC INTERESTS OF INDIVIDUAL
AMERICANS TO PROTECT:

-- OUR INTERNATIONAL ENERGY POLICIES DETERMINE WHETHER AMERICANS WILL HAVE REGULAR SUPPLIES AND STABLE PRICES FOR ENERGY RESOURCES SO VITAL FOR OUR CONTINUED ECONOMIC PROSPERITY.

-- OUR RELATIONS ABROAD CAN PROVIDE THE AMERICAN
FARMER WITH STABLE AND GROWING EXPORT MARKETS
AND THE AMERICAN CONSUMER WITH MORE STABILITY
IN FOOD PRICES.

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-- OUR COMMODITY POLICY CAN ASSURE US OF A REGULAR SUPPLY AND REASONABLE PRICES FOR THE CRITICAL RAW MATERIALS THAT WE IMPORT, AND STABLE AND EXPANDING MARKETS FOR THOSE THAT WE EXPORT.

-- OUR FOREIGN POLICIES IN MONEY, TRADE AND INVESTMENT CAN GIVE GROWING OPPORTUNITIES FOR AMERICANS WHOSE LIVELIHOOD DEPENDS ON EXPANDING EXPORT MARKETS FOR MANUFACTURED AND TECHNOLOGY-INTENSIVE ITEMS. OUR POLICIES CAN PROVIDE THE AMERICAN CONSUMER A WIDE RANGE OF GOODS AND SERVICES FROM WHICH TO CHOOSE AND PROTECTION AGAINST HIGH PRICES AND THE MONOPOLISTIC PRACTICES OF SPECIAL INTEREST GROUPS.

THERE MAY BE OCCASIONS, HOWEVER, WHEN SPECIFIC ECONOMIC INTERESTS ARE IN OPPOSITION TO OUR LARGER FOREIGN POLICY GOALS AND ECONOMIC DISPUTES WITH A PARTICULAR COUNTRY ARE IN

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THE RESPONSIBILITIES OF THE WORLD ECONOMIC
SYSTEM.

THE MEETING OF THE LEADERS OF SIX MAJOR INDUSTRIALIZED
DEMOCRACIES IN RAMBOUILLET, FRANCE, LAST NOVEMBER WAS A
SIGNIFICANT FOREIGN POLICY EVENT. THEY AGREED TO COORDINATE
THEIR ECONOMIC POLICIES MORE CLOSELY TO ASSURE A STABLE AND
DURABLE RECOVERY. THEY CONFIRMED THEIR COMMITMENT TO THE
OECD TRADE PLEDGE. AND THEY CONCURRED IN THE BASIC ELEMENTS
OF AN AGREEMENT ON MONETARY REFORM THAT WAS ACCEPTED BY THE
IMF INTERIM COMMITTEE IN JAMAICA ON JANUARY 9.

OUR RELATIONS WITH THE COMMUNIST NATIONS CAN BE
STABILIZED AND MORE PRUDENT BEHAVIOR ON THE PART OF THE
SOVIET UNION AND ITS ALLIES CAN BE ENCOURAGED BY CLOSER
ECONOMIC TIES.

THE GRAIN AGREEMENT THAT WE NEGOTIATED WITH THE SOVIET
UNION WAS A MAJOR STEP IN BUILDING A BETTER RELATIONSHIP.

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FIRST, AS A MAJOR CONSUMER WE ARE CONCERNED WITH SECURITY OF SUPPLY AT REASONABLE PRICES. WHILE WE ARE NOT GENERALLY CONCERNED WITH THE POSSIBILITY OF SUCCESSFUL OPEC-TYPE ACTION IN RAW MATERIALS, WE CANNOT IGNORE THE POSSIBILITY THAT UNILATERAL ATTEMPTS TO LEVERAGE INDUSTRIAL CONSUMERS ARE A POSSIBILITY AND COULD, IN A FEW CASES, BE ECONOMICALLY DISRUPTIVE. WE INTEND TO ADDRESS THIS ISSUE THROUGH SUPPLY ACCESS NEGOTIATIONS IN THE MTN, AS THE CONGRESS HAS CLEARLY LEGISLATED.

SECOND, WE ARE CONCERNED THAT AN UNCERTAIN INVESTMENT CLIMATE IN THE DEVELOPING WORLD, AS WELL AS THE INCREASING COST OF MINERAL EXPLORATION AND EXPLOITATION, WILL UNDERMINE ADEQUATE PRIVATE INVESTMENT FLOWS FOR MINERAL DEVELOPMENT.

OUR RESPONSE HAS BEEN ON TWO LEVELS. WE HAVE EXPRESSED A WILLINGNESS TO IMPROVE THE INVESTMENT CLIMATE IN THE DEVELOPING WORLD BY DISCUSSING GUIDELINES FOR THE BEHAVIOR OF BOTH MULTINATIONALS AND GOVERNMENTS, BY CALLING FOR A MULTILATERAL

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THIS IS THE PRINCIPLE UNDERLYING THE CONGRESS' ACTION IN EXTENDING TEMPORARY GENERALIZED TARIFF PREFERENCES TO THESE COUNTRIES. IT IS THE PRINCIPLE I STATED IN THE UN SPECIAL SESSION. IN BOTH CASES ACCOUNT IS TAKEN OF THE FACT THAT OUR GOAL IS THE DEVELOPMENT OF THESE COUNTRIES TO THE POINT WHERE THEY CAN PARTICIPATE MORE FULLY IN THE WORLD TRADING SYSTEM, SHARING BOTH ITS RIGHTS AND OBLIGATIONS. SOME ARE ALREADY NEARER THIS POINT THAN OTHERS. THE DIFFERENT LEVELS OF DEVELOPMENT AMONG THESE COUNTRIES WERE TAKEN INTO ACCOUNT BY CONGRESS IN OUR GENERALIZED SYSTEM OF PREFERENCES. IN THAT SYSTEM, DEVELOPING COUNTRIES CEASE TO ENJOY PREFERENTIAL TREATMENT FOR PRODUCTS THEY CAN SELL IN OUR MARKET IN SUBSTANTIAL VOLUME, AS DEFINED IN THE COMPETITIVE NEED PROVISIONS OF THE TRADE ACT, INDICATING THAT THEY HAVE BECOME COMPETITIVE AS EXPORTERS OF THESE PRODUCTS. WE INTEND TO SEE THAT SIMILAR PROVISIONS ARE MADE IN OTHER FORMS OF SPECIAL AND DIFFERENTIAL TREATMENT WHICH MAY BE AGREED TO.

WHERE SUCH LEGISLATION IS REQUIRED. COFFEE IS AN
EXAMPLE.

IN THE TRADE AREA WE ARE ACTING IN FULL COMPLIANCE WITH
THE LETTER AND SPIRIT OF THE TRADE ACT OF 1974 AND OUR PROPOSALS
WILL COME TO THE CONGRESS IN ACCORDANCE WITH THE TERMS OF
THAT LEGISLATION. WE WILL BE CONSULTING WITH THE CONGRESS
AND THIS COMMITTEE ON A CONTINUING BASIS.

CLEARLY, THE SUCCESS OF OUR EFFORTS IN NORTH/SOUTH DIPLOMACY
DEPENDS ON PARTNERSHIP BETWEEN THE ADMINISTRATION AND THE
CONGRESS. THE ROLE OF THIS IMPORTANT COMMITTEE IS CRITICAL.

THE SUCCESS OF OUR EFFORTS IN NORTH/SOUTH DIPLOMACY
DEPENDS ALSO ON MORE SYSTEMATIC EFFORTS BY US TO ENSURE
THAT EACH DEVELOPING COUNTRY UNDERSTANDS THAT OUR BILATERAL
RELATIONS WITH IT INCLUDE THAT COUNTRY'S BEHAVIOR TOWARD US
IN INTERNATIONAL MEETINGS AND, IN PARTICULAR, ITS VOTES
THERE ON ISSUES OF HIGHEST IMPORTANCE TO US. I HAVE ASKED

CONFLICT WITH OUR LARGER FOREIGN POLICY INTERESTS IN THAT PARTICULAR COUNTRY. THIS POINTS UP THE NEED FOR EFFECTIVE COORDINATION WITHIN OUR GOVERNMENT OF OUR SPECIFIC AND LARGER POLICY GOALS. IT IS NOT SURPRISING THAT THE POSITIONS OF DEPARTMENTS AND AGENCIES MAY CLASH. INDEED, IT WOULD BE STRANGE IF THEY DID NOT. EACH DEPARTMENT LOOKS AT ISSUES FROM THE PERSPECTIVE OF ITS INTERESTS AND GOALS. WHAT IS NECESSARY IS TO BRING THESE CONFLICTS TO A RESOLUTION.

WE HAVE VARIOUS FORMAL AND INFORMAL MECHANISMS FOR RESOLUTION OF DIFFERENCES. THE FORMAL MECHANISMS INCLUDE THE COUNCIL ON INTERNATIONAL ECONOMIC POLICY, THE ECONOMIC POLICY BOARD, THE NATIONAL SECURITY COUNCIL, AND THE TRADE POLICY COMMITTEE. IN FACT, INTERAGENCY CONSULTATION TAKES PLACE ON A CONTINUING BASIS AND AT ALL LEVELS. THE AGENCIES TRY TO REACH AGREEMENT WITHOUT BURDENING THE PRESIDENT NEEDLESSLY. BUT WHEN SERIOUS CONFLICTS CANNOT BE RESOLVED,

(10)

THE PRESIDENT MAKES THE DECISION. HE DOES SO ON THE BASIS
OF OUR TOTAL NATIONAL INTEREST AND OBJECTIVES.

IT HAS BEEN MY EXPERIENCE THAT THE COORDINATION OF
FOREIGN ECONOMIC POLICY IN THIS ADMINISTRATION HAS BEEN OUT-
STANDING, AND IT IS A MISREADING OF THE SITUATION TO BELIEVE
THAT OCCASIONAL DIFFERENCES MEAN DISARRAY. DIFFERENCES LEAD
TO COMPROMISE AND DECISION. THE END RESULT OF THE PROCESS
IS A COHERENT FOREIGN ECONOMIC POLICY.

OUR APPROACH TO FOREIGN ECONOMIC POLICY HAS THREE
BASIC ELEMENTS:

-- THE BUILDING OF STRONGER ECONOMIC TIES WITH
OUR INDUSTRIAL ALLIES;

-- THE CONSTRUCTION OF A STABLE AND MUTUALLY
BENEFICIAL ECONOMIC RELATIONSHIP WITH THE
COMMUNIST NATIONS; AND

-- PROVIDING OPPORTUNITIES FOR THE LESS DEVELOPED
NATIONS TO SHARE IN BOTH THE BENEFITS AND

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IT PROVIDES AN ASSURED EXPORT MARKET FOR OUR FARMERS. YET BY PUTTING OUR GRAIN TRADE WITH THE SOVIET UNION ON A MORE REGULAR BASIS, IT PROTECTS OUR CONSUMERS FROM THE WILD SWINGS IN GRAIN PRICES CAUSED BY LARGE AND ERRATIC SOVIET PURCHASES. AND IT PUTS THE SOVIET UNION ON NOTICE THAT THE ECONOMIC BENEFITS OF OUR RELATIONSHIP REQUIRE AN ATMOSPHERE OF ACCOMMODATION AND UNDERSTANDING BETWEEN EAST AND WEST.

UNFORTUNATELY, THE ABILITY OF THIS COUNTRY TO USE THE PROCESS OF NORMALIZING TRADE WITH THE COMMUNIST COUNTRIES AS A FLEXIBLE AND CONSTRUCTIVE ELEMENT IN EAST-WEST RELATIONSHIPS IS REDUCED BY THE PROVISIONS OF TITLE IV OF THE TRADE ACT. THESE PROVISIONS, IN ESTABLISHING A SINGLE ISSUE IN EAST-WEST RELATIONS AS THE GOVERNING CONDITION FOR NORMALIZING TRADE, CLOSE THE DOOR ON THE USE OF THE TRADE RELATIONSHIP OVER A WIDER RANGE OF ISSUES AND INTERESTS.

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THE RELATIONS OF THE INDUSTRIALIZED WITH THE DEVELOPING WORLD IS A PROBLEM OF PARTICULAR CONCERN AT THE MOMENT AND OUR POLICY DESERVES A FULLER ELABORATION TO THIS COMMITTEE.

## RELATIONS WITH DEVELOPING COUNTRIES

OVER THE LAST FEW YEARS THE INDUSTRIAL COUNTRIES HAVE BEEN THE OBJECT OF MOUNTING CRITICISM BY MUCH OF THE DEVELOPING WORLD, WHICH BELIEVES THAT THE INTERNATIONAL ECONOMIC SYSTEM AND THE POLICIES OF THE INDUSTRIAL NATIONS HAVE DENIED THEM OPPORTUNITIES FOR ADVANCEMENT. THE HOSTILITY OF SOME THIRD WORLD SPOKESMEN AND BLOC VOTING HAVE MADE CONSTRUCTIVE DISCUSSION IN UN FORUMS BETWEEN THE INDUSTRIAL AND DEVELOPING WORLDS ALMOST IMPOSSIBLE.

THE DEVELOPING COUNTRIES ARE NOT A NATURAL BLOC. THEY COMPRISE MORE THAN 100 COUNTRIES WHICH DIFFER WIDELY IN INCOME, ECONOMIC STRUCTURE, AND LEVEL OF DEVELOPMENT. IN RECENT YEARS THEY HAVE NOT PURSUED THEIR REAL AND VARIED INTERESTS IN UN FORUMS. THEY HAVE COMBINED INSTEAD TO CONFRONT

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AND ACCUSE THE DEVELOPED WORLD OF EXPLOITING THEM.

THE RADICALIZATION OF THE THIRD WORLD AND ITS CONSOLIDATION INTO AN ANTAGONISTIC BLOC IS NEITHER IN OUR POLITICAL NOR OUR ECONOMIC INTEREST. A WORLD OF HOSTILE BLOCS IS A WORLD OF TENSION AND DISORDER. DEVELOPING COUNTRIES CAN PLAY A SPOILER'S ROLE IN THE WORLD ECONOMY, ATTEMPTING TO RESTRICT THE SUPPLY OF CRITICAL MATERIALS, SUBJECTING FOREIGN INVESTMENT TO HARASSMENT AND CONFISCA-TION, THWARTING OUR EFFORTS TO RESTRUCTURE THE WORLD TRADE AND MONETARY SYSTEM. CLEARLY, IT IS IN OUR NATIONAL INTEREST -- AND IN THE WORLD INTEREST -- THAT ECONOMIC RELATIONS BETWEEN THE DEVELOPED AND DEVELOPING NATIONS BE CONDUCTED IN A COOPERATIVE WAY, AND THAT EACH HAVE A REALISTIC APPRECIATION OF WHAT CAN BE DONE TO ADVANCE THEIR MUTUAL INTERESTS.

IN ADDRESSING THIS PROBLEM, OUR OBJECTIVES HAVE BEEN FOURFOLD: TO CHANGE THE ATMOSPHERE IN WHICH DISCUSSIONS BETWEEN THE DEVELOPED AND DEVELOPING COUNTRIES ARE HELD FROM CONFRONTATION TO COOPERATION; TO CHANGE THE SUBSTANCE OF THE DISCUSSIONS FROM IDEOLOGY TO CONSIDERATION OF PRACTICAL ACTIONS; TO ENCOURAGE THE DEVELOPING COUNTRIES TO PURSUE THEIR REAL AND VARIED INTERESTS IN A REALISTIC WAY; AND TO SHIFT THE LOCUS OF DISCUSSIONS AND ACTIONS INSOFAR AS POSSIBLE TO FORUMS IN WHICH PARTICIPANTS CAN BE EXPECTED TO ACT RESPONSIBLY.

AT THE UN SPECIAL SESSION, WE SET AN AGENDA FOR FUTURE DISCUSSIONS BETWEEN THE RICH AND THE POOR COUNTRIES WITH A BROAD RANGE OF PRACTICAL PROPOSALS THAT SERVE THE MUTUAL INTERESTS OF BOTH. OUR PROPOSALS WERE DEVELOPED IN CONSULTATION WITH MEMBERS OF CONGRESS WHO MET WITH ME DURING THE SUMMER MONTHS PRECEDING THE SPECIAL SESSION. I AM AWARE OF YOUR CONCERN, MR. CHAIRMAN, THAT WE DID NOT AT THAT TIME

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CONSULT DIRECTLY WITH YOUR COMMITTEE, AND I REGRET THAT
WE DID NOT DO SO.

OUR INITIATIVES WERE ADDRESSED TO FIVE AREAS:

- TO MODERATE THE INSTABILITY IN THE WORLD ECONOMY
  THAT IMPEDES THE DEVELOPMENT OF THE POOR COUNTRIES;

- TO ACCELERATE THEIR ECONOMIC GROWTH BY PROVIDING
  IMPROVED ACCESS TO CAPITAL AND TECHNOLOGY, AND
  IMPROVEMENT IN THE CONDITIONS OF PRIVATE FOREIGN
  INVESTMENT;

- TO MAKE THE WORLD TRADING SYSTEM BETTER SERVE THE
  NEEDS OF DEVELOPMENT;

- TO IMPROVE THE CONDITIONS OF TRADE AND INVESTMENT
  IN KEY COMMODITIES;

- TO ADDRESS THE SPECIAL NEEDS OF THE POOREST COUNTRIES.

IN EACH OF THESE AREAS WE OFFERED CONCRETE SOLUTIONS TO
DEVELOPING COUNTRY PROBLEMS THAT ARE CONSISTENT WITH OUR
OWN ECONOMIC PHILOSOPHY AND OUR OWN ECONOMIC INTERESTS. WE

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TRIED TO MAKE THE DEVELOPING COUNTRIES AWARE THAT THE
EXISTING ECONOMIC SYSTEM CAN FURTHER THEIR WELFARE AND THAT
THEY HAVE A STAKE IN ITS EFFECTIVENESS. WE WERE, I BELIEVE,
CONSTRUCTIVE AND FORTHCOMING AS IS FITTING FOR A GREAT
NATION AND AS IS NECESSARY IF WE ARE TO ENCOURAGE THE
DEVELOPING COUNTRIES TO LOOK TO THE REAL, NOT THE RHETORICAL,
WORLD. IN MY VIEW, WE ACHIEVED OUR OBJECTIVES AT THE UN
SPECIAL SESSION.

THE SPECIAL SESSION WAS AN IMPORTANT EVENT IN THE SLOW
PROCESS OF ENCOURAGING THE DEVELOPING COUNTRIES TO PURSUE
THEIR VARIED INTERESTS IN A REALISTIC WAY, BUT IT WAS ONLY
A BEGINNING. WE NEED TO MOVE AHEAD TO GIVE EFFECT TO OUR
INITIATIVES, AND WE NEED TO MAINTAIN A CONTINUING DIALOGUE
WITH THE DEVELOPING WORLD. WE HAVE BEGUN A NEW DIALOGUE WITH
THESE COUNTRIES AND WITH THE OIL EXPORTING COUNTRIES IN THE
CONFERENCE ON INTERNATIONAL ECONOMIC COOPERATION WHICH MET

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IN PARIS LAST DECEMBER. WE LOOK TO THE CONFERENCE, WITH ITS FOUR COMMISSIONS ON ENERGY, RAW MATERIALS, DEVELOPMENT, AND RELATED FINANCIAL ISSUES, TO CONSIDER SERIOUSLY MANY OF OUR UN PROPOSALS THAT HAVE NOT YET BEEN IMPLEMENTED. UNLIKE THE BROAD UN FORUMS IN WHICH DEVELOPING NATIONS VASTLY OUTNUMBER THE INDUSTRIAL DEMOCRACIES AND VIE WITH EACH OTHER TO ESCALATE THEIR DEMANDS, THE COMMISSIONS WILL BE SMALL -- 15 MEMBERS IN EACH -- AND FOCUSSED ON SPECIFIC ISSUES. WE THINK THE DISCUSSIONS WILL BE MORE BALANCED AS A RESULT. THE CIEC AND ITS COMMISSIONS ARE A ONE-YEAR EXPERIMENT. THE SUCCESS OF THE EXPERIMENT WILL DEPEND ON THE WILLINGNESS OF MEMBER GOVERNMENTS TO USE THE COMMISSIONS FOR DISCUSSIONS OF PRACTICAL SOLUTIONS TO CONCRETE PROBLEMS, SOLUTIONS THAT TAKE DUE ACCOUNT OF THE INTERESTS OF ALL THE COUNTRIES CONCERNED.

WE ARE PURSUING OUR SPECIAL SESSION INITIATIVES AND DIALOGUE IN MANY OTHER APPROPRIATE FORUMS -- AMONG THEM, THE

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INTERNATIONAL MONETARY FUND, THE MULTILATERAL TRADE
NEGOTIATIONS, THE WORLD BANK, AND PRODUCER/CONSUMER COMMODITY
GROUPS -- WITH SOME SUCCESS. THUS, THE IMF, WITH THE SUPPORT
OF ITS DEVELOPING AS WELL AS INDUSTRIALIZED MEMBERS, HAS
ALREADY ACTED FAVORABLY ON SEVERAL OF OUR KEY INITIATIVES,
NOTABLY:

- THE ESTABLISHMENT OF A TRUST FUND TO PROVIDE
CONCESSIONAL BALANCE OF PAYMENTS ASSISTANCE TO
THE POOREST COUNTRIES;

- THE SUBSTANTIAL LIBERALIZATION OF ARRANGEMENTS
TO STABILIZE THE EXPORT EARNINGS OF DEVELOPING
COUNTRIES; AND

- INCREASED ACCESS TO IMF CREDIT (FROM 100 TO 145
PERCENT OF QUOTA).

I WOULD LIKE TO PUT SOME OF OUR OTHER INITIATIVES,
ESPECIALLY THOSE IN THE TRADE, COMMODITY, INVESTMENT, AND

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ENERGY AREAS, IN PROPER CONTEXT BY OUTLINING THE GENERAL POLICIES THAT GUIDE US IN THESE AREAS.

## TRADE

THE MULTILATERAL TRADE NEGOTIATIONS REPRESENT A MAJOR FOREIGN POLICY INITIATIVE. THEIR RESULTS WILL AFFECT OUR RELATIONS WITH ALL OUR TRADING PARTNERS. THEY WILL AFFECT OUR DOMESTIC -- AND INTERNATIONAL -- PROSPERITY. MY COLLEAGUES HAVE ALREADY DISCUSSED PROBLEMS AND PROGRESS IN THESE NEGOTIATIONS. I WOULD LIKE TO TALK ABOUT THE DEVELOPING COUNTRIES.

THE DEVELOPING COUNTRIES HAVE BEEN PLAYING AN INCREASINGLY IMPORTANT ROLE IN OUR TRADE -- A FACT WHICH I BELIEVE WE TEND TO OVERLOOK. THEY NOW ACCOUNT FOR ABOUT ONE-THIRD OF OUR TOTAL TRADE AND -- MORE IMPORTANTLY -- FOR 90 PERCENT OF OUR TOTAL TRADE SURPLUSES IN RECENT YEARS. WHILE RECESSION HAS BEEN DEPRESSING OUR EXPORT OF MANUFACTURES TO DEVELOPED

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COUNTRIES, OUR EXPORTS OF THESE ITEMS TO DEVELOPING COUNTRIES HAVE BEEN INCREASING -- SUPPORTING EMPLOYMENT AND INCOME IN THE UNITED STATES. CENTRAL TO THE DEVELOPMENT OBJECTIVES OF THE DEVELOPING COUNTRIES IS EXPANDING MARKETS FOR THEIR EXPORTS. WITHOUT THESE OPPORTUNITIES TO EARN FOREIGN EXCHANGE, THEY WILL NOT BE ABLE TO CONTINUE TAKING AN INCREASING SHARE OF OUR EXPORTS.

TRADE, THEREFORE, FORMS A VITAL AND TWO-WAY LINK IN OUR RELATIONS WITH THESE COUNTRIES. THE COMMITTEE, I BELIEVE, FULLY APPRECIATES THIS POINT AND ADOPTED SECTION 106 OF THE TRADE ACT TO STRESS THE INTEREST WE HAVE IN MUTUALLY BENEFICIAL TRADE AGREEMENTS WITH DEVELOPING COUNTRIES. TO MAKE THIS A REALITY, HOWEVER, WE MUST ALSO RECOGNIZE THAT THE NEEDS OF THE DEVELOPING COUNTRIES ARE DIFFERENT, REQUIRING TRANSITIONAL SPECIAL AND DIFFERENTIAL TREATMENT WHICH ACCORDS WITH THEIR INDIVIDUAL DEVELOPMENT STATUS.

WITH REGARD TO OUR SYSTEM OF GENERALIZED PREFERENCES, WE CONTINUE TO SUPPORT AMENDATORY LEGISLATION, SUCH AS THAT WHICH HAS BEEN INTRODUCED BY SENATOR BENTSEN, WHICH WOULD WAIVE THE OPEC EXCLUSION PROVISION OF TITLE V OF THE TRADE ACT FOR THOSE OPEC MEMBERS THAT DID NOT PARTICIPATE IN THE 1973 OIL EMBARGO.

THE BLANKET EXCLUSION OF OPEC COUNTRIES HAS HAD A NOTICEABLE ADVERSE EFFECT ON OUR RELATIONS WITH IMPORTANT COUNTRIES SUCH AS INDONESIA, VENEZUELA AND ECUADOR -- COUNTRIES THAT DID NOT PARTICIPATE IN THE 1973 EMBARGO, AND HAS DIMINISHED THE OVERALL FAVORABLE IMPACT OF GSP ON OUR RELATIONS WITH DEVELOPING COUNTRIES. THE GSP DENIAL HAS BECOME A MAJOR ISSUE BETWEEN THE U.S. AND PRACTICALLY ALL OF LATIN AMERICA, AND IS BY ALL ODDS THE MOST DIVISIVE FACTOR IN THE HEMISPHERE IN THE TRADE FIELD; IT HAS ALSO AFFECTED

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U.S. RELATIONS WITH MEMBERS OF ASEAN. FURTHERMORE, IT CASTS
A SHADOW ON THE NORTH-SOUTH DIALOGUE THAT IS JUST BEGINNING
IN THE CONFERENCE ON INTERNATIONAL ECONOMIC COOPERATION.

THE PRESENT PROVISION HAS LED TO SUPPORT AND SYMPATHY AMONG
OTHER LDCS FOR THE OPEC COUNTRIES. AMENDMENT OF THE OPEC
EXCLUSION PROVISION IS IN THE U.S. NATIONAL INTEREST.

COMMODITIES

THE U.S. HAS ASSUMED THE LEADERSHIP ROLE IN THE AREA
OF INTERNATIONAL COMMODITY POLICY. THE REASON IS CLEAR:
WE ARE THE WORLD'S LARGEST PRODUCER, CONSUMER, AND TRADER OF
COMMODITIES. WE ARE IMPORTING AN INCREASING AMOUNT OF OUR RAW
MATERIAL CONSUMPTION EACH YEAR. IT IS THUS IN OUR INTEREST
TO INSURE THAT COMMODITY MARKETS FUNCTION EFFICIENTLY, THAT
THEY OFFER INCENTIVES TO PLAN AND INVEST FOR THE FUTURE AND
NOT RESULT IN SHORTAGES AND INFLATIONARY PRICES TOMORROW.

WE HAVE SEVERAL SPECIFIC CONCERNS FOR WHICH WE ARE
CONTINUING TO DEVELOP POLICIES.

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INVESTMENT INSURANCE AGENCY, AND BY USING WHAT LEVERAGE WE HAVE TO SETTLE INVESTMENT DISPUTES BY THIRD PARTY ARBITRATION.

WE HAVE ALSO PROPOSED THAT THE WORLD BANK -- BOTH THE IBRD AND THE IFC -- BECOME MORE INVOLVED IN MINERAL FINANCING IN THE LDCS. THESE INSTITUTIONS WOULD MOBILIZE PRIVATE RESOURCES, ACTING WHERE NECESSARY AS THE MIDDLEMAN BETWEEN FOREIGN COUNTRIES AND U.S. COMPANIES.

THIRD, WE MUST DIRECT ATTENTION TO THOSE COMMODITIES WHOSE PRICES FLUCTUATE EXCESSIVELY, WITH SEVERE INFLATIONARY EFFECTS ON OUR OWN ECONOMY. WE ARE PREPARED TO GIVE CONSIDERATION TO MEANS OF MODERATING FLUCTUATIONS, RANGING FROM A BETTER EXCHANGE OF INFORMATION BETWEEN PRODUCERS AND CONSUMERS TO FORMAL ARRANGEMENTS IN SPECIFIC COMMODITIES WHERE APPROPRIATE.

FOURTH, WE RECOGNIZE THAT FOR MANY COMMODITIES THE DOMINANT PROBLEM MAY NOT BE VOLATILE PRICES BUT COMPETITION FROM SYNTHETICS, DECLINING OR SLUGGISH SECULAR DEMAND, OR OVERPRODUCTION AS NEW SUPPLIERS COME ON THE MARKET. THE

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REMEDIES IN SUCH CASES WOULD BE MEASURES SUCH AS DIVERSIFICATION, IMPROVED PRODUCTIVITY, OR BETTER MARKETING PRACTICES. EACH COMMODITY HAS ITS PARTICULAR CHARACTERISTICS AND PROBLEMS PECULIAR TO IT AND MUST BE CONSIDERED INDIVIDUALLY. WE HAVE, THEREFORE, PROPOSED THAT THERE BE A PRODUCER-CONSUMER FORUM FOR EACH KEY COMMODITY TO CONSIDER WHAT CAN BE DONE TO PROMOTE THE EFFICIENCY, GROWTH AND STABILITY OF ITS MARKET.

NEGOTIATIONS HAVE BEEN COMPLETED ON A NEW COFFEE AGREEMENT WHICH CONTAINS SUBSTANTIAL IMPROVEMENTS FROM BOTH CONSUMER AND PRODUCER VIEWPOINTS. WE WILL SUBMIT THIS SHORTLY TO THE PRESIDENT FOR DECISION. THE NEW COCOA AGREEMENT CONTAINS INSUFFICIENT PROTECTION FOR CONSUMERS AND ITS PRICE PROVISIONS ARE TOO RIGID. WE ARE ASKING FOR RENEGOTIATION. WE WILL SHORTLY SUBMIT THE TIN AGREEMENT, WHICH IS A TREATY, FOR ADVICE AND CONSENT BY THE SENATE.

INTERNATIONAL INVESTMENT

TRANSNATIONAL ENTERPRISES HAVE BEEN IMPORTANT INSTRUMENTS FOR GROWTH IN BOTH THE INDUSTRIAL AND DEVELOPING COUNTRIES.

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THEY CONTRIBUTE NOT ONLY SCARCE CAPITAL BUT ALSO SCARCE TECHNOLOGY, MANAGEMENT, AND MARKETING SKILLS. IN RECOGNITION OF THESE BENEFITS, THE INDUSTRIAL COUNTRIES, INCLUDING THE UNITED STATES, HAVE MAINTAINED AN OPEN POLICY ON INTERNATIONAL INVESTMENT.

THE DEVELOPING COUNTRIES ARE AMBIVALENT ABOUT PRIVATE FOREIGN INVESTMENT. THEY WANT IT FOR THE BENEFITS IT BRINGS, BUT THEY ARE UNEASY ABOUT IT -- AND IN PARTICULAR ABOUT THE TRANSNATIONAL COMPANY WHICH IS THE MAJOR INSTRUMENT FOR INTERNATIONAL INVESTMENT -- BECAUSE OF ITS POWER AND GLOBAL OUTLOOK.

MANY OF THE MOST SUCCESSFUL DEVELOPING COUNTRIES HAVE TAKEN ADVANTAGE OF FOREIGN PRIVATE INVESTMENT. IN GENERAL THE RESULTS HAVE BEEN MORE RAPID MODERNIZATION AND A STRENGTHENED PRIVATE SECTOR. WE REMAIN CONVINCED THAT DEVELOPING COUNTRIES WOULD BE WELL SERVED BY OFFERING A SECURE CLIMATE FOR FOREIGN INVESTMENT BUT THE CHOICE REMAINS THEIRS, AS DO THE COSTS OF FOREGOING INVESTMENT.

THE BENEFITS DERIVING FROM TRANSNATIONAL ENTERPRISES MAKE IT IMPORTANT THAT GOVERNMENTS DEAL WITH LEGITIMATE CONCERNS ABOUT THESE COMPANIES. ONE MAJOR CONCERN IS THAT THESE ENTERPRISES MAY DEVIATE FROM PROPER STANDARDS OF BUSINESS BEHAVIOR. THERE HAVE ALSO BEEN SERIOUS INSTANCES OF APPARENT DISREGARD FOR NATIONAL LAW WITH RESPECT IN PARTICULAR TO ILLICIT PAYMENTS. I AM AWARE OF THE KEEN INTEREST OF MEMBERS OF THIS COMMITTEE ON THIS ISSUE AS REFLECTED IN SENATE RESOLUTION 265.

THE U.S. HAS TAKEN THE LEAD IN DEALING WITH THESE CONCERNS BECAUSE OF OUR COMMITMENT TO AN OPEN INTERNATIONAL SYSTEM FOR INVESTMENT AND TRADE. WE ARE ACTIVE IN EFFORTS WITHIN THE OECD TO WORK OUT GUIDELINES DEFINING REASONABLE STANDARDS OF BUSINESS PRACTICES FOR TRANSNATIONAL ENTERPRISES. OUR DELEGATION TO THE MULTILATERAL TRADE NEGOTIATIONS HAS ALSO RAISED THIS ISSUE IN THAT FORUM. SUCH GUIDELINES CAN PROVIDE

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THE BASIS FOR BETTER UNDERSTANDING BETWEEN GOVERNMENTS AND ENTERPRISES AND THUS ASSIST IN PRESERVING A FAVORABLE CLIMATE FOR INTERNATIONAL INVESTMENT.

IN MY ADDRESS TO THE UN SPECIAL SESSION, I SAID THAT THE U.S. IS WILLING TO PURSUE DISCUSSION OF INTERNATIONAL GUIDELINES FOR TRANSNATIONAL ENTERPRISES WITHIN THE UN. WE ARE WILLING TO ADDRESS THE CONCERNS OF DEVELOPING COUNTRIES, IN PARTICULAR THAT TRANSNATIONAL ENTERPRISES CONTRIBUTE TO THE DEVELOPMENT PROCESS. AT THE SAME TIME, WE BELIEVE THAT ANY UN GUIDELINES SHOULD BE BALANCED. IN PARTICULAR THEY SHOULD INCLUDE NOT ONLY THE OBLIGATIONS OF ENTERPRISES, BUT ALSO THOSE OF GOVERNMENTS TO TREAT THE ENTERPRISES EQUITABLY AND IN ACCORDANCE WITH INTERNATIONAL LAW; THEY SHOULD APPLY EQUALLY TO DOMESTIC AND INTERNATIONAL ENTERPRISES, AND TO PRIVATE AND PUBLIC FIRMS, WHEREVER APPROPRIATE; THEY SHOULD STRESS THE OBLIGATION OF ALL PARTIES TO CARRY THROUGH ON STRESS THE OBLIGATION OF ALL PARTIES TO CARRY THROUGH ON

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UNDERTAKINGS FREELY ENTERED UPON.

ENERGY

TWO YEARS HAVE PASSED SINCE THE OIL EXPORTING COUNTRIES SENT SHOCK WAVES THROUGH THE WORLD ECONOMY BY THE ABRUPT AND ENORMOUS INCREASE IN THE PRICE OF OIL. IN THOSE TWO YEARS WE HAVE:

-- CREATED THE INTERNATIONAL ENERGY AGENCY, A POTENTIALLY DYNAMIC CENTER FOR ENERGY COOPERATION;

-- ESTABLISHED A COMPREHENSIVE EMERGENCY PROGRAM TO INCREASE THE ABILITY OF IEA MEMBERS TO WITHSTAND THE ECONOMIC IMPACT OF ANOTHER EMBARGO;

-- NEGOTIATED A FINANCIAL SUPPORT FUND TO MEET PROBLEMS POSED BY THE HUGE FINANCIAL ACCUMULATIONS OF THE OIL PRODUCING COUNTRIES;

-- ESTABLISHED THE LONG-TERM IEA PROGRAM TO ACCELERATE THE SHIFT IN SUPPLY AND DEMAND FOR WORLD ENERGY THAT WILL EVENTUALLY END OUR VULNERABILITY TO ARBITRARY OPEC CONTROL OVER WORLD PRICES.

(c)

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THE EIGHTEEN COUNTRIES OF THE INTERNATIONAL ENERGY AGENCY ARE MEETING TODAY IN PARIS ON THE ESTABLISHMENT OF A PROGRAM FOR LONG-TERM COOPERATION IN THE FIELD OF ENERGY. THIS LONG-TERM PROGRAM WILL TIE TOGETHER AND REINFORCE OUR RESPECTIVE NATIONAL EFFORTS TO REDUCE OUR EXCESSIVE DEPENDENCE ON IMPORTED OIL.

THE ADOPTION OF THIS LONG-TERM PROGRAM WILL COMPLETE THE BASIC DESIGN FOR CONSUMER COUNTRY COOPERATION IN ENERGY WHICH IS A CENTRAL PILLAR OF U.S. INTERNATIONAL ENERGY POLICY. HAVING COMPLETED THIS FRAMEWORK FOR COOPERATION AMONG THE INDUSTRIAL DEMOCRACIES, WE ARE NOW READY TO BEGIN A DIALOGUE WITH THE OIL PRODUCERS AND THE NON-OIL PRODUCING DEVELOPING COUNTRIES.

ON FEBRUARY 11, THE ENERGY COMMISSION OF THE CONFERENCE ON INTERNATIONAL ECONOMIC COOPERATION WILL MEET IN PARIS UNDER THE CO-CHAIRMANSHIP OF SAUDI ARABIA AND THE UNITED STATES. WE APPROACH THIS DIALOGUE IN A SPIRIT OF CONSTRUCTIVE COOPERATION,

AWARE OF OUR OWN VITAL INTERESTS, BUT CONVINCED THAT OUR
INTERESTS AND THOSE OF THE OIL PRODUCERS CAN BE HARMONIZED.

NEXT STEPS

THE ATTAINMENT OF OUR OBJECTIVE OF SUBSTITUTING
COOPERATION FOR NORTH/SOUTH CONFRONTATION WILL DEPEND
IMPORTANTLY ON THE ABILITY OF THE ADMINISTRATION AND THE
CONGRESS, WORKING TOGETHER, TO TRANSLATE OUR PROPOSALS INTO
CONCRETE POLICIES AND ACTION.

WE WILL NEED AUTHORITY FROM THE CONGRESS TO REPLENISH
THE RESOURCES OF THE REGIONAL LENDING INSTITUTIONS AND TO
SUBSCRIBE NEW CAPITAL TO THE INTERNATIONAL FINANCE CORPORATION.

IN THE COMMODITY AREA, WE WILL BE SEEKING THE ADVICE AND
CONSENT OF THE SENATE TO U.S. MEMBERSHIP IN THE INTERNATIONAL
TIN AGREEMENT AND IN OTHER INTERNATIONAL COMMODITY AGREEMENTS
THAT WE DETERMINE ARE CONSISTENT WITH OUR INTERESTS. WE WILL
BE COMING TO THIS COMMITTEE FOR IMPLEMENTING LEGISLATION