[L]

©AP BZQ1 FAS$$$1412 Art 1412 fa-sum 11412 5/12-230Ax Kissinger/Vance 05-20-88 16-38-58 ap:

BIPARTISAN FOREIGN POLICY 909

munity moving toward virtual economic integration by 1992,
it is especially important that a revised structure for the defense
of Western Europe also be in place by then.

As the European component in Atlantic defenses continues
to develop, the United States will face an alliance whose part-
ners will feel a greater sense of identity. The members of the
alliance have often had contrasting views. Differences of views
within NATO may not be limited to alliance strategies toward
the Warsaw Pact countries. Distinctive West European ap-
proaches to crises in the Third World could become more
common. We believe, nevertheless, that NATO leaders must
understand that if divisions within the Atlantic community
over issues outside NATO are permitted to fester, they will
threaten the capacity of the alliance for cooperation and mutual
defense within the NATO area, and hence the vital interests of
each member.

We should not be apologetic about discussing openly the
need to reform the Atlantic alliance. On the contrary, we
should be proud that Europe has gained in strength and that
this free association of democratic nations has served our
common objectives so well. The alliance can manage change
constructively by anticipating and adjusting in ways that are
deliberate, rational and supported by public opinion. If NATO
waits for a crisis—such as differences over how to respond to
major Soviet diplomatic or military moves, or a severe eco-
nomic recession in the West—the Atlantic framework will
change for the worse under the pressure of unfavorable exter-
nal events.

There is no significant political force in the West opposed to
the existence of NATO. Political parties sometimes differ on
how or when, but not on whether, NATO should be strong and
vigilant. Politicians may disagree in their assessments of Mikhail
Gorbachev, but the Atlantic alliance cannot base its policies on
his fate. Finally, recent events in Poland serve to remind us
that a stable relationship between Eastern and Western Europe
remains on the agenda.

The strengths of the Western alliance derive from its com-
mon democratic values and its ability to respond, often in
concert, when circumstances change or public attitudes evolve.
The West is fully capable of reorganizing itself and thus emerg-
ing better prepared to continue to defend its freedoms and
prosperity.

(c)

910 FOREIGN AFFAIRS

IV

*The world economy.* America's role in the world has become directly dependent on the strength and performance of the U.S. economy. Foreign policy and economic policy have become increasingly interdependent.

When we served as secretaries of state, only a relatively small portion of our time was spent on international economic issues. Our successors do not have this luxury. Economic strength is today even more central to the way America is perceived by its friends and potential adversaries. U.S. political leadership in the world cannot be sustained if confidence in the American economy continues to be undermined by substantial trade and budget deficits.

For these reasons, the weaknesses of the U.S. economy may be among the most serious and urgent foreign policy challenges to the next president. Convincing economic discipline, clear and publicly supported long-term economic strategies, as well as equitable budget reductions, must be applied quickly if we are to halt the erosion of our international position.

It is increasingly obvious that our military prowess and even our nuclear capabilities do not by themselves contribute to the struggle for international markets; in this realm competitiveness, education, judicious government intervention, as well as price, wage and currency levels, determine success. The impact of the international economy on the daily lives of all Americans has drawn many more citizens, special interest groups, public and private institutions, businesses and elected representatives into seeking to influence U.S. foreign policy. The persistence of the American budget deficit has become a source of international as well as domestic concern. Great emotion is now attached to discussions of international trade and financial questions in our political debates—especially how we can restore our competitive position. Moreover, our citizens worry that the American standard of living is directly affected by economic decisions taken in foreign capitals that are less politically and militarily powerful than our own. This is not an argument against maintaining adequate defenses; it is to stress that this objective must go hand in hand with reducing our budgetary and trade deficits.

The primary responsibility of every president is to defend our national security. Given the range of American commit-

BIPARTISAN FOREIGN POLICY 911

ments and responsibilities, and given a continuing challenge to
those interests, defense spending must remain a major budget-
ary outlay for the indefinite future. But the weaknesses of the
American economy threaten to limit the resources available
for maintaining our defense, foreign affairs and assistance
budgets at adequate levels. Of course, changes in military
posture and strategy should be made if assessments of the
threat change, negotiations succeed or technological break-
throughs occur. However, too many major modifications of
the American force structure now primarily occur not for these
reasons but as a result of budgetary pressures. Even when
reductions will not produce an abrupt deterioration in our
strategic position, in the long run they could well weaken us.

The budget contraction is already beginning to complicate
vital bilateral political relations and call into question whether
the United States will be able to maintain some of its foreign
military commitments, including those installations which give
U.S. forces the ability to defend our interests, and those of our
friends, throughout the world. Dramatic cuts in funds available
to assist friends in the developing world are provoking serious
political and humanitarian aftershocks in many of the poorer
countries as well.

These reductions, including those in the civilian foreign
affairs budget, also weaken the morale and performance of
those Americans whose task it is to serve our country overseas.
In the State Department, posts and positions are being elimi-
nated not because they are redundant but because we cannot
afford them. It is absurd that when the national interest dictates
the need for emergency assistance of $200 million for the
Philippines, we are hard pressed to find the money somewhere
in our $4.5-trillion economy.

To sum up: America's ability to influence events abroad and ensure prosperity at home will be determined in large part by how rapidly we get our economic house in order. Fortunately we can still make these decisions ourselves. We must face the fact that our economy and consumption have become so over-extended in recent years that the remedies will involve sacrifice and slower growth in our standard of living. If, however, we ignore these economic realities, American influence abroad will decline significantly and our children will pay the price of our inattention and excesses in weakened security and declining competitiveness.

©AP BZQ1 FAS$$$1412 Art 1412 fa-sum 11412 5/12-230Ax Kissinger/Vance 05-20-88 16-38-38 aps5f

912 FOREIGN AFFAIRS

V

*Japan.* The stunning economic success and political stability that Japan has achieved have placed it in a privileged, but also precarious, position. Tokyo is experiencing what can be fairly described as the "problems of success." Its major trading partners want Japan to modify its practices of emphasizing its national efforts above all other priorities. This approach may well have been necessary for Japan during the period of postwar reconstruction, but now it is inappropriate for an economic superpower with global reach and impact. Many Japanese would prefer to leave their international economic and security practices intact; some political and business leaders in Tokyo, however, understand the need for changes.

There are many shrill and contradictory voices in this country proffering advice on how Japan should change. Some regard Japan's $60-billion trade surplus with the United States as the most urgent problem, and they insist that Japan modify its trading rules to reduce that imbalance substantially. Some believe that Japan should concentrate on providing massive economic and financial assistance to the developing world out of its substantial foreign exchange surpluses. Still others are convinced that Japan, which is fast becoming the most proficient non-nuclear military power in the world, should relieve the United States of some of its Asian defense burdens and increase defense spending substantially above the present level of one percent of GNP.

There can be no debate over the importance of Japanese-American ties. They are based on strong common interests—strategic and political, as well as economic. Preserving this relationship is vital to both countries. What is at issue is how best to proceed, not the value of the relationship itself. The United States needs a national strategy for dealing with our Japanese allies before we can ask our friends in Tokyo to work with us on strengthening our partnership.

We should start by recognizing that a root cause of the trade imbalance is the current superior productivity and long-range planning of Japanese industry. The so-called Japan problem is partly a result of superior Japanese competitiveness. The falling dollar has not yet curbed the American taste for Japanese imports, because they are presumed to be of superior quality. In the end, market forces more than governmental intervention will affect the trade deficit. At the same time, Japan needs

[L]

BIPARTISAN FOREIGN POLICY 913

to accelerate its efforts to stimulate domestic demand and to
eliminate unfair discrimination against foreign imports.

We warn against any attempt to deal with the deficit by
pressing Japan to step up its defense efforts. Of course, Japan
has the right to determine its appropriate security require-
ments. The United States can have no interest in urging Japan
to go beyond that. Such a course would generate the gravest
doubts all over Asia. It might deflect Japan from a greater
economic contribution to international stability, through a
cooperative effort by all developed countries to infuse capital
into the developing world.

We consider it essential that the dialogue with Japan be lifted
to a more comprehensive level. Japan will be one of the major
powers of the 21st century. We are becoming more and more
interdependent. The issue is how to deal with the consequences
of interdependency, not how to reverse or change the relation-
ship.

The American-Japanese dialogue must not be confined to
mutual harassment and recrimination on an industry-by-indus-
try basis. The two countries should seek to establish overall
goals and work toward them. One step would be to establish
an overall trade balance the United States would find tolerable;
within that balance, Japan would have the choice of either
reducing its exports or increasing its imports, thus removing
the need for sector-by-sector industrial negotiations.

Even more important is a broad strategy for contributing to
the growth of developing areas. Japanese capital, funneled
through international institutions, could play a seminal role in
this regard. This is also important, especially in Latin America,
as a means of alleviating the debt problem. A Japanese com-
mitment to recycle a percentage of its trade surplus toward aid
and assistance in the underdeveloped world would be a major
achievement. For only in adopting a common course can we
sustain the global economic growth without which economic
competition between Japan and the United States could degen-
erate into a disastrous political conflict.

*China.* No relationship has changed more dramatically over
the past four administrations, of both parties, than America's
relations with the People's Republic of China. Sino-U.S. friend-
ship is one of few uncontested achievements of American policy
in the past two decades of bitter debates. We are concerned
that it not be neglected as we become more involved in a new

[L]

914 FOREIGN AFFAIRS

phase of East-West negotiations. There is a strong bipartisan
consensus in favor of developing the relationship further.

The broad improvement in Sino-American relations remains
grounded in common strategic concerns, supported by a polit-
ical dialogue. A new element, however, is China's economic
modernization program, inspired by the leadership of Deng
Xiaoping. China's economic reforms offer an avenue for de-
veloping stronger and mutually advantageous ties. Given our
technological prowess, the United States can play a special role
in the development of the Chinese economy without generating
fears of U.S. domination. We believe that we should play such
a role, for a strong and independent China is in the American
interest in sustaining an Asian balance of power and in collab-
orating on broader global issues.

China has already taken decisions that offer opportunities to American economic interests. American business no longer expects profits on the scale originally contemplated during the initial stages of normalizing relations with China. Nevertheless, the existence of a market of over one billion people and an increasingly open economy are reasons for optimism over the long run about the future of our trade and investment in the P.R.C. It is short-sighted and unfair, however, to continue to include the P.R.C. in less favorable categories for the purposes of technology transfer and financing, especially when we encourage China to maintain adequate defenses because of the strong Soviet military presence nearby. Thus we favor the use of discretionary powers to encourage the transfer of technology to China, to assist economic growth.

Americans should take the long view, as the Chinese always
do. China's position is changing. Its relations with its northern
neighbor in particular, may be improving; this should not be
disconcerting for us. We are confident that the Chinese leaders,
now and in the future, will have a keen appreciation for China's
geopolitical interests, which we believe will continue to be
consistent with our own.

VI

We turn now to two regions where the United States has
special interests.

*The Arab-Israeli conflict.* For the past forty years the United
States has been the only major country able to engage all of
the belligerents in peaceful efforts to solve the Arab-Israeli
disputes. No progress toward peace has ever been achieved

©AP BZQ1 FAS$$$1412 Art 1412 fa-sum 11412 5/12-230Ax Kissinger/Vance 05-20-88 16-38-58 aps5

LC

BIPARTISAN FOREIGN POLICY 915

between warring Israelis, Egyptians, Jordanians, Syrians, Palestinians—and now Lebanese—without the personal involvement of an American president and secretary of state, not only in the procedure but also in the substance of the issues. American influence has led to important diplomatic achievements by the administrations we served. Separating the adversaries geographically, negotiating an effective cease-fire between the major armies and then brokering the peace treaty and diplomatic recognition between Israel and Egypt were important steps in the direction of a lasting solution.

Unfortunately, the peace process has been stalled for the past decade, and the forces of conciliation and compromise in the area have been weakened. The Israeli invasion of Lebanon in 1982 contributed to the rise of religious extremism, violence and foreign influence in that beleaguered nation. The tolerance of terrorism and the political intransigence of some radical Arab states have inflamed the atmosphere. The economies of the non-oil-producing Arab states—which are among the most moderate—are suffering. A deep political division in Israel over the peace process paralyzes diplomacy. The Palestinians are also divided and have not yet brought themselves to recognize Israel. Moreover, the long-festering, and deeply felt, Arab protests against the Israeli occupation of the West Bank and Gaza fuel both Arab demands and Israeli reprisals, particularly as a new generation appears on the scene.

In the midst of this turmoil and within months of elections in both the United States and Israel, Washington has put forward a new initiative. At the center of this American proposal is the convocation of an international conference. Whatever the structure of the negotiations, we agree with the Administration that Israel should not be asked to negotiate with groups that are unwilling to renounce Israel's destruction, or that justify acts of terrorism against its population. We believe that Palestinians ready to abjure these goals should have an opportunity to participate fully in any peace process. We differ on the question of an international peace conference, but we agree that the ultimate issue is not procedure but substance.

³ Kissinger has serious reservations about an international conference on the Middle East; he believes that it would legitimize a formal Soviet presence in the peace process for the first time and that it would lead to a stalemate. Vance considers that an international conference could at least provide an umbrella for the first direct negotiations between Israel, Jordan and the Palestinians, and is therefore desirable.

[L.C.]

©AP BZQ1 FAS$$$1412 Art 1412 fa-sum 11412 5/12-230Ax Kissinger/Vance 05-20-88 16-38-58 a;

916 FOREIGN AFFAIRS

Whatever the negotiating forum, America needs to develop a substantive position on the principal question in addressing the Palestinian issue. This can be summed up in three principles:

- Israel should not and cannot stay where it is in the occupied territories. The demographic trends there are running against Israel: the militancy of a hostile population will increase; radicalism will grow in the rest of the Arab world.

- At the same time, Israel has a right to secure and recognized frontiers. This elementary right was recognized more than twenty years ago in U.N. Resolution 242. Admittedly, in the missile age security cannot be absolute. We believe that a return to Israel's pre-1967 borders would not be compatible with Israel's survival. We believe, however, that Gaza and parts of the West Bank, including major Arab population centers, should be put under Arab control.

- The Palestinians have legitimate rights which should be recognized, provided they in turn unambiguously recognize the right of Israel to live within secure and recognized boundaries.

We are in no position to suggest a precise line on the West Bank. But we believe either the current American administration or its successor should develop a concept for a solution, in close consultation with all of the interested parties; coordination with Israel is obviously essential. The objective would be to develop a consensus on the basis for negotiations; if a consensus can be obtained then procedure will become secondary; if not, a stalemate is certain. The choice between the two outcomes will depend importantly on the creativity and purposefulness of whatever administration in Washington does the principal negotiation—almost surely the next one.

*The western hemisphere.* It is no longer possible for the United States to pretend that it alone can determine events from within or deter hostile forces from without in the western hemisphere. Since its own independence, the United States has felt a special concern for developments in the New World, although there has often been too much ignorance and arrogance in our policies and attitudes. The past presence of our missionaries, corporations and, on some occasions, U.S. gunboats and troops, in many of these countries are all part of a difficult heritage for Latin and North Americans. Recent troubles in these

BIPARTISAN FOREIGN POLICY 917

relations have made it clear that we must deal with the problems of our region differently than before, and also differently from the way we defend our interests on other continents. While it may be necessary to retrench American commitments in more distant places, it is unthinkable that we should now pay less attention to the western hemisphere.

*Canada.* Canada is a close ally, a friend and an important neighbor. It is often said that Americans pay attention to Canada only when there is a problem between us, e.g., the question of acid rain. Regrettably, the United States does too often take its friendship with Canada for granted, and fails to nurture this crucial relationship. Fortunately, despite this neglect, for more than a century relations between the two countries have been exemplary. Our common border is the most open in the world. The recently concluded U.S.-Canadian trade agreement is a historic achievement and a model way for close trading partners to regularize their commerce. We hope that it will be ratified soon. Some observers believe that this bilateral settlement of our trading problems could serve as a broader international model, especially in the western hemisphere. It is symbolic of our special relationship with Canada that President Reagan recently agreed to transfer to Canada sensitive military technology which heretofore had only been available to Great Britain.

*Mexico.* Mexico may well present the most challenging problems for the United States in the western hemisphere. Most Americans appreciate the importance of Mexico to the United States. However, it is very difficult to know how to deal with the complex relationship.

Traditional foreign policy approaches are of little use: the usual levers of diplomacy, military power and international economic policies do not apply to a close and friendly neighbor, with which we are connected by so many intangible ties. The issues that we face in Mexico are almost all domestic in character: the flow of people, cross-border trade, energy, culture, education, financial and fiscal matters, drugs. Organizationally, it is important to have a central and high-level coordinator for U.S. policy toward Mexico with good access to the president.

The United States has led public and private efforts to provide new financing for Mexico's debt servicing, and the presidents of both countries have given high visibility to the special ties between the two countries. Mexico has liberalized

[L]

©AP BZQ1 FAS$$$1412 Art 1412 fa-sum 11412 5/12-230Ax Kissinger/Vance 05-20-88 16-38-58 al

918 FOREIGN AFFAIRS

significantly its trading practices and joined the General Agree-
ment on Tariffs and Trade (GATT).

It would be unrealistic to assume that there is a simple, global
solution for all of the issues in such a complex problem. We
believe, however, that Mexican-American relations deserve
high priority. Of particular importance is the handling of the
Mexican external debt. How the United States and Mexico
deal with the issue will strongly influence the broader question
of Latin American debt.

The new presidents of the United States and Mexico should
meet early and often. Relations with Mexico always will be
delicate, and we must provide constant attention to maintaining
a high degree of trust in a relationship that is enormously
important and interdependent. The two leaders can try to
anticipate key issues and particular problems on which they
must focus, while encouraging active cabinet-level discussions
of all outstanding differences.

*Central America.* The most immediate political concerns that we have in the western hemisphere relate to ending the wars in Central America while strengthening democratic forces and reducing Soviet and Cuban influence in the area. Central America provides a conspicuous example of an area where U.S. policy has suffered because of a lack of clear-cut national objectives that could be publicly debated and congressionally mandated. Confusion remains over whether our principal aim should have been to overthrow the Nicaraguan government, halt Nicaraguan support for insurrections elsewhere in Central America, eliminate the Soviet-Cuban presence and military assistance in Nicaragua or democratize the Sandinista regime. Now the presidents of five Central American nations have taken on the responsibility for making peace.

Is there anything left for the United States to do to promote
an acceptable peace in the region?

First, it remains very much in the U.S. interest to obtain the
withdrawal of Cuban and Soviet military advisers from Nica-
ragua, significant reductions in the armies and armaments in
the region (especially in Nicaragua), a total ban on Sandinista
help to guerrillas elsewhere, and the internal democratization
of Nicaragua.

Second, the situation in Central America can be one measure
of U.S.-Soviet relations: whether the Soviet Union is willing to
suspend arms shipments into this area of our most traditional
relationships.

©AP BZQ1 FAS$$$1412 Art 1412 fa-sum 11412 5/12-230Ax Kissinger/Vance 05-20-88 16-38-58 ap-

BIPARTISAN FOREIGN POLICY 919

Also outstanding is the issue of the level and scope of our
assistance to the area. Four years ago a bipartisan commission
appointed by the president unanimously recommended sub-
stantial economic assistance to Central America. That recom-
mendation is even more important today and will gain in
relevance if the Arias plan succeeds. Such aid should go pri-
marily to regional development rather than to individual coun-
tries. The task of the United States should be to reinforce
those institutions that give the Central Americans good reason
to live productively and peacefully together.

Finally, the United States should also continue to support
democracy within Nicaragua. Our diplomatic and material aid
to those who work for a pluralistic economy and representative
political process should be done openly.

Preventive diplomacy and preemptive reform can reduce the
risks of extremist political infection and radical contamination.
When confronted with such situations, the United States must
define its interests early on and then develop strategies in
cooperation with regional friends that will promote the likeli-
hood of peaceful change and successor governments compati-
ble with our own.

*Latin American debt.* One clear aim of the United States is to increase the likelihood that stable and democratic governments will survive in the region. To this end we must help them resolve critical problems of debt and development.

Most of the democratic governments that replaced military
regimes in South America in recent years are fragile. Extreme
leftist guerrilla movements, sometimes encouraged by powerful
drug traffickers, pose serious threats to law and order. Violence
and urban terrorism have increased while some in the military
covet a return to power. Moreover, their massive external
debts reduce significantly the capital available for growth and
development.

At present, the principal Latin American debtors—Argentina, Brazil, Chile, Colombia, Mexico, Peru and Venezuela—owe foreign creditors about $350 billion. Interest payments alone on these debts range between 19 percent of export earnings, in the case of Colombia, and 46 percent of export earnings, as with Argentina. These governments cannot extend a major part of their export earnings on servicing their external debts; the key issue is to stimulate economic growth.

Western commercial banks alone cannot resolve debt problems of this magnitude. Their governments must become more

[L]

©AP BZQ1 FAS$$$1412 Art 1412 fa-sum 11412 5/12-230Ax Kissinger/Vance 05-20-88 16-38-58 aps

920 FOREIGN AFFAIRS

fully involved, together with international financial institutions. Some new public and private monies must be provided so that Latin America can begin to grow again—which would also make it possible for the region again to absorb significant quantities of U.S. exports.

At the same time, the Latin Americans should restructure their economies to promote expansion of investments in the private sector from both domestic and foreign sources. Western nations other than the United States should make a major effort to buy more from these developing countries. For example, over the past several years, the United States has been taking over 60 percent of the manufactured exports from the developing world while Japan—with an economy more than half our size—has been taking only ten percent.

We cannot have a single policy for all of the region. We can, however, demonstrate concern and sensitivity for the Latin countries and tailor our strategy to meet individual cases. Many problems of the region can be solved with foresight and resources. If neglected, they will produce dangers to American interests that are much more serious than what has preoccupied us in Central America for the past decade.

VII

As is apparent from the foregoing, our next president will be severely challenged to guide us through a period of international transition and to secure a firm place for the United States in a changing configuration of nations. He must focus American resources and energies on areas where precisely defined U.S. national interests are at stake. He must not be reluctant to admit that there are important issues, even conflicts, in which the United States has no special role to play because our vital interests are not engaged. But he must not shrink from defending our interests.

It is true that this is a more restrictive approach to the defense of American objectives than that in the immediate postwar period. We believe, however, that America's international standing and national security need not be diminished because we adopt more selective and collaborative international strategies based on new realities. Our position can be strengthened by taking into account the growing strength of other regions.

We believe profoundly in the resiliency of the American people. They bring qualities to our foreign and national secu-

[c]

©AP BZQ1 FAS$$$1412

Art 1412 fa-sum 11412 5/12-230Ax Kissinger/Vance 05-20-88 16-38-58 aps5E

BIPARTISAN FOREIGN POLICY 921

rity policies that should reassure our allies and ourselves. Often
in the past we have overcome great international challenges
thanks to our adaptability and resourcefulness. The dynamic
heterogeneity and individualism inherent in our society, which
could cause chaos and confusion, have produced an array of
talents—social, scientific and moral—that remain a formidable
source of national energy. Imaginatively analyzing the new
realities affecting America’s role in the world should provide
the next administration with prescriptions for its foreign poli-
cies. Through such understanding and discipline, our leaders
can guarantee that the future security and well-being of the
American people will be at least as well defended in the future
as they have been in the past.

FOREIGN AFFAIRS

58 EAST 68TH STREET, NEW YORK, N.Y. 10021 | (212) 734-0400

WILLIAM G. HYLAND
EDITOR

A MAY 17 1988

May 16, 1988

Yvette,

I would appreciate it if you could telefax the following
to Henry as soon as possible from me:

To: Henry Kissinger

From: Bill Hyland

All changes now agreed by Vance. Following is slight
rewrite of one sentence:

"At the same time Israel has a right to secure and
recognized frontiers. This elementary right was
recognized more than twenty years ago in U.N.
Resolution 242. Admittedly, in the missile age
security cannot be absolute. Although we do not
believe that a restoration of the 1967 frontiers
would be compatible with Israel's survival, we do
believe that Gaza and parts of the West Bank,
including major Arab population centers, should
be put under Arab control.

The Palestinians [___] have legitimate rights
which should be recognized, provided they in turn
unambiguously recognize the right of Israel to
live within secure and recognized boundaries."

The only change is slight nuance as a result of joining
two separate sentences. Unless we hear otherwise, this
will be final text.

FOREIGN AFFAIRS

58 EAST 68TH STREET, NEW YORK, N.Y. 10021 | (212) 734-0400 | TELEX: 239852 CFR UR

WILLIAM G. HYLAND
EDITOR

PETER GROSE
MANAGING EDITOR

May 13, 1988

Dear Henry,

Attached are the page proofs, *not* proofread by us.
Pending any last-minute changes by you and/or Cy,
this will be the text.

I talked to the office of Jesse Levine, who is traveling in Europe. I asked that he call me but I discussed the article with his assistant and told her of our official publication date, June 9, and informed her that I would deliver per your contract a copy of the final article when it is completed (we probably will get final page proofs around 24/25 May). I asked her to call to reassure you or your office that we had been in touch and there is no problem.

I did *not* get into the question at all of the *Newsweek* version and the *L.A. Times* Syndicate.

So, I believe we and you are all square with all of your obligations. Accordingly, I need for you to sign the attached form and have your office send it back.

I will be in New York on Saturday and Sunday if you want to talk, though I may be doing some errands, but I will leave the machine on, and I may call you just to make sure there are no last-minute hitches.

P.S. Also enclosed is the Afghan article that I promised you last night.

enc.

WGH, PG, LR, PH, SR, LD, MB, DH, GF,
RH, AUTHORS, PT, NEWSWEEK
FOREIGN AFFAIRS

BIPARTISAN FOREIGN POLICY

1st proofs (LC)

ORIGINAL SET

PROOF - READ & RETURN

MAY 13 1988

Henry Kissinger
Cyrus Vance

BIPARTISAN OBJECTIVES FOR
AMERICAN FOREIGN POLICY

We have decided to write this article together because of our deep belief that the security of free peoples and the growth of freedom both demand a restoration of bipartisan consensus in American foreign policy. We disagree on some policy choices. But we are convinced that the American national purpose must at some point be fixed. If it is redefined—or even subject to redefinition—with every change of administration in Washington, the United States risks becoming a factor of inconstancy in the world. The national tendency to oscillate between exaggerated belligerence and unrealistic expectation will be magnified. Other nations—friends or adversaries—unable to gear their policies to American steadiness will go their own way, dooming the United States to growing irrelevance.

We hope the next president will appreciate the value of continuity in American foreign policy. He should know that the country has been well served by maintaining principles which have kept us strong and prosperous for almost half a century under Republican and Democratic presidents alike.

In this year of political transition, and in a foreign policy setting where major roles are changing at home and abroad, we believe it vital to identify several crucial bipartisan objectives for the next administration, whether it be Republican or Democratic. In this year's political campaign, differences of opinion will exist between the candidates about the best ways to achieve these goals, and debate will continue past election day over specific policies and methods of implementation. However, if broad agreement on central foreign policy objectives can be achieved, the 41st president of the United States will be able to start his term with a strong popular mandate for leadership at home and abroad.

Henry Kissinger and Cyrus Vance are former secretaries of state.

©AP BZQ1 FAS$$$1412 Art 1412 fa-sum 11412 5/12-230Ax Kissinger/Vance 05-12-83 12-48-21 aps5B

900 FOREIGN AFFAIRS

II

By the end of this century a number of the pillars on which the global order was rebuilt after World War II will have changed significantly. For the United States, our nuclear monopoly will have disappeared and our relative share of the world economy will be less than half of what it was forty years ago. Other countries, playing a variety of roles, already have had a major impact on U.S. interests: the economies of Japan, Western Europe and the "newly industrializing countries" are obvious examples; several countries have nuclear weapons capability and others are able to acquire it quickly. Old East-West security issues persist, but new issues such as state-sponsored terrorism and international drug trafficking have become urgent. At the same time, long-standing problems cannot be ignored: there will be a continuing need of the poorest countries and peoples for humanitarian assistance.

A growing list of constraints on American actions also must be considered: despite our vast military power, our ability to shape the world unilaterally is increasingly limited. Even with strong domestic support, we can no longer afford financially to do as much internationally by ourselves as was the case in the immediate postwar period. For many of our staunchest friends, the Soviet threat to the free world seems diminished, especially with the accession to power of a reform-minded leadership in the U.S.S.R. This perception tends to reduce Western dependence on America's dominant role. Thus the United States is called upon to exercise new, subtler and more comprehensive forms of leadership, and especially to play a major role in defining the threats to the alliance.

Since 1941 successive generations of Americans have accepted the global responsibilities thrust on the United States. It now appears that a growing number of Americans want the United States to be less active internationally than before. They urge that other nations assume greater risks, responsibilities and financial burdens for the maintenance of world order and international prosperity. We understand the frustration underlying this national mood, and agree that it must be dealt with constructively in the decades ahead. But we are also convinced that it is the duty of our national leadership to prevent international burdens from jeopardizing important American interests and the cause of freedom.

Our nation is on the eve of a new international era. At a

©AP BZQ1 FAS$$$1412 Art 1412 fa-sum 11412 5/12-230Ax Kissinger/Vance 05-12-88 12-48-21 aps5B

BIPARTISAN FOREIGN POLICY 901

time of political transition it is important to have a national
debate on how and where the United States should spend its
diplomatic, military and economic resources in the decades
ahead. These discussions should involve Americans from a
broad range of occupations, because citizens in all walks of life
are vitally concerned not only about their survival, but about
the shape of the world in which they will live.

At the highest level of our political system, the Republican and Democratic presidential candidates should describe, not specific tactical moves, but their visions of America's role in the world. We hope that they will explain which international commitments they would reinforce, reduce or reallocate to others. And we hope that they will recognize that the United States has undertaken certain commitments in pursuit of vital interests which cannot be redefined on the basis of transitory fashions.

There are other constraints that have evolved in the past twenty years: the legislative branch of the government and the media have both become increasingly powerful players in the making and implementation of American foreign policy; their roles are appropriate subjects for public discussion.

The legislative branch has clearly defined constitutional re-
sponsibilities in overseeing and funding U.S. foreign and de-
fense policies. Congress must be well informed about the plans
and actions of the executive branch, and no foreign policy is
sustainable if a majority of the Congress, reflecting public
opinion, is adamantly opposed. At the same time, Congress
should not manage the tactics of American foreign policy nor
should it overburden high administration officials with de-
mands for redundant testimony. Surely there are better ways
for the executive and legislative branches to consult than
having the secretaries of state and defense spend more than a
quarter of their time on repetitive congressional testimony.

A relationship of trust between the Congress and the White
House is essential, even with policy differences. However, such
a relationship does not operate automatically. When there is a
vacuum in executive branch leadership, or when the Congress
overreaches, the result is an attempt to legislate day-to-day
foreign policy, thereby subjecting our national interest to the
vicissitudes of short-term swings in the public mood and shifting
congressional coalitions.

It is equally desirable to have a better appreciation of the
considerable impact of the media on U.S. foreign policy deci-

902 FOREIGN AFFAIRS

sion-making. Some tension will always exist between govern-
ment, which seeks to use the press to make its case, and the
media, which seeks to obtain more information. A more mature
relationship is needed on both sides. Most clashes between the
media and the government occur when journalists confuse
their role with that of governing, or when officials consider
favorable press coverage more important than policy results.
A measure of restraint and understanding by both sides is
essential.

As we define our choices we must consult with our closest
allies and friends about the course of our deliberations, urge
them to do likewise, and then share our findings. It is essential
that we explore with our principal partners the pace and shape
of the changes we envisage. Once common decisions are
reached—as we believe it is possible to do—we should collec-
tively manage change so as to enhance our long-term relations
and our publics' confidence in our determination to remain
close.

Over time we would anticipate that the American role in
some areas of the world may become less conspicuous. For the
foreseeable future, however, the United States must continue
to play a major and often vital role. Far into the future, the
United States will have the world's largest and most innovative
economy, and will remain a nuclear superpower, a cultural and
intellectual leader, a model democracy and a society that pro-
vides exceptionally well for the needs of its citizens. These are
considerable strengths.

A United States that adjusts to new international realities
and develops a broad consensus on its primary interests in the
world will give cause for optimism. Only a combination of
domestic ideological extremism, confusion between past and
present, internal economic failings, xenophobia or loss of con-
fidence can weaken the central role of the United States in
world affairs.

III

For purposes of illustration we shall apply the principles we
have discussed to some of the major foreign policy issues,
beginning with the core issue of relations with the Soviet
Union.

*U.S.-Soviet relations.* The possession of vast nuclear arsenals imposes on the two superpowers a special obligation to maintain world peace. Both have a moral and practical duty to prevent

©AP BZQ1 FAS$$$1412 Art 1412 fa-sum 11412 5/12-230Ax Kissinger/Vance 05-12-88 12-48-21 aps51

BIPARTISAN FOREIGN POLICY 903

a nuclear holocaust. But this common interest occurs in the context of ideological differences and geopolitical rivalry. America also has an obligation to ensure that the willingness to defend freedom and justice is not impaired by negotiations with the Soviet Union that raise unrealistic expectations.

Today the emergence of a rejuvenated Soviet leadership has raised new hopes for Soviet-American relations. We have both met several times with General Secretary Mikhail Gorbachev and have spent considerable time with some of his close advisers. We found Gorbachev highly intelligent and determined to remedy the failures of the Soviet economy with socialist solutions. He is eloquent in arguing that he prefers to live in peace with the West and that he wants to reduce Soviet defense spending so as to transfer resources into the civilian economy. At the same time, we have no doubt that Gorbachev is also firmly committed to defend Soviet international aims.

What then is the practical consequence of these observations? What, for example, does Gorbachev mean when he speaks of a "balance of interests"? And how, precisely, would he define legitimate Soviet aims?

Our Soviet policy should not be determined by partisan politics in the United States, nor by the internal politics of the Kremlin. Our ultimate concerns must be Soviet foreign policy and our concept of U.S. national interests.

No American president can base his policies for dealing with the U.S.S.R. on the presumed intentions of a Soviet general secretary. We cannot predict whether his intentions may radiatively change under domestic political pressure. A successor may change policies, as has happened before. Nor can we pretend to understand the inner workings of the Kremlin well enough to know whether Gorbachev will succeed or survive. Even *glasnost* and *perestroika*, which are intrinsically appealing to the West, should not by themselves fundamentally alter how we conduct our relations with the Soviet Union.

There is a significant struggle going on in the Soviet Union between reformers and conservatives in the party and government. But what divides them is, above all, the method of strengthening the Soviet Union. Of course we welcome evidence of greater internal freedom in the U.S.S.R. and the increased emigration of minorities. Quite naturally we favor the forces of change, but ultimately the West can only marginally affect the outcome of a struggle that derives from the

[L]

904 FOREIGN AFFAIRS

internal failures and contradictions of the Soviet system and
that is over issues not necessarily of direct concern to us.

Up to now the major—almost exclusive—object of East-West negotiations has been arms control. The purpose of these negotiations has been to contribute to the lessening of East-West tensions, to improve political relations and to ease communications between Washington and Moscow.

Each of us has participated at earlier periods in these negotiations. We agree with the motives underlying them. We continue strongly to support the concept of strategic arms control. At the same time, we would warn against putting too much of a burden on arms control and turning it into the sole barometer of the U.S.-Soviet relationship.

The Intermediate-range Nuclear Forces (INF) Treaty will be the first arms agreement ratified by both countries in more than 15 years. Because it covered the simplest and most easily separable elements in the arms control agenda and presented manageable verification problems, the agreement was reached while maintaining the essential elements of Atlantic cooperation.

Future agreements with the Soviet Union, however, will be much more difficult to conclude. The Strategic Defense Initiative has helped soften Soviet negotiating positions, but the place of space defenses in a future arms treaty or in future Western defense planning is far from clear. While still of concern to the Soviets, the value of SDI as a bargaining chip for the United States has declined as domestic opposition and budgetary objections to the project have grown. This is a good example of the need to work out a domestic consensus. Though we differ on deployment, research and development in SDI should be continued and gains that have come out of our SDI programs should be preserved.¹

It is imperative that the next phase of arms control concentrate on conventional forces and weapons in Europe. The place of conventional arms and force reductions in any future arms control agreement will be of overriding concern to the West.

¹ Kissinger believes that defensive forces should be limited primarily in relation to the limits on offensive forces. He believes we must continue to develop SDI actively and ultimately deploy it, because of Soviet research in the field and because of SDI's potential future value to Western defenses. Vance also believes that we should continue research and development, but at a measured pace; he is highly doubtful that it will ever prove to be cost-effective militarily or advantageous politically for the United States to deploy even elements of an SDI system.

AP BZQ1 FAS$$$1412

Art 1412 fa-sum 11412 5/12-230Ax Kissinger/Vance 05-12-88 12-48-21 aps5B

LC

BIPARTISAN FOREIGN POLICY 905

We believe that NATO must examine its force structure and arms control plans in light of potential negotiations. Neither of us advocates further reductions in the "short-short" (battlefield) nuclear weapons in Europe without reductions in Soviet conventional forces and weapons.²

Unfortunately, the West has not yet done adequate homework on the key aspects of conventional arms control. There is no agreement on goals, on accurate data or the means of reliable verification of conventional forces and equipment. Even before a new administration takes office, the American government should concentrate its best intellectual and scientific resources on the issues surrounding the limitation or reduction of conventional forces. It is clear that any reductions will have to be highly asymmetrical in order to create a stable balance. This factor alone means that conventional arms negotiations are certain to become the most difficult arms control problem for the NATO alliance in the 1990s.

We also believe that the time has come to give much greater emphasis to the political dialogue between the United States and the Soviet Union. At this writing the Soviets have agreed to withdraw their forces from Afghanistan. If carried out in a manner that permits the Afghan people to determine their own fate we consider this a significant development. The Soviets now rhetorically embrace "mutual" and "collective" security rather than unilateral advantage. In discussions with Western officials, they emphasize that these military strategies and doctrines are "defensive," and they seem to be more flexible in some discussions on arms control.

Nonetheless, the ultimate test of any government's intentions is not its rhetoric, but the concrete positions it adopts at the negotiating table and the specific actions it takes. Thus some of the issues that require a Soviet response are: international cooperation against state-sponsored terrorism; willingness to accept asymmetrical reductions in Soviet conventional forces

² While placing great importance on conventional arms control negotiations, Vance would not make the signing of an agreement on a 50-percent reduction of strategic nuclear weapons, along the lines now being discussed, or the conclusion of treaties covering nuclear testing and biological or chemical warfare, conditional on the convening of a conventional arms control negotiation, or on its outcome. Kissinger believes further strategic arms control treaties should be negotiated side by side with conventional arms control; he believes that, at a minimum, the United States should have a clear idea of how the Soviets define conventional arms control in Europe, before proceeding with the conclusion of a strategic arms control treaty; moreover, he believes that the agreement for a 50-percent reduction in strategic arms needs to be linked to a joint executive and legislative examination of the impact of the agreement on the structure of American strategic forces.

906 FOREIGN AFFAIRS

so as to eliminate their military advantage in Europe; and steps
to help end regional conflicts.

Our overall conclusion is that there is a strategic opportunity
for a significant improvement in Soviet-American relations.
The issue is how to take advantage of what may be a favorable
correlation of forces. This requires a concrete American and
Western political program.

The West should explore, with an open mind, what steps
can prudently be taken to reconcile vital U.S. and Soviet
interests. In this context, there will be an opportunity for an
unprecedented kind of conversation between the next Ameri-
can president and the Soviet general secretary early next year.
A new chief executive will be in the White House, and Mikhail
Gorbachev will have completed his first four years in office.
He will be preoccupied with drafting his country's 12th five-
year plan, which will guide the Soviet economy during the
early 1990s. Given their internal problems, and in light of the
new balance of international forces, it is likely that the Soviet
leadership may conclude that a serious and continuing dialogue
with the United States is in its interest.

Thus, at the outset of their relationship, the new American
president and the Soviet general secretary should initiate a
wide-ranging discussion of where they want U.S.-Soviet rela-
tions to be at the beginning of the next century and how they
propose to contribute to a climate of international restraint.
The modalities of the contacts will have to be decided by the
new administration, of course. The process could be started by
trusted representatives of the new president and the general
secretary charged with exploring what opportunities and limits
each of their principals foresees in the relationship during the
period they will both be in office. A dialogue could set the
agenda and tone for further, more formal meetings of the
leaders themselves devoted primarily to political issues.

Beyond this initial phase, we would favor regular U.S.-Soviet
summits, so that meetings between the two leaders are not seen
as rewards for good behavior or reasons for concessions or
pretexts for signing agreements.

With the accession to power of Mikhail Gorbachev, interest
has revived in the prospects for Soviet-American economic
relations. There are probably more opportunities for American
commerce with the U.S.S.R., although trade with the West is
not likely to alter significantly the pace and direction of the
Gorbachev reforms. The American business community is al-

[L]

BIPARTISAN FOREIGN POLICY 907

ready exploring what it sees as a potentially growing and more
open Soviet market. We are not worried that expanded eco-
nomic ties with the U.S.S.R. may aid in the creation of a serious
economic threat. There seems to be no prospect that the
volume of Western trade and finance could reach proportions
that would radically improve Soviet economic prospects. The
modernization goals that Gorbachev has set will not be fulfilled
for decades, by which time the Western economies will have
grown by even greater rates.

Nonetheless, the United States should reflect carefully and
act cautiously in shaping its trade policy. First, great care must
be taken with respect to technology transfers that would
strengthen Soviet military capabilities. The Soviets continue to
place the highest priority on acquiring, by whatever means,
commercial and militarily sensitive information from the West.

We also hope that Western executives will understand that
economic reform in the U.S.S.R. does not automatically mean
new business opportunities. Indeed, there will continue to be
legal, moral and political constraints imposed by each side on
economic intercourse. Both authors have had serious doubts
about the Jackson-Vanik and Stevenson amendments, which
made granting most-favored-nation status and financing facili-
ties for the U.S.S.R. dependent on Soviet emigration proce-
dures. Soviet emigration policy seems to be under review, but
we have yet to see whether the changes will be sufficient to
consider a modification of the U.S. position.

*Atlantic relations.* Early in his term, the next president will preside over the 40th anniversary of the founding of the Atlantic alliance. NATO is one of the most successful treaty arrangements in history. It has preserved the peace in Europe for four decades—the longest such period since the European state system came into being. It connects America with countries of similar cultural heritage. It must remain the keystone of U.S. policy.

But conditions have changed vastly since the early days of
NATO. The U.S. atomic monopoly of 1945 has given way to
nuclear parity with the U.S.S.R.; this situation, as well as other
aspects of East-West relations, has aroused doubts in some
quarters about America's continued commitment to the de-
fense of Europe. A second important change since the 1940s
has been Europe's economic recovery and the growing impor-
tance of the European Community as an economic and political
entity; this tempts more intense economic competition with the

908 FOREIGN AFFAIRS

United States and raises some broader issues in European-American relations. On both sides of the Atlantic a new generation has matured which shares neither the sense of danger nor the emotional commitment to cooperation that characterized NATO's early years. Moreover, the era of more active diplomacy with the East that involves both U.S. and allied efforts creates new challenges and risks of competitive, separate approaches to Moscow.

In sum, the state of the Atlantic alliance encourages a new impetus in strategy, diplomacy and internal relations.

It is time for NATO to redefine its goals and rededicate itself to new missions. Immediately following the U.S. elections, the Atlantic partners should begin a broad reassessment of their mission and plans for the next decade—perhaps by appointing a distinguished group of private citizens to submit a report; such a reassessment should be completed in no more than 12 months. A revised alliance structure and force posture should emerge from this review, as well as clear parameters for conducting the next round of arms control negotiations with the U.S.S.R.

The United States must make unequivocally clear that NATO cannot be defended without sufficient quantities and types of both nuclear and conventional weapons, so as to deter a nuclear adversary that continues to enjoy a conventional superiority in some significant categories and to possess nuclear weapons stationed inside its territory capable of reaching all of Europe. It is no service to the alliance to engage in speculation about extreme proposals or fanciful notions—such as the complete denuclearization of Europe, the total elimination of all ballistic missiles, pledges against the first use of nuclear weapons or exaggerated claims that SDI will provide an impenetrable shield. Such utopian visions undermine serious discussions of a common Atlantic strategy and stigmatize the very weapons on which a credible deterrence and effective defense must be based for the foreseeable future.

Europe will inevitably play a greater part and have a larger voice in the defense of its own territory. This reflects the reality of Europe's strength. Accordingly, the relative role of the United States is likely to decline, although not its commitment to defend Europe by all necessary means. Growing intra-European defense cooperation, possibly in the form of a European defense entity, should be endorsed. With the European Com-

BIPARTISAN FOREIGN POLICY 909

As the European component in Atlantic defenses continues to develop, the United States will face an alliance whose partners will feel a greater sense of identity. The members of the alliance have often had contrasting views. Differences of views within NATO may not be limited to alliance strategies toward the Warsaw Pact countries. Distinctive West European approaches to crises in the Third World could become more common. We believe, nevertheless, that NATO leaders must understand that if divisions within the Atlantic community over issues outside NATO are permitted to fester, they will threaten the capacity of the alliance for cooperation and mutual defense within the NATO area, and hence the vital interests of each member.

We should not be apologetic about discussing openly the need to reform the Atlantic alliance. On the contrary, we should be proud that Europe has gained in strength and that this free association of democratic nations has served our common objectives so well. The alliance can manage change constructively by anticipating and adjusting in ways that are deliberate, rational and supported by public opinion. If NATO waits for a crisis—such as differences over how to respond to major Soviet diplomatic or military moves, or a severe economic recession in the West—the Atlantic framework will change for the worse under the pressure of unfavorable external events.

The strengths of the Western alliance derive from its common democratic values and its ability to respond, often in concert, when circumstances change or public attitudes evolve. The West is fully capable of reorganizing itself and thus emerging better prepared to continue to defend its freedoms and prosperity.

[c]

910 FOREIGN AFFAIRS

IV

[L]

BIPARTISAN FOREIGN POLICY 911

To sum up: America's ability to influence events abroad and ensure prosperity at home will be determined in large part by how rapidly we get our economic house in order. Fortunately we can still make these decisions ourselves. We must face the fact that our economy and consumption have become so overextended in recent years that the remedies will involve sacrifice and slower growth in our standard of living. If, however, we ignore these economic realities, American influence abroad will decline significantly and our children will pay the price of our inattention and excesses in weakened security and declining competitiveness.

[L]

912 FOREIGN AFFAIRS

V

[L]

BIPARTISAN FOREIGN POLICY 913

We warn against any attempt to deal with the deficit by pressing Japan to step up its defense efforts. Of course, Japan has the right to determine its appropriate security requirements. The United States can have no interest in urging Japan to go beyond that. Such a course would generate the gravest doubts all over Asia. It might deflect Japan from a greater economic contribution to international stability, through a cooperative effort by all developed countries to infuse capital into the developing world.

We consider it essential that the dialogue with Japan be lifted to a more comprehensive level. Japan will be one of the major powers of the 21st century. We are becoming more and more interdependent. The issue is how to deal with the consequences of interdependency, not how to reverse or change the relationship.

The American-Japanese dialogue must not be confined to mutual harassment and recrimination on an industry-by-industry basis. The two countries should seek to establish overall goals and work toward them. One step would be to establish an overall trade balance the United States would find tolerable; within that balance, Japan would have the choice of either reducing its exports or increasing its imports, thus removing the need for sector-by-sector industrial negotiations.

Even more important is a broad strategy for contributing to the growth of developing areas. Japanese capital, funneled through international institutions, could play a seminal role in this regard. This is also important, especially in Latin America, as a means of alleviating the debt problem. A Japanese commitment to recycle a percentage of its trade surplus toward aid and assistance in the underdeveloped world would be a major achievement. For only in adopting a common course can we sustain the global economic growth without which economic competition between Japan and the United States could degenerate into a disastrous political conflict.

China. No relationship has changed more dramatically over the past four administrations, of both parties, than America's relations with the People's Republic of China. Sino-U.S. friendship is one of few uncontested achievements of American policy in the past two decades of bitter debates. We are concerned that it not be neglected as we become more involved in a new

(C)

914 FOREIGN AFFAIRS

The broad improvement in Sino-American relations remains grounded in common strategic concerns, supported by a political dialogue. A new element, however, is China's economic modernization program, inspired by the leadership of Deng Xiaoping. China's economic reforms offer an avenue for developing stronger and mutually advantageous ties. Given our technological prowess, the United States can play a special role in the development of the Chinese economy without generating fears of U.S. domination. We believe that we should play such a role, for a strong and independent China is in the American interest in sustaining an Asian balance of power and in collaborating on broader global issues.

VI

AP BZQ1 FAS$$$1412

LC

BIPARTISAN FOREIGN POLICY 915

Unfortunately, the peace process has been stalled for the past decade and the forces of conciliation and compromise in the area have been weakened. The Israeli invasion of Lebanon in 1982 contributed to the rise of religious extremism, violence and foreign influence in that beleaguered nation. The tolerance of terrorism and the political intransigence of some radical Arab states has inflamed the atmosphere. The economies of the non-oil-producing Arab states—which are among the most moderate—are suffering. A deep political division in Israel over the peace process paralyzes diplomacy. The Palestinians are also divided and have not yet brought themselves to recognize Israel. Moreover, the long-festering, and deeply felt, Arab protests against the Israeli occupation of the West Bank and Gaza fuel both Arab demands and Israeli reprisals, particularly as a new generation appears on the scene.

In the midst of this turmoil and within months of elections in both the United States and Israel, Washington has put forward a new initiative. At the center of this American proposal is the convocation of an international conference. Whatever the structure of the negotiations, we agree with the administration that Israel should not be asked to negotiate with groups that are unwilling to renounce Israel's destruction, or that justify acts of terrorism against its population. We believe that Palestinians ready to abjure these goals should have an opportunity to participate fully in any peace process. We differ as to the desirability of a peace conference, but we agree that the ultimate issue is not procedure but substance.³

916 FOREIGN AFFAIRS

a substantive position on the principal question in addressing
the Palestinian issue. This can be summed up in three princi-
ples:

—Israel should not and cannot stay where it is in the occu-
pied territories. The demographic trends there are run-
ning against Israel; the militancy of a hostile population
will increase; radicalism will grow in the rest of the Arab
world. It is therefore required by justice as well as com-
pelled by Israel's self-interest that it relinquish its admin-
istration of the large Arab population that it controls in
the name of its security.

—At the same time, Israel has a right to secure and recog-
nized frontiers. This elementary right was recognized
more than twenty years ago in U.N. Resolution 242.
Admittedly, in the missile age security cannot be absolute.
We do not believe that a restoration of the 1967 frontiers
would be compatible with Israel's survival, but at the same
time we believe that Israel should be prepared to accept
Arab control of Gaza and parts of the West Bank, includ-
ing major Arab population centers.

—The Palestinians also have legitimate rights which should
be recognized, provided they in turn recognize the right
of Israel to live within secure and recognized boundaries.

We are in no position to suggest a precise line on the West
Bank. But we believe either the current American administra-
tion or its successor should develop a concept for a solution, in
close consultation with all of the interested parties; coordina-
tion with Israel is obviously essential. The objective would be
to develop a consensus on the basis for negotiations; if a
consensus can be obtained then procedure will become second-
ary; if not, a stalemate is certain. The choice between the two
outcomes will depend importantly on the creativity and pur-
posefulness of whatever administration in Washington does the
principal negotiation—almost surely the next one.

BIPARTISAN FOREIGN POLICY 917

for Latin and North Americans. Recent troubles in these relations have made it clear that we must deal with the problems of our region differently than before, and also differently from the way we defend our interests on other continents. While it may be necessary to retrench American commitments in more distant places, it is unthinkable that we should now pay less attention to the western hemisphere.

The United States has led public and private efforts to provide new financing for Mexico's debt servicing and the presidents of both countries have given high visibility to the special ties between the two countries. Mexico has liberalized

[L.C.]

918 FOREIGN AFFAIRS

[L.C.]

BIPARTISAN FOREIGN POLICY 919

Preventive diplomacy and preemptive reform can reduce the risks of extremist political infection and radical contamination. When confronted with such situations, the United States must define its interests early on and then develop strategies in cooperation with regional friends that will promote the likelihood of peaceful change and successor governments compatible with our own.

(L)

## 920 FOREIGN AFFAIRS

fully involved, together with international institutions. Some new public and private monies must be provided so that Latin America can begin to grow again—which would also make it possible for the region again to absorb significant quantities of U.S. exports.

### VII

BIPARTISAN FOREIGN POLICY 921

MAY. 11 '88 10:14 KISSINGER ASSOCIATES N.Y.

P.002

Galley [f]. WGH edit PH copyedit authors fixes 5/10 #3110f

Henry A. Kissinger

Cyrus R. Vance

BIPARTISAN FOREIGN POLICY

MAY. 11 '88 10:15 KISSINGER ASSOCIATES N.Y.

P.003

2

_ii_

By the end of this century a number of the pillars on which the global order was rebuilt after World War II will have gone or changed significantly. For the United States, our nuclear monopoly will have disappeared and our relative share of the world economy will be less than half of what it was forty years ago. Other countries, playing a variety of roles,

MAY.11 '88 10:16 KISSINGER ASSOCIATES N.Y.

P.004

3

A growing list of constraints on American actions also
must be considered: despite our vast military power, our
ability to shape the world unilaterally is increasingly
limited. Even with strong domestic support, an American
president can no longer afford financially to do as much
internationally by ourselves as was the case in the immediate
postwar period. For many of our staunchest friends, the Soviet
threat to the free world seems diminished, especially with the
accession to power of a reform-minded leadership in the
U.S.S.R. This perception tends to reduce Western dependence on
America's dominant role. Thus the United States is called upon
to exercise new, subtler and more comprehensive forms of
leadership, including playing a major role in defining the
threats to the alliance.

MAY. 11 '88 10:17 KISSINGER ASSOCIATES N.Y.

P.005

the United States to be less active internationally than
before. They urge that other nations assume greater risks,
responsibilities and financial burdens for the maintenance of
world order and international prosperity. We understand the
frustrations underlying this national mood, and agree that it
must be dealt with constructively in the decades ahead. But we
are also convinced that a desire to be relieved of some of our
international burdens must not jeopardize important American
interests and the cause of freedom.

Our nation is on the eve of a new international era. At
a time of political transition it is important to have a
national debate on how and where the United States should spend
its diplomatic, military and economic resources in the decades
ahead. These discussions should involve Americans from a broad
range of occupations, because citizens in all walks of life are
vitally concerned not only about their survival, but about the
shape of the world in which they will live.

At the highest level of our political system, the
Republican and Democratic candidates should describe, not
specific tactical moves, but their visions of America's role in
the world. We hope that they will explain which international
commitments they would reinforce, reduce or reallocate to
others. And we hope that they will recognize that we have
undertaken certain commitments in pursuit of vital
interests---which cannot be redefined on the basis of
transitory fashions.

MAY.11 '88 10:18 KISSINGER ASSOCIATES N.Y.

P.006

past twenty years: the legislative branch of the government and
the press have both become increasingly powerful players in the
making and implementation of American foreign policy; their
roles are appropriate subjects for public discussion.

The legislative branch has clearly defined
constitutional responsibilities in overseeing and funding U.S.
foreign and defense policies. Congress must be well informed
about the plans and actions of the executive branch and no
foreign policy is sustainable if a majority of the Congress,
reflecting public opinion, is adamantly opposed. At the same
time, Congress should not manage the tactics of American
foreign policy nor should it overburden high administration
officials with demands for redundant testimony. Surely there
are better ways for the executive and legislative branches to
consult than having the secretaries of state and defense spend
more than a quarter of their time on repetitive congressional
testimony.

A relationship of trust between the Congress and the
White House is essential, even with policy differences.
However, such a relationship does not operate automatically.
When there is a vacuum in executive branch leadership, or when
the Congress overreaches, the result is an attempt to legislate
day-to-day foreign policy, thereby subjecting our national
interest to the vicissitudes of swings in public mood and
shifting congressional coalitions.

MAY. 11 '88 10:19 KISSINGER ASSOCIATES N.Y.

P.007

decision-making. Some tension will always exist between government which seeks to use the press to make its case and the media which seeks to obtain more information. A more mature relationship is needed on both sides. Most clashes between the media and the government occur when journalists confuse their role with that of governing, or when officials consider favorable press coverage more important than policy results. A measure of restraint and understanding by both sides is essential.

As we define our choices we must consult with our closest allies and friends about the course of our deliberations, urge them to do likewise and then share our findings. It is essential that we explore with our principal partners the pace and shape of the changes we envisage. Once common decisions are reached---as we believe it is possible to do---we should collectively manage change so as not to disrupt our relations or undermine our publics' confidence in our determination to remain close.

Over time we would anticipate that the American role in some areas of the world may become less conspicuous. For the foreseeable future, however, the United States must continue to play a major and often vital role. Far into the future, the United States will have the world's largest and most innovative economy, remain a nuclear superpower, a cultural and intellectual leader, a model democracy and a society that provides exceptionally well for the needs of its citizens. These are considerable strengths.

MAY.11 '88 10:20 KISSINGER ASSOCIATES N.Y.

P.001

7

A United States that adjusts to new international realities and develops a broad consensus on its primary interests in the world, will give cause for optimism. Only a combination of domestic ideological extremism, confusion between past and present, internal economic failings, xenophobia or loss of confidence can weaken our central role in world affairs.

_iii_

*U.S.-Soviet Relations.* The possession of vast nuclear arsenals imposes on the two superpowers a special obligation to maintain world peace. Both have a moreal and practical duty to prevent a nuclear holocaust. But this common interest occurs in the context of ideological differences and geopolitical rivalry. America also has an obligation to ensure that the willingness to defend freedom and justice is not impaired by negotiations that raise unrealistic expectations.

Today the emergence of a rejuvenated Soviet leadership has raised new hopes for Soviet-American relations. We have met several times with General Secretary Mikhail Gorbachev; we have spent considerable time with some of his close advisers. We found Gorbachev highly intelligent and determined to remedy

MAY. 11 '88 10:22 KISSINGER ASSOCIATES N.Y.

8

P.001

the failures of the Soviet economy with socialist remedies. He is eloquent in arguing that he prefers to live in peace with the West and that he wants to reduce Soviet defense spending so as to transfer resources into the civilian economy. At the same time, we have no doubt that Gorbachev is also firmly committed to defend Soviet international aims.

No American president can base his policies for dealing with the U.S.S.R. on the presumed intentions of a Soviet general secretary. We cannot predict whether his intentions may radically change under domestic political pressure. A successor may change policies, as has happened before. Nor can we pretend to understand the inner workings of the Kremlin well enough to know whether Gorbachev will succeed or survive. Even *glasnost* and *perestroika*, which are intrinsically appealing to the West, should not by themselves fundamentally alter how we conduct our relations with the Soviet Union.

MAY.11 '88 10:23 KISSINGER ASSOCIATES N.Y.

P.002

strengthening the Soviet Union. Of course we welcome evidence
of greater internal freedom in the U.S.S.R. and the increased
emigration of minorities. Quite naturally we favor the forces
of change, but ultimately the West can only marginally affect
the outcome of a struggle that derives from the internal
failures and contradictions of the Soviet system.

Up to now the major---almost exclusive---object of
East-West negotiations has been arms control negotiations. The
purpose of these negotiations has been to contribute to the
lessening of East-West tensions, to improve political relations
and to ease communications between Washington and Moscow.

Each of us has participated at earlier periods in these
negotiations. We agree with the motives underlying them. We
continue strongly to support the concept of strategic arms
control. At the same time we would warn against putting too
much of a burden on arms control and turning it into the sole
barometer of the U.S.-Soviet relationship.

The Intermediate-range Nuclear Forces (_inf_) Treaty
will be the first arms agreement ratified by both countries in
more than 15 years. Because it covered the simplest and most
easily separable elements in the arms control agenda and
presented manageable verification problems, the agreement was
reached while maintaining the essential elements of Atlantic
cooperation.

Future agreements with the Soviet Union will be much
more difficult to conclude. The Strategic Defense Initiative
has helped soften Soviet negotiating positions, but the place

MAY.11 '88 10:24 KISSINGER ASSOCIATES N.Y.

10

P.003

of space defenses in a future arms treaty or in future Western defense planning is far from clear. While still of concern to the Soviets, the value of _sdi_ as a bargaining chip, for the United States has declined as domestic opposition and budgetary objections to the project have grown. This is a good example of the need to work out a consensus. We both agree that research in _sdi_ should be continued and gains that have come out of our _sdi_ programs should be preserved.

It is imperative that the next phase of arms control concentrate on conventional forces and weapons in Europe. The place of conventional arms and force reductions in any future arms control agreement will be of overriding concern to the West. We believe that _nato_ must examine its force structure and arms control plans in light of potential negotiations. Neither of us advocates further reductions in short-short ("battlefield") nuclear weapons in Europe without reductions in Soviet conventional weapons and forces.²

Unfortunately, the West has not yet done adequate homework on the key aspects of conventional arms control. There is no agreement on goals, on accurate data or the means of reliable verification of conventional forces and equipment. Even before a new administration takes office, the American government should concentrate its best intellectual and scientific resources on the issues surrounding the limitation or reduction of conventional forces; it is clear that any reductions will have to be highly asymmetrical in order to create a stable balance. This factor alone means that

MAY. 11 '88 10:25 KISSINGER ASSOCIATES N.Y.

11

P.004

We also believe that the time has come to give much greater emphasis to the political dialogue between the United States and the Soviet Union. At this writing the Soviets have agreed to withdraw their forces from Afghanistan. If carried out in a manner that permits the Afghan people to determine their own fate we consider this a significant development. The Soviets now rhetorically embrace "mutual" and "collective" security rather than unilateral advantage. They emphasize "defensive" military strategies and doctrines in discussions with Western officials, and they seem to be more flexible in some discussions on arms control.

Nonetheless, the ultimate test of any government's intentions is not its rhetoric but the concrete positions it adopts at the negotiating table and the specific actions it takes. Thus some of the issues that require a Soviet response are: international cooperation against state-sponsored terrorism; willingness to accept asymmetrical reductions in Soviet conventional forces so as to eliminate their military advantage in Europe; steps to help end regional conflicts.

MAY. 11 '88 10:26 KISSINGER ASSOCIATES N.Y.

P.005

12

The West should explore, with an open mind, what steps can prudently be taken to reconcile vital U.S. and Soviet interests. In this context, there will be an opportunity for an unprecedented kind of conversation between the next American president and the Soviet general secretary early next year. A new chief executive will be in the White House, and Mikhail Gorbachev will have completed his first four years in office. He will be preoccupied with drafting his country's 12th five-year plan, which will guide the Soviet economy during the early 1990s. Given their internal problems, and in light of the new balance of international forces, it is likely that the Soviet leadership may conclude that a serious and continuing dialogue with the United States is in its interest.

Thus, at the outset of their relationship, the new American president and the Soviet general secretary should initiate a wide-ranging discussion of where they want U.S.-Soviet relations to be at the beginning of the next century and how they propose to contribute to a climate of international restraint. The modalities of the contacts will have to be decided by the new administration, of course. The process could be started by trusted representatives of the new president and the general secretary charged with exploring what opportunities and limits each of their principals foresees in the relationship during the period they will both be in office. A dialogue could set the agenda and tone for further, more formal meetings of the leaders themselves devoted primarily to political issues.

MAY. 11 '88 10:27 KISSINGER ASSOCIATES N.Y.

P.006

13

With the accession to power of Gorbachev, interest has revived in the prospects for Soviet-American economic relations. There are probably more opportunities for American commerce with the U.S.S.R., although trade with the West is not likely to alter significantly the pace and direction of the Gorbachev reforms. Our businessmen are already exploring what they see as a potentially growing and more open Soviet market. We are not worried that expanded economic ties with the U.S.S.R. may aid in the creation of a serious economic threat. There seems to us no prospect that the volume of Western trade and finance could reach proportions that would radically improve Soviet economic prospects. The modernization goals that Gorbachev has set will not be fulfilled for decades, by which time the Western economics will have grown by even greater rates.

Nonetheless, we should reflect carefully and act cautiously as we shape our trade policy. First, great care must be taken with respect to technology transfers that would strengthen Soviet military capabilities. The Soviets continue to place the highest priority on acquiring, by whatever means, commercial and militarily sensitive information from the West.

MAY.11 '88 10:28 KISSINGER ASSOCIATES N.Y.

P.007

14

mean new business opportunities. Indeed, there will continue
to be legal, moral and political constraints imposed by each
side on economic intercourse. Both authors have had, serious
doubts about the Jackson-Vanik and Stevenson amendments, which
made granting most-favored nation status and financing
facilities for the U.S.S.R. dependent on Soviet emigration
procedures. Soviet emigration policy seems to be under review,
but we have yet to see what the future will bring, and whether
the changes will be sufficient to consider a modification of
the U.S. position.

Atlantic Relations. Early in his term, the next
president will preside over the 40th anniversary of the
founding of the Atlantic alliance. _nato_ is one of the most
successful treaty arrangements in history. It has preserved
the peace in Europe for four decades---the longest such period
since the European state system came into being. It connects
America with countries of similar cultural heritage. It must
remain the keystone of U.S. policy.

But conditions have changed vastly since the early days
of _nato_. The U.S. atomic monopoly of 1945 has given way to
nuclear parity with the U.S.S.R.; this situation, as well as
other aspects of East-West relations, has aroused doubts in
some quarters about America's continued commitment to the
defense of Europe. A second important change since the 1940s
has been Europe's economic recovery and the growing importance
of the European Community as an economic and political entity;
this tempts more intense economic competition with the United

MAY. 11 '88 10:29 KISSINGER ASSOCIATES N.Y.

P.008

15

States and raises some broader issues in European-American relations. On both sides of the Atlantic a new generation has matured which shares neither the sense of danger nor, the emotional commitment to cooperation that characterized _nato_'s early years. Moreover, the era of more active diplomacy with the East that involves both U.S. and allied efforts creates new challenges and risks of competitive, separate approaches to Moscow.

It is time for _nato_ to redefine its goals and rededicate itself to new missions. Immediately following the U.S. elections, the Atlantic partners should begin a broad reassessment of their mission and plans for the next decade---perhaps by appointing a distinguished group of private citizens to submit a report; such a reassessment should be completed in no more than 12 months. A revised alliance structure and force posture should emerge from this review, as well as clear parameters for conducting the next round of arms control negotiations with the U.S.S.R.

The United States must make unequivocally clear that _nato_ cannot be defended without sufficient quantities and types of both nuclear and conventional weapons, so as to deter a nuclear adversary that continues to enjoy a conventional superiority in some significant categories and to possess nuclear weapons, stationed inside its territory capable of reaching all of Europe. It is no service to the alliance to

MAY.11 '88 10:30 KISSINGER ASSOCIATES N.Y.

P.009

16

engage in speculation about extreme proposals or fanciful
notions---such as the complete denuclearization of Europe, the
total elimination of all ballistic missiles, pledges, against
the first use of nuclear weapons or exaggerated claims that
_sdi_ will provide an impenetrable shield. Such utopian
visions ~~undermine~~ serious discussions of a common Atlantic
strategy and stigmatize the very weapons on which a credible
deterrence and effective defense must be based for the
foreseeable future.

Europe will inevitably play a greater part and have a
larger voice in the defense of its own territory. This
reflects the reality of Europe's strength. Accordingly, the
relative role of the United States is likely to decline,
although not its commitment to defend Europe by all necessary
means. Growing intra-European defense cooperation, possibly in
the form of a European defense entity, should be endorsed.
With the European Community moving toward virtual economic
integration by 1992, it is especially important that a revised
structure for the defense of Western Europe also be in place by
then.

As the European component in Atlantic defenses continues
to develop, the United States will face an alliance whose
partners will feel a greater sense of identity. The members of
the alliance have often had contrasting views. Differences of
views within _nato_ may not be limited to alliance strategies
toward the Warsaw Pact countries. Distinctive West European
approaches to crises in the Third World could become more

MAY. 11 '88 10:39 KISSINGER ASSOCIATES N.Y.

P.001

17

common. We believe, nevertheless, that _nato_ leaders must understand that if divisions within the Atlantic community outside the _nato_ area are permitted to fester, they will threaten the capacity for cooperation and for mutual defense within the _nato_ area, and hence the vital interests of each member.

We should not be apologetic about discussing openly the need to reform the Atlantic alliance. On the contrary; we should be proud that Europe has gained in strength and that this free association of democratic nations has served our common objectives so well. The alliance can manage change constructively by anticipating and adjusting in ways that are deliberate, rational and supported by public opinion. If _nato_ waits for a crisis---such as differences over how to respond to major Soviet diplomatic or military moves or a severe economic recession in the West---the Atlantic framework will change for the worse under the pressure of unfavorable external events.

There is no significant political force in the West opposed to the existence of _nato_. Political parties may differ on how, when or how much, not on whether to remain strong and vigilant. Politicians may disagree in their assessments of Mikhail Gorbachev, but the Atlantic alliance cannot base its policies on his fate. Finally, recent events in Poland serve to remind us that a stable relationship between Eastern and Western Europe remains on the agenda.

The strengths of the Western alliance derive from our

MAY. 11 '88 10:40 KISSINGER ASSOCIATES N.Y.

18

P.002

common democratic values and our abilities to respond, often in concert, when circumstances change or public attitudes evolve. The West is fully capable of reorganizing itself and thus emerging better prepared to continue to defend its freedoms and prosperity.

_iv_

*The World Economy.* America's role in the world has become directly dependent on the strength and performance of the U.S. economy. Foreign policy and economic policy have become increasingly interdependent.

When we served as secretaries of state, only a relatively small portion of our time was spent on international economic issues. Our successors do not have this luxury. Economic strength is today even more central to the way we are perceived by our friends and potential adversaries. U.S. political leadership in the world cannot be sustained if confidence in the American economy continues to be undermined by substantial trade and budget deficits.

MAY.11 '88 10:41 KISSINGER ASSOCIATES N.Y.

19

P.003

It is increasingly obvious that our military prowess and even our nuclear capabilities do not by themselves contribute to the struggle for international markets; in this realm competitiveness, education, judicious government intervention, as well as price, wage and currency levels, determine success. The impact of the international economy on the daily lives of all Americans has drawn many more citizens, special interests, public and private institutions, businesses as well as elected representatives into seeking to influence U.S. foreign policy. The persistence of the American budget deficit has become a source of international as well as domestic concern. Great emotion is now attached to discussions of international trade and financial questions in our political debates---especially how we can restore our competitive position. Moreover, our citizens worry that the American standard of living is directly affected by economic decisions taken in foreign capitals that are less politically and militarily powerful than our own. This is not an argument against maintaining adequate defenses: it is to stress that this objective must go hand in hand with reducing our budgetary and trade deficits.

The primary responsibility of every president is to defend our national security. Given the range of American commitments and responsibilities, and given a continuing challenge to those interests, defense spending must remain a major budgetary outlay for the indefinite future. But the weaknesses of the American economy threaten to limit the resources available for maintaining our defense, foreign

MAY. 11 '88 10:42 KISSINGER ASSOCIATES N.Y.

20

P.004

affairs and assistance budgets at adequate levels. Of course, changes in military posture and strategy should be made if assessments of the threat change, negotiations succeed or technological breakthroughs occur. However, too many major modifications of the American force structure now primarily occur not for these reasons but as a result of budgetary pressures. Such reductions will not produce an abrupt deterioration in our strategic position in the long run they could weaken us. The budget contraction is already beginning to complicate vital bilateral political relations and call into question whether the United States will be able to maintain some of its foreign military commitments, including those installations which give U.S. forces the ability to defend our interests, and those of our friends, throughout the world. Dramatic cuts in funds available to assist friends in the developing world are provoking serious political and humanitarian aftershocks in many of the poorer countries as well.

These reductions, including those in the civilian foreign affairs budget, also weaken the morale and performance of those Americans whose task it is to serve our country overseas. In the State Department, posts and positions are being eliminated not because they are redundant but because we cannot afford them. It is absurd that when the national interest dictates the need for emergency assistance of $200 million for the Philippines, we are hard pressed to find the money somewhere in our $4.5-trillion economy.

MAY.11 '88 10:43 KISSINGER ASSOCIATES N.Y.

P.005

21

-v-

Japan. The stunning economic success and political stability that Japan has achieved have placed it in a privileged but also precarious position. Tokyo is experiencing what can be fairly described as the "problems of success." Its major trading partners want Japan to modify its practices of emphasizing its national efforts above all other priorities. This approach may well have been necessary for Japan during the period of postwar reconstruction, but now it is inappropriate for an economic superpower with global reach and impact. Many Japanese would prefer to leave their international economic and security practices intact; some political and business leaders in Tokyo, however, understand the need for changes.

MAY.11 '88 10:44 KISSINGER ASSOCIATES N.Y.

22

P.006

country proffering advice on how Japan should change. Some regard Japan's $60-billion trade surplus with the United States as the most urgent problem, and they insist that Japan modify its trading rules to reduce that imbalance substantially. Some believe that Japan should concentrate on providing massive economic and financial assistance to the developing world out of its substantial foreign exchange surpluses. Still others are convinced that Japan, which is fast becoming the most proficient non-nuclear military power in the world, should relieve the United States of some of its Asian defense burdens and increase Japanese defense spending substantially above the present level of one percent of gnp.

There can be no debate over the importance of Japanese-American ties. They are based on strong common interests---strategic and political, as well as economic. Preserving this relationship is vital to both countries. What is at issue is how best to proceed, not the value of the relationship itself. The United States needs a national strategy for dealing with our Japanese allies before we can ask our friends in Tokyo to work with us on strengthening our partnership.

We should start by recognizing that a root cause of the trade imbalance is the current superior productivity and long-range planning of Japanese industry. The so-called Japanese problem is partly a result of superior Japanese competitiveness. The falling dollar has not yet curbed the American taste for Japanese imports, because they are presumed

MAY. 11 '88 10:45 KISSINGER ASSOCIATES N.Y.

P.007

23

to be of superior quality. In the end, market forces more than governmental intervention will affect the trade deficit. At the same time, Japan needs to accelerate its efforts to stimulate domestic demand and to eliminate unfair discrimination against foreign imports.

We warn against any attempt to deal with the deficit by pressing Japan to step up its defense efforts. Of course, Japan has the right to determine its appropriate security requirements. But the United States can have no interest in urging Japan to go beyond that. Such a course would generate the gravest doubts all over Asia. It might deflect Japan from a greater economic contribution to international stability, through a cooperative effort by all developed countries to infuse capital into the developing world.

MAY.11 '88 10:46 KISSINGER ASSOCIATES N.Y.

P.008

24

Even more important is a broad strategy for contributing to the growth of developing areas; Japanese capital, funneled through international institutions, could play a seminal role in this regard. This is also important, especially in Latin America, as a means of alleviating the debt problem. A Japanese commitment to recycle a percentage of its trade surplus toward aid and assistance in the underdeveloped world would be a major achievement. For only in adopting a common course can we sustain the global economic growth without which economic competition between Japan and the United States could degenerate into a disastrous political conflict.

China. No relationship has changed more dramatically over the past four administrations of both parties than America's relations with the People's Republic of China. Sino-U.S. friendship is one of few uncontested achievements of American policy in the past two decades of bitter debates. We are concerned that it not be neglected as we become more involved in a new phase of East-West negotiations. There is a strong bipartisan consensus in favor of developing the relationship further.

The broad improvement in Sino-American relations remains grounded in common strategic concerns, supported by a political dialogue. A new element, however, is China's economic modernization program, inspired by the leadership of Deng Xiaoping. China's economic reforms offer an avenue for developing stronger and mutually advantageous ties. Given our

MAY.11 '88 10:47 KISSINGER ASSOCIATES N.Y.

P.009

We should take the long view, as the Chinese always do.
China's position is changing. Its relations with its northern
neighbor in particular, may be improving; this should not be
disconcerting for us. We are confident that the Chinese
leaders, now and in the future, will have a keen appreciation
for China's geopolitical interests, which we believe will

MAY.11 '88 10:48 KISSINGER ASSOCIATES N.Y.

P.010

26

continue to coincide with our own.

_vi_

The Arab-Israeli Conflict. For the past forty years
the United States has been the only major country able to
engage all of the belligerents in peaceful efforts to solve the
Arab-Israeli disputes. No progress toward peace has ever been
achieved between warring Israelis, Egyptians, Jordanians,
Syrians, Palestinians and now Lebanese without the personal
involvement of an American president and secretary of state,
not only in the procedure but also in the substance of the
issues. American influence has led to important diplomatic
achievements by the administrations we served. Separating the
adversaries geographically, negotiating an effective cease-fire
between the major armies and then brokering the peace treaty
and diplomatic recognition between Israel and Egypt were
important steps in the direction of a lasting solution.

MAY.11 '88 10:49 KISSINGER ASSOCIATES N.Y.

P.011

27

of the non-oil-producing Arab states---which are among the most
moderate---are suffering. A deep political division in Israel
over the peace process paralyzes diplomacy. The Palestinians
*AND HAVE NOT YET BROUGHT THEMSELVES TO RECOGNIZE ISRAEL,*
are also divided. Moreover, the long-festering, and deeply
felt, Arab protests against the Israeli occupation of the West
Bank and Gaza fuel both Arab demands and Israeli reprisals,
particularly as a new generation appears on the scene.

---Israel should not and cannot stay where it is in the
occupied territories. The demographic trends there are running
against Israel; the militancy of a hostile population will

MAY.11 '88 10:50 KISSINGER ASSOCIATES N.Y.

28

P.012

increasing radicalism will grow in the rest of the Arab world. It is therefore required by justice as well as compelled by Israel's self-interest that it relinquish its administration of the large Arab population that it controls in the name of its security.

---At the same time, Israel has a right to secure and recognized frontiers. This elementary right was recognized more than twenty years ago in U.N. Resolution 242. Admittedly, in the missile age security cannot be absolute. We doubt that a restoration of the 1967 frontiers would be compatible with Israel's survival, but at the same time we believe that Israel should be prepared to accept Arab control of Gaza and significant parts of the West Bank, including major Arab population centers.

---The Palestinians also have legitimate rights which should be recognized, provided they in turn recognize the right of Israel to live within secure and recognized boundaries.

We are in no position to suggest a precise line on the West Bank. But we believe either the current American administration or its successor should develop a concept for a solution, in close consultation with all of the interested parties; coordination with Israel is obviously essential. The objective would be to develop a consensus on the basis for negotiations; if a consensus can be obtained then procedure will become secondary; if not, a stalemate is certain. The choice between the two outcomes will depend importantly on the creativity and purposefulness of whatever administration does

MAY. 11 '88 10:50 KISSINGER ASSOCIATES N.Y.

29

P.013

the principal negotiation---almost surely the next one.

*The Western Hemisphere.* It is no longer possible for the United States to pretend that it alone can determine events from within or deter hostile forces from without in the western hemisphere. Since its own independence, the United States has felt a special concern for developments in the New World, although there has often been too much ignorance and arrogance in our policies and attitudes. The past presence of our missionaries, corporations and, on some occasions, U.S. gunboats and troops, in many of these countries are all part of a difficult heritage for Latin and North Americans. Recent troubles in these relations have made it clear that we must deal with the problems of our region differently than before, and also differently from the way we defend our interests on other continents. While it may be necessary to retrench American commitments in more distant places, it is unthinkable that we should now pay less attention to the western hemisphere.

*Canada.* Canada is a close ally, a friend and an important neighbor. It is often said that Americans pay attention to Canada only when there is a problem between us, e.g., the question of acid rain. Regrettably, Americans do too often take their friendship with Canada for granted, and fail to nurture this crucial relationship. Fortunately, despite this neglect, for more than a century relations between the two countries have been exemplary. Our common border is the most open in the world. The recently concluded U.S.-Canadian trade agreement is a historic achievement and a model way for close

MAY.11 '88 10:51 KISSINGER ASSOCIATES N.Y.

30

P.014

trading partners to regularize their commerce. We hope that it
will be ratified soon. Some observers believe that this
bilateral settlement of our trading problems could serve as a
broader international model, especially in the western
hemisphere. It is symbolic of the special relationship with
Canada that the president recently agreed to transfer to Canada
sensitive military technology, which heretofore had only been
available to Great Britain.

Mexico. Mexico may well present the most challenging
problems for the United States in the western hemisphere. Most
Americans appreciate the importance of Mexico to the United
States. However, it is very difficult to know how to deal with
the complex relationship.

MAY. 11 '88 10:52 KISSINGER ASSOCIATES N.Y.

P.015

31

significantly its trading practices and joined the General
Agreement on Tariffs and Trade (_gatt_).

It would be unrealistic to assume that there is a
simple, global solution that would solve such complex
problems. We believe, however, that Mexican-American relations
deserve the highest priority. Of particular importance is the
handling of the Mexican external debt. How the United States
and Mexico deal with the issue will have a strong influence on
the broader question of Latin American debt.

The new presidents of the United States and Mexico
should meet early and often. Relations with Mexico always will
be delicate and we must provide constant attention to
maintaining a high degree of trust in a relationship that is
enormously important and interdependent. The two leaders can
try to anticipate key issues and particular problems on which
they must focus, while encouraging active cabinet-level
discussions of all outstanding differences.

Central America. The most immediate political
concerns that we have in the western hemisphere relate to
ending the wars in Central America while strengthening
democratic forces and reducing Soviet and Cuban influence in
the area. Central America provides a conspicuous example of an
area where U.S. policy has suffered because of a lack of
clear-cut national objectives that could be publicly debated
and congressionally mandated. Confusion remains over whether
our principal aim should have been to overthrow the Nicaraguan
government, halt Nicaraguan support for insurrections elsewhere

MAY. 11 '88 10:53 KISSINGER ASSOCIATES N.Y.

32

First, it remains very much in the U.S. interest to obtain the withdrawal of Cuban and Soviet military advisers from Nicaragua, significant reductions in the armies and armaments in the region, especially in Nicaragua, a total ban on Sandinista help to guerrillas elsewhere, and the internal democratization of Nicaragua.

Second, the situation in Central America can be one measure of U.S.-Soviet relations: whether the Soviet Union is willing to suspend arms shipments into this area of our most traditional relationships, ~~which cannot be critical to Soviet security~~

Also outstanding is the issue of the level and scope of our assistance to the area. Four years ago a bipartisan commission unanimously recommended substantial economic assistance to Central America. That recommendation is even more important today and will gain in relevance if the Arias plan succeeds. Such aid should go primarily to regional development rather than to individual countries. Our task should be to reinforce those institutions that give the Central Americans good reason to live productively and peacefully together.

MAY.11 '88 10:54 KISSINGER ASSOCIATES N.Y.

33

P.017

*Latin American Debt*. One clear aim of the United States is to increase the likelihood that stable and democratic governments will survive in the region. To this end we must help them resolve critical problems of debt and development.

Most of the democratic governments that replaced military regimes in South America in recent years are fragile. Their massive external debts reduce significantly the capital available for growth and development. Extreme leftist guerrilla movements, sometimes encouraged by powerful drug traffickers, pose serious threats to law and order. Violence and urban terrorism have increased while some in the military covet a return to power.

At present, the principal Latin American debtors---Argentina, Brazil, Chile, Colombia, Mexico, Peru and Venezuela---owe foreign creditors about $350 billion. Interest payments on these debts range between 19 percent of export

MAY. 11 '88 10:55 KISSINGER ASSOCIATES N.Y.

34

P.018

earnings, in the case of Colombia, and 46 percent of export earnings, as with Argentina. These governments cannot expend a major part of their export earnings on servicing their external debts; the key issue is to stimulate economic growth.

Western commercial banks alone cannot resolve debt problems of this magnitude. Their governments must become more fully involved, together with international institutions. Some new public and private monies must be provided so that Latin America can begin to grow again---which would also make it possible for the region again to absorb significant quantities of U.S. exports.

At the same time, the Latin Americans should restructure their economies to promote expansion of investments in the private sector from both domestic and foreign sources. Western nations other than the United States should make a major effort to buy more from these developing countries. For example, over the past several years, the United States has been taking over 60 percent of the manufactured exports from the developing world while Japan---with an economy more than half our size---has been taking only ten percent.

MAY.11 '88 10:56 KISSINGER ASSOCIATES N.Y.

P.019

35

_vii_

As is apparent from the foregoing, our next president
will be severely challenged to guide us through a period of
international transition and to secure a firm place for the
United States in a changing configuration of nations. He must
focus American resources and energies on areas where more
precisely defined U.S. national interests are at stake. He must
not be reluctant to admit that there are important issues, even
conflicts, in which the United States has no special role to
play because our vital interests are not engaged.

But he must
not shrink from defending our vital interests.

It is true that this is a more restrictive approach to
the defense of American objectives than that in the immediate
postwar period. We believe that our international standing and
national security need not be diminished because we adopt more
selective and collaborative international strategies based on
new realities. Our position can be strengthened by taking
into account the growing strength of other forces.

We believe profoundly in the resiliency of the American
people. They bring qualities to our foreign and national
security policies that should reassure our allies and
ourselves. Often in the past we have overcome great
international challenges thanks to our adaptability and
resourcefulness. The dynamic heterogeneity and individualism
inherent in our society, which could cause chaos and confusion,
have produced an array of talents---social, scientific and
moral---that remain a formidable source of national energy.

MAY. 11 '88 10:57 KISSINGER ASSOCIATES N.Y.

P.020

36

Imaginatively analyzing the new realities affecting America's
role in the world should provide the next administration with
prescriptions for its foreign policies. Through such
understanding and discipline, our leaders can guarantee that
the future security and well-being of the American people will
be at least as well defended in the future as they have been in
the past.

Henry A. Kissinger and Cyrus R. Vance are former
secretaries of state.

¹> Kissinger believes that defensive forces should be
limited primarily in relation to the limits on offensive
forces. He believes we must continue to develop SDI actively
because of Soviet research in the field and because of SDI's
potential future value to Western defenses. Vance also
believes that we should continue research and development, but
at a measured pace; he is highly doubtful that it will ever
prove to be cost-effective militarily or advantageous
politically for the United States to deploy even elements of an
SDI system.

²>While placing great importance on conventional arms
control negotiations, Vance would not make the signing of an
agreement on a 50-percent reduction of strategic nuclear
weapons, along the lines now being discussed, or the conclusion
of treaties covering nuclear testing and biological or chemical
warfare, conditional on the convening of a conventional arms
control negotiation, or on its outcome. Kissinger believes
further strategic arms control treaties should be negotiated

MAY. 11 '88 10:58 KISSINGER ASSOCIATES N.Y.

P.021

37

³> Kissinger has serious reservations about an international conference on the Middle East; he believes that it would legitimize a formal Soviet presence in the peace process for the first time and that it would lead to a stalemate. Vance considers that an international conference could at least provide an umbrella for the first direct negotiations between Israel, Jordan and the Palestinians, and is therefore desirable.