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GOVERNOR MANDEL: On that note, I think on behalf
of all of the Governors here today I'd like to express
our deep appreciation to the Secretary for not only coming
here but for the candor and the manner in which he
responded to all of the questions that were asked him. And
on behalf of all the Governors, Mr. Secretary, thank you
very much. We deeply appreciate having you. (Applause.)

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the relationship between the United States and the
industrial countries of Western Europe and Japan and not
in the form of American financial outlays but in the
form of political and economic cooperation.

The second general observation I would make is:
I agree with you that it is important for us -- crucial
for us -- to deal with our domestic problems. But I do not
believe -- and that may be a professional bias -- that
we can choose between our domestic and foreign problems.
I think we are now in a position where, if we cannot solve
both, we will not be able to solve either.

GOVERNOR MANDEL: Governor Holshouser.

GOVERNOR HOLSHOUSER: I'm working.

GOVERNOR MANDEL: Governor Boren.

GOVERNOR BOREN: Mr. Secretary, I have two inter-
related questions. The first is this: the Helsinki statements
and other recent statements appear to give only broad lip ser-
vice to the concept of doing something about freedom of
emigration out of the Soviet Union and religious freedom for
both Christians and Jews and intellectual freedom within
the Soviet Union. Are we in fact, really, trying to exert
any real leverage on this situation -- or have we really, as a

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whatever you want to call it -- with no illusions about the
structure of what we are dealing with.

At the same time, we recognize we are living
in a world that is different from our historical
experience. Until the end of World War II, the United
States could be secure behind two oceans; and changes in
the world balance of power had to be of an enormous magnitude
before we were affected.

For about a generation after World War II, we
had such an overwhelming military superiority that we could
overwhelm most of our problems with our resources. But
today we live in a world in which, while we are still the
single strongest factor, we are no longer predominant.

We also are in a situation of
effective nuclear parity, in which neither side will be able
to gain a decisive strategic advantage unless one side
simply quits.

Under these conditions, we have to conduct a policy
in which we try to limit or contain the power of other
countries through creating balances, backed by our military
strength around the world.

We also face the fact that under current conditions

PR #481-

nuclear war would be an extraordinary calamity.

Therefore, we are attempting to create a situation where we will not give up our vital interests, but where we will also not unnecessarily run the risk of confrontation; where we give an opportunity to the Soviet Union to pursue a more moderate course but where, when challenged, we act with great firmness, as we did at the time of the building of a submarine base in Cuba, as we did during the Jordan crisis of 1970, as we did during the Middle East alert of 1973.

We must have a military strength which does not
tempt aggression. Without that, no policy of coexistence,
relaxation, is possible. But, beyond that, we must have a
diplomacy that gives an opportunity for settling disputes
by peaceful means. And we have the problem of balancing
incentives and penalties for the Soviet Union in the
correct way.

Now, there are endless disputes of what the correct
balance of incentives and penalties is. I, for example, do not
believe that economic relations should be conducted for their
own sake. I have always believed that they should be linked
to progress on foreign policy issues.

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19

Now, on the Helsinki Declaration, there was
a great deal of -- there were many misconceptions. One,
for example: It was not primarily an American show.
It was agreed to by 34 heads of
government, or 34 governments; and, in fact, the United
States did not play the dominant role in shaping it.

Secondly, the Helsinki Declaration recognized
nothing that had not already been accepted in previous
international conferences to which we were a part.

Thirdly, insofar as there was anything new
in the Helsinki Declaration, it was in the area of human
rights and human contacts-- not as far as you would wish it
but, nevertheless, there were formal declarations.

Now, our view with respect to human rights has
been this: We have believed that we could be more effective
by quiet, undramatic representations than by turning them
into tests of prestige. And I think our experience with
Jewish emigration proves this. We had increased the
emigration from 400 in 1969 to 38,000 in 1973, when by making
it a formal test it dropped again to 10,000. But this is
a question of tactics; this is not a question of objectives
or purpose. And our test over the next decade is whether

20

we have the strength to pursue both a policy of
relaxation of tension and keep up our military defenses
whether we are prepared to be flexible in our diplomacy
and yet firm in our purposes and avoid oscillating between
extremes of intransigence and extremes of conciliation --
which had been the case in previous periods.

This is what I would define to be the basic
problem.

GOVERNOR MANDEL: Governor Wallace of Alabama.

GOVERNOR WALLACE: Mr. Secretary, after the
unfortunate conclusion of the matter of Indochina, do you
feel that the United States now can afford to give up
control of the Panama Canal?

SECRETARY KISSINGER: On the issue of the Panama
Canal, the question is, what is meant by control of the
Panama Canal and how we define our vital interests in
relation to the Panama Canal.

The United States must maintain the right,
unilaterally, to defend the Panama Canal for an indefinite
future, or for a long future. On the other hand, the United
States can ease some of the other conditions in the Canal
Zone.

[10]

Senator Taft, Senator Glenn, Congressmen, distinguished guests, ladies and gentlemen:

As America enters its 200th year as a free nation our role has grown central to the peace and progress of the world. We have become the engine of the global economy, the rock of security for those who share our values, the creative force in building international institutions and the pioneer in science and technology.

Americans have carried the burdens of world leadership for a generation. They have done so with dedication and good will but understandably they ask when and if their labors can cease. They want to know what our purposes are in international affairs. They sense that the world needs us, but they ask: do we need the world?

The past three decades have taught us that our commitment to global leadership is not an act of choice but a recognition of reality. Awesome weapons can span continents in minutes. The international economic system thrives or declines as one. Conflict in faraway regions has vast political, security and economic repercussions here at home. Communications make us instantly aware of developments in every corner of the globe -- of the travels of diplomats, the movement of troops, or the hunger of little children. World peace and American security, global well-being and American prosperity have become virtually inseparable.

The past three decades have also taught us that our contribution is indispensable. We cannot solve every problem, but few solutions are possible without us. Other countries must do more, but we cannot ignore the responsibility that rests on us. If we do not help resist aggression, if we do not work for a dynamic world economy, if we do not promote liberty and justice, no other nation can -- at least no other nation that shares our values.

Americans have a right to be proud of how they have met this challenge. Through five Administrations of both political parties we led in assisting Europe and Japan recover from the devastation of the Second World War. We helped create a trading and monetary system that has spread prosperity in our own land and around the world. We forged alliances with the major democracies that have kept the global peace for a generation. We have mediated and helped resolve conflicts. We have fed the hungry, educated men and women from other lands, and welcomed those who flee oppression to our shores. With all humility we can say that no other nation in history has made comparable efforts on such a scale.

## The Design of Global Peace

But history has rewarded our exertions with new challenges. The world has been transformed over the thirty years since World War II partly because of the success of this nation's policies.

In the early years of the postwar period we were militarily and economically the world's predominant power. Our allies were recovering; new nations were just coming into being; potential adversaries were restrained by our nuclear supremacy.

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Today's world is radically different. The industrialized nations are strong and self-confident; our alliances are cooperative endeavors between equals. We have preserved the world balance of power -- but in the process both superpowers have acquired the capacity to destroy civilized life in a matter of hours. The growth of the world's economic system has spread economic power more widely among the new nations; they seek a greater role in international affairs and a larger share of the world economy.

The United States remains the largest single factor in international affairs. But we must learn what most other nations in history have known -- that one country can neither escape from the world nor dominate it. We can no longer overwhelm problems with our resources. We no longer have the luxury of simple choices.

Thus, beyond the issues that make daily headlines, we have sought to conduct a foreign policy that takes account of the fundamental changes in the international order. We cannot afford oscillation between extremes of crusading and isolation. We must maintain a steady course which offers hope for long-term international stability and progress -- a course which Americans can support, which gives courage to our allies and pause to our adversaries.

Our first priority is the vigor of our alliances with the great democracies of the Atlantic Community and Japan. We formed these ties a generation ago to protect weaker friends against military danger. Today we work together as equals on issues going far beyond security. We have coordinated our efforts to ease tensions with the East; we have built new institutions of energy cooperation; we have developed common approaches to the developing countries. And we have begun to harmonize our economic policies to move together toward non-inflationary economic recovery. The vitality of Western democracy and the solidarity of our alliances is an essential factor of global stability.

On the basis of allied cohesion and strength, we have also sought to place our relations with the Communist countries on a more stable and long-term basis. For thirty years, mankind's hopes for peace and its fear of war have turned on the relationship between the United States and the Soviet Union.

Today, strategic nuclear parity has transformed international politics. Your Government -- in any Administration -- must manage a basic conflict of values and interests with the Soviet Union in the shadow of nuclear holocaust. Never before in history have the weapons of war been so devastating -- and so ill-suited to the pursuit of specific policy objectives. Therefore, the United States has engaged the Soviet Union in negotiations on the limitation of strategic armaments. We have solved political disputes such as Berlin and restrained great-power conflict in the Middle East to give both sides a continuing stake in positive political relations. We have begun more normal contacts in trade and scientific, technical, and cultural exchanges. And we have regularized our consultations at the highest level.

The necessity of coexistence in the shadow of nuclear peril does not mean a coincidence of moral purpose. This country knows the moral difference

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between freedom and tyranny. But we shall also never lose sight of the fact that in the age of nuclear weapons, peace, too, is a moral imperative. We shall insist on reciprocity but we believe that incentives for cooperation and penalties for intransigence are more effective than rhetorical posturing. We shall keep up our military strength second to none; but we will not succumb to the illusion that military power offers the final answer to international problems.

On the basis of firmness and flexibility, strength and willingness to negotiate, we shall strive to moderate conflicts and to bring a more secure world to future generations.

As we have maintained alliance cohesion and begun to ease tensions with the Communist powers, a new dimension has been added to the spectrum of international issues before us: the future of the relationship between developed and developing countries. The vast and growing problems of energy, food, raw materials and economic development now face us in all their complexity, as the fundamental issues of the last quarter of the 20th Century.

These problems are not technical, or at bottom even economic. They go to the heart of the question of international order: whether the world can accommodate the needs of all nations; whether countries will regulate their affairs by cooperation or by confrontation; whether international relations will reflect the search for mutual benefit and common progress or turn into tests of strength. The United States is in a better position than any other nation to go it alone or to face such a test of strength; but we know that ultimately the whole world will suffer.

The United States has made its position clear. At the UN Special Session called to discuss these issues two weeks ago, I pledged our country to a cooperative, understanding approach. I said that we are prepared to work with other nations to put the technological and economic genius of the modern age in the service of all mankind. The United States is convinced that the developed and the developing nations working together can achieve through cooperation what neither can extort through economic warfare or ideological pressure -- economic advance for all our peoples.

In this spirit, the United States presented a comprehensive and detailed program for economic and social cooperation to the Special Session. These proposals and this attitude will guide us in future discussions with the less developed nations. The results at the Special Session which just concluded today were constructive. Discussions took place in a conciliatory spirit, and the final document produced considerable convergence between the developed and the developing countries, and the outlines of a consumer program of action.

Cooperation must remain a two-way street. If nations wield their special strengths as weapons, the promise of global progress will give way to the perils of global confrontation.

The most critical immediate issue, of course, is the question of the price of oil. We and our partners in the International Energy Agency have already taken major steps to conserve oil and to establish financial structures that will help us cope with the impact of rising oil prices. Much still

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remains to be done, but the United States, in cooperation with other industrial nations, will make a determined effort to reverse the conditions that have enabled oil prices to be set unilaterally. The United States cannot and will not entrust its political and economic destiny to decisions made elsewhere.

At the same time, we are ready to seek a new relationship with the oil-producing nations. We ought to be partners, not adversaries. Consumers must have reliable access to oil supplies at reasonable prices. To invest their new oil wealth, the producers must become major importers of our products. We are ready to cooperate with the oil producers in linking our economies on equitable terms.

Next month the oil producers, developing countries and industrial countries will meet to launch a dialogue on energy, raw materials, development and finance first proposed by President Giscard d'Estaing of France. We have worked hard to make these meetings possible. We will work hard to make them a success. They provide us the opportunity to shape new constructive relationships in the world economy.

But another oil price rise would severely jeopardize these hopes. It could set off a relentless sequence of action and reaction to the detriment of all countries, developed and developing. This vicious cycle must be avoided. The possibilities of a cooperative world order depend upon it.

## Peace in the Middle East

There is no more vivid example of the stake that we have in the world around us, and the decisive contribution that this nation can make than the conflict in the Middle East.

The Congress is now deliberating on the recent Egyptian-Israeli agreement. As it does so, it is important for the American people to understand why the United States is involved, what strategy we have pursued, the significance of the agreement, and where we will go from here.

The Middle East lies at the crossroads of three continents. Because of the area's strategic importance, and because it provides the energy on which much of the world depends, outside powers have continued to involve themselves in its conflicts, often competitively.

For the United States a diplomatic role in the Middle East is not a preference but a matter of vital interest:

- Because of our historical and moral commitment to the survival and security of Israel;

- because of our important concerns in the Arab world -- an area of more than 150 million people and the site of the world's largest oil reserves;

- because perpetual crisis in the Middle East would severely strain our relations with our most important allies in Europe and Japan;