[YJ]

- 11 -

I: By the way, had you met him during your many visits?

K: Well, not consciously. If I've met him, it was on the
two Nixon visits. There were in each case Politburo
dinners and Politburo receptions. And now, was he there
as a member of the Politburo, I really...

I left no lasting impression.

I: You never chatted with him?

K: I never chatted with him, no. If I did, it left no im-
pression. I have no visual recollection of him. We were
certainly not focused on him as a ...

I: Comer.

K: As a comer.

I: By the way, what do we really know about him other than ...

K: Well, this is one of the...

I: His zeal for reform?

K: Well, we don't even know that all that much. We don't
really know anything about him. We don't even know if
he's married or not.

I: He must be because he has a son.

K: I know, but we don't even know where his wife is. We
know he is married, but we don't know whether he now has a
wife. We know he has a son. We don't know whether he
speaks English or not. Some people say that he speaks
English. On the other hand, when Vice President Bush was
there, he gave no sign of understanding English, but neither
did Chou En Lai when I first saw him, so I don't know.

[YJ]

- 12 -

K: We really know very little about Andropov. I noticed that the French Foreign Minister...

I: The Cheysson thing yesterday. That was interesting.

K: Yes. Cheysson considers him a sort of a computer.

I: But I'm not sure I know what that means either.

K: No. I must say that one of the more attractive aspects of Brezhnev was his extreme..

I: Exhuberance.

K: His humanity and his almost slightly vulnerable aspect, his need for approbation and recognition by Americans.

But all of this doesn't mean that the Soviets are going to throw in the towel. It does mean that there are many reasons why they should seek a serious negotiation with us to gain time, to consolidate, to, if they want to, reform their system. They certainly cannot want a major crisis in U.S. - Soviet relations while they have all these other things going on. So, I think if we could get a moratorium on the debate on whether we should negotiate or whether we should make proposals and concentrate on what proposals to make, I think we will be doing our necessary to make progress. It is then

Should we a tactical question whether one says we take the European wait for a Organic Initiative for a Soviet ultimatum? Theater Force negotiation. Is it better for us to say we're ready to examine any Soviet proposal or is it better for us to put up an alternative proposal of our own?

- 13 -

I: Well, that becomes technique of negotiation.

K: That's a technique of negotiation. That's not so crucial. At some point, I think we'd probably do better with our own proposal than with their proposal.

I: That was your experience in negotiating with them?

K: Well, my experience in negotiating with them on arms was that they seem to be even more muscle bound than we are, or that they seem to be more muscle-bound than we are. I had the impression that the separation between their department was so total that they have great difficulty generating new positions and joint positions. And almost every substantive proposal that's been negotiated has emerged one way or another from American thinking.

I: Well, this was true in your case during the seventies?

K: Yes. But it seems to be...

I: Through SALT and a variety of other cases.

K: Yes. But it seems to be true even now, because if you look at everything that has been said, if we take these Theater Nuclear Force negotiations, I would still think that whatever view one has of the Nitze proposal,...

I: The so-called unofficial, unauthorized..

K: The unofficial proposal. It certainly has been more thoughtfully better than the Soviet proposal. It's more thoughtful than the Soviet proposal.

I: Can I take you back on a concept? You said that this is

- 18 -

K: the crisis broke forth much worse in several assaults on Berlin. We must annuit a repetition of this process. Now, this is the danger now. I think that-

No matter what happens, we will have a relatively quiet two, three years, the problem is whether we will just end on them or pick a new item for a major step towards peace.

I: With them?

K: With them. And so, in that sense, I disagree completely with the people who argue that there is a greater danger of nuclear war than in previous periods. The biggest danger of war now is as a result of events in areas which neither of the superpowers can control.

I: The Persian Gulf, for example.

K: The Persian gulf or some upheaval somewhere that is not now quickly foreseeable. But, I would consider the opportunity lost if all we got was a three year's stagnation. And my definition of opportunity is whether we can make real progress in the arms reduction front, real progress in the restraint of international conduct, and some real definition of some ideas of East-West trade. If we can get these three things in the next three years, then, I think, the relation may, in fact, stabilize over an extended period, especially as I do not think that the Soviet Union is growing in strength as an historical phenomenon, whatever it does in the military field.

I: Several questions come out of this. Number one, in the current stage as you described it, you get the sense -

- 19 -

I: I use the word advisedly - that Andropov can bring his constituencies with him on the accommodation policy, however, (unintelligible) the military, you know, the power that brought this...

K: It's a good question. I don't think I don't know the answer to it.

I: It would be a prerequisite. Brezhnev was able to do it.

K: I don't think I don't know it and he may not know it, but we'll never know unless we test it.

I: Okay. Are we testing it? Seriously, at this point? The United States?

K: I think we have to separate again to separate two things. As of this moment, when you and I are talking, the Administration is pretending that it is maintaining all existing positions. I think this is mostly a question of internal, American, bureaucratic management because...

I: That's the Zero Option and etcetera, etcetera.

K: That's right. Because the body language of the Administration, if I can use that word...

I: Yes.

K: Or any sensible analyst would realize that the administration is in full movement towards a negotiation, towards an attempted negotiation. And, whether it is doing it with all the skill that's required remains to

- 20 -

K: be seen. I think that is one case where, really, the results of the German election will make a difference.

I: We will come back to that in two weeks as a specific point.

K: Exactly.

I: I'm making a note on the transcript.

K: Exactly.

I: Let us imagine that you are today the general manager of U.S. foreign policy, however you want to define this. What would you do today, this week, after the German elections, the balance of this year presumably, and of the TNF negotiations, and beyond that to seize the moment?

K: Well, I would...

I: Back to the larger thing. You used to talk about building blocks. Remember?

K: Well, first of all, I'm not an aspirant general manager of American foreign policy.

I: No, I understand it. It's a theoretical question.

K: Right. And I'd do it, and the answer is therefore what does the analyst, Henry Kissinger, what would he imagine somebody might do.

I: Right.

K: I think that three steps are necessary. One is to attempt to get an historical perception for ourselves of how we visualize a desirable course of U.S.- Soviet

- 21 -

CYJ

K: relations over the next, say, five to ten years.
Where do we want this process to go?

I: What you had in mind when you came into office? On
both sides.

K: Well, yes. I think I did. Well, I'd been thinking
about it all my life. But leaving aside now whether
I did or not, I think this is something - and I think,
in fairness, Nixon had it too - now, this is something
that, at a minimum, President Reagan, Secretary Shultz,
Judge Clark, Weinberger and one or two other trusted
people must talk out among themselves so that they know
what they're after. Otherwise, they are going to get
caught in a bog of petty-fogging details. You take the
INF negotiations where .. I was not myself a great fan
of the Zero Option, but in the public debate, it is

von der Leyen's ~~sort of ridiculous~~ that the Zero Option is ~~hard line~~ managed as the present.
the age of self-delusionary military side when it does not advance.
It's the hard line position, so that...
bilateral agreements is in fact ongoing rather slowly.

I: Today.

K: Today.

I: But on November 18th, it was not.

K: It was not. And the soft line position presumably is
to be in favor of some missiles in Europe.

I: Exactly.

K: This is .. it's a weird reversal of positions. So I
think this is the first thing that has to happen. The

- 25 -

I: And I'm thinking of Williamsburg, which is the last days of May. As you see things moving or not moving, is it plausible, viable that Williamsburg could be used, unlike Versailles, I guess, last year, as a serious forum to move on with some of the ideas that you have? I saw Mitterand in November and I brought it up with him, and he was extremely vague. I said, "Well, what do you have in mind? Do you want a new Bretton Woods?" "I don't know. I would like to have a link between me and ___ and the dollar." But it was completely unclear in his mind.

K: I think...

I: How do you see this whole thing?

K: I think that, if we have another summit of the industrial democracies without some concrete work program, that institution will fall into disuse. Now, that may not be a disaster, but, in any event, when the big economic crisis in almost every democratic country is likely to hit the state of the world economy, it is not appropriate for the world leaders to meet without attempting to find some remedy, especially since each of them knows that the solution can not be found in national policies. So I had hoped that the summit would be used...

END OF SIDE ONE

- 26 -

[Y]

SIDE TWO_

I: What it should or should not accomplish.

K: Whatever it is that Williamsburg should accomplish must be decided in its objective almost immediately, because you can't simply put an item on the agenda of heads of government; there has to be some detailed preparation in essential for significant results to be achieved.

I: And there isn't very much, I kind of gathered?

K: Well, I don't know. It's not obvious to the outsider.

I: Specific things. Farm problems between the Community and ourselves. Is this something you see getting out of hand unpleasantly but dangerously?

K: Well, I think, fundamentally, the industrial democracies have to decide among themselves whether they are serious about free trade or whether they are each going to pursue various forms of mercantilism. If the latter continues, then everything will sort of get out of hand, farm problems as well as others.

I: Isn't everyone a prisoner of their domestic problems too?

K: Yes.

I: We are, the Germans are, the French are.

K: Yes. If the trends of the last five years continue, then we have to say, then it's probable that we are heading into a mercantilistic world. But that would have

CJA

- 27 -

K: very grave implications also for the kind of foreign policy that can be conducted. In my view we would better off agreeing to better use some limited areas of mercantilism - in the name of national security or者的 interest - instead of perclaiming free trade while practicing mutual benefit.

I: Because then alliances break down?

K: Because then alliances break down, autarky is attempted, nations attempt to line up others into trading blocs, and it will become very complex. It can be done, It's been done before. But it will be a different world.

I: When you were doing your *Newsweek* piece, did you have it in mind - because I'm not sure; I thought it was fairly clear to me - that time has really come to rethink the structures to replace that which was Bretton Woods?

K: Yes.

I: Could you be a little more specific on that?

K: Well, I think that the international currency system that was adopted in the early seventies ... well, the Bretton Woods was a system of more or less fixed exchange rates, buttressed by a number of institutions like the IMF to deal with specific crises. When the Bretton Woods institutions were created, there really wasn't a developing world yet. And I don't think that anyone envisaged that there would be so many independent states so rapidly. Since then, there are many changes that have to be taken place. Now, since then, two things have happened. One is that the fixed exchange rates were abandoned for the floating system, which meant that the currencies were supposed to be determined by market forces.

- 28 -

K: forces.

I: The Smithsonian.

K: Smithsonian.

I: Azores and Smithsonian

K: Azores and Smithsonian. And then, after .. Actually, at the Azores and Smithsonian, we still tried to rescue the fixed system. But afterwards, when the Smithsonian Agreement broke down, it turned into a floating system. And the second is the emergence of so many developing countries. And the third is the dislocations caused by the energy crisis that started in the early seventies. Now we have The result of all this is that with the floating currencies, theoretically the market was supposed to provide the corrective. In fact, it has appeared that governments can manipulate the market, and therefore have a great temptation to set the exchange rate of their currency to solve an immediate domestic problem. This has caused the dollar to be overvalued, the Yen to be undervalued. But it has, above all, made currencies fairly unpredictable and it has meant that domestic decisions have had vast international implications without the affected countries having a voice in those decisions. That is a very destabilizing element. Finally, the emergence of so

- 30 -

K: countries learn that the only way to deal with their auditor developed countries is by blackmail. And the developed countries will develop, will adopt a policy of pure, narrow, seemingly selfish national interest which will, however, have the consequence of being a disaster for everyone, because, after all, more of our exports today already go to the developing countries than go to Europe and Japan. So we are all in the same boat.

I: Do you see a debtor's cartel? As a madcap thing.

K: Well, I don't think it will happen explicitly, but it is conceivable that some country pressed against the wall will default. But then, contrary to what people say, it will not be read out of the international financial community but will, in fact, be rescheduled on more favorable terms than it had before, which will then trigger all of the other countries into the same process.

I: As you see the totality...

K: But, you see, I would like to avoid having the issue discussed as a debt problem.

I: Per se?

K: I want it to be discussed as a problem of world economic growth because everyone has an interest in world economic growth. And if there is sufficient growth, then the debt problem becomes less serious.

CYJ

1

[Y]

- 31 -

I: You are saying this to the U.S. Congress, among other people, aren't you?

K: all natural leaders in the matter as well as in the legislative branch. I say it to our government that they should be less focused on emergency measures and more focused on long range solutions.

I: You know, if these things do not occur, let's say, during this year, if Williamsburg is another Versailles, does something start giving then?

K: Yes.

I: Great protectionism,...

K: In my opinion, you could have growing protectionism...

I: It's a short fuse, no?

K: And growing de facto defaulting. But I would also say that we also have an opportunity in East-West relations. I think we also have a great opportunity in North-South relations. Everybody is up against it now. We will suffer a financial crisis if the debt problem becomes unmanageable. The developing countries can get rid of their debt, but they can not make economic progress without cooperation of the developed nations. So, we have an overwhelming interest in coming forward with a program of world economic growth for our country and for the rest of the world. We cannot separate the two anymore.

- 32 -

I: It doesn't exist right now, does it?

K: And if we don't do it, it isn't an acceptable way. If we do not do it, then it is highly predictable that somewhere a crisis will catch us in which we'll have to deal with the worst thing that can happen to a government is to look as if it did not foresee potential catastrophes.

I: Could we use the last few minutes on the Middle East?

K: Sure.

I: The question is really very simple. What would you do with all of this: Lebanon, the September 1 Plan, all the cross relationships. And also, while we are on the subject, how would you respond to suggestions that some of your friends in print that you should take it on yourself?

K: I think we should take the last question first, then I would be happy to advise the government on a part time basis, as I do occasionally now. I do not think that it would be a good idea for me to take this on at this point in time, but an situational job at another point in the game. So, it is not only not a position I am looking for, but it is a position I think it would be unwise to explore at this moment.

I: At this moment, I am considering substance.

K: Explore. Take out what you consider. The best now, what should be done, what might be done. I think it is...

[Y]

- 35 -

I: Well, you saw the PLO in Algiers, which was .. which
added nothing and detracted nothing, I guess.

K: Well, by not detracting anything, they really added
a little.

I: Yeah. Enough to give Hussein a plausible margin of
manuver.

K: I mean, they could ... that remains to be seen, but
they could have stopped the negotiation if they had
wanted to.

I: That's true. Tell me, you mentioned yourself that
you occasionally advise the government. From what I
read, you have advised Secretary Shultz on China, on
the Middle East.

K: Yeah, but not regularly.

I: No, I understand. You were part of a group where you
were along. But you have been involved in at least
these two areas.

K: Oh, I talked to Shultz about China and the Middle
East, both alone and in groups.

I: Are there subjects that you've been called upon?

K: Well, I don't make a habit really to announce these
meetings.

I: No, I know that.

K: I have no objection if the Administration want to tell
you what, if anything, they consult me about, as long as
my role is not exaggerated. This is líkely individual.

- 37 -

[y]

K: volunteer. I respond to their requests for advice.
I am not looking for and would not accept any regular position.

I: No. The reason I'm asking the question is obvious.
Given the fact that you have obviously interesting thoughts, the question comes to my mind as it will to my reader. Whether the sort of things you are saying to me, for example, in part, are also being heard by the Reagan troops (?) and company. That's sort of the professional reason for the question. And I think that you've answered it.

K: Good. You can assume that I say privately what I say publicly.

I: Okay. Shall we photograph you for posterity?

K: Yes.

I: This is not the photographer I had hoped to bring, but there was an accident and we had to change things.

THE END