24

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 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

25

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.

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.

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 reasonably confident that the

26

Chinese leaders, now and in the future, will have a keen appreciation for China's geopolitical interests, which we believe continue to coincide 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 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 global 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

27

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.
A divided Palestinian leadership seems unable to agree on
anything except violence against Israel. Moreover, the
long-festering 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.⁴

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

28

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.
It is therefore required by justice as well as compelled by
Israel's self-interest that it relinquish its administration
over 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

29

choice between the two outcomes will depend importantly on the
creativity and purposefulness of whatever administration 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 been too much American ignorance and arrogance in our policies and attitudes. The past presence of our missionaries, corporations, gunboats and sometimes soldiers in many of these countries are all part of a difficult heritage for Latins 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.

Before turning to the problems of Central and Latin America, we wish to emphasize the importance of relations with our two immediate neighbors, Canada and Mexico.

*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.-Canada 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. 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.

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.

31

Overall, the Reagan Administration has handled our relations with Mexico well. 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 significantly its trading practices and joined the General Agreement on Tariffs and Trade (_gatt_).

We offer no comprehensive set of policy recommendations. 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

32

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. Whatever the wisdom of American support for the anti-Sandinista contras, the United States and five Central American nations now should concentrate on implementing the Arias peace plan.

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 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 the area, which cannot be critical to Soviet security, and whether the U.S.S.R. is prepared to forgo efforts to weaken U.S. influence in the area of its most traditional relationships.

33

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 relevancy 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.

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 likelihood of peaceful change and successor governments compatible 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.

34

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, and interest payments on this debt represent approximately 23 percent of their export earnings. 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 involved. Some new public and private monies must be provided so that Latin America can begin to grow again---which would, incidentally, make it possible for the region to again 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

35

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 more narrowly 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.

It is true that this is a more restrictive approach to the defense of American objectives than in the immediate postwar period. It may even be perceived as accepting a lessening of U.S. influence worldwide. However, what we advocate is a new realization that our international standing and national security need not be diminished, simply because we adopt more selective and collaborative international

36

EYD

strategies Indeed, our position can be strengthened.

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. 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 the political cost of the INF agreement was out of proportion to the arms control benefit.

²> 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

37

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.

³While 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 the character of a conventional arms control agreement 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.

⁴Kissinger has serious reservations about an international conference on the Middle East; he believes it would legitimize a formal Soviet presence in the peace process for the first time, while it will lead to a settlement that considers that an international conference could at least provide an umbrella for the first direct negotiations between Israel, Jordan and the

38

Palestinians, and is therefore desirable.

⁵>Kissinger believes that U.S. backing for the contras has made the Nicaraguan government more willing to reduce its support for leftist guerrilla movements elsewhere and to liberalize the country's internal political system. Vance regards the contras as a weak and ineffective force that could not win militarily, and that was used as the justification for the buildup of a much larger Sandinista military machine and greater aid from the U.S.S.R. than would otherwise have been the case.

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

To: Henry A. Kissinger and Cyrus R. Vance

April 28, 1988

Dear Henry and Cy,

Attached is a new version of the draft we discussed at
Henry's office.

1) It includes brand new texts on China, Mexico and Canada, and Latin American debt.

2) The other sections have been edited and rewritten in places to take into account the discussion of Henry and Cy's comments on the Kissinger draft.

3) What I hope both of you can do is to go over it rather carefully and in those places where you have problems, propose new language, etc.

4) Please look carefully at the Middle East where I am not familiar enough with the careful language that is always required.

5) The footnotes will be on the page of the text but for now they are at the end and I hope you will go over them carefully.

6) I have added some language in the Soviet section to record that you both agree on the value of strategic arms control. Somehow this seemed to have fallen out and it would seem strange that you are only highlighting your differences on SDI and linkage. This section also requires careful reading.

7) If you could give back to us a marked-up text (on this system copy) by Tuesday morning, we could then proceed to a next-to-final draft (Peter Tarnoff is out of town but will be back by Tuesday).

Revised Ms. WGH edit to authors 4/28 #3110f

Henry A Kissinger

Cyrus R Vance

BIPARTISAN OBJECTIVES FOR
AMERICAN FOREIGN POLICY

BIPARTISAN 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 the 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 administrations in Washington, we risk 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 us 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

2

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 useful to identify several crucial
bi-partisan 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 November 8 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 international leadership.

_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 long since disappeared and our
relative share of the world economy will be less than half of
what it was fifty years ago. Other countries playing a variety
of roles have already had a major impact on U.S. interests: the
economies of Japan, Western Europe and the Newly Industrialised
Countries are obvious examples; several countries have nuclear
weapons capability and others are able to acquire it quickly.

3

Old East-West security issues persist, but new issues such as state-sponsored terrorism and international drug trafficking have become urgent. Although the same basic 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, an American President can no longer afford financially to do as much as he might want to do. 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, and thus the United States is called upon to exercise new and +more comprehensive/ forms of leadership, including in defining the nature of the world.

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 insist 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 it must be dealt with creatively in the decades ahead. But we are also concerned that a desire to be relieved of some of our

CYJ

4

international burdens not lead to unintended consequences that could jeopardize important American interests and the cause of freedom and liberty.

Our nation is on the eve of a new international era. We cannot continue to conduct international affairs in the old ways. 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 well informed and vitally concerned about their livelihoods and ultimate survival. The slope of the hill is steep and high.

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.

There are two others constraints that have evolved in the 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.

Widespread understanding of the role of Congress in the making of American foreign policy is essential. 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
cannot manage the tactics of American foreign policy ~~must~~ 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 Congressional testimony.

If a relationship of trust is established between the
Congress and the White House, even with policy differences, a
mutual respect and essential complementarity between these two
branches of government can be maintained. However, when there
is a vacuum in executive branch ~~capability for~~ leadership, or
when the Congress overreaches, the result is an attempt to
legislate foreign policy, thereby subjecting our national
~~monumental~~ interest to the vicissitudes of swings in public mood.

It is equally desirable to have a better appreciation of
the considerable impact of the media on U.S. foreign policy
decision making. Some tension will always exist between
government which seeks to exploit the press and the media which
~~seeks~~ to expose. There are, however, enough examples of
~~is needed for~~ mutually beneficial relations between journalists and
government officials to believe that the two professions can
~~co-exist constructively.~~ Most clashes occur between the media
and the government when journalists confuse their role with
that of governing and officials consider favorable press

6

coverage more important than policy results. Healthy respect tinged with skepticism is probably the best natural chemistry possible between the press and policy makers. A measure of restraint and understanding by both sides is essential.

As we define our choices we must consult with, and
inform 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 if we move preemptively and not reactively---we should
collectively manage change so as not to disrupt our relations
or undermine our publics' confidence in our determination to
remain close albeit on new terms.

Over time we would anticipate that the American role may
become less conspicuous in certain areas of the world. We
should not, however, underestimate the critical role that the
United States can and must continue to play. Far into the
future, the U.S. will have the world's largest and most
innovative economy, remain one of only two nuclear superpowers,
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.

If, therefore, the United States can adjust to certain new international realities and develop a broad consensus on our primary interests in the world, we are optimistic about the future. Only a combination of domestic ideological extremism,

7

confusion between past and present, internal economic failings, xenophobia or loss of confidence can weaken our central role 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 impose on the two superpowers a special obligation to maintain world peace. But they are divided by ideological differences and geopolitical rivalry. They have a moral duty to prevent a nuclear holocaust. Yet, for our part, we must also 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 fiercely determined to remedy the failures of the Soviet economy with socialist remedies. He is persuasive 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

8

economy. At the same time, we have no doubt that Gorbachev is
also firmly committed to defend what he believes are legitimate
Soviet international aims.

What then is the practical consequence of these
observations? Precisely what does it underlie
by ultimate Soviet aims?

Our Soviet policy should not be determined either by our
own domestic politics, nor by the same token, by the internal
politics of the Kremlin. The ultimate concern of our foreign
policy must be their foreign policy, our concept of force
natural law.

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 know his deepest motives. We
cannot predict whether his intentions may not radically change
under domestic political pressure. We cannot pretend to
understand the inner workings of the Kremlin well enough to
know whether he 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.

what is all

There is a historically significant struggle going on in
the Soviet Union between reformers and conservatives in the
party and government. Of course we are pleased at 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 battle which derives from the internal
failures and contradictions of the Soviet system.

9

Up to now the major---almost exclusive---object of East-West negotiations has been borne by arms control negotiations. The purpose of these negotiations has been to contribute to the lessening of East-West tensions, to better 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 was the first agreement ratified by both countries in more than fifteen years. Because it covered the simplest, and easily separable elements in the arms control agenda and presented manageable verification problems as well, the agreement was reached without causing intolerable strain on the political fiber of the Atlantic alliance.¹

Future agreements with the Soviet Union will be much more difficult to conclude. The Strategic Defense Initiative (_sdi_) 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 U.S. has declined as domestic opposition and budgetary objections to the project have grown. This is a good example

10

of the need for a bipartisan consensus. We both agree that
research in _sdi_ should be continued and gains that have come
out of our _sdi_ programs should be preserved.²

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 reductions in short-short
("battlefield") nuclear weapons in Europe without reductions in
Soviet conventional weapons and forces, *that in effect amount to* the Soviet conventional threat.

We do differ on the relationship between new strategic
arms control agreements and potential conventional arms control
negotiations.³

Unfortunately, the West has not yet done adequate homework on what course is desirable. There are enormous problems of assembling and agreeing on accurate data and 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, which are certain to become the most difficult arms control problems 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

11

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. We also welcome Soviet hints at greater support for a complete Vietnamese military withdrawal from Cambodia. Rhetorically the Soviets now 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 over arms control.

Nonetheless, the ultimate test of any government's intentions is not its rhetoric but the concrete position adopted at the negotiating table and in specific action. 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.

Our overall conclusions 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.

What the West should do is to probe actively, with an open mind, to determine what steps can be prudently taken that will yield progress in Soviet-American relations and create opportunities for reconciling vital interests. In this

12

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 twelfth Five Year plan
that 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 has concluded that it is in their interest to be
open to a serious and continuing dialogue with the United
States.

Thus, at the outset of their relationship, the new American President and the Soviet General Secretary should have 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 initiated by trusted representatives of the new President and the General Secretary charged with explaining 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 U.S.-Soviet

13

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 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 already are exploring what
they see is 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 ~~such~~ proportions so as to radically
improve Soviet economic prospects. The modernization goals
that Gorbachev has set will not be fulfilled for decades by
which time the Western economies also will have grown by even

greater rates.

Nonetheless, we should reflect carefully and act
cautiously as we shape our trade policy. First, until there is
a major breakthrough in political relationships restrictions on
the transfer of strategic Western technology to the U.S.S.R.
should be maintained. 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

14

mean new business opportunities. Indeed, there will continue
to be legal, moral and political constraints imposed by both
sides on economic intercourse. Both of us had serious doubts
about the Jackson-Vanik and Stevenson amendments which made
most-favored nation status and financing facilities for the
U.S.S.R. dependent on a substantial relaxation of Soviet
restrictions on emigration. Now Soviet visa issuing practices
seem to be under review; we should only modify U.S. legislative
limitations on trade and investment with the U.S.S.R. if there
is significant change for the better in Soviet immigration
procedures.

*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 *keynote* 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 *complete* economic recovery and the growing
importance of the European Community as an economic and

[4]

15

political entity; this tempts more intense economic competition with the 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 a 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 a 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 creating a group of distinguished outsiders to submit a report; in any case the reassessment should be completed in no more than twelve 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. It is dangerous to the alliance to engage in periodic speculation about extreme

16

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. As long as some of the utopian visions of a nuclear-free world are not put to rest, they will subvert serious discussions of a common Atlantic strategy and symbolize the weapons on which for the foreseeable future Western Europe will inevitably play a greater part and have a larger voice in the defense of its territory. This reflects the reality of Europe's strength. Accordingly, the relative role of the United States is likely to decline as a consequence, but 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, but in a manner consistent with overall alliance aims. 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 U.S. will face an alliance whose partners will feel more equal and assertive. 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 third areas could become more common. We believe, nevertheless, that _nato_ leaders must understand that if

17

divisions within the Atlantic Community are permitted to endure
they would threaten the capacity for cooperation and for mutual
well in the Nato area
defense, and hence the vital interests of each member.

We should not be defensive in discussing openly the need
to reform the Atlantic alliance. On the contrary. We should
be proud 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.
such as demands for the
unilateral withdrawals of American forces from Europe,
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, and 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 not many of the TK million
people in the Atlantic alliance countries want to base their
survival---economically, politically or militarily---on his
goodwill or his fate. The strengths of the Western system of
government derive from our 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 to emerge better prepared to

18

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. There is no way that the American political leadership in the world can be sustained if confidence in our 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.

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 will remain a

19

major budgetary outlay for the indefinite future. It is increasingly obvious, however, that our military prowess and even our nuclear capabilities are by themselves irrelevant in the struggles 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 the making of U.S. foreign policy. Great emotion is now attached to discussions of international trade and financial questions in our political debates. Our citizens worry that the American standard of living is directly affected by economic decisions taken in foreign capitals which 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, above all, our trade deficit.

In fact the weaknesses of the American economy 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 breakthroughs occur. However, major modifications of the American force structure now occur not for these reasons but primarily as a result of budgetary

pressures. Such reductions will not produce an abrupt deterioration in our strategic position. Nonetheless, the budget contraction is beginning to complicate vital bilateral political relations and call into question whether the United States will be able to <u>afford the costs of maintaining</u> many of the foreign military <u>installations</u> that 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 $3 trillion economy.

To sum up: America's ability to influence events abroad and insure 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,

21

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.

_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; for Japan this approach may
well have been necessary during a period of postwar
reconstruction, but now it is inappropriate for an economic
superpower with global reach and impact. Quite understandably,
most Japanese would prefer to leave their international
economic and security practices intact, although many political
and business leaders in Tokyo understand the need for changes.

There are many shrill and contradictory voices in this
country preferring advice on how Japan should change. Some
regard Japan's $60 billion trade surplus with the U.S. as the
most urgent problem, and they insist that Japan modify its
trading rules to reduce substantially that imbalance. 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

22

are convinced that Japan, which is fast becoming the third most proficient military power in the world, should relieve the U.S. of some of our Asian defense burdens and increase its defense spending substantially above its present one percent of _gnp_.

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 a mutually-advantageous new partnership.

The first thing to recognize is that a root cause of the trade imbalance is the superior productivity and long-range planning of Japanese industry. The so-called Japanese problem of its parts 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 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, though a cooperative effort by all developed countries to

CJD

23

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, whether we like it or not. 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 to 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 with a disastrous political conflict.

China. No relationship has changed more dramatically

24

It has become a friend of the United States and this 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 are still, in our view, prospects for further gains in our relations with China and 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 technological prowess, the United States can play a special role in the development of the Chinese economy. 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 and in collaborating on broader global issues.

China has already taken decisions that offer opportunities to American economic interests. American business no longer expects profits on a 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

25

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 given 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.

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 reasonably confident that the
Chinese leaders, now and in the future, will have a keen
appreciation for China's geopolitical interests, which we
believe 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 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 in the substance and not only

26

the procedure 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
global 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 disintegration of a central authority and to the rise of religious extremism, violence and foreign influence in that beleaguered nation, where several American hostages are now held. 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. A divided Palestinian leadership seems unable to agree on anything except violence against Israel. Moreover, the long-festering Arab protests against the Israeli occupation of the West Bank and Gaza fuel both Arab demands and Israeli reprisals.

In the midst of this turmoil and within months of
elections in both the United States and Israel, the 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

27

1) Israel should not stay where it is. The demographic trends are 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 compelled by Israel's self-interest that it relinquish its administration over the large Arab population that it controls in the name of its security.

2) At the same time, Israel has a right to secure frontiers. This elementary right was recognized more than 20 years ago in UN 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 significant parts of the West Bank hopefully including major Arab population centers.

3) The Palestinians also have legitimate rights which

28

should be recognized, but 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
the principal negotiation---almost surely the next one.

The Western Hemisphere. It is no longer possible for
the United States to pretend that we alone can determine events
from within or deter hostile forces from without in the Western
Hemisphere. Since its own independence, the U.S. has felt a
special concern for developments in the New World although
there has been too much American ignorance and arrogance in our
policies and attitudes. The past presence of our missionaries,
corporations, gunboats and sometimes soldiers in many of these
countries are all part of a difficult heritage for Latins and
Americans. Recent troubles in these relations have made it
clear that we must deal with the problems of our region
differently from 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

economic policies do not apply to a close and friendly
neighbor. 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, 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.

Overall, the Reagan Administration has handled our
relations with Mexico extremely well. 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 significantly its trading
practices and joined the General Agreement on Tariffs and Trade
(_gatt_).

We offer no comprehensive set of policy
recommendations. It would be unrealistic to assume that there
is a simple, global solution that would solve such complex
problems. All an American or Mexican President can be expected
to do is to deal discretely with immeidate issues while
encouraging active Cabinet-level discussions of all outstanding
differences. 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.

Central America. The most immediate political

31

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
clearcut 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.⁵ Now the Presidents of five Central American nations
have taken on the responsibility for making peace. Whatever
the wisdom of American support for the anti-Sandinista contras,
the United States and five Central American nations now should
concentrate on implementing the Arias peace plan.

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 guerillas elsewhere, and the internal
democratization of Nicaragua.

32

be critical to Soviet security and whether the U.S.S.R. is
prepared to forego efforts to weaken U.S. influence in the area
of its most traditional relationships.

There is also outstanding 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 relevancy 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 reasons to live productively and peacefully
together.

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

If successful, it will have taken a decade to restore
peace to Central America. Whatever bitter lessons the Central
Americans may have learned in the process, the U.S. should now
be in a better position to protect its interests in similar
circumstances elsewhere in the developing world.

33

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 guerilla
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 $TK and interest payments in
this debt represent TK percent of their export earnings.
Western commercial banks alone cannot resolve debt problems of
this magnitude; their governments must become involved. Some
new public and private monies must be provided so that Latin
America can begin to grow again which would, incidentally, make
it possible for the region to again absorb significant
quantities of U.S. exports.

34

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 should be prepared to provide substantial military
assistance to the endangered democratic governments of South
America. In countries where drug traffickers or insurgents
threaten the survival of representative regimes, specialized
military aid should be furnished in addition to longer-term
financial and development assistance.

We cannot have a single policy for all of the region.
We can, however, demonstrate concern and sensitivity for the
Latin countries while strategies are tailored for individual
cases. Their problems 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_

It is apparent from the foregoing, that our next
President will be severely challenged to guide us through a
period of international transition and 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

35

narrowly defined U.S. national interests are at stake. He must
not be reluctant to admit that there are important issues, even
conflicts, in the world where the United States has no special
role to play because our vital interests are not engaged.

It is true that this is a more restrictive approach to
the defense of American objectives than in the immediate
postwar period. It may even be perceived as accepting a
lessening of U.S. influence worldwide. However, what we
advocate is a new realization that our international standing
and national security need not be diminished, simply because we
adopt more selective and collaborative international
strategies. Indeed, our position can be strengthened.

We believe profoundly in the resiliency of the American
people, who 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.
Imaginatively analyzing the new realities affecting America's
role in the world should provide the next Administration with
perscriptions 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

C.YJ

36

the past.

¹Kissinger believes that the political cost of the _inf_ agreement was out of proportion to the arms control benefit.

²Kissinger believes that offensive forces should be limited only in relation to the limits on defensive forces. He believes we must continue to develop _sdi_ actively because of Soviet research in the field and because of _sdi_'s potential in limited 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 U.S. to deploy even elements of an _sdi_ system.

³Vance would not make additional agreements on a 50 percent reduction of strategic nuclear weapons, along the lines now being discussed, or conclusion of treaties covering nuclear testing and biological or chemical warfare, dependent on convening a conventional arms control negotiation, or awaiting 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 U.S. should have a clear idea of the character of a conventional arms control agreement 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

37

⁴Kissinger has serious reservations about an international conference on the Middle East; he believes it would legitimize a formal Soviet presence in the peace process for the first time. Vance considers that an international conference could at least provide an umbrella for the first direct negotiations between Israel and Jordan, and is therefore desirable.

⁵Kissinger believes that U.S. backing for the contras has made the Nicaraguan government more willing to reduce its support for leftist guerilla movements elsewhere and to liberalize the country's internal political system. Vance regards the contras as a weak and ineffective force that could not win militarily and that was used as the justification for the buildup of a much larger Sandinista military machine and greater aid from the U.S.S.R. than would otherwise have been the case.

APR 25 1988.

April 22, 1988

Hyland revisions

American Foreign Policy

We believe that a critical need exists for a substantial bipartisan consensus on the foreign policy objectives that the nation should pursue during the course of the next Administration. We are concerned that the international standing of the U.S. is in danger of declining, and that the U.S. finds itself increasingly reactive to crises and foreign initiatives. In too many key areas of policy we tend to lurch from belligerency to euphoria and back again. Our policies need to be given a greater sense of constancy of purpose. We need to be more responsive to a broad strategy that has bipartisan support from the public and the Congress.

Such a strategy is essential especially at the outset of a new administration. Too often new Administrations are tempted to try to invent a totally new American foreign policy, sometimes relying on people with little background and experience. This is a recipe for serious errors. We hope that the next President will appreciate the importance of continuity in foreign policy as well as the desirability for creative innovation. He should know that the country has been well served by defending certain principles which have kept us

In this year of political transition and in a foreign
policy setting where major roles are changing both at home and
abroad, we believe it useful to identify several bi-partisan
objectives. 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 November 8
over specific policies and methods of implementation. However,
if broad agreement on foreign policy objectives can be reached
in the country, the 41st President of the United States will be
able to start his term with a strong popular mandate for
international leadership.

## II

By the end of this century many of the pillars on which
the global order was rebuilt after World War II will have gone
or changed significantly. For the U.S., our nuclear monopoly
will have long since disappeared and our relative share of the
world economy will be less than half of what it was fifty years
ago. Other countries playing a variety of roles already have a
major impact on U.S. interests: the economies of Japan, Western
Europe and the Newly Industrialised Countries are obvious
examples; several countries have nuclear weapons capability and
others are able to acquire it quickly. The old security issues
persist, but new issues such as states supporting international

[L]

terrorism and international drug trafficking have become
urgent; at the same time, long standing problems cannot be
avoided: 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, an American President can no
longer afford financially to do as much internationally as he
might want to. 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. Finally, a growing number of Americans want the U.S.
to be less active internationally than before. They insist
that other nations assume greater risks, responsibilities and
financial burdens for the maintenance of world order and
international prosperity.

The U.S. is on the eve of a new international era. We
cannot continue to conduct international affairs in the old
ways. At a time of political transition it is important to
have a national debate on how and where the U.S. should spend
its diplomatic, military and economic resources in the decades
ahead. These discussions should involve Americans in all
professions because citizens in all walks of life are well
informed and vitally concerned about their livelihoods and
ultimate survival.

[L]

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 reallcoate to others.

As we define our choices we must inform our closest allies and friends about these 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 to come. Once common decisions are reached - as we believe it possible to do if we move preemptively and not reactively - we should collectively manage change so as not to disrupt our relations or undermine our publics' confidence in our determination to remain close albeit on different terms.

Over time we would anticipate that the American role may become less conspicuous in certain areas of the world. We should not, however, underestimate the critical role that the U.S. can continue to play. Far into the future, the U.S. will have the world's largest and most innovative economy, remain one of only two nuclear superpowers, 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.

If, therefore, the U.S. can adjust to certain new international realities and develop a broad consensus on our primary interests in the world, we are optimistic about the future. Only a combination of domestic ideological extremism,

NB Text then picks up with Sov American relations. )

### III

For as far as anyone can see, American Presidents and Soviet General Secretaries will consider the state of U.S.-Soviet relations as the single most critical issue they face either foreign or domestic. Each has no higher calling than to work with the other to avoid a nuclear holocaust and to manage constructively their bilateral relations and rivalries elsewhere in the world.

This ultimate sharing of responsibility between Washington and Moscow has existed since the Soviet Union acquired a nuclear arsenal comparable to that of the United States in the late 1960s. Today, what is new to the relationship is the emergence of a rejuvenated Soviet leadership under General Secretary Mikhail Gorbachev. Both of us have spent hours with Mikhail Gorbachev. We found him highly intelligent and fiercely determined to remedy the failures of the Soviet economy

"To The Union Station: Bipartisan Objectives
For An American Foreign Policy"

We decided to write this article together because both of us believe that a critical need exists for a substantial bipartisan consensus on foreign policy objectives that the nation should pursue during the course of the next Administration. We share this conviction although we disagree on several specific policy choices —some of which will be described below.

We also are expressing our views out of a concern that American foreign policy has lacked constancy of purpose and, claims by those in power notwithstanding, the international standing of the U.S. has declined in the course of recent Administrations. The U.S. has become increasingly reactive to crises and foreign initiatives rather than responsive to an American strategy for pursuing our international objectives. In key policy areas we have been on a rollercoaster hurtling from moods of exaggerated belligerency to unrealistic expectations and back again.

DRAFT
Kissinger/Vance Foreign Affairs Article

C4J

page 29

Conclusions

- the economies of Japan, Western Europe and the Newly Industrialised Countries

- OPEC and other sources of fossil fuels

- countries with a nuclear weapons capability and those able to acquire it quickly

- states supporting international terrorism

- the poorest countries and peoples who will require humanitarian assistance indefinitely

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page 30

- although capable of destroying the planet and sending military forces anywhere in the world within hours, our ability to shape the world unilaterally is extremely limited.

- even with strong domestic support, an American President can no longer afford financially to do as much internationally as he might want to. Part of the world simultaneously, this is a need to establish priorities.

- many of our staunchest friends regard the Soviet threat to the free world as diminished following the decline in the appeal of the Communist ethic and economic system and the accession to power of a reform-minded leadership in the U.S.S.R. While this perception is premature or not, it tends to reduce Western dependence on American leadership, especially among the younger generations. And it seems for a new & subtle form of American leadership.

- a growing number of Americans want the U.S. to be less active internationally than before. They insist that other nations assume greater risks, responsibilities and financial burdens for the maintenance of world order and international prosperity. We step ahead of this tendency but it must be dealt with creatively in the decades ahead.

In the past twenty years, the legislative Branch of government and the press have both become powerful players in the making of American foreign policy and their roles are appropriate subjects for public discussion.

Widespread understanding of the role of Congress in the making of American foreign policy is essential. 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 try to micromanage American foreign policy or overburden high Administration officials with demands for redundant testimony. 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 testifying on the Hill. If a relationship of trust is established between the Congress and the White House, even with policy differences, mutual respect and the essential complementarity that exists between these two branches of government can be maintained. However, when there is a vacuum in Executive Branch credibility or leadership, the Congress tends to legislate foreign policy.

Matters have been made worse when new Administrations failed to understand that they inherit a wealth of experience and skilled professionals when they come into office. It is wasteful for a clean sweep of all precedent and predecessors to occur on January 20 when the new team takes over. Administrations determined to invent a totally new American foreign policy using people with little background and experience always make serious errors of judgments and lose valuable time. We hope that 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 certain 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 both at home and abroad, we believe it useful to identify several bi-partisan 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 November 8 over specific policies and methods of implementation. However, if broad agreement on foreign policy objectives can be reached in the country, the 41st President of the United States will be able to start his term with a strong popular mandate for international leadership.

In order to keep this article within the space allotted, we have chosen to discuss only a few among many important American foreign policy interests. This list is not exhaustive and it excludes several issues which should concern future Administrations.

US-Soviet Relations

DRAFT

He is persuasive in arguing that he with Socialist remedies. We believe Gorbachev when he tells us 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. However, Gorbachev is also committed to defend what he believes are legitimate Soviet international aims. What then is the partial consequence if there peeperitus?

Despite the reasonable hopes that such a leader can inspire, 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 know his deepest motives. We cannot predict whether his intentions might not radically change under pressure from the Politburo. We cannot pretend to understand the inner workings of the Kremlin well enough to know whether he will succeed or survive. Even "glasnost" and "perestroika" which intrinsically appeal to us should not yet fundamentally alter how we conduct our relations with the Soviet Union. Of course we are pleased at evidence of greater intellectual freedom in the U.S.S.R. The increased outward flow of emigration of minorities in Soviet Jews and other dissidents and minorities seeking to emigrate is a welcome but still tentative development since we cannot be sure that many more exit visas will be issued after most of the remaining so-called original "refusniks" have left. There is a historically significant struggle going on in the Soviet Union between reformers and conservatives in the party and government. Quite naturally we favor the forces of change but ultimately the West can do little to affect

CYD

DRAFT

page 5

the outcome of a battle which derives from the internal failures and contradictions of the Soviet system. The ultimate concern of us foreign policy must be Soviet foreign, not Soviet domestic policy, with an open mind.

What the West should do is to probe actively and sympathetically to determine whether this turbulence within the premier Communist state is having an impact on those Soviet policies which affect our vital interests.

We believe that at this time it is time to give there are some encouraging signs that Soviet foreign and military efforts to the political situation between us and defense policies are changing for the better. As we write this, the

Soviets seem more inclined than before to withdraw their forces from Afghanistan and are hinting at greater support for a complete Vietnamese military withdrawal from Cambodia. Moscow also appears willing to discuss restraint on arms shipments to Central America. Rhetorically the Soviets now embrace "mutual" and "collective" security rather than unilateral advantage, they emphasize "defensive" military strategies and they seem more flexible in some discussions of nuclear and conventional force reductions and mutually acceptable definitions of research, development and testing of space defense systems.

Nonetheless, the ultimate test of any government's intentions is not at the podium but on the negotiating table. We will know better in the coming years, and so will the Soviets, the extent of real change

If carried out in a manner that permits the Afghan people to determine their own fate, we consider this a significant development. We also welcome Soviet lands

CJD

DRAFT

in Moscow's vision of world leadership. Among the questions to be
answered are: do the Soviets intend to allow the countries of Eastern
Europe to develop independently, to cooperate internationally against
state-sponsored terrorism; to accept asymmetrical reductions in Soviet
conventional forces so as to reduce their military advantage in Europe;
and to help end regional conflicts, even at the cost of losing Soviet
influence?

Thus there is an urgent need for an
Although difficult and extended negotiations on these and
other matters will remain at the heart of the relationship between the
U.S. and U.S.S.R., a unique opportunity for a different kind of
conversation between an American President and Soviet General Secretary
will present itself 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 and will be consumed with drafting his country's
twelfth Five Year plan that will guide the Soviet economy during the
early 1990's. It would be a waste of time for both men to meet for an
inconsequential get-acquainted session or a meeting to discuss items
left over from the unfinished Reagan-Gorbachev agenda. At the outset
of their relationship, the new American President and the Soviet
General Secretary should have an unstructured discussion of where they
want U.S.-Soviet relations to be on the eve of the next century and how
Although our experiences as Secretary of State give us pause, we
nevertheless favor the leaders meeting alone for this purpose. Neither

They propose to us
uniquely to international
standpoint. Such a dialogue
should be carried and initially
by United representatives of the new President
and the General Secretary

CYJ

DRAFT

be encouraged to reach understandings on what both sides would be allowed to test and develop. It is more productive for the parties to concentrate on such specifics than to haggle over what was intended by American and Soviet negotiators in the early 1970's.

The place of conventional arms and force reductions in any future arms control agreement will be of overriding concern to the West. It is highly desirable to have some conventional component in concentrate on conventional weapons. the next arms control package. (3) Unfortunately the West is even less prepared to develop Alliance positions on conventional issues than on course is desirable. the nuclear questions. Enormous data and verification problems data processing present themselves in the conventional area. As soon as possible even before a change in Administrations - the American government should concentrate its best intellectual and scientific resources on the conventional forces issue, which is certain to become the most difficult arms control problem for the NATO Alliance in the 1990's.

**Trade** - Although trade with the West is not likely to alter significantly the pace and direction of the Gorbachev reforms, there probably will be more opportunities for American commerce with the U.S.S.R. Our bankers, industrialists and salesmen already are exploring what they see is 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 rival. There

DRAFT

seems to us no prospect that the volume of Western trade and finance
could reach such proportions so as to radically improve Soviet economic
prospects. The modernization goals that Gorbachev has set will not be
fulfilled for decades by which time the Western economies also will
have grown by even greater rates.

Nonetheless, we should reflect [before] encouraging our corporations, banks and government agencies to sweep away all restraint in trading with the Soviet Union. First, there remain major problems [until there is a major breakthrough] in political relations [present], involved in the transfer of restricted Western technology to the U.S.S.R. The Soviets continue to place the highest priority on acquiring, by whatever means, commercial and militarily sensitive information from the West. Second, we should caution Western executives that economic reform in the U.S.S.R. is presently more [rhetorical than real] and remind them that commerce with "liberalizing" Socialist countries in the past has not always turned out to be good business. And finally there are legal and moral constraints on trade with the U.S.S.R. [Bottled services documents about the Jackson-Vanick or Stevenson amendments which deny MFN and financing facilities to the U.S.S.R. until there is a substantial relaxation of Soviet restrictions on emigration. However, now that Soviet visa issuing practices seem to be under review, we should only modify U.S. legislative limitations on trade and investment with the U.S.S.R. if there is a permanent and significant change for the better in Soviet

DRAFT

immigration procedures.

**Regional Conflicts** - Once nuclear parity existed between the superpowers, the greatest risks of confrontation between us occurred when differences threatened to become hostilities in third country areas. It is perfectly clear that Mikhail Gorbachev has no intention of reducing the Soviet presence and influence throughout the world even if he describes Moscow's international role more in economic and political and less in military terms. The Soviet challenge to U.S. foreign policy interests remains and it is too early to tell whether Washington and Moscow can successfully cooperate in the resolution of regional conflicts.

In both the Carter and Reagan Administrations the U.S. engaged the Soviet Union in extensive conversations and occasional negotiations on regional conflicts. Little was achieved. American and Soviet interlocutors had authority only to repeat previously stated positions. The negotiators found their briefs buried under weightier bilateral issues. The governments were quick to take unilateral actions in places where they hoped to gain an advantage.

However, if Americans and Soviets seriously discuss their worldwide interests, they could more easily avoid the recriminations over responsibility for regional conflict and diplomatic stalemate. If

DRAFT

productive, such conversations could weaken the arguments for political
linkage between arms control agreements and the resolution of regional
conflicts. Although the U.S. and U.S.S.R. may not be able to dictate
settlements of regional conflicts without the concurrence of the
directly-affected third parties, bilateral conversations about our
respective interests could well advance the prospects for negotiated
solutions.

Atlantic Relations

Before accelerating our negotiations with Moscow we need
urgently to determine the future of the NATO Alliance and discuss with
our Atlantic partners how to contend with the new Soviet realities. It
would be harmful to our common security for the major Atlantic powers
including the U.S. to respond individually to major Soviet initiatives
without prior NATO consultation and coordination. Dividing and
weakening NATO remains a constant Soviet objective.

NATO governments at their highest levels should deliberate
all of the issues that were mentioned in the previous section on
"U.S.-Soviet Relations." Since NATO was created to respond to a
serious threat posed by the Soviet Union, the Alliance members should
begin by asking themselves how the challenges from the East may, or may
not, be changing. A majority of the voting-age populations in the NATO
countries was born after the Alliance was founded in 1949. These

DRAFT

younger people have no recollection of NATO's origins and will not accept, nor should they, descriptions of an adversary that are no longer current. Although there will never be total agreement among or within the NATO countries on the character of Soviet objectives, we would not be surprised to find a considerable degree of consensus on <u>Soviet intentions among the Alliance governments.</u>

To relieve any doubts about the American commitment to Western Europe the U.S. should make unequivocally clear that NATO can not be defended without sufficient quantities and types of nuclear weapons so as to deter a nuclear adversary, who enjoys conventional superiority in some areas. It is dangerous to the Alliance for present and former U.S. officials to talk seriously about the potential denuclearization of Europe, the elimination of all ballistic missiles or exaggerated claims that SDI will provide an impenetrable shield. As long as some of the fanciful notions of a nuclear-free world advanced at the <u>Reykjavik summit</u> are not put to the rest, they will subvert serious discussions of a common Atlantic strategy.

Immediately following the U.S. elections, the Atlantic partners should give themselves no more than twelve months to complete a broad reassessment of their mission and plans for the next decade. A revised Alliance structure and force posture should emerge from this review as well as clear parameters for the next rounds of arms control

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page 14

It is vital that such a report conclude that Europe will play a greater part, including financially, and have a larger voice in the defense of its territory. It should also contain a timetable for gradual reductions in U.S. contributions - men, money, materiel - to defend Europe by all necessary means. Growing intra-European defense cooperation, possibly in the form of a European defense entity, should be endorsed, but in a manner consistent with overall Alliance aims.

As the European component in Atlantic defenses continues to develop, the U.S. will face an Alliance whose partners feel more equal and assertive than before. Differences of views within NATO may not be limited to Alliance strategies toward the Warsaw Pact countries.

Distinctive West European approaches to crises in third areas could become more common. Increasingly, the Alliance will experience times

where Europeans and Americans go their separate ways. We hope, nevertheless, that most NATO leaders will understand that deep and enduring divisions within the Atlantic Community would threaten the vital interests of each of its members.

capacity for cooperation + mutual defense + leave the vital interests of each member

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page 15

We should not be defensive in discussing openly the need to
reform the Atlantic Alliance. On the contrary. We should be proud
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
demands for the unilateral withdrawls of American forces from Europe,
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, and for the worse, under the pressure of
unfavorable external events.

What gives us confidence in the future of the Atlantic
Alliance is the widespread acceptance throughout the member countries
that on the whole NATO has worked extremely well. It has provided a
barrier behind which the Western democracies have enjoyed forty years
of peace and economic growth. 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 not many of the 400 million people in the Alliance
countries want to base their survival - economically, politically or
militarily - on his goodwill or his fate. The strengths of the Western
system of government derive from our common democratic values and our

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page 16

abilities to respond, often in concert, when circumstances change or
public attitudes evolve. Unlike totalitarian regimes which resist
reform and crack from internal pressures, the West is fully capable of
reorganizing itself and thus to emerge better prepared to continue to
defend its freedoms and prosperity.

## 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 fairly be described as the
"problems of success." It's major trading partners want Japan to
modify practices that were necessary during a period of reconstruction
but which they consider inappropriate for an economic superpower with
*global reach* + industry.

Quite understandably most Japanese would prefer to leave their
international economic and security practices intact although many
political and business leaders in Tokyo understand the need for changes.

There are many shrill and contradictory voices in the U.S.
proferring advice on how Japan should change. Some regard its $60
billion trade surplus with the U.S. as the most urgent problem in our
bilateral relations and they insist that Japan must modify its trading
rules so as to reduce substantially that imbalance. Some believe that
Japan should concentrate on providing massive untied economic and

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page 18

several years: Americans are not reducing their appetites for Japanese imports even as these products become more expensive. Moreover, a dollar worth half its value of two years ago has not made American exports much more attractive to the Japanese. The best way to relieve this difficult problem would be for U.S.-Japanese trade to decline as American companies become more competitive with Japanese firms in foreign markets. Market forces not governmental controls and intervention will likely govern these adjustments. Japan also should continue to take measures that stimulate internal demand and reduce domestic savings as ways to sustain a high rate of economic growth not dependent on increased exports.

If increases in Japan's defense spending are undesirable and our trade imbalance declines, the U.S. should then concentrate on working with Japan and others on a cooperative Western effort to infuse capital into selected areas of the developing world. Once the U.S., Western Europe and Japan agree on priorities for debt relief and of Latin America, in the end the solution of debt problem development assistance, major improvements in the performances and requires returning growth - as we shall see below prospects of the developing countries could result.

## The Arab-Israeli Conflict

For the past forty years the U.S. has been the only major power able to engage all of the belligerents in the Arab-Israeli

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financial assistance to the developing world out of its substantial
foreign exchange surpluses. Still others are convinced that Japan,
which is fast becoming the third most proficient military power in the
world, should relieve the U.S. of some of our Asian defense burdens and
increase its defense spending substantially above its present 1% of GNP
(U.S. defense spending is 6% of GNP).

The U.S. needs a national strategy for dealing with our
Japanese allies before we can ask our friends in Tokyo to work with us
on strengthening a mutually-advantageous new partnership.

In setting priorities for negotiations with Japan, ~~both of us~~ oppose a substantial growth in Tokyo's defense role. Present levels of defense cooperation, between the U.S. and Japan, allowing for increasing exchanges of military technology, strike us as appropriate. All of Asia would strongly oppose a greater military role for Japan. Abdicating American defense responsibilities in the region, and encouraging Japan to pick up the slack, would severely weaken the prospects for continuing economic growth and political stability in most of non-Communist Asia. Regarding Japan's enormous trade imbalances with the U.S., the trend must be reversed and the deficit should shrink. However it will be extremely difficult for the U.S. to cut significantly our negative trade balance with Japan - even if Tokyo provides the U.S. more access to its domestic market - for at least

DRAFT

disputes. No progress towards 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. This influence has led to substantial 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 first steps in the direction of a global solution.

Unfortunately the peace process has been stalled for the past decade and the forces of reason and compromise in the area have been weakened. The disastrous Israeli invasion of Lebanon contributed to the disintegration of a central authority and to the rise of religious extremism, violence and foreign influence in that beleaguered nation where several American hostages are now held. 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, the future of the West Bank, Gaza and the Palestinian question paralyzes the political process of that democratic enclave and special friend of the U.S. A fractious Palestinian leadership seems unable to agree on anything except violence against Israel. Moreover, the unprecedented and spontaneous Arab protests against the Israeli presence in the West Bank and Gaza fuel both Arab demands and Israeli

DRAFT

reprisals.

In the midst of this turmoil and within months of elections in the U.S. and Israel, the Administration has offered a sweeping new peace initiative. At the center of this American proposal is an international conference - an idea favored in some form by all of the heads of government in the area except Prime Minister Shamir of Israel.

(4) Whatever the structure of the negotiations, we agree with the Administration that Israel should not be asked to negotiate with any government, whether Jewish or Arab, that seeks to改变 the status of Israel or to cause it to accept any form of government other than that of Israel. We believe that the Arab governments should be willing to deal directly with Israel on all outstanding issues and not negotiate through intermediaries.

In the next rounds of peace negotiations - whenever they occur - the U.S. should commit itself to be actively involved at highest levels. If a global peace cannot be achieved, we should propose further incremental steps such as an accord between Israel and Jordan, provided that some representative Palestinians can be persuaded to join the undertaking. If an international conference cannot be convened, the U.S. should proceed with unilateral initiatives. We must be prepared, discretely whenever possible, to state our positions on the issues as well.

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Other Americans are far more competent than the two of us to debate the merits of solutions to our economic ills, but there is no way that American political leadership in the world can be sustained if confidence in our economy continues to be undermined by substantial trade and budget deficits. Convincing economic discipline, clear and publicly-supported long-term economic strategies, as well as fairly apportioned budget reductions, must be applied quickly if we are to halt the erosion of our international position.

Since an Administration's primary responsibility is to defend our national security, defense spending will remain a major budgetary outlay for the indefinite future. However, our enormous military power, and our nuclear parity with the U.S.S.R., are ~~of little use to~~ relevant in the struggles for international markets where competitiveness, education, judicious government intervention, as well as price, wage and currency levels determine winning and losing. Unfortunately, our large defense obligations represent costly diversions of scarce resources for our country. There is good evidence that the two nuclear superpowers, whose defense responsibilities far exceed those of others, will become increasingly hard pressed to compete while more innovative and agile economies, freed from the responsibilities of alliance leadership, outperform them.

page 27

all Americans has drawn many more citizens, special interests, public
and private institutions, businesses as well as elected representatives
into the making of U.S. foreign policy. Great emotion is now attached
to discussions of international trade and financial questions in our
political debates. Americans ask what good it is for us to have enough
nuclear weapons to destroy the planet many times over if we cannot
obtain fair trading practices from friendly governments whose
contributions to their own security are minimal. They worry that the
American standard of living is directly affected by economic decisions
taken in foreign capitals which are less politically and militarily
powerful than our own. This is not an argument against
maintaining adequate defense. Instead, it stress the
need for and will reducing our
army and above all our trade deficit.

The weaknesses of the American economy also limit the
resources available for maintaining our defense, foreign affairs and
assistance budgets at adequate levels. Changes in military posture and
strategy should be made if threat assessments change, negotiations
succeed or technological breakthroughs occur. However, we now face the
need to modify our force structure (primarily for budgetary reasons).

Such reductions will not provoke an abrupt deterioration in our
strategic position. The nuclear balance should continue to insure the
survival of our nation and allies for generations to come.

Nonetheless, the budget contraction is beginning to complicate vital
bilateral political relations and call into question whether the U.S.
will be able to afford maintaining many of the foreign military

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installations that 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 after shocks 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 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. 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 $3 trillion economy.

America's ability to influence events abroad and insure prosperity at home will be determined in large part by how soon and how we get our own economic house in order. Fortunately we can still make these decisions ourselves, without having to accept orders from abroad. Unfortunately, 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 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.

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At the same time we should make clear to all of the belligerents that the U.S. supports exchanging territory for peace and the termination of the state of war that exists between states in the area. As a democratic society, Israel cannot govern forever an unwilling and unrepresented Arab population. The only way to guarantee peace in the area is to create a Palestinian entity, preferably federated with Jordan at least during an initial period. Meanwhile, the Arab nations must satisfy Israel's legitimate security demands including those in the presently occupied territories.

What our Israeli friends should realize is that peace will only be more difficult to achieve if we wait. Trends in the area are not favorable to those favoring compromise. The Arab populations governed by Israel are growing in size and militancy. If moderate Arab leaders are overthrown, their successors will take years to recognize the need to negotiate with Israel. Within the U.S. support for Israel may weaken if our public sees more Israeli violence directed against Arab demonstrators. Calls for cuts in military and economic assistance for Israel might grow if the Israeli government appears reluctant to seek a reasonable peace.

It is most unlikely, however, that much can be achieved before American and Israeli voters choose their leaders. Afterwards there will not be much time left to get the process moving. The next Administration should assign several of its best minds and skilled negotiators to this particularly difficult and urgent set of problems.

The Western Hemisphere

It is no longer possible for the U.S. to pretend that we alone
can determine events from within or deter hostile forces from without
in the Western Hemisphere. Since its own independence, the U.S. has
felt a special concern for developments in the New World although there
has been too much American ignorance and arrogance in our policies and
attitudes. The past presence of our missionaries, corporations,
gunboats and sometimes soldiers, in many of these countries are all
part of a difficult heritage for Latins and Americans. Recent troubles
in these relations have made clear that we must deal with the problems
of our region differently from 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
around the world, it is unthinkable that we should now pay less
attention to the Western Hemisphere.

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 the 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
clearcut national objectives that could be publicly debated and

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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. Whatever the wisdom of American support for the anti-Sandinista contras (5), the U.S. and five Central American nations now should concentrate on implementing the peace plan drafted principally by Costa Rican President Oscar Arias Sanchez.

It remains, nevertheless, very much in U.S. interest to obtain the withdrawal of Cuban and Soviet military advisors from Nicaragua, as well as significant reductions in the armies and armaments in the region especially in Nicaragua, a total ban on Sandinista help to guerillas elsewhere and the internal democratization of Nicaragua.

Is there anything left for the U.S. to do to promote an acceptable peace in the region? A valuable asset that we possess is our ability to discuss such matters with the U.S.S.R. General Secretary Gorbachev has indicated that under some circumstances he might be willing to reduce arms shipments to the Sandinistas. Although his initial proposals were vague, the Soviets appear willing to be

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engaged on the subject. There is also some evidence that Moscow has
urged the Nicaraguan leaders to help make the Arias plan work. We
should pursue these issues with Moscow.

The U.S. should commit itself to providing substantial
economic assistance to Central America, after real peace is assured. It
would be preferable for such aid to go primarily to regional
development rather than to individual countries. Our task should be to
reinforce those institutions that give the Central Americans good
reasons to live productively and peacefully together.

The U.S. also should continue to support democratic forces
within Nicaragua. Our diplomatic and material aid to those who work
for a pluralistic economy and representative political process should
be done openly. At the same time, the U.S. should be mindful that,
whatever the policies of the Administration and the Congress, some
private Americans will want to continue to arm the anti-Sandinista
resistance. It is very important that we apply rigorously all American
laws governing such activities. U.S. interests have been badly hurt
recently by freebooters operating openly in Central America.

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position to protect its interests in similar circumstances elsewhere in
the developing world. When young men and women despair of being able
to improve their station and live in freedom, they embrace
revoluntary change and help create an environment where governments
alien to a region secure a place by providing military help. In such
instances, preventive diplomacy and preemptive reform can reduce the
risks of extremist political infection and radical contamination. When
confronted with such situations, the U.S. 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.

American Leadership and the World Economy

When we served as Secretaries of State, only a small portion
of our time was spent on international economic issues. This is no
longer possible for our successors. Foreign policy and economic policy
have become increasingly interdependent. Economic strength is central
to the way we are perceived by our friends and potential adversaries.
America's role in the world has become directly contingent on the
strength and performance of the U.S. economy. For these reasons, the
domestic and international weaknesses of the U.S. economy may be among
the most serious and urgent foreign policy challenges to the next
President.

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policy thereby subjecting our national interest to the vicissitudes of
public mood swings.

It is equally desirable to have a better appreciation of the
considerable impact of the media on U.S. foreign policy decision
making. Some tension will always exist between government which seeks
to exploit the press and the media which seeks to expose an
Administraton. There are, however, enough examples of mutually
beneficial relations between journalists and government officials to
believe that the two professions can co-exist constructively. Most
clashes occur between the media and government when journalists confuse
their role with that of governing and officials consider favorable
press coverage more important than policy results. Healthy respect
tinged with skepticism is probably the best natural chemistry possible,
between the press and policy makers. However, a responsible press can
make an extremely important contribution to the functioning of our
democracy and the wisdom of our policies.

* * *

We have tried to explain why the U.S. is on the eve of a new
international era and why America cannot continue to conduct
international affairs in the old ways. At a time of political
transition it is important to have a national debate on where the U.S.

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should spend its diplomatic, military and economic resources in the decades ahead. These discussions should involve Americans in all professions because citizens in all walks of life are well informed and vitally concerned about their livelihoods and ultimate survival. 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 during their presidency. The candidates should explain what international commitments they would reinforce, what they would reduce and what they would try to transfer to others.

Over time we would anticipate that American leadership may become less conspicuous in certain areas of the world. We should not, however, underestimate the critical role that the U.S. can continue to play. Far into the future, the U.S. will have the world's largest and

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If, therefore, the U.S. can adjust to certain new
international realities and develop a broad consensus on our primary
interests in the world, we are optimistic about the future. 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.

* * *

There is no greater challenge for our next President than that
of guiding us through this period of international transition and
securing a firm place for the U.S. in a changing configuration of
nations. He must focus American resources and energies on areas where
more narrowly defined U.S. national interests are at stake. He must
not be reluctant to admit that there are important issues, even
conflicts, in the world where the U.S. has no role to play because our
vital interests are not engaged.

This more restrictive approach to the defense of American

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objectives abroad may be perceived as admitting to a lessening of U.S.
influence worldwide. However, it is essential to realize that our
international standing and national security need not be diminished by
more selective and collaborative international strategies.

The depth and resiliency of the qualities that the U.S. can
bring to its foreign and national security policies 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 can also be the cause of chaos and confusion,
have produced a range of talents - social, scientific and moral - that
remain formidable. Imaginatively analyzing the new realities affecting
America's role in the world should provide the next Administration with
perscriptions 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.

Footnotes

HAK believes that we must continue to actively develop SDI because of Soviet research in the field and its potential, if limited, future value to Western defenses. CRV believes that we should continue research and development at a measured pace but is highly doubtful that it will ever be cost-effective militarily or advantageous politically for the U.S. to deploy even elements of an SDI system.

(2) HAK believes that the Administration is justified in claiming that the negotiating record that preceded the conclusion of the Anti-Ballistic Missile Treaty in 1972 allows expanded testing of SDI systems. CRV does not believe that the negotiating record supports the so-called "broad interpretation" of the ABM Treaty.

(3) Nevertheless, CRV could support additional agreements on a 50% reduction on strategic nuclear weapons as well as treaties covering nuclear testing and biological or chemical warfare without some conventional reductions. HAK favors no further arms control treaties unless cuts are made in Soviet conventional weapons or forces. Both CRV and HAK would not advocate reductions in short-short ("battlefield") nuclear

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weapons without reductions in Soviet conventional weapons and forces.

(4) HAK has serious reservations about an international conference on the Middle East which, he believes, would legitimize a formal Soviet presence in the peace process for the first time. CRV considers that an international conference which could at least provide an umbrella for the first direct negotiations between Israeli and Jordan is desirable.

(5) HAK believes that U.S. backing for the contras has made the Nicaraguan government more willing to reduce its support for leftist guerilla movements elsewhere and to liberalize the country's internal political system. CRV regards the contras as having been a weak and ineffective force that could not win militarily and that was used as the justification for the buildup of a much larger Sandinista military machine and greater aid from the U.S.S.R. than would otherwise have been the case.

We decided to write this article together because both of us
believe that a critical need exists for a substantial bipartisan
consensus on foreign policy objectives that the nation should pursue
during the course of the next Administration. We share this conviction
although we disagree on several specific policy choices - some of which
will be described below.

[L.C.]

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page 2

Matters have been made worse when new Administrations failed to understand that they inherit a wealth of experience and skilled professionals when they come into office. It is wasteful for a clean sweep of all precedent and predecessors to occur on January 20 when the new team takes over. Administrations determined to invent a totally new American foreign policy using people with little background and experience always make serious errors of judgements and lose valuable time. We hope that the next President will appreciate the value of continuity in American foreign policy. He should know that the country has been well served by defending certain principles which have kept us strong and prosperous for almost half a century under Republican and Democratic Presidents alike.

US-Soviet Relations

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Despite the reasonable hopes that such a leader can inspire, 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 know his deepest motives. We cannot predict whether his intentions might not radically change under pressure from the Politburo. We cannot pretend to understand the inner workings of the Kremlin well enough to know whether he will succeed or survive. Even "glasnost" and "perestroika" which intrinsically appeal to us should not yet fundamentally alter how we conduct our relations with the Soviet Union. Of course we are pleased at evidence of greater intellectual freedom in the U.S.S.R. The increased outward flow of Soviet Jews and other dissidents and minorities seeking to emigrate is a welcome but still tentative development since we cannot be sure that many more exit visas will be issued after most of the remaining so-called original "refusniks" have left. There is a historically significant struggle going on in the Soviet Union between reformers and conservatives in the party and government. Quite naturally we favor the forces of change but ultimately the West can do little to affect

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There are some encouraging signs that Soviet foreign and
defense policies are changing for the better. As we write this, the
Soviets seem more inclined than before to withdraw their forces from
Afghanistan and are hinting at greater support for a complete
Vietnamese military withdrawal from Cambodia. Moscow also appears
willing to discuss restraint on arms shipments to Central America.
Rhetorically the Soviets now embrace "mutual" and "collective"
security rather than unilateral advantage, they emphasize "defensive"
military strategies military in discussions with Western officials and
and they seem more flexible in some discussions of nuclear and
conventional force reductions and mutually acceptable definitions of
research, development and testing of space defense systems.

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in Moscow's vision of world leadership. Among the questions to be
answered are: do the Soviets intend to allow the countries of Eastern
Europe to develop independently; to cooperate internationally against
state-sponsored terrorism; to accept asymmetrical reductions in Soviet
conventional forces so as to reduce their military advantage in Europe;
and to help end regional conflicts even at the cost of losing Soviet
influence?

Although difficult and extended negotiations on these and
other matters will remain at the heart of the relationship between the
U.S. and U.S.S.R., a unique opportunity for a different kind of
conversation between an American President and Soviet General Secretary
will present itself 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 and be consumed with drafting his country's
twelfth Five Year plan that will guide the Soviet economy during the
early 1990's. It would be a waste of time for both men to meet for an
inconsequential get-acquainted session or a meeting to discuss items
left over from the unfinished Reagan-Gorbachev agenda. At the outset
of their relationship, the new American President and the Soviet
General Secretary should have an unstructured discussion of where they
want U.S.-Soviet relations to be on the eve of the next century.
Although our experiences as Secretary of State give us pause, we
nevertheless favor the leaders meeting alone for this purpose. Neither

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man will open up fully to the other; that is not the purpose of the conversation. Each should however explain what opportunities and limits he foresees in the relationship during the period they will both be in office. A sense of what they might expect to do together and what will be the toughest problems between them could help set the agenda and tone for further more formal meetings including those at lower levels. We also favor annual 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.

Before leaving U.S.-Soviet relations we have several additional thoughts, and some differences, on issues that are central to the relationship:

**Arms Control** - Progress in reducing the nuclear and conventional arsenals of both countries will dominate the bilateral relationship for some time to come. Arms reductions can contribute to the lessening of East-West tensions and are conducive to better political relations and easier communication between Washington and Moscow.

All of these considerations have merit but we should be careful not to put too much of a burden on arms control and make it the sole barometer of the U.S.-Soviet relationship. The I.N.F. Treaty

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was the first agreement ratified by both countries in more than fifteen
years. Because it covered the simplest and separable elements in the
arms control agenda and presented manageable verification problems, it
passed without causing intolerable strain on the political fiber of the
Atlantic Alliance.

Future arms agreements with the Soviet Union will be much more
difficult to conclude. The Strategic Defense Initiative (SDI) 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 U.S. has declined as domestic
opposition and budgetary objections to the project have grown here.
(1) In any event, the U.S. should not abandon the research and gains
that have come out of our SDI programs unless the U.S.S.R. were to make
significant concessions of strategic importance to us. (These
reductions need not be symmetrical: for example, a Soviet offer to
reduce substantially its SS-18 heavy missile force in return for
constraints on SDI should be seriously considered.)

Regarding the Anti-Ballistic Missile (ABM) Treaty, both
capitals appear disposed to accept a minimum period of non-withdrawal
from the agreement. While debate will continue in the U.S. over how to
interpret the ABM treaty (2), American and Soviet negotiators should