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Deep Appends

7/11/95

Mr. Chairman:

Thank you for the opportunity of appearing before you to discuss the direction of post-Cold War American foreign policy. It is surely one of the most difficult international challenges in our history, less dangerous than the Cold War had been but more complicated; less ominous than the world we encountered at the end of the Second World War, but more intricate. For the task before us is nothing less than to distill a sense of direction from a world in which almost all key elements are changing simultaneously.

While too many Americans are under the illusion that their foreign policy tasks are already accomplished and seem tempted to turn their back on the world beyond our shores.

That challenge has not yet been mastered. A variety of factors--absence of a philosophical consensus, an uncertain

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Executive Branch, divisions between the Executive Branch and the Congress, Congressional macromanagement of foreign policy--threaten to marginalize American foreign policy.

NATO is drifting; Western Hemisphere policy is marking time, torn between constructive pronouncements and operational lassitudes; in Asia, we are confronting the major powers, China and Japan, simultaneously, while relations with China are on a collision course. Around the world, more and more decisions are taken which the United States does not shape and which therefore do not take basic American interests adequately into account. Gradually, a pattern of international politics could creep into being that makes us increasingly uncomfortable, both in terms of our values and of our economic self-interest.

This of course is far from inevitable. The United States remains the world's most powerful nation and the strongest economy. The values which we profess continue to

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animate the quest for liberty in all parts of the globe. We
retain the capability to shape a constructive world order.

But to realize our potential requires a coherent foreign
policy which engages a bipartisan consensus over an extended
period of time similar to what sustained us through to
victory in the Cold War.

The New International Environment

The United States faces an unprecedented international
situation on the basis of historical interpretations which
are in fact unique. Populated almost exclusively by
immigrants, ours is the only country that has never
experienced a powerful neighbor along its borders, and
therefore has never had to face the security issues
confronted by less favored nations. The Americans'
perception of foreign policy was always one of nearly
limitless choice and, above all, of having the ability to

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participate or to withdraw from international engagements at will. Every American initiative of the postwar period was presented to the American public as having a terminal date, after which America could again withdraw, allowing the postulated underlying harmonious pattern of the world to reassert itself.

Much of America's foreign policy has traditionally been presented in alternately psychiatric and theological terms: either as a means by which relations among nations could be conducted as they might be if they were relations among individuals, or when that did not seem possible, as a crusade to destroy or, even better, to convert antagonists to the American perception of international affairs. In that sense, the Cold War and victory in the Cold War were a *America's perception of* a culmination of the *special mission of international affairs*.

How many historical examples, if any, can be recalled where a nation's leaders stated goals that, some forty years

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later, were practically all achieved? That is the position
in which America finds itself at the end of the Cold War.

But what Americans have not sufficiently understood is that
foreign policy knows no plateaus; even the greatest
achievement--perhaps especially the greatest achievement--
leads to a decline if it is not the building block of a new
advance.

For the first time in its history, America will be
obliged to conduct a global foreign policy in the absence of
an overwhelming ideological or strategic enemy, and in a
world from which it can neither withdraw nor dominate.
Thus, the classic maxim of American foreign policy--the
invocation of an overwhelming crisis transmuted into large-
scale enterprises--does not apply.

Paradoxically this occurs while the United States is
the only remaining superpower. But military power by itself
represents a simplistic assessment of the emerging

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international reality. For the issues susceptible to
solution by military action are in decline. The kind of
power in which the United States excels is less and less
relevant to most foreseeable international crises. On the
other hand, economics and technology are becoming much more
~~veryly~~ crucial. Even a cursory glance at the condition of
the dollar makes it clear that the relative economic
position of the United States is not what it was even ten
years ago.

The current world contains six or seven major global
players whose ability to affect nonmilitary decisions is
essentially comparable. In such an international order,
there are only two roads to stability: one is hegemony based
on a country's dominance; the other is equilibrium, which is
another way of describing the notorious balance of power.
The trouble is that the American body politic tends to
reject both approaches. Hegemony will prove physically

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draining; the American public seems determined to reject the
role of global policeman which hegemony implies, and the
course runs counter to the moral convictions of the American
people. But balance of power has been historically rejected
by the American political and intellectual communities as a
source of endless tensions--though at crucial periods, such
as in deciding to enter the two world wars to preserve the
global balance of power, Americans have been prepared to
overcome their prejudice. Still, a call to rely on the
national interest is considered by many a revolutionary, if
not a reactionary, proposition. And even when an attempt is
made to apply the concept, the national interest continues
to be defined in sweeping, ideological terms.

Yet the reality is that the emerging world order will
have to be based on some concept of equilibrium, at least
some concept of balance among its various regions. In
practice, this requires a balancing of dissatisfactions. It

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is impossible for every participant in an international
system to be perfectly satisfied with every aspect and at
all times; that happy condition has never been achieved by
humanity. Still, it may be possible for the major players
to be sufficiently satisfied that they do not seek to
overthrow the international system by violence, terrorism,
economic warfare, or other methods so well elaborated in our
century.

But while post-Cold War foreign policy reflects some
traditional patterns, there are important differences as
well. For one thing, modern economics has changed the
nature of incentives. Historically, nations could effect
changes in the balance only by conquest. In our day, modern technology
permits quantum changes in a society's power by changes
entirely within its own territory. No conceivable conquest
could augment a nation's power like the acquisition of
nuclear weapons or the mastering of modern information

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9 nuclear
proliferation is a permanent
technology. Thus the paradox: 
temptation and a permanent danger while, at the same time,
the cost of war, at least among major powers, has risen to
near prohibitive levels.

Then, too, the elements of national strength are no
longer homogeneous. Many economic powerhouses--especially
in Asia and the Middle East--are politically fragile.

NoP
Communications are instantaneous, and economies are
global. Every day a trillion dollars moves in world
financial markets, only 5 percent of which is generated by
commercial transactions. Global well-being is becoming both
interconnected and precarious: a bank clerk in Singapore
managed to create $27 billion in derivatives in three days
and bring down a major international bank. But political
loyalties remain imprisoned in the nation state. And with
the breakup of old empires, conflicts have even shriveled to
the ethnic level where their intensity magnifies almost in

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proportion as their global relevance is shrinking. Such dichotomies complicate the evaluation and, even more, the operation of any conceivable balance of power under modern conditions.

Not just the United States but every major nation finds itself in a transitional stage. The traditional European nation state lacks the scale to deal with the entire spectrum of contemporary problems. Russia is living within borders it has not known since Peter the Great. China is emerging as a world power for the first time in several centuries while its leadership is changing. Japan is reversing a pattern of political withdrawal.

How is American foreign policy to be defined in such a period? Theoretically, the United States could pursue a pure interest policy in the manner of Britain throughout most of the 19th century: a posture of "splendid isolation," maintaining good relations wherever possible but throwing

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its weight to the side that confers certain advantages at a
specific moment (which, in the British case, was generally
the weaker side). ~~This would be a latter-day version of the~~ SDF
~~European balance-of-power diplomacy.~~ SED

There are, however, huge, probably insurmountable,
obstacles to such a strategy. The first is that, whereas
Britain conducted its policy primarily in Europe, we would
have to conduct it globally. Secondly, Britain had a
leadership group that had trained itself in the conduct of
public policy. America has neither such a leadership group
nor any similar tradition of hard-headed, purely interest-
oriented policy. Third, when communications are
instantaneous, economics global, and politics democratic, it
is probably not possible to conduct the same kind of cold-
blooded policy in every part of the world simultaneously.

Fourth, international stability is increasingly affected by
splinter groups with no interest in the global equilibrium

G

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at all, usually ethnic groupings which, in fact, are using
the major powers' desire for global order to achieve their
own parochial objectives.

For the United States to practice its version of
"splendid isolation" on a global basis under these
circumstances would exhaust us physically and
psychologically. A nation founded by people who have
traditionally believed in the universal applicability of
their values cannot simply abandon the Wilsonianism that had
dominated 20th century American foreign policy.

Finding our way through this maze would be difficult
enough were Americans at one in assessing the international
situation. We are, however, divided, especially along
generational lines. The generation that won the Cold War
had its seminal experience in the Second World War and its
immediate aftermath. They believed in a constructive
American role and in the beneficent role of American power.

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The generation whose seminal experience was the Vietnam War
holds a quite different view. ~~The Vietnam War--the defining~~
~~experience of their generation--is viewed not just as a~~
terrible mistake but as an indictment of American power in
general. Just as many who used the outcome of America's
role in World War I as rationale for the nonintervention
policy of the 1920s and 1930s, current American policy
debates--whether in the Balkans or the Caribbean, in Africa
or Asia--can best be understood in the context of a
generation that views the world through a lens largely
provided by a local and unsuccessful conflict. They do so
by abdicating a foreign policy role by fleeing into either
extreme multilateralism or extreme nationalism.

That difference in perspective is sharpened by one of
the fundamental transformations of human consciousness
through which our period is living: the change of the
process of learning from books to pictures and from reading

+

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to viewing which roughly marks the borderline between the
generations I have described. To learn from books, one
requires concepts that relate seemingly disparate events to
each other; pictures, on the other hand, teach by
impressions which emphasize the mood of a moment. All this
foreshortens the policy perspective and makes it more
vulnerable to fluctuating sentiments and transitory
occurrences.

These factors have shaped the argument between the
advocates of a national interest-based philosophy and the
so-called multilateralists. The first point of view states
that America should base its foreign policy on a clear
perception of the national interest, evoking some of the
resistances I have sketched earlier. Most of us who embrace
this proposition do not interpret the national interest in
the extreme version described above. We would argue that
the national interest, properly understood, has to encompass

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the relevance of our values to other societies; indeed, that
forming an international consensus was part of America's
interest. But we would also insist that objectives
essential for American security or American values should be
pursued alone, if necessary. While we would prefer some
international support, in the extreme, we would be prepared
to act alone.

The opposing point of view considers the American role
in the Cold War to have been presumptuous, excessive, and
even potentially evil, and seeks to discipline American
power by reining it in through international institutions.
Though the proponents of this view now present themselves as
internationalists, they generally derive America's
international role on a multilateral consensus.

Emphasis on multilateral diplomacy was one of President
Clinton's campaign themes; Undersecretary of State Peter
Tarnoff, in May 1993, insisted that America was losing the

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capacity to act alone while UN Ambassador Madeleine Albright has described Administration policy as "assertive multilateralism." The implication of such statements is that the national interest is on the whole defined by the attainable global consensus.

The trouble is that excessive reliance on multilateral diplomacy is proving starkly at variance with the realities of ethnic conflict, rampant nationalism and the emergence of multiple centers of power sketched earlier. In this fragmented world, excessive multilateralism leads either to abdication (as in Bosnia) or to sacrifices not tolerated by the American public because they are not perceived to reflect basic US interests (as in Somalia).

To be sure, only extreme and unrealistic nationalistic isolationism could categorize the national interest and international consensus as polar opposites. In the real world, the difference is one of nuance: whether to start

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with the national interest and exercise American leadership to shape multilateral views; or whether the definition of the national interest should be made dependent on the emergence of a multilateral consensus. Yet on this very nuance depends the possibility of a dynamic American foreign policy.

Let me now apply these principles to two foreign policy areas: Europe and Asia. There are many other policy areas, but for the purposes of this discussion, I will focus on Europe and Asia, particularly in the Western Hemisphere, on areas that are such as the Western Hemisphere, nuclear proliferation or the Middle East. Given the limitations of time, I shall deal with these areas on another occasion as it is in Europe and Asia that our foreign policy seems to me in deepest trouble.

## US European Policy

For over a generation, the Atlantic Alliance has been the bedrock of American foreign policy, uniting the oldest functioning democracies with genuinely pluralistic systems

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and economies based on the market. In the end, the nations of the Atlantic area need each other in their own self-interest. Without America, Europe turns into a peninsula at the tip of Eurasia, unable to find equilibrium much less unity and at risk of gradually subsiding into a role similar to that of ancient Greece in relation to Rome--the only outstanding question being whether America or Russia will play the role of Rome. Without Europe, America will become an island off the shores of Eurasia, condemned to a kind of pure balance-of-power politics difficult to reconcile with its national genius. Without America, Europe's role will shrink. Without Europe, America's path will be precarious and lonely; after all, we fought two world wars to prevent the domination of Europe by potentially hostile powers.

A major American role in Europe is a prerequisite for European coherence. Without it, the European Union would founder on the fear of German domination; France would see

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reinsurance in a Russian option; historic European coalitions would form, compounding their traditional tenuousness with irrelevance; Germany would be tempted into a nationalist role, Russia into revanchism.

An American presence in Europe provides a measure of equilibrium. It gives France assurance against German hegemony and Germany a security anchor against Russian pressure as well as protection against excessive European nationalism.

Europe by itself cannot handle the two most dangerous Russian contingencies: resurgence of nationalism or implosion. A Russia facing a divided Europe would find the temptation to fill the vacuum irresistible. Even Russia has much to gain from an American presence, which is one of the best guarantees against the reemergence of historical European temptations.

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There are new challenges as well. While technically a subject outside NATO competence, Muslim fundamentalism, were it to dominate North Africa, would pose a grave challenge to Western security. Nor is it necessary to define every threat in detail to seek to preserve the Atlantic system of regular consultation and an infrastructure of military forces, logistics systems and experience in crisis management which provides a vital, perhaps indispensable, resource in a period of transition.

But the importance of close relations with Europe goes beyond the traditional catalogue of threats. Though I believe the time has come for America to develop a concept of the national interest and apply it in a balance-of-power context, I believe it equally necessary to limit this kind of foreign policy to regions where no alternative exists and to stress the areas where a more cooperative--even Wilsonian--approach based on common values is feasible.

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The two regions where moral consensus can undergird cooperative relationships are the Western Hemisphere and the North Atlantic area. In both, the key countries have, to all practical purposes, forsworn the use of force in their relations with each other. In each, institutions already exist capable of serving as building blocks of a cooperative world order: NAFTA and Mercosur in the Western Hemisphere, NATO and the European Union in the Atlantic region. But while the Administration has put forward an imaginative vision for the Western Hemisphere, it has failed to do the equivalent for the North Atlantic area, in part because it has never resolved its own ambivalence between relying on traditional alliances and its preference for

multilateralism. This is why it has fudged the key issues.

How to define the Europe to which America should relate
itself--especially over the issue of NATO expansion--and
what should be Russia's relationship to that Europe. But

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unless America assumes a real leadership role, the nations bordering the North Atlantic will gradually drift apart; the two sides of the Atlantic will grow more conscious of their rivalries than of their common purposes.

With respect to NATO expansion, the Administration has been reluctant and ambivalent, torn between the alliance policy which it inherited and the multilateralism which it prefers. It is aware of the German distaste for having the border of NATO on the eastern border of Germany and of the pressures of the Visegrad countries (Poland, the Czech Republic, Slovakia and Hungary) to join NATO. But it really is not comfortable with traditional alliances; indeed, some of its policymakers seem to believe that NATO may have contributed to causing the Cold War rather than to ending it. They would like to reverse what they consider the key error of the Cold War which, in their view, was the exclusion of Russia from Europe. They seek to build Europe

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from east to west based on Russia, rather than from west to east and based on the nations bordering the North Atlantic.

This explains the Administration's reluctance to expand NATO. President Clinton put forward as an alternative the so-called Partnership for Peace which, in his view, is not about security but about reconciliation: to "use our military power to do something never before done in the history of the nation state on the European Continent: to unify truly free and independent nations of their own free will in a Europe that is truly free together rather than have some new and different divisions of Europe..."

To use military power to unite nations of their own free will would, until our time, have been considered a contradiction in terms--especially when the area envisaged is vast, covering most of the Northern Hemisphere: the Atlantic Alliance, the former satellite orbit, the successor republics of the Soviet Union, the European neutrals and, of

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course, Russia itself. In any event, such a grouping is an
altogether different animal from the Atlantic Alliance as
heretofore conceived; it is in many respects contradictory
to it.

NATO was designed for security; its purpose was to
resist a definable danger. The Partnership is designed not
for defense but for reassurance. The Partnership's joint
military planning is an end in itself and assumes no
specific peril; it is undertaken bilaterally between NATO
and each partner. Yet what is the common threat or purpose
that unites, say, Uzbekistan and Spain? The Atlantic
Alliance assumed that its threats came from outside the
treaty area, while the Partnership seeks to avoid threats
within its area by affirmations of good intentions. No
wonder that the Partnership is based on the proposition that
the extension of NATO to Eastern Europe is "provocative" and
"divisive."

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If present trends continue, NATO policy will become increasingly contradictory. Despite ritualistic assertions to the contrary, the Partnership for Peace creates two categories of frontier in Europe: those that are guaranteed are not threatened, and those that are threatened are not guaranteed. The result is a gray area in Eastern and Central Europe that the nations affected find severely demoralizing.

The nations of Central and Eastern Europe are joining the Partnership for Peace because they see it as a steppingstone into NATO. Russia is joining to drain NATO of content, as is evidenced by various Russian proposals amounting to a veto over NATO decisions. Thus, when America's leaders imply to Poland that NATO membership is just around the corner and to Russia that it can participate in any security arrangement open to its former satellites (in other words, that it may be able to join NATO

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eventually), confusion (and worse) is inevitable when the
promissory notes fall due. In any event, the prospect of
Russia's eventual membership in NATO removes NATO as a
safety net against what Russia's neighbors fear most. NATO
was designed to defend its members against threats from
outside the NATO area, not against threats from other NATO
members.

The Partnership for Peace runs the risk of diluting
what is left of the Atlantic Alliance into a vague
multilateralism. When Russia is as eligible for NATO
membership as Poland, what is left of any common purpose?
If Uzbekistan is eligible, why not India? If everybody
between Vladivostok and Vancouver is eligible--if everybody
is allied with everybody--why even have an Atlantic
Alliance? Either NATO has in fact become vestigial or,
alternatively, Asia will see the new grouping as ranging the
white races against the peoples of the Far East. Or, more

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likely, we will get the worst of all worlds by trying (or pretending) to include Russia in NATO: an ineffective NATO that nevertheless gives Asians the sense that we are trying to organize Eurasia against them.

In recent months, the Administration seems to have recognized the impossibility of maintaining its original position. It announced first that the subject of expansion should be studied. It has more recently advocated expansion but avoided a timetable which is the only basis on which serious planning can begin. It is not clear, at least to me, whether the Administration is seeking to navigate between domestic advocates of NATO expansion and Russian opposition by embracing the concept of *expansion* while avoiding a timetable, thus keeping open all options and leaving the actual decision up to an indefinite future.

If that is the case, NATO will continue to languish.

Until the question of NATO membership is settled, the revitalization of the core Atlantic Alliance will mark time.

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So long as NATO and the Partnership are merged organizationally, it will prove very difficult to define common objectives for the core Alliance. Twenty-two nations have already applied for membership in the Partnership; scores are eligible. Each nation is supposed to come up with its own program of bilateral cooperation with NATO. No one familiar with how NATO operates can believe that, as now constituted, the Alliance bureaucracy can plan individual Partnership programs and simultaneously generate a creative adaptation of the Alliance itself to the new circumstances. Gresham's Law will apply: the bad currency will drive out the useful one.

The Administration needs to face the implications of its rhetoric. If the purpose is to avoid "discrimination," there will never be a good time for East European membership without Russia; and if it is made dependent on Russia, Moscow will have been given a veto or

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the option of watering down the existing institutions to the
point of irrelevance. And if later on Eastern Europe is
taken into NATO because Russia has become a declared threat,
the crisis would surely be exacerbated.

It is therefore necessary to take another look at a
Russian policy which stakes everything on a kind of
psychoanalytic social engineering. A realistic approach to
Russia policy would recognize that integrating Russia into
the international system has two components that must be
kept in balance: influencing Russian attitudes and affecting
Russian calculations.

The Administration's attempts to return Russia to the
international community are laudable. I agree with
Secretary Christopher's statement that "helping democracy
prevail in Russia remains the wisest--and least expensive--
investment that we can make in American security." I

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strongly support the Administration's program of economic
assistance to Moscow.

Russia should indeed be made welcome in institutions
that foster economic, cultural and political cooperation
with the West.~~ Bull The Conference on Security and Cooperation
in Europe would be a far better home for this than a
Partnership for Peace that invents nonexistent military
missions.

The tendency to treat Russian leaders as if they were
fragile novices easily flustered by exposure to the
realities of international politics is an invitation to
disillusionment and misunderstanding. These are tough men
who have survived the brutal school of Communist and Russian
politics; they are quite capable of comprehending a policy
based on mutual respect for each other's national interest
and strict reciprocity. In fact, they are likely to

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understand such a calculus better than appeals to an
abstract and distant utopianism.

Perhaps the most serious misapprehension has been that
a Russian government that declares itself reformist would
automatically abandon traditional foreign policy goals. For
the incentives of the most well-meaning Russian government
are quite different from most American expectations.
Nationalism is on the rise inside Russia, and there is a
great temptation to ease the pain of transition to market
economics by appealing to that basic instinct.

At the moment, Russian armies are in Moldova, Georgia,
Azerbaijan, and Tajikistan and participate in some of the
local civil wars with a strategy that seems designed to make
the new republics--all of them members of the United
Nations--rue their independence and return to the womb of
imperial Russia. The foreign minister of Russia has
repeatedly put forward a scheme for a Russian monopoly on

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peacekeeping in the "near abroad," indistinguishable from an
attempt to reestablish Moscow's domination. By its silence
and its repeated invocation of an American-Russian
partnership, the United States has come close to acquiescing
in these actions.

A moderate Russian foreign policy will be impeded, not
helped, by turning a blind eye to the reappearance of
historic Russian imperial pretensions. Russia's effort at
reform cannot exempt it from accepted principles of
conducting international relations. It is ambiguity about
dividing lines, not their existence, and ambivalence about
Western reactions, not their certainty, that tempt
militarists and nationalists alike. Reform will be
strengthened if moderates are put in a position of being
able to highlight the dangers of a nationalistic Russian
policy.

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Russia and the United States have parallel interests in Central Asia, in nonproliferation, and in stability in the Middle East. All these subjects should be the focus of intensive consultations at all levels, including the summit. Finally, Russia and America share a mutual interest in a stable Europe and Central Europe. This can be achieved best by America's presence in Europe, which is based on NATO. Stability in Europe requires reaffirming the centrality of NATO rather than diluting it in an abstract multilateralism.

This leads to the following conclusions:

* The crisis in the Atlantic Alliance can be solved only by opening a dialogue on fundamentals; previous American vacillations complicate the ability to restore confidence.

* The structure of American-European relations needs to be modified. With the military threat receding and the

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risk of political crises growing, the political role of the
Atlantic Alliance should be given greater emphasis.

* The most sensitive immediate issue is NATO expansion, which the Administration put before recent NATO ministerial meetings. But it must take care lest, in seeking to please every constituency and respond to every pressure, it winds up in the same dead end as Bosnia.

The current policy of carrying water on both shoulders, of hinting at expansion to Western and Central Europe while trying to placate Russia with prospects of a protracted delay--is likely to accelerate the disintegration of Western unity without reassuring Russia. NATO expansion requires a decision, not a study.

* Having been approved by the NATO Council, joined by Russia and a host of other Central and East European countries, the Partnership for Peace is now a fact of life. But it is not too late to prevent the Partnership from

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submerging the Atlantic Alliance by separating its
organization from that of NATO.

Nevertheless, security can no longer be the principal
unifying bond of the Atlantic nations because, fortunately,
there no longer exists a unifying threat. Common purposes,
not common fears, must provide the cohesion in the new era
in which economic and social issues will dominate.

One such initiative that would give a new impetus to
North Atlantic relations would be a North Atlantic Free
Trade Area for manufactured goods and services, with
negotiations on agriculture to follow. Such a grouping
would accelerate the movement toward the principle of free
trade to which the members of the World Trade Organization
have committed themselves. In the meantime, it would foster
cooperation among the nations of the North Atlantic.
Conditions are propitious. Labor standards and wage scales
on the two sides of the Atlantic as well as environmental

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concerns are comparable. Prime Minister John Major of Great Britain and Foreign Minister Klaus Kinkel of Germany have expressed their interest in such a project.

In time, NAFTA and the North Atlantic Free Trade Area could be merged, and new consultative machinery could be created in the political and social fields between the Western Hemisphere and the European Union. As Russia's economy develops and its policy becomes more national, associate membership for it in such a free trade area would be a distinct possibility--much more so than in NATO.

In short, America should return to what it has traditionally done best: putting forward its vision for how the nations of the North Atlantic can create a new world worthy of their democratic principles.

Asia

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of the emergence of a hegemonical power or by ill-judged American policies and pressures.

Therefore

In focusing on economics, we overlook at our peril the crucial reality that the political situation in almost every Asian country is extremely fragile. The majority of them find themselves in a state of transition. These transformations are producing in each country a tension between nationalism and internationalism and, at a minimum, will modify existing alliances including the Japanese-American alliance.

Japan is in the process of transforming its political institutions and probably the orientation of its postwar foreign policy. The electoral system is changing with as yet unpredictable consequences. When the process is completed, after one or two more elections, it is likely that a new dominant political party will appear. But its character will change from what has heretofore been

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familiar. The postwar generation of Japanese leaders lived
with the trauma of defeat, sheltered its foreign policy
under the American security treaty, and emphasized the
economic rebuilding of the shattered country. But the
period of political self-abnegation is clearly ending.
Japan's policy is bound to become more national and, above
all, more political.

China may already have completed most of the transition
from Deng Xiaoping to the next generation of leaders.
Nevertheless, the process of consolidation has its own
logic. Above all, the extraordinary rate of growth of the
Chinese economy is bound to bring with it political
adaptation to an industrial information age.

Indonesia's President has just started what many
believe to be his last term--a prospect his advanced age
makes all the more probable.

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India is shifting towards a greater readiness to
embrace market economics.

All these changes are with variations taking place in
all the countries of Asia and will produce certain common
features:

-- tension between the internationalism required by
global economies and the nationalism which many of the
leaders believe is needed for political cohesion.

-- pressure on existing alliances and alignments,
especially as there is a perception in every Asian nation
that American policy is itself in a state of flux and for
their leaders increasingly unpredictable.

As I have said, Japanese policy will take on an
increasingly national character. The shock of defeat in
World War II has worn off; the end of the Cold War has
destroyed the conviction that American and Japanese
perceptions of their national interest are inevitably

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parallel. The rise of China, the unification of Korea, the
possible shift of the center of gravity of Russian policy
towards Siberia--all have a different significance for Japan
than they have for the United States. The size of the
Japanese defense budget--already the third largest in the
world--reflects this reality, and a Japanese nuclear program
in the next century cannot be excluded. Japanese and
American political purposes are far from irreconcilable.
But there is a need for an explicit effort to bring them
into closer harmony with each other--a task inadequately
addressed until now.

Korea--the last remaining divided country--will be
beset by the challenge of unification. It faces a North
Korean strategy to delegitimize it and to settle problems
directly with the United States, as with the North Korean
nuclear program. South Korean unease with this process,
though publicly understated, clashes to a quite considerable

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extent with the Administration's apparent conviction that
North Korea's rigidity is caused by its exclusion from the
world economy and that the United States has a special
responsibility (or obligation) to soften their sense of
isolation by increasing its own contacts with Pyongyang.

South Korea too is aware that China and even more Japan do
not share, to put it mildly, its own aspiration toward
unification, thereby magnifying its own nationalism. And if
China and the United States continue or increase their
confrontation, the situation in Korea could turn ugly.

The nations of Southeast Asia can be divided into those
which are above all afraid of China and those which are more
concerned about Vietnamese nationalism. The first group
cultivates close relations with Vietnam, the latter
emphasizes friendship with Beijing.

As India emerges into great power status, it can be
expected to return to the policies of the British raj which

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were after all conceived by the Indian civil service under
the viceroys located first in Calcutta and, toward the end
of British rule, in New Delhi. It will seek an influential,
if not dominant, role, in the arc extending from Aden to
Singapore. This will produce clashing perceptions with
China in Tibet and Burma, and with Indonesia, Vietnam and,
to a lesser extent, China in Southeast Asia.

This fragmentary survey underlines two realities which
American policy has so far neglected. The first concerns
the basic difference between the nations of Europe and those
of Asia. During the Cold War period, Europe developed
regional structures for economic and political cooperation
for which there is no equivalent in Asia. More recently, the
European nations have organized themselves into the European
Union; whatever their differences, military conflict between
them is inconceivable; strategic considerations are a

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negligible aspect of the conduct of their relations with
each other.

The opposite is true in Asia. Ritualistic
protestations at APEC meetings of the existence of a Pacific
Community notwithstanding, the nations of Asia have never
organized themselves into an Asian Economic Community or an
Asian Defense Pact. Too, they lack the common historical
experience shared by most European nations represented by
Rome, Charlemagne, the Church. As a result, the nations of
Asia perceive each other as strategic rivals and potential
threats (excluding the relations of the ASEAN nations--
except perhaps Vietnam--to each other). They are at least
as conscious of their mutual rivalries as they are of any
potential common purposes.

This state of affairs has caused the United States to
play the principal stabilizing role in Asia since the Second
World War. Unlike in Europe, the United States has done so

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through a series of bilateral security and political
arrangements which, if discarded, could collapse the whole
structure.

Even in the post-Cold War world, the United States is
in an excellent position to advance American long-term
interests. Because the conflicts of the Asian nations with
each other are more deep-seated than any disagreements they
might have with the United States, in a well-conceived
policy, the United States bargaining position is excellent-
-an advantage reinforced by the fact that America provides
the principal market for all Asian nations.

Yet in recent years, the United States has not only
failed to draw benefits from this state of affairs, it has
permitted itself to become embroiled in conflicts with many
of the key Asian nations. Some of these conflicts are
generated by ad hoc domestic pressures on the Congress
unrelated to a long-term strategy; others reflect an

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Administration tendency to equate foreign policy with domestic politics. It ought to be a settled maxim of American foreign policy not to take on the principal Asian nations simultaneously. The opposite has been the case. During calendar year 1995, the United States has been in confrontation with Japan and China simultaneously and, in recent days, has managed to throw in a glancing blow at Thailand as well.

In recent years, relations with Japan have been characterized by seemingly endless confrontations. On many of these, the American position has had much merit. It is surely a legitimate objective of the US Government to gain greater access to the Japanese market. But we have lost track of the equally important interest in developing political state-to-state relations as one element of Asian stability.

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Foreign policy always involves trade-offs. Giving more weight to the economic side has produced a confrontational style that accentuates the impression of potentially clashing national interests. This may come back to haunt us as Japan increasingly articulates its national foreign policy. Moreover, many of the economic "victories" are more apparent than real, and more public relations coups than substantive achievement. In the process, there has been next to no scope for the elaboration of parallel political strategies on which close American-Japanese relations will increasingly depend. We may pay for this short-term approach in the years to come.

But by far the most worrisome policy area concerns Sino-American relations. For over twenty years after 1949, China and the US had no relations at all. Between 1971 and 1989, they achieved something approaching a strategic partnership. Since then, relations have steadily declined

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as a result first of the impact of Tiananmen Square and
Congressional pressures and, more recently, a cycle of
action and reaction over Taiwan. Having just returned from
Beijing, I want to say in the most solemn way that our two
countries are again on a collision course. A general review
of American foreign policy does not afford the opportunity
to go into the details of every issue. But it makes it
necessary to stress in the most insistent manner why US-
China relations are important and why they must not be
jeopardized lightly, if indeed at all.

Stability in Asia is most likely if both China and the
United States participate in shaping Asia's future.

Conflict with China would tempt each side to organize the
rest of Asia against the other, encouraging virulent
nationalism. While an overbearing Chinese foreign policy
could at some point in the future drive American

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foreign policy to such an expedient, nothing in the
current world calls for a policy of isolating China,
the weight of one interest is in place to settle the question.

For the next decade at least, America and China have a
parallel interest in equilibrium in Asia. Both countries
have their reasons for opposing the domination of Asia by a
single power. China wants the United States to help balance
its relationships with powerful neighbors--Japan, Russia and
India--at least until it is strong enough to do so on its
own. America needs Chinese cooperation on these matters as
well as on a peaceful evolution of the future of Taiwan, on
nuclear proliferation, and on the transfer of weapons
technology.

These are the sorts of issues which should be key
elements of the Sino-American dialogue at least for the next
decade. If they moved to the center of Sino-American
relationships, they would facilitate dealing with human
rights and proliferation issues by providing a strategic

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context. In the course of their country's long history,
China's leaders have frequently taken account of the special
needs of their counterparts provided such an action also
served Chinese interests. What they will not accept, or
will accept only under extreme duress, is the implication
that America bestows its cooperation as a special favor
without reciprocity to be withdrawn at will.

But this is precisely what has been happening. At the
moment, Sino-American relations are in a free fall. The
immediate cause has been the granting of a US visa to
President Lee Teng-hui of Taiwan. But the issue would not
have taken on such dimension had the visit not been the
culmination of a series of US actions perceived as
unilateral and high-handed in Beijing over recent years.
That Chinese actions are being interpreted as provocative in
Washington only accentuates the problem.

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The central issues now looming before the two
governments are proliferation, human rights and,
overshadowing everything else, Taiwan. A general review of
post-Cold War foreign policy is not the occasion to go into
detail on each of these issues. I will take another
occasion to elaborate my views.

But I need to explain why the issue of Taiwan is so
fraught with risks. To many Americans, the immediate issue
appears as the sovereign American right to determine the
entry of visitors. In fact, it is seen as a challenge to
the territorial integrity of China, a challenge to which it
is particularly sensitive because the alienation of Taiwan
was an early stage in the process by which Imperial Japan
sought to dominate China. It is also viewed as a violation
of formal American undertakings by six American presidents
of both parties over 23 years. As China proved in the
Korean War and in its reaction to the Vietnamese occupation

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-- Beijing should end its invective and take seriously issues about which Americans feel deeply, such as the fate of Harry Wu, as a prelude to resumed negotiations with Washington.

The danger of the existing roller-caster shift to confrontation to both China and the United States and to stability and progress in Asia is incalculable. A containment policy toward China under present circumstances is a pipe dream.

Unlike the containment policy of a generation ago, it will have no takers except perhaps Vietnam, turning the history of the last two decades on its head. It will force every nation of Asia to take sides with uncertain outcomes and with a guaranteed enhancement of Asian nationalism.

America's ability to influence Japan will dramatically decline. Korea may turn into a tnderbox. Nations with hegemonical aspirations--or even territorial claims--will sense new opportunities.

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China will try to organize the nations of Asia into a grouping to oppose America--a process whose beginning can already be noticed. The European nations will eagerly step into the economic vacuum--a process whose outlines are also already discernible. The economic damage to America will be as horrendous as the political one.

To be sure, China may suffer even greater economic damage, and it is even more vulnerable to unleashed Asian nationalism. But this will prove little consolation in the midst of the decline in restraints that collapsing confidence in American leadership will produce. I am aware that there is a school of thought holding that China will in the end recoil or perhaps even collapse as the Soviet Union did. I do not believe in the analogy, and I warn against playing chicken with the fate of nations. I believe there must be a moratorium on further unilateral steps in Washington by both the Congress and the Executive Branch and

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an end to invective from Beijing and pressures from Taiwan
to permit a calm reassessment.

Mr. Chairman:

I have attempted to describe the overall condition of
American foreign policy, as well as two major problem areas.

I want to conclude with an appeal for bipartisanship. The
national interest of the United States does not change every
four years; foreign leaders judge our country by its insight
and its constancy.

We have as a nation failed this test in recent years.
The Administration has not given a conceptual lead and has
too often subordinated foreign policy to domestic politics.

The Congress has sought to micromanage foreign policy-
-a task for which it is not organized.

At the end of the Second World War, it took America
four years to develop the policies which saw us through the

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# APPENDIX

The following statistics show the increasing importance
of Asian economic progress.

## Asia's Importance to the World Economy

* APEC represents half of the world's GNP and population, and soon half of its trade.

* The World Bank estimates that developing countries in Asia will average growth of 7.5 percent in 1995 and 1996, faster than anywhere else.

* In 1993, East Asia and the Pacific received 55 percent of total Foreign Direct Investments (FDI) into the developing world. China alone accounted for 38 percent of the total FDI into the developing world.

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Asia Surpasses Europe as the US' Largest Trading Partner

* The US now does 40 percent of its trade across the Pacific, up from 24 percent in 1980.

Transatlantic trade represents one-third of US total.

* In 1994, US exports to Asia, including Japan, were approximately $150 billion, 30 percent greater than exports to the European Union (EU).

* US exports to Asia had an annual average percentage growth of 10 percent from 1982 through 1993; to the EU and Japan, US exports grew 5 percent and 7 percent, respectively, for the same period.

South and Southeast Asia Are Good Customers

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* ASEAN is the US' fifth largest export market (US-ASEAN trade has grown 17 percent per year for the past decade).

* The US now exports more to Singapore than it does to Italy; more to Malaysia than to the former USSR; and more to Indonesia than to Central and Eastern Europe.

* Trade between Singapore and Taiwan and the US is now 20 percent greater than US trade with Germany.

* The US is India's largest trading partner, taking 18 percent of its exports and the source of 12 percent of its imports.

## Asia Attracts Substantial US Investment

* The US holds the largest stock of direct foreign investment in Asia. Japan is the recipient of approximately half of the US total.

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* Total stock of US FDI in the region grew from $14 billion in 1980 to $78 billion in 1994.

* Accounting for less than 7 percent of accumulated US FDI in 1980, by 1993 the proportion had reached 13 percent.

* US companies favored Asia in the 1990s above other regions. US outward stock of FDI in Asia grew between 1990-1992 at 18 percent compared to 12 percent in Latin America and 6 percent in Europe.

* US exports to Asia support more than two and one-half million American jobs. One in fifty US workers was employed as a result of US exports to countries of Asia and the Pacific Rim.

* More than one-sixth of all US jobs created between 1989 and 1993 can be attributed to trade with this region.

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# US Largest Equity Investor in Asia's Developing Markets

## Markets

* Total market capitalization of regional exchanges, not including China or Japan, could rise to $5 trillion by 2000, a 430 percent increase from current levels and the equivalent of US exchanges today.

* Asia received 43 percent of portfolio equity flows into the developing world in 1993.

## Asia and US Business Opportunities

* China is becoming the primary engine of economic growth in the region. Southern China, Hong Kong and Taiwan are fast becoming the world's fourth major "growth pole" after US, Western Europe and Japan. Chinese imports grew 25 percent in each of the last two years.

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* It is estimated that infrastructure needs in Asia will absorb $600 billion in investment over the next five years.

* Asia will place 45 percent of all global orders for power generation equipment over the next ten years.

* China is fast becoming the world's largest market for commercial aircraft.

* Asia is the world's fastest growing area in terms of disposable income, with growth rates three times those of the US and Europe.

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7/11/95

Mr. Chairman:

Thank you for the opportunity of appearing before you to discuss the direction of post-Cold War American foreign policy. It is surely one of the most difficult international challenges in our history, less dangerous than the Cold War had been but more complicated; less ominous than the world we encountered at the end of the Second World War, but more intricate. For the task before us is nothing less than to distill a sense of direction from a world in which almost all key elements are changing simultaneously, while too many Americans under the illusion that their foreign policy tasks are already accomplished seem tempted to turn their back on the world beyond our shores.

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Much of America's foreign policy has traditionally been presented in alternately psychiatric and theological terms: either as a means by which relations among nations could be conducted as they might be if they were relations among individuals, or when that did not seem possible, as a crusade to destroy or, even better, to convert antagonists to the American perception of international affairs. In that sense, the Cold War and victory in the Cold War were a culmination of the special mission of international affairs.

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international reality. For the issues susceptible to
solution by military action are in decline. The kind of
power in which the United States excels is less and less
relevant to most foreseeable international crises. On the
other hand, economics and technology are becoming much more
evenly crucial. Even a cursory glance at the condition of
the dollar makes it clear that the relative economic
position of the United States is not what it was even ten
years ago.

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But while post-Cold War foreign policy reflects some
traditional patterns, there are important differences as
well. For one thing, modern economics has changed the
nature of incentives. Historically, nations could effect
changes in the balance only by conquest. Modern technology
permits quantum changes in a society's power by changes
entirely within its own territory. No conceivable conquest
could augment a nation's power like the acquisition of
nuclear weapons or the mastering of modern information

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technology. Thus the paradox: proliferation is a permanent temptation and a permanent danger while, at the same time, the cost of war, at least among major powers, has risen to near prohibitive levels.

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its weight to the side that confers certain advantages at a specific moment (which, in the British case, was generally the weaker side). This would be a latter-day version of the European balance-of-power diplomacy.

There are, however, huge, probably insurmountable, obstacles to such a strategy. The first is that, whereas Britain conducted its policy primarily in Europe, we would have to conduct it globally. Secondly, Britain had a leadership group that had trained itself in the conduct of public policy. America has neither such a leadership group nor any similar tradition of hard-headed, purely interest-oriented policy. Third, when communications are instantaneous, economics global, and politics democratic, it is probably not possible to conduct the same kind of cold-blooded policy in every part of the world simultaneously. Fourth, international stability is increasingly affected by splinter groups with no interest in the global equilibrium

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The generation whose seminal experience was the Vietnam War
holds a quite different view. The Vietnam War--the defining
experience of their generation--is viewed not just as a
terrible mistake but as an indictment of American power in
general. Just as many who used the outcome of America's
role in World War I as rationale for the nonintervention
policy of the 1920s and 1930s, current American policy
debates--whether in the Balkans or the Caribbean, in Africa
or Asia--can best be understood in the context of a
generation that views the world through a lens largely
provided by a local and unsuccessful conflict. They do so
by abdicating a foreign policy role by fleeing into either
extreme multilateralism or extreme nationalism.

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15

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Let me now apply these principles to two foreign policy areas: Europe and Asia. There are many other policy areas, such as the Western Hemisphere, nuclear proliferation or the Middle East. Given the limitations of time, I shall deal with these areas on another occasion as it is in Europe and Asia that our foreign policy seems to me in deepest trouble.

## US European Policy

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