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HK SPEECHES AS
SECRETARY OF STATE

INTRODUCTION

An important aspect of the Ford Presidency was the
attempt by HK to set forth a coherent concept of the Adminis-
tration's foreign policy. With our Vietnam involvement
and Watergate behind us, it seemed possible in the Ford
Administration, for the first time, to devote attention
to more positive initiatives. As it turned out, however,
the April 1975 debacle in Indochina and the burgeoning political
controversies as the 1976 election approached meant that
HK had to struggle to maintain national unity behind our
foreign policy. HK's speeches reflected both the positive
conceptual and the damage-limiting purposes.

The accompanying book contains the texts of 81 of HK's
speeches and statements as Secretary of State from 1973 to
1977. They are in chronological order in the accompanying
book and are referred to here by Tab number (#1-81).
While the first 14 of them occurred under the Nixon Presidency,
the overwhelming majority took place under Ford. Some
diplomatic initiatives, such as energy, the "new dialogue"
with Latin America and general approaches to the Third World,
began under Nixon but reached their fruition under Ford.

The speeches naturally covered almost every main subject
of US foreign policy: US-Soviet relations, the Western Alliance,
economic and political strategy toward the Third World
(e.g., on energy and food), and regional concerns such as
the "new dialogue" with Latin America, Asia, Southern Africa,
and the Middle East. Pulling all these topics together were
another series of speeches on philosophical themes. These
attempted to provide some overall perspective to our foreign
policy but also were a means of taking on some of the most
politically controversial issues--detente, human rights, etc.--
on a philosophical plane, trying to raise the level of the
public debate.

A basic theme in several philosophical speeches was the
need for national unity. Particularly in the wake of the
1975 debacle in Indochina, HK energetically sought to bolster
public confidence in the efficacy and moral importance of
America's role in the world. From August 1974 to August 1976,
HK embarked on a series of 32 visits to the American heart-
land, taking him to 25 American cities. In each city HK

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would meet with civic leaders and senior media representatives and often also hold a local press conference. At Tab A attached is a summary memorandum from Jack Reinhardt describing the scope, format, and success of the heartland tours. (Two fat briefing books with all the briefing papers for all the heartland visits are in my office.)

This paper will deal first with the philosophical themes, then with the main substantive themes of our foreign policy, and finally the appeal for national unity.

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# I. PHILOSOPHICAL THEMES

## American Attitudes to Foreign Policy

Many of the controversies in American foreign policy, particularly those over morality, human rights, and US-Soviet relations, stemmed at least in part from America's historical experience. Our history did not prepare us for a world of moral ambiguity in which we were permanently engaged without hope of escape or predominance. Even the previous 30 years of postwar world leadership were untypical.

HK touched on this theme in his remarks to the annual dinner of the Alfred E. Smith Memorial Foundation in New York on October 16, 1974 (#18):

Al Smith's America was an optimistic country—a land that never doubted its ability to solve the problems before it, regardless of magnitude. We were a people confident in the worth of our moral values and the decency of our purposes.

Al Smith epitomized the irrepressible spirit of his time and his country. He never flinched from a battle, but he never let the battle consume him. His compassion and his dreams sustained him because he knew that all great achievements begin as ideals.

Our America, regrettably perhaps, has lost some of that innocence. We have learned that we are not omnipotent, and now we face the true test of maturity: Having learned our limits, are we prepared to marshal our strengths? Or will we shrink in frustration from our new challenges? It is a crucial question, for the world needs our optimism, our faith, and our creativity as never before.

Cardinal Cooke [Terence Cardinal Cooke, Archbishop of New York], in his gracious letter of invitation, asked that I share with

you my "vision of a better and more peaceful world."

It is not an easy task. For what is peace? Through most of our history Americans thought of peace as a static condition—a world living in the absence of war unless evil men intruded their darker designs. Secure behind two oceans, we left to others the day-to-day decisions that, over time, spelled war or peace, security or fear for less favored nations. We were spared the agony of reconciling the ideal with the practical, of making do with limited means and contingent ends.

But two World Wars and an era of involvement and conflict should now have taught us that peace is a process, not a condition. We have learned we must express moral values in steadfastness of purpose even while necessity imposes compromise. We now know that we are on a journey that has no terminal point, whose engine is reality, and whose beacon is a better life for future generations. And we have come to realize that if we are ever to have true peace there can be no end to our own exertions.

The heritage of isolationism was touched upon again in other speeches—in Minneapolis on July 15, 1975 (#36), in San Francisco on February 3, 1976 (#49)—but the most comprehensive historical treatment was at the University of

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Wyoming at Laramie on February 4, 1976 (#50). HK traced in some detail how American attitudes toward foreign policy--our "shared mythology"--were shaped by our unique history:

We declared our independence in "decent respect to the opinions of mankind." Our Founding Fathers were sophisticated statesmen who understood the European balance of power and knew how our country could profit from it. Our independence was not won by American arms alone. The shrewd diplomacy of Franklin and Jefferson led to the involvement of Britain's enemies—France, Spain, and Russia—and eventually engineered the only defeat Britain suffered in the modern era. We then cut loose from our temporary allies when John Jay won the British Crown's recognition and liquidated the residual problems of our war with England.

For more than three decades after we gained our independence, we lived in an age of international turmoil that saw us go to the brink of war with France and suffer the capture of our capital by Britain. Again, alert to new opportunities provided by changes on the international scene, we moved astutely to take advantage of them. The effective elimination of France and Spain from the hemisphere, the expansion of Russia in the Pacific Northwest, and the growing disaffection of Great Britain from the European powers led us in 1823 to concert the Monroe Doctrine with Great Britain.

Thereafter, for the hundred years between Waterloo and 1914, America benefited from the existence of a world balance of power, presided over by Britain, which maintained global stability and prevented international war. In the words of Prime Minister Canning, the doctrine "called the New World into existence to redress the balance of the Old."

Thus, the balance of power in Europe and our skill in using it protected the young United States; it enabled us, in reliance upon the British Navy, to turn our back on the Atlantic and open the continent before us.

Theodore Roosevelt noted that long before Jefferson negotiated an end to the

French claim to Louisiana, foreign claims had been effectively undermined by the great western movement of Americans and the free communities they quickly founded. But the consolidation of their pioneering achievement was made possible by those negotiations and by the subsequent series of remarkable diplomatic successes. The annexation of Florida, the Oregon boundary settlement with Great Britain, the Treaty of Guadeloupe Hidalgo, the Gadsden Purchase, Secretary of State Seward's purchase of Alaska from Russia—all were triumphs of diplomacy during decades when most citizens believed America did not have, or need, a foreign policy.

Indeed, our very achievements in dealing with the world brought Americans under the sway of a shared mythology. As a society made up of men and women who had fled the persecutions and power politics of the Old World, Americans—whether Mayflower descendants or refugees from the failed revolutions of 1848—came to assume that we were beyond the reach of the imperatives of traditional foreign policy.

While our security continued to be assured by our place in the international structure of the time, we became bemused by the popular belief that President Monroe's obligation to defend the Western Hemisphere and, indeed, almost any obligation we might choose to assume, depended on unilateral American decisions to be entered into or ended entirely at our discretion. Shielded by two oceans and enriched by a bountiful nature, we proclaimed our special situation as universally valid even while other nations with a narrower margin of survival knew that their range of choice was far more limited.

The preoccupation of other nations with security only reinforced our sense of uniqueness. We came increasingly to regard diplomacy with suspicion. Arms and alliances were seen as immoral and reactionary. Negotiations were considered less a means of reconciling our ideals with our interests than

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a device to entangle us in the endless quarrels of a morally questionable world. Our native inclination for straightforwardness brought increasing impatience with diplomacy, whose essential attribute is ambiguity and compromise.

In this atmosphere even the purchase of Alaska—which excluded Russia from our continent—was regarded in its day as a towering folly explainable only in terms of American gullibility in the face of Old World diplomatic guile. Congress was prevailed upon only with the greatest difficulty to provide the $7 million to complete the deal. The mythology of American ineptitude in its diplomatic pursuits has carried into the 20th century. Will Rogers was always assured of a laugh when he cracked, “America never lost a war and never won a conference.” With the humility for which I am famous, I of course reject this attitude.

Forgetful of the wisdom and skilled statecraft by which the Founding Fathers won our independence and secured our safety, and disdainful of the techniques by which all nations—even the United States—must preserve their interests, America entered the 20th century—the most complex and turbulent time in history—largely unprepared for the part we would be called upon to play.

As Lord Bryce said in his "American Commonwealth," America had been sailing "on a summer sea," but a cloud bank was "on the horizon and now no longer distant, a time of mists and shadows, wherein dangers may be concealed whose form and magnitude she can scarcely conjecture."

## U.S. Ascendancy: Maintaining Global Stability

In the early years of this century, America seemed to face a choice between continued detachment and active involvement in world affairs. But this was more apparent than real, for the Pax Britannica on which we had relied for so long was coming to an end. We had become—almost without noticing it—the world's major economic power. Increasingly, we were the only democratic nation with sufficient power to maintain a precarious world balance. But nothing in our experi-

ence had equipped us to recognize our new responsibility. We continued to reject the demands of the politics of security and abhorred alliances as contrary to American principles. In the place of foreign policy we fell back on our tradition of law, in repeated and unsuccessful attempts to legislate solutions to international conflicts. Many thought that power and principle were forever incompatible.

Our entry into World War I was produced by real geopolitical interests, such as freedom of the sea and the threat of the domination of Europe by a hostile power; but we chose to interpret our participation in legal and idealistic terms—we fought the war “to end war.” The inevitable disillusion with an imperfect outcome led to a tide of isolationism. We responded again with moral and legal gestures—humanitarian relief, new armament schemes, the Kellogg-Briand Pact to ban war—at a time when the very nature of the international order was being brought into question by the convulsions of the new century. We sought security in aloofness, just as we looked for scapegoats—rooting out the so-called “munitions makers”—to explain why we had ever engaged in such an undertaking as the First World War. The Great Depression drew our energies further inward to deal with the problems of our own society, even while economic upheaval simultaneously generated overwhelming perils abroad.

Our refusal to admit that foreign policy should be related to interests led us, in the years between the wars, to treat allies as rivals, whose armaments had to be limited because they contributed to international tensions. On the brink of World War II, isolationism had been transformed from a comfortable assumption to a deeply felt conviction. Just as the world was about to impinge upon us as never before, we had virtually abandoned the basic precautions needed to preserve our national security. Only with the greatest difficulty could President Franklin D. Roosevelt begin to assert international leadership openly and take steps against the mounting global threat by preparing America for war.

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World War II was well underway before we were shocked out of isolation by external attack. Total victory, and the refusal to consider the security of the postwar world in terms of any notion of equilibrium, ill prepared us for the war's aftermath—when the destruction of Europe's traditional power centers suddenly drew Soviet power into the heart of the European Continent.

Yet in the first postwar years America found within itself extraordinary capacities of statesmanship and creativity. Leaders of both parties and many backgrounds—Truman and Eisenhower, Vandenberg and Marshall, Acheson and Dulles—built a national consensus for responsible American world leadership, for a foreign policy based on both principle and pragmatism.

Albert Einstein said at the outset of the nuclear age that "everything has changed, except our mode of thinking." To cope with a world whose basic conditions were so radically altered was a task comparable in magnitude to that which faced the Founding Fathers. When Dean Acheson said he was "present at the creation," he referred not

only to the creation of our postwar policy but to a new era in the history of mankind.

American foreign policy had come full circle. With sophistication, the Founding Fathers had manipulated the balance of power to gain our independence and then drew on the international system to assure our survival. A century and a quarter of almost total security had tempted us into isolationism. And now, after two World Wars in this century, we have learned that the responsibilities—and the burdens—of world leadership are inescapable.

Americans can be enormously proud of what their country has accomplished in the postwar decades to build a more stable, secure, and prosperous world. The recovery of Western Europe and Japan, the creation and revitalization of peacetime alliances, the shaping of the global trade and monetary system, the economic advance of newer and poorer nations, the measures to control the nuclear arms race—these comprise an enduring achievement of American statesmanship.

## Morality and Foreign Policy/Human Rights

Against this background, Americans developed their unique moral vision of the world. Recent major controversies about how we should seek to effectuate our moral values in the world were nurtured first of all in the hothouse of Vietnam; they survived after the Paris Agreement as other debates emerged, for example, over US-Soviet relations.

HK addressed some of these issues in general terms in his address to the Third Pacem in Terris Conference sponsored by the Center for the Study of Democratic Institutions in Washington on October 8, 1973 (#5) soon after becoming Secretary of State. The policymaker and the intellectual had different perspectives, and each needed to understand the other better:

> It is characteristic of periods of upheaval that to those who live through them they appear as a series of haphazard events. Symptoms obscure basic issues and historical trends. The urgent tends to dominate the important. Too often goals are presented as abstract utopias, safe havens from pressing events.

> But a debate, to be fruitful, must define what can reasonably be asked of foreign policy and at what pace progress can be achieved. Otherwise it turns into competing

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catalogues of the desirable rather than in-
formed comparisons of the possible. Dialogue
degenerates into tactical skirmishing.

The current public discussion reflects
some interesting and significant shifts in
perspective:

—A foreign policy once considered ex-
cessively moralistic is now looked upon by
some as excessively pragmatic.

—The government was criticized in 1969 for holding back East-West trade with certain countries until there was progress in their foreign policies. Now we are criticized for not holding back East-West trade until there are changes in those same countries' domestic policies.

—The administration's foreign policy, once decried as too cold war oriented, is now attacked as too insensitive to the profound moral antagonism between communism and freedom.

One consequence of this intellectual shift
is a gap between conception and performance
on some major issues of policy:

—The desirability of peace and détente's affirmed, but both the inducements to progress and the penalties to confrontation are restricted by legislation.

—Expressions of concern for human val-
ues in other countries are coupled with fail-
ure to support the very programs designed
to help developing areas improve their eco-
nomic and social conditions.

—The declared objective of maintaining
a responsible American international role
clashes with nationalistic pressures in trade
and monetary negotiations and with calls
for unilateral withdrawal from alliance
obligations.

It is clear that we face genuine moral
dilemmas and important policy choices. But
it is also clear that we need to define the
framework of our dialogue more perceptively
and understandingly.

The Competing Elements of Foreign Policy

Foreign policy must begin with the under-
standing that it involves relationships be-
tween sovereign countries. Sovereignty has

been defined as a will uncontrolled by others;
that is what gives foreign policy its con-
tingent and ever-incomplete character.

For disagreements among sovereign states
can be settled only by negotiation or by
power, by compromise or by imposition.
Which of these methods prevails depends on
the values, the strengths, and the domestic
systems of the countries involved. A nation's
values define what is just; its strength deter-
mines what is possible; its domestic struc-
ture decides what policies can in fact be
implemented and sustained.

Thus foreign policy involves two partially
conflicting endeavors: defining the interests,
purposes, and values of a society and relat-
ing them to the interests, purposes, and
values of others.

The policymaker therefore must strike a
balance between what is desirable and what
is possible. Progress will always be measured
in partial steps and in the relative satis-
faction of alternative goals. Tension is
unavoidable between values, which are in-
variably cast in maximum terms, and efforts
to promote them, which of necessity involve
compromise. Foreign policy is explained do-
mestically in terms of justice. But what is
defined as justice at home becomes the sub-
ject of negotiation abroad. It is thus no acci-
dent that many nations, including our own,
view the international arena as a forum in
which virtue is thwarted by the clever prac-
tice of foreigners.

In a community of sovereign states, the
quest for peace involves a paradox: The at-
tempt to impose absolute justice by one side
will be seen as absolute injustice by all oth-
ers; the quest for total security for some
turns into total insecurity for the remainder.
Stability depends on the relative satisfac-
tion and therefore also the relative dissatis-
faction of the various states. The pursuit of
peace must therefore begin with the prag-
matic concept of coexistence—especially in a
period of ideological conflict.

We must, of course, avoid becoming ob-
sessed with stability. An excessively prag-
matic policy will be empty of vision and
humanity. It will lack not only direction but

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also roots and heart. General de Gaulle wrote in his memoirs that "France cannot be France without greatness." By the same token, America cannot be true to itself without moral purpose. This country has always had a sense of mission. Americans have always held the view that America stood for something above and beyond its material achievements. A purely pragmatic policy provides no criteria for other nations to assess our performance and no standards to which the American people can rally.

But when policy becomes excessively moralistic it may turn quixotic or dangerous. A presumed monopoly on truth obstructs negotiation and accommodation. Good results may be given up in the quest for ever-elusive ideal solutions. Policy may fall prey to ineflectual posturing or adventuristic crusades.

The prerequisite for a fruitful national debate is that the policymakers and critics appreciate each other's perspectives and respect each other's purposes. The policy-maker must understand that the critic is obliged to stress imperfections in order to challenge assumptions and to goad actions. But equally the critic should acknowledge the complexity and inherent ambiguity of the policy-maker's choices. The policy-maker must be concerned with the best that can be achieved, not just the best that can be imagined. He has to act in a fog of incomplete knowledge without the information that will be available later to the analyst. He knows—or should know—that he is responsible for the consequences of disaster as well as for the benefits of success. He may have to qualify some goals, not because they would be undesirable if reached but because the risks of failure outweigh potential gains. He must often settle for the gradual, much as he

might prefer the immediate. He must compromise with others, and this means to some extent compromising with himself.

The outsider demonstrates his morality by the precision of his perceptions and the loftiness of his ideals. The policy-maker expresses his morality by implementing a sequence of imperfections and partial solutions in pursuit of his ideals.

There must be understanding, as well, of the crucial importance of timing. Opportunities cannot be hoarded; once past, they are usually irretrievable. New relationships in a fluid transitional period—such as today—are delicate and vulnerable; they must be nurtured if they are to thrive. We cannot pull up young shoots periodically to see whether the roots are still there or whether there is some marginally better location for them.

We are now at such a time of tenuous beginnings. Western Europe and Japan have joined us in an effort to reinvigorate our relationships. The Soviet Union has begun to practice foreign policy, at least partially, as a relationship between states rather than as international civil war. The People's Republic of China has emerged from two decades of isolation. The developing countries are impatient for economic and social change. A new dimension of unprecedented challenges—in food, oceans, energy, environment—demands global cooperation.

We are at one of those rare moments where through a combination of fortuitous circumstances and design man seems in a position to shape his future. What we need is the confidence to discuss issues without bitter strife, the wisdom to define together the nature of our world, as well as the vision to chart together a more just future.

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HK devoted another major speech to the subject of "the moral foundations of foreign policy" on July 15, 1975, in Minneapolis, to a luncheon meeting sponsored by the Upper Midwest Council and other organizations (#36). The speech bears reading in its entirety. Key excerpts are included here. After a short section tracing the impact of American history on American attitudes, HK spelled out the moral dilemmas we faced in the modern world. In some sense America was going through "a rebellion against contemporary foreign policy." After a section on detente (covered elsewhere), HK then took up the general question of human rights:

> Our success and the preeminent position it brought convinced us that we could shape the globe according to American design. Our preponderant power gave us a broad margin for error, so we believed that we could overwhelm problems through the sheer weight of resources. No other nation possessed so much insurance against so many contingencies; we could afford to be imprecise in the definition of our interests. Indeed, we often imagined that we had nothing so selfish as interests, only obligations and responsibilities. In a period of seemingly clear-cut black-and-white divisions, we harbored few doubts about the validity of our cause.

## America's Role

We no longer live in so simple a world. We remain the strongest nation and the largest single factor in international affairs. Our leadership is perhaps even more essential than before. But our strategic superiority has given way to nuclear balance. Our political and economic predominance has diminished as others have grown in strength, and our dependence on the world economy has increased. Our margin of safety has shrunk.

Today we find that—like most other nations in history—we can neither escape from the world nor dominate it. Today, we must

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conduct diplomacy with subtlety, flexibility, maneuver, and imagination in the pursuit of our interests. We must be thoughtful in defining our interests. We must prepare against the worst contingency and not plan only for the best. We must pursue limited objectives and many objectives simultaneously. In this effort, the last decade has taught us:

- That our power will not always bring preferred solutions; but we are still strong enough to influence events, often decisively.

- That we cannot remedy all the world's ills; but we can help build an international structure that will foster the initiative and cooperation of others.

- That we can no longer expect that moral judgments expressed in absolute terms will command broad acceptance; but as the richest and most powerful nation, we still have a special responsibility to look beyond narrow definitions of our national interests and to serve as a sponsor of world order.

- That we cannot banish power politics from international affairs; but we can promote new and wider communities of interest among nations; we can mute the use and threat of force; we can help establish incentives for restraint and penalties for its absence; we can encourage the resolution of disputes through negotiation; and we can help construct a more equitable pattern of relations between developed and developing nations.

This new complexity has produced in some a rebellion against contemporary foreign policy. We are told that our foreign policy is excessively pragmatic, that it sacrifices virtue in the mechanical pursuit of stability. Once attacked as cold-war-oriented, we are now criticized by some as insensitive to moral values. Once regarded as naive in the use of power, we are now alleged to rely too much on the efficacy of force. Once viewed as the most generous of nations, we now stand accused by some of resisting a more equitable international economic system.

It is time to face the reality of our situation. Our choice is not between morality and pragmatism. We cannot escape either, nor are they incompatible. This nation must be

true to its own beliefs, or it will lose its bearings in the world. But at the same time it must survive in a world of sovereign nations and competing wills.

We need moral strength to select among often agonizing choices and a sense of purpose to navigate between the shoals of difficult decisions. But we need as well a mature sense of means lest we substitute wishful thinking for the requirements of survival.

Clearly we are in need of perspective. Let me state some basic principles:

- *Foreign policy must start with security.*
A nation's survival is its first and ultimate responsibility; it cannot be compromised or put to risk. There can be no security for us or for others unless the strength of the free countries is in balance with that of potential adversaries, and no stability in power relationships is conceivable without America's active participation in world affairs.

The choices in foreign policy are often difficult and the margins are frequently narrow; imperfect solutions are sometimes unavoidable. In the Second World War, for example, we joined forces with countries whose values we did not share, in order to accomplish the morally worthy objective of defeating nazism. Today we cooperate with many nations for the purpose of regional stability and global security, even though we disapprove of some of their internal practices. These choices are made consciously and are based on our best assessment of what is necessary.

- *At the same time, security is a means, not an end.*
The purpose of security is to safeguard the values of our free society. And our survival is not always at stake in international issues. Many of our decisions are not imposed on us by events. Where we have latitude, we must seize the moral opportunity for humanitarian purposes.

Our assistance to developing nations, for example, serves both foreign policy and humanitarian ends. It strengthens political ties to other nations. It contributes to expanded trade; close to 90 percent of our foreign assistance is eventually spent in this country. And our assistance reflects our

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values as a people, because we cannot close
our eyes to the suffering of others. Because
of history and moral tradition, we cannot
live with ourselves as an island of plenty in
a world of deprivation.

In the whole field of foreign aid, and par-
ticularly in food aid, America's record is un-
surpassed. We and the world owe much to
leaders with vision and compassion like
Senator Humphrey who drafted the Food
for Peace legislation some 20 years ago.

—Finally, our values link the American people and their government. In a democracy, the conduct of foreign policy is possible only with public support. Therefore your government owes you an articulation of the purposes which its policies are designed to serve—to make clear our premises, to contribute to enlightened debate, and to explain how our policies serve the American people's objectives. And those principles—freedom, the dignity of the individual, the sanctity of law—are at the heart of our policy; they are also the foundation of our most basic and natural partnerships with the great industrial democracies, which are essential to our safety and well-being.

* * *

These considerations raise a more general
question: To what extent are we able to
affect the internal policies of other govern-
ments and to what extent is it desirable?

There are some 150 nations in the world,
and barely a score of them are democracies
in any real sense. The rest are nations whose
ideology or political practices are incon-
sistent with our own. Yet we have political
relations and often alliances with some of
these countries in Asia, Latin America,
Africa, and Europe.

Congressman Fraser has raised this issue
with great integrity and concern, and I have
profited from many discussions with him. We
do not and will not condone repressive prac-
tices. This is not only dictated by our values

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but is also a reflection of the reality that regimes which lack legitimacy or moral authority are inherently vulnerable. There will therefore be limits to the degree to which such regimes can be congenial partners. We have used, and we will use, our influence against repressive practices. Our traditions and our interests demand it.

But truth compels also a recognition of our limits. The question is whether we promote human rights more effectively by counsel and friendly relations where this serves our interest or by confrontational propaganda and discriminatory legislation. And we must also assess the domestic performance of foreign governments in relation to their history and to the threats they face. We must have some understanding for the dilemmas of countries adjoining powerful, hostile, and irreconcilable totalitarian regimes.

Our alliances and political relationships serve mutual ends; they contribute to regional and world security and thus support the broader welfare. They are not favors to other governments, but reflect a recognition of mutual interests. They should be withdrawn only when our interests change and not as a punishment for some act with which we do not agree.

In many countries, whatever the internal structure, the populations are unified in seeking our protection against outside aggression. In many countries our foreign policy relationships have proved to be no obstacle to the forces of change. And in many countries, especially in Asia, it is the process of American disengagement that has eroded the sense of security and created a perceived need for greater internal discipline—and at the same time diminished our ability to influence domestic practices.

The attempt to deal with those practices by restrictive American legislation raises a serious problem not because of the moral view it expresses—which we share—but because of the mistaken impression it creates that our security ties are acts of charity. And beyond that, such acts—because they are too public, too inflexible, and too much a stimulus to nationalistic resentment—are almost inevitably doomed to fail.

There are no simple answers. Painful experience should have taught us that we ought not exaggerate our capacity to foresee, let alone to shape, social and political change in other societies. Therefore let me state the principles that will guide our action:

- Human rights are a legitimate international concern and have been so defined in international agreements for more than a generation.

- The United States will speak up for human rights in appropriate international forums and in exchanges with other governments.

- We will be mindful of the limits of our reach; we will be conscious of the difference between public postures that satisfy our self-esteem and policies that bring positive results.

- We will not lose sight of either the requirements of global security or what we stand for as a nation.

## The Domestic Dimension

For Americans, then, the question is not whether our values should affect our foreign policy, but how. The issue is whether we have the courage to face complexity and the inner conviction to deal with ambiguity, whether we will look behind easy slogans and recognize that our great goals can only be reached by patience and in imperfect stages.

The question is also whether we will use our moral convictions to escape reality or as a source of courage and self-confidence. We hear too often assertions that were a feature of our isolationist period: that a balance of power is a cynical game; that secret conspiratorial intentions lurk behind open public policies; that weapons are themselves the sources of conflict; that intelligence activities are wicked; that humanitarian assistance and participation in the economic order are an adequate substitute for political engagement.

These are the counsels of despair. I refuse to accept the premise that our moral values and policy objectives are irreconcilable. The ends we seek in our foreign policy must have

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validity in the framework of our beliefs, or we have no meaningful foreign policy. The maintenance of peace is a moral as well as a practical objective; measures to limit armaments serve a moral as well as practical end; the cohesion of our alliances with the great industrial democracies makes our way of life and our principles more secure; cooperation to improve the world economic system enhances the well-being of peoples; policies to reconcile the rich nations and the poor, and to enhance the progress of both, serve a human as well as a political end.

The moral dimension of foreign policy came up in other contexts as well. HK brought it up in the context of the Middle East in an address before the American Jewish Congress in Washington on April 4, 1976 (#57), in terms similar to the Minneapolis speech:

## The Moral Basis of Foreign Policy

History challenges us amid the world's ambiguities to shape events by our own purposes and ideals. If democratic societies like America and Israel are to prosper, we must summon the unity and resolve to be masters of our futures on the basis of our values.

The decisions that must be made are always difficult, for foreign policy deals with the interaction of sovereign entities. No country, no matter how strong, can impose its will on the world. Today, in a world of thermonuclear weapons, diffusion of power, and growing interdependence, foreign policy is more than ever an enterprise of incomplete and imperfect solutions. Tension is unavoidable between moral values, which are invariably cast in absolute terms, and efforts to achieve them, which of necessity involve compromise.

This accounts for much of the foreign policy debate in democratic societies, which to some extent is a rebellion against the contemporary world. In all democratic societies the temptation is great to deny the circumstances of the contemporary world and to blame them on individuals, to confuse optimism with the shallow projection of the desirable.

But we cannot escape the conditions around us. Morality without pragmatic action is empty, just as pragmatism without moral direction is like a rudderless ship. The true optimists are those who are prepared to face complexity and who have the faith that their people can master it by dedication and vision.

If democracies like America and Israel are to survive and flourish in a world of sovereign states and competing wills, we must stand firmly for our belief in human dignity; otherwise we will lose our bearings. There is no way to make these choices and to navigate between the shoals of temptation and danger without a strong inner moral conviction. Equally, we need a mature and hardheaded understanding of the difficult choices that must be made, lest we substitute wishful thinking for the requirements of survival.

For Americans, foreign policy has always been more than the search for stability. Americans have a vision of a world of justice that drives all our efforts. A pragmatic policy alone would be empty of humanity; it would lack direction and roots and heart.

But, equally, if policy becomes excessively moralistic, it can turn quixotic or dangerous. A presumed monopoly on virtue can make impossible any solution or negotiation. Good

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results may be given up or sabotaged in the
quest for the elusive ideal. Some of this
country's most serious errors—of both in-
volvement and abdication—were driven by
misguided moral arguments. Some interven-
tions began as crusades to reform other
societies; and we were isolationist in the
1980's to preserve our purity and register
our distaste for the balance of power.

Our responsibility to conduct a moral, far-
sighted, and realistic policy has grown in
recent years. In a world made smaller by
technology and communications, events any-
where are instantly known and have effects in
distant places. Never before have the desti-
nies of nations been more intertwined—not
only practically but morally.

And so we have a stake in a peaceful world
and an environment where man's aspirations
for justice and liberty and dignity have the
greatest chance of fulfillment. The ultimate
safety of every minority, every oppressed
people, lies in a world where respect for
human dignity governs the affairs of nations.
Peace can be said to exist only when the
insecurity of nations is eased, the hopes of
people for economic advance are fulfilled,
international habits of restraint and con-
ciliation are nurtured, and men experience

at last the blessings of a world of justice and
progress.

* * *

We will never forget that America's re-
sponsibility for peace includes, above all,
responsibility for the fate of smaller nations
who rely upon us as the ultimate defender of
their survival and freedom and that Israel's
fate is inseparable from the future of human
dignity. America will not abandon a friend,
because to do so in one part of the world
would shake confidence in every part of the
world. There will be no American weakness
or abdication, for this can only tempt adver-
saries, confuse allies, and undermine security
in the world, ultimately to the grave peril of
our country.

Moral ideals and practical interest thus
come together. Peace in the Middle East is
a goal shared by Americans and by Israelis
alike. The road toward it will be a common
one. And so, in truth, as we pursue the
course of peace, our guarantees rest not so
much in any formal agreements or reassur-
ances endlessly repeated as in the deeper ties
of emotion and morality, history and princi-
ple, that can never be sundered.

[N]

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America's moral commitment to human rights and racial equality underlay HK's speech in Lusaka on April 27, 1976, on Southern Africa (#61):

Of all the challenges before us, of all the purposes we have in common, racial justice is one of the most basic. This is a dominant issue of our age, within nations and among nations.

We know from our own experience that the goal of racial justice is both compelling and achievable. Our support for this principle in southern Africa is not simply a matter of foreign policy but an imperative of our own moral heritage.

The people of Zambia do not need to be reminded of the importance of realizing this goal. By geography and economic necessity, Zambia is affected directly and grievously by strife in southern Africa. Political stability in this region means more to Zambia than to many others. Yet Zambia has chosen to stand by her principles by closing her border with Rhodesia and enduring the economic consequences. This is a testimony to the determination of the people of this country and to the statesmanship of its great leader, President Kaunda.

And it was in this city seven years ago that leaders of east and central African states proclaimed their Manifesto on Southern Africa.

One is struck by the similarity of philosophy in the American Declaration of Independence and in the Lusaka Manifesto. Two hundred years ago Thomas Jefferson wrote:

> We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the Pursuit of Happiness. That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed.

And seven years ago the leaders of east and central Africa declared here in Lusaka that:

> By this Manifesto we wish to make clear, beyond all shadow of doubt, our acceptance of the belief that all men are equal, and have equal rights to human dignity and respect, regardless of colour, race, religion or sex. We believe that all men have the right and the duty to participate, as equal members of the society, in their own Government.

There can be no doubt that the United States remains committed to the principles of its own Declaration of Independence. It follows that we also adhere to the convictions of the Lusaka Manifesto.

Therefore, here in Lusaka, I reaffirm the unequivocal commitment of the United States to human rights, as expressed in the principles of the U.N. Charter and the Universal Declaration of Human Rights. We support self-determination, majority rule, equal rights, and human dignity for all the peoples of southern Africa—in the name of moral principle, international law, and world peace.

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And human rights was the subject of a major speech in Santiago, Chile, on June 28, 1976, before the OAS General Assembly (#67). Excerpts follow:

One of the most compelling issues of our time, and one which calls for the concerted action of all responsible peoples and nations, is the necessity to protect and extend the fundamental rights of humanity.

The precious common heritage of our Western Hemisphere is the conviction that human beings are the subjects, not the objects, of public policy, that citizens must not become mere instruments of the state.

This is the conviction that brought millions to the Americas. It inspired our peoples to fight for their independence. It is the commitment that has made political freedom and individual dignity the constant and cherished ideal of the Americas and the envy of nations elsewhere. It is the ultimate proof that our countries are linked by more than geography and the impersonal forces of history.

Respect for the rights of man is written into the founding documents of every nation of our hemisphere. It has long been part of the common speech and daily lives of our citizens. And today, more than ever, the successful advance of our societies requires the full and free dedication of the talent, energy, and creative thought of men and women who are free from fear of repression.

The modern age has brought undreamed-of benefits to mankind—in medicine, in technological advance, and in human communica-

tion. But it has spawned plagues as well, in the form of new tools of oppression, as well as of civil strife. In an era characterized by terrorism, by bitter ideological contention, by weakened bonds of social cohesion, and by the yearning for order even at the expense of liberty, the result all too often has been the violation of fundamental standards of humane conduct.

The obscene and atrocious acts systematically employed to devalue, debase, and destroy human life during World War II vividly and ineradically impressed the responsible peoples of the world with the enormity of the challenge to human rights. It was precisely to end such abuses and to provide moral authority in international affairs that a new system was forged after that war—globally in the United Nations and regionally in a strengthened inter-American system.

The shortcomings of our efforts in an age which continues to be scarred by forces of intimidation, terror, and brutality—fostered sometimes from outside national territories and sometimes from inside—have made it dramatically clear that basic human rights must be preserved, cherished, and defended if peace and prosperity are to be more than hollow technical achievements. For technological progress without social justice mocks humanity; national unity

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without freedom is sterile; nationalism
without a consciousness of human commu-
nity—which means a shared concern for
human rights—refines instruments of op-
pression.

We in the Americas must increase our
international support for the principles of
justice, freedom, and human dignity; for
the organized concern of the community of
nations remains one of the most potent
weapons in the struggle against the degrada-
tion of human values.

The Human Rights Challenge in the Americas

The ultimate vitality and virtue of our
societies spring from the instinctive sense
of human dignity and respect for the rights
of others that have long distinguished the
immensely varied peoples and lands of
this hemisphere. The genius of our inter-
American heritage is based on the funda-
mental democratic principles of human and
national dignity, justice, popular participa-
tion, and free cooperation among different
peoples and social systems.

The observance of these essential princi-
ples of civility cannot be taken for granted
even in the most tranquil of times. In periods
of stress and uncertainty, when pressures on
established authority grow and nations feel
their very existence is tenuous, the practice
of human rights becomes far more difficult.

The central problem of government has
always been to strike a just and effective
balance between freedom and authority.
When freedom degenerates into anarchy, the
human personality becomes subject to arbi-
trary, brutal, and capricious forces. When
the demand for order overrides all other
considerations, man becomes a means and
not an end, a tool of impersonal machinery.
Clearly, some forms of human suffering are
intolerable no matter what pressures nations
may face or feel. Beyond that, all societies
have an obligation to enable their people to
fulfill their potentialities and live a life of
dignity and self-respect.

As we address this challenge in practice,
we must recognize that our efforts must

engage the serious commitment of our
societies. As a source of dynamism, strength,
and inspiration, verbal posturings and self-
righteous rhetoric are not enough. Human
rights are the very essence of a meaningful
life, and human dignity is the ultimate pur-
pose of government. No government can ig-
nore terrorism and survive, but it is equally
true that a government that tramples on the
rights of its citizens denies the purpose of
its existence.

In recent years and even days, our news-
papers have carried stories of kidnapings,
ambushes, bombings, and assassinations.
Terrorism and the denial of civility have
become so widespread, political subversions
so intertwined with official and unofficial
abuse and so confused with oppression and
base criminality, that the protection of indi-
vidual rights and the preservation of human
dignity have become sources of deep concern
and—worse—sometimes of demoralization
and indifference.

No country, no people—for that matter no
political system—can claim a perfect record
in the field of human rights. But precisely
because our societies in the Americas have
been dedicated to freedom since they
emerged from the colonial era, our short-
comings are more apparent and more signifi-
cant. And let us face facts. Respect for the
dignity of man is declining in too many coun-
tries of the hemisphere. There are several
states where fundamental standards of hu-
mane behavior are not observed. All of us
have a responsibility in this regard, for the
Americas cannot be true to themselves un-
less they rededicate themselves to belief in
the worth of the individual and to the de-
fense of those individual rights which that
concept entails. Our nations must sustain
both a common commitment to the human
rights of individuals and practical support
for the institutions and procedures necessary
to insure those rights.

The rights of man have been authorita-
tively identified both in the U.N.'s Univer-
sal Declaration of Human Rights and in the
OAS's American Declaration of the Rights
and Duties of Man. There will, of course,

2

Department of State Bulletin

-18-

always be differences of view as to the
precise extent of the obligations of govern-
ment. But there are standards below which
no government can fall without offending
fundamental values, such as genocide, of-
ficially tolerated torture, mass imprisonment
or murder, or the comprehensive denial of
basic rights to racial, religious, political, or
ethnic groups. Any government engaging in
such practices must face adverse interna-
tional judgment.

The international community has created
important institutions to deal with the chal-
lenge of human rights. We here are all par-
ticipants in some of them: the United Na-
tions, the International Court of Justice, the
OAS, and the two Human Rights Commis-
sions of the United Nations and the OAS. In
Europe, an even more developed interna-
tional institutional structure provides other
useful precedents for our effort.

Procedures alone cannot solve the prob-
lem; but they can keep it at the forefront
of our consciousness, and they can provide
certain minimum protection for the human
personality. International law and experience
have enabled the development of specific
procedures to distinguish reasonable from
arbitrary government action on, for example,
the question of detention. These involve ac-
cess to courts, counsel, and families; prompt
release or charge; and if the latter, fair and
public trial. Where such procedures are fol-
lowed, the risk and incidence of unintentional
government error, of officially sanctioned tor-
ture, of prolonged arbitrary deprivation of
liberty, are drastically reduced. Other im-
portant procedures are habeas corpus or
amparo, judicial appeal, and impartial review
of administrative actions. And there are the

procedures available at the international
level: appeal to, and investigations and rec-
ommendations by, established independent
bodies such as the Inter-American Commis-
sion on Human Rights, an integral part of
the OAS and a symbol of our dedication to
the dignity of man.

Necessity for Concern and Concrete Action

It is a tragedy that the forces of change
in our century—a time of unparalleled hu-
man achievement—have also visited upon
many individuals around the world a new
dimension of intimidation and suffering.

The standard of individual liberty of con-
science and expression is the proudest herit-
age of our civilization. It summons all na-
tions. But this hemisphere, which for cen-
turies has been the hope of all mankind, has
a special requirement for dedicated commit-
ment.

Let us then turn to the great task before
us. All we do in the world—in our search
for peace, for greater political cooperation,
for a fair and flourishing economic system—
is meaningful only if linked to the defense of
the fundamental freedoms which permit the
fullest expression of mankind's creativity.
No nations of the globe have a greater re-
sponsibility. No nations can make a greater
contribution to the future. Let us look deeply
within ourselves to find the essence of our
human condition. And let us carry forward
the great enterprise of liberty for which this
hemisphere has been—and will again be—the
honored symbol everywhere.

-18A-

To the UN General Assembly on September 30, 1976 (#76), HK spoke in a philosophical vein of the perilous state of human rights on this planet. The international community had a role to play:

## Human Rights

The final measure of all we do together, of course, is man himself. Our common efforts to define, preserve, and enhance respect for the rights of man thus represent an ultimate test of international cooperation.

We Americans, in the year of our Bicentennial, are conscious—and proud—of our own traditions. Our founders wrote 200 years ago of the equality and inalienable rights of all men. Since then the ideals of liberty and democracy have become the universal and indestructible goals of mankind.

But the plain truth—of tragic proportions—is that human rights are in jeopardy over most of the globe. Arbitrary arrest, denial of fundamental procedural rights, slave labor, stifling of freedom of religion, racial injustice, political repression, the use of torture, and restraints on communications and expression—these abuses are too prevalent.

The performance of the U.N. system in protecting human rights has fallen far short of what was envisaged when this organization was founded. The principles of the Universal Declaration of Human Rights are clear enough. But their invocation and application, in general debates of this body and in the forums of the Human Rights Commission, have been marred by hypocrisy, double standards, and discrimination. Flagrant and consistent deprivation of human rights is no less heinous in one country or one social system than in another. Nor

is it more acceptable when practiced upon members of the same race than when inflicted by one race upon another.

The international community has a unique role to play. The application of the standards of the Universal Declaration of Human Rights should be entrusted to fair and capable international bodies. But at the same time let us insure that these bodies do not become platforms from which nations which are the worst transgressors pass hypocritical judgment on the alleged shortcomings.

Let us together pursue practical approaches:

- To build on the foundations already laid at previous Assemblies and at the Human Rights Commission to lessen the abominable practice of officially sanctioned torture;

- To promote acceptance of procedures for protecting the rights of people subject to detention, such as access to courts, counsel, and families and prompt release or fair and public trial;

- To improve the working procedures of international bodies concerned with human rights so that they may function fairly and effectively; and

- To strengthen the capability of the United Nations to meet the tragic problems of the ever-growing number of refugees whose human rights have been stripped away by conflict in almost every continent.

The United States pledges its firm support to these efforts.

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On October 19, 1976, HK spoke to the Synagogue Council of America in New York (#77) and addressed again the subject of "moral promise and practical needs." Nuclear survival, international interdependence, and human rights were discussed:

No people has experienced more of man's exaltation—and man's depravity—than the Jewish people. The Jewish people know that survival requires unending struggle. But they know, as well, that peace, if it is to be more than a prophet's dream, must rest on the conscience of mankind made real by the concrete efforts of all peoples and all nations.

America, because of its own heritage, is perennially engaged in such a search of its conscience. How does our foreign policy serve moral ends? How can America carry forward its role as a humane example and champion of justice in a world in which power is still often the final arbiter? How do we secure both our existence and our values? How do we reconcile ends and means, principle and survival?

These questions have been asked throughout our history; they are being posed again today, as they should. But they require more than simple answers and easy slogans.

There is no doubt that policy without moral purpose is like a ship without a rudder, drifting aimlessly from crisis to crisis. A policy of pure calculation will be empty of both vision and humanity. It will lack not only direction but also roots and heart. Americans have always held the view that America stood for a moral purpose above and beyond its material achievements.

But we must recall, as well, that policy is the art of the possible, the science of the relative. We live in a world of 150 sovereign states, profound ideological differences, and nuclear weapons. Our power is enormous, but it is still finite. A truly moral policy must relate ends to means and commitments to capabilities. America, to be true to itself, must keep its eyes on distant horizons; we must also keep our feet planted firmly in reality. We must

learn to distinguish morality from moralizing. We must remember that the invocation of lofty principles has led, in our history, as frequently to abdication as to overcommitment. Either tendency would be disastrous for international order and our well-being.

The challenge of American foreign policy is to live up to America's moral promise while fulfilling the practical needs of world order. How we meet it will determine the peace and progress of America and of the world.

* * *

We must always keep in mind that it was precisely under the banners of universal moralistic slogans that a decade and a half ago we launched into adventures that divided our country and undermined our international position. It is only in the last few years that we have finally begun to bring our commitments into line with our capabilities.

Clearly we must maintain our values and our principles; but we risk disaster unless we relate them to concepts of the national interest and international order that are based not on impulse but on a sense of steady purpose that can be maintained by the American people for the long term.

This is not a choice between morality and pragmatism. We cannot escape either and still remain true to our national character or to the needs of the world community. Our cause must be just, but it must prosper in a world of sovereign nations and competing wills. We can achieve no positive ends unless we survive, and survival has its practical necessities. Neither moralistic rhetoric nor obsession with pure power politics will produce a foreign policy worthy of our opportunity or adequate for our survival.

-20-

## The Morality of Ends and Means

America, and the community of nations, today faces inescapable tasks:

- We must maintain a secure and just peace.

- We must create a cooperative and beneficial international order.

- We must defend the rights and the dignity of man.

Each of these challenges has both a moral and a practical dimension. Each involves important ends, but ends that are sometimes in conflict. When that is the case we face the real moral dilemma of foreign policy: the need to choose between valid ends and to relate our ends to means.

### Peace

In an age when nuclear cataclysm threatens mankind's very survival, peace is a fundamental moral imperative. Without it, nothing else we do or seek can ultimately have meaning. Let there be no mistake about it: averting the danger of nuclear war, and limiting and ultimately reducing destructive nuclear arsenals, is a moral as well as political act.

In the nuclear age, traditional power politics, the struggle for marginal advantages, and the drive for prestige and unilateral gains must yield to an unprecedented sense of responsibility. History teaches us that balances based on constant tests of strength have always erupted into war. But common sense tells us that in the nuclear age history cannot be permitted to repeat itself. Every President, sooner or later, will conclude with President Eisenhower that there is no alternative to peace.

But peace, however crucial, cannot be our *only* goal. To seek it at any price would render us morally defenseless and place the world at the mercy of the most ruthless. Mankind must do more, as Tacitus said, than make a desert and call it peace.

There will be no security in a world whose obsession with peace leads to appeasement, but neither will there be security in a world in which mock tough rhetoric and the accumulation of arms is the sole measure of competition. We owe our people a convincing justification for their exertions; we can spare no effort to bequeath to future generations a peace more hopeful than an equilibrium of terror.

Barely four years ago demonstrations in the streets demanded "peace" as overriding all other considerations; today policies of conciliation are frequently denounced as unilateral concessions. Both extremes falsify our challenge. In the search for peace we are continually called upon to strike balances—between strength and conciliation, between the need to defend our values and our interests and the need to take into account the views of others, between partial and total settlements.

The task of foreign policy is to find that balance between competing ends and between ends and means. The problems of timing, method, and feasibility impose themselves on any conscientious policy decision. There are certain experiments that cannot be tried, not because the goals are undesirable, but because the consequences of failure would be so severe that not even the most elevated goal can justify the risk.

* * *

## International Cooperation

America's second moral imperative is the growing need for global cooperation.

We live in a world of more than 150 countries, each asserting sovereignty and claiming the right to realize its national aspirations. Clearly no nation can fulfill all its goals without infringing on the rights of others. Hence, compromise and common endeavors are inescapable on some issues at least. The growing interdependence of states in the face of the polarizing tendencies of nationalism and ideologies makes imperative the building of world community.

We live in an age of division, division between East and West and between the advanced industrial nations and the developing nations. Clearly a world in which a few nations constitute islands of wealth in a sea of poverty, disease, and despair is fundamentally insecure and morally intolerable. Those nations that consider themselves dispossessed will become the seedbed of upheaval. But the tactics of confrontation with which some of the developing nations have pursued their goals are also both intolerable and unsafe.

The challenge of world community will require realistic assumptions and actions by North and South alike. The industrial nations should not be obsessed with guilt or wedded to the status quo. The developing nations should not seek to gain their objectives through extortion or blackmail. What is required all around is a serious dedication to the requirements of cooperation, without which neither group can achieve its goals.

The objectives of the developing nations are clear: they want economic development, a role in international decisions that affect them, and a fair share of global

-21-

economic benefits. The goals of the industrial nations are equally clear: widening prosperity, an open world system of trade and investments with expanding markets for North and South, and reliable and equitable development of the world's resources of food, energy, and raw materials.

The goals of both sides can be achieved only if they are seen as complementary rather than antagonistic. The process of building a new era of international economic relationships will continue through the rest of this century. If those relationships are to be equitable and lasting, negotiation and compromise among diverse and contending interests will clearly be required. Above all, a moral act will be necessary: on the part of the industrial nations, a willingness to make, while there is still time for conciliation, the sacrifices necessary to build a sense of community; and on the part of the developing nations, a readiness to forgo blackmail and extortion, now, before the world is irrevocably split into contending camps, and to seek progress through cooperation.

For its part, the United States is committed to the path of cooperation, to build a stable and creative world which all nations—new and old, weak and strong, rich and poor—have a stake in preserving because they had a part in its shaping.

## Human Values

Our third moral imperative is the nurturing of human values. It is the tragedy of our times that the very tools of technology that have made ours the most productive century in the history of man have also served to subject millions to a new dimension of intimidation and suffering and fear.

Individual freedom of conscience and expression is the proudest heritage of our civilization. All we do in the search for peace, in the struggle for greater political cooperation and for a fair and flourishing international economy, is rooted in our belief that only liberty permits the fullest expression of mankind's creativity. We

602

Department of State Bulletin

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know that technological progress without justice mocks humanity; that national unity without freedom is a hollow triumph; and that nationalism without a consciousness of human community, including a concern for human rights, is likely to become an instrument of oppression and a force for evil.

It is our obligation as the world's leading democracy to dedicate ourselves to assuring freedom for the human spirit. But responsibility compels also a recognition of our limits. Our alliances, the political relationships built up between ourselves and other nations over the years, serve the cause of peace by strengthening regional and world security. If well conceived, they are not favors to others but a recognition of common interests. They should be withdrawn when those interests change; they should not, as a general rule, be used as levers to extort a standard of conduct or to punish acts with which we do not agree.

In many countries—whatever our differences with their internal structures—the people are unified in seeking our protection against outside aggression. In many countries, our foreign policy relationships have proved to be no obstacle to the forces of change. And in others the process of American disengagement has eroded the sense of security, creating a perceived need for greater internal discipline while at the same time diminishing our ability to influence the domestic practices we criticize.

There is no simple answer to the dilemma a great democracy faces under such circumstances. We have a moral, as well as practical, obligation to stand up for our values and to combat injustice. Those who speak out for freedom and expose the transgressions of repressive regimes do so in the best American tradition. They can have—and have had—a dramatic and heartening impact. But there are also times when an effort to teach another country a moral lesson can backfire on the values we seek to promote.

This Administration has believed that we must bend every effort to enhance respect for human rights but that a public crusade is frequently not the most effective method. Our objective has been results, not publicity. We were concerned—and with good reason—that when such sensitive issues are transformed into tests of strength between governments, the impulse for national prestige will defeat the most worthy goals. We have generally opposed attempts to deal with sensitive international human rights issues through legislation, not because of the moral view expressed, which we share, but because legislation is almost always too inflexible, too public, and too heavyhanded a means to accomplish what it seeks.

Through quiet diplomacy, this Administration has brought about the release or parole of hundreds of prisoners throughout the world and mitigated repressive conditions in numerous countries. But we have seldom publicized specific successes.

The most striking example has been the case of Jewish emigration from the Soviet Union. The number of Soviet Jews who were permitted to emigrate in 1968 was 400; by 1973 that number had risen to 35,000. The reason for this quantum leap lies largely in persistent but private approaches to the Soviet Government and the parallel overall improvement in U.S.-Soviet relations.

Hundreds of hardship cases were dealt with in quiet personal discussions by the President or his senior officials. No public announcement or confrontation ever took place. But the results were there for all to see.

When even greater advances were sought by confrontation and legislation, the result was tragic. Today Jewish emigration from the Soviet Union has dropped to approximately 10,000 a year. I stress this not to score debating points against men whose seriousness of purpose and dedication to Jewish emigration I greatly respect. Rather it is to indicate that moral ends are often

603

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not enough in themselves. The means used
also have a moral quality and moral conse-
quences.

And whatever honest differences of opin-
ion may have existed between concerned
individuals about the problem of Jewish
emigration from the Soviet Union, this Ad-
ministration remains dedicated to the ob-
jective. It will spare no effort to increase
the flow of emigrants once again and will
cooperate with the relevant organizations
in that effort.

The issue of human rights is not, as I
have said, an easy one, and it should be
presented with a full awareness of its com-
plexity. The experience of the last decade
should have taught us that we ought not
to exaggerate our capacity to foresee, let
alone to shape, social and political change
in other societies. With this painful lesson
in mind, let me state the principles that
guide the actions of the Ford Administra-
tion:

-Human rights are a legitimate inter-
national concern and have been so defined
in international agreements for more than
a generation.

—The United States will further the
cause of human rights in appropriate inter-
national forums and in exchanges with
other governments. We will use all our in-
fluence to encourage humane conduct with-
in and between nations.

—We will be mindful of the limits of our
reach; we will be conscious of the differ-
ence between public postures that satisfy
our self-esteem and policies that bring posi-
tive results.

—We will never forget that the victims
of our failures, of omission or commission,
are human beings and thus the ultimate test
of all we do.

We thus return to the central problem
of ends and means. If every nation of the
world presses for the immediate imple-
mentation of all of its values, hopes, and
desires, eternal conflict is inevitable. If we

insist that others accept all our moral pref-
erences, are we then ready to use military
force to protect those who do as we urge?
And if those who refuse our prescriptions
are deprived of our support, what will we
do if the isolation of these governments
tempts external pressures or attack by
other countries even more repressive? Will
we have served moral ends if we thereby
jeopardize our own security?

If we back up universal moral claims
with power, we take upon ourselves the
role of the world's policeman, a role which
the American people have rejected in a
decade of turmoil. But if we fail to back up
these claims, we will lose relevance and
credibility; we will be conducting a policy
of self-gratification without effectiveness
and ultimately without stature. Is it more
moral to attempt what cannot be accom-
plished and fail than to make only those
commitments that we know we can
keep?

There is nothing more essential for
Americans today than the need to recog-
nize the inevitable and inescapable tension
between our moral aims, which of necessity
are stated in universal terms, and the con-
stant imperative of choice that is imposed
upon us by competing goals and finite re-
sources. The making and implementing of
foreign policy is, like life, a constant effort
to strike the right balance between the best
we want and the best we can have, be-
tween the ends we seek and the means we
adopt.

We need moral strength to select among
often agonizing choices and a sense of ethi-
cal purpose to navigate between the shoals
of difficult decisions. But we need, as well,
a mature sense of means, lest we substitute
wishful thinking for the requirements of
survival. The ultimate test of morality in
foreign policy is not only the values we pro-
claim but what we are willing and able to
implement.

I have discussed the dilemmas of moral
choice not to counsel resignation but as a

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message of hope. Fond as we are of self-flagellation—especially in years divisible by four—Americans can take pride in the achievements of their foreign policy in recent years, which have both a moral and a practical foundation:

- We have ended the war we found and preserved the peace.

- We have restructured and strengthened our partnerships with the industrial democracies and our sister republics in this hemisphere.

- We have opened new relationships with adversaries.

- We have begun to curb the nuclear arms race.

- We have helped to sow the seeds of peace in the Middle East and begun the process of conciliation in southern Africa.

- We have put forth and begun to implement a comprehensive agenda for co-operation between the industrial and developing worlds to combat poverty, ignorance, disease, misery, and hunger.

- We have worked with others on new global challenges that transcend boundaries and ideologies: the problems of pol-lution, of sharing the resources of the sea, of the transfer of technology.

- We have defended our values and interests around the globe.

But an agenda of such scope inevitably remains unfinished. Great opportunities lie before us:

- The industrial democracies can usher in a new and dynamic period of creativity in their relations with each other and lay the foundation for a new approach to the developing world.

- We have an early opportunity to place a ceiling on strategic nuclear arsenals and move on from there to reduce them.

- We can build on the promising foundations of the new relationship with the People's Republic of China.

- We have the possibility of major progress

toward peace in the Middle East while strengthening our commitment to the security and survival of Israel.

- We can help the peoples of Africa reach for conciliation, human justice, and development rather than violence and hatred.

- We can see to it that the atom is used for mankind's benefit, not its destruction.

- The developing countries can become true partners in the international community.

- All countries can work together to fashion a global community both on land and in the vast domains of the oceans.

In pursuing these goals, we must have the courage to face complexity and the inner conviction to deal with ambiguity; we must be prepared to look behind easy slogans and recognize that great goals can only be reached by patience, and often only in gradual stages.

A world of turmoil and danger cries out for structure and leadership. The times summon a steady, resolute, purposeful, and self-assured America. This requires confidence—the leaders' confidence in their values, the public's confidence in its government, and the nation's collective confidence in the worth of its objectives. It is time to remind ourselves that while we may disagree about means, as Americans we all share the same dreams: peace, prosperity, and justice in our nation and throughout the world.

Many years ago Abraham Lincoln proclaimed that no nation could long endure "half slave and half free" and touched the conscience of a nation. Today people the world over cry out for liberty, dignity, respect; and they look with hope and longing to America, for we have touched the conscience of all mankind. If we hold to our ideals, if we set our sights high but without self-indulgence, the generations that come after us may at last be able to say that no man is a slave and no man a master.

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## Peace as Equilibrium

HK spoke occasionally on the nature of peace. To the Pacem in Terris Conference on October 8, 1973, (#5), he described peace in terms of equilibrium, though an equilibrium more complex than ever before in history:

### The World as It Is and the World We Seek

Addressing the United Nations General Assembly two weeks ago, I described our goal as a world where power blocs and balances are no longer relevant; where justice, not stability, can be our overriding preoccupation; where countries consider cooperation in the world interest to be in their national interest.

But we cannot move toward the world of the future without first maintaining peace in the world as it is. These very days we are vividly reminded that this requires vigilance and a continuing commitment.

So our journey must start from where we are now. This is a time of lessened tension, of greater equilibrium, of diffused power. But if the world is better than our earlier fears, it still falls far short of our hopes. To deal with the present does not mean that we are content with it.

The most striking feature of the contemporary period, the feature that gives complexity as well as hope, is the radical transformation in the nature of power. Throughout history power has generally been homogeneous. Military, economic, and political potential were closely related. To be powerful, a nation had to be strong in all categories. Today the vocabulary of strength is more complex. Military muscle does not guarantee political influence. Economic giants can be militarily weak, and military strength may not be able to obscure economic weakness. Countries can exert political influence even when they have neither military nor economic strength.

It is wrong to speak of only one balance of power, for there are several, which have to be related to each other. In the military sphere, there are two superpowers. In economic terms, there are at least five major groupings. Politically, many more centers of influence have emerged; some 80 new na-

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tions have come into being since the end of World War II, and regional groups are arising ever-increasing importance.

Above all, whatever the measure of power, its political utility has changed. Throughout history increases in military power, however slight, could be turned into specific political advantage. With the overwhelming arsenals of the nuclear age, however, the pursuit of marginal advantage is both pointless and potentially suicidal. Once sufficiency is reached, additional increments of power do not translate into usable political strength, and attempts to achieve tactical gains can lead to cataclysm.

This environment both puts a premium on stability and makes it difficult to maintain. Today's striving for equilibrium should not be compared to the balance of power of previous periods. The very notion of "operating" a classical balance of power disintegrates when the change required to upset the balance is so large that it cannot be achieved by limited means.

More specifically, there is no parallel with

a 19th century. Then the principal countries shared essentially similar concepts of legitimacy and accepted the basic structure of the existing international order. Small adjustments in strength were significant. The "balance" operated in a relatively confined geographic area. None of these factors obtain today.

Nor when we talk of equilibrium do we mean a simplistic mechanical model devoid of purpose. The constantly shifting alliances that maintained equilibrium in previous centuries are neither appropriate nor possible in our time. In an age of ideological schism the distinction between friends and adversaries is an objective reality. We share ideals as well as interests with our friends, and we know that the strength of our friendships is crucial to the lowering of tensions with our opponents.

When we refer to five or six or seven major centers of power, the point being made is not that others are excluded but that a few short years ago everyone agreed

that there were only two. The diminishing tensions and the emergence of new centers of power have meant greater freedom of action and greater importance for all other nations.

In this setting, our immediate aim has been to build a stable network of relationships that offers hope of sparing mankind the scourges of war. An interdependent world community cannot tolerate either big-power confrontations or recurrent regional crises.

But peace must be more than the absence of conflict. We perceive stability as the bridge to the realization of human aspirations, not an end in itself. We have learned much about containing crises, but we have not removed their roots. We have begun to accommodate our differences, but we have not affirmed our commonality. We may have improved the mastery of equilibrium, but we have not yet attained justice.

In the encyclical for which this conference is named, Pope John sketched a greater vision. He foresaw "that no political community is able to pursue its own interests and develop itself in isolation" for "there is a growing awareness of all human beings that they are members of a world community."

The opportunities of mankind now transcend nationalism and can only be dealt with by nations acting in concert:

- For the first time in generations mankind is in a position to shape a new and peaceful international order. But do we have the imagination and determination to carry forward this still-fragile task of creation?

- For the first time in history we may have the technical knowledge to satisfy man's basic needs. The imperatives of the modern world respect no national borders and must inevitably open all societies to the world around them. But do we have the political will to join together to accomplish this great end?

If this vision is to be realized, America's active involvement is inescapable. History

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will judge us by our deeds, not by our good intentions.

But it cannot be the work of any one country. And it cannot be the undertaking of any one administration or one branch of government or one party. To build truly is to chart a course that will be carried on by future leaders because it has the enduring support of the American people.

An elevated statement describing peace as both structure and ideal was made in HK's remarks accepting the Nobel Peace Prize, read in Oslo on December 10, 1973, by US Ambassador Thomas R. Byrne (#6):

Our experience has taught us to regard peace as a delicate, ever-fleeting condition, its roots too shallow to bear the strain of social and political discontent. We tend to accept the lessons of that experience and work toward those solutions that at best relieve specific sources of strain, lest our neglect allow war to overtake peace. To the realist, peace represents a stable arrangement of power; to the idealist, a goal so preeminent that it conceals the difficulty of finding the means to its achievement. But in this age of thermonuclear technology, neither view can assure man's preservation. Instead, peace, the ideal, must be practiced. A sense of responsibility and accommodation must guide the behavior of all nations. Some common notion of justice can and must be found, for failure to do so will only bring more "just" wars.

In his Nobel acceptance speech, William Faulkner expressed his hope that "man will not merely endure: he will prevail." We live today in a world so complex that even only to endure, man must prevail—over an accelerating technology that threatens to escape his control and over the habits of conflict that have obscured his peaceful nature.

Certain war has yielded to an uncertain peace in Viet-Nam. Where there was once

only despair and dislocation, today there is hope, however frail. In the Middle East the resumption of full-scale war haunts a fragile cease-fire. In Indochina, the Middle East, and elsewhere, lasting peace will not have been won until contending nations realize the utility of replacing political competition with armed conflict.

America's goal is the building of a structure of peace, a peace in which all nations have a stake and therefore to which all nations have a commitment. We are seeking a stable world, not as an end in itself but as a bridge to the realization of man's noble aspirations of tranquillity and community.

If peace, the ideal, is to be our common destiny, then peace, the experience, must be our common practice. For this to be so, the leaders of all nations must remember that their political decisions of war or peace are realized in the human suffering or well-being of their peoples.

As Alfred Nobel recognized, peace cannot be achieved by one man or one nation. It results from the efforts of men of broad vision and good will throughout the world. The accomplishments of individuals need not be remembered, for if lasting peace is to come it will be the accomplishment of all mankind.

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In more personal terms, HK described what peace meant to him in remarks in Fuerth, on December 15, 1975, accepting the Gold Medal of the city (#46):

Our generation has witnessed—and has no excuse ever to forget—the dark force of brutality and raw power at large in the modern world. As I stand here today, suffering is still dominant in many parts of the globe. Of all the species on this planet, man alone has inflicted on himself the great part of his own anguish.

Yet our generation, more than any other, also has the possibility and indeed the imperative of something better. We live in a world of some 150 sovereign nations, in an era of both instant communication and ideological competition and in the shadow of nuclear cataclysm. No longer can we afford to submit to an assumed inevitability of history's tragedy. The interdependence of states links our societies, our economies, and our destinies; we will either progress together or we will decline together.

Much has happened from which we can take hope and courage. Free societies have come closer to the dream of well-being and justice than any earlier period has witnessed. Our two nations have moved from bitter conflict to peace and from peace to reconciliation and common endeavor. We have been leaders in the quest for peace—in Europe and in the world.

Our common challenge is to help build an international structure of relationships which keeps continents stable and nations secure, which ties nations to each other by bonds of mutual interest, which fosters the habits of restraint and moderation in international conduct, which gives free rein to man's striving for freedom and justice. Our goal is a peace which all—the small as well as the large—have a share of shaping; a peace that will endure because all—the strong as well as the weak—have a stake in making it last.

We know that such a peace will not come—nor can it be maintained—without effort and courage. We must be conciliatory without weakness and tolerant without moral con-

fusion; we must temper strength with wisdom and seek justice while respecting the sense of justice of others. Posterity will not forgive either truculence or the failure to act firmly in defense of interest and principles. Posterity will not forgive either illusions or the failure to grasp opportunities that come fleetingly and may never return.

In our search for a peaceful world we must never forget:

- That freedom must be vigilantly defended;

- That stability depends on restraint among as well as within nations;

- That no nation or group of nations can achieve satisfaction of its needs alone;

- That the best must not become the enemy of the good; and

- Above all, that every great achievement is an ideal before it becomes a reality.

Thus in its deepest sense this simple ceremony, which shows to what extent we have overcome an unhappy past, symbolizes as well the future for which we must strive—a world of nations which find pride in their reconciliations, not their power; an era in which convictions are the source of moral strength rather than of intolerance or hatred.

One of America's first and greatest leaders, Benjamin Franklin, expressed a universal hope of human society:

> ... God grant that not only the love of liberty, but a thorough knowledge of the rights of men, may pervade all nations of the earth, so that a philosopher may set his foot anywhere on its surface and say, "This is my country."

Human history has not yet reached this ideal. But we must persevere until what is now unfamiliar becomes natural, what is now a vision of peace becomes a reality and our legacy to our children.

In this spirit—and on behalf of my family as well—I accept your distinction and shall treasure it. I am honored and moved and grateful.

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# The Design of Our Foreign Policy

In various speeches, HK stressed the coherence of our foreign policy, outlining the major new initiatives that the Nixon and Ford administrations had undertaken in many fields and the interrelationship between them. These passages represent a general overview of our foreign policy, set in historical context.

In a speech to the American Society of Newspaper Editors in Washington on April 17, 1975 (#26), in the midst of the Indochina debacle, HK sketched the design of our foreign policy in order to show that there was ample reason for confidence in spite of the immediate setback:

## The Design

Let us therefore look to the future. We start with a sound foreign policy structure.

We are convinced that a continuing strong American role is indispensable to global stability and progress. Therefore the central thrust of our foreign policy has been to adjust our role in the world and the conceptions, methods, and commitments which define it to the conditions of a new era—including an America fatigued by Indochina.

The postwar order of international relations ended with the last decade. No sudden upheaval marked the passage of that era, but the cumulative change by the end of the 1960's was profound. Gone was the rigid bipolar confrontation of the cold war. In its place was a more fluid and complex world—with many centers of power, more subtle dangers, and new hopeful opportunities. Western Europe and Japan were stronger and more self-confident; our alliances needed to be adjusted toward a more equal partnership. The Communist world had fragmented over doctrine and national interests; there were promising prospects for more stable relations based on restraint and negotiation. And many of our friends in other parts of the globe were now better prepared to shoulder responsibility for their security and well-being, but they needed our assistance during the period of transition.

At home, the American people and Congress were weary from two decades of global exertion and years of domestic turmoil. They were not prepared for confrontation unless all avenues toward peace had been explored.

The challenge for our foreign policy has been to define an effective but more balanced

U.S. role in the world, reducing excessive commitments without swinging toward precipitate and dangerous withdrawal.

We have come a long way.

Our major allies in the Atlantic world and Japan have grown in strength politically and economically; our alliances are firm anchors of world security and prosperity. They are the basis for close cooperation on a range of unprecedented new problems, from détente to energy.

We have launched a hopeful new dialogue with Latin America.

We are looking to a new era of relations with Africa.

We have taken historic steps to stabilize and improve our relations with our major adversaries. We have reduced tensions, deepened dialogue, and reached a number of major agreements.

We have begun the process of controlling the rival strategic arms programs which, unconstrained, threaten global security. When the Vladivostok agreement is completed, a ceiling will have been placed for the first time on the level of strategic arsenals of the superpowers.

We have helped to ease longstanding political conflicts in such sensitive areas as Berlin and the Middle East.

And we have taken the major initiatives to mobilize the international response to new global challenges such as energy, food, the environment, and the law of the sea.

In all these areas the American role has frequently been decisive. The design still stands; our responsibilities remain. There is every prospect for major progress. There is every reason for confidence.

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In a speech in St. Louis on May 12, 1975, before the St. Louis World Affairs Council (#27), HK described the "vast agenda" that lay before the United States in the post-Vietnam era:

The leadership role we have exercised for a generation has never been more vital. The world of the 1970's is less predictable, more fluid than the world of 10 years ago. America's strength is less dominant, our margins for error narrower, our choices more complex and ambiguous. New centers of power and influence have emerged, and nearly a hundred new nations have come into being since the Second World War. What we once considered a monolithic Communist bloc has been fractured by profound divisions. Our alliances have taken on new balance and are adjusting to new conditions. Developing countries are pressing their claims with fresh urgency and unity. Economic interdependence has become a fact of life. While the cold war structure of international relations has come apart, a new stable international order has yet to be formed.

A changing world places new demands on our leadership. Inevitably our policy must be more flexible, more complicated, more subtle, and more imaginative than in the early postwar period. But the link between our international performance and our national destiny remains fundamental; it has become, if anything, more crucial:

- Never before in history have the elements of national military power been so vast, so ready, so dangerous—and so ill suited to political objectives. An upsetting of the strategic equation could doom us; a spiraling arms race could produce a nuclear holocaust. We must prevent both dangers from arising.

- The contemporary world has many centers of power and initiative and many other dimensions of international concern besides military threats to security. In military power, the world is still essentially bipolar. In economic power, there are several poles—Western Europe, Japan, China, the producers of energy and key raw materials—in addition to North America and the Soviet Union. Political, military, and economic power are no longer necessarily commensurate with each other. Only the United States is strong in all categories. Our responsibilities are therefore inescapable. Our

performance has profound consequences whether we act or fail to act.

- Regional and local conflicts still abound. The absence of world war for a generation has made the world too complacent about local wars. But if not contained or resolved through diplomacy, these wars pose grave dangers. A war in the Middle East, for example, carries with it profound risks of global economic depression and confrontation among the major powers. We must do our utmost to prevent this.

- The Indian nuclear explosion of a year ago raises anew the specter of an era of plentiful nuclear weapons in which any local conflict risks exploding into a nuclear holocaust. As nuclear weapons proliferate, nuclear catastrophe looms more plausible—whether through design or miscalculation, accident, theft, or blackmail. The withdrawal or weakening of the American security mantle would accelerate this process. It would give an additional incentive to many countries to seek their security in the development of nuclear weapons.

- The advanced industrial nations and the developing nations are part of a single global economic system whose stability and growth is a vital American interest. The health of the dollar, the expansion of our trade, the free flow of investment, and the supply and price of energy, food, and other vital raw materials are all essential for our own prosperity. Whether we can accommodate the interests of consumers and producers, rich and poor, will determine whether our children inherit a world of tranquillity or of constant conflict.

- The future of the oceans will be shaped in the next few years. At stake are the reach of our navies, the safety of shipping lanes, the rights to vast economic resources, and the choice between chaos and the rule of law across three-quarters of this earth.

In short, as technology expands man's reach, the planet continues to shrink. Global communications make us acutely aware of each other. Human aspirations and destinies increasingly are intertwined.

We thus face a vast agenda. It is time for us to stop tormenting ourselves and get to work.

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And again, in simple terms, in his Minneapolis speech of July 15, 1975 (#36):

## The Modern Agenda

Today we face a new agenda. Our accomplishments over the past generation have changed the world and defined our tasks for the coming decades:

-Our allies, the major industrial democracies, have recovered their vigor and influence. We are transforming our alliances into more equal partnerships. We shall act in harmony with friends whose security and prosperity is indispensable to our own and whose cooperation is essential for progress and justice.

-The incredible destructiveness of modern weapons has transformed international politics. We must maintain our military strength. But we have an obligation, in our own interest as well as the world's, to work with other nations to control both the growth and the spread of nuclear weapons.

-In our relations with the Communist powers we must never lose sight of the fact that in the thermonuclear age general war would be disastrous to mankind. We have an obligation to seek a more productive and stable relationship despite the basic antagonism of our values.

-Thirty years of economic and political evolution have brought about a new diffusion of power and initiative. At the same time, interdependence imposes upon all nations the reality that they must prosper together or suffer together. The destinies of the world's nations have become inevitably intertwined. Thus, the capacity of any one nation to shape events is more limited, and consequently our own choices are more difficult and complex.

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## II. THE INDUSTRIAL DEMOCRACIES

### The Year of Europe

HK's "Year of Europe" speech of April 13, 1973, was given when HK was Assistant to the President for National Security Affairs. HK delivered a second speech on the same subject, however, when he was Secretary of State. This was the speech to the Pilgrims of Great Britain, in London, on December 12, 1973 (#7).

The Pilgrims speech first addressed some of the procedural squabbles of the Year of Europe, and sought to clear up some misconceptions left by the April Year of Europe speech. HK then highlighted the substantive agenda that would confront the industrial democracies over the next several years: East-West relations, defense, and a world of economic interdependence:

#### The Year of Europe

Because we have a historical and intimate relationship, I want to speak tonight frankly of what has been called the "Year of Europe"—of the difficulties of 1973 and the possibilities of 1974 and beyond.

Last April the President asked me to propose that Europe and the United States strive together to reinvigorate our partnership. He did so because it was obvious that the assumptions on which the alliance was founded have been outstripped by events:

- Europe's economic strength, political cohesion, and new confidence—the monumental achievements of Western unity—have radically altered a relationship that was originally shaped in an era of European weakness and American predominance.

- American nuclear monopoly has given way to nuclear parity, raising wholly new problems of defense and deterrence—problems which demand a broad reexamination of the requirements of our security and the relative contribution to it of the United States and its allies.

- The lessening of confrontation between East and West has offered new hope for a relaxation of tensions and new opportunities for creative diplomacy.

- It has become starkly apparent that the great industrialized democracies of Japan, Europe, and North America could pursue di-

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vergent paths only at the cost of their prosperity and their partnership.

These historic changes were occurring in a profoundly changed psychological climate in the West. The next generation of leaders in Europe, Canada, and America will have neither the personal memory nor the emotional commitment to the Atlantic alliance of its founders. Even today, a majority on both sides of the Atlantic did not experience the threat that produced the alliance's creation or the sense of achievement associated with its growth. Even today, in the United States over 40 Senators consistently vote to make massive unilateral reductions of American forces in Europe. Even today, some Europeans have come to believe that their identity should be measured by its distance from the United States. On both sides of the Atlantic we are faced with the anomalous—and dangerous—situation in which the public mind identifies foreign policy success increasingly with relations with adversaries while relations with allies seem to be characterized by bickering and drift.

There exists, then, a real danger of a gradual erosion of the Atlantic community which for 25 years has insured peace to its nations and brought prosperity to its peoples. A major effort to renew Atlantic relations and to anchor our friendship in a fresh act of creation seemed essential. We hoped that the drama of the great democracies engaging themselves once again in defining a common future would infuse our Atlantic partnership with new emotional and intellectual excitement. This was the origin of the initiative which came to be called the "Year of Europe."

Let me lay to rest certain misconceptions about American intentions:

—The President's initiative was launched after careful preparation. In all of our conversations with many European leaders during the winter and spring of 1972-73 there was agreement that Atlantic relations required urgent attention to arrest the potential for growing suspicion and alienation between Europe and America.

—We do not accept the proposition that

the strengthening of Atlantic unity and the defining of a European personality are incompatible. The two processes have reinforced each other from the outset and can continue to do so now. The United States has repeatedly and explicitly welcomed the European decision to create an independent identity in all dimensions, political and economic. Indeed, we have long—and more consistently than many Europeans—supported the goal of political cohesion.

—We have no intention of restricting Europe's international role to regional matters. From our perspective, European unification should enable Europe to take on broader responsibilities for global peace that ultimately can only contribute to the common interest. The American initiative was meant to mark Europe's new preeminence on the world scene as well as within the North Atlantic community.

A comprehensive reexamination of all aspects of our relationship, economic, political, and military, is imperative. It is a fact that our troops are in Europe as a vital component of mutual defense. It is also a fact—indeed, a truism—that political, military, and economic factors are each part of our relationship. In our view, the affirmation of the pervasive nature of our interdependence is not a device for blackmail. On the contrary, it is the justification for conciliatory solutions. For the specialized concerns of experts and technicians have a life of their own and a narrow national or sectarian bias. The purpose of our initiative was to override these divisive attitudes by committing the highest authority in each country to the principle that our common and paramount interest is in broadly conceived cooperation.

## The European Identity

Since last April Europe has made great strides toward unity—particularly in political coordination. The United States strongly supports that process. But as an old friend we are also sensitive to what this process does to traditional ties that, in our view, remain essential to the common interest.

Europe's unity must not be at the expense

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of Atlantic community, or both sides of the Atlantic will suffer. It is not that we are impatient with the cumbersome machinery of the emerging Europe. It is rather the tendency to highlight division rather than unity with us which concerns us.

I would be less than frank were I to con-
ceal our uneasiness about some of the recent
practices of the European Community in the
political field. To present the decisions of a
unifying Europe to us as faits accomplis not
subject to effective discussion is alien to the
tradition of U.S.-European relations.

This may seem a strange complaint from
a country repeatedly accused of acting itself
without adequately consulting with its allies.
There is no doubt that the United States has
sometimes not consulted enough or adequate-
ly—especially in rapidly moving situations.
But this is not a preference; it is a deviation
from official policy and established practice—
usually under pressure of necessity. The at-
titude of the unifying Europe, by contrast,
seems to attempt to elevate refusal to consult
into a principle defining European identity.
To judge from recent experience, consulta-
tion with us before a decision is precluded,
and consultation after the fact has been
drained of content. For then Europe appoints
a spokesman who is empowered to inform us
of the decisions taken but who has no author-
ity to negotiate.

We do not object to a single spokesman, but we do believe that as an old ally the United States should be given an opportunity to express its concerns before final decisions affecting its interests are taken. And bilateral channels of discussion and negotiation should not be permitted to atrophy—at least until European political unity is fully realized. To replace the natural dialogue with extremely formalistic procedures would be to shatter abruptly close and intangible ties of trust and communication that took decades to develop and that have served our common purposes well.

The United States recognizes the problems
of a transitional period as Europe moves to-
ward unity. We understand the difficulty of
the first hesitant steps of political coordina-
tion. But we cannot be indifferent to the tend-

ency to justify European identity as facili-
tating separateness from the United States;
European unity, in our view, is not contra-
diction to Atlantic unity.

For our part, we will spare no effort to
strengthen cooperative relationships with a
unifying Europe, to affirm the community of
our ideals, and to revitalize the Atlantic rela-
tionship. That was the purpose of our initia-
tive last April. It remains the central goal of
our foreign policy.

The Common Challenge

The leaders of the European Community meet this week. They will consider the nature of European identity; no doubt they will adopt common policies and positions. In the light of this important meeting, let me outline the position of the United States:

- *Détente is an imperative.* In a world shadowed by the danger of nuclear holo-caust, there is no rational alternative to the pursuit of relaxation of tensions. But we must take care that the pursuit of détente not undermine the friendships which made détente possible.

- *Common defense is a necessity.* We must be prepared to adjust it to changing conditions and share burdens equally. We need a definition of security that our peoples can support and that our adversaries will respect in a period of lessened tensions.

- *European unity is a reality.* The United States welcomes and supports it in all its dimensions, political as well as economic. We believe it must be made irreversible and that it must strengthen transatlantic ties.

- *Economic interdependence is a fact.* We must resolve the paradox of growing mutual dependence and burgeoning national and regional identities.

We are determined to continue construc-
tive dialogue with Western Europe. We have
offered no final answers; we welcome Eu-
rope's wisdom. We believe that this opportu-
nity will not come soon again.

So let us rededicate ourselves to finishing
the task of renewing the Atlantic community.

First, let us complete the work before us;

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let us agree on a set of declarations equal to the occasion so that they may serve as an agenda for our governments and as an example and inspiration for our peoples.

Second, let us then transform these declarations into practical and perceptible progress. We will restore mutual confidence if our policies begin to reinforce rather than work against our common objectives. And let us move quickly to improve the process of consultation in both directions. The U.S. Government made concrete suggestions in this regard at the recent meeting of the Foreign Ministers in the North Atlantic Council.

But let us also remember that even the best consultative machinery cannot substitute for common vision and shared goals; it cannot replace the whole network of intangible connections that have been the real sinews of the transatlantic and especially the Anglo-American relationship. We must take care lest in defining European unity in too legalistic a manner we lose what has made our alliance unique: that in the deepest sense Europe and America do not think of each other as foreign entities conducting traditional diplomacy, but as members of a larger community engaged, sometimes painfully but ultimately always cooperatively, in a common enterprise. The meeting to which the Foreign Ministers of the Community were courteous enough to invite me marks a significant step forward in restoring the intangibles of the transatlantic dialogue.

Let us put false suspicions behind us. The President did not fight so hard in Congress for our troops in Europe, for strong defenses, for a conciliatory trade bill, for support for allies around the world; he did not strive so continually to consult on SALT [Strategic Arms Limitation Talks] and develop common positions on MBFR [mutual and balanced force reductions]; he did not stand up so firmly to challenges in crises around the world—suddenly to sacrifice Western Europe's security on the altar of condominium. Our destiny, as well as the full strength of our military power, is inextricably linked with yours.

As we look into the future we can perceive

challenges compared to which our recent disputes are trivial. A new international system is replacing the structure of the immediate postwar years. The external policies of China and the Soviet Union are in periods of transition. Western Europe is unifying. New nations seek identity and an appropriate role. Even now, economic relationships are changing more rapidly than the structures which nurtured them. We—Europe, Canada, and America—have only two choices: creativity together or irrelevance apart.

* * *

We have every reason of duty and self-interest to preserve the most successful partnership in history. The United States is committed to making the Atlantic community a vital positive force for the future as it was for the past. What has recently been taken for granted must now be renewed. This is not an American challenge to Europe; it is history's challenge to us all.

The United Kingdom, we believe, is in a unique position. We welcome your membership in the European Community—though the loosening of some of our old ties has been painful at times. But you can make another historic contribution in helping develop between the United States and a unifying Europe the same special confidence and intimacy that benefited our two nations for decades. We are prepared to offer a unifying Europe a “special relationship,” for we believe that the unity of the Western world is essential for the well-being of all its parts.

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[Y]

HK gave a postmortem, of sorts, on the Year of Europe in his address to the IISS in London on June 25, 1976, inaugurating the Alastair Buchan memorial lecture series (#71). HK reiterated American support for European unity:

## The United States and a United Europe

In 1973, with Viet-Nam at last behind us, and fresh from new initiatives with China and the Soviet Union, the United States proposed that the collaboration of the industrial democracies be given new impetus. Military security, while still crucial, was no longer sufficient to give content or political cohesion to our broader relationship or to retain support for it from a new generation. We faced important East-West negotiations on European security and force reductions, a fresh agenda of international economic problems, the challenge of shaping anew our relationship with the developing world, and the need to redefine relations between America and a strengthened and enlarged European community.

It is academic to debate now whether the United States acted too theoretically in proposing to approach these challenges through the elaboration of a new Atlantic Declaration, or whether our European friends acted wisely in treating this proposal as a test case of European identity. The doctrinal arguments of 1973 over the procedure for Atlantic consultations, or whether Europe was exercising its proper global role, or whether economic and security issues should be linked, have in fact been settled by the practice of consultations and cooperation unprecedented in intensity and scope. The reality and success of our common endeavors have provided the best definition and revitalization of our relationship.

There is no longer any question that Europe and the United States must cooperate closely under whatever label and that the unity of Europe is essential to that process.

In its early days, the European Community was the focus of much American idealism, and perhaps of some paternalism, as we urged models of federal unity and transatlantic burden sharing on our European friends. By now, leaders on both sides of the Atlantic have come to understand that European unity cannot be built by Americans or to an American prescription; it must result from European initiatives.

The evolution of European initiatives—both its successes and its setbacks—inevitably gives rise to new questions about whether the United States still welcomes European unification. Let me take this occasion to emphasize our conviction that European unity is crucial for Europe, for the West, and for the world. We strongly support and encourage it.

We have perhaps become a little more sophisticated about our contribution to the process. We no longer expect that it will grow from the desire to ease American burdens. If Europe is to carry a part of the West's responsibilities in the world, it must do so according to its own conceptions and in its own interest.

Alastair Buchan wrote:

> It is impossible to inspire Western Europe to political unity or to encourage Japanese self-reliance unless they have the freedom and confidence to define their interests in every sphere, interests which must be reconciled with those of the United States but not subordinated to them.

The United States endorses this principle wholeheartedly. It is not healthy for the United States to be the only center of initiative and leadership in the democratic world. It is not healthy for Europe to be only a passive participant, however close the friendship and however intimate the consultation.

[N]

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We therefore welcome the fact that Europe's role in global affairs is gaining in vigor and effectiveness. A vital and cohesive Western Europe is an irreplaceable weight on the scales of global diplomacy; American policy can only gain by having a strong partner of parallel moral purposes.

Of course we do not want Europe to find its identity in opposition to the United States. But neither does any sensible European. Of course there will be disagreements between us of tactics and sometimes of perspectives, if not of ends. But I do not believe that we Americans have so lost confidence in ourselves that we must inhibit the role of others with whom we may have occasional differences but who share our highest values. The wisest statesmen on the two sides of the ocean have always known that European unity and Atlantic partnership are both essential and mutually reinforcing.

So let us finally put behind us the debates over whether Europe's unity has American support. We consider the issue settled. Let us, rather, address ourselves to the urgent challenges of mutual concern which a uniting Europe, the United States, and all industrial democracies must face together—common defense, East-West relations, and the international economy.

## Energy Cooperation

The main substantive focus of the Pilgrims Speech of December 12, 1973 (#72), however, was the Middle East and energy: HK's effort to achieve a unified or coordinated position on energy among the industrial democracies in order to face the cartel of oil producers. In his Pilgrims speech HK proposed an Energy Action Group among the oil-consuming nations (which later became the International Energy Agency). Interestingly, the oil producers were to be invited to join the EAG "from the very beginning." Nevertheless it was clear that the thrust of the initiative was the unity of the oil consumers, which took on increasing urgency in later months as the recession deepened. Excerpts follow:

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## The Middle East and Energy

The Middle East crisis illustrates the importance of distinguishing the long-range from the ephemeral. The differences of recent months resulted not so much from lack of consultation as from a different perception of three key issues: Was the war primarily a local conflict, or did it have wider significance? Has the energy crisis been caused primarily by the war, or does it have deeper causes? Can our common energy crisis be solved by anything but collective action?

As for the nature of the Middle East conflict, it is fair to state—as many Europeans including your Foreign Secretary have—that the United States did not do all that it might have done before the war to promote a permanent settlement in the Middle East. Once the war began, the United States demonstrated great restraint until the Soviet effort reached the point of massive intervention. Once that happened, it became a question of whether the West would retain any influence to help shape the political future of an area upon which Europe is even more vitally dependent than the United States. We involved ourselves in a resupply effort not to take sides in the conflict but to protect the possibility of pursuing after the war the objective of a just, permanent settlement which some of our allies have urged on us ever since 1967.

At the same time, we must bear in mind the deeper causes of the energy crisis: It is not simply a product of the Arab-Israeli war; it is the inevitable consequence of the

explosive growth of worldwide demand outrunning the incentives for supply. The Middle East war made a chronic crisis acute, but a crisis was coming in any event. Even when prewar production levels are resumed, the problem of matching the level of oil that the world produces to the level which it consumes will remain.

The only long-term solution is a massive effort to provide producers an incentive to increase their supply, to encourage consumers to use existing supplies more rationally, and to develop alternate energy sources.

This is a challenge which the United States could solve alone with great difficulty and that Europe cannot solve in isolation at all. We strongly prefer, and Europe requires, a common enterprise.

To this end, the United States proposes that the nations of Europe, North America, and Japan establish an Energy Action Group of senior and prestigious individuals with a mandate to develop within three months an initial action program for collaboration in all areas of the energy problem. We would leave it to the members of the Niño whether they prefer to participate as the European Community.

The Group would have as its goal the assurance of required energy supplies at reasonable cost. It would define broad principles of cooperation, and it would initiate action in specific areas:

- To conserve energy through more rational utilization of existing supplies;

- To encourage the discovery and development of new sources of energy;

- To give producers an incentive to increase supply; and

- To coordinate an international program of research to develop new technologies that use energy more efficiently and provide alternatives to petroleum. The United States

-39-

would be willing to contribute our particular
skills in such areas as the development of the
deep seabed.

The Energy Action Group should not be
an exclusive organization of consumers. The
producing nations should be invited to join
it from the very beginning with respect to
any matters of common interest. The prob-
lem of finding adequate opportunity for de-
velopment, and the investment of the pro-
ceeds from the sale of energy sources, would
appear to be a particularly important area
for consumer-producer cooperation.

As an example of a task for the Energy Action Group, I would cite the field of enriching uranium for use in nuclear power reactors. We know that our need for this raw material will be great in the 1980's. We know that electric utilities will wish to assure their supply at the least possible cost. We know that European countries and Japan will wish to have their own facilities to produce at least part of their needs for enriched uranium. Such plants require huge capital investment. What could be more sensible than that we plan together to assure that scarce resources are not wasted by needless duplication?

The United States is prepared to make a
very major financial and intellectual contri-
bution to the objective of solving the energy
problem on a common basis. There is no
technological problem that the great democ-
racies do not have the capacity to solve to-
gether—if they can muster the will and the
imagination. The energy crisis of 1978 can
become the economic equivalent of the sput-
nik challenge of 1957. The outcome can be
the same. Only this time, the giant step for
mankind will be one that America and its
closest partners take together for the bene-
fit of all mankind.

[N]

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At the Washington Energy Conference in February, 1974, HK made another strong pitch for cooperation among the consuming countries. The producing countries indeed had to be part of any long-range solution (as some of our Allies insisted), but this could be effective only if the consuming countries too had a coordinated position. HK addressed the Washington Energy Conference along these lines on February 11, 1974 (#10):

Let me summarize the U.S. views on the major issues confronting us:

First, the energy situation poses severe economic and political problems for all nations. Isolated solutions are impossible. Even those countries, like Canada and the United States, capable of solving the energy problem by largely national means would still suffer because of the impact on them of a world economic crisis. Consumer or producer, affluent or poor, mighty or weak—all have a stake in the prosperity and stability of the international economic system.

Second, this challenge can be met successfully only through concerted international action. Its impact is controllable if we work together; it is unmanageable if we do not.

Third, the developing countries must quickly be drawn into consultation and collaboration. Their futures are the most profoundly affected of all. Unable to meet present prices for oil and fertilizer, they face the threat of starvation and the tragedy of abandoned hopes for further economic development. In the name both of humanity and common sense we cannot permit this.

Fourth, cooperation *not* confrontation must mark our relationships with the producers. We each have legitimate interests. We each face looming dangers. We need each other. If we move rapidly and cooperatively toward collective action, all will benefit.

Fifth, the United States recognizes its own national responsibility to contribute significantly to a collective solution. While we are less immediately affected than others, we see it as a matter of enlightened self-interest—and moral responsibility—to collaborate in the survival and restoration of the world economic system. Project Independence, which will reduce the American demand for world supplies, can be a way station on the road to a new Project Interdependence. We

are willing to share American advances in energy technology, to develop jointly new sources of supply, and to establish a system of emergency sharing. We are prepared to make specific proposals in these areas in the follow-on work of this conference.

* * *

These global dilemmas cannot be avoided through exclusive bilateral arrangements. We do not dispute the right of sovereign nations to make individual arrangements. But we believe that it is essential that these arrangements follow agreed rules of conduct. In their absence, unrestrained bilateralism is certain to produce disastrous political and economic consequences.

No conceivable increase in bilateral trade with the producing nations can cover the massive payments deficits that each nation faces. The only result of unmanaged bilateralism will be to bid up prices, perhaps even beyond present levels, and to stabilize them at levels that will ruin the countries making the bilateral arrangements before they ruin everyone else.

Thus the ultimate challenge is to the fragile fabric of international principles and institutions. If we fail to achieve a cooperative solution, each of us will be tempted to transfer the problem onto others. This was the approach the industrial world followed during the "beggar-thy-neighbor" policies of the 1930's. We all know the consequences.

* * *

It seems clear that enlightened self-interest of consumers and producers need not and should not be in conflict. Future generations may not enjoy a permanent source of petroleum. Excessively high prices are already calling forth massive investments in alternative

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energy sources, which raises the prospect of lower prices and shrunken export markets for the producers in the future. But stable oil earnings, at just prices, wisely invested and increasing by the principle of compound interest, will be available as a long-term source of income.

Thus the producers must have an interest in a "just" price and in stable long-term political and economic relations. Therefore, at the consumer-producer conference for

which we are heading, let us discuss what constitutes a just price and how to assure long-term investments. A well-conceived producer-consumer meeting, in which the consumers do not seek selfish advantages either as a group or individually, far from leading to confrontation, could instead lay the basis of a new cooperative relationship. But it will do so only if it is well prepared—and if the consumers have first constructed a solid basis of cooperation among themselves.

HK made more detailed proposals on energy cooperation in an address to a University of Chicago Board of Trustees banquet on November 14, 1974 in Chicago (#21). Consumer cooperation was essential if the industrial democracies were to avoid political, economic, and social chaos:

A generation ago the Western world faced a historic crisis—the breakdown of international order in the wake of world war. Threatened by economic chaos and political upheaval, the nations of the West built a system of security relations and cooperative institutions that have nourished our safety, our prosperity, and our freedom ever since. A moment of grave crisis was transformed into an act of lasting creativity.

We face another such moment today. The stakes are as high as they were 25 years ago. The challenge to our courage, our vision, and our will is as profound. And our opportunity is as great.

What will be our response?

I speak, of course, of the energy crisis. Tonight I want to discuss how the administration views this problem, what we have been doing about it, and where we must now go. I will stress two themes that this government has emphasized for a year and a half:

- First, the problem is grave but it is soluble.

- Second, international collaboration, particularly among the industrial nations of North America, Western Europe, and Japan, is an inescapable necessity.

The economic facts are stark. By 1978, worldwide industrial expansion was outstripping energy supply; the threat of shortages was already real. Then, without warning, we were faced first with a political embargo, followed quickly by massive in-

creases in the price of oil. In the course of a single year the price of the world's most strategic commodity was raised 400 percent. The impact has been drastic and global:

- The industrial nations now face a collective payments deficit of $40 billion, the largest in history and beyond the experience or capacity of our financial institutions. We suffer simultaneously a slowdown of production and a speedup of an inflation that was already straining the ability of governments to control.

- The nations of the developing world face a collective yearly deficit of $20 billion, over half of which is due to increases in oil prices. The rise in energy costs in fact roughly equals the total flow of external aid. In other words, the new oil bill threatens hopes for progress and advancement and renders problematical the ability to finance even basic human needs such as food.

- The oil producers now enjoy a surplus of $60 billion, far beyond their payments or development needs and manifestly more than they can invest. Enormous unabsorbed surplus revenues now jeopardize the very functioning of the international monetary system.

Yet this is only the first year of inflated oil prices. The full brunt of the petrodollar flood is yet to come. If current economic trends continue, we face further and mounting worldwide shortages, unemployment, poverty, and hunger. No nation, East or

-42-

West, North or South, consumer or pro-
cesser, will be spared the consequences.

An economic crisis of such magnitude
would inevitably produce dangerous political
consequences. Mounting inflation and re-
cession—brought on by remote decisions
over which consumers have no influence—
will fuel the frustration of all whose hopes
for economic progress are suddenly and
cruelly rebuffed. This is fertile ground for
social conflict and political turmoil. Mod-
erate governments and moderate solutions
will be under severe attack. Democratic so-
cieties could become vulnerable to extremist
pressures from right or left to a degree not
experienced since the twenties and thirties.
The great achievements of this generation
in preserving our institutions and construct-
ing an international order will be im-
periled.

The destinies of consumers and producers
are joined in the same global economic sys-
tem, on which the progress of both depends.
If either attempts to wield economic power
aggressively, both run grave risks. Political
cooperation, the prerequisite of a thriving
international economy, is shattered. New
tensions will engulf the world just when the
antagonisms of two decades of the cold war
have begun to diminish.

The potentially most serious international
consequences could occur in relations be-
tween North America, Europe, and Japan.
If the energy crisis is permitted to continue
unchecked, some countries will be tempted
to secure unilateral benefit through separate
arrangements with producers at the expense
of the collaboration that offers the only hope
for survival over the long term. Such uni-
lateral arrangements are guaranteed to en-
shrine inflated prices, dilute the bargaining
power of the consumers, and perpetuate the
economic burden for all. The political conse-
quences of disarray would be pervasive.
Traditional patterns of policy may be aban-
doned because of dependence on a strategic
commodity. Even the hopeful process of
easing tensions with our adversaries could
suffer, because it has always presupposed
the political unity of the Atlantic nations
and Japan.

The Need for Consumer Cooperation

This need not be our fate. On the con-
trary, the energy crisis should summon once
again the cooperative effort which sustained
the policies of North America, Western
Europe, and Japan for a quarter century.
The Atlantic nations and Japan have the
ability, if we have the will, not only to
master the energy crisis but to shape from
it a new era of creativity and common
progress.

In fact we have no other alternative. The
energy crisis is not a problem of transitional
adjustment. Our financial institutions and
mechanisms of cooperation were never de-
signed to handle so abrupt and artificially
sustained a price rise of so essential a com-
modity with such massive economic and
political ramifications. We face a long-term
drain which challenges us to common action
or dooms us to perpetual crisis.

The problem will not go away by per-
mitting inflation to proceed to redress the
balance between oil producers and producers
of other goods. Inflation is the most gro-
tesque kind of adjustment, in which all other
elements in the domestic structure are up-
set in an attempt to balance one—the oil
bill. In any event, the producers could and
would respond by raising prices, thereby
accelerating all the political and social
dangers I have described.

Nor can consumers finance their oil bill
by going into debt to the producers without
making their domestic structure hostage to
the decisions of others. Already, producers
have the power to cause major financial up-
heavals simply by shifting investment funds
from one country to another or even from
one institution to another. The political im-
plications are ominous and unpredictable.
Those who wield financial power would
sooner or later seek to dictate the political
terms of the new relationships.

Finally, price reductions will not be
brought about by consumer-producer dia-
logue alone. The price of oil will come down
only when objective conditions for a reduc-
tion are created, and not before. Today the
producers are able to manipulate prices at
will and with apparent impunity. They are

750

Department of State Bulletin

-43-

N]

not persuaded by our protestations of damage to our societies and economies, because we have taken scant action to defend them ourselves. They are not moved by our alarms about the health of the Western world, which never included and sometimes exploited them. And even if the producers learn eventually that their long-term interest requires a cooperative adjustment of the price structure, it would be foolhardy to count on it or passively wait for it.

We agree that a consumer-producer dialogue is essential. But it must be accompanied by the elaboration of greater consumer solidarity. The heart of our approach must be collaboration among the consuming nations. No one else will do the job for us.

## Blueprint for Consumer Cooperation

Consumer cooperation has been the central element of U.S. policy for the past year and a half.

In April 1973 the United States warned that energy was becoming a problem of unprecedented proportions and that collaboration among the nations of the West and Japan was essential. In December of the same year, we proposed a program of collective action. This led to the Washington Energy Conference in February 1974, at which the major consumers established new machinery for consultation with a mandate to create, as soon as possible, institutions for the pooling of effort, risk, and technology.

In April 1974 and then again this fall before the U.N. General Assembly, President Ford and I. reiterated the American philosophy that global cooperation offered the only long-term solution and that our efforts with fellow consumers were designed to pave the way for constructive dialogue with the producers. In September 1974 we convened a meeting of the Foreign and Finance Ministers of the United Kingdom, Japan, the Federal Republic of Germany, France, and the United States to consider further measures of consumer cooperation. And last month President Ford announced a long-term national policy of conservation and

development to reinforce our international efforts to meet the energy challenge.

In our view, a concerted consumer strategy has two basic elements:

- First, we must create the objective conditions necessary to bring about lower oil prices. Since the industrialized nations are the principal consumers, their actions can have a decisive impact. Determined national action, reinforced by collective efforts, can transform the market by reducing our consumption of oil and accelerating development of new sources of energy. Over time this will create a powerful pressure on prices.

- Second, in the interim we must protect the vitality of our economies. Effective action on conservation will require months; development of alternative sources will take years. In the meantime, we will face two great dangers. One is the threat of a new embargo. The other is that our financial system may be unable to manage chronic deficits and to recycle the huge flows of oil dollars that producers will invest each year in our economies. A financial collapse—or the threat of it—somewhere in the system could result in restrictive monetary, fiscal, and trade measures and a downward spiral of income and jobs.

The consumers have taken two major steps to safeguard themselves against these dangers by collaborative action.

One of the results of the Washington Energy Conference was a new permanent institution for consumer energy cooperation —the International Energy Agency (IEA). This agency will oversee a comprehensive common effort—in conservation, cooperative research and development, broad new action in nuclear enrichment, investment in new energy supplies, and the elaboration of consumer positions for the consumer-producer dialogue.

Equally significant is the unprecedented agreement to share oil supplies among principal consumers in the event of another crisis. The International Energy Program that grew out of the Washington Energy Conference and that we shall formally adopt

751

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next week is a historic step toward consumer solidarity. It provides a detailed blueprint for common action should either a general or selective embargo occur. It is a defensive arrangement, not a challenge to producers. But producing countries must know that it expresses the determination of the consumers to shape their own future and not to remain vulnerable to outside pressures.

The International Energy Agency and the International Energy Program are the first fruits of our efforts. But they are only foundations. We must now bring our blueprint to life.

To carry through the overall design, the consuming countries must act in five interrelated areas:

-First, we must accelerate our national programs of energy conservation, and we must coordinate them to insure their effectiveness.

-Second, we must press on with the development of new supplies of oil and alternative sources of energy.

-Third, we must strengthen economic security—to protect against oil emergencies and to safeguard the international financial system.

-Fourth, we must assist the poor nations whose hopes and efforts for progress have been cruelly blunted by the oil price rises of the past year.

-Fifth, on the basis of consumer solidarity we should enter a dialogue with the producers to establish a fair and durable long-term relationship.

* * *

## Constructive Dialogue With Producers

When the consumers have taken some collective steps toward a durable solution—that is, measures to further conservation and the development of new supplies—and for our interim protection through emergency planning and financial solidarity, the conditions for a constructive dialogue with producers will have been created.

We do not see consumer cooperation as antagonistic to consumer-producer cooperation. Rather we view it as a necessary prerequisite to a constructive dialogue, as do many of the producers themselves, who have

urged the consumers to curb inflation, conserve energy, and preserve international financial stability.

A dialogue that is not carefully prepared will compound the problems which it is supposed to solve. Until the consumers develop a coherent approach to their own problems, discussions with the producers will only repeat in a multilateral forum the many bilateral exchanges which are already taking place. When consumer solidarity has been developed and there are realistic prospects for significant progress, the United States is prepared to participate in a consumer-producer meeting.

The main subject of such a dialogue must inevitably be price. Clearly the stability of the system on which the economic health of even the producers depends requires a price reduction. But an equitable solution must also take account of the producers' need for long-term income security and economic growth. This we are prepared to discuss sympathetically.

In the meantime the producers must recognize that further increases in the prices while this dialogue is being prepared and when the system has not even absorbed the previous price rises would be disruptive and dangerous.

On this basis—consumer solidarity in conservation, the development of alternative supplies, and financial security; producer policies of restraint and responsibility; and a mutual recognition of interdependence and a long-term common interest—there can be justifiable hope that a consumer-producer dialogue will bring an end to the crisis that has shaken the world to its economic foundations.

* * *

Let there be no doubt, the energy problem is soluble. It will overwhelm us only if we retreat from its reality. But there can be no solution without the collective efforts of the nations of North America, Western Europe, and Japan—the very nations whose cooperation over the course of more than two decades has brought prosperity and peace to the postwar world. Nor, in the last analysis, can there be a solution without a dialogue with the producers carried on in a spirit of reconciliation and compromise.

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[N]

HK touched upon the energy crisis briefly in his speech on January 24, 1975, to the Los Angeles World Affairs Council (#23), again stressing the importance of cooperation among the major consuming countries, the industrial democracies:

Overcoming the Energy Crisis

Clearly, the energy crisis is the most pressing issue on the new agenda. In the American view, a permanent solution is possible based on the following principles.

The first imperative is solidarity among the major consumers. Alone, no consuming country, except possibly the United States, can defend itself against an oil embargo or a withdrawal of oil money. Alone, no country, except perhaps the United States, can invest enough to develop new energy sources for self-sufficiency. But if the United States acted alone, it would doom the other industrialized nations to economic stagnation and political weakness; this would soon undermine our own economic well-being. Only by collective action can the consuming countries free their economies from excessive dependence on imported oil and their political life from a sense of impotence.

We have made important progress since the Washington Energy Conference met less than a year ago. Last November, the United States and 15 other countries signed an unprecedented agreement to assist each other in the event of a new oil emergency. That agreement commits each nation to build an emergency stock of oil; in case of a new embargo, each will cut its consumption by the same percentage and available oil will be shared. Thus, selective pressure would be blunted and an embargo against one would be an embargo against all.

Equally important, we have moved dramatically toward financial solidarity. Only last week, the major consuming nations agreed to create a solidarity fund of $25 billion, less than two months after it was first proposed by the United States. Through the creation of this fund, the industrial nations have gained significant protection against shifts, withdrawals, or cutoffs of funds from the petrodollar earners. The industrial countries will now be able to offset financial shifts of oil producer funds by loans to each other from the $25 billion mutual

insurance fund. The United States considers this rapid and decisive decision for the creation of the solidarity fund to be of the greatest political and economic significance.

* * *

Ultimately the energy problem must be solved through cooperation between consumers and producers. The United States, as a matter of evident necessity, seeks such a dialogue in a spirit of good will and of conciliation. But just as the producers are free to concert and discuss among themselves, so too are the consumers.

A principal purpose of consumer cooperation will be to prepare substantive positions for a producer dialogue to insure that it will be fruitful. The consumer nations should neither petition nor threaten. They should be prepared to discuss the whole range of issues of interdependence: assured supplies, a fair return to the producers of a depleting resource, security of investment, the relationship between oil and the state of the world economy.

Over the long term, producers and consumers, developed and developing nations, all depend on the same global economic system for the realization of their aspirations. It is this system which is now in jeopardy, and therefore the well-being of all nations is threatened. We must—together and in a cooperative spirit—restore the vitality of the world economy in the interests of all mankind.

Though we are far from having overcome the energy crisis, the outlines of a solution are discernible. The right course is clear, progress is being made, and success is well within our capacity. Indeed, the energy crisis which accelerated the economic difficulties of the industrial democracies can become the vehicle by which they reclaim control over their future and shape a more cooperative world.

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Before the National Press Club in Washington on February 3, 1975 (#24), HK urged the Congress to give priority to President Ford's energy program. In outlining our strategy, HK stressed consumer cooperation. In this speech HK proposed, among other things, a floor price to prevent OPEC or market forces from undercutting efforts to develop alternative energy sources:

## The Strategy of Energy Cooperation

We and our partners in the International Energy Agency have been, for a year, pursuing strategy in three phases:

- The first phase is to protect against emergencies. We must be prepared to deter the use of oil or petrodollars as political weapons, and if that fails, we must have put ourselves in the best possible defensive position. To do this, we have established emergency sharing programs to cope with new embargoes and created new mechanisms to protect our financial institutions against disruption. This stage of our common strategy is well on the way to accomplishment.

- The second phase is to transform the market conditions for OPEC oil. If we act decisively to reduce our consumption of imported oil and develop alternative sources, pressure on prices will increase. Measures to achieve this objective are now before the International Energy Agency or national parliaments; we expect to reach important agreements on them before the end of March.

- Once the consumer nations have taken these essential steps to reduce their vulnerability, we will move to the third stage of our strategy: to meet with the producers to discuss an equitable price, market structure, and long-term economic relationship. Assuming the building blocks of consumer solidarity are in place, we look toward a preparatory meeting for a producer-consumer conference before the end of March.

Our actions in all these areas are interrelated. It is not possible to pick and choose; since they are mutually reinforcing, they are essential to each other. No emergency program can avail if each year the collective dependence on OPEC oil increases. New sources of energy, however vast the invest-

ment program, will be ineffective unless strict measures are taken to halt the runaway, wasteful growth in consumption. Unless the industrial nations demonstrate the political will to act effectively in all areas, the producers will be further tempted to take advantage of our vulnerability.

In recent months we and our partners have taken important steps to implement our overall strategy. Two safety nets against emergencies have been put in place. In November, the IEA established an unprecedented plan for mutual assistance in the event of a new embargo. Each participating nation is committed to build an emergency stock of oil. In case of embargo, each nation will cut its consumption by the same percentage, and available oil will be shared. An embargo against one will become an embargo against all.

And in January, the major industrial nations decided to create a $25 billion solidarity fund for mutual support in financial crises—less than two months after it was first proposed by the United States. This mutual insurance fund will furnish loans and guarantees to those hardest hit by payments deficits, thus safeguarding the international economy against shifts, withdrawals, or cut-offs of funds by the producers.

The next steps should be to accelerate our efforts in the conservation and development of new energy sources. Action in these areas, taken collectively, will exert powerful pressures on the inflated price. No cartel is so insulated from economic conditions that its price structure is invulnerable to a transformation of the market.

* * *

New energy sources will cost considerably more than we paid for energy in 1973 and can never compete with the production costs of Middle Eastern oil.

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This disparity in cost poses a dilemma. If the industrial countries succeed in developing alternative sources on a large scale, the demand for OPEC oil will fall, and international prices may be sharply reduced. Inexpensive imported oil could then jeopardize the investment made in the alternative sources; the lower oil prices would also stimulate demand, starting again the cycle of rising imports, increased dependence, and vulnerability.

Thus, paradoxically, in order to protect the major investments in the industrialized countries that are needed to bring the international oil prices down, we must insure that the price for oil on the domestic market does not fall below a certain level.

The United States will therefore make the following proposal to the International Energy Agency this Wednesday:

In order to bring about adequate investment in the development of conventional nuclear and fossil energy sources, the major oil-importing nations should agree that they will not allow imported oil to be sold domestically at prices which would make those new sources noncompetitive.

This objective could be achieved in either of two ways. The consumer nations could agree to establish a common floor price for imports, to be implemented by each country through methods of its own choosing such as import tariffs, variable levies, or quotas. Each country would thus be free to obtain balance-of-payments and tax benefits without restimulating consumption, if the international price falls below agreed levels. Alternatively, IEA nations could establish a common IEA tariff on oil imports. Such a tariff could be set at moderate levels and phased in gradually as the need arises.

President Ford is seeking legislation requiring the executive branch to use a floor price or other appropriate measures to achieve price levels necessary for our national self-sufficiency goals.

Intensive technical study would be needed to determine the appropriate level at which prices should be protected. We expect that they will be considerably below the current world oil prices. They must, however, be high enough to encourage the long-range development of alternative energy sources.

These protected prices would in turn be a point of reference for an eventual consumer-producer agreement. To the extent that OPEC's current high prices are caused by fear of precipitate later declines, the con-

suming countries, in return for an assured supply, should be prepared to offer producers an assured price for some definite period so long as this price is substantially lower than the current price.

In short, the massive development of alternative sources by the industrial countries will confront OPEC with a choice: they can accept a significant price reduction now in return for stability over a longer period, or they can run the risk of a dramatic break in prices when the program of alternative sources begins to pay off. The longer OPEC waits, the stronger our bargaining position becomes.

The second problem is that the capacities of the industrialized countries to develop new energy sources vary widely. Some have rich untapped deposits of fossil fuels. Some have industrial skills and advanced technology. Some have capital. Few have all three.

Each of these elements will be in great demand, and ways must be found to pool them effectively. The consumers therefore have an interest in participating in each other's energy development programs.

Therefore the United States will propose to the IEA this Wednesday the creation of a synthetic fuel consortium within IEA. Such a body would enable countries willing to provide technology and capital to participate in each other's synthetic energy projects.

## Mutual Interests of Consumers and Producers

Consumer solidarity is not an end in itself. In an interdependent world, our hopes for prosperity and stability rest ultimately on a cooperative long-term relationship between consumers and producers.

This has always been our objective. It is precisely because we wish that dialogue to be substantive and constructive that we have insisted that consumers first put their own house in order. Collective actions to restore balance to the international economic structure, and the development in advance of common consumer views on the agenda, will contribute enormously to the likelihood of the success of the projected consumer-producer dialogue. Without these measures, discussions will only find us restating our divisions and tempt some to seek unilateral advantages at the expense of their partners. The result will be confusion, demoralization, and inequity, rather than a just reconciliation between the two sides.

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[Y]

HK naturally elaborated on the theme of consumer cooperation in his speech to the IEA Ministerial Meeting on May 27, 1975, in Paris (#31). The IEA strategy was to transform market conditions to restore the balance in consumer-producer relations:

The embargo and price rises of 1978 taught us how vulnerable we had become. We saw that neither the supply nor the price of a central factor in our economies was any longer under our control. Our well-being and progress had become hostage to decisions in which we could not take part. At the Washington Energy Conference we recognized that only collective action could reduce our excessive dependence on imported oil and restore to our governments mastery over our own economies and foreign policies. Separately we could never create conditions for lower oil prices. Nor could any one of us, except at exorbitant cost, defend against a new embargo. Our security, our economic growth, our role in the world, were at risk.

Nothing so vividly demonstrates the cooperative vitality of the industrial democracies as the speed and imagination with which this Agency acted on these conclusions. It articulated a realistic strategy for attacking the problems of price and supply and launched a series of major steps which together make up the elements of a comprehensive program.

* * *

In the short term, our objective in this Agency has been to restore the balance in the international energy market. Through rigorous conservation and the development of alternative sources, we have sought to create such a surplus of capacity that the flexibility of decision of the producers will be reduced. As our conservation policies gain momentum, our dependence on imported oil can at least be kept constant, while our economies recover from the recent recession.

As the proportion of our energy needs from our own production increases, the producers' market will begin to shrink, first relatively and then in absolute terms. The producers will have to distribute ever-larger cutbacks among themselves to maintain the high prices, and even larger cutbacks to support an increase. Individual producers, especially those with ambitious development, defense, and other spending programs, will be under pressure to increase sales or at least to refuse further production cuts. Thus at some point, if this process succeeds, the cartel will have lost the exclusive and arbitrary control over prices.

We acknowledged from the start that our countries vary widely in energy needs and potential. Some of us have major and as yet untapped oil, gas, and coal reserves. Others must rely almost entirely on nuclear energy and new technology to reduce national dependence on imported oil.

This very diversity gives a strong impetus to our cooperation. Because of our interdependence, we all have an interest in each other's success. The action each country takes to reduce its vulnerability reduces the vulnerability of us all. And the decision to work cooperatively assures an equitable sharing of costs and benefits. The sacrifices of one country will not simply be offset by the failure of other nations.

All elements of our strategy are linked. Plans to deal with an emergency will prove empty if we permit our dependence on imported oil to mount year by year. Efforts to develop a new relationship with the producers will be thwarted if we fail to create the objective conditions for a new equilibrium through programs of conservation and the development of alternative supplies.

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[Y]

HK touched upon energy cooperation in other speeches in the same terms--to the Japan Society in New York on June 18, 1975 (#33); to the Southern Council on International and Public Affairs in Atlanta on June 23, 1975 (#34); and to the Southern Governors' Conference in Orlando on September 16, 1975 (#40).

In 1976, HK addressed the OECD Ministerial meeting again in Paris on June 21, 1976 (#70), and included energy among the topics requiring cooperation among the democracies, summing up what had been achieved and proposing further steps:

The fourth crucial sphere of cooperation among the industrial nations is energy. The cooperation of energy-consuming nations has become an imperative, for the last few years have demonstrated the economic and political costs of loss of control over this critical component of industrial growth.

For the next several years, our nations' heavy dependence on imported oil will contribute to our political and economic vulnerability. The outlook for reducing our dependence in the next decade is not encouraging. Forecasts based on existing energy programs in the industrial countries indicate that our imports of OPEC [Organization of Petroleum Exporting Countries] oil will increase from 27 million barrels a day in 1975 to as much as 37 million barrels per day by 1985. At the same time, it has become clear that oil reserves, while still large, are finite. Thus we must reduce our immediate dependence on imported oil side by side with beginning a long-term transition to alternative energy systems through the most rapid possible development of new and alternative sources of energy.

The industrial countries have begun to respond to the energy challenge. The difficult process of reorienting energy priorities and establishing new energy policies has been started. When the energy crisis became apparent, we moved rapidly to set up the new International Energy Agency (IEA), within the framework of the OECD. Through its impetus, a comprehensive structure of technical cooperation and policy coordination among industrial countries has grown up. At the same time, a dialogue with the OPEC countries has been started in the Conference on International Economic Cooperation (CIEC). And the importance of helping the poorer developing countries--especially those with limited energy resources-to survive the energy crisis has been recognized.

Despite these accomplishments, our efforts

have fallen far short of our needs. They will neither adequately reduce our immediate energy vulnerability nor achieve a satisfactory global balance of energy supply and demand over the longer term. The United States therefore proposes that OECD members take the following cooperative steps:

- First, that we establish on an urgent basis joint energy production projects to pool technical know-how and financing in areas such as coal extraction and utilization, uranium enrichment, and synthetic fuels. Such actions would accord with the commitments we undertook in the IEA Long-Term Program. They will contribute to the early availability of commercially attractive additional energy sources.

- Second, that we establish collective and individual goals for substantially reduced dependence on imported oil by 1985. This will require agreed targets for additional energy production, particularly in the coal and nuclear energy sectors; these represent our best hope for substantially reducing our energy dependence in the next decade.

- Third, that we agree to intensify our national efforts to reduce the growth in demand for energy.

The United States urges that the Governing Board of the IEA launch these efforts on a priority basis. Member governments should endorse these goals for reduced dependence and also make the essential political commitments to specific and concrete actions to achieve them. We should aim for a ministerial meeting in six to nine months to accomplish these objectives. The ministerial meeting should also look beyond the next decade to the post-oil era and seek ways to build on cooperative research and development efforts in such areas as solar power and nuclear fusion. OECD countries not members of the IEA should be given an opportunity to participate fully in this process.

[v]

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## Economic Relations

During 1975 and 1976, the focus shifted from energy cooperation among the democracies to cooperation on the full range of economic problems.

On May 28, 1975, in Paris, the day after addressing the IEA (#31, above), HK addressed the Ministerial Council of the OECD (#32) and spoke of the importance of collaboration among the democracies on the range of economic problems, to insure continuing prosperity amid the current economic difficulties:

Economic expansion in the industrial world and economic cooperation with the less developed countries go hand in hand. Only economic growth can satisfy competing demands for more income and more opportunity within and among countries. An expanding world economy is essential for development. It stimulates trade, investment, and technology; it supports necessary bilateral and multilateral aid programs; it assures growing markets for the raw materials, manufactures, and agricultural products of the developing countries; it provides the best framework for accommodation on the difficult, potentially divisive issues of food, energy, raw materials, trade, and investment.

These issues go far beyond economic considerations. Economic stagnation breeds political instability. For the nations of the industrialized world, the economic crisis has posed a threat to much more than our national income. It has threatened the stability of our institutions and the fabric of our cooperation on the range of political and security problems. Governments cannot act with assurance while their economies stagnate and they confront increasing domestic and international pressures over the distribution of economic benefit. In such conditions, the ability to act with purpose—to address either our national or international problems—will falter. If they are to contribute to world security and prosperity, the industrialized nations must be economically strong and politically cohesive.

The Organization for Economic Cooperation and Development reminds us of our strengths. It calls attention to the wisdom of our predecessors, who saw that we multiply our effectiveness by our cooperation. This organization was originally created to promote cooperation among those few nations which were already most advanced. This is still a worthwhile objective, but today's realities demand that we also increasingly base our policies on the recognition that growth in the industrial world is inexbericably linked to our relationship with the rest of the world.

We thus face two important challenges:

- First, the challenge to the nations of the industrial world to restore sustained and stable economic growth, so essential to maintain confidence in their institutions.

- A challenge to all nations to improve the system of international economic cooperation, and thus provide greater opportunity for the less developed countries to share both the benefits and responsibilities of a growing world economy.

The industrialized nations are now experiencing the most serious economic crisis since the Great Depression of the thirties. We see it in widespread recession. We encounter it in the inflation that has become the bane of our societies. We note it in the increasing difficulty of governments to manage their economies and even to control their budgets. We observe it in the declining incentives to investment that many of the industrial democracies are willing to offer.

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[Y]

We see now how much all our social and economic objectives depend on the general trend of prosperity. A democratic society thrives on a political and social consensus. The distribution of economic benefit must be broadly accepted as just or as offering opportunity for those who seek it. Otherwise escalating wage and price demands, lagging work performance, and labor unrest will undermine productivity; and inflation, which destroys growth and shatters hope, will be the arbiter of social priorities. Stagnation magnifies all our difficulties; stable growth enhances our possibilities.

The Finance Ministers, meeting tomorrow, will discuss specific measures to achieve our goal. Secretary Simon will then describe in detail the trend of American economic recovery. Today, let me offer some general propositions about our long-term future.

Our first task is to rebuild confidence through decisive, coordinated, and mutually supportive action to promote sustained expansion. We must recognize, especially in the short- and medium-term management of our economies, that the economic policies of one nation can have a profound impact on others. And the United States, because of the size and impact of its economy, has a particular obligation to recognize the magnitude of its responsibility.

In the past we have kept each other informed on short-term policy measures. In a new departure, this past winter President Ford consulted with Chancellor Schmidt [of the Federal Republic of Germany], Prime Minister Wilson [of the United Kingdom], President Giscard d'Estaing [of France], and former Prime Minister Tanaka [of Japan] on our efforts to combat the recession. The major industrial countries need to do so. It will greatly improve the chances of avoiding the sequence of boom and bust experienced these last three years. The United States is prepared to cooperate fully in such efforts.

Second, we must collaborate to sustain the growth of international trade and investment. The great postwar effort to liberalize trade, to lessen barriers to investment, and to maintain free monetary exchanges has nourished our prosperity for over a generation. Trade has consistently expanded at a rate twice that of our domestic economy. We must carry this momentum forward in the OECD by renewing our pledge not to resort to restrictive trade measures to cover deficits resulting from current world economic difficulties. And we must take advantage of the multilateral trade negotiations to lower tariffs and nontariff barriers and improve the world trading system.

Third, as I outlined yesterday in the IEA, we must collectively adopt strong national and international policies on energy conservation and the development of alternative energy sources. This is indispensable if we are to lower prices and inhibit the political exploitation of a scarce resource. We must end, or at least reduce, the vulnerability of our economies to external economic or political manipulation.

Finally, we must develop longer term growth strategies by systematically addressing some fundamental questions:

- How can the industrial nations bring about the massive capital formation required over the next decade for an adequate rate of growth and for a new quality of life?

- What policies are needed to restore a noninflationary environment, without which long-term growth cannot occur?

- How can we encourage the research and development necessary to advance the technology vital to growth and to share it with others?

To begin the search for answers to such questions, I propose that we constitute a special group of distinguished economists both in and out of government. Their purpose should be to identify measures that OECD nations can adopt to assure long-term growth. This group should draw on the projections now being developed within the Economic Policy Committee and turn them into policy recommendations for the next ministerial meeting.

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[N]

The importance of our economic cooperation transcends immediate economic utility; it also fosters our sense of community and common interest. If we are to cooperate in times of political and military crisis, we cannot, in calmer periods, afford to be economically weak, or disunited, or preoccupied with clashing economic interests. The inter-relationship of our political, economic, and security interests which the United States suggested two years ago is a fact, not a theory.

Moreover, eased relations with the Communist world presuppose the political unity and economic vitality of the industrialized countries. The East's incentive to play a responsible role in the world economy and to improve political relationships with the industrialized nations will be enhanced as its stake in our economic success grows. This has been one of the more hopeful trends of recent years and it is up to us to assure its continuation.

The need for economic cooperation among the democracies led to the first Economic Summit, at Rambouillet in November 1975. Before this summit, HK gave a speech in Pittsburgh on November 11, 1975, to a dinner meeting sponsored by the Pittsburgh World Affairs Council and 18 other area organizations. The world was still reeling from the oil shocks; economic and social problems were still racking all the industrial democracies. No solutions could be found unilaterally:

(#44)

I want to talk to you tonight about the central concern of American foreign policy: our relationship with the industrial democracies of the world.

For three decades we and our allies in the Atlantic community and Japan have been the engine of the global economy and the cornerstone of global peace. But fundamental change is now before us; the world we have known is in the process of transformation.

We must understand this change and help shape it. Thirty years ago the democracies banded together in the Marshall plan and peacetime alliance to overcome the chaos of the aftermath of the Second World War. Today a decade of upheaval impels us to make the cooperation of the industrial democracies as dynamic and creative a force in shaping a new world environment as it was a generation ago. The challenge is, above all, to our imagination and our vision.

* * *

In an age of undiminished ideological competition, America will never forget that its most important relationships are with those nations which share our principles, our way of life, and our future. It is for this reason that next Saturday President Ford will meet in Europe with the heads of government of Britain, West Germany, France, Italy, and Japan at what has come to be called the economic summit.

The immediate task of the summit is to deal with economic questions. But in a more fundamental sense, it is a step to confirm and consolidate allied cooperation in every sphere at a crucial moment in history. It will not resolve all problems, but it can set goals for common policies and chart a direction for common action.

## Central Role of the Industrial Democracies

Clearly the postwar era of international relations is ended. No single upheaval marked this transformation in the way that two World Wars shattered the earlier structure of the international order. But the cumulative evolution of a generation has profoundly altered our world.

In the forties and fifties, the world was divided into rigid blocs locked in continual confrontation. Western Europe and Japan needed our military shield for security and our aid for reconstruction. Crises were frequent—in Greece, Berlin, the Taiwan Strait—and in Korea and Indochina there was war.

The industrial democracies responded with courage and imagination, building new institutions and relationships. America's nuclear supremacy and economic strength gave us the predominant roles in our alliances and in world leadership. We drew on our domestic experience of reform and organizing skill

-53-

less when everybody will suffer. How these
economic issues are addressed by the world
community will determine the kind of world
that our children will inhabit and the nature
of international relations over the last quar-
ter of this century.

The actions of the industrial democracies
therefore are crucial to the peace and pros-
perity of the world. And the United States
has most at stake.

In 1973, the United States called for a re-
affirmation of the solidarity of our alliances
with the Atlantic community and Japan.
We emphasized the overriding need for a
fresh, common approach to the interrelated
issues of politics, economics, and security.
We stressed the necessity of galvanizing our
peoples with the challenge of new positive
endeavors.

In the last two years, this need has been
brought home by economic difficulties. All of
our countries have been in the throes of
recession and inflation more severe than at
any time since World War II.

The European experience in the 1920's and
1930's teaches us the crucial relationship be-
tween economic vitality and the health of
political institutions and global stability.
Then, inflation and depression tore the fabric
of democratic societies. Social and political
divisions weakened the capacity of demo-
cratic governments to overcome economic
and social problems. In some countries the
confidence of people in free institutions
eroded; the habits of accommodation that
bind societies together gave way to extrem-
ism and mounting civil strife. Strains *within*
nations spawned economic nationalism; in-
creased tensions *between* nations led to war.

Similar economic problems, if of a lesser
magnitude, have assaulted almost the entire
industrialized world in the last few years—
unemployment, loss of production, rapid in-
flation. The oil embargo and the quadrupling
of oil prices dealt further severe blows; a
central element of the price structure of our
economies was now at the mercy of other
countries whose interests were hardly iden-
tical with our own.

The deepest consequence is not economic

but the erosion of people's confidence in their
society's future and a resulting loss of faith
in democratic means—in governmental insti-
tutions and leaders. Criticism degenerates
into demagogy. In some countries public
cynicism is reflected at the polls or in the
weakening of traditional party loyalties; in
other countries it spawns the resurgence of
extremist political parties of left and right;
in yet other countries, it leads to communal
or ideological violence. In America, we suf-
fered the additional tragedies of a divisive
war and constitutional crisis, though our in-
stitutions have shown a resilience that is the
envy of our partners.

In every one of the industrial democracies
a new generation accustomed to freedom and
military security questions the very values
and institutions that have brought these
conditions about. It does not remember the
spirit of the late forties and fifties—the
immediacy of the dangers that brought
about our alliance or the enthusiasm with
which we undertook the Marshall plan and
collective defense.

Instant communications force the pace of
events and expectations. Unwieldy modern
bureaucracies become obstacles to creative
government, making more difficult the tasks
of political leadership. The technical com-
plexity of issues challenges the capacities of
leaders, legislators, the media, and the public.

Ironically, democratic ideals are most
cherished in countries where they are least
practiced by governments and most dis-
paraged in the countries of their origin,
where they too often are taken for granted.
What we need now is the boldness and crea-
tive spirit that animated our response to
crisis a generation ago; we must infuse our
actions with an overriding sense of our
common heritage and common future.

This worldwide crisis to the democratic
process is the deepest challenge before the
leaders at the economic summit. They meet
to give their peoples the sense that they are
masters of their destiny, that they are not
subject to blind forces beyond their control.

I am confident that this test will be met.
The industrial democracies will demonstrate,

760

Department of State Bulletin

-54-

In dealing with global issues. We mobilized
vast material resources. The American peo-
ple, with pride in victory and with fresh
memory of the folly of isolationism, confi-
dently assumed the responsibilities of an
active foreign policy.

Today, as basic conditions have changed,
so have our challenges. America's role is still
crucial, but we can no longer overwhelm our
problem with resources. Thirty years of ex-
ertion have distributed power in the world
and require wider participation. We have
reached a new stage of alliance relations,
marked by greater equality and sharing of
initiative and responsibility. Europe's unity
has grown hand in hand with its economic
and political revival. The European Com-
munity is heading toward political unity and
a greater European role in both political and
economic issues. Japan and Canada have
made remarkable progress.

※※※

Together the industrial democracies have
been the engine of global prosperity. We ac-
count for 65 percent of the world's produc-
tion and 70 percent of its trade. The inter-
national financial and trading system de-
pends crucially on our performance. Together
we have led the global effort of assistance to
developing countries and the fight against
hunger and disease.

But the institutions and practices created
at Bretton Woods in 1944, which fostered
expanding trade and monetary stability for
a generation, were founded on realities in
the process of change: American preponder-
ance, the exclusive participation of the devel-
oped countries, and the openness of the free
market.

Today, fresh centers of economic power—
in both the industrial and developing worlds
—strain the system. New participants, prac-
tices, and demands have given rise to dis-
putes over energy, food, raw materials, and
rules for exploitation of ocean resources.
Economic issues are now a central dimension
of international politics.

The interdependence of all our econo-
mies—consumer and producer, industrial and
developing—emphasizes the necessity of
cooperative solutions. Only cooperative solu-
tions can maintain and spread global pros-
perity; an era of economic warfare would
spell common decline. The industrial democ-
racies, as the wealthiest and most technically
advanced, would best survive economic con-
flict; but we take no comfort in suffering

-55-

as so often before, that the greatest force
in the world today is the voluntary associa-
tion of free peoples.

The Economic Summit

It is the economic issues which must be
solved first. Since the Great Depression, the
well-being of our citizens has been a funda-
mental goal of all our societies. High un-
employment and the persistence of poverty
have become politically and morally intolerab-
le. Inflation, which eats away at the living
standard and status of all classes of society,
is rightly regarded as a social evil.

The striving for a share in national prosperity drives groups into sharper competition with each other. As competing sectors press for higher wages, more credit, increased Federal spending, or rising industrial or agricultural prices, the claims on the economy expand faster than its capacity to produce. A slackening of capital investment retards the growth of productivity. Budgets become chronically unbalanced. If these trends persist, all industrial democracies will be locked in a cycle of growing frustration—with raised but unfulfilled expectations and sluggish growth and continuing inflation.

In such a situation, the close and impor-
tant ties among the industrial nations are
imperiled. Trade is threatened by protection-
ist measures that attempt to shift the burden
to consumers and other nations. Continued
instability of exchange rates, swings in
short-term capital movements, and periodic
crises in the international monetary sys-
tem—all these reflect and exacerbate in-
stability in our economies.

Because of interdependence, no country's
national programs for recovery can succeed
fully in isolation. The economic summit
springs from the conviction of all of the
leaders of the industrial democracies that
only by cooperative decisions can the trade
and monetary system be adapted to chang-
ing conditions and yet be kept stable enough
to stimulate the international flow of goods,
services, and investment.

Cooperation among the industrial nations
is also essential if we are to achieve greater
self-sufficiency and less vulnerability in
energy; if we are to maintain and expand
the world's markets and supplies of food;
and if we are to insure adequate supplies
and market stability for other vital raw
materials. Our relations with the developing
world and the centrally planned economies
are becoming increasingly important in the
international system; we can meet this
challenge effectively, and turn it into oppor-
tunity, only if we are conscious of our own
common interests and move boldly and
jointly in these new areas.

A special responsibility falls on the United
States. We are the world's largest and most
dynamic economy. We produce fully two-
fifths of all the goods and services of the
industrial democracies. Our leadership is
essential in the trade and monetary nego-
tiations. Our example is vital in the field of
energy, food, and raw materials. The re-
covery of the other industrialized states de-
pends importantly on our own. As President
Ford said in his state of the Union message
last January: "A resurgent American econ-
omy would do more to restore the confidence
of the world in its own future than anything
else we can do."

The United States intends to discharge its
responsibility.

The Program Before Us

At the economic summit this weekend the
leaders of the industrial democracies will
concentrate on these specific tasks:

-First, to cooperate more closely on poli-
cies for recovery.

-Second, to look beyond this to common
action to strengthen the basic structure of
the international economic system for long-
term stability, expansion, and prosperity.

-Third, to review their policies on trade
negotiations, monetary questions, and our
dialogue with the developing countries.

The first task, economic recovery without
inflation, is of immediate concern to every

761

-56-

American. The industrial democracies are
already on the road to recovery—partly as
a result of cooperative actions over the re-
cent period. At the beginning of the reces-
sion and the oil crisis, the United States
joined other industrial countries in a pledge
not to resort to restrictive trade practices
to deal with payments deficits caused by
excessive oil prices. We set up institutions
and mechanisms to cope with financial emer-
gencies and to guarantee emergency sharing
in the case of any new oil embargo.

Last winter, in a fresh departure in allied
collaboration, President Ford held a series of
bilateral meetings with heads of government
of Germany, France, the United Kingdom,
and Japan to review the state of our econo-
mies and to determine whether new action
was required. After these meetings, expan-
sonary measures were adopted in several of
the major industrial countries, including,
most decisively, our own.

A strong recovery is well underway in
the United States, as shown by the 11 per-
cent increase (annual rate) in our national
product in the third quarter of this year.
Other nations—while our efforts cannot sub-
stitute for theirs—will feel their recovery
reinforced by ours.

We intend at the economic summit to con-
solidate the cooperation of the industrial
democracies. We plan to discuss common
goals and agree on cooperative means to
achieve them. The heads of government can
assess the current situation, identify needs,
and discuss measures that they should take
in common.

in the U.S. view, the summit should set
as our goal generalizing the recovery during
1976 among the major industrial countries.
We should seek to restore vigorous, sustained
expansion and high employment by 1977.
We should aim to reduce inflation in our
economy as a whole as well as disparities in
our national inflation rates. And we should
seek to restore vigorous growth in world
trade as our domestic recovery proceeds.

The United States will propose that min-
isters of our countries responsible for eco-
nomic policy meet periodically to follow up on
policy directions set at the summit and to
review what further decisions may be needed.
The U.S. representative would be Treasury
Secretary Simon.

In a climate of recovery and renewed con-
fidence, the United States and its major
allies must then lift their sights beyond the
business cycle to the fundamental challenge
of improving the structure of the inter-
national economy in order to foster stable
growth and cooperation over the long term.

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The OECD Ministerial meeting was the occasion for another HK speech, on June 21, 1976, in Paris (#70). HK called for greater economic cooperation among the industrial democracies in such areas as promoting economic growth, strengthening the trade and monetary system, encouraging transnational investment, and addressing the energy problem. This discussion is included here (except for energy, which was excerpted in the previous section):

## Relationship of the Industrial Democracies

Our first and fundamental concern must be economic cooperation and progress among the industrialized democracies of North America, Western Europe, and Asia. Tomorrow, finance and economic ministers will discuss these economic questions in detail. Today I want to sketch in broad terms four essential areas of our cooperation which have the greatest significance for world order and the future of the international system:

- Noninflationary economic growth;

- Strengthening our open international trade and monetary system;

- The encouragement of transnational investment; and

- Greater cooperation in energy.

I shall discuss each of these in turn.

First, as our nations move to recovery and expansion, we must insure steady, noninflationary economic growth. Only in this manner can we resolve conflicting claims on resources, reinforce the political vitality of our institutions, enhance our freedom of action in world affairs, and enlarge the economic horizons of all societies.

We must overcome cycles of boom and stagnation, which in the past have impaired

productivity, constricted investment, and choked off our full economic potential. We can achieve sustained growth by containing inflation. The investment needed to create jobs for our growing labor forces will dry up in an environment of rapidly and constantly rising prices. Inflation erodes the progress made in raising the standard of living of our peoples; it strains the social fabric of our democratic societies.

The responsibility for noninflationary growth rests with national governments. But close consultation and collaboration are essential to insure that national policies are complementary and reinforcing; to contribute to exchange rate stability among us; to give special attention to members that are in difficulty; and to collaborate on policies of trade, energy, and relations with the developing countries. The summit meeting at Rambouillet last November made a major contribution to general recovery and promotion of these goals. The summit next week in Puerto Rico will assess the progress we have made and use it as a point of departure for future advances.

This meeting provides an opportunity for the nations assembled here to reaffirm our

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joint commitment to an open economic system, to national responsibility, and to international cooperation. With sound and concerted policies among us and with efforts to coordinate our strategies for expansion, the potential for the world's sustained economic growth can be realized.

At last year's OECD ministerial meeting, at U.S. recommendation, a Group of Distinguished Economists was set up, chaired by Professor [Paul W.] McCracken. It was assigned the task of examining the medium- and long-term and structural problems of sustained economic growth. It is exploring the problems of inflation, investment, structural imbalances, and adequate supplies of raw materials. We look forward to its conclusions and recommendations.

Strengthening our trade and monetary system also requires enhanced collaboration. In recent years, high unemployment and economic uncertainty have revived protectionist pressures in many countries; inflation and drastic differences in the performance of member nations have produced major payments imbalances, exchange rate pressures, and financial strains.

The Rambouillet summit and the IMF [International Monetary Fund] meeting in Jamaica last January were milestones in adapting the international monetary system to a new era. We have agreed to new IMF rules to avoid the shocks and disequilibrium which plagued the Bretton Woods system and to insure a smoother functioning of our trade and investment.

Today and tomorrow the OECD nations are continuing close and detailed consultations. We will examine both current problems and the long-term future, both the existing institutions and institutional reform. A recent example of our capacity for innovation was the agreement on the OECD Financial Support Fund, designed to help us deal cooperatively with serious economic dislocations aggravated by the oil price rises. The United States is seeking swift ratification of this agreement so that the Fund may come into being soon.

In trade, two years ago the OECD nations

jointly undertook an extraordinary political commitment to preserve an open economic system despite a period of general economic difficulty. On May 30, 1974, we pledged to avoid new restrictions on trade. We rejected policies which would tend to shift one nation's difficulties onto others. That declaration strengthened our successful efforts to resist protectionist pressures and thus benefit countries with particularly acute balance-of-payments problems. The declaration was renewed last year. We should now renew it for an additional year.

Our economic recovery provides significant opportunities for further progress:

-First, the political commitment represented by our trade pledge should be the basis for wider cooperation among us. The United States proposes that this organization recommend further areas for common action, not only on current trade problems and negotiations but on the long-term operation of our open trading system.

-Second, all nations assembled here should make a political commitment to accelerate the multilateral trade negotiations in Geneva. We are at the point where we must move forward at a more rapid pace if the negotiations are to reach a successful conclusion in 1977. To this end, the United States strongly recommends that we reach agreement this fall in Geneva on a tariff-cutting formula.

-Third, it is our shared obligation to improve the conditions of trade for developing countries. The postwar trading system was built on a consensus among industrial countries in which the developing countries did not participate and which they now challenge in several important respects. We need to reexamine the trading system, prepared to change or strengthen it where necessary. In the multilateral trade negotiations we will be negotiating new provisions in such areas as nontariff barriers, supply access, the settlement of disputes, and trade restrictions that are justified for balance-of-payments purposes. This organization and its members can play a crucial role in building a new global consensus on these issues.

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Transnational investment is the third area calling for close collaboration among the industrial nations.

Investment is the lifeblood of our economies and vital to worldwide development. It has been a principal source of the economic growth and security and prosperity which the nations represented here enjoy. It has been the single largest source of development capital for Third World nations and a powerful force marshaling management and technology for their benefit. It has developed resources; it has increased income; it has provided jobs. Since the midsixties, foreign direct investment has been growing faster than international trade and global GNP.

The increasing importance of transnational investment to the global economy has been accompanied by no little concern over the activities of private investors, particularly the multinational corporations. Questions have been raised as to how the international firms can serve the national interests of their hosts as well as their own. A few notorious cases of illicit payments have stirred apprehension and cast a cloud over the overwhelming majority of international firms whose behavior has been beyond reproach.

Governments, too, have impeded the flow of capital through inconsistent policies or discriminatory treatment of international firms. And most industrial countries have been under pressure at home to take increasingly nationalistic positions toward international investment.

If this trend is not halted, we shall face a gradual deterioration in the international investment climate, with serious consequences for economic development and the global economy.

It is highly significant, therefore, that this organization undertook two related tasks: to negotiate voluntary guidelines for multinational firms and to clarify governmental responsibilities to preserve and promote a liberal investment climate. We are able to announce today the acceptance by OECD member governments of a declaration on investment. This declaration extends the co-

operation which has characterized our trade and monetary relations into the area of investment. It includes:

-Recommended guidelines for the activities of multinational corporations;

-An agreed statement of the basic responsibilities of our governments with respect to transnational investment;

-Provision for strengthened cooperation on the questions of incentives and disincentives to foreign direct investment; and

-Provision for increased consultations between our governments on all these matters.

The United States strongly endorses this declaration and urges its widest possible adoption and observance.

A framework for investment is now emerging. We must encourage its development. Therefore, in addition to our full support for the OECD declaration, the United States urges the following policies for our nations:

-First, we should support the work of the U.N. Commission on Transnational Corporations and the related U.N. Information and Research Center within its Secretariat, which will develop a comprehensive information system on issues relating to transnational corporations. This will contribute to a fuller understanding of investment issues among all nations.

-Second, we should review the proposal of the International Resources Bank which the United States put forward at UNCTAD [U.N. Conference on Trade and Development] at Nairobi last month. While the Bank will focus on energy and raw materials, its principal features—as a multilateral guarantor against noncommercial risk and as a facilitator of production sharing and technology transfer—have important implications for development generally.

-Third, we should take strong collective measures to eliminate corrupt payments. Bribery and extortion are a burden on international trade and investment. We reiterate our proposal that negotiation of a binding international agreement on corrupt practices

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begin at next month's session of the U.N.
Economic and Social Council.

—Fourth, we should cooperate to restrain anticompetitive practices of firms which undermine the benefits of our open economic system. The United States proposes a dual effort: to reduce international procedural obstacles to the enforcement of laws against international restrictive business practices and to pursue bilateral and multilateral agreements for international antitrust cooperation similar to that about to be concluded between the United States and the Federal Republic of Germany.

—Fifth, we should strengthen the work of specialized OECD committees which deal with investment problems such as harmonizing statistical systems, cataloguing restrictive business practices, improving the ex-

change of tax information, dealing with tax haven problems, as well as their work now underway on the general topics of technology transfer and short-term capital movements.

* * *

This agenda—of action for growth, trade and monetary affairs, investment, and energy—suggests an expanding role and responsibility for the OECD. Working together, the nations of the OECD face an unprecedented opportunity to advance their common welfare and prosperity. And from this foundation of cooperation we can more effectively deal with the issues which involve us with nations outside the OECD region.

## Security Cooperation

HK reiterated on several occasions the American commitment to the defense of Western Europe and the vital importance of allied cooperation in the security field. Before the American Legion National Convention on August 20, 1974, in Miami (#15), he remarked on the importance of U.S. troops in Europe:

In an era of rough strategic balance, the threat to launch an all-out nuclear war grows less and less credible; hence it is less and less likely to deter the full range of potential conflicts. Military challenges at the conventional level may become more difficult to prevent. Thus the political and military importance of tactical forces grows correspondingly.

Our conventional forces must therefore be strong. They keep the nuclear threshold high by helping to contain, discourage, or altogether prevent hostilities. They are the essential tool of our diplomacy in times of crisis. In no recent crisis did we come close to using our strategic forces, but on many occasions our tactical forces were alerted or deployed to deter aggressive actions or to de-

fend the interests of America and its allies. About one-third of our conventional forces are deployed abroad. They are there to serve these purposes. They are not overseas as a favor to foreigners; they are abroad as part of our defense.

American forces in Europe are a vivid illustration of these principles. Reducing our forces there unilaterally would risk serious military and political instability in the center of Europe, enhance Soviet political influence by default, and, ironically, make reliance on nuclear weapons more necessary. It would undercut promising negotiations for the mutual reduction of forces. The defense of Western Europe remains—as it has been throughout the postwar period—the cornerstone of our own security.