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Dfficial Monthly Record of United States Foreign Policy / Volume 87/ Number 2124
July 1987
Arms Control/17
Japan/35
Persian Gulf/58
South Asia/75
ONltE"
Department of State
bulletin
Volume 87 / Number 2124 / July 1987
Cover Photo:
Japanese Prime Minister Nakasone.
(White House photo by Pete Souzal
The DEPARTMENT OF STATE
BULLETIN, published by the Office of
Public Communication in the Bureau of
Public Affairs, is the official record of
U.S. foreign policy. Its purpose is to pro-
vide the public, the Congress, and
government agencies with information
on developments in U.S. foreign rela-
tions and the work of the Department of
State and the Foreign Service. The
BULLETIN'S contents include major
addresses and news conferences of the
President and the Secretary of State;
statements made before congressional
committees by the Secretary and other
senior State Department officials;
selected press releases issued by the
White House, the Department, and the
U.S. Mission to the United Nations; and
treaties and other agreements to which
the United States is or may become a
party. Special features, articles, and
other supportive material (such as maps,
charts, photographs, and graphs) are
published frequently to provide addi-
tional information on current issues but
should not necessarily be interpreted as
official U.S. policy statements.
GEORGE P. SHULTZ
Secretary of State
CHARLES REDMAN
Assist£int Secretary
for Public Affairs
PAUL E. AUERSWALD
Director,
Office of Public Communication
NORMAN HOWARD
Chief, Editorial Division
PHYLLIS A. YOUNG
Editor
SHARON R. HAYNES
Assistant Editor
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the publication of this periodical is necessary
in the transaction of the public business
required by law of this Department. Use of
funds for printing this periodical has been
approved by the Director of the Office of Man-
agement and Budget through September 30,
1987.
Department of state bulletin (ISS^
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Bulletin.
CONTENTS
iPresident
I Promoting Freedom and
Democracy in Central America
Secretary
Meeting the Challenges of
Change in the Pacific
Working for Peace and Freedom
ASEAN: A Model for Regional
Cooperation
News Briefing of May 8 (Excerpt)
East Asia
35 Trade With Japan {President
Reagan. Proclamation,
Memorandum, White House
Fact Sheet)
37 Visit of Japanese Prime Minister
Nakasone (Yasuhiro Nakasone,
President Reagan, Secretary
Shultz, Joint Statement)
41 U.S. Policy Priorities for Rela-
tions With China {Gaston J.
Sigur, Jr.)
Nuclear Policy
67 Nonproliferation and the Peaceful
Uses of Nuclear Energy {John
D. Negroponte)
68 Nonproliferation Agreement With
Allies {White House Statement)
Refugees
70 Refugees and Foreign Policy:
Immediate Needs and Durable
Solutions {Jonathan Moore)
African Development: An Admin-
istration Perspective {John C.
Whitehead)
* Control
Benefits of an INF Agreement
{Secretary Shultz)
Improving the Balance of Con-
ventional Forces in Europe
{John H. Hawes)
MBFR Talks Resume {Depart-
ment Statement)
U.S., Soviet Union to Establish
Nuclear Risk Reduction
Centers {White House
Statement)
Effective Arms Control Demands
a Broad Approach
{Edward L. Rowny)
Nuclear and Space Arms Talks
Open Round Eight {Max M.
Kampelman. President Reagan)
U.S. -Soviet Nuclear and Space
Arms Negotiations
{President Reagan)
U.S. Arms Control Initiatives: An
Update
irtment
Challenges Facing the Foreign
Service {Ronald I. Spie7's)
U.S. -Soviet Agreement on
Embassy Construction in
Washington {Ronald I. Spiers)
Economics
43 OECD Council Meets in Paris
{Final Communique)
45 World Trade Week, 1987
{Proclamation)
Energy
47 lEA Governing Board Meets in
Paris {John S. Herrington,
Final Communique)
51 Energy Security {Message to the
Congress)
Environment
52 The Environmental Agenda and
Foreign Policy {Richard E.
Benedick. John D. Negroponte)
Europe
56 Visit of French Prime Minister
{Jacques Chirac, President
Reagan)
57 NATO Nuclear Planning Group
Meets in Norway {Final
Communique)
57 31st Report on Cyprus {Message
to the Congress)
Middle East
58 U.S.S. Stark Hit by Iraqi Missiles
{Richard W. Murphy, President
Reagan, Secretary Shultz,
White Hov^e and Department
Statements)
61 U.S. Food Aid Program for
Lebanon {Departnfient
Statement)
63 Meeting With Arab League
Delegation {Secretary Shultz)
64 The Persian Gulf: Stakes and
Risks {Richard W. Murphy)
Science & Technology
74 World Radio Conference
Concludes
South Asia
75 South Asia and the United States:
An Evolving Partnership
{Michael H. Armacost)
Western Hemisphere
80 The Spirit Behind the Monroe
Doctrine {Elliott Abrams)
81 Monroe Portrait Unveiled
{Secretary Shultz)
83 Central America: What Are the
Alternatives? {Elliott Abrams)
86 Pan American Day and Week,
1987 {Proclamation)
87 Proposed Sale of F-5s to
Honduras {Elliott Abrams)
88 Argentine Military Rebellion
{White House Statement)
Treaties
89 Current Actions
Press Releases
91 Department of State
Publications
92 Department of State
92 Background Notes
93 Foreign Relations Volumes
Released
Index
Deoartment of State Bulls
THE PRESIDENT
Promoting Freedom
and Democracy
in Central America
President Reagan's address before
the American Newspaper Publishers
Association at Ellis Island, New York,
on May 3, 1987J
It's a great honor to be here with you on
this, the 100th anniversary of your con-
vention. The truth is, it's always a great
pleasure to be addressing something
older than I am. I'm beginning to feel
right at home here in New York Harbor.
Last year, of course, we celebrated
another centenary— that of the Statue of
Liberty— the generous lady who, for 100
years now, has stood watch over this
gateway to freedom. It couldn't be more
appropriate that, a year later, we gather
here on Ellis Island to celebrate with all
of you, the ladies and gentlemen of the
fourth estate, who also have stood watch
over our freedoms and who have been
the guardians of our liberty.
You all know what Thomas Jefferson
said of the press— that given the choice
of a government without newspapers or
newspapers without a government, he
wouldn't hesitate for a second to choose
the latter. Of course, Jefferson said that
before he became President.
You know, it reminds me of a par-
ticular editor who just wouldn't admit to
any mistakes ever in his paper. Every-
thing in his paper had the weight of
scripture. And then early one morning
he received a call from an outraged
subscriber who protested that his name
was listed in that morning's obituary
section as having died the previous day.
And the editor said, "And where did you
say you were calling from?"
Well, of course, presidents aren't
always entirely objective themselves,
like Harry Truman when he read the
reviews of Margaret's recital. And then
Bill Moyers likes to tell the story of one
day at lunch with President Johnson. Bill
was saying grace when Johnson bel-
lowed, "Speak up, Bill, I can't hear a
darn thing." And Bill looked up and said,
"I wasn't addressing you, Mr. Presi-
dent." The fact is, if those of us in
government and the press sometimes
think of ourselves as antagonists, it's
only in the context of transitory events.
The rush of daily business can obscure
ibr us a deeper truth— that we're two
complementary institutions, each
drawing life and strength from the other
and that together we hold the sacred
trust of democratic government and
freedom. The life and hope of liberty in
an all-too-often threatening world— that
is our solemn responsibOity.
Mr. Jefferson also wrote that the
truth of human liberty is self-evident,
but he knew its success was anything but
so. It was only the courage and the will
of free men that gave freedom a chance,
and, once established, it was only their
continuing dedication that kept freedom
alive and allowed it to prosper.
The Dream of Freedom
That dream of freedom has a special
meaning to us today as we gather here
on Ellis Island, beneath the gaze of Miss
Liberty. It would be easy to come here
and tell once more the story of those
who have passed through these gates, to
simply celebrate once again the freedoms
Americans enjoy. But my job today is
more difficult. It's not about those who
came to this land, but it's about the
dream that brought them here. Today,
another people are in search of that
dream, and theirs, too, is an inspiring
story— one that must speak to the heart
of all who came to this island and cherish
the great lady of this harbor.
I speak of the people of Central
America. And let me begin in 1981. 1
wonder how many remember that when
we first drew attention to the crisis in El
Salvador, we were met with an almost
fatalistic acceptance of communist vic-
tory in that country— if not the whole
region. Democracy, it was said, couldn't
work in El Salvador: the people were too
poor; they had no democratic tradition;
they didn't want the chance for democ-
racy that we offered; in fact, their sym-
pathies lay with the communist guer-
rillas, we were told.
THE PRESIDENT
But then one day the silent, suffer-
ing people of El Salvador were offered a
chance to choose for themselves— a
national election. And despite the
bullets, the bombs, and the death threats
of the communists, the people of El
Salvador turned out in record numbers,
standing in line for hours waiting to
vote— to vote for democracy.
Congressional observers in that
national election told me of a woman
who was wounded by rifle fire on the
way to the polls because the guerrillas
tried to keep the people from getting
there. She refused to leave the line and
have her wound treated until after she
had voted. And the wait in the line was
hours long. One grandmother, as she
started to the polls, had been warned by
the guerrillas that, if she voted, she
would be killed when she returned from
the polls. She told them, "You can kill
me, kill my family, kill my neighbors, but
you can't kill us all." That was the voice
of Central America— the testimony of a
people determined to be free.
The Threat to Freedom
and Democracy
Much has been achieved since 1981. In a
region in which military dictatorships
have dominated society, democracy is
taking root. A decade ago, only Costa
Rica was a democracy. Today, Costa
Rica has been joined by elected civilian
governments in El Salvador, Guatemala,
and Honduras— only Nicaragua remains
a dictatorship. But while the trend
toward democracy is unmistakable, the
threat to freedom and democracy in
Central America remains powerful
because of Sandinista totalitarianism in
Nicaragua. The aspirations of millions
for freedom still hang in the balance.
The elected leaders of neighboring
Central American countries understand
this; they have personally told me this.
They know the Nicaraguan regime
threatens their own future and the
stability of this hemisphere. They know
that the establishment of a genuinely
democratic system in Nicaragua— with
the full, guaranteed liberties of free
assembly, free speech, and free press-
offers the only real hope for the long-
term peace and security of the region.
They know such a system provides a
check and balance on any government,
discourages militarism, and ensures the
people's right to choose their own
destiny. And that's why the views of our
Central American friends and the aspira-
tions of the Nicaraguan people are one
and the same— the establishment of full,
popularly elected, legitimate democratic
rule in Nicaragua. So what we seek for
Nicaragua is simple enough: self-determi-
nation for the Nicaraguan people— the
right to select their own leaders in free,
fair, contested, and regularly scheduled
elections.
The majority of Central Americans
have made this choice. And I have come
here today to say to you that the free-
dom fighters of Nicaragua are fighting
for the same thing that the brave woman
in El Salvador risked her life for:
democracy— real democracy, rooted in
sound, stable, democratic institutions
and ensuring the full range of political
liberties and human rights. And I have
come here to say that the U.S. Government
pledges to the American people what the
freedom fighters have pledged to their
own people: that our objective in
Nicaragua is clear— free elections.
On the other hand, the Soviets and
the Sandinistas have also made a choice,
not for democracy, not for a free press,
and not for free elections but for control
through force. In 1986 alone, overall
Soviet-bloc assistance to the Sandinistas
exceeded $1 billion. These Soviet ship-
ments have made the small country of
Nicaragua an aggressor nation with the
largest military machine in Central
America, threatening the security of the
entire region.
The Challenge to the United States
Make no mistake: the Soviets are
challenging the United States to a test
of wills over the future of this hemi-
sphere. The future they offer is one of
ever-growing communist expansion and
control. And this is the choice before
Congress and our people— a basic choice,
really, between democracy and com-
munism in Nicaragua, between freedom
and Soviet-backed tyranny. For myself,
I'm determined to meet this Soviet
challenge and to ensure that the future
of this hemisphere is chosen by its peo-
ple and not imposed by communist
aggressors.
Now, I could go on for hours about
our negotiations with the Sandinistas,
the Contadora process, and the missions
of my regional diplomatic negotiator,
Philip Habib. But since those first
negotiations back in 1979, in which the
Sandinistas promised a democratic,
pluralistic society, we've seen that these
Marxists-Leninists never intended to
honor those promises; we've seen them
use negotiations time and again simply
to delay, to manipulate world opinion.
And that's why the choice remains the
same: democracy or communism, elec-
tions or dictatorship, freedom or
tyranny.
The debate in this country over Ce-
tral American policy has been direct at
tough— and, yes, even heated at times.
While such debate is healthy, we all
know that a divided America cannot
offer the leadership necessary to provi:
support and confidence to the emergin,
democracies in Central America.
I do not think there's anyone in Co
gress who wants to see another base ff
Soviet subversion, another Cuba, estal
lished on American shores. And yet th;
is what is happening right now. It's no
an issue on which all Americans must
unite; it's simply too important to
become a partisan firefight in the next
election. If we cut off the freedom
fighters, we will be giving the Soviets ^
free hand in Central America, handing
them one of their greatest foreign poll
victories since World War II. Without
the pressure of the Central American
democracies and the freedom fighters,
the Soviets would soon solidify their
base in Nicaragua, and the subversion .
El Salvador would reignite. The
Nicaraguans have already infiltrated
operatives even into Costa Rica, and
they're simply waiting for the signal.
Soon the communists' prediction of a
"revolutionary fire"— it's their words-
sweeping across all of Central Americ.
could come true. Let us not delude our
selves about the ultimate objective of t
Soviets' billion-dollar war in Nicaragua
There is a line attributed to Nikola
Lenin: "The road to America leads
through Mexico." I do not intend to
leave such a crisis for the next Americ;
president. For almost 40 years, Amerii
has maintained a bipartisan consensus
on foreign policy. The Democratic
Party— the party of Franklin Roosevel'
Harry Truman, and John Kennedy— k
stood in firm support of democracy anc
our national security. This is no time f(
either party to turn its back on that
tradition or on the cause of freedom,
especially when the threat to both is »
close to home.
U.S. Policy Framework
The survival of democracy in our hemi
sphere requires a U.S. policy consistet
with that bipartisan tradition. So toda)
I want to describe the framework of tt
policy, a policy that begins with suppor
for the stable, long-lasting democracy t
Costa Rica and the democracies taking
root in El Salvador, Guatemala, and
Honduras.
Department of Rtats BulMJI
THE PRESIDENT
!" > Need for Additional Economic
Since. Many in Congress have
1 the importance of maintaining
nt levels of economic aid to assist
emocracies. I couldn't agree more,
why additional economic assist-
ust be approved for the four
American democracies.
ntinuing Diplomatic Efforts.
close cooperation with our demo-
riends in Central America is also
al, and our policy is to continue
; in the past, diplomatic efforts to
a lasting peace. Earlier this
resident Arias of Costa Rica put
1 a proposal aimed at achieving a
J settlement of the conflict in
^a. At the center of his proposal
sistence on democracy in
Tua. The United States welcomes
;iative and supports its general
'e. At the same time we have
)ncems which need to be resolved,
r larly on the sequence of imple-
i ion. It's essential that any cease-
j negotiated with the full range of
1 osition. It is our profound hope
i ilentral American consensus can
I hed soon and that a process
I toward freedom in Nicaragua
] forward.
'. igress has expressed its support
I efforts of the Central American
acies to achieve a diplomatic
ent to the regional conflict.
3 asked for an increased effort by
ited States to examine ways for a
il conclusion to the civil strife in
jua. This Administration has
supported regional diplomatic
/es aimed at peace and democ-
hether it be through Contadora,
J T face-to-face meetings with the
Darty in Nicaragua, or through
; Central American initiatives,
say right now that I will lend my
)port to any negotiations that can
emocracy throughout Central
■a without further bloodshed,
u know, I recently received a let-
led by 111 Members of the House
resentatives calling for a major
atic effort "designed"— their
-"designed to achieve peace,
y guarantees for all Central
mn nations, the promotion of
ratic institutions, and the removal
let and Cuban military personnel
licaragua." While I do not endorse
King in the letter, I certainly join
Congressmen in calling for the
ition of freedom of the press,
m of religion, freedom to assem-
edom of speech, and free elections—
*fhich are now denied by the
iment of Nicaragua.
Our Senate passed, by a 97-1 vote, a
resolution stating that a "durable peace
is only possible writhin the context of
democratic regimes committed to eradicat-
ing extreme poverty, to establishing an
effective means for equal opportunity for
all elements of society, and free and
periodic elections."
So, while Congress gets no argument
from me in seeking a peaceful, diplo-
matic solution in Nicaragua, you can see
the key is democracy and that a majority
in Congress clearly recognized this.
That's why I strongly believe there is a
solid basis upon which to build a common
effort with Congress to resolve this con-
flict in Central America. I plan to make
every effort to work toward these goals,
and I hope Congress will join with me.
Supporting Freedom Fighters. And
that brings me to the third element in
our policy— our commitment to, our support
for the freedom fighters who have
pledged their lives and honor to a free
Nicaragua. This Administration's sup-
port of the Nicaraguan freedom fighters,
in their struggle for peace and demo-
cratic government, will not change unless
the regime in Nicaragua accedes to the
democratic aspirations of the Nicaraguan
people. Every day the Nicaraguan peo-
ple are becoming more outraged by the
repression of their communist rulers.
The democratic Nicaraguan resistance,
including the freedom fighters, today
offers the only political alternative to the
dictatorship of the past and the com-
munism of today. That alternative is
democracy, and it's winning increasing
support from the people of Nicaragua.
For as long as I'm President, I have
no intention of withdrawing our support
of these efforts by the Nicaraguan peo-
ple to gain their freedom and their right
to choose their own national future. In
the next few months, I'll be asking Con-
gress to renew funding for the freedom
fighters. Again, I stress the danger of
the course argued by some in the Con-
gress: that the most expeditious route to
peace in Central America is abandoning
our commitment to the Nicaraguan free-
dom fighters. Delays and indecision here
at home can only cause unnecessary suf-
fering in Nicaragua, shake the confidence
of the emerging democracies in the
region, and endanger our owm security.
We've come a long way in these last
7 years toward understanding the true
nature of the Sandinista regime and its
aggressive aims against its own people
and its democratic neighbors in Central
and South America. A new bipartisan
consensus is forming, one that rejects all
the old excuses. Last year, in an edito-
rial entitled "The Road to Stalinism,"
The New York Times charged that the
"pluralistic revolution" the Sandinistas
promised is "hopelessly betrayed."
Stated the Times: "Only the credulous
can fail to see the roots of the police
state now emerging."
And then my old friend. Tip O'Neill,
in the wake of one of the Sandinistas'
most blatant acts of aggression, declared
that Daniel Ortega was what he had
always said he was, nothing less than a
"Marxist-Leninist communist," intent on
provoking a "revolution without
borders."
Well, now the question before the
American people and the U.S. Congress
is, "What do we do about it?" Well,
despite almost universal acknowledg-
ment of the brutal, totalitarian, and
subversive intentions of the Sandinista
regime, the renewal of aid to the free-
dom fighters is still a debated question.
But I think there's increasing recognition
that the freedom fighters are the only
ones who stand between the Sandinistas
and their expansionistic aims; that they
are the major obstacle to preventing all
of Central America from being engulfed
in the communists' "revolutionary fire";
that the freedom fighters are the only
ones who offer the hope of freedom to
the people of Nicaragua and a chance for
a stable and long-lasting peace in Latin
America. They're worthy of our support.
So that's why the upcoming vote in
Congress on whether to continue provid-
ing support to the freedom fighters in
Nicaragua may well be the most impor-
tant vote our representatives cast in
1987 and possibly one of the most impor-
tant cast in their careers in public office.
The Call to Freedom
It's an important question for the press
and media, as well. I can't help but note
that in the new democracy of El Salvador,
communist-supported guerrillas continue
to try to bring down democratic rule.
There's little or no media attention. Yet,
just across a border in Nicaragua, the
freedom fighters battle against a totalitar-
ian communist regime and are assailed
far and wide as lawless terrorists or
worse. Forgive me, but the story needs
perspective. And that perspective is pro-
vided by the aggressive nature of
Sandinista communism.
Today, the people of Nicaragua know
from experience the reality of Sandinista
communism: the brutality, the poverty,
the oppression. And for that reason they
know what we too often forget— that
freedom is worth fighting for.
It's the same firsthand knowledge of
oppression and yearning for liberty that
987
THE SECRETARY
steels the brave Afghan resistance and
gives them the courage to take up arms
against the overwhelming might of the
Soviet military machine; the same knowl-
edge that inspires the brave Angolans
and Cambodians, fighting long wars of
liberation against their Soviet-backed
oppressors; the same knowledge that
drove the Grenadian people to embrace
the American servicemen liberating their
country and throw flowers in their path.
And wasn't it something to see graffiti
on the walls saying not "Yankee Go
Home," but when I was there, every
place I looked, it was saying, "God Bless
America."
They were all responding to the call
to freedom— a call that has a particular
eloquence among these buildings, on this
island where so many of our ancestors
greeted the sight of Liberty with tears
of joy. We hear the call of freedom in the
work to which you've dedicated your lives,
sounding clearly, proudly, every morning
and evening in the pages of a free press.
Tragically silenced in Nicaragua by the
closing of La Prensa, we still hear that
call in the brave voice of its publisher,
Violeta Chamorro, who makes it clear
that on the subject of freedom, the press
can never be agnostic. She said, "With-
out liberty of the press, there is no rep-
resentative democracy, nor individual
liberty, nor social justice . . . only
darkness, impunity, abuse, mediocrity,
and repression."
Well, that's the choice we face:
between the light of liberty or the
darkness of repression. When, after
terrible voyages of sickness and hard-
ship, our ancestors first spied Liberty's
torch, they knew that light shone for
them— "those huddled masses yearning
to breathe free." For those who've
known only the bitterness of want and
oppression, that torch burns especially
bright.
Today, the light of freedom is our
sacred keepsake, the promise of America
to all mankind. We must forever hold its
flame high, a light unto the world, a
beacon of hope that extends beyond this
harbor all the way to the jungled hills of
Nicaragua, where young men are fighting
and dying today for the same liberties
we hold dear; all the way into the hearts
of people everywhere who fight for
freedom.
Meeting the Challenges
of Change in the Pacific
'Text from Weekly Compilation of
Presidential Documents of May 11, 1987. I
Secretary ShuUz 's address before the
Stanford University Cornerstone Centen-
nial Academic Convocation in Stanford
on May U, 1987.^
Our world is in the midst of dramatic
change. International politics and the
global economy are rapidly evolving into
far more complex patterns of power and
growth than any traditional East- West
or North-South metaphor might convey.
Familiar assumptions about economic
development— and, by extension,
military and political strength— are fast
becoming outdated. We have to adapt to
new ways of thinking about this new
world.
We are, for instance, witnessing a
quiet but steady shift of political and
economic dynamism toward the lands
and peoples surrounding the Pacific. Too
many Americans tend to think of the
Pacific rim as someplace "out there"—
separate and distinct from us. But that
sort of thinking is wrong. Our three
countries represented here today-
Canada, Mexico, and the United
States— are at the very center of this
process of Pacific growth.
It's not simply that our collective
coastlines represent perhaps a quarter to
a third of the geography of the Pacific
rim. Our combined GNPs [gross national
products] account for fully two-thirds of
the total GNP of the region. The trade
flows just between the three of us
amount to well over $150 billion a year—
approximately 30% of the total trade
between members of the Pacific basin.
And, in recent years, the United States,
Canada, and Mexico have together
exported roughly $75 billion annually to
other members of the Pacific region,
while we imported about twice as much
from these other Pacific economies-
over $150 billion.
As a result of all this activity, new
interrelationships are being formed
between the societies and economies of
North and Latin America, East Asia,
Australia, and Oceania. The relative
success— or failure— of this evolving
Pacific community in encouraging fur-
ther growth and stability will shape how
our world will look and run well into the
21st century.
For our part, the United States is
seeking to build upon our strong
bilateral relations with individual coun-
tries of the area to encourage greater
regional cooperation. We believe that
the countries of this Pacific region hav.
powerful advantages working in their
favor— although there is nothing
automatic or inevitable about continuir
economic success, political stability, or
regional security. On the contrary, the
dramatic nature of change in today's
world makes complacency dangerous.
Over the coming years, it will be increi
ingly important that, together with ott
Pacific rim nations, we seek to address
the following challenges.
• How do we sustain the condition
necessary for continuing high levels of
economic growth and for expanding ou
prosperity among the varied states ths
rim the Pacific?
• How do we maintain stability
security in the face of new political tei
sions and military threats?
• And how do we best support the
further growth of democracy and
freedom among the diverse and unique
societies of the region?
Prerequisites for
Continuing Economic Growth
Our world has already moved out of tli-
industrial age and into an era
characterized by new information
technologies. Economic success is
becoming less a function of rich nature
resources or simple concentrations of
labor and capital. More and more,
growth and competitiveness will depec;
upon:
• The freedom with which a socier
can use and share knowledge;
• Its openness and receptivity to
new ideas, goods, and services; and
• The ability of its economy to ma)
the best use of rapidly changing
technologies.
Some economies along the Pacific
rim— beginning with Japan and now
including Asia's "Four Tigers" of Scut
Korea, Singapore, Taiwan, and Hong
Kong— have achieved tremendous suc-
cess in their own development. They
have aggressively pursued a strategy «■
export-led growth, moving from the
initial production of textiles and low
value-added manufactures on to indus-
trialized products of ever-increasing
sophistication. But in doing so, they ha
depended, to a great extent, upon theii
Department of State Bulij
THE SECRETARY
) export into a vast and open
in market.
ly, various less developed
are now striving to duplicate this
of export-led growth. These new
tors include the largest nation of
fie rim— China, which has vig-
smbarked on its own program of
g economic reform and modern-
But at the same time, the more
economies of the countries
ited here— as well as Europe and
ire beginning to face their own
)roblems of restructuring. New
;ion-based industries and serv-
supplanting their more tradi-
anufacturing processes and
; of international commerce,
sequently, the strategy of
ve export-led growth— which
30 well in the recent past for
)nomies— is becoming less effec-
Ij iir rapidly changing environ-
; smand has slackened for many
1 ities upon whose export earn-
1 ly of the less developed nations
5 md. Competition is widening
f nsifying in the export of
t iral products, textiles, steel,
id consumer electronics. And,
! ious of all, the efforts of many
s nations to expand overseas
■ lile maintaining barriers to pro-
1 r own domestic markets, are a
: 1 stimulus to destructive protec-
! 3verywhere.
S Tiust acknowledge a simple
I: 'ery export represents an import
f !one else. But this need not be a
1 game. As long as there is eco-
-owth and the level of worldwide
; increases, everyone gains. But
itional economy cannot succeed
or net exporter at the same time.
re face a major problem: if
; approaches to economic growth
ming less appropriate and a
f potential conflict, what should
jvelopment strategy involve?
eps must the members of the
:ommunity take in order to max-
eir chances for a high volume of
ichnological innovation, and
prosperity for their peoples?
)f the Pacific rim nations have to
difficult decisions needed to
fundamental market-opening
!S across the board. Ironically,
to genuinely free trade in the
ncreased competition are simply
for eroding national com-
ness and slowing down economic
This is true for both the highly
ed and the developing countries
5gion. The protection of infant
industries or traditional sectors such as
agriculture— an argument we hear so
frequently— too often results in high
prices and lower standards of living and
resistance to new ideas and investment.
I'm happy to say that we are taking
important steps toward greater
economic openness among our three
countries represented here today. At
Prime Minister Mulroney's initiative,
Canada and the United States have
begun negotiation of a comprehensive
free trade area agreement. This agree-
ment would create the world's largest
single market— and with it, an unprece-
dented opportunity to improve the com-
petitiveness of Canadian and U.S. firms.
Similarly, under President de la
Madrid's firm leadership, Mexico has
entered the General Agreement on
Tariffs and Trade, more commonly
known as the GATT. This action has
demonstrated his government's will-
ingness to undertake a major commit-
ment to liberalize trade.
But beyond trade arrangements, the
members of the Pacific rim also need to
adapt their economic policies to reflect
more accurately their own new status
and responsibilities. In years past, a
vigorous and open American economy
served as the major engine of global
growth. But in a world economy with
increasingly diverse centers of produc-
tive capacity, the United States cannot
continue to perform this function alone.
It is especially important that Japan
move away from excessive reliance upon
exports and to domestically led growth.
Japan's leaders recognize this. During
his recent visit to Washington, Prime
Minister Nakasone clearly acknowledged
the need to transform Japan's economic
structure toward stronger domestic
growth in order to put that country's
external trade in better balance with the
rest of the world. This is a difficult
task— involving, among other actions,
stimulating private consumption,
reforming agricultural policies,
facilitating greater housing investment,
and building up Japan's public infra-
structure. But these necessary steps will
benefit not only the Japanese people but
the Pacific community and the global
economy as a whole. The addition of
greater Japanese "pulling power" to
world growth will be especially needed
as the United States redresses its own
trade imbalance over the next few years.
Korea and Taiwan can help as well
by changing their own policies of
restricted financial markets, closed
import regimes, and managed exchange
rates. This would enable them to encour-
age more vigorous domestic demand and
to undertake long-deferred improve-
ments in the quality of life for their own
people. Elsewhere in the region, much
more should be done to encourage private
investment and individual entrepreneur-
ship. Experience shows, again and again,
that the most vibrant economies are
those that rely less upon efforts at cen
trally planned growth and more upon the
inherent dynamism of the private sector.
There is, of course, much that we in
the United States have to do as well.
Our industries need to be flexible and
creative in meeting the future demands
of the marketplace. We have to resist
energetically unwise efforts within the
Congress to impose protectionist
measures on trade. But, most especially,
we, as a nation, must reduce our Federal
budget deficit and encourage greater
domestic savings and investment.
And, not the least, all of the Pacific
nations have an important stake in work-
ing together to promote early and mean-
ingful progress in the new Uruguay
Round of the GATT multilateral trade
negotiations.
And so, if we are to sustain continu-
ing growth, if we are to reduce trade
imbalances that are fueling pressures for
protectionism, then the members of the
Pacific community have to give greater
emphasis in their policies to comprehen-
sive macroeconomic measures and be
determined in their efforts to open up
domestic markets.
Strengthening Regional
Peace and Stability
It will be just as important that we work
to ensure the peace and stability within
the Pacific that are so essential for
economic growth. We cannot take this
stability for granted. Despite its peaceful
name, the Pacific is a part of the world
with a long history of vigorous competi-
tion and periods of conflict.
One of the most encouraging
developments of the postwar era has
been the growth of constructive rela-
tions between former Pacific adver-
saries. This has taken place between the
United States, Japan, China, Korea, and
other nations.
Unfortunately, the Soviet Union and
its client states in the region continue to
show a readiness to exacerbate and
exploit local tensions for their own ends.
The decade of the 1970s demonstrated
that these nations are prepared to use
force to expand their control and influ-
ence over their neighbors. At the same
time, there has been a massive buildup
of Soviet nuclear and conventional forces
in Asia.
37
THE SECRETARY
More recently, we have seen
expanded Soviet military operations out
of their naval and air bases at Cam Ranh
Bay and the supply of more sophisticated
weaponry to North Korea. In light of
North Korea's past attempts at subver-
sion and aggression, the situation on the
Korean Peninsula remains volatile. And
a tragic conflict continues in Indochina
as a result of the Vietnamese invasion of
Cambodia and Moscow's support for
Vietnamese regional ambitions.
The United States has reaffirmed its
commitment to the continuing peace and
security of the Pacific region. Together
with our allies and friends in the area,
we have worked hard to strengthen
capabilities for self-defense. We have
supported the member states of ASEAN
[Association of South East Asian
Nations] in seeking a political solution to
the conflict in Cambodia that provides
for the early withdrawal of Vietnamese
forces and self-determination by the
Cambodian people. We have fully backed
the efforts of the Republic of Korea both
to deter the threat of North Korean
aggression and to establish a direct
dialogue with Pyongyang aimed at pro-
moting greater stability on the
peninsula.
The global nature of the current
Soviet SS-20 missile threat illustrates a
vital point: these security issues, includ-
ing arms control, cannot be considered
as problems exclusive to any single
region of the world— whether Europe,
Asia, or the Americas. And, accordingly,
we have strengthened our consultations
with Japan, China, Australia, and other
key members of the Pacific rim on all of
these problems.
But genuine peace depends upon
more than just a lack of external con-
flict. And so, it is important that we also
continue to support an evolution toward
greater democracy and the rule of law
throughout the Pacific region. This is a
matter for us of both principle and prac-
ticality. Experience proves that freedom
and representative government are a
means of ensuring political stability,
economic growth, and peace among
nations.
But democracy seldom comes easily.
In the Philippines, for instance, Presi-
dent Corazon Aquino's government is
grappling courageously not only with dif-
ficult economic and social problems but
with a determined and vicious com-
munist insurgency as well. Within the
Republic of Korea, we urge that all
parties— representing both the govern-
ment and the opposition— pursue, with a
common willingness to compromise, a
serious political dialogue designed to
create a process of free and fair
elections.
The diversity of the Pacific rim is a
source of great strength, but it also
means we will continue to see differing
approaches to expanding political and
economic freedom throughout the
region. Various societies in transition
will have to find their own paths toward
political reforms as well as economic
growth. In some— as in China today-
there will be great difficulty in reconcil-
ing desires for greater individual free-
dom with traditions of highly centralized
authority. In others— such as South
Korea— there will be concern over the
need to sustain hard-won but fragile
peace and stability in the face of very
real external threats. A peaceful evolu-
tion toward increased individual freedom
in all of these societies can only come
about in a way consistent with each peo-
ple's history, culture, and with the
realities of their political and security
situations.
For our part, we should recognize
the complex process of moving toward
greater freedom and craft our policies
accordingly. The United States believes
that democratic rights and forms of
government are both an incentive for
and a guarantor of stability and growth.
We will not be shy in saying so. We will
not seek to meddle in the internal affairs
of others. But, consistent with the basic
dignities promised all individuals under
the UN Charter, we will remain con-
cerned about persistent violations of
human rights, wherever and whenever
they occur. We will encourage demo-
cratic political forces throughout the
region.
Conclusion
These are daunting challenges-
economic, political, and strategic— that
the Pacific community faces in the midst
of a rapidly changing world. We have
our work cut out for us, and yet we have
a great deal going for us.
First, we need to change the way in
which we think and act about economic
relations along the Pacific rim. For too
long we have focused on bilateral trade
balances. That's an inadequate, counter-
productive approach. The Pacific nations
need to reaffirm the shared political
stake we all have in the expansion of an
open and growing international
economic order. This isn't solely an
American responsibility or that of the
Japanese or any other single nation.
Every member of the Pacific community
has an important contribution to make in
preserving open trade and a growing
world economy.
Second, we must redouble our
efforts to reinforce peace and stabilit;
through the maintenance of a credible
deterrent to the use or threat of forc( «
expansionist states. In recent years, ■
have made important progress in doii
so, working together with our allies a 1
friends within the region. But our tasii
far from over. However, some might
wish otherwise— as, for instance, somlo
our friends in New Zealand; declarati y
statements of goodwill and so-called
confidence-building measures that
weaken strategic deterrence are not fe
answer. They won't close off oppor-
tunities for military aggression or rec c
the temptations for political intimi-
dation. We have learned from the bit r
experience of the 1930s. It's only
through strength and solidarity that
democracies are able to convince exp -
sionist powers that adventurism and
excessive military buildups offer no e y
rewards.
Finally, we should continue to
encourage the spread of freedom,
democracy, and the rule of law
throughout the region. Representativ
government can't be imposed from tl
outside; it must come from within a
society. It requires mutual tolerance,
commitment to peaceful change, and
security from external threats. The
peoples of the various Pacific societie
now in transition have the chance bell
them to work out their own solutions
moving toward more representative
political processes and institutions. \^
should make our position clear and fd
support them in their efforts.
That's a full agenda. There will b ai
quick and easy answers. But I am buJ ih
about our collective ability to meet th \e
challenges— provided we act on them
vigorously and with a sense of sharec
purpose.
This morning I had the opportuni j
to discuss these issues with my friencj
and distinguished colleagues here-
Canada's Secretary of State for Ext
nal Affairs, Joe Clark, and Mexico's
Secretary of Foreign Relations,
Bernardo Sepulveda. It was a very in r-
mal session with none of the usual
diplomatic trappings— just sitting aro id
in the Stanford sunshine; just good
friends sitting down to talk frankly ai
seriously. I believe we all came away
with a much clearer appreciation of tl
problems ahead and with a commitmct
to broaden our consultations as we se :
to deal with these issues.
So it was a very useful morning, ad
I was struck by the fact that this occa
sion of Stanford's centennial repre-
sented a very rare opportunity for tht
iiniH
mcl
H
DeoartmRnt of StatR Rnllin
THE SECRETARY
3. Secretary of State and the Foreign
;retaries of our two closest neighbors
gei together as a threesome to discuss
nmon concerns. As Mr. Christopher
arren Christopher, president of the
inford University Board of Trustees]
;ed, "'it never happened before," and
.t shouldn't be a rare event. The very
nire of our changing world, with the
)wing demands of interdependence,
[uires that the three of us do this
re often— but not too formally and
hout the constraints of protocol,
•haps we should just call ourselves
"the Stanford Trio" and get together
unofficially under that name.
So that's my message for today: it's
a time for rolling up our sleeves and get-
ting down to work. But by tapping the
energy and creativity of our respective
peoples, the three nations represented
here today have a great opportunity
before us to build a more prosperous and
secure Pacific community that will con-
tinue to set an example of progress for
the world as a whole.
iPress release 111 of May 18, 1987.
/orking for Peace and Freedom
Secretary Skultz 's address before the
•lerican Israel Public Affairs Commit-
(AIPAC) on May 17, 1987.^
I hate to start on such a sober note,
. perhaps it is the right note, because
Ti deeply honored to be here. You said
first to be invited back twice, or
ybe you said the first to be invited
1 accepted to come back twice. That's
Lfference. But I accepted, because
ve gotten to know each other over
past 5 years, and I feel one of the
rmest and best things that's happened
ne in this job is the expansion of my
jady, at the time, wide list of Jewish
;nds.
And so I've come here— and I have a
' notes— but I'm not going to read
lething to you. Tve come here to talk
ifou as friends, informally but very
iously, about two related problems.
e involves the world we have ahead of
and America's role in it. The other
elves our role in the Middle East,
lecially in the light of recent
'elopments. Both these problems are
Dortant to us as Americans, and they
• both important to Israel. So let me
ill them out for you, and I hope that
I can help me with both of them.
S. Role in the World
I'st, the world ahead of us and the U.S.
[ e in it: I think we are at a moment of
■ al change in world affairs. There are
^nty of problems out there, and some
i them have to do with the fact that we
' ve a determined and strong adversary
Ithe U.S.S.R., an adversary with global
|)pe. But basically, the situation is
bst promising for our system of values
j d for our pattern of interest.
So we should be engaged as never
before in a sophisticated, energetic, and
knowledgeable way, because there are
problems, because we have adversaries,
and because there are great opportu-
nities. But just at this opportune
moment, we are, I fear, in the process of
drawing away— of drifting, stumbling,
perhaps unconsciously— out of phase, I
believe, with the outward-looking
citizens of our country and their wide-
ranging interests.
We have a winning hand, but we are
not positioning ourselves to be able to
play it. So that's problem one, and let
me spell it out to you, and, as I say, this
winning hand is held by us; it's held by
Israel; it's held by the countries that
believe in freedom, that believe in
openness.
It's a changing world. We're moving
into a new age, and it can be our age if
we're willing to engage in it, because it's
an age based on openness and freedom,
on knowledge, on information that's
widely shared and moves around, a gen-
uine information age, knowledge age. So
here are some of the things that I think
we have learned that are going to
characterize the world ahead of us if we
play our cards right.
We have learned once again that
freedom is the most revolutionary force
in the world. We have learned how much
people value democracy and the rule of
law if only they have access to it, and we
have seen how people all over the world
are ready to resist totalitarianism. We
have learned that freedom and economic
progress are related. We see how well
the market can work if we'll let it. Peo-
ple all around the world see that if you
build your economy on incentives, on the
market, on enterprise, you're going to be
much better off.
The countries of East Asia have
been a glowing example, but the
message has been spreading to Africa.
It's interesting to see the Chinese and
the Soviets beginning to struggle with
this problem because they see that a
highly centralized, highly compart-
mented economic system is not produc-
ing. I have the impression that even
Israel's getting the message— the
market, incentives, private enterprise.
We have learned about the power of
information technology as we move from
an agricultural age that's long since in
our past, through an industrial age— the
industrial age is over in this country— to
an information and knowledge-based
economy and society.
We can see right now that this kind
of new technology has revolutionized
financial markets. The only way to think
about financial markets is in world
terms. There is a world financial market,
and it's open 24 hours a day. We have
seen how the meaning of raw materials
has been changed. Processes are being
substituted for materials.
To take an example, in the telecom-
munications industries now, fiber optics
are replacing copper at a very rapid
rate. Fiber optics, in a sense, come out
of the mind instead of out of the ground,
and I could cite you a lot more examples.
We see the implications across many
areas, including agriculture, of bio-
technology. Malthus is being turned on
his head.
We also can see, as the gross
national product of the world grows,
that its distribution is spreading out, and
we see that more and more countries
around the world, or sections of coun-
tries even, have the economic size to
give an account of themselves in some
particular field. And, I might say, with
the existence of deep ethnic tensions in
many parts of the world— look at Sri
Lanka right now with its Tamil insur-
gency; I use that example because it has
nothing to do with East- West prob-
lems—we see religious fundamentalism
which, among other things, has a
tendency to be intolerant. So we see
those things combined with the exis-
tence, very widespread, of weaponry
that— even though it may not be the
most sophisticated and up to date by the
standard of our military or the Israeli
military but was considered up to date
10 or 15 years ago— still can be very
lethal and is widely available. So that has
some big implications.
rl987
THE SECRETARY
i
Facing Up to Opportunities
and Challenges
So what are we doing as a country to
face up to these opportunities and these
challenges? Well, we have before had the
experience of swinging from involve-
ment to a kind of isolationism. I hope
that's not happening to us, but let me
tick off some of the danger signs to you.
Protectionism. A big one is protec-
tionism, and we are riveted on various
trade barriers which we must knock
down. But, nevertheless, we have to
agree, I'm sure, analytically that those
trade barriers are not the source of our
trade deficit. It has other sources. But
look what protectionism will do. It is, of
course, a threat to our economy and to
the world economy. It also is a message
about freedom, because if you say we
believe in economic freedom except
we're going to protect our markets, peo-
ple wonder if you really do believe in it.
And it has a strategic message, just as
we saw before World War II when the
world got compartmented by the
extreme protectionism of the 1930s, and
while this was not the cause of the war,
it contributed. The object of political
movement, military movement, strategic
movement to break out of those boun-
daries was a contribution.
We should learn from the contrasts
between what happened to us in the
1930s and its outcome and what hap-
pened to us in the post- World War II
world, where some great statesmen,
most of them from this country, con-
vinced that we had to have international
institutions that were better than what
we had in the 1930s, put together a
structure that opened trade, that had a
world view, that recognized our economy
was part of the world economy— which
was much less so then than it is now—
and for those efforts what we got was an
expanding world, not just for us but
including us and for everybody. Whereas
we all know about the 1930s, and, of
course, I don't have to remind this
audience of the tragic consequences that
flowed from a disengagement by the
United States in the 1930s.
Apartheid. We also see abounding in
this country a kind of self-righteous
moralism which also leads to withdrawal
rather than involvement. I'll stand here
with anybody and denounce apartheid.
There is nothing good to be said for it, at
all. So we know what we're against in
South Africa, and we know what we're
for— a different kind of governmental
structure where everybody has a chance
to participate. But it doesn't make any
sense— I don't think— to say because we
don't like it and we think there should be
change, therefore we should disengage
ourselves and go away. On the contrary,
we should stay there. We should state
our views. We should work for our
views. We should be engaged, not throw
up our hands in self-righteous moral
indignation and leave, which is what is
happening to us right now.
The Foreign Affairs Budget. Now,
probably you knew I'd get around to
money sooner or later. But let me tell
you what is happening to our foreign
affairs budget. This is the money that we
use to support our security, our pros-
perity, our ideals; to fight terrorism; to
fight drug trafficking; to represent
ourselves around the world. Here's
what's happened to it.
In the fiscal year 1985, the amount
of money allocated to all those functions-
all the security assistance and economic
assistance all over the world, managing
the State Department, the Voice of
America, Export-Import Bank, and so
on— was $23 billion. In fiscal year 1986, it
was $19 billion. In the fiscal year we're
now in, it's a little above $17 billion.
The Congress is now jockeying
around in the budget resolution process
with numbers approximating $16 billion.
Now, there has been inflation here, and
there has been a big decline in the value
of the dollar over that period, so it
doesn't go as far. And running through
that is about $8 billion that doesn't get
cut at all. I'm not saying it should get
cut. Personally, I support those items-
most particularly, aid to Israel and
Egypt.
But when you cut from $23 billion to
$16 billion, and you have $8 billion, say,
going through as a constant, then every-
thing else is brutalized. And we are in
the process of depriving ourselves of the
eyes and the ears and the hands neces-
sary to represent ourselves, and it
makes no sense in the kind of world I
described to you— no sense at all. The
changing world favors us, and that's
good news for us, and it's good news for
the world in general, and it's good news
for Israel. The larger the democratic
community of nations, the closer Israel's
dream of a secure and peaceful exist-
ence. And the more influential and
involved America is, the more effective a
partner we can be for Israel.
Keeping America Engaged
So we have a winning hand, but will we
play it? I don't want to have America turn
inward, and I'm sure you don't want to
see that either. You know that this is a
dangerous world. You recognize thai he
United States has enemies, that Israi
has enemies, and that our adversariel
will be quick to exploit any signs of f
American disengagement from our iier
national responsibility, so let's not dd.
Now we're never going to walk aa;
from Israel or Egypt when it comes
the budget, but when we fail to meetnu
obligations elsewhere, it affects ever
thing, including Israel. So you in AlkC
have a big stake in keeping America
engaged. As I have come to ask for } m
help to keep us on the right track, I
want you to help us avoid a retreat f n
our global responsibilities, including ir
responsibilities in the Middle East. I
cannot ser/e Israel's interest if Amea
withdraws and the Soviet Union moi s
into the vacuimi.
Today, America's support for Isi j1
has never been stronger or more ste -
fast, and I promise you— I know the
President would promise you, and it a
bipartisan matter in the Congress— t it
we will be working closely with Israe
see that this strong and steadfast rei
tionship remains.
Last night I was in New York, at
made a few remarks about David Be
Gurion, and I was honored there. Ar
looking back, we can see that he kne
what was basic. Israel had to be truff
its roots, its religion, its heritage. Is e
had to be a democracy, because it h£ t
be free. Only a democracy could giv<
tolerance and justice to the great dii ••
sity of the Jewish people that gather I
in from all over the place to the new
State of Israel.
Israel had to be strong, unwaver
ingly strong, because it would have t
fight for its life— not once, but contii -
ally— and to endure, Israel had to se: :
and work for peace at every opportu t
I think those were the basics that I p I
out of my study of Ben-Gurion, and
believe most people would identify tl ■
as fundamentals.
Prospects for
Middle East Peace
So now there seems to be discussion
possible new opening toward peace,
am going to spend some time with y<
looking at it from a U.S. point of vie'
and saying, "Let's evaluate it," and
ask ourselves, "What is making peac i
about?" Well, to me it's really simpk
It's sitting down with people who wa:
to make peace, and who are qualifieo
and ready to negotiate. That's how yi
make peace. So you have to look for I
pie who are qualified and ready, so k
ask a few questions.
DeDartmen^^tat^u j
THE SECRETARY
Is the PLO [Palestine Liberation
rganization] qualified?
udience response: No.
jcretary Shultz: Hell, no! Let's try
at on for size. PLO?
udience response: Hell, no!
jcretary Shultz: You got it! Look at
hat they've just done. Their alliance
volves the most violent and radical
ements around, and they just put it
gether again. They showed once again
at they don't want peace; they want
e destruction of Israel, so they're not
iialified.
Palestinians? Certainly, they have to
I part of peacemaking. There are
lilestinians who know that the only
iswer is through a nonviolent and
I sponsible approach to direct negotia-
)ns for peace and justice. We have to
ntinue to find them, help them, and
pport them.
How about the Soviet Union?
idience response: No. No.
(cretary Shultz: Could it be a con-
ructive presence?
idience response: Hell, no!
I icretary Shultz: Yes. It could be. And
! ere have been some interesting
velopments recently, but are they now
instructive presence?
kidience response: No.
: jcretary Shultz: No. Look what they
■. They encourage the PLO to turn
er more radical and rejectionist. They
gn themselves with the worst ter-
rists and tyrants in the region. They
fuse to reestablish diplomatic recogni-
)n to Israel. Their treatment of Jews
I id the practice of the Jewish religion in
1 e Soviet Union is not acceptable by
ly standard, let alone the Universal
1 sclaration on Human Rights and the
elsinki Final Act, to which they are
mnd by their own signature.
We can all welcome the release of
sroes like Natan Shcharanskiy, but as
! is the first to say, the emigration of
li Jviet Jews is in no way proportionate
!■ the desire and the right of Jews to
lave. So if the Soviets want to be a part
' the peace process, as they say, let
n lem step forward and qualify
lemselves.
King Hussein has qualified himself,
i e is serious and committed to peace.
' e has rejected the rejectionists. He has
Jated his readiness to pursue— these are
is words— "a negotiated settlement in
n environment free of belligerent and
ostile acts." He has dealt straight-
forwardly with Israel. He has coura-
geously established relations with Egypt,
enhancing the welcome process by which
Egypt's role in the Arab world grows
even as Egypt solidifies its peace with
Israel.
He has recognized that only
bilateral, face-to-face negotiations can do
the job. The name of the game is direct,
face-to-face negotiations. He has shown
great concern and solid support for the
Palestinian people. He is for including
Palestinians in the Jordanian delega-
tion—not independent, include them with
Jordan. And he has said that the interna-
tional conference he advocates will not
impose any solution or veto any agree-
ment made by the negotiating parties.
All this undeniably represents progress.
We welcome it, and we are for it.
International Peace
Conference Initiative
Now, let me say a little more, from the
standpoint of the United States, what
we are for and what we make of all this.
• First of all, we are for a strong
Israel and for the strongest permanent
link possible between the United States
and Israel. We beheve, among other
things, that the underpinning of move-
ments toward peace is to make it crystal
clear to everybody that there is no
military solution as far as the enemies of
Israel are concerned. They can't get
there that way.
• We are for, in the strongest
terms, the Treaty of Peace Between
Egypt and Israel. With the passage of
time and serious efforts on both sides,
that relationship, born of Camp David,
represents the brightest hope for peace
in the Middle East. Egypt is our friend,
and we honor the role it has taken for
peace and justice. I think we made a fur-
ther step in the Taba agreement.
• We are for the President's Sep-
tember 1 initiative. It's not a plan; it's
an initiative. That is our position, and we
will take it to the table as our view; just
as we recognize, when we get to those
face-to-face negotiations, others will
come with their own views and, no
doubt, differing views. But that
represents the view the United States
will take unto that table.
• We are for the effort to achieve
real improvement in the quality of life on
the West Bank and Gaza. This program
has made progress in recent years. It
draws sustenance from the diplomatic
activity in the peace process and con-
tributes to creating an atmosphere in
which negotiations can take place. And
we consistently stand for the principle
that the only reliable way to achieve
peace is through face-to-face negotia-
tions between Israel and its Arab
neighbors.
The United States believes it is
important to explore all possible
approaches to this objective, to see
whether any of these approaches, includ-
ing an international conference, would
lead immediately to direct negotiations.
I might say we are also careful not
to intervene in domestic Israeli politics.
I have the highest regard for and the
closest relationship with both Prime
Minister Shamir and Foreign Minister
Peres and, for that matter, many other
Israeli leaders. We are working with all
of them to reach an agreed position on
recent developments, and I want to say
that I know, knowing them all as I do,
that all of them are dedicated to peace—
all of them are.
Now, this Administration remains
committed to helping Israel in its quest
for peace and security, as we always
have. That has been a steady, constant
commitment of the United States, and it
has helped time after time after time.
We are still here— the same steady
friends, working together with Israel
and you on the basis of the same
principles.
But important developments have, in
fact, occurred that have led us, consist-
ent with our established policies, to look
carefully at the idea of an international
conference. I say carefully, cautiously,
skeptically, but, nonetheless, with open
minds and willing spirits. The answers
are worth working through, even if this
idea fails, like so many others on which
we have worked. No one should ever be
able to claim that a failure to advance
the cause of peace resulted from the lack
of effort on the part of the United
States. For any approach to warrant
consideration, we would have to insist
that, in addition to leading promptly and
directly to face-to-face negotiations, it
also would not interfere with, impose its
will on, or veto work of the bilateral
negotiating parties; include Palestinians
in the negotiations, only in a Jordanian-
Palestinian delegation; and require all of
the negotiating participants to accept
UNSC [UN Security Council] Resolu-
tions 242 and 338 and to renounce
violence and terrorism.
Now, sometimes in our policy about
the PLO, we use the words: "and recog-
nize Israel's right to exist." Frankly, I
cringe a little bit when anybody says
that or when I say it, although it is part
of our policy. Of course, Israel has a
lJiJlv1987
THE SECRETARY
right to exist. It exists. It has a right to
prosper. It has a right to peace.
Now, if such a conference were ever
to take place, only states would be
represented and involved. They should
have diplomatic relations with all of the
parties that come to the table. And it
should be clear that the right of any
party to remove itself from the con-
ference or the negotiations is there if
such rules or understandings are not
observed. Now there recently has been
progress toward such a negotiating for-
mat, which would offer serious prospects
of reaching an agreement between the
parties on peace. So as far as we are
concerned, we have to, as I said, look
this over carefully, skeptically, but look
it over. It may be that there is a genuine
opportunity to bring about direct talks.
If so, we have all been striving for that.
I might say, all across the spectrum
of Israeli politics, there is a desire to
have direct talks. Everybody is in favor
of that. Once direct talks have been
achieved, an important psychological
obstacle would have been overcome,
irrespective of the results. We have to
insist that there is no predetermined
result or plan, so each party can
advocate its preferred approach, includ-
ing the approach that is represented in
the Camp David accords.
As far as the Soviets are concerned,
it's impossible to know whether they
want to be spoilers or whether they want
to be constructive. I must say they
couldn't do a lot worse than they're
doing now— encouraging the PLO and
the radicals to reunite. So we'll have to
see about that.
And, of course, I think we also need
to remind ourselves, as the statement I
made at the outset underlines, that a
lack of progress has its own dangers,
including increased and deepening
bitterness and the continued and poten-
tially explosive tension that we know is
there in the region. I believe that as we
look at this— as I said, carefully and
skeptically— we need to take out an
insurance policy in terms of the close
working relationship which is there
between Israel and the United States; as
long as we agree on that basic struc-
ture—and we're ready to walk away
from the idea or walk away from a con-
ference if it fails— then we can pursue
this road without too great a risk. But
we can only pursue it if we are able to do
so in partnership with the Government
of Israel, and we will make no moves
unless we are assured of that.
So let me summarize the present
initiative accurately. The President and I
are not committed to an international
conference, and we are not asking others
to commit themselves now to the idea.
We believe, however, that Jordan is
sincere and that a real opportunity has
been presented for progress. We are not
interested in disrupting Israeli politics in
the process. To the contrary, as I said,
we will proceed only with the support of
the Government of Israel. We have our
own views, however, and we will state
them in the same spirit in which we have
worked with Israel for many years. We
believe the present circumstances clearly
call for a fair and thorough effort to
develop an acceptable plan, however
dubious we may be of the general idea.
If no acceptable understanding emerges.
so be it. We will try again another w;
but let us try. Let us use our ingenuil
and courage so that we accomplish
whatever progress toward peace is
achievable.
Israel has fought many wars in it
short history. Let us continue to do
everything we can to avoid another
while safeguarding forever Israel's
security and prosperity.
^The Secretary opened this address wl
statement on the Iraqi missile attack on tl
U.S.S. Stark; for text see page 58. The sti
ment and address, plus a question-and-
answer session with the audience are prim
in press release 109 of May 18, 1987. r
ASEAN: A Model
for Regional Cooperation
Secretary Shultz 's remarks before the
Wilson Center's seminar on the future of
regional cooperation in Southeast Asia
at the Smithsonian Institution on
May 27, 1987.^
I'm glad to speak under your auspices,
because when I was at Princeton, my
major was in what was then called the
School of Public and International
Affairs, later called the Woodrow Wilson
School. So you see there is a certain
affiliation here.
But I also wanted to take the occa-
sion to say something in a somewhat for-
mal way about the Association of South
East Asian Nations (ASEAN), because
of the fact that it has been around now
for quite a while and has come to play
quite an interesting part in international
life. So the subject, of course, is partic-
ularly timely. I met with the ambas-
sadors of the six ASEAN countries last
week; I see some are here. I'm going out
to the region, as you said, in a few
weeks— as I have each year since I've
been in this job; I feel it's a very impor-
tant thing to do— and meet with the
foreign ministers at their annual
postministerial conference of dialogue
partners. This time the meeting will be
in Singapore. And, of course, I think it is
very interesting to note that the
ASEAN heads of government will meet
for the first time in 10 years next
December in Manila, a sign of the
organization's vitality in its 20th year.
The member nations of ASEAN are
rich in natural resources, but even richer
in human resources. Their governments
support private sector entrepreneurii
growth, domestic and foreign invest-
ment, and an open world trading sysi t
They take a constructive, creative
approach to important world issues a
the United Nations and in other foru 5.
And as America's seventh largest trt
ing partner, their economic policies 1 «
a significant impact on our own
well-being.
Over the past 20 years, the meml r
of ASEAN have accomplished a grea
deal. But perhaps what is most imprc
sive about ASEAN is its role as a pr( -
type of pragmatic cooperation amonj^
nations of a given region. I think thi^ r
a very important point, because it sei ii
to me, as we look at developments
around the world, the notion of regio
organizations, to my mind, takes on
greater and greater importance. So
today I'd like to review with you the
evolution and significance of this
remarkable institution.
As all of you know, international
relations have traditionally been, andi
continue to this day to be, conducted
largely in a bilateral context. But
bilateral international relations have
great limitations. Competition is built
into the system, and too often its effe
are destructive. Small countries are
especially vulnerable to one-on-one re
tionships which inevitably highlight th
strength of the larger and more powe
ful state. Even large countries feel thi
limitations of an exclusively bilateral
international order, especially when
they're drawn into the kind of local c(
flicts which are so endemic to our woil
10
Departmen^^tat^Bu II
THE SECRETARY
Recognition of the problem inherent
uncontrolled competition has led to
iny attempts at multilateral interna-
nal cooperation. The League of
itions and the United Nations are the
indest experiments. Both of these
:re noble efforts at collective manage-
imt of international problems, but each
■3 failed to meet the expectations of its
inders. The League couldn't prevent
:? outbreak of World War II. The
jiited Nations has, at least, contributed
sthe prevention of another world war,
't its limitations are obvious. In partic-
,ir, despite a few local successes, the
jiited Nations has not been able to do
|ich to prevent regional conflicts.
' The world has also seen efforts at
i^ional international cooperation. One
tably successful example has been
jstern Europe's Economic Commu-
y. I don't want to go through the
ihabet soup of listing these organiza-
ns, but they've been created in vir-
illy every region. Instead, I would like
discuss what I consider to be the best
imple of the more recent efforts at
^onal cooperation— the Association of
ath East Asian Nations.
lEAN's Diversity
appreciate how successful ASEAN
5 been, it's important to recall the
ersity of its six member countries and
!ir regional neighbors. Though they
; small in size, it is hard to conceive a
■re diverse group of people than those
Southeast Asia. They speak hundreds
languages, belong to all the major
igions of the world, and draw their
itures from many races. It is a truism
note that, even after independence,
i links of the individual ASEAN coun-
es outward from Southeast Asia to
ndon, Paris, The Hague, and Wash-
?ton were stronger than those among
3 regional capitals.
The diversity of Southeast Asia has
d adverse consequences for the people
ing there. Traditional conflicts arising
)m rivalries in the region were tem-
rarily suppressed by the colonial
wers, but they emerged after independ-
ce in new forms. The conflict we all
low most directly, of course, took place
Indochina, especially Vietnam. How-
er, we often forget how much trouble,
me of it quite bloody, has occurred
sewhere in the region. Indonesia
iposed the formation of Malaysia and
nt soldiers into battle to back its
lallenge. Thailand and Malaysia both
ught and defeated insurgencies which
Jeatened to destroy their peoples' way
life. Indonesia found itself on the
brink of internal chaos. Singapore was
born of political conflict with the Malay-
sian federation, and conflict with
Malaysia deferred the independence of
Brunei for more than 20 years. Ter-
ritorial claims still sustain tension
throughout the region, on land and
at sea.
In this situation of active and poten-
tial turmoil, the foreign ministers of
ASEAN's five original members met in
Bangkok in August 1967 and proclaimed
the establishment of the Association of
South East Asian Nations. Their avowed
goals were to promote economic growth,
social progress, and cultural develop-
ment in the region. Although one of the
declared aims of the association was "to
promote regional peace and stability
through abiding respect for justice and
the rule of law," the emphasis was
deliberately not on political and security
goals.
ASEAN's Strengths
However, the five members made a con-
scious effort, for the sake of ASEAN
solidarity, to resolve, play down, or
otherwise deal with bilateral political dif-
ferences which plagued them at the time
of the association's founding. In the
course of doing this, an interesting thing
happened. As rhetoric began to cool,
political leaders met frequently and got
to know one another better, and
exchanges of people across a wide front
accelerated. The tone of bilateral dis-
course improved, and serious cooperation
was initiated. The pace of interaction
picked up and gradually encompassed a
wide range of subjects: economic policy,
trade, energy, food, narcotics, tourism,
journalism, education, culture, the
military, the United Nations, and the
Nonaligned Movement. ASEAN itself
became more institutionalized, with new
agreements signed and structures
created almost every year. A sense of
ASEAN community came to exist,
gradually affecting the way these coun-
tries thought and felt about each other.
I might just inject parenthetically,
however, that the ASEAN countries
have nourished a kind of abhorrence of a
bureaucracy, and I remember our meet-
ing in Jakarta in the ASEAN building. It
was rather proudly pointed out that they
hadn't occupied it fully. Something
different.
On the external front, the progress
of the Vietnam war and the uncertainty
of its outcome hindered for a time the
development of a common ASEAN posi-
tion on the conflict. However, the events
of 1975 pushed ASEAN rapidly toward a
common stance for dealing with the
threat posed by a militant, expansionist
Vietnam. ASEAN's first reaction was to
seek accommodation with Hanoi after
the United States greatly reduced its
role in Southeast Asia. Bangkok, Kuala
Lumpur, and Manila all recognized the
new Socialist Republic of Vietnam, and
some even began small aid programs.
The 1978 Vietnamese invasion of
Cambodia, however, rapidly changed
ASEAN's position. Led by the Thai, who
were now faced with a large Vietnamese
force across a common border, ASEAN
quickly developed a position of adamant
opposition to Hanoi's occupation of
Cambodia.
Despite some inevitable differences,
ASEAN's members have steadfastly
maintained a common position toward
Vietnam's occupation of Cambodia.
While they actively pursue a formula for
negotiation, they keep military,
economic, and diplomatic pressures on
Hanoi as the best way to reach a
negotiated settlement. Although some
claim to see cracks in the foundation of
ASEAN solidarity on this issue, I believe
the association remains as firm today as
ever. Perhaps the most important point
in all this is the fact that the ASEAN
nations have accepted primary responsi-
bility for their own security in their own
region.
Thus, the formation of ASEAN has
been a vital force in smoothing tradi-
tional frictions; it has given its members
the strength to stand up to challenges
which might have overwhelmed them
individually. ASEAN has by no means
solved all of the questions faced by its
members. But the existence of ASEAN
has meant that Southeast Asia is a more
peaceful, more stable, more prosperous
place than most of us would have
imagined 15 or 20 years ago. And in this
peaceful, stable, and prosperous
Southeast Asia, American strategic,
political, and economic interests have
flourished as few would have predicted
in that difficult and uncertain period in
the past decade when Hanoi's army took
over South Vietnam by force and subse-
quently invaded Cambodia.
Potential Role Model
But the significance of ASEAN extends
well beyond Southeast Asia. Hopefully,
ASEAN's example will inspire nations in
other parts of the world to form regional
associations in order to solve common
problems and exploit common oppor-
tunities. By promoting regional develop-
ment and security, such associations can
UbLl987
11
THE SECRETARY
serve the political, economic, and secu-
rity interests of both the member states
of the region and the United States. In
this connection, the formation of the
Southern Africa Development Coordina-
tion Conference (SADCC) is especially
encouraging. And I might say we have
suggested to them, "Why don't you go
to Southeast Asia and go around and
talk to the ASEAN countries and ask
them how they operate that? Maybe you
can learn something."
Similarities between the two
organizations are striking. Both ASEAN
and SADCC have a clearly identified
security threat; they are increasingly
turning to free market growth strat-
egies; and they share a broad range of
interests with the United States. The
United States has launched an Initiative
for Economic Progress in Southern
Africa to assist SADCC 's efforts at
economic reform and development. We
believe SADCC has the potential to
become an African ASEAN, providing
the economic underpinning for peace and
development in southern Africa.
ASEAN and the United States
During the late 1970s and early 1980s,
the ASEAN countries realized annual
rates of economic growth which were
the envy of developing and developed
countries alike, averaging around 7%.
This remarkable record of growth
reflected in no small measure the
remarkable expansion of trade and
investment links between ASEAN and
the United States, as well as the market-
oriented development policies pursued
by the ASEAN governments. Taken
together, the ASEAN countries last year
constituted our seventh largest trading
partner in terms of total trade, even
though that trade has contracted
somewhat since its 1984 peak of $26.3
billion.
Despite the continuing controversy
over protectionist pressures in this coun-
try, we remain by far the largest and
most open market for the ASEAN coun-
tries. Last year we took about 23% of
ASEAN's total exports, and we buy far
more of ASEAN's manufactured goods
than does any other industrialized coun-
try. U.S. imports of ASEAN manufac-
tures amounted to nearly $9 billion in
1985, compared with $1.8 billion in
Japan's case. Think about that. We think
about it. In addition to trade, U.S. firms
became the largest source of direct
foreign investment and technology
transfer for ASEAN over the past
decade, with our total stake in the states
of the association exceeding $9 billion at
the end of 1985.
People now must face up to the fact
that the United States cannot continue
to run the large trade and current
account deficits which have emerged in
recent years. As a result of exchange
rate realignments, the process of
correcting these imbalances is now
underway. Make no mistake about it; our
trade deficit will shrink dramatically,
and this will have important conse-
quences for the ASEAN countries as
well as our other major trading partners.
As adjustment occurs, our collective
challenge will be to assure that the
rebalancing of world trade and world
demand occurs without impairing global
growth or reigniting inflation. All
nations will share in this challenge.
Others must assume greater respon-
sibilities as open economies and engines
of global growth. If they do not, the
gains of the past for ASEAN and all
trading nations will be jeopardized, and
the vast potential for future growth will
go unrealized.
ASEAN's Future
ASEAN, therefore, faces major
challenges as it seeks new ways of ensur-
ing continued economic prosperity.
Unfortunately, ASEAN has not yet
made much real progress toward
regional economic integration. Most of
the national economies making up the
association are at roughly comparable
competitive levels of development and
lack the complementarity that con-
tributed to the success of the European
Economic Community. ASEAN has
given birth to programs meant to
encourage cooperation and integration,
such as the preferential tariff arrange-
ment, ASEAN industrial projects, and
the joint industrial venture project pro-
gram. Nevertheless, the organization
itself has recognized that these explicit
cooperative programs have had rela-
tively little impact. Intra-ASEAN trade,
for example, has been fairly static for
many years at about 15% of the total
trade of the individual member states.
Such considerations have led the
ASEAN governments to undertake some
comprehensive soul-searching in
preparation for the December summit in
Manila to find ways of lending new
momentum to ASEAN's economic
character in its third decade. We wish
them well in that search but recognize
that it is for the ASEAN countries
themselves, through their traditional
consensual process, to determine the
pace and modalities of cooperation thi
best suit their needs.
Virtually every aspect of our
diplomacy in Southeast Asia takes as
premise the value of ASEAN's surviv
and growth. In this regard, the Unite
States supports ASEAN's courageous
stand against Vietnamese aggression
Cambodia and recognizes ASEAN's
leading role in developing creative
diplomatic approaches to resolving th(
destabilizing regional conflict. We coo
dinate closely and often on this issue i
are ready to lend support where we c:
I meet with the ASEAN foreign
ministers at least twice a year as a ms
ter of course, once at their own annua
meeting in Southeast Asia and once ai
the United Nations. We routinely deai
with ASEAN as an organized group ii
many fora— at the United Nations, in |
commodity negotiations, and in the '
General Agreement on Tariffs and Tr l(
(GATT). Most recently, for example, i
ASEAN countries played a key role a
moderate developing GATT signatori ■
in getting the new round of multilate I
trade negotiations underway. The U.I -
ASEAN economic dialogue provides :
forum for discussion and resolution o
wide range of issues of common cone i
We, of course, also have strong
bilateral ties with the individual
members of ASEAN. This is most
obvious in the case of the Philippines
where ties of history and culture hav(
created a special relationship. But it i
true of the others as well. We have a
strong alliance with Bangkok as well
Manila, and we maintain mutually
beneficial military-to-military ties wit
the nonaligned members of ASEAN. (
provide economic assistance to Thaila i
Indonesia, and the Philippines. We hf ;
launched communications satellites fc
Indonesia. Singapore is a major port •
call for American naval and merchant
shipping. We are working with the
Brunei Ministry of Education to build
new university. We work closely with 11
the ASEAN states, but especially
Thailand and Malaysia, in combating e
scourge of drug abuse.
But our relationship with ASE A^ 3
greater than the sum of our bilateral s
to its member states, greater precisel
because of ASEAN's own regional
dynamism and international stature, 'e
are heartened by ASEAN's commitmil
to free economic and political systems
that give play to the diverse talents oj
its people. This is one of its greatest
strengths.
12
npnartmpnt nf .qtatP Rn I, ii
THE SECRETARY
ASEAN has served its member
ites and their people well for 20 years,
remains an example of the positive
lergy that can result when nations
d people put aside their individual dif-
•ences for the sake of regional prog-
is and security. We deeply value our
rtnership with ASEAN and look for-
rd to close cooperation in the
ure.
'Press release 119 of May 28, 1987. ■
ews Briefing of
iay 8 (Excerpt)
Secretary Shultz held a news briefing
the Homestead in Hot Springs,
rginia, on May 8, 1987.^
Q. From your perspective, what is
! potential for serious disruption
tween Tokyo and Washington with
! trade frictions that seem to have
jn focused on in the last 2 weeks?
A. The trade problem between the
i ited States and Japan is a very
i ious one for both countries. I think
I Te is no question about the fact that
I • deficit and their surplus must recede
1 )t, if not turn around.
The question is not whether that will
I :pen. The question is, through what
I )cess, and some processes are a lot
I re healthy than others. So that is
I Jly the issue. Both countries have a
I of work to do, but there must be a
I inge in the situation. There's no doubt
i 3ut it.
Q. Is one of the unhealthy proc-
< ses a Gephardt-like amendment?
■ A. Yes, I think that would be the
ong thing to do. I was very glad to see
; Senate bill and hear Chairman
,j oyd] Bentsen talking about it just now
• d saying that he opposed that amend-
mt. It's not on the Senate bill. I think
,| would be a great mistake because that
saying that we should solve this prob-
jn by basically restricting world trade.
If we learn anything by comparing
' 3 1930s with the post-World War II
riod, it is that the road to poor
jonomic performance in the world,
.| nerally, if not a depression, is the road
rough protection. What the post- World
ar II world shows us is that as we
inage to create a regime, sharply in
ntrast to the 1930s of more open trade
and more and more open trade through
the successive rounds of negotiations,
world trade flourished and along with
the flourishing of world trade, all our na-
tional economies benefited
tremendously.
Q. Could you give us a sense of
prospects of some sort of major,
substantive agreement coming out of
the seven-nation summit next month to
resolve the problems of coordinating
economic policies?
Do you see, for example, the Ger-
mans and Japanese pledging to take
some new steps to stimulate their
economies and the United States
pledging to take in some more
substantive way than in the past to do
something about its fiscal situation?
A. I'm not sure just what shape the
discussion and possible outcome on
coordination of economic policies will
take. But the flow of discussion in those
meetings, and it was highlighted last
year, was to the effect that we live in a
world economy and, therefore, the
economic policy actions— key ones taken
by the different countries— have a rela-
tionship to each other. So we ought to
talk about them, and, to the extent pos-
sible, have some kind of coordinated
action.
Just into what fields that wall go and
nailed-down it will be is always a ques-
tion. Obviously, countries wish to main-
tain their own sovereign rights to con-
trol, for example, their money supply or
other key economic variables.
Q. There was a perception, I
think, in some of the financial markets
with regard to the recent talks with
the Japanese, of disappointment that
the Japanese didn't announce more
concrete steps to stimulate their
economy.
Did the Administration share a
certain sense of disappointment that
the Japanese didn't go further than
they did in terms of what they were
doing to try to stimulate their
economy?
A. I think the key will be in the
follow-through rather than on the
announcements. That is, what will Japan
actually do to rearrange the structure of
demand in Japan? That's the key ques-
tion as well, of course, of the various
market opening things that were
discussed.
They have proposed a stimulation
measure amounting to about $35 billion
of extra spending in their budget with
the statement that that spending will be
front-loaded. That's something that the
Diet will have to deal with, and the
Prime Minister gave us a mid-summer's,
or August, expectation on that, so we'll
have to see.
They've talked about tax reform,
including rate cuts, first, and they've
talked about a kind of tax reform that
changes somewhat the very large incen-
tives to saving that exist in the Japanese
structure.
Well, if you put all those things
together, and they really happen, they
could, over a reasonable period of time,
make a substantial difference. So we'll
have to see what the follow-through will
be, and I hope that there will be a follow-
through. I'm sure that there will be. It's
a question of how much.
See, I think that to a certain extent
people structure this question the wrong
way. We tend to say, we have a big
deficit and it's a problem, it will bring
about protection; and, therefore, the
Japanese, in order to avoid that kind of a
world, ought to open their markets and
do something about their big export
surplus.
It's sort of as though Japan should
do the world a favor by taking these
measures, and in their own, so to speak,
enlightened self-interest. I think the
problem is different from that.
As I said earlier, we are going to see
our trade deficit shrink. It wouldn't sur-
prise me any. In fact, I think there's a
certain logic to saying it has to turn into
a trade surplus. And by the same line of
reasoning, their trade surplus has to
shrink drastically, and perhaps even turn
into a deficit.
Why? It is because we are now
accumulating a situation where the
assets held by foreigners here exceed the
assets that Americans hold abroad. And
with reasonable assumptions about rates
of return, what that means is that we
will have a debt to service, so to speak.
How are you going to service it? You
can service the debt for a while by add-
ing to it. But, as people become con-
cerned about the effective rate of
return— that is, looking at the nominal
rate of return and considering the
exchange risk, and things of that kind-
it gets more and more expensive for us
to service that debt through adding to it.
And so you have to service it somehow,
and you wind up having to service it by a
trade surplus.
It's almost like arithmetic, but it is a
reality that will force its way into the
economic processes through whatever
repricing arrangements.
Now, when that takes place, and
given the fact that Japan, in a sense, has
exactly the reverse— the other side of
13
THE SECRETARY
the coin— when that takes place, or in
consideration of this— and we said this to
the Prime Minister— what Japan has to
reahze is that their economy is exceed-
ingly vulnerable. It is heavily dependent
on the willingness of the world to take a
gigantic excess of Japanese exports over
Japanese imports— mostly the United
States.
Now, when that stops, where does
that leave the Japanese economy? Unless
Japan does something about changing its
savings investment ratio and its
dependence on this export surplus, it's
going to leave the Japanese economy in
very serious trouble.
So it is in Japan's interest to change
the situation just as it is very much in
our interest to change the situation.
These big imbalances are very
unhealthy.
Q. What, in our view, would make
the economic summit successful for
the Administration? Would it be
actually getting some agreement on
the dollar or getting the economy to
stimulate?
A. I don't think summits work that
way, in the sense of getting some par-
ticular agreement. They are occasions
where heads of state, and their relevant
ministers— but heads of state, in par-
ticular, because the ministers are a lot
together in one way or another— can talk
to each other about leading problems
and generate a more deeply shared sense
of what is the problem and how to go
about solving it. So that gives something
to build on.
Then there are certain kinds of
things that have been stated again and
again. They do have an effect. The con-
sistent opposition to protection that's
come out of those summits— I think from
the very first one— has been a contribu-
tion. It has, tended to be a kind of "tak-
ing the pledge" in public and with each
other. It hasn't stopped the growth in
protection but it has inhibited it a lot,
I'm convinced.
By the same token, the statements
about the importance of coordination
that have been made, and with more
clarity in the Tokyo summit than before,
undoubtedly helped in that process.
There are also statements of a political
sort that have impacted. At Williams-
burg, there was an extremely important
security statement. At the Tokyo sum-
mit, there was a very important state-
ment about terrorism that specifically
singled out Libya, and we've seen what's
happened since that time.
So, I don't think you can set up a
kind of a— five objectives and work up a
score card. The process is more elusive
than that, but I think, nevertheless, very
important, and important right now
because the world economy is threatened
by these big imbalances. They have to be
discussed and have a perception of
what's to be done about them.
Q. Are you taking that view
because the Germans feel very much
that the United States needs to deal
with its budget deficit, and that
they're saying, look, we're not going
to stimulate our economy because you
need to deal with the U.S. budget
deficit?
A. The process of getting at the
problems of the world economy is, to a
very considerable extent, a process of
everybody taking a good look in the
mirror.
At the Bonn summit, the statement
that came out of it was very much of
that sort. And I think that, just as I've
been saying here, Japan has to take a
good look in the mirror. So do we. You
mentioned one of the big things we see
when we look in the mirror. We see this
gigantic deficit in our own fiscal
accounts, and it is having a very bad
effect.
Q. Do you have a view on the reap-
pointment of Federal Reserve Board
Chairman [Paul A.] Volcker? And have
you talked with President Reagan
about this?
A. No, I wouldn't want to commi t
on that. That's not for me to say. I d( t
know where that stands. But 1 have 1" 1
the privilege of working closely with r.
Volcker. When I was Secretary of th(
Treasury, he was Under Secretary. V
have been good friends and colleague
so I can only say that I have great
admiration for him.
Q. To what extent, given what m
said about trade and the need to tal
looks in mirrors, to what is the poli '
to reduce the value of the dollar ver is
the yen a major part of our directioi
A. When I was Secretary of the
Treasury, I happened to be in Tokyo
once and my friend Mel Laird made
some comments about the dollar here
said, and it caught the headlines arou I,
"Tell Mel Laird to keep his cotton-
pickin' hands off this subject," and I
haven't changed my mind. So I'll kee
my cotton-pickin' hands off. That's fo
the Secretary of the Treasury to say.
Q. Do you expect a summit witl
Mr. Gorbachev this year?
A. It's certainly a possibility. It -
mains to be seen. There's no date set r
anything of that kind.
Q. Would that take place in the
United States if it came to be?
A. Oh, yes. Yes.
Okay? I'm glad we had one foreig
policy question.
iPress release 103 of May 11, 1987.
14
n^^or.n.^nt..fQt=.t^R.llli
.FRICA
African Development:
m Administration Perspective
f John C. Whitehead
Address before the Carnegie Corpora-
m on May 7, 1987. Mr. Whitehead is
{^piity Secretary of State.
ippreciate the opportunity to par-
[ipate in this retreat devoted to
''rican development to present our
>ws on several aspects of African
velopment, particularly sub-Saharan
j'rica.
The United States has an interest in
'strong, healthy Africa which can be an
"ective partner strategically, politi-
lly, and economically. Let me cite just
'ew of our ties.
• One in eight Americans can trace
! or her roots to Africa. Africa is,
?refore, important to us in cultural
d historic terms.
• Africa's 51 countries comprise
nost one-third of the members of the
lited Nations, the most cohesive vot-
j bloc in the United Nations. These
intries play an increasingly significant
e in the formation of UN positions
d policies in areas of great importance
the United States— on terrorism, for
ample, on human rights, on refugee
airs, and on Middle East peace talks,
name just a few.
• Africa has vast hydroelectrical,
ricultural, and mineral resources. Its
rrent mineral production is essential
U.S. industry and commerce; it is vir-
lUy the only non-Soviet source of
/eral strategic minerals.
• We have a strong interest in fur-
jring democracy and human rights in
rica so that Africans can live in more
ace and security.
• And, lastly, we have an interest in
eing that the countries of Africa suc-
ed in their current efforts to move
: /ay from statist economic policies—
lich have proven to be failures— toward
irket-oriented economies, which will
ovide a better basis for economic
owth. Our goal is to help Africa help
self. This is one of the most important
pects of U.S. policy toward Africa.
)ssibly the most significant develop-
ent in Africa in the past half-dozen
•ars has been the growing recognition
mong Africans that they need to come
grips with the financial and human
>sts of misguided economic policies.
In countries beginning to take the
first brave steps toward a reordered and
reinvigorated economic process, these
changes will not be easy to make and are
not without political risks to the govern-
ments involved. But without solid eco-
nomic policies and well-managed, market-
oriented economies, Africa's develop-
ment aspirations will not be realized.
Social Development
Economic development and social
development go hand in hand. Let me
touch on a few of the most important
areas where the two intersect: popula-
tion growth, health, and education.
Population. The current rate of
population growth of around 3% a year
threatens Africa with disaster. Should a
burgeoning population outstrip economic
growth, living standards will decline
and the African environment will be fur-
ther degraded as more and more people
try to eke out a living from marginal
land.
African countries have become increas-
ingly aware of the burden which high
population growrth rates place on their
resources. Many are beginning to develop
national population policies. The United
States has been supplying over $20 mil-
lion a year in family planning assistance
to Africa, relying heavily on nonprofit,
private voluntary agencies to deliver
family planning products and services.
Africa needs continued international
support in this area.
Health. Africans have the lowest life
expectancy in the world— 50 years— and
the highest infant mortality rate. These
and other quality-of-life indicators have
shown improvement in the past 20 years.
But, clearly, there is a lot of room for
further improvement.
Child survival clearly must have a
very high priority. In 1986, over 2.5
million African infants under 1 year of
age and over 8 million under 5 died. One
African child in five will not live to see
his or her fifth birthday. This is a truly
tragic situation, one we must all work to
correct through better health services,
better living conditions, and education.
This is a challenge for the Africans
themselves. But here, too, they need and
deserve our support.
Education. In many developing
countries, improving educational quality
and expanding access to education are
among the best investments which can
be made. In the context of health, educa-
tion of women is especially important.
Studies have shown that educated women
are far more receptive to family plan-
ning and tend to be healthier. Healthier
mothers are more likely to have babies
who survive and enjoy good health.
Lower mortality, in turn, reduces the
incentive to have more children.
Unless Africa can accelerate its
economic growth rate and reduce birth
rates, education will be under tremen-
dous pressure because the resources to
educate the rapidly growing school-age
population will simply not be available.
In the 15 years between 1985 and 2000,
the number of children in the 5-14 age
group is projected to grow by 5% in the
developed world; by just under 30% in
Latin America and the Caribbean; but by
as much as 60% in Africa.
While the need for increased educa-
tional resources is clear, the cost to
these frail economies is very high. On
average, African countries spend 20% of
their national budgets on education.
They would be hard pressed to spend
more. Demand for education is already
great and will continue to grow along
with the size of the population. Here, as
in the related areas of population and
health, we need to work with African
governments to meet growing needs.
AIDS
I also want to mention just briefly a
disease which is afflicting the whole
world— including the United States— and
is becoming a threat to African societies:
AIDS [acquired immune deficiency syn-
drome]. Although information on the
incidence of AIDS in those parts of
Africa that are most affected is fragmen-
tary, it is, nonetheless, highly alarming.
Anticipating a trend that is now also
increasingly apparent in the United
States, men and women in Africa appear
to be infected in equal proportions. Fur-
thermore, in many areas of central and
east Africa, the incidence of AIDS
appears to be highest among young pro-
fessionals. With Africa's younger,
educated people threatened by this dread-
ful disease, it is emerging as an increas-
ing threat to African economic growth
and development. In response, more and
more African governments are joining
Western governments in launching pub-
lic information campaigns to educate
their people in how to prevent its spread.
15
AFRICA
This is a global problem and needs to
be addressed at both the national and inter-
national level. In the United States, we
have formed a National Commission on
AIDS to deal with the problem in this
country. AIDS will be on the interna-
tional agenda for the Venice summit in
June. The World Health Organization has
taken the lead in developing and coor-
dinating international AIDS programs in
Africa, and these efforts will undoubtedly
grow, as long as donor countries con-
tinue to support them.
Economic Development
Economic development is the key to
combatting these social problems. Greater
prosperity can bring better education
and improved health services. To encour-
age economic growth, we are emphasiz-
ing the importance of moving to open
economies.
At independence, many African coun-
tries adopted statist orientations for their
economies which inevitably led to eco-
nomic distortions and a misallocation of
resources. The urban population was sub-
sidized at the expense of the rural popu-
lation, and consumption was encouraged
at the expense of investment. Govern-
ments and state-owned corporations bor-
rowed heavily abroad, frequently to
finance prestigious projects which could
not be justified economically.
The disastrous results are all too
apparent. Economies stagnated; agricul-
tural productivity declined; and people
migrated to the cities in unprecedented
numbers, thereby increasing pressures
for social services which the productive
sectors could not support.
Africa took a major step forward
last May at the UN-sponsored Special
Session on the Critical Economic Situa-
tion in Africa. It was the first such UN
special session to focus on the economic
needs of one particular region; and it
served to highlight the change in
Africa's economic direction. At that ses-
sion, African leaders acknowledged
publicly that past statist policies had
failed to produce the economic growth
needed to improve the living conditions
of their peoples.
At this UN special session, the
Africans presented an action program
which, among other things, included
commitments to give priority to agricul-
tural development and to undertake a
variety of other economic, fiscal, and
policy reforms. They also pledged to
strengthen investment incentives,
review public financing policies, improve
economic management, and encourage
domestic resource mobilization and the
role of the private sector.
Two-thirds of the sub-Saharan African
countries have recently embarked on or are
about to initiate major structural reform
programs. Let me cite just a few examples.
Senegal has substantially increased
agricultural producer prices, reduced
subsidies, embarked on reform of its
parastatal sector, reduced tarrifs on
industrial products, opened rice trading
to the private sector, and raised utility
rates to minimize the burden on the
national budget.
Kenya has mounted a major stabiliza-
tion effort, liberalized import licensing
and maize and fertilizer marketing, and
adopted a flexible exchange rate policy.
Somalia and Uganda have liberal-
ized prices for a variety of agricultural
products. They have been rewarded with
large increases in agricultural production.
Guinea closed down its entire state
banking system and allowed the establish-
ment of three commercial banks.
Ghana has changed its financial
policy so that interest rates, which used
to be highly negative in real terms, are
now positive.
Mozambique has undertaken a
tough program of economic reform,
including a sharp devaluation of its cur-
rency, lifting of many price controls, a
reduction of tariffs, the privatization of
more than 20 state enterprises, and enact-
ment of a new liberalized investment code.
Zaire has launched one of Africa's
most far-reaching and sustained eco-
nomic stabilization and reform programs,
abolishing most price controls, deregu-
lating interest rates, eliminating almost
all import restrictions, and drastically
devaluing its currency.
Tanzania, after years of economic
decline, reached agreement with the
IMF [International Monetary Fund] and
the World Bank in 1986 on a reform
package correcting price signals to the
economy, including a commitment to
establish an equilibrium exchange rate,
positive real interest rates by mid-1988,
and liberalization of price controls.
These reforms are just beginning to
bear fruit. We have seen important
changes in consumption and income dis-
tribution patterns and rationalization of
production patterns. Of course, there is
much more to be done, but we are encour-
aged that many countries are seeing the
benefits of letting the market work.
But this adjustment process is not
without cost to the countries that are
trying it. Reversing policy decisions
made at independence in practice means
reducing, if not eliminating, the sub- I
sidization of the urban population at \b
expense of rural producers. Such belt
tightening strikes at the heart— and
pocketbook— of urban elites; that is t(
say, the constituencies on which polita
power has been based— clearly a risk}
proposition for reformist government
This is why it is so important for the
United States to support our African
friends as they try to implement the
very reforms we have been urging th n
to adopt.
U.S. Response
Our government believes strongly th; i
continuing flow of U.S. assistance to
Africa at significant levels is necessa
to sustain the continentwide effort tc
abandon statist strategies, to embrac
free market principles in their stead, k
to attain international competitivene;
Consolidation of these trends would ( i
stitute a major American success anc .
significant defeat for our adversaries
not only in Africa but throughout the
Third World. The economic bind in w c
most African states find themselves ; d
the prevalence of one-party governm t
and military regimes tend to promoti .
search for radical solutions while ere
ing low-cost openings for our adver-
saries, such as Libya and the Soviet
Union. An African disavowal of stati i
has the potential, over time, to trans
form the African politico-economic la I-
scape to the advantage of both Afric
peoples and the United States.
Market economies and private se^ »
led development are now on trial in
Africa as government after governm t
feels the public outcry from the austt t;
measures which, in most instances, a i
necessary, if unpleasant, accompanin n
of economic reform. Our goal must b x
keep our partners headed in the righ
direction and to demonstrate convinc
ingly that it is the West, not the Sovi
bloc, that is the natural and effective
partner of African countries seeking
develop and modernize.
But instead of increasing support 3
Africa in these challenging times, the
Congress has cut the amount of mon<
available to further African develop-
ment. In 1985, economic support fum
and development assistance appropri
tions totaled $762 million. In 1986, tl
total dropped to $575 million— a 24%
decline in 1 year. In 1987, we sustain I
a further 15% cut to $486 million. Th;,
in just 2 years, our economic and devf >l
ment assistance fell by over one-thirc
These budget cuts have had a de\ 8-
tating impact on our ability to respor
,t Ot.,t„ D.,1A1
I
ARMS CONTROL
', p Africa's critical needs. Let me
■•^lustrate.
■ , 'In 1985, we began a 5-year pro-
ram to allocate $500 million to support
irican economic policy reform: $100
; 'lillion a year. In the first year, we spent
. j75 million on the program. This was
, educed to $48 million in the second
, ear. This year, the third year, we have
^ nly $27 million to spend.
• The "front-line states" in
Duthern Africa are trying very hard to
educe their economic dependence on
outh Africa. In September, the Presi-
ent sent letters to Congress reiterating
is intention to present a comprehensive
lultiyear program for the area. But
. I nless the Congress approves our appro-
riations request, there will be no money
;t all to support the southern Africa
,:Conomic initiative, and our aid to the
rea will actually fall.
I For the fiscal year 1988, we have
I sked Congress to appropriate $600 mil-
on for Africa. This level would partially
averse the precipitous decline of the
I revious 2 years and enable us to pro-
j ide adequate support for development
I I many low income and financially
;rapped countries. While the authoriza-
on and appropriation processes are not
et complete, it appears that the Con-
ress is determined to slash our budget
?ain. Unless there is a dramatic and
ipid shift of opinion in the Congress,
e will have to cut our economic assist-
nce to Africa once again next year.
Bluntly speaking, we are fast approach-
ig a time when our foreign affairs
udget will only pay for assistance to
;rael, Egypt, Pakistan, and Central
.merica, with inadequate support for
le base rights countries and withdrawal
verywhere else. That is not an exag-
eration. It means, among other things,
meaningful aid for Africa.
Secretary Shultz's recent comments
a the implications of insufficient fund-
ig for the foreign assistance budget are
orth repeating.
The President's foreign affairs budget
ight usefully be looked upon as a form of
itional insurance. In asking the Congress to
;vote only two cents out of every budget
lilar to our foreign policy goals, the Presi-
!nt has determined the minimum premium
i must pay as a people to safeguard the
ace and lead the free world. If we fail to
ly these costs, we are gambling needlessly
th our nation's future.
onclusion
summary, African countries face con-
lerable challenges in the years ahead,
ispite the important strides they have
made since independence. While the
major effort has to be made by the
Africans themselves, we and other donor
countries and institutions must continue
to provide support. By its actions over
the past few years. Congress appears to
be saying that it is not willing to give
this support.
The amounts involved are not so
large. Our total foreign assistance
budget is only two cents out of the Federal
budget dollar. The amounts needed to
support African countries, while impor-
tant to them and to us, are only a small
percentage of this total. Our relations
with friends and allies in Africa and else-
where must demonstrate our commit-
ment to a long-term partnership— a part-
nership which will bring people closer
together, reduce suffering, improve
standards of living, and generally
enhance freedom and opportunity.
The United States stands for free-
dom, prosperity, and leadership. But we
have to put our money where our mouth
is or be content to abandon our friends
and watch our dreams of world peace
and freedom slip away. ■
Benefits of an INF Agreement
Following is Secretary Shultz 's
response, published in Time magazine
May 18. 1987, to comynents made by
former President Nixon and former
Secretary Kissinger.
The United States and the Soviet Union
appear to be nearing an agreement on
intermediate-range nuclear forces (INF).
Such an agreement is not assured— our
negotiators still have imporant work
before them— but if it is cpncluded, it
would constitute the first time in 25
years of U.S. -Soviet arms control talks
that significant and verifiable reductions
in any category of offensive nuclear
weapons had taken place. Now some are
questioning whether an agreement along
the lines emerging would be in our
interest. The Administration's judgment
is that it would be decidedly so.
In the mid-1970s Moscow began to
deploy the SS-20, a highly accurate
missile with three nuclear warheads that
could reach London in 12 minutes. The
United States had withdrawn its last
INF missile from Europe more than a
decade earlier. In 1979 we and our
NATO allies agreed that our objective in
response to the SS-20s was to get the
Soviets to pull them out. Failing that, we
should counter these missiles with
NATO deployments.
When, in 1981, President Reagan
first proposed the zero option, a plan to
eliminate longer range INF (LRINF)
missiles, we had not yet deployed a
single weapon of this type. The Soviets
were not willing to bargain. In 1983 we
proposed an interim agreement: equal
U.S. and Soviet levels worldwide below
NATO's planned deployment of 572
LRINF warheads. The Soviets still said
no. By last October a sizable number of
the U.S. missiles was in place.
At his meeting with the President in
Reykjavik, General Secretary Gorbachev
said he was now prepared for an interim
agreement-a limit of 100 LRINF
missile warheads for each side, all
deployed outside Europe. This was con-
sistent with the U.S. interim proposal,
although key issues remained. Thus
NATO's resolve may have brought us to
the point of success.
To reach the equal levels, the Soviet
arsenal would be reduced by more than
1,300 LRINF missile warheads and ours
by some 200. For the first time since the
1950s, no Soviet LRINF missiles would
be deployed in Europe. In Asia, Soviet
LRINF warheads would be reduced by
more than 80%.
Former President Nixon and Former
Secretary of State Kissinger are con-
cerned that such an outcome would
render our overall deterrent capabilities
more vulnerable. Others have expressed
concern that it would lead to the
"denuclearization" of Europe or the
"decoupling" of the United States from
its security commitments to the conti-
nent. These are avowedly the objectives
of Soviet policy. We are not going to
accede to them. But it is not necessary
to abandon the quest for nuclear arms
cuts to defeat these Soviet aims.
For two decades NATO's strategy of
flexible response has depended on three
elements: strong conventional forces in
place in Europe, balanced nuclear forces
deployed in support of allied forces on
the continent, and U.S. strategic
systems as the ultimate deterrent force.
Today this doctrine is firmly established
among Western allies, and we are deter-
mined to sustain it.
iMiiA
ARMS CONTROL
Even after an INF agreement,
NATO would retain a robust deterrent.
More than 4,000 U.S. nuclear weapons
would still be in Europe, on aircraft that
could retaliate deep into the Soviet
Union, and on remaining missiles and
nuclear artillery. NATO is planning or
undertaking modernization of several of
these systems. Also several hundred
submarine-launched ballistic-missile
warheads would remain available to the
Supreme NATO Commander. Thus even
after eliminating LRINF missiles, we
could continue to discourage a Soviet
attack without relying exclusively on
strategic systems. Perhaps even more
significant are our 40 years of shared
political and defense goals, integrated
command structure, technological know-
how, and military preparedness. These
factors, together with the continued
deployment in Europe of more than
300,000 U.S. troops, inexorably link the
United States to Europe in a way that
will continue to deter Soviet adven-
turism on the continent.
We and our allies are working to
meet the threat posed by the longstand-
ing imbalance in conventional forces in
Europe, both by strengthening our
defenses and by discussing with the
Soviets new conventional arms control
talks that would cover the whole of
Europe. But linking an INF agreement
to conventional force reductions would
distort the reason for the decision to
deploy U.S. LRINF missiles in the first
place. The intent was to offset the
SS-20s or, preferably, to secure their
removal, not to provide NATO's sole
means of compensating for the conven-
tional imbalance. This linkage would also
mock our negotiators' persistent efforts
to break the Soviet linkage between INF
and SDI [Strategic Defense Initiative] as
well as other issues, a tactic that stalled
progress in Geneva and Reykjavik. To
add a new demand now that an INF'
agreement be linked to conventional
reductions, which will undoubtedly take
many more years to negotiate, would be
tantamount to introducing a "killer
amendment."
One must ask whether we wish to
deny ourselves the success we have
achieved m the negotiations and leave
Europe in the shadow of the Soviet
SS-20s, with far more of them facing
our Asian friends and allies as well.
Working with our allies, we have
been careful to ensure that an INF
agreement would be beneficial in its own
right. We have insisted that it result in
an equal outcome for the United States
and the U.S.S.R., that it be global in
scope and not simply shift the threat of
missile deployments from Europe to
Asia, and that it be verifiable. If the
Soviets meet our terms, we should not
forego the benefits of such an agreement,
even as we seek the stabilizing reduc-
tions in strategic offensive arms that are
our highest priority and as we work to
redress the conventional imbalance.
We are on the right course toward
the goal set by NATO. We should sticl-
with it, collect our winnings, take prid'
in the success that NATO's steadiness
has produced, and move on to further
building of alliance strength and
cohesion. ■
Improving the Balance of
Conventional Forces in Europe
by John H. Hawes
Address before a National Defense
University (NDU) symposium entitled
"The Future of Conventional Defense
Improvements in NATO" on March 27,
1987. Mr. Hawes is Deputy Assistant
Secretary for Politico-Military Affairs.
I am pleased to have this opportunity to
address the NDU symposium on "The
Future of Conventional Defense
Improvements in NATO." The topic is
particularly timely. Ambassador [Assist-
ant Secretary for Politico-Military
Affairs H. Allen] Holmes, who was to
have addressed this session, is in
Brussels chairing an SCG [Special Con-
sultative Group] meeting. They say the
price of liberty is eternal vigilance. For
officials of NATO, it also means eternal
membership in the Pan Am Frequent
Flyer Club.
You have gone into a lot of detail in
36 hours. I could not begin to recapit-
ulate that effort. Rather, I would like
to sketch a perspective on NATO con-
ventional defense improvements as we
look at Western security in the spring
of 1987.
Opportunities and Pitfalls
This is a potentially promising moment.
The Soviet logjam in Geneva may be
breaking. Arms agreements which
NATO has long sought may now be
reached. We may see major changes in
Eastern and Western forces. At the
same time, the new Soviet leadership
poses a new and more dynamic
challenge. Patterns of competition are
shifting. There are opportunities for the
West, but also pitfalls.
NATO needs to exploit the oppor-
tunities to enhance stability and secu-
rity. NATO must also avoid the pitfalls.
To do both requires understanding. We
cannot rely on partial or simplistic
images.
This is easier said than done. Then
was a cartoon last week which typified
the problem. In the first scene, a U.S.
arms control delegation proposes the
removal of medium-range missiles fror
Europe. In the next scene, the Soviets)
accept. The last scene shows the U.S.
delegates in consultation, supposedly
shocked and at a loss for what to do
next.
That cartoon echoes a lot of super-
ficial commentary. It does not, howeve
reflect the facts. In the real world, thet
President immediately tabled a treaty.
Far from being embarrassed, we mova
to nail down an LRINF [longer range
intermediate-range nuclear forces]
agreement at zero in Europe and 100
globally.
In the cartoon world, NATO minus
LRINF is pictured as naked or
"denuclearized" opposite heavily
armored Soviet conventional forces. Iif
the real world, we know better. We ar''
constantly concerned with the Soviet
conventional threat and the need to
improve NATO forces— this conferencw
testifies to that. But we know that
decades of effort have not been withou
result. We know that the alliance detei
rent triad, flexible response, and the
U.S. commitment to Europe would
remain unshaken.
That's more complicated and less
funny than the cartoons. But it is just
such complications that are the basis fc
understanding NATO's conventional
defense problems. There are four facto
we must weigh in considering the futui
of conventional defense improvements:
First, the nuclear/conventional inti
action in doctrine, programs, and publi
perceptions;
Second, the implications of the con
ventional debate for trans- Atlantic and!
intra-European relations;
Third, the resources available; andl
Fourth, the actual improvement
programs.
^^iAk^^ta
ARMS CONTROL
he Nuclear/Conventional
iteraction
istorically, weaknesses in NATO's con-
mtional posture have— perhaps
iradoxically— helped feed a vicious cir-
s of pubHc fixation on our nuclear
rces. While alliance military experts
we devoted time to conventional prob-
ms, publics have been bored with con-
•ntional force complexity, or convinced
is politically or economically hopeless,
diverted (and not a little frightened)
' nuclear issues, which are far sexier
r the media and the layman.
The upshot of this paradox is that
nventional weaknesses, rather than
imulating public pressure for their
medy, may actually lead publics away
om the hard issues.
Not all members of the public make
is mistake. Many are aware of conven-
)nal issues and concerned with doing
mething about them. But often one
ids that their concern is less motivated
I the conventional balance itself than
j a desire to diminish nuclear risks.
] lis is a noble goal which no one would
j estion. It is shared by pohcymakers on
th sides of the Atlantic. But it some-
nes leads proponents to favor shoddy
uick fixes." And it has never proven
equate to generate the impetus for
rious conventional force improvements.
It may never be possible to free the
nventional debate from the nuclear
;ue. But we should seek a treatment of
nventional issues that is as objective
possible under the circumstances. A
bate that depends on images of nuclear
calation to generate monies for con-
ntional defense is not likely to be pro-
etive and has not been. Nor is a
bate that regards the conventional
oblem as a derivative issue likely to
tract long-term commitment.
Last November in Chicago, Secretary of
ate Shultz addressed conventional
rces and nuclear weapons cuts, such as
.d been projected at the Reykjavik
mmit. His remarks, however, were not
id to a particular scheme but to the
erall challenges of a less nuclear
)rld. He noted the prospect of such a
orld had provoked anxiety— ironically,
ven the arguments nuclear weapons
evoke. He said he was not signaling
e end of the nuclear era, which will be
ith us for the foreseeable future. But
' specifically urged new thinking on
'fense including, specifically, conven-
mal defense improvement. Reviewing
lATO thinking over several decades, he
included:
. . .our reliance for so long on nuclear
weapons has led some to forget that these
arms are not an inexpensive substitute-
mostly paid for by the United States— for
fully facing up to the challenges of conven-
tional defense and deterrence.
The Trans-Atlantic
Political Context
A second element of NATO conventional
defense improvements is the political
context between Europe and North
America. The trans-Atlantic tie is both
competitive and cooperative.
There are two subthemes of this trans-
Atlantic context. One is the issue of
burdensharing, with its corollary, the
level of U.S. forces in Europe. The other
is the nature of intra-European coopera-
tion. Both themes go back to the begin-
ning of the alliance.
The postwar withdrawal, and rein-
troduction, of U.S. forces reflected an
enduring debate in the United States.
We have seen it flare up again this
winter, with renewed calls for U.S. troop
withdrawals. As [U.S. Ambassador to
the Federal Republic of Germany] Rick
Burt noted recently, such calls make no
more sense from the right than from the
left. We can and will rebut these sugges-
tions. But we cannot eliminate the
source of the tension. A recent poll
found that a majority of Americans
would go to war to help defend Europe.
That is an encouraging sign of interna-
tional responsibility. But it does not
resolve budget problems or remove the
burdensharing question from the agenda.
Similarly, the issue of intra-
European cooperation has affected
European/North American relationships,
from initial EDC [European Defense
Community] debates, to arms coopera-
tion, to the variety of national participa-
tion in NATO activities.
In the best of worlds, the interaction
of trans- Atlantic and intra-European
politics should multiply Western forces.
That happened at the founding of NATO
and in the fight over INF. At times,
however, interactions have been cen-
trifugal. To some people, the most effec-
tive argument for European security
cooperation is the alleged difficulty of
working with Washington. Perhaps we
should not quibble if NATO gets more
MBFR Talks Resume
DEPARTMENT STATEMENT,
MAY 14, 1987'
Today in Vienna the representatives of
the North Atlantic alliance and the War-
saw Pact convened the 42d session of
the mutual and balanced force reduction
(MBFR) talks. Despite the continuing
failure to reach a verifiable accord which
would reduce and limit conventional
forces of the two alliances in the critical
region of central Europe, the United
States believes that such an agreement
is achievable.
Because of the NATO commitment
to enhance stability in Europe through
such an accord, the Western partners
made a major compromise on December
5, 1985, to end the deadlock between the
sides. The West withdrew its require-
ment that the sides agree on the number
of forces of each side in the area prior to
signing a treaty on reductions and
limitations. To facilitate even further the
possibilities of near-term progress, the
NATO partners also consented to adopt
the East's framework for a time-limited,
first-phase agreement calling for initial
U.S. and Soviet reductions. This would
be followed by a 3-year commitment by
the sides not to increase forces in the
region.
Regrettably, the Warsaw Pact has
not reacted constructively to this major
step by the West. The lack of respon-
siveness on the key issue of verification
has been especially discouraging. This
failure has been particularly disappoint-
ing in view of the expectations raised by
claims of Eastern leaders since
December 1985, including General
Secretary Gorbachev, that they were
willing to accept reasonable verification
measures in the context of a conven-
tional arms control agreement.
President Reagan has instructed his
representative to the negotiations.
Ambassador Robert D. Blackwill, to con-
tinue our effort to obtain Eastern agree-
ment to the Western initiative of
December 5, 1985. Such an agreement
would serve the goal of fostering secu-
rity and stability in Europe.
'Made available to news correspondents
by Department deputy spokesman Phyllis
Oakley. ■
JjIv 19ft7
19
ARMS CONTROL
defense, even for the wrong reason.
However, a negative political spin has its
own costs.
The U.S. view of European collabo-
ration has been ambivalent and, at
times, counterproductive. That is not the
intent of the present Administration. We
support all efforts to enhance defense col-
laboration. We support WEU [Western
European Union] revitalization. We are
concerned only that intra-European col-
laboration not become stuck at the
lowest common denominator; that it lead
to more, not less, defense; and that it
produce more, not less, clarity on secu-
rity issues.
The Need for
Adequate Resources
The third area to discuss is resources. In
his November speech. Secretary of State
Shultz underscored the West's advantages.
In any competition ultimately
depending upon economic and political
dynamism and innovation, the United
States, Japan, and Western Europe have
tremendous inherent advantages. Our
three-to-one superiority in GNP [gross
national product] over the Warsaw Pact,
our far greater population, and the
Western lead in modern technologies—
these are only partial measures of our
advantages. The West's true strength
lies in the fact that we are not an ideo-
logical or military bloc like the Warsaw
Pact— we are an alliance of free nations,
able to draw upon the best of the diverse
and creative energies of our peoples.
Commentators immediately said that
is all well and good, but it is politically
naive to expect democracies to allocate
enough of that advantage to security.
And an advantage which is only
theoretical does not build tanks. They
noted that defense budgets may shrink
in real terms. They noted demographic
changes and political constraints which
make it difficult to sustain large stand-
ing armies. They noted the history of the
burdensharing debate as an antidote to
misplaced optimism.
None of these objections is false. But
in their pessimism, they themselves con-
strict our options. It is often said we get
the kind of defense we choose. And a
preemptive narrowing of options leads to
anomalies. People lament the conven-
tional forces gap but wish to fill it only
with nuclear weapons, then lament the
dangers in nuclear weapons, agonize over
imbalances in those weapons, and expect
the Soviets to solve our problems in
negotiations. That chain would be funny
if it were not real. Breaking it requires a
serious policy on conventional forces.
Improvement Programs
Which brings us to the fourth area: pro-
grams. There has been remarkable con-
tinuity in prescriptions. Despite fads,
NATO concerns have been consistent.
• AD-70 looked at aircraft shelters,
antiarmor capabilities, war reserve
stocks, and air defense.
• The long-term defense program
looked at readiness; rapid reinforcement;
reserve forces and mobilization; air
defenses; maritime forces; command,
control, and communications; ratio-
nalization and standardization; electronic
warfare; and tactical nuclear forces, as
well as NATO's long-term planning
mechanisms.
• The emerging technology program
looked at systems for defense against
first-echelon Warsaw Pact forces and
Soviet operational maneuver groups;
defense against follow-on forces;
counterair operations; attacks on com-
mand, control, communications, and
intelligence capabilities; and
strengthened long-term planning.
• The conventional defense improve-
ment program has looked at redressing
deficiencies in munitions supplies and
ammunition stocks; improved long-term
planning; armaments cooperation and
planning; infrastructure planning; better
coordination in the areas of medium- and
long-term force requirements, strate-
gies, and doctrines; and the weapons
acquisition and infrastructure programs.
These initiatives have brought NATO
a long way. Programmatically, NATO
has adapted to a dynamic threat. Politi-
cally, it has moved beyond debate over
whether conventional forces need
strengthening. Conventional forces are a
central part of the agenda.
One of the reasons for continuity in
prescriptions is the continuity of the
Soviet challenge. Talk of the Soviet
challenge produces sharp reactions.
Some people brush aside analysis as
mere "bean counting" and tend to
downplay the military threat. On the
other side, some people overdraw the
analysis and attribute superhuman
capabilities to the Soviets. Both views
inhibit clear thinking about what needs
to be done.
The task is to soberly evaluate the
facts and the trends. On the negative
side, the Warsaw Pact has kept and
expanded its numerical advantage in
almost every major weapons system.
More ominously, the pact has reduced
NATO's qualitative edge.
• The reorganization of Soviet air'
forces and the creation of theaters of
military operations have significantly
improved Soviet ability to conduct con
bined operations.
• The prepositioning of fuel, amm
nition, and other logistics support with
forward-deployed Soviet divisions has
given the pact an edge in sustainabilitj
• The introduction of operational
maneuver groups and Spetznaz forcesi
enhances capability for deep operation
• The upgrading of equipment— fo
example, deployment of the T-80, the
MiG 29/31, and the Mi-24 combat
helicopter— augment combat firepowe)
At the same time, the Soviets hav
number of weaknesses.
• Despite trends, NATO still hold i
qualitative edge in several weapons
systems and in training and intelligen(
Moreover, Western leads in underlyin
technologies— e.g., computers, sensors
and optics— suggest we should be able i
keep that edge.
• Second, Eastern Europe is a pr -
lem. Pact equipment is falling behind
Soviet equipment. The reliability of E; t
European forces would be uncertain.
And the overall political situation is
delicate.
• Third, the Soviets face resource
constraints. A command economy can
allocate resources, but it cannot abolii
need for tradeoffs, as, for example,
between defense and industrial modei
ization. Demographic trends may also
affect the armed forces and defense
industries.
Looking at these strengths and
weaknesses must give the Soviets pau .
For example, they appear to believe n /
technologies have ushered in a revolu
tion in warfare. From what Marshal
Ogarkov— the former Soviet Chief of 1 3
General Staff and apparent current
Commander of the Western Theater r
Military Operations— and others are s; -
ing, the Soviets seem uncertain wheth •
NATO's achievements in high technol y
have undermined the pact's ability to
win conventionally. The object of NA^ '
conventional defense improvement is .
sustain and increase that Soviet I
uncertainty. |
A viable force improvement progr n
must meet several tests: political cons i-
sus, resource feasibility, cost effective
ness, and military utility. Many propo:
als to improve NATO's conventional
forces are unrealistic or impractical.
There is no quick fix to NATO's prob-
lems; if there were, NATO would hav«
adopted it long ago.
20
nonartmont nf QtatP Riill !£
ARMS CONTROL
NATO, for example, is not going to
place forward defense with heavily
fensive or dispersed defensive strate-
es. Nor is NATO going to radically
lange force structure or make unprec-
lented defense spending increases.
Dr are members likely to subordinate
mmercial interests sufficiently to
hieve major defense procurement
vings.
NATO can, however, improve its
nventional forces without drastic
anges in strategy or force structure
id with a reasonable application of
sources. The alliance is headed in the
jht general direction: it needs to do
lat it is doing, only better and faster,
lis does not mean we relax. As in many
elds, the real profits are at the margin.
fforts To Achieve Balance
2 weeks, Secretary Shultz will go to
3SC0W for talks with his Soviet
unterpart on arms control, human
^hts, and regional and bilateral issues,
le meeting was set up by Soviet will-
jness to drop their artificial linkage on
F. We now have an opportunity to
)ve the whole security agenda. Con-
ntional forces are an important part of
They have been on the agenda since
e 1960s. But efforts have been either
lited in scope— the CSCE [Conference
Security and Cooperation in Europe]
Helsinki and the CDE [Conference on
infidence- and Security-Building
easures and Disarmament in Europe]
Stockholm— or more ambitious but
adlocked, as in MBFR [mutual and
lanced force reductions].
A new effort is now being explored
Vienna. No one can have any illusions
at this will be easy, that the Soviets
i\ cheerfully renounce superiority in
nks— or any other area of their conven-
)nal preponderance. But to the degree
at NATO can sustain its defenses, the
)viet Union will have to recognize that
cannot gain political or military advan-
ge from its posture. At that point,
ductions may become more attractive,
id arms control can help structure
ivelopments toward the NATO objec-
ve of greater stability at lower levels.
Work on specific reductions pro-
)sals has just begun. We know what we
) not like about the present situation—
3viet predominance in tanks, artillery,
id other weapons and the offensive
JSture of forward-deployed Soviet
irces. How, specifically, to deal with
lese problems is a subject of intense
ebate among the experts.
Past approaches tried to cut overall
manpower. That's tough to verify and of
limited military impact. We need more
sophisticated approaches which can limit
and reduce pact offensive capability by
focusing on major equipment and combat
units.
We also need to ensure that any
arms control proposals are consistent
with our conventional defense improve-
ment effort— a type of coordination we
have never achieved in the past. That is
easier said than done, given long force
planning cycles, national political proc-
esses, negotiating dynamics, and NATO
consultation mechanisms. But our
chance of getting enhanced stability at
lower levels may depend on our ability to
draw operational consequences from the
truism that arms control and force plan-
ning are two sides of the security coin.
Conventional Balance
and Public Opinion
The conventional balance is now on the
public agenda. Last week I saw an opin-
ion survey, entitled: "Europeans favor
eliminating INF from Europe, but are
reluctant to pay for stronger conven-
tional forces." That's the nub of our
issue today. Publics recognize NATO is
on the verge of a major INF success.
But many have trouble supporting the
conventional corollary. The details are
interesting. In all countries polled, peo-
ple ranked conventional parity the most
important element for national security.
This outranked strategic parity or even
INF. Publics split on whether the pact is
ahead, equal, or behind. All countries
had sizable minorities who would pay for
increased conventional forces if that was
needed to reduce nuclear weapons; but
only one had a majority that would do so.
That's not discouraging. Indeed, in
the light of historic debates, it is striking
that, today, the need to deal with the
conventional force balance is so widely
accepted. The alliance needs to capitalize
on that recognition. Our ability to do so,
despite our problems, is better than
Soviet ability to meet their challenges.
You know the story comparing
generations of Soviet leaders? They are
on a train, stuck at the end of the tracks
in Siberia. What should they do? Stalin
would shoot the peasants and use
political prisoners to lay more track.
Khrushchev would take track from
behind the train and relay it in front.
Brezhnev would close the curtains and
rock slowly. Gorbachev would open the
windows and shout, "Move!"
Trite, perhaps. But it is good to
know we are not alone with problems.
We cannot belittle our difficulties-
budgetary, political, or technical. But
our methods of solving them, of getting
our train moving, have typically been far
more inventive than those in the story.
They can be, because our societies and
our politics encourage and make room
for innovation.
The alliance has come a long way in
38 years. It has not run out of track.
And it has not needed to open the win-
dows and shout. Our windows have never
been closed. NATO's deterrent reflects
years of hard work and commitment to
the ideal of common security. It is a
deterrent comprised of many elements-
some technical, some political, some
flesh and blood. It grows, it evolves, and
it endures. That is the context in which
we consider the future of NATO conven-
tional force improvements. It is a
hopeful one and a realistic one. ■
U.S., Soviet Union to
Establish Nuclear
Risk Reduction
Centers
WHITE HOUSE STATEMENT,
MAY 5, 1987'
Yesterday representatives of the United
States and the Soviet Union concluded 2
days of negotiations on the establish-
ment of Nuclear Risk Reduction
Centers. At these meetings, the sides
reached agreement on the establishment
of such centers, which agreement will be
referred for final approval to the leaders
of both countries.
The delegations were headed by
Assistant Secretary of Defense Richard
Perle and Special Assistant to the Presi-
dent Robert Linhard for the United
States side and Ambassador Alexsei
Obukhov for the Soviet side.
Agreement to explore the establish-
ment of such centers was reached at the
summit between the President and
General Secretary Gorbachev in Geneva,
November 1985. Senators Sam Nunn
and John Warner played a particularly
helpful role in the deliberations that led
to the President's proposal.
i
21
ARMS CONTROL
The Administration welcomes this
agreement as a practical measure that
will reduce the risk of conflict between
the United States and the Soviet Union,
particularly nuclear conflict that might
result from accident, misinterpretation,
or miscalculation. This agreement com-
plements U.S. efforts in the nuclear and
space arms talks to reach agreement on
broad, deep, equitable, and effectively
verifiable reductions in nuclear arms, as
well as other U.S. efforts to achieve a
more stable and secure international
environment.
'Text from Weekly Compilation of
Presidential Documents of May 11, 1987.
Effective Arms Control
Demands a Broad Approach
by Edward L. Rowny
Address at the U.S. Air Force
Academy in Colorado Springs on April
27, 1987. Ambassador Rowny is special
adviser to the President and the
Secretary of State on arms control
matters.
I would like to discuss with you some
implications of Secretary Shultz's
meetings in Moscow earlier this month
with Soviet General Secretary Gor-
bachev and Foreign Minister
Shevardnadze.
The Secretary traveled to the Soviet
capital with a broad agenda in hand.
President Reagan had asked him to
press for improvement of relations
between the United States and the
Soviet Union with regard to four critical
areas: bilateral affairs, regional conflicts,
human rights, and arms control. On
arms control, the United States wanted
to discuss a wide range of topics, includ-
ing nuclear testing, strategic and
intermediate-range nuclear weapons,
and conventional and chemical weapons.
In the end, the most progress was made
in the area of intermediate-range nuclear
forces (INF). Even here, two formidable
issues remain to be resolved before an
agreement becomes possible— effective
verification and global limits with equal
deployment rights for shorter range INF
(SRINF) missiles.
Before I discuss the newest
developments in arms control, let me
elaborate on why we attach so much
importance to the first three "pillars" of
the U.S. -Soviet relationship. A single
sentence that comes closest to sum-
marizing these thoughts is one that
President Reagan often has articulated:
nations do not distrust one another
because they have weapons; they have
weapons because they distrust one
another. An arms control agreement will
not ensure that we will have better rela-
tions. On the other hand, better relations
will make the chances of achieving and
keeping an arms control agreement
much better.
"Four Pillars" of
U.S.-Soviet Relations
This year marks the 70th anniversary of
Lenin's rise to power and the establish-
ment of the first modern totalitarian
regime. Seven decades of devastating
experience have taught the free world
that there is no realistic way to seek to
deal with any important aspect of inter-
national relations with the Soviet state
without taking into account the entire
spectrum of the attitudes and behavior
of its Leninist leadership.
Thus, in seeking better U.S.-Soviet
bilateral relations that would approx-
imate the norms generally observed
between civilized states, we must never
lose sight of the goals and methods of
their leadership. The Soviets' no-holds-
barred espionage efforts against our
Embassy is a hard but much-needed
lesson that not much change has taken
place in the Soviet Union. And, as was
evident in Secretary Shultz's recent trip
to Moscow, Soviet diplomatic style still
displays a Leninist edge.
As examples, the Soviet Foreign
Minister's spokesman suggested that
Secretary Shultz had perhaps not been
authorized to conduct serious business in
Moscow. The Soviets also censored a
small portion of the Secretary's remarks
as he was being interviewed on a live
Soviet television broadcast. As the
Secretary spoke of the Soviet military
occupation of Afghanistan, the Soviet
interpreters abruptly stopped translating
his words into Russian.
While the Secretary enjoyed an
unparalleled opportunity to address
directly the Soviet people, the partial
censorship of his remarks about Afghan-
istan, of course, also dramatizes the
Soviet leadership's attitude on fun-
damental rights and freedoms. The
media in the Soviet Union are not indt
pendent as they are in the United
States; they are organs of the state.
Dissemination of private publications c i
be treated as a crime which carries a
heavy prison sentence. Obviously, the
Soviet regime cannot enhance its
credibility with us when it suppresses
the truth and propagates lies to its
people.
To put matters in perspective, I
should acknowledge that Soviet viewei
were allowed to hear some uncensored
remarks by Secretary Shultz that
departed quite dramatically from the
usual fare in the Soviet media. The fac
that the Secretary was allowed to talk,
directly to the Soviet people for 30
minutes on their television is an exami
of General Secretary Gorbachev's
recently launched campaign of gla^nos\
or openness. Since last fall, some of th
gestures of glasnost have included the
release of more than 100 prisoners of
conscience from incarceration or exile
including such courageous defenders |
human rights as Andrey Sakharov, la
Ratushinskaya, and Sergey KhodoroVi
Repression of free expression in the a
and in literature is also being somewW
loosened.
We can only hope that Mikhail Go:
bachev's glasnost signals the beginninj
of a much greater easing of repressioi
the Soviet Union. But they have a Ion]
long way to go. At this early stage we
cannot with any prudence urge anyon(
to expect far-reaching reforms. The
actions we have seen so far, welcome !-
they are, do not challenge the basic
structure of the Soviet system. The lav
regulations, and secret police practices
that send prisoners of conscience to th»
gulag have not been changed. Further-
more, the religious or political prisone)
released were pressured to sign state-
ments admitting that their activities b
been "illegal." Stern antireligious laws
remain in force, abuse of psychiatry cc
tinues, and bans on private organizatic i
and independently published news and
literature are still in effect. The one-
party system and the central power of
the KGB remain intact.
True Openness: A Key
to Confidence in Agreements
I believe the most constructive stance
that Westerners can take toward Gor-
bachev's glasnost would be to acknowl-
edge it but not to praise too profusely
what is, thus far, a very modest accom
•
^aaatlaaai^^m^i^i
ARMS CONTROL
ishment. It would be premature and
lite detrimental to Western security
ir us to make economic or military con-
!Ssions to the Soviet state on the sup-
jsition that this would encourage more
jpenness." I know from long experi-
ice that the Soviets simply do not act
lat way. I agree with Irina Ratushin-
;aya who says "democratization" in the
.S.S.R. should be judged credible only
hen:
• All political prisoners are freed
id the laws through which they had
;en punished repealed;
• Freedom of the press and speech
guaranteed; and
• Soviet borders are opened to
avel by Soviet citizens.
I The need for the West to encourage
ue reform of the Soviet system has
, ore than merely moralistic implica-
)ns. Andrey Sakharov remarked wdth
I 'eat insight:
I i long as a country has no civil liberty, no
iedom of information, no independent press
1 B wrote], then there exists no effective body
public opinion to control the conduct of the
vernment and its functionaries. Such a
uation is not just a misfortune for citizens
protected against tyranny and lawlessness;
is a menace to international security.
As a longtime student of the Soviet
nion and a specialist in arms control, I
n attest that if truly profound open-
gs in the Soviet system were to come
lOut, our confidence in Soviet com-
iance with arms control agreements
Duld become greater. The Soviets can
rify our compliance with agreements
■ry simply because of the openness of
ir government, our economy, and vir-
ally every other element of our soci-
y. The Soviet system offers no such
herent means for penetrating or
•eventing strategic deception by its
talitarian regime.
jviet Expansionism's
Dnventional Wars
le third topic that must be taken into
I -count in our relationship with the
Dviet Union is its role in the world's
i-called regional conflicts, where the
jople in a number of formerly non-
igned countries are struggling to
!gain their freedom from communist
ctators. These beleaguered nations
iclude Afghanistan, Cambodia, Angola,
id Nicaragua. In Angola and Nicara-
ua, the Soviets and their Cuban proxies
ave been pouring heavy amounts of
lilitary assistance into the communist
^gimes' efforts to crush popular
resistance and consolidate their power.
In Cambodia, the Soviet Union is heavily
subsidizing Vietnam's military occupa-
tion. But the most chilling example is
Afghanistan, where the Soviet Army
itself is waging a furious war against
civilians and armed freedom fighters.
For more than 7 years, the Red
Army has occupied Afghanistan. Over
115,000 Soviet troops are in the country.
Out of the prewar Afghan population of
some 15 million, an estimated 4 million
have fled to neighboring lands.
Thousands of Afghan civilians have
perished from aerial bombings and sum-
mary executions by Soviet forces and
agents of the Soviets' puppet govern-
ment in Kabul.
The Soviet war against Afghanistan
presents a daunting example of the
power of Soviet conventional and
chemical forces and the unscrupulous
manner in which the Red Army is willing
to use them. According to reports by
international human rights observers
and a special rapporteur appointed by
the United Nations, Soviet forces in
Afghanistan have violated the 1949
Geneva conventions and international
law which proscribe murder, mutilation,
and the massive use of antipersonnel
weapons. The Soviets have also violated
the 1925 Geneva protocol by the use of
chemical weapons in Afghanistan. More-
over, according to the the annual report
of the Assistant Secretary of State for
Human Rights and Humanitarian
Affairs, the Soviets have practiced tor-
ture in violation of the International
Covenant on Civil and Political Rights.
Outlook for Reducing Nuclear Arms
For 6 years now, President Reagan has
responded to Soviet arms control prop-
aganda with patience and strength. His
steadfast approach now has brought us
close to concluding an agreement for
deep reductions in intermediate-range
nuclear forces. Last Thursday, April 23,
negotiators resumed work in Geneva
that could, if the Soviets are serious,
result in a verifiable treaty on INF. We
have indicated we could sign a treaty, as
an interim step, which embodies the
Reykjavik formula of reducing U.S. and
Soviet longer range INF (LRINF) mis-
sile warheads to a global limit of 100
warheads, wdth none in Europe. Those
remaining would be deployed in the
United States and Soviet Asia.
Our final goal, however, remains the
complete global elimination of all LRINF
systems. Since weapons of this class are
easily moved, their complete elimination
will aid in ensuring effective verification.
Together with our allies in Europe
and Asia we are studying the new Soviet
offer presented in Moscow on shorter
range INF missiles. It may be that we
decide it would be best to retain small,
equal numbers of residual SRINF
weapons. Or we may decide they should
be eliminated altogether, both in Europe
and in Asia. As with LRINF, the U.S.
principles for dealing with SRINF
include globality and equality. These
principles are cornerstones of our
negotiating position, and the United
States will not deviate from them.
While we welcome any reductions of
intermediate-range missiles. Western
security requires that we make progress
in reducing other weapons as well, both
at the strategic and conventional/
chemical warfare ends of the spectrum.
Since his Eureka speech in 1982, Presi-
dent Reagan has been repeating his call
for deep, equitable, and verifiable reduc-
tions of strategic offensive arms.
Finally, in 1985, at the Geneva summit.
General Secretary Gorbachev agreed to
seek reductions of these weapons by
50%. Last year at Reykjavik a formula
was found for doing this which formed a
basis acceptable to both sides. It, too,
reflects the merits of the President's
steadfast approach. What is necessary
now is to push on toward agreement on
other elements of an accord— partic-
ularly sublimits on particularly
dangerous missiles and verification
measures— that would make the agree-
ment truly stabilizing and verifiable.
Earlier this month, in Prague, Gor-
bachev said the reduction of strategic
arms was of paramount importance and
called it "the root problem" of arms con-
trol. Yet, when he met a few days later
with Secretary Shultz, he refused to
drop his insistence that any reduction in
offensive arms be linked to unreasonable
restrictions on testing and development
of strategic defenses. These constraints
are not acceptable because they would
cripple the U.S. Strategic Defense
Initiative (SDI), our hope for a more
stable deterrent which uses defensive
systems. We need to challenge the
Soviet leaders to get at the "root prob-
lem," the high levels of devastating
weapons targeted against one another.
We also need to get the Soviets to
deal rapidly and positively with conven-
tional imbalances and a verifiable ban on
chemical weapons. As we move to
reduce nuclear weapons, we do not want
to make the world "safe" for aggression
or intimidation based on Soviet conven-
tional superiority.
ajlv 1Qfl7
23
ARMS CONTROL
While we welcome reductions of
LRINF and SRINF missiles, we should
not be deluded into thinking that this
precludes the need to reduce the central
strategic and the conventional/chemical
weapons threats as well. There is no
objective reason why progress in these
areas should not keep pace with progress
in the INF area. We must press the
Soviets to make progress across the
board.
Verification will be our other major
concern. It remains the Achilles' heel of
any arms control agreement. This is not
for lack of talent and resources in
verification on the U.S. side— I have the
highest respect for the professionalism
and effectiveness of our officials respon-
sible for monitoring Soviet activities.
The concern stems from a realistic look
at 70 years of the closed nature of the
Soviet Union. This concern also stems from
examples of internal repression, external
aggression, and disregard for interna-
tional law which I detailed earlier.
The President recognizes that the
Soviets are masterful at llth-hour
negotiations. If we allow them, they will
put off agreeing to the details of
verification until the last minute. We
must not permit a natural desire to
reach an agreement to tempt us to take
unwarranted risks with our national secu-
rity. For this reason we will continue
to insist that verification measures be
negotiated concurrently with other
aspects of the agreement.
Putting Competitive Advantage
to Work for Western Security
Barring a profound and unexpected
transformation of the Soviet system.
Western confidence in new arms control
agreements will have to be based not on
trusting the Soviets but on trusting our
own strength. The freedom of the
Western democracies gives us tremen-
dous competitive advantages over the
stultified societies and stagnant
economies of the Soviet empire. If we
muster the full strength of our
technological prowess, our political will,
and— not least— our moral fiber, we can
begin to make our defenses even
stronger with less reliance on nuclear
weapons. I would like to focus on three
applications for these strengths.
• One is to complete our program of
modernizing our arsenal. We need to
complete the deployment of the full 100
Peacekeeper missiles, complete our sub-
marine Trident D-5 program, and
develop and deploy heavy bombers and
cruise missiles emphasizing stealth
technology.
• A second challenge is to proceed
wdth President Reagan's Strategic
Defense Initiative, toward a defense-
dominant deterrence with less reliance
on the threat of offensive ballistic
missiles. The SDI program is founded on
the moral and practical sense that while
deterrence based on the threat of retalia-
tion is necessary today, we can and
should seek to move to a safer world in
the future. Because they are fast-flying,
nonrecallable systems, ballistic missiles
are more destabilizing than other stra-
tegic systems. SDI offers great promise
toward supplanting these systems as the
cent/al factor in the strategic balance
between the United States and the
U.S.S.R. By pursuing SDI, we can
enhance U.S. and allied security by rely-
ing increasingly on defensive rather than
offensive deterrence.
• Third, and analogous to SDI, I
urge that the West apply its techno-
logical advantage to more vigorous pur-
suit of improved conventional defenses.
The Warsaw Pact now holds a numerical
advantage in a number of categories of
conventional weapons and qualitative
superiority in a few such categories.
There is no reason this imbalance should
be permanent.
Just as the Soviets want to prevent
the full application of Western techno-
logical prowess to strategic defenses,
they also have good reasons to respect
the ability of Western scientists to
exploit technology for conventional
defenses. The leading military thinkers
of the Soviet Union, including Marshal
Ogarkov, former chief of the Soviet
General Staff, have clearly seen that
emerging technologies will change the
way war may be fought in the future.
They are uneasy in realizing that the
free exchange of ideas and the mobility
of capital and skilled labor found only in
the industrialized free world make it
extremely difficult for the Soviets to
compete with us in the development of
technology.
I support completely one of Secre-
tary Weinberger's major themes, what
he calls "competitive strategies." This
theme involves the will to make the com-
ing era of rapid technological change
work to our advantage.
Thinking and acting confidently
upon our competitive advantages is not
merely a slogan. By no means is it
simply an abstraction. After all, I see in
front of me tonight several hundred of
the proudest young competitors in
uniform. The time now is very short
before you will begin your service as
officers in the U.S. Air Force. If you put
your talent and courage to work to thi
fullest, I know that the cause of peace
and true arms control can be advancei
with no weakening of our nation's
defenses.
Finally, we should do some clear
thinking about arms control. We shou
welcome any progress the Soviets are
willing to make in the reduction of
longer range and shorter range INF
weapons. We should not assume that
this is inevitable. Much hard negotiati ;
remains ahead of us, especially in
insisting that the Soviets agree in
writing to their oral statements regar
ing verification. But we should not be
satified with progress in this field aloi
We must insist that progress is made
the reduction of strategic weapons, th
correction of imbalances in conventioi
weapons, and a ban on chemical
weapons. Only then can we say we ari
doing everything we can to create a
more stable deterrence and a safer
world. ■
Nuclear and Space
Arms Talks Open
Round Eight
PRESIDENT'S STATEMENT.
MAY 4, 1987'
Since the early days of my Admini-
stration, our number one arms contrc
objective has been the achievement o:
significant and verifiable reductions c
offensive nuclear forces, particularly e
most destabilizing weapons— fast-flyii
ballistic missiles.
I have directed our U.S. START
[strategic arms reduction talks]
negotiator [Ambassador Ronald F.
Lehman II] to intensify efforts to reai
agreement on reducing strategic offe
sive nuclear arms by 50%. Toward th
end, the United States will shortly tal i
a draft START treaty text. This text D
reflect the basic agreements on stratt ic
arms reductions reached by General
Secretary Gorbachev and myself in o
meeting at Reykjavik last October. It
will be responsible as well to Soviet c< -
cerns expressed subsequent to Reykjj li
and will provide ample basis for the c a
tion of a fair and durable START
agreement. ■
Tomorrow marks the opening in
Geneva of the eighth round in our
negotiations with the Soviet Union or
strateg^ic arms reductions and strateg
^
24
nonartmont nf Qtoto Riill
ARMS CONTROL
lefense issues. With the negotiations on
ntermediate-range nuclear forces (INF)
laving resumed on April 23, all three
legotiating groups of the nuclear and
space talks will now be underway.
We have made great progress in
5TART. I am firmly convinced that a
5TART agreement is within our grasp,
'ven this year, if the Soviets are
)repared to resolve the remaining
lutstanding issues. And most important
miong these issues is the need, for the
lurpDse of ensuring strategic stability,
, place sublimits on ballistic missile
Warheads.
We will likewise be making a new
move in the defense and space area. Our
negotiators return to Geneva ready to
Dlace on the negotiating table the new
U.S. proposal which Secretary Shultz
liscussed during his Moscow meetings.
This new proposal incorporates the
ollowing elements.
1 • Both the United States and the
'■ 50viet Union would commit through
994 not to withdraw from the Anti-
)allistic Missile Treaty.
• This commitment would be con-
' ingent on implementation of agreed
5TART reductions, i.e., 50% cuts to
qual levels of 1,600 strategic nuclear
lelivery vehicles and 6,000 warheads,
vith appropriate sublimits, over 7 years
'rem entry into force of a START
igreement.
• The agreement would not alter the
lovereign rights of the parties under
ustomary international law to withdraw
n the event of material breach of the
igreement or jeopardy to their supreme
nterests.
• After 1994 either side could
ieploy defensive systems of its choosing,
inless mutually agreed otherwise.
• To build mutual confidence by fur-
her enhancing predictability in the area
)f strategic defense, and in response to
stated Soviet concerns, we are also pro-
)osing that the United States and the
soviet Union annually exchange data on
;heir planned strategic defense activi-
;ies. We also seek to have the United
States and U.S.S.R. carry out reciprocal
Driefings on their respective strategic
iefense efforts and visits to associated
■•esearch facilities, as we have proposed
,in our open laboratories initiative. In
j addition, we have proposed establishing
^ mutually agreed procedures for
reciprocal observation of strategic
defense testing.
Since the April 23 opening of the INF
'negotiations in Geneva, there have been
some new developments in these talks.
Last week, the Soviet Union presented a
detailed draft INF treaty text which now
joins our own draft text on the
negotiating table. We are studying
carefully the Soviet proposal and
requesting the Soviets to clarify some
important points in their text.
The Soviet proposal appears to
reflect the agreements General
Secretary Gorbachev and I made at
Reykjavik on longer range INF (LRINF)
missile limits and to accept the principle
of global equality between our two coun-
tries in regard to shorter range INF
(SRINF) missile systems.
Nevertheless, important issues
remain to be resolved before an INF
agreement can be concluded, including
verification and shorter range INF
missiles. Verification is a particularly
crucial issue. While the Soviet draft indi-
cates that they will seek agreement in
some basic areas which we require for
effective verification, they have yet to
provide the all-important details which
U.S. -Soviet Nuclear
and Space Arms Negotiations
PRESIDENT'S STATEMENT,
MAY 8, 1987'
I have directed the U.S. START
[strategic arms reduction talks] negoti-
ator in the nuclear and space talks in
Geneva to present to the Soviet Union at
today's meeting of the START negotiat-
ing group a draft treaty which provides
for 50% reductions in U.S. and Soviet
strategic offensive nuclear arms. The
text of the U.S. draft treaty reflects the
basic areas of agreement on strategic
arms reduction General Secretary Gor-
bachev and I reached at our meeting at
Reykjavik last October.
Our draft treaty provides for both
sides to reduce to 1,600 strategic nuclear
delivery vehicles and 6,000 warheads,
with appropriate sublimits, over a period
of 7 years after such a treaty enters into
force. It provides a solid basis for the
creation of a fair and durable agreement.
The United States proposal, in addi-
tion to the overall limits, provides for
specific restrictions on the most
destabilizing and dangerous nuclear
systems— above all, fast-flying ballistic
missiles. It includes detailed rules
designed to eliminate any ambiguity as
to what is agreed, and extensive verifica-
tion provisions designed to ensure that
each side can be confident that the other
is complying fully with the agreement.
The treaty is the result of intensive work
by all appropriate agencies of the U.S.
Government. I have reviewed the treaty,
and it has my approval.
By tabling this text, the United
States seeks to build on the significant
progress made in START and to provide
a vehicle for resolving the remaining dif-
ferences. If the Soviets are prepared to
work with us on the remaining outstand-
ing issues, especially the need— for the
purpose of ensuring strategic stability—
for sublimits on ballistic missile
warheads, we will be able to take a
significant step toward a safer and more
stable world.
While tabling this treaty is an
important indication of our desire to
achieve deep, equitable, and verifiable
strategic arms reductions as soon as
possible, I do not wish to minimize the
difficult issues which remain to be
resolved, particularly Soviet insistence
on linking a START agreement to
measures which, if accepted by the
United States, would seriously contain
SDI [Strategic Defense Initiative]. This
is unacceptable. I cannot and I will not
accept any measures which would cripple
or kill our SDI program. In view of the
continuing Soviet offensive buildup, com-
bined with the longstanding Soviet ac-
tivities in strategic defense, the SDI pro-
gram is vital to the future security of the
United States and our allies.
As we begin detailed discussion of
our proposed treaty with the Soviets, we
are resolved to do our part to bring
about, for the first time in history, real
reductions in strategic offensive arms. I
hope the Soviets will demonstrate
similar determination and work with us
on the basis of our draft treaty to
translate the areas of agreement reach-
ed at Reykjavik into concrete reductions.
'Text from Weekly Compilation of
Presidential Documents of May 11, 1987.
LJnlu_1Qft7
25
ARMS CONTROL
are essential to working out an effective
verification regime. In addition, they
have not met our requirements for
inspection of sites suspected of violations
of an INF agreement.
Another major issue is that of
shorter range INF missile systems. We
and our allies continue to insist that an
agreement on these systems must be
bilateral in nature, global in scope, con-
current with an initial INF treaty, and
effectively verifiable. In addition, Soviet
efforts to include the missiles of any
country other than the United States
and U.S.S.R. are patently unacceptable.
We are continuing our close consulta-
tions with our allies in Europe and Asia
on SRINF and other INF issues.
Our negotiators in Geneva— led by
Ambassadors Max Kampelman, Mike
Glitman, and Ron Lehman— have done
an excellent job, and they continue to
have very full agendas. We are well
prepared for hard bargaining, and we
are resolved to do our part to bring
about— for the first time in history-
actual reductions in nuclear weapons. It
is up to the Soviets now to demonstrate
similar determination to move ahead on
these important issues.
Despite all the progress that has
been made in Geneva, there are events
occurring right here at home which could
destroy the groundwork which we have
laid so carefully in bringing the Soviets
back to the negotiating table and getting
them to negotiate seriously for the first
time on deep reductions in our respec-
tive nuclear arsenals. An effort has been
made by some members of the House of
Representatives to attach to the Defense
Authorization Bill amendments on arms
control which would pull the rug out
from under our negotiators and under-
mine our most vital defense programs-
such as our Strategic Defense Initiative.
And now it seems that some Senators
want to move in the same direction.
Let there be no mistake about it: I
will veto any bill which cuts back our
ability to defend ourselves and leaves the
Soviet Union free to continue its military
buildup.
The United States remains fully
committed to achieving deep, equitable,
verifiable, and stabilizing reductions in
the U.S. and Soviet nuclear arsenals.
AMBASSADOR KAMPELMAN'S
STATEMENT,
MAY 4, 1987^
Round eight of the nuclear and space
talks begins tomorrow. The U.S. delega-
tion comes to Geneva confident that our
work during the past 26 months has
been useful and important. We believe
that significant progress toward historic
arms reduction agreements can be made
during this round.
The April 13-15 meetings between
Secretary Shultz and Foreign Minister
Shevardnadze have given significant
impetus to our work here, just as have
the November 1985 and the October
1986 meetings in Geneva and Reykjavik
between President Reagan and General
Secretary Gorbachev.
The INF negotiating group has been
meeting under an accelerated schedule.
These talks continued in special session
for 2 weeks following the end of round
seven and began here again on April 23.
We submitted a draft INF treaty at the
end of the last round, and the Soviets
have given us their version in recent
days. We are pleased that these talks
have progressed to the stage of treaty-
drafting. Much hard and painstaking
work remains to be done. Ambassador
Glitman and his group are prepared for
it. Important issues have still to be
resolved. They should not be under-
estimated. But we are committed to find
solutions to these problems that are
verifiable, deeply signifcant, and stabiliz-
ing. Our own security and that of our
allies and friends are very much in the
forefront of our objectives.
It is also appropriate here to empha-
size an additional major goal toward
which the American delegation will
strive during this round. The United
States attaches the highest importance
to achieving a treaty providing for
drastic 50% reductions in U.S. and
Soviet strategic arms, a goal agreed
upon at Reykjavik and again reaffirmed
at the recent Moscow meeting. Such
major reductions, carried out in a
stabilizing manner, including appropriate
sublimits, would significantly enhance
the security of both sides. The strategic
stability that would result would benefit
the whole world. Agreeing on these
reductions remains, therefore, a top
priority of the United States in these
negotiations and in this round. Note-
worthy progress has been made in the
last year. Ambassador Lehman is deter
mined to press forward in these STAR'!
talks. We see no reason to hold them
hostage to any other results in these
negotiations. We are, therefore, prepar
ing and will shortly table a draft treaty
to expedite movement in these
negotiations.
In the defense and space negotiatin
area, the United States is aware that
both we and the Soviet Union are
actively engaged in extensive research
and exploration to strengthen our
respective defenses against nuclear
missiles. The Soviet Union, as is well
known, has always put heavy emphasis
on defense. Our task here in Geneva is
seek a cooperative transition from an
offense-dominant military structure in
the world toward a defense-dominant
structure. A cooperative approach
toward this task will help assure that tl
transition is a stabilizing one.
In sum, we have every expectation
that this can be a fruitful round, pro-
vided there is genuine effort on both
sides. The United States intends to mal
such an effort. We have every reason t(
hope that we will be matched by the
Soviet delegation in that effort.
'Text from Weekly Compilation of
Presidential Documents of May 11, 1987.
^Max M. Kampelman is head of the U.S,
delegation to the nuclear and space arms
talks and U.S. negotiator at the defense and
space talks. ■
26
nonartmont ^« g»-.t^ P,,llot-
ARMS CONTROL
J.S. Arms Control Initiatives: An Update
n conjunction with the ongoing nuclear
nd space talks (NST) in Geneva between
he United States and the Soviet Union,
s well as other current arms control
egotiations, the Administration
eleased on June 1, 1987, the following
iimmary of the most recent U.S.
iitiatives on various arms control
isues and a chronology of U.S. -Soviet
rms control negotiations and expert-
wel meetings in 1986 and to date in
987.
trategic Offensive Forces
'n May 8, 1987, the United States
ibled at the nuclear and space talks in
eneva a draft START [strategic arms
eduction talks] treaty text which pro-
ides for 50% reductions in U.S. and
oviet strategic offensive nuclear arms,
he draft treaty, which reflects the basic
'eas of agreement on strategic arms
eductions reached by President Reagan
id General Secretary Gorbachev at
eykjavik last October, provides for 50%
iductions by both sides to 1,600
rategic nuclear delivery vehicles and
000 warheads, with appropriate
iblimits, over a period of 7 years after
ich a treaty enters into force.
The U.S. draft treaty, in addition to
16 overall limits, provides for specific
;strictions on the most destabilizing
id dangerous nuclear systems— fast fly-
ig ballistic missiles, particularly the
oviet heavy intercontinental ballistic
lissiles (ICBMs). To this end, we have
roposed limits and sublimits on ballistic
lissile warheads, missile throw- weights,
nd heavy ICBMs. Our proposal also
icludes detailed rules designed to
liminate any ambiguity as to what is
greed, and extensive verification
revisions— including onsite inspec-
;on— designed to ensure that each side
an be confident that the other is com-
lying fully with the agreement.
By tabling this draft treaty, the
Inited States seeks to build on the
ignificant progress made in START and
provide a vehicle for resolving the
emaining outstanding issues, especially
he need— for the purpose of ensuring
trategic stability— for sublimits on
lallistic missile warheads. Unfortu-
lately, progress has been delayed by
ioviet insistence on linking a START
-greement to measures which would
■ffectively end the Strategic Defense
nitiative (SDI). The United States will
not accept any measures which would
cripple or kill the SDI program. Due to
the promise it holds for a safer means of
deterrence, the SDI program is vital to
the future security of the United States
and its allies.
The United States believes that the
draft START treaty provides a solid
basis for the creation of a fair and
durable agreement to bring about— for
the first time in history— deep reductions
in the strategic nuclear arsenals of the
United States and the U.S.S.R. The
United States is ready to do its part to
achieve such an agreement and hopes
the Soviets will demonstrate similar
determination.
Intermediate-Range
Nuclear Forces (INF)
Western determination to adhere to
NATO's 1979 "dual track" decision in
response to Soviet deployment of SS-20s
is now paying off. NATO's resolve to
redress the INF imbalance through
deployment of U.S. longer range INF
(LRINF) missiles, while seeking to
negotiate with the Soviets to reach an
INF balance at the lowest possible level,
has brought us to the point where pros-
pects for a U.S. -Soviet agreement for
significant reductions in INF missiles
are bright.
On March 4, 1987, the United States
tabled a draft INF treaty text at the
NST talks in Geneva. The basic struc-
ture of an INF agreement— the nature
and level of LRINF missile reductions-
had been agreed upon by President
Reagan and General Secretary Gorbachev
last October at Reykjavik and is
reflected in the draft U.S. treaty text.
This calls for reductions to an interim
global ceiling of 100 warheads each on
LRINF missiles on U.S. and Soviet ter-
ritory, with none in Europe. The United
States and our NATO allies continue,
however, to prefer a zero LRINF missile
outcome— the global elimination of this
entire class of missiles— and will con-
tinue to press the Soviet Union to drop
its insistence on retaining the remaining
LRINF missiles.
In response, the Soviet Union tabled
on April 27 its draft INF treaty which
reflects the basic agreements on LRINF
issues made at Reykjavik. A number of
key issues remain to be resolved. The
most important of these issues is
verification. Any INF agreement must
be effectively verifiable if it is to
enhance stability and increase the secu-
rity of the United States and its allies.
The United States has proposed a com-
prehensive verification regime to
enhance compliance. The Soviets have
noted that they will be seeking verifica-
tion in some of the basic areas which we
require, which Mr. Gorbachev accepted
in principle at Reykjavik. These include,
for example, data exchange, onsite
observation of destruction, and effective
monitoring of remaining LRINF inven-
tories and associated facilities, including
onsite inspection. However, they have
yet to provide the needed details.
Another major issue concerns
shorter range INF (SRINF) missile
systems. We and our allies continue to
insist that an agreement on these
systems must be bilateral in nature, con-
current with an initial INF treaty, effec-
tively verifiable, and provide for global
equality. Soviet efforts to include the
systems of any country other than the
United States and the U.S.S.R. in an
INF agreement are unacceptable.
Resolution of these and other out-
standing issues will demand considerable
hard bargaining. The United States con-
tinues to do its part to resolve these
issues and move forward toward an INF
agreement. It is up to the Soviet Union
to show the same commitment to real
progress.
Defense and Space Issues
During Secretary Shultz's April 1987
meetings in Moscow and subsequently at
the NST talks in Geneva, the United
States made a new proposal on defense
and space issues. This new proposal
incorporates the following elements.
• Both the United States and the
Soviet Union would commit through
1994 not to vidthdraw from the Anti-
Ballistic Missile Treaty.
• This commitment would be con-
tingent on implementation of agreed
START reductions, i.e., 50% cuts to
equal levels of 1,600 strategic nuclear
delivery vehicles and 6,000 warheads,
with appropriate sublimits.
• The agreement would not alter the
sovereign rights of the parties under
customary international law to withdraw
in the event of material breach of the
agreement or jeopardy to their supreme
interests.
• After 1994, either side could
deploy defensive systems of its choosing,
unless mutually agreed otherwise.
'du_1QQ7
27
ARMS CONTROL
To build mutual confidence by fur-
ther enhancing predictability in the area
of strategic defense, and in response to
stated Soviet concerns, the United
States also proposed that the United
States and the Soviet Union annually
exchange data on their planned strategic
defense activities. In addition, we seek
to have the United States and the
U.S.S.R. carry out reciprocal briefings
on their respective strategic defense
efforts and visits to associated research
facilities, as we have proposed in our
Open Laboratories Initiative. Finally, we
have proposed establishing mutually
agreed procedures for reciprocal obser-
vation of strategic defense testing.
Chemical Weapons (CW)
In April 1984, the United States tabled
at the 40-nation Conference on Disarma-
ment in Geneva a comprehensive treaty
banning development, production, use,
transfer, and stockpiling of chemical
weapons to be verified by various means,
including prompt mandatory onsite
challenge inspection. At the November
1985 Geneva summit. President Reagan
and General Secretary Gorbachev
agreed to intensify bilateral discussions
on all aspects of a comprehensive, global
chemical weapons ban including; verifica-
tion. Since then, we have held five
rounds of bilateral CW treaty talks. A
sixth round is anticipated in the summer
of 1987.
Although the bilateral treaty discus-
sions have narrowed some differences,
and the Soviets finally admitted in
March 1987 that they possess chemical
weapons, important differences remain
on a number of key issues. For example,
on the crucial issue of verification of
treaty compliance, the United States
calls for mandatory "challenge inspec-
tions" to investigate suspected viola-
tions. The Soviets still insist that accept-
ance of challenge inspection be
voluntary. Although they recently
indicated that mandatory challenge
inspection procedures could apply to cer-
tain limited cases, they continue to insist
on a right of refusal that would weaken
a CW convention and increase the
possibility for cheating.
In addition to treaty discussions, we
are working with allies and other friendly
countries and with the Soviets on pre-
venting the proliferation of chemical
weapons. Primarily in response to the
continuing use of chemical weapons in
the Iran-Iraq war, the United States and
17 other Western industrialized coun-
tries have been consulting since 1985 to
harmonize export controls on CW-
related commodities and to develop
other mechanisms to curb the illegal use
of chemical weapons and their dangerous
spread to other countries. Also, in the
two bilateral meetings with the Soviets
in 1986, we reviewed export controls
and political steps to limit the spread of
chemical weapons.
Nuclear Testing
The United States is fully committed to
seeking effective and verifiable
agreements with the Soviet Union on
nuclear testing limitations. To this end,
the President has proposed a practical,
step-by-step process. He has proposed
that the United States and U.S.S.R.
begin negotiations on nuclear testing.
The agenda for these negotiations would
first be to improve verification provi-
sions of the existing Threshold Test Ban
Treaty and Peaceful Nuclear Explosions
Treaty. Once these verification concerns
had been satisfied and the treaties
ratified, the United States and U.S.S.R.
would immediately engage in negotia-
tions on ways to implement a step-by-
step parallel program— in association
with a program to reduce and ultimately
eliminate all nuclear weapons— of
limiting and ultimately ending nuclear
testing.
The United States has made con-
crete, practical proposals to make prog-
ress on nuclear testing limitations. In
July 1985, the President invited Soviet
experts to come to the U.S. test site to
measure the yield of a U.S. test, bring-
ing with them whatever equipment they
deemed necessary. In December 1985,
he proposed a meeting of official U.S.
and Soviet technical experts to discuss
verification. In March 1986, he invited
Soviet experts to come to Nevada to
examine the CORRTEX [Continuous
Reflectrometry for Radius versus Time
Experiment] method for yield measure-
ment, to receive a demonstration of the
CORRTEX system, and to measure a
U.S. test.
Finally, in the summer of 1986, the
Soviets agreed to have experts from
both sides meet to discuss without
preconditions the broad range of nuclear
testing issues. The experts met in
Geneva in July, September, and
November 1986, and January and May
1987. Discussions have focused on
verification techniques— CORRTEX in
particular— as well as the agenda for for-
mal testing negotiations. During
Secretary Shultz's April trip to Moscow,
he and Soviet Foreign Minister Shevard-
nadze agreed that the experts should
explore joint verification activities which
might help evaluate the effectiveness of
verification techniques.
:
Conference on Confidence-
and Security-Building Measures
and Disarmament in Europe (CDE)
The 35-nation Stockholm CDE con-
ference adjourned September 22, 1986,
with the adoption of a set of concrete
measures designed to increase opennesi
and predictability of military activities i
Europe. These measures, which are bui
around NATO proposals, provide for
prior notification of all military activitie
above a threshold of 13,000 troops or
300 tanks, observation of military activ
ities above a threshold of 17,000 troops
and annual forecasts of upcoming
military activities. The accord also con-
tains provisions for onsite air and
ground inspections for verification.
Although modest in scope, these provi-
sions are the first time the Soviet Unio;
has agreed to inspection on its own ter-
ritory for verification of an internations
security accord.
Bilateral Confidence-
Building Measures
On May 4, 1987, U.S. and Soviet negot
ators reached agreement on a draft joii
text to establish Nuclear Risk Reductio
Centers in their respective capitals. Th
agreement, which is the direct result oi
U.S. initiative, is a practical measure
that will strengthen international secu-
rity by reducing the risk of conflict
between the United States and the
Soviet Union that might result from
accident, misinterpretation, or miscalcU
lation. The centers would play a role ini
exchanging information and notificatioir
required under existing and possible
future arms control and confidence-
building measures agreements.
Mutual and Balanced
Force Reductions
On December 5, 1985, NATO tabled a
new initiative designed to meet Easteri"
concerns. The proposal deferred the
Western demand for data agreement oi
current forces prior to treaty signature
The Soviets had claimed that this
Western demand was the primary
roadblock to agreement. The proposal
also called for a time-limited, first phaS'
withdrawal of 5,000 U.S. and 11,500
Soviet troops, followed by a 3-year,
no-increase commitment by all parties
with forces in the zone, during which
residual force levels would be verified
through national technical means, agret
entry/exit points, data exchange, and 3i
annual onsite inspections. Thus far, the
Soviets have not responded construc-
tively to the Western initiative.
^^ttiMiiMliiiliil
ARMS CONTROL
lATO High-Level Task Force on
lonventional Arms Control
'his task force presented its report on
18 direction of NATO's conventional
rms control policy to the North Atlantic
ouncil on December 11, 1986. At that
leeting, NATO ministers produced the
Brussels declaration," which states
lATO's readiness to enter into new
egotiations with the Warsaw Pact
imed at establishing a "verifiable, com-
rehensive and stable balance of conven-
onal forces at lower levels" in the
hole of Europe from the Atlantic to the
rals. NATO began discussions in
ebruary 1987 to develop a mandate for
ew negotiations. The Brussels declara-
on also calls for separate negotiations
I build upon and expand the results of
le CDE.
Nuclear Non-Proliferation Treaty
On December 15-18, 1986, the United
States and the Soviet Union met in
Washington for the eighth round in an
ongoing series of consultations, which
began in December 1982, on nuclear
nonproliferation. These consultations
covered a wide range of issues, including
prospects for strengthening the interna-
tional nonproliferation regime, support
for the nuclear Non-Proliferation Treaty,
and the mutual desire of the United
States and the U.S.S.R. to strengthen
the International Atomic Energy
Agency. These consultations are not
negotiations but, rather, discussions to
review various issues of common con-
cern. The United States and the Soviet
Union share a strong interest in prevent-
ing the dangerous spread of nuclear
weapons and have agreed to use these
consultations as a forum for discussion
and exchange of views.
hronology: January 1 , 1986-June 1 , 1987
.S.-SOVIET ARMS
ONTROL NEGOTIATIONS
Wclear and Space Talks
ound IV: January 16-March 4, 1986
ound V: May 8-June 26, 1986
ound VI: September 18-
November 13, 1986
ound VII: January 15-March 6, 1987
(INF continued to March 26)
ound VIII: Began on April 23 (INF) and
May 5, 1987 (START and defense and
space talks)
onference on Confidence-
id Security-Building Measures and
isarmament in Europe (Multilateral)
ound IX: January 28-March 15, 1986
ound X: April 15-May 23, 1986
ound XI: June 10-July 18, 1986
ound XII: August 19-Septem-
ber 19, 1986— agreement concluded
onference on Security
nd Cooperation in Europe
irst Round of FoUowup Conference:
November 4-December 20, 1986
econd Round of Followup Conference:
January 27- April 11, 1987
hird Round of Follovnip Conference:
May 4- July 23, 1987 (proposed
ending date)
Conference on Disarmament
(Multilateral)
Chemical Weapons Committee Rump
Session: January 13-31, 1986
Spring Session: February 4-April 25, 1986
Summer Session: June 10-August 29, 1986
Chemical Weapons Committee Chair-
man's Consultations: November 24-
December 17, 1986
Chemical Weapons Committee Rump
Session: January 6-30, 1987
Spring Session: February 2-April 30, 1987
Mutual and Balanced Force
Reductions (Multilateral)
Round 38: January 30-March 20, 1986
Round 39: May 15-July 3, 1986
Round 40: September 25-December 4, 1986
Round 41: January 29-March 19, 1987
Round 42: May 14-July 2, 1987 (proposed
ending date)
Nuclear Risk Reduction Centers
Round I: January 13, 1987
Round II: May 3-4, 1987— agreement
concluded, ad referendum
U.S.-SOVIET ARMS CONTROL
EXPERT-LEVEL MEETINGS
Nuclear and Space Talks
August 11-12, 1986, in Moscow
September 5-6, 1986, in Washington
December 2-5, 1986, in Geneva at the
negotiator level
Mutual and Balanced
Force Reductions Talks
August 6-7, 1986, in Moscow
September 10-11, 1986, in Washington
Conference on Confidence-
and Security-Building Measures
and Disarmament in Europe
August 14-15, 1986, in Stockholm
Chemical Weapons Treaty Talks
January 28-February 3, 1986, in Geneva
April 15-25, 1986, in Geneva
July 1-18, 1986, in Geneva
October 28-November 18, 1986, in New
York City
February 16-March 5, 1987, in Geneva
Biological and Toxin
Weapons Convention
Experts Meeting: March 31-April 15, 1987,
in Geneva
Chemical Weapons
Nonproliferation Discussions
March 5-6, 1986, in Bern
September 4-5, 1986, in Bern
Nuclear Testing
First Session: July 25-August 1, 1986, in
Geneva
Second Session: September 4-18, 1986,
in Geneva
Third Session: November 13-25, 1986, in
Geneva
Fourth Session: January 22, 1987,
recessed on February 9, resumed on
March 16, concluded on March 20 in
Geneva
Fifth Session: May 18-May 29, 1987, in
Geneva
Nuclear Risk Reduction Centers
May 5-6, 1986, in Geneva
August 25, 1986, in Geneva
Nuclear Nonproliferation Talks
December 15-18, 1986, in Washington ■
.ulv 1987
29
DEPARTMENT
Challenges Facing
the Foreign Service
by Ronald I. Spiers
Address at the State Department's
22nd annual Foreign Service Day on
May 1, 1987. Ambassador Spiers is
Under Secretary for Management.
This is the third annual report I have
been privileged to give on this occasion
since I became Under Secretary of State
for Management in November 1983. It is
a practice I hope future Under Secre-
taries for Management will follow. We
have a responsibility to you. You are
members of our extended Foreign Serv-
ice family, bonded by your continuing
interest in the institution you have
served loyally and well.
Last year, I said that 1985 had been
a difficult year for the Department and
for the Foreign Service. I reported then
that the picture for 1987 was clouded
but threatened to worsen. That, unfor-
tunately, turned out to be an
understatement.
I would like to focus on three sub-
jects today:
• The resource situation for the
Department of State as we look ahead to
1988;
• The personnel problems we face
this year when large numbers of talented
senior and midlevel officers will leave
the Foreign Service involuntarily; and,
equally important,
• Diplomatic security at a time
when the Department of State is under
intense criticism in light of recent events
in Moscow involving Marine security
guards and our new chancery now under
construction.
The State Department
Resource Crisis
Few, even in the Department, fully
understand the seriousness of the
resource situation we now confront as a
consequence of the executive-congres-
sional impasse over how to control the
Federal deficit. I want to give you,
today, a somewhat more focused report
on our resource situation than you may
have heard on the nightly news. Unfor-
tunately, this means citing some figures.
The overall budget of the Depart-
ment of State is somewhat over $3.5
billion. About half of this, however, is
what I call "transfer" payments. These
funds have nothing to do with running
the Department but pay our membership
dues to international organizations, our
contributions to international commis-
sions of one kind or another, and the
money to finance international refugees
and narcotics programs.
To convey the real dimensions of our
problems, I have to telescope in on our
salaries-and-expenses account. This is
the money that pays all of the normal
expenses of our over 23,000 American
and Foreign Service national employees
at more than 250 posts overseas and in
the United States. This account finances
our salaries and allowances. It pays for
storing and transporting our household
effects. It buys our vehicles and furnish-
ings. It finances our communications,
our computer systems, our security pro-
grams, our training, our travel, and
so on.
For 1986, the President proposed a
lean budget of $1.47 billion for this
account. However, the Congress cut it
by over $80 million, and we were forced
to absorb the shortfall from our ongoing
activities after the fiscal year was well
underway. In a time of trillion-dollar
deficits, $80 million may not seem like a
lot of money. But for a small agency like
State, whose annual budget is less than
the cost of a single Trident submarine,
an $80-million cut assumes monstrous
proportions. We spend more than 65
cents out of every dollar on people-
related costs. Therefore, to absorb the
$80 million from personnel expenses, we
would have had to put all of our
employees worldwide on unpaid leave for
44 days. Obviously, this did not make
sense.
We tried to make up for this short-
fall by asking for slightly more
money-$1.84 billion-for 1987. How-
ever, Congress again cut the Admin-
istration's request for State, this time by
$314 milHon, and earmarked $127 mil-
lion of what we got for security. As a
result, when the dust settled in 1987, we
ended up with only $6 million more than
last fiscal year; but bear in mind that
last year we had to cut out a lot of our
important activities to stay within the
appropriated amounts.
So this is the key figure, the bottom
line, to keep in mind: we have $6 million
more to spend in 1987 than in 1986.
Six million dollars is a lot of money.
However, let me describe what this $6
million has to cover:
• $76 million in overseas inflation
and exchange rate losses (at one point
last December, our West German post;
were losing a half million dollars a day
due to the drop in the dollar's value);
• $55 million in domestic mandate
wage and price increases, including tht
recent American pay increase and the
cost of managing the new retirement
system; and
• $20 million in new programs, sui
as opening several new posts, estab-
lishing a new congressionally mandatei
Inspector General's office, implementii
the new immigration law, and so on.
That adds up to a minimum of $15
million in mandatory increases in our
expenses. Where were we going to fim
the funds to pay for these increases? Ii i
salaries-and-expenses agency such as
State, the only possibility is out of cur-
rent day-to-day operations. That is the
genesis of the following cuts we were
forced to make in 1987.
• We took $114 million out of equ
ment and furnishings programs, post-
poning the modernization of our aging
communications and computer system;
Noncareer ambassadors have asked m
repeatedly why the State Department
personnel in their missions are so poor
equipped compared to our colleagues
from other agencies. This is the answe
• We have taken about $20 millioi
out of personnel and directly related
support costs. As a result, we have
significantly reduced the Department'
nonsecurity work force. We have also
reduced the size of incoming Foreign
Service officer classes, creating major
staffing gap problems. We will pay
dearly for this several years down the
line. We are taking similar cuts in vir-
tually all other personnel categories.
• We are closing seven posts in ac
dition to the seven we closed last year
From this, we will reap an immediate
savings of something over $1.5 million
this fiscal year. This small figure is
deceptive, however, because it only
relates to the direct costs of operating
these posts. We will also save other
costs, such as salaries and support cos
in Washington.
The main point— and it is one we
have had a hard time getting across at
home— is that if we have to cut people
and save money in communications,
travel, security, and so on, we must cu
work stations. For us, work stations ai
positions in Washington and posts
overseas. There are Members of Con-
gress who want to mandate reopening]
the posts that we have closed; unfor-
tunately, no one has offered to augmeii
^0
Dfinartmfinf of .'ifatfi Rnllf IL
DEPARTMENT
lur funds in order to do so. We in the
Department have made a strategic
■hoice to terminate our more marginal
ictivities rather than shortchange our
nore important ones.
Opening and closing posts is nothing
lew. We have shut at least 535 posts
jince we opened our first one in 1778.
!)ince 1945, we have closed about four
ler year. This does not mean that our
jmall posts are interchangeable, expend-
able, or unimportant. Quite the opposite
5 the case. They are the capillaries of
,ur information-gathering systems. They
'lug us into the important regions. They
nhance our ability to provide services to
American citizens abroad. They help
tiniulate export markets. They provide
aluable professional and managerial
Ixperience for our junior personnel. But
he Secretary of State must have the
bility to allocate scarce resources to
riorities for which he bears ultimate
responsibility. Congressional
licromanagement does not help.
I Other cuts are being made in equally
ndesirable areas: post language train-
ig, travel, publications procurement,
niversity training, and the like. Despite
lese cuts, we are still having trouble
laking ends meet. As a result, we have
sked for a 1987 supplemental appro-
riation of $83 million to keep us
Dlvent. If we get it, we can avoid some
f the worst effects of these cuts,
[owever, the prognosis is uncertain at
est, and we cannot delay making the
ery tough resource decisions required
) help us manage within our means. We
innot spend at a rate that will get us in
■ouble if we do not get this supplemen-
il relief.
Outlook for 1988
much for 1987. The outlook for 1988
i not just unpleasant, it is grim.
Our bureaus requested $2.06 billion to
leet the responsibilities levied on them
Dr 1988. Of this total, $447 million was
^r security. We pared the bureaus'
equests back somewhat ourselves; the
tffice of Management and Budget then
ut these figures further to come up with
final Administration request of $1.86
illion. However, the Congress has
/arned that we should expect— at
■est— a funding freeze at last year's
Jvels.
Here is what such a freeze could
nean to us:
• Further post closings, perhaps as
nany as 10-20. This would further con-
'ey the impression that the United
states is withdrawing from active
nvolvement in world affairs.
• Further personnel reductions—
perhaps as many as 800-1,000 in
Washington and overseas. Cuts of this
magnitude could only be accomplished
through large-scale reductions in force
or furloughing.
These are drastic steps. From Con-
gress' standpoint, a funding freeze on
the surface might seem a logical and,
perhaps, convenient method of coping
with tight budgets and the Federal
deficit. For State, however, a freeze is
really a cut since there are certain new
mandatory expenses which we would
have to carve out of this frozen figure.
These mandatory expenses include:
• $52 million to finance the new
Federal Employees Retirement System;
• $12 million to cover mandatory
Foreign Service national wage increases;
• About $28 million for overseas
inflation and exchange rate losses; and
• $8 million to pay rent increases
for the buildings we occupy in
Washington.
The net increases, after deducting
some decreases, amount to $107 million.
In other words, a freeze actually means
we would have over $100 million less to
spend in 1988 than we had in 1987.
Further complicating this picture,
however, is the fact that there are some
expensive but very important programs
which we must start if we are to main-
tain and improve our effectiveness as an
institution. Among these are:
• Upgrading the Department's
diplomatic telecommunications service.
We must begin this program now to give
the foreign affairs community the
capacity it needs for the future, at
reduced annual costs.
• Building a new, less vulnerable,
mainframe computer center which we
intend to collocate with our new alter-
nate communications facility we just
opened in Beltsville. We are the only
major government agency without such
backup communications facilities. With
no such backup, the Department's entire
data base is vulnerable. The Secretary
has rightly said that this is a "must do"
project.
• Developing our new Foreign
Affairs Information System to give us
the information technology we need to
do our jobs and to help us march into the
future abreast of our colleagues in the
intelligence and defense communities.
• Continuing our effort to rebuild
our vital diplomatic capabilities and to
upgrade hard language training, as
recommended in a recent report by
Ambassador Stearns. This will cost us
almost $4 million in 1988 alone.
When we add these and other
annualizations to the mandatory
increases and 1987 shortfalls, we come
up with a figure of $208 million which
must be taken out of our day-to-day
operations in 1988 if we receive no
increase from the Congress.
This situation is not the result of
some special congressional hostility
toward the Department of State and its
mission. Indeed, we have encountered
substantial sympathy toward our plight.
We are caught in a vise; there is no
effective consensus within the Congress
or between the Congress and the Presi-
dent about the relative priorities to be
accorded to tax increases, defense
expenditures, and social service expend-
itures. Until there is such a consensus,
the Department will suffer particularly
bad times since we are essentially a
salaries-and-expenses agency. We have
no costly programs to string out or to
cannibalize. It is not an exaggeration to
say that the current budget crisis will
force us to drastically reshape the insti-
tution through which the United States
conducts its diplomatic relations with the
rest of the world. This reshaping cannot
help but radically reduce our diplomatic
presence overseas. Our embassies will
become, more and more, the office space
for other, perhaps wealthier, agencies of
government. It is sobering to think that
the $20 million we have cut in personnel
alone this year is less than one-tenth the
cost of a single B-1 bomber.
Personnel Issues and the
1980 Foreign Service Act
Let me deal more briefly with our per-
sonnel situation. As you know, the 1980
Foreign Service Act put into place
systems designed to produce a predict-
able flowthrough and to ensure that only
the best officers advance to the top. The
others— although by any objective stand-
ards very good officers— drop by the
wayside in this extremely competitive
milieu. Our entry system continues to be
one of the most selective in the world.
While more than 17,000 applicants take
the annual Foreign Service written
examination, we appoint only some 200
new officers each year. But even after
joining the Foreign Service, being simply
a "very good officer" may not be good
enough. This highly competitive system
and its byproducts are, today, among the
most controversial management issues in
the Department of State.
This year, we will lose 49 of our
FO-ls due to the 6-year window. They
will join 53 others who will have to leave
because they have reached time-in-class
limits without being promoted into the
Senior Foreign Service. In addition.
yiMlVl987
31
DEPARTMENT
more than 130 of our Senior Foreign
Service officers have retired after they
were not offered the limited career
extensions set up under the 1980 act.
This loss of Senior Foreign Service
officers has, however, been relatively
less noticed since it has occurred over a
longer period of time— i.e., since 1984.
We have faced a great deal of
pressure to extend the 6-year window
during which promotion opportunities to
the Senior Foreign Service remain open.
(This 6-year period was set after con-
sultation with AFSA [American Foreign
Service Association] by Secretary Haig
in fulfillment of the 1980 act.) We have
resisted extending the window since, as
I have reported to you in previous years,
we cannot simply postpone facing dif-
ficult management decisions. We must
take the necessary steps now to set the
Service on a clear and predictable
course.
A colleague recently put the issue we
face better than I could, and I quote him
here:
A competitive system which retained its
less competitive members would be wasteful.
A system which did not provide for advance
of junior officers would be wasteful. A system
which did not continuously reoxygenate would
be wasteful. A rigorous up-or-out philosophy
is a practical and workable means of balanc-
ing the needs for experience, progression and
employee development; and the practices
applied by Management seem to achieve the
desired ends of that philosophy.
In short, we cannot both retain all
senior officers and FO-ls and still
preserve opportunities for the most
gifted of the next generation to move
up. The trick is to find the right balance
between these two legitimate concerns.
Confronting
Security Challenges
I have saved my comments on security
until last. For the last month, the story
of the Moscow Marines and the bugging
of our new office building in Moscow
have occupied headlines around the
world. From parts of the Hill and the
media, critics variously charge incom-
petence on the part of the Department
or, in the words of one TV journalist,
"criminal negligence" on the part of our
Ambassador in Moscow. The Depart-
ment, according to some critics, has
ignored warnings and was naive about
the Soviets, sloppy in its procedures, and
indifferent about security. Behind much
of this assault lies ignorance of facts or,
perhaps, hidden agendas.
If there has been laxness about
security or misfeasance, we will uncover
it and deal with it. However, we should
32
not start with the predisposition that
someone must be pilloried. Witch-hunts
do not, as past experience will attest,
improve systems.
As some of you know from firsthand
experience, our diplomats in Moscow
work in a difficult and unremittingly
hostile environment. Recently, I read a
despatch on "General Conditions in
Russia" sent from Moscow in March
1936 by Ambassador William Bullitt,
who was himself quoting from des-
patches sent in the early 1850s by his
predecessor, Neill Brown. These
excerpts have a familiar ring as I quote
from them:
The Russian mind seems naturally
distrustful, and this is especially so with the
Government officials .... [T]he Government
possesses in an exquisite degree the art of
worrying a foreign representative without
giving him even the consolation of an insult.
The position as an Ambassador here is far
from being pleasant. The opinion prevails that
no communication, at least of a public nature,
is safe in the Post Office, but is opened and
inspected as a matter of course .... Ministers
are constantly subjected to a system of
espionage, and that even their servants are
made to disclose what passes in their
households, their conversations, their associa-
tions, et cetera. . . . [T]o be made to appre-
hend such a state of things is exceedingly
annoying.
The living and working conditions
which our people face in Moscow are not
news to the Department of State. The
campaign of Soviet attacks against our
diplomats in Moscow is bold and
relentless. In recent times, our people
have been microwaved and tracked with
spy dust. Now, the press has reported
that our new office building in Moscow is
honeycombed with various types of
listening devices. I assure you, this came
as no surprise to us. We have been
tracking and analyzing the Soviet
technical attack since the very
beginning.
Contrary to the popular impression,
the Department of State has done a
great deal to protect our people, our
property, and our information over the
past 3 years. In early 1984, then-
Assistant Secretary for Administration
and Security Bob Lamb and I agreed
that we needed to launch a major new
program to cope with contemporary
security challenges. We did not believe
that we could address these challenges
with a business-as-usual approach. We
recommended that the Secretary
establish a panel of experienced out-
siders to examine the entire range of
security threats— both physical and
counterintelligence— against our
overseas missions. We recommended
that Adm. Bobby Inman head this panel.
We knew that any comprehensive secu-
rity program
recommended by such a panel would
require a tremendous amount of addi-
tional resources but felt that the time
had come to lay out for the Congress a 1
for the American public a security pro-
gram that they could accept or reject.
The Secretary approved our plan
without hesitation.
The Inman panel made its report ti
the Secretary in mid-1985, and, within
weeks, we had put together a 5-year,
$4.4-billion program to implement mos
of the panel's 91 recommendations. At
the same time:
• We established a new bureau in
the Department devoted exclusively to
security.
• We set up recruitment and train
ing programs for a new, expanded
generation of security officers. Our
security specialist corps has grown fro
572 in 1985, to 675 in 1986, to 1,017 b;
the end of this fiscal year.
• We took steps to change the
Foreign Service culture to increase th(
security sensitivity of our colleagues,
many of whom felt security contradicti
the traditional mission of the State
Department— i.e., to get out and make
contacts and penetrate other cultures
and societies. To make the point
dramatically, the Secretary, in
September 1984, began holding daily
morning meetings on security. This co
municated his priorities throughout th
Service.
• We collaborated effectively with
our sister agencies in the intelligence
community to understand and develop
effective countermeasures to foil elec-
tronic threats against the integrity of
our information and communications
systems.
• We reorganized our Office of
Foreign Buildings to bring it into the
modern age, staffed and equipped to
cope with a massive new security con-
struction program. They are now man; -
ing 62 construction projects, the bulk c
which are on schedule and within
budget.
We had the full support of the
Secretary of State at every step of thei
way. The Inman report succeeded in gj
ing a "jump start" to what I believe wi
turn out to be an effective security pra
gram. After a lengthy series of congrei
sional hearings, we received congres-
sional authorization last fall for a $2.1-
billion security construction program.
However, the funds appropriated so fai
have fallen far short of the amounts
requested. (A total of $2.7 billion was
requested while only $622 million was
appropriated to implement Inman pans
recommendations.) We got the first
Department of State Bullen
DEPARTMENT
JoUar on August 12, 1986— and most of
'he initial $39 million did not materialize
intil the end of October.
The Department of State, in short,
las nothing to apologize for and a lot to
)e proud of.
Security Problems
it Embassy Moscow
jet me say a few words about each of
he current specific problems of the
.Iosco w Marines and our Embassy
luilding.
First, the Marines: the United States
las relied on the integrity of the Marine
ecurity guard system for almost 40
ears. The program has a proud history.
Ve never considered we needed guards
guard the guards. We had clear rules
estricting fraternization in East Euro-
pean countries because we knew that the
ind of sexual entrapment we have
ecently seen in Moscow is an age-old
taple of intelligence systems. The
larine guards in Moscow understood
his, but some of them knowingly
iolated the rules. When we discovered
tiese violations, we moved swiftly to
amove the offenders. What we failed to
0, however, was to investigate imme-
iately whether the fraternization viola-
ions had led to more serious violations,
uch as treason. When one Marine
orned himself in for having collaborated
nth the KGB, we then immediately
lunched an aggressive investigation
?hich has led to further espionage
harges against other Marine security
uards.
We have discovered other violations
f our nonfraternization policy, but these
iolations did not lead to espionage. In
he cases in which it allegedly did, we
annot excuse these crimes on the
rounds of youth, loneliness, the harsh
loscow environment, the quality of
upervision, or a philosophy that "boys
/ill be boys." Treason is treason, and
here are no grounds on which to
xcuse it.
What about the question of culpa-
dlity or security laxness on the part of
■mbassy management?
Like the captain of a ship, the
.mbassador is ultimately responsible for
vhat takes place in his mission. How-
'ver, rules of reason must also be
applied. There is a chain of command. If
he Marine sergeant in charge of the
letachment was aware of fraternization
ir espionage and did not act to stop it or
•eport it to the RSO [regional security
)fficer], he is culpable. The same is true
)f the RSO and up the line to the ambas-
sador. There is no evidence to suggest
that any of this is the case, but investiga-
tions are proceeding. I do not agree with
those who charge that Ambassador
Hartman was lax in his approach to
security.
However, we do not— nor will we—
follow our personnel 24 hours a day. The
espionage and fraternization reported in
Moscow appears to have taken place
clandestinely.
We do not know all of the damage
that was done as a result of these events
in Moscow and Leningrad. However, we
have to assume the worst. Accordingly,
we will be spending substantial time and
money to replace potentially compro-
mised facilities in Moscow and Len-
ingrad. We have also broadened our
investigations to include other missions
in Eastern Europe.
We will be strengthening poHcies to
prevent the recurrence of these security
breaches in other high-technical-threat
posts. In my view, substantially shorter
tours of duty for Marine security guards
would reduce their window of vulnerabil-
ity to hostile intelligence services. We
are working closely with the Marine
Corps to improve the program. We had
already planned to install alarm systems
which record events such as intrusions
and which cannot be bypassed. This pro-
gram will be accelerated. We will use
polygraphs as an investigative tool in
cases of fraternization. We will reaffirm
the role of the chief of mission as the
commander in chief of the Marine secu-
rity guard detachment. We will, no
doubt, examine other approaches in the
course of the investigations I have
mentioned.
When the problem of Moscow
Foreign Service nationals and their KGB
connections was raised as a policy issue
several years ago, the Department of
State thoroughly examined the idea of
replacing them with Americans. There
were strong arguments on both sides of
the issue. The price tag for replacing the
Soviets with Americans was high and
required additional appropriations from
the Congress. Ambassador Hartman and
others in the Department also pointed
out that this kind of a replacement pro-
gram might solve one set of security
problems while creating yet another set
of security problems. Americans
imported into Moscow's harsh environ-
ment as mechanics, plumbers,
carpenters, and chars would widen the
target for Soviet espionage.
On the other hand, Soviet-supplied
support personnel were known quan-
tities. They could be watched and
isolated. We knew that some of them
had KGB connections. We also knew
that there were risks involved in letting
them work at close proximity with the
American staff. Others believe these
considerations were outweighed by the
fact that the Soviet support staff pro-
vided the Soviet intelligence services
with yet another means of evaluating
potential viilnerabilities of the American
staff.
This was an issue on which
reasonable men could disagree. After
weighing these arguments, the
Secretary decided to proceed with a
phased substitution program. Ambas-
sador Hartman himself proposed such a
program in April 1985, and it com-
menced the next month. Before it was
put fully into effect, however, the
Soviets preempted it by withdrawing all
Soviet support staff last October. It is
ironic, and perhaps revealing, that many
in Washington predicted that the Soviets
would never withdraw the support staff
because the KGB was too dependent on
them for intelligence entree.
A few words are necessary about the
building project in Moscow. You are
aware of our discoveries over a period of
years about the sophisticated and care-
fully designed intelligence system the
Soviets have built into our new chan-
cery. State Department security officers,
working with other agency experts, are
leading an all-out effort to develop
countermeasures to thwart the Soviet
penetrations of our chancery. The
Soviets were able to mount this attack in
part because we allowed them, pursuant
to an agreement concluded 15 years ago,
to prefabricate the concrete beams for
the structure offsite and away from U.S.
supervision. We will cope with this
Soviet technical attack even if it means
dismantling the $23-million structural
shell. (The press has incorrectly reported
that we will lose a $190-million invest-
ment if we tear down the chancery. In
fact, the $190-million Moscow project
actually consists of eight buildings, only
one of which is the chancery, which
would house sensitive activity. The other
seven buildings are already occupied.)
Furthermore, we are submitting to arbi-
tration the costs we've incurred in iden-
tifying and correcting the Soviet
technical attack.
At our recommendation. Secretary
Shultz asked former Secretary of
Defense and CIA Director Schlesinger to
examine all of the information we have
gathered on the Moscow chancery prob-
lem in all its aspects and to make recom-
mendations as to how to deal with it. We
expect his report shortly.
In the meantime, we must cope with
the fact that our institutional cultural
heritage in the Foreign Service can lead
a!y 1987
33
DEPARTMENT
our people abroad to attach less priority
to security considerations in comparison
to other aspects of our activities than we
in Washington feel should be the case.
Given the budget situation I described at
the outset, we are having to tell ambas-
sadors to cut reporting positions while,
at the same time, we are expanding
expenditures and personnel devoted to
security. Questions are repeatedly raised
about the wisdom of our priorities. These
questions are legitimate, although
sometimes we have to be authoritarian
in imposing our choices.
In the final analysis, I do not believe
there is a contradiction between main-
taining an adequate level of security and
conducting diplomacy effectively. Our
diplomats must understand the country
and the culture in which they live and
work. This requires getting out and
tracking down information and develop-
ing contacts. We as a nation also have an
obligation to provide the resources-
money and people— necessary to achieve
our diplomatic objectives. However,
unless we provide a safe and secure
environment for our people and our
national security information, we cannot
conduct successful diplomacy. Constant
vigilance and awareness is a prerequi-
site, but this does not require that we
immure ourselves in fortresses or
operate on the basis that we cannot trust
each other.
We will continue to work to con-
struct such a secure environment, but in
doing so, we will avoid creating an
atmosphere that will undermine the
spirit and effectiveness of our diplomacy.
Guarded Optimism
Let me conclude on a note of guarded
optimism. The Foreign Service has suc-
cessfully overcome comparable dif-
ficulties in the past. I am confident we
can and will do so again. Institutionally,
the challenges we face today are hardly
worse than the crisis of the 1950s when
the China hands were purged for being
correct. We recovered from that episode
and emerged a stronger Service. We can
and will do so again. But we must not be
complacent, and we must adapt to new
challenges. Unless we take a realistic
account of the world we face today, the
Foreign Service cannot effectively carry
out its fundamental and important role
in furthering our national interests as
the first point of contact with other na-
tions and societies. ■
U.S. -Soviet Agreement
on Embassy Construction in Washington
by Ronald I. Spiers
Statement before the Subcommittee
on Foreign Operations of the House
Foreign Affairs Committee on May 19.
1987. Ambassador Spiers is Under
Secretary for Managem,ent. ^
We will be examining today a set of
issues as complex and difficult as any I
have encountered as Under Secretary of
State for Management. They are issues
which were difficult when first addressed
by the U.S. Government over 20 years
ago. They have been made more difficult
to deal with for having been embellished
over the years by a good deal of anec-
dotal misinformation and myth. Let me
briefly summarize the basic facts.
Backgfround
By the late 1950s, both the U.S. and
Soviet Governments were rapidly out-
growing their diplomatic facilities, and
each recognized the need for a new
chancery and residential buildings. It
would be over 10 years, however, before
agreement was reached— in 1969— on an
exchange of sites and another 3 years
before a terms-of-construction agree-
ment was concluded in 1972.
Throughout this lengthy period of
back-and-forth with the Soviets, many
factors influenced the course of the
discussions: concern for providing an
adequate living and working environ-
ment for our personnel; questions of
reciprocity and security; local municipal
regulations in both Washington and
Moscow; and, of course, the overall
tenor of U.S. -Soviet relations, to name a
few. There were times when our nego-
tiators were convinced we could not
come to terms and were ready to call the
discussions off. There were also times
when political decisions at the highest
levels of the U.S. Government bridged
difficult gaps.
Throughout the period, and particu-
larly as we focused our discussions on
specific sites and specific construction
issues, we approached the process as an
interagency effort to ensure that all our
concerns were adequately addressed.
Intelligence and security questions were
carefully studied by the appropriate inter-
agency committees representing the
intelligence community. The State
Department participated in interagenc
meetings, regularly briefed the appro-
priate committees on the progress of
negotiations, and conferred with the p: -
ties concerned when technical question
arose. Concerns raised within the Intel
gence community were thoroughly
vetted through the interagency coor-
dinating committee and in other agenc
to-agency contacts and meetings.
U.S. -Soviet Negotiations
To give you a thumbnail sketch of the
negotiations, in the summer of 1963, tl
Soviets negotiated the purchase of the
Bonnie Brae estate in the Chevy Chas<
section of Washington, and the D.C.
Board of Zoning approved a zoning exo ■
tion to permit the construction of an
embassy in this residential area. Throu i
a series of court actions, however, loc£
residents successfully overturned the
zoning exception in January 1964,
thereby blocking use of the property fi
an embassy.
To avoid such difficulties in the
future, an effort was made to find
Federal property suitable as an embas
site, since U.S. Government-owned lai
is not subject to D.C. zoning restrictio .
The General Services Administration
identified two locations: the Bureau of
Standards site (now the International
Chancery Project) and the Veteran's
Administration Hospital site on Mt. Ai .
The Soviets had expressed no prior
interest in either site.
Of the two properties, Mt. Alto we
available earlier. Over the course of 2
years, representatives of all relevant U .
Government agencies examined the sit
and agreed to the proposal to lease it t
the Soviets in exchange for leasing a s ;
for our new Embassy. In fact, Mt. Alt(
was not offered to the Soviets until we Y i
written agreement from the agencies
most concerned, and the exchange-of-si 3
agreement was not signed until the Hoi J
Foreign Affairs Committee approved c r
new Embassy site in Moscow.
The Soviets were not enthusiastic
about the Mt. Alto site. They complain 1
that we had shown them only one site
and argued that it was "not very
favorable" because of its distance fron
the center of the city. Indeed, the
34
Department of State Bullei
EAST ASIA
loviets expressed interest in building a
'hancery at Tregaron in Cleveland Park,
lUt the idea was opposed by the U.S.
lovernment on security grounds.
In 1969, we finally signed an
xchange-of-sites agreement with the
Soviets in which they received an 85-year,
ent-free lease on 12.5 acres at Mt. Alto.'
'he United States leased for 85 years an
quivalent-sized lot in Moscow (10 acres
or a chancery and residential compound
lus 1.8 acres for the Ambassador's
esidence), also at no cost. Congressman
V^ayne Hays had traveled to Moscow in
967 to examine the U.S. site and recom-
. lended that his House Foreign Affairs
ubcommittee support the lease.
Many contentious issues remained to
e worked out before a terms-of-construc-
lon agreement was signed in 1972.
ftmong them was the question of how tall
ach embassy could be. It was finally
, greed that the Soviet chancery, located
1 an area of Washington where building
eights are strictly controlled, could not
xcede 136.21 meters above sea level—
I le maximum height allowed on Mt. Alto
y the National Capital Planning Com-
lission. Again, as with the decision to
ffer Mt. Alto to the Soviets, all of these
latters were carefully vetted with the
elevant Washington agencies.
'onclusion
think the pattern which emerges from
II of this is that the Department of
tate has, over a period of many years,
Dught conscientiously to deal with the
roblem of a site for a new Soviet
imbassy in Washington, and the related
uestion of a new U.S. Embassy in
loscow, in a manner which serves the
est interests of the United States,
lome of the decisions implemented were
ased on technical or operational judg-
ments beyond our competence to question;
ome were made at the highest levels of
ur government. But in implementing
hem, the Department has scrupulously
ought to involve all relevant agencies at
ach step of the way.
'The complete transcript of the hearings
nW be published by the committee and will be
vailable from the Superintendent of
'ocuments, U.S. Government Printing
'ffice, Washington, D.C. 20402. ■
Trade With Japan
PRESIDENTS STATEMENT,
MAR. 27, 1987'
I am today announcing my intent to
raise tariffs on as much as $300 million
in Japanese exports to the United
States. I am taking these actions in
response to Japan's inability to enforce
our September 1986 agreement on semi-
conductor trade. Regrettably, Japan has
not enforced major provisions of the
agreement aimed at preventing dumping
of semiconductor chips in third-country
markets and improving U.S. producers'
access to the Japanese market. I am
committed to the full enforcement of our
trade agreements designed to provide
American industry with free and fair
trade opportunities.
Under the agreement, which was
negotiated to resolve a series of unfair
trade practice cases brought by my
Administration and American industry,
the Government of Japan agreed to pre-
vent Japanese semiconductor producers
from selling below cost in markets out-
side Japan and to provide additional
access in Japan for foreign producers.
Despite monthly consultations with the
Japanese since the agreement was
signed and repeated assurances that all
aspects of the agreement would be fully
implemented, the most recent evidence
we have demonstrates that dumping has
continued. Moreover, American firms'
access to the Japanese market has not
improved from last fall's levels.
The Government of Japan has in
recent days announced a number of
actions aimed at improving their com-
pliance with the agreement. I am encour-
aged by these steps, and that is why we
are not terminating the agreement.
When the evidence indicates that third-
country dumping has stopped and U.S.
firms are enjoying improved access to
the Japanese market, I am prepared to
lift these sanctions.
PRESIDENT'S STATEMENT,
APR. 17, 1987^
I am today releasing the list of Japanese
exports to the United States upon which
tariffs are being raised, effective today,
in response to Japan's inability to
enforce our September 1986 agreement
on semiconductor trade.
I announced my intent to take these
actions on March 27 after it became
apparent that Japan has not enforced
major provisions of the agreement aimed
at preventing dumping of semiconductor
chips in third-country markets and
improving U.S. producers access to the
Japanese market. The health and vitality
of the U.S. semiconductor industry are
essential to America's future competi-
tiveness. We cannot allow it to be
jeopardized by unfair trading practices.
In my March 27 announcement, I
said we would impose tariffs on $300
million in Japanese exports to the United
States to offset losses suffered by
American semiconductor producers as a
result of the agreement not being fully
implemented. The products upon which
the tariffs are being raised were chosen
to minimize the impact on American con-
sumers and businesses. All these prod-
ucts are available from domestic or other
foreign producers.
These actions are being taken to
enforce the principles of free and fair
trade. I regret that these actions were
necessary. We will eliminate them as
soon as we have firm and continuing
evidence that the dumping in third-
country markets has stopped and that
access to the Japanese market has
improved.
I am encouraged by recent actions
taken by the Government of Japan to
improve their compliance with the U.S.-
Japan semiconductor agreement. I
believe the agreement is in the best
interests of both Japan and the United
States, and I look forward to the day
when it is working as effectively as it
should.
PROCLAMATION 5631,
APR. 17, 1987^
1. On April 17, 1987, I determined pursuant
to section 301 of the Trade Act of 1974, as
amended ("the Act") (19 U.S.C. 2411), that
the Government of Japan has not imple-
mented or enforced major provisions of the
Arrangement concerning Trade in Semicon-
ductor Products, signed on September 2,
1986, and that this is inconsistent with the
provisions of, or otherwise denies benefits to
the United States under, a trade agreement;
and is unjustifiable and unreasonable and con-
stitutes a burden or restriction on United
States commerce. Specifically, the Govern-
ment of Japan has not met its commitments
to increase market access opportunities in
Japan for foreign-based semiconductor pro-
ducers or to prevent "dumping" through
monitoring of costs and exports from Japan
of semiconductor products. I have further
determined, pursuant to section 301(b) of the
Act (19 U.S.C. 2411(b)), that the appropriate
mss^
35
EAST ASIA
and feasible action in response to such failure
is to impose increased duties on certain
imported articles that are the products of
Japan.
2. Section 301(a) of the Act (19 U.S.C.
2411(a)) authorizes the President to take all
appropriate and feasible action within his
power to obtain the elimination of an act,
policy, or practice of a foreign government or
instrumentality that (1) is inconsistent with_
the provisions of, or otherwise denies benefits
to the United States under, a trade agree-
ment; or (2) is unjustifiable, unreasonable, or
discriminatory and burdens or restricts
United States commerce. Section 301(b) of
the Act authorizes the President to suspend,
withdraw, or prevent the application of
benefits of trade agreement concessions with
respect to, and to impose duties or other
import restrictions on the products of, such
foreign government or instrumentality for
such time as he determines appropriate. Pur-
suant to section 301(a) of the Act, such
actions can be taken on a nondiscriminatory
basis or solely against the products of the
foreign government or instrumentality
involved. Section 301(dXl) of the Act (19
U.S.C. 2411(d)(1)) authorizes the President to
take action on his own motion.
3. I have decided, pursuant to section
301(a), (b), (dXl) of the Act, to increase U.S.
import duties on the articles provided for in
the Annex to this Proclamation that are the
products of Japan.
Now. Therefore. I, Ronald Reagan.
President of the United States of America,
acting under the authority vested in me by
the Constitution and the statutes of the
United States, including but not limited to
sections 301(a), (b), and (dXl) and section 604
of the Act (19 U.S.C. 2483), do proclaim that;
1. Subpart B of part 2 of the Appendix to
the Tariff Schedules of the United States (19
U.S.C. 1202) is modified as set forth in the
Annex of this Proclamation.
2. The United States Trade Represent-
ative is authorized to suspend, modify, or
terminate the increased duties imposed by
this Proclamation upon publication in the
Federal Register of his determination that
such action is in the interest of the United
States.
3. This Proclamation shall be effective
with respect to articles entered, or withdrawn
from warehouse for consumption, on or after
April 17, 1987, except that it shall not apply
with respect to articles that were admitted
into a U.S. foreign trade zone on or before
March 31, 1987,
In Witness Whereof. I have hereunto
set my hand this seventeenth day of April, in
the year of our Lord nineteen hundred and
eighty-seven, and of the Independence of the
United States of America the two hundred
and eleventh.
Ronald Reagan
PRESIDENT'S MEMORANDUM,
APR. 17, 1987^
Memorandum for the United States
Trade Representative
Subject: Determination Under Section 301
of the Trade Act of 1974
Pursuant to section 301 of the Trade Act of
1974, as amended (19 U.S.C. 2411), I have
determined that the Government of Japan has
not implemented or enforced major provisions
of the Arrangement concerning Trade in
Semiconductor Products ("the Arrange-
ment"), signed on September 2, 1986, and
that this is inconsistent with the provisions of,
or otherwise denies benefits to the United
States under, the Arrangement; and is un-
justifiable and unreasonable, and constitutes a
burden or restriction on U.S. commerce. I
also have determined, pursuant to section 301
of the Act, to proclaim increases in customs
duties to a level of 100 percent ad valorem on
certain products of Japan in response. The
tariff increases I am proclaiming shall be
effective with respect to the covered products
of Japan which are entered on and after April
17, 1987. I am taking this action to enforce
U.S. rights under a trade agreement and to
respond to the acts, policies and practices of
the Government of Japan with respect to the
Arrangement.
Reasons for Determination
In the Arrangement, the Government of
Japan joined the Government of the United
States in declaring its desire to enhance free
trade in semiconductors on the basis of
market principles and the competitive posi-
tions of the semiconductor industries in the
two countries. The Government of Japan
committed: (1) to impress upon Japanese
semiconductor producers and users the need
aggressively to take advantage of increased
market access opportunities in Japan for
foreign-based semiconductor firms; and (2) to
provide further support for expanded sales of
foreign-produced semiconductors in Japan
through establishment of a sales assistance
organization and promotion of stable long-
term relationships between Japanese pur-
chasers and foreign-based semiconductor pro-
ducers. Finally, both Governments agreed
that the expected improvement in access to
foreign-based semiconductor producers should
be gradual and steady over the period of the
Arrangement.
Although the Government of Japan has
taken some steps toward satisfying these
obligations, they have been inadequate;
foreign-based semiconductor producers still
do not have access in that market equivalent
to that enjoyed by Japanese firms.
In the Arrangement, the Government of
Japan also committed: (1) to prevent "dump-
ing" through monitoring of costs and export
prices of semiconductor products exported
from Japan; and (2) to encourage Japanese
semiconductor producers to conform to anti-
dumping principles. Again, the Government
of Japan has taken steps toward satisfying
these obligations, but they have been
inadequate.
Consultations were held with the Govern
ment of Japan on numerous occasions
between September 1986 and April 1987 in
order to enforce U.S. rights under the
Arrangement and to ensure that the Govern-
ment of Japan undertake concerted efforts ti
fulfill its obligations under the Arrangement
To date these obligations have not been met.
On March 27, 1987, I announced my
intention to raise customs duties to a level oi
100 percent ad valorem on as much as $300
million in Japanese exports to the United
States in response to the lack of implementai
tion or enforcement by the Government of
Japan of major provisions of the Arrange-
ment. I also announced that the products
against which retaliatory action would be
taken would be selected after a comment
period ending April 14, 1987. Finally, I
announced that sanctions would remain in
effect until there is firm and continuing
evidence that indicates that the Government
of Japan is fully implementing and enforcing
the Arrangement.
This determination shall be published in
the Federal Register.
Ronald Reaga
WHITE HOUSE FACT SHEET,
APR. 17, 1987
Background
On September 2, 1986, the United Stat*
and Japan signed an agreement on trad
in semiconductors designed to promote
free trade in semiconductors on the has
of market principles. In that agreemeni
the Japanese Government committed tc*
prevent sales below cost of Japanese-
produced semiconductors in third-
country markets and to enhance sales
opportunities in the Japanese market fo
foreign-based producers. Furthermore,
the Japanese Government agreed to prr
vent dumping in the United States.
The part of the agreement concern-
ing dumping in the United States
appears to be working satisfactorily, bu
the provisions concerning third-country
dumping and access to Japan's market
are not being properly implemented.
U.S. officials met with their
Japanese counterparts in October,
November, and December to address
major problems under the agreement. li
addition, on January 28, 1987, emer-
gency consultations were held in Japan
to address evidence of Japanese non-
compliance with the agreement's third-
country dumping and market-access
provisions.
At the January 28 consultations,
U.S. officials notified the Government o
Japan that the United States would tak'
appropriate steps to enforce the agree-
36
npnprtmPnt nf State BulM,
EAST ASIA
lent if third-country dumping did not
nd within 30 days and if foreign semi-
jnductor sales in Japan did not increase
ithin 60 days.
A comprehensive Commerce Depart-
lent analysis of Japanese pricing activ-
y in third-country markets conclusively
emonstrates that significant dumping
as still occurring as of the February 28
^ eadline. At that time, Japanese-
reduced DRAMS (an advanced type of
jmiconductor) were being sold on
verage at 59.4% of the fair value, while
PROMS (another advanced semicon-
iict.ir) were being sold at 63.6% of the
lii- value. If dumping of this magnitude
ere to continue, U.S. semiconductor
jmpanies would have little or no chance
) compete in overseas markets.
The deadline to improve access in
ipan for foreign semiconductors was
[arch 28. The U.S. Government has
-lalyzed the relevant data and deter-
lined that market access has not
nproved since the agreement was
he President's Action
he President has decided to impose
inctions on certain Japanese exports to
le United States. These sanctions will
jmain in place until the semiconductor
^eement is properly implemented. A
otice was placed in the Federal Register
(onday, March 30 listing possible prod-
:ts on which sanctions could be
aposed. After a public comment period
f 14 days, and 2 days of public hearings
1 April 13 and 14, the Administration
elected from the list products against
hich retaliatory action is being taken,
ffective today, 100% ad valorem tariffs
ill be imposed on Japanese products
)taling approximately $300 million, off-
Jtting the lost sales opportunities by
.S. industry.
These sanctions vnll not deprive
.merican consumers of the products
gainst which retaliatory action will be
iken. All products on the list can be
ipplied by domestic or other foreign
roducers. The higher tariffs, which will
e placed only on Japanese imports of
lese products, will be removed when it
as been determined that the agreement
being fully implemented.
Visit of Japanese
Prime IVIinister Nakasone
'Text from Weekly Compilation of
residential Documents of Apr. 6, 1987.
^Text from Weekly Compilation of
residential Documents of Apr 20. ■
Prime Minister Yasuhiro Nakasone
of Japan made an official visit to
Washington, D.C., April 29-May 2, 1987,
to meet with President Reagan and other
government officials.
Following are remarks made by the
President and the Prime Minister at the
arrival and departure ceremonies.
Secretary Shultz 's luncheon remarks,
and the text of the joint statement issued
at the conclusion of the visits
ARRIVAL CEREMONY,
APR. 30. 1987^
President Reagan
It's a pleasure today to welcome again
Prime Minister Nakasone, the elected
leader of a valued ally, which is also one
of the world's great democracies.
The good wall and cooperation
between Japan and the United States
has been a tremendous boon to both our
peoples. Such relationships as our coun-
tries enjoy and benefit from are a
historical rarity. Great care has been
taken over four decades by political
leaders on both side of the Pacific to
mold and create this gem of friendship
which is of such immense value.
This hasn't been easy; it has taken
effort on both sides. Ours, after all, is a
dynamic and changing friendship, filled
with all the energy and spirit which one
would expect between two robust
peoples. Today our governments must
meet the great responsibility of over-
seeing a continued, positive evolution
between the United States and Japan. I
have confidence in your judgment, and
by working together, any problem we
face can be solved.
Even the closest of friends have dif-
ferences. Ours is the challenge of keep-
ing trade and commerce— the lifeblood of
prosperity— flowing equitably between
our peoples. To do that, we must address
the current unsustainable trade balance.
It has spawned calls for protectionism
that would undo the shining economic
accomplishments we've achieved
together. If history tells us anything, it
is that great advances in the human con-
dition occur during times of increasing
trade. Conversely, it is also clear that
interruptions in international commerce
result in stagnation and decline.
uhr
37
EAST ASIA
We recognize the domestic political
pressures that play a part in the deci-
sionmaking processes of our respective
countries, but we also know that it is the
long-term well-being of our societies that
must govern. Today the trading system
is in need of adjustment, yet the answer
is not in restrictions but in increased
opportunities. So together, let us seek
positive solutions.
As we've learned, progress will not
happen on its own; tangible actions must
be taken by us both. I have heard
outlines of new measures that you are
considering, and I'm most encouraged by
what appears to be a commitment to
policies of domestic growth and the
expansion of consumer demand in
Japan— something we strongly believe
will have a positive effect on the trade
balance. I look forward to exploring
these new approaches with you in our
meetings today.
Americans firmly believe that the
free flow of goods and services, accen-
tuated with head-on and above-board
competition, benefits everyone. We
would like to see Japan, for example,
open its markets more fully to trade and
commerce. Many of our companies in
manufacturing, agriculture, construc-
tion, and the financial and high
technology industries want to fully par-
ticipate in the Japanese market. This,
too, would also provide the benefits of
lower prices in Japan.
There's an unseen bridge that spans
the vast Pacific, a bridge built by the
hard work, commercial genius, and pro-
ductive powers of our two peoples. We
must strive to see that it is maintained
in good order and is traveled with equal
intensity in both directions, carrying the
goods and services that improve lives
and increase happiness.
The bridge to which I refer rests on
the firm bedrock of democracy. Today
free government and free economics
complement one another and are the
basis of our Pacific partnership. Today
Japan and the United States, with two
of the world's most powerful economies,
share heavy global responsibilities. Your
country's skillful leadership at last year's
Tokyo summit demonstrated the role
Japan now plays. As we prepare for the
upcoming summit in Venice, our two
governments will continue working
closely together, fully appreciating that
our cooperation has much to do with
prosperity enjoyed throughout the
world. The summit is an opportunity to
look to the future, to ensure the peace
and prosperity of the last 40 years are
maintained and strengthened as we
approach the new century.
Similarly, our mutual dedication to
the cause of peace and security has had
vast implications, especially on the
Pacific rim, where the upward thrust of
human progress is so apparent. We're
well into the third decade of the 1960
U.S. -Japan mutual security treaty, and
we look forward to continuing and
expanding upon our security
cooperation.
I am pleased to have this opportu-
nity to speak directly with Prime
Minister Nakasone on the bilateral and
international issues. It was 120 years
ago since Commodore Perry first arrived
on the shores of Japan. Commodore
Perry sent a message, explaining his
purpose to be "a mutual interchange of
those acts of kindness and good will
which will serve to cement the friendship
happily commenced and to endure, I
trust, for many years."
In coming to our shores, we welcome
you in that spirit. Let us, too, cement
the friendship happily commenced so
that it will endure for many years.
Prime Minister Nakasone
Thank you very much for your warm
words of welcome. It gives me great
pleasure to make an official visit to the
United States at your invitation and to
have this opportunity, together with my
family, to meet again with you and Mrs.
Reagan.
Since I assumed the Office of the
Prime Minister of Japan, I have con-
sistently made my utmost efforts to
strengthen further the friendly and
cooperative relations between our two
countries. Today the relations are
basically strong and sound. In addition
to our bilateral cooperation in many
areas, the two countries are working
closely together to solve the political and
economic problems facing the world.
The United States is continuing a
genuine effort to build upon the poten-
tial agreements reached in Reykjavik on
arms control, to lay a solid foundation
for world peace. For the success of such
efforts, it is now more important than
ever to strengthen solidarity among the
Western nations.
Looking toward the upcoming
summit meeting in Venice, I strongly
hope that my visit will prove to be con-
structive from this global perspective, as
well. If our two countries are to fully
discharge our global responsibilities, it is
essential that our bilateral relations
develop on an unshakable foundation.
I am deeply concerned that serious
frictions on the trade and economic
issues are on the rise between our two
countries. We should not allow such a
situation to undermine the friendship
and mutual trust between our two coun-
tries. Throughout my visit, I intend to
state clearly the policy measures Japan
has taken so far and will take in the
future for overcoming these problems.
At the same time, I will listen carefully
to the views of the Administration, the
Congress, and the people of the United
States.
I have journeyed across the Pacific
Ocean knowing that at times one must
sail on high waves. But I hope that my
visit, with everyone's assistance, will
offer maximum beneficial results for ou)
two countries.
In your Inaugural Address in 1981,
you said, "We have every right to drear
historic dreams." With energetic leader
ship, the American people have built thi
great nation constantly moving forward
and aspiring to seek out new frontiers.
This pursuit of heroic dreams forms the
driving spirit of your nation. We, the
Japanese people, have built our present
nation desiring to occupy an honored
place in the international society and
determined to contribute to world peace
and prosperity. I am determined to exei
all my efforts, too, so that our two
peoples can dream heroic dreams
together, looking towards a bright
future for all mankind.
SECRETARY'S LUNCHEON
REMARKS,
APR. 30, 1987'
Mr. Prime Minister, Mrs. Nakasone, an-
distinguished guests. Your visit to the
United States and the talks you've had
with President Reagan once again give
expression to the warm friendship and
constructive ties that join our two coun-
tries. You have helped remind all
Americans of the importance of our
bilateral relationship and our impressive
far-reaching cooperation. This reminder!
could not be more timely.
Over 130 years have now passed
since the first American Consul,
Townsend Harris, arrived at Shimoda in
1854. At that time, the United States
and Japan had almost nothing in com-
mon. Today we enjoy a close partnershil
founded on the fundamental congruence
of our political, security, and economic
interests.
Where Consul Harris was a lonely
representative of the United States on
Japanese shores, today there are almost
120,000 Americans-including 55,000
U.S. servicemen— living and working in
Japan. In working together toward our
common objectives, our governments
have continued to expand the frequency
38
Donartmont nf CJtato Riilletl
EAST ASIA
and scope of our bilateral consultations.
•Ever-increasing nongovernmental con-
jtacts in business, research, the arts, the
jmedia, and sports have broadened and
.deepened bonds between our two
peoples.
Through this lively and wide-ranging
■Japanese- American dialogue, our two
countries have been able to resolve to
mutual satisfaction the continuing tlow
3f problems that inevitably arise in our
sxtensive and complex bilateral rela-
tions. Today we face new and substantial
challenges in the economic sphere-
challenges that stem from the sheer
scale and growing complexity of our
;rading relationship and our increasing
competition at the leading edge of
;echnology. It is important that we con-
■ sider our trade and competition within
:he context of our entire economic rela-
;ionship. We must recognize not simply
;he vast scope of our trading ties but
ilso their dynamic nature and the degree
;o which the great flow of goods and
j nvestment between us benefits both
lountries.
Japan is our second largest trading
)artner after Canada, and we are
(apan's largest export market. Our two-
vay trade in 1986 amounted to $112
)illion, a figure greater than the gross
lational product of all but a few nations.
The United States is Japan's largest
['■"oreign investor and Japan is our third
argest investor. Japanese companies
low have over $25 billion in direct
nvestment in the United States. We
)elieve that a free flow of investment is
n everyone's interest. Japanese inves-
,ors in the United States contribute to
)ur country's employment and competi-
-iveness. Well over 200,000 Americans
vork for Japanese firms in the United
States.
Like our broader security and
oolitical ties, our economic relationship
strengthens both countries. However, as
i^ou yourself have recognized, our persist-
ant trade imbalances have reached levels
:hat cannot be sustained. Since your
innouncement of Japan's action pro-
gram in 1985, Japan has taken a number
3f welcome steps to open its market. In
recent months we have seen removal of
ifarious barriers to foreign fish products,
tobacco, legal services, forest products,
medical and pharmaceutical goods,
telecommunications equipment, and
banking services. Our joint efforts in
improving market access must continue,
but we recognize that improved market
access in itself will not resolve the U.S.
trade deficit.
Our global deficit is the result of
macroeconomic factors. It does not flow
mainly from an alleged lack of an
American competitiveness; rather it is,
in part, a reflection of our attractiveness
to foreign investment resulting in a
massive net inflow of foreign capital that
provides needed savings otherwise con-
sumed by our fiscal deficit— in other
words, we have got to do something
about our fiscal deficit— and in part a
reflection of a formerly way-over-valued
dollar.
The appreciation of the yen during
the past year-and-a-half reflects the
underlying strength of the Japanese
economy and the realities of Japan's new
role in the world economy. This shift in
exchange rates has already begun to
affect the marketplace. As a result of
exchange rate realignments, the process
of correction in our trade is now under-
way. As we look to the future, we will
see our trade deficit shrinking as the
surpluses of Japan and other countries
are reduced.
Make no mistake about it; this
adjustment will take place. In fact, it is
inevitable that the United States will,
before long, run a trade surplus. The
inevitability of it comes from the fact
that we are now a very large debtor
nation with the debts growing, and the
only way in the end we are going to
service those debts is by running a trade
surplus. So that will happen. The only
question is by what process it takes
place.
Our challenge is to assure that the
rebalancing of world trade and world
demand occurs without impairing global
economic growth or intensifying infla-
tionary pressures. This requires that we
address the domestic imbalances which
underlie today's trade difficulties. For
our part. President Reagan remains
committed to reducing the U.S. budget
deficit, and he will energetically fight the
forces of protectionism.
Your special advisory council, the
Maekawa Commission, last year issued a
report which recommended the trans-
formation and opening of Japan's
economy to promote greater emphasis
on domestic-led growth and the importa-
tion of foreign goods. The report also
recommended increased growth in
domestic demand in three sectors-
private consumption, housing invest-
ment, and public works.
Last week the Maekawa Commission
reaffirmed the importance of its original
recommendations. The commission
stressed the need for their prompt and
full implementation if Japan is to play a
role in supporting a more stable and
open international economy. These
measures are commensurate with the
interests of the Japanese people and the
great benefits they have gained from an
open world trading system in the
postwar era.
We welcome and applaud these
recommendations. Can we expect to see
them put into effect? We do understand
that correcting these economic imbal-
ances means hard political decision. It is
a test for statesmanship on the part of
both our governments. But we are not
alone in this regard; all members of the
international trading system bear a
responsibility to strengthen the global
economy through economic policies that
expand rather than limit the open inter-
national trading system which has served
us both so well these past four decades.
Our two governments are already
cooperating effectively in helping to
ensure peace and stability in East Asia
by deterring aggression. We are work-
ing together to assist strategically vital
nations such as the Philippines that are
seeking to rebuild democracy.
The new Uruguay Round of multilat-
eral trade negotiations offers yet
another important opportunity for us to
work closely together, this time in seek-
ing to advance the interests of both our
countries by extending liberalized rules
of trade to such key areas as services
and agriculture. Japan and the United
States, together with our major trading
partners, must push hard to achieve
early and substantial success in the
Uruguay Round so that the rules of the
global trading system recognize the com-
mercial realities of the 21st century.
In sum, we have accomplished much
together, but there remains a con-
siderable task before us. We must strive
to build a more balanced trading rela-
tionship while avoiding protectionism.
To do so requires imagination, hard
work, and no small amount of courage in
facing up to tough decisions. These
qualities are not lacking in either of our
countries, and they will be needed if we
are to resolve our differences in a spirit
of friendship and cooperation.
You have shown great vision in your
efforts to develop for Japan an inter-
national role commensurate with its
economic dynamism. We applaud your
leadership and look forward to continu-
ing to work closely and productively
with Japan in our joint efforts to pro-
mote peace, democracy, and prosperity
throughout the world. There is much we
can accomplish if we work together.
In this spirit, I now ask all of you to
join me in a toast to the health of Prime
Minister and Mrs. Nakasone and to
Japanese- American friendship and
cooperation.
July 1987
39
EAST ASIA
DEPARTURE CEREMONY,
MAY 1, 1987^
President Reagan
I have been pleased to welcome Prime
Minister Nakasone to Washington. He is
a friend, a wise colleague, and the leader
of America's most important partner
and ally in the Pacific. Prime Minister
Nakasone and I have worked together
now for more than 4 years, and I've
greatly valued his advice and
cooperation.
Our talks covered a wide range of
issues. We reaffirmed our shared com-
mitment to peace and democracy
throughout East Asia and the Pacific.
And Prime Minister Nakasone was
briefed on the current status of arms
talks with the Soviet Union, and we
agreed on the vital importance of
Western solidarity in this endeavor.
He and I also discussed in detail the
upcoming Venice summit. We agreed
that agriculture will be an important
topic, along with macroeconomic matters
and debt. Many governments, including
our own, have constructed impediments
to agricultural trade and have market-
distorting subsidies in place. We've
agreed these costly and harmful policies
should be removed. I emphasized this to
Prime Minister Nakasone and told him
that early improvements in access for
U.S. agricultural products to Japan's
markets are vital, economically and
politically. The Prime Minister and I
affirmed that all of the policies of our
respective nations affecting trade and
agriculture are subject for discussion in
the new round of trade negotiations
along with the agricultural policies of
other countries.
Trade between our two countries
was, as expected, an area of heavy
discussion. Both Japan and the United
States recognize that the current trade
imbalance is politically unsustainable and
required urgent attention. The Prime
Minister described to me measures his
government intends to take, and I am
supportive of those positive actions and
optimistic that we will soon see the
situation begin to improve. In this
regard, we reaffirmed our commitment
to cooperate closely on economic policy
as described in our joint statement.
Of course, the United States, too,
must do its part, and I made clear that
we are committed to cutting the budget
deficit and are strengthening the com-
petitiveness of U.S. industry. Consistent
with the approach Prime Minister
Nakasone and I have agreed to, protec-
tionism will be strenuously opposed on
both sides of the Pacific.
The Prime Minister and I also
discussed our two countries' shared com-
mitment to assist the world's debtor
nations. I welcome the Japanese Govern-
ment's plans to make available to
developing countries on an untied basis
more than $20 billion in new funds over
the next 3 years.
On the semiconductor issue, we have
agreed to review the data in mid-May.
It's my hope that, with the Venice sum-
mit coming up, our ongoing review of
the semiconductor agreement will
demonstrate a persuasive pattern of
compliance, thereby allowing removal of
the sanctions as soon as possible.
America's relationship with Japan is
both close and broadly based. We share a
host of common interests in the world.
Prime Minister Nakasone and I agreed
that the leaders of our two great coun-
tries should hold regular annua!
meetings. The widespread economic and
social contacts between our peoples will,
of course, continue, and we will remain
each other's close friends and trading
partners. Of that there is no doubt.
I look forward to seeing Prime
Minister Nakasone again in a few weeks
in Venice and now wish him and his wife
Godspeed on their journey home.
Prime Minister Nakasone
I would like to thank you, Mr. President,
for your warm hospitality, and I'm very
pleased that we have had 2 days of very
fruitful meetings.
The President and I placed most of
our emphasis on the future of the world
economy, recognizing that our respective
huge current account imbalances could
bring about serious consequences for the
health of the world economy. It is
necessary to rectify this situation funda-
mentally and as soon as possible. We
affirmed our shared political determina-
tion that our two countries will take
vigorous and consistent policy measures.
In this connection, we are determined to
cooperate closely on microeconomic
policy and exchange rates, as described
in our joint statement.
I emphasized to the President that
between our two countries, problems
should be solved by cooperation and joint
endeavors and that the measures of the
United States concerning semiconduc-
tors should be withdrawn promptly.
The President and I noted with satis-
faction the progress seen on other
specific issues. The two governments
will continue to work to resolve remain-
ing issues. I explained to the President
that our government is taking the lead in
the effort to expand the import through
extraordinary and special budget
measures of substantial magnitude. I
also told him that our government
intends to complete our 7-year target foi
doubling our official development
assistance 2 years in advance; to recycle
more than $20 billion, new funds, in
totally untied form over 3 years, mainly
to the developing countries suffering
from debt problems, totaling more than
$30 billion if added from the previous
pledge; and to extend positive assistanct
to sub-Saharan and the other less
developing countries. The President
expressed his high appreciation for our
decision.
The President and I agreed to
actively promote the GATT [General
Agreement on Tariffs and Trade]
Uruguay Round. We noted that all of
our nations' policies affecting trade in
agriculture are a subject for discussion
in the Uruguay Round, along with the
agriculture policies of other nations. Thi
President explained that he's endeavor-
ing to reduce the budget deficit and to
promote measures to improve competi-
tiveness. I stated my strong wish for th'
success of these policy measures. More-
over, I was encouraged by the Presi-
dent's statement of his determination t{
stand firm against protectionism.
We noted with satisfaction that the
security relations between our two cour
tries are excellent and agreed that Japs
and the United States will continue our
efforts for further strengthening the
credibility of the Japan-U.S. security
arrangements. I reiterated my firm
belief that the global and total elimina-
tion of long-range INF [intermediate-
range nuclear forces] is the best solution
for the security of the West and that thi
remain the ultimate goal.
Should an interim agreement be
arrived at, the President concurred witt
my statement: Japan, in close com-
munication with the United States, willi
expand its effort for the political and
economic stability of the regions of the
Middle East, Africa, the South Pacific,
and Latin America as well as Asia. In
particular, we reaffirmed our further
support for the Philippines.
We also agreed, given the present
severe international economic situation,
on the need for stronger political leaden
ship in promoting policy coordination
among the nations at the upcoming
Venice summit.
We should also further consolidate
the solidarity of the West in political
fields in light of the present state of
East- West relations and of arms contro
negotiations. Taking into account the
results of our meetings, including our
40
Department of State Bullet
EAST ASIA
Tiutual agreement to hold regular,
innual Japan-U.S. summit meetings, I
•enew my determination to do my ut-
nost to further consolidate U.S. -Japan
•elations for the peace and prosperity of
;he world.
(OINT STATEMENT,
itfAY 1. 1987
i^resident Reagan and Prime Minister
»}akasone reaffirmed their commitment
nade at the 1986 Tokyo summit to
trengthen international economic policy
oordination. They welcomed the prog-
ess that has been made toward this end,
ncluding the commitments and actions
•mbodied in the Louvre accord and in
he recent statement of the G-7 in
Vashington. They agreed that reducing
he large trade imbalances of the United
States and Japan— which they view as
lolitically unsustainable— is a key objec-
ive of their policy efforts.
In this regard, the President empha-
ized his determination to reduce the
J.S. budget deficit. He also pledged to
lursue vigorously policies designed to
•nprove the competitiveness of
' American industry and to resist firmly
rotectionist pressures. Prime Minister
lakasone outlined his plan to take
igorous action to stimulate domestic
Towth in Japan. This action includes the
tep just taken by the Bank of Japan to
egin operations to lower short-term
iterest rates. The Ministry of Finance
upports this action. Other short- and
ledium-term policy actions to stimulate
growrth will include: support for the
governing Liberal Democratic Party's
proposals for near-term enactment of a
comprehensive economic package,
including unprecedented front-loading of
public works expenditures and fiscal
stimulus measures amounting to more
than 5 trillion yen; further measures to
liberalize Japanese financial markets;
and redoubled efforts to implement the
recommendations for structural reform
in the Maekawa report.
The President and Prime Minister
agreed that outstanding trade issues
between the two countries need to be
resolved expeditiously. In this connec-
tion, they referred to the specific discus-
sion of trade policy matters in their
respective departure statements.
The President and Prime Minister
agreed that a further decline of the
dollar could be counterproductive to
their mutual efforts for stronger growth
in their economies and for reduced
imbalances. In that connection, they
reaffirmed the commitment of their
governments to continue to cooperate
closely to foster stability of exchange
rates.
iTexts of the President's and Prime
Minister's remarks and the joint statement
from the Weekly Compilation of Presidential
Documents of May 4, 1987.
2Held at the South Portico of the White
House where Prime Minister Nakasone was
accorded a formal welcome with full military
honors.
^Held at the Department of State (press
release 96 of May 1).
■•Held in the Rose Garden at the White
House. ■
J.S. Policy Priorities
or Relations With China
■y Gaston J. Sigur, Jr.
Address before the National Issues
\jrum on the Outlook for U.S. -China
"rii:h' and Economic Relations at the
Ir 1 1,, kings Institution on April 22, 1987.
Ir. Sigur is Assistant Secretary for
^a.st Asian and Pacific Affairs.
t is a pleasure to appear this afternoon
)efore the forum on "The Growing Role
>f China in U.S. Economic Relations,"
sponsored by the Brookings Institution,
'^s usual, Brookings has drawn together
iistinguished representatives from
icademic, business, government, and
iiplomatic circles— people who are
<nowledgeable and experienced and
whose views on China are worthy of
attention. Such gatherings can con-
tribute to our appreciation of the com-
plex realities of current relations
between China and the United States.
There is an ancient Chinese maxim
which speaks to the nature of human
interaction and, by extension, to interna-
tional relations as well. It states: "For
those who respect the dignity of man,
and practice what . . . courtesy requires—
all within the four seas are brothers."
This maxim expresses an ideal which
few humans and fewer nations have ever
achieved. Certainly, I am not so dis-
ingenuous as to suggest that it repre-
sents an accurate description of the cur-
rent state of relations between China
and the United States. Nevertheless, the
words are suggestive of the trend that
has marked the course of our relations
over the past 15 years as we have
replaced hostility with friendship and
rediscovered the wisdom of dealing with
each other in terms of mutual respect,
dignity, and courtesy— as behooves two
great Pacific nations with a long history
of positive interaction.
Historical Perspective
Only two decades ago, the United States
of America and the People's Republic of
China (P.R.C.) were separated by seem-
ingly insurmountable differences. China
was embroiled in the chaos of the
Cultural Revolution and had isolated
itself from the rest of the world. We
were deeply involved in Vietnam as an
outgrowth of our concerns about com-
munist designs on Southeast Asia. The
deep-seated mutual antagonisms bred by
the Korean war, and the vast differences
in our political and social systems,
cultural and historical backgrounds, and
foreign policy objectives, made future
confrontation seem more likely than
cooperation.
Beginning in the early 1970s,
however, courageous leaders on both
sides began the process of transforming
enmity into friendship. This year we are
celebrating the 15th anniversary of the
Shanghai communique, a declaration
which had a profound impact on our
bilateral relations, on the region as a
whole, and, indeed, on the global
strategic balance. This document,
together with the 1979 Joint Communi-
que on the Establishment of Diplomatic
Relations between the United States of
America and the People's Republic of
China and the August 17, 1982, joint
communique on arms sales to Taiwan,
established the foundation for the stable
and durable relations which we enjoy
today and on which we hope to build in
the future. In short, as the ancient
Chinese sage anticipated, through
mutual respect and courtesy, we have
shown that countries whose histories,
cultures, and political/economic systems
are markedly different can work
together in the spirit of cooperation.
Current Status of Relations
Our current relations with the Chinese
can be characterized by the word
"maturity." Since the establishment of
diplomatic relations 8 years ago, we
have become accustomed to dealing with
each other in normal ways. Through
regular exchanges of visits between
July 1987
41
EAST ASIA
high-level leaders, regional and local
officials, academics, business people,
scientists, cultural representatives,
students, and ordinary citizens, we have
learned to communicate more effectively
with each in a broad range of areas. We
have developed a limited military rela-
tionship consistent with the friendly
nonallied status of our relationship. And
we have reached agreements in such
areas as science and technology, nuclear
cooperation, taxes, trade, culture, and
education.
Politically, the United States and
China have found we have common
interests on a range of regional matters
in Asia. We agree, for example, that the
conflicts in Cambodia and Afghanistan
must be resolved through the withdrawal
of foreign forces. The People's Repubhc
also shares our desire to enhance stabil-
ity on the Korean Peninsula and to
reduce tensions between the North and
the South.
Differences in our policies do exist,
of course. We have established a
framework— in the form of the three
communiques— for dealing with the prob-
lem of Taiwan, but we still differ at
times over how these principles are
applied. We do not always see eye to eye
on matters such as population control,
human rights, and some trade issues. We
can anticipate that such differences will
continue to arise during the course of
our relations. Nevertheless, it is
indicative of the maturity of our present
ties that we can now discuss such dif-
ferences in a nonpolemical atmosphere,
without permitting them to hinder the
search for ways to improve our overall
relationship.
Thus, if I were to summarize the
decade and a half of our present associa-
tion, I would say that we have made an
excellent start. But the time has now
come for us to move beyond this initial
phase in a growing relationship— a phase
marked by the excitement of getting
used to one another again after a pro-
longed separation, the renewal of con-
tacts between our governments and
peoples, and the creation of the
infrastructure necessary for us to con-
duct a normal relationship.
Where Do We Go From Here?
As we enter this new, more mature
phase in our relations, we will be con-
fronted with issues no less concrete and
complex than those we faced in the past.
This phase will present enormous new
opportunities, but it will also test the
strength of the bonds which we have
created and place new demands on our
ability to speak and deal frankly and
honestly with one another. This phase
poses new questions about our future
relationship.
• What are our policy priorities for
China in the next phase of our relations?
• What are the critical elements of
our relationship, and how would we like
these to develop in the coming years?
• Where do we go from here?
Basic Priorities
In the broadest sense, our chief priority
is to continue building a friendly and
cooperative relationship with China that
will be a stabilizing factor in East Asia
and the world. In his speech in Shanghai
last month. Secretary Shultz recalled
that our two governments had agreed in
the Shanghai communique that "nor-
malization of the relations between the
two countries is not only in the interest
of the Chinese and American peoples but
also contributes to the relaxation of ten-
sion in Asia and the world." We both
have a major responsibility to ensure
that this remains as true in the future as
it has been in the past.
Fortunately, we now have a strong
base to build on. A broad consensus on
China policy continues to exist in the
United States— a consensus which had
its roots in President Nixon's initial
overtures to China, which has been given
fresh impetus under President Reagan,
and which enjoys broad congressional
and public support. This consensus rests
on certain central beliefs:
• That our long-range foreign policy
goals in East Asia require us to meet the
Soviet strategic and geopolitical
challenge in the area;
• That to do so we must preserve a
communality of interests with major
Asian states such as China, with our
allies, and with other key East Asian
nations;
• That our interests must be pur-
sued within the context of a one China
policy; and
• That Taiwan's future should be
determined by the Chinese on both sides
of the strait; our sole interest is that the
issue be resolved peacefully.
A second key element in this consen-
sus is the conviction that U.S. interests
are served by the P.R.C.'s continued
commitment to economic modernization,
internal reform, and expanded relations
with foreign countries— the so-called
open door policy. Since China emerged
from the chaos of the Cultural Revolu-
tion, the nation's preoccupation has been
to make up for lost time through speedy
modernization. Under Deng Xiaoping' s
leadership, the Chinese have undertaken
major initiatives on many fronts: raising
agricultural production; improving living
standards; economically developing the
less advanced interior regions; reform-
ing industry; expanding foreign trade
and investment; and playing a more
active role in the global economy.
These bold domestic policies have
not been without difficulties. Ironically,
these have centered on problems of too
rapid development rather than too slow
growth. Nevertheless, despite these
problems, China's efforts have been
remarkably successful. We welcome this
since we believe cooperation on modern-
ization can bring benefits for both of us.
We have, therefore, noted with pleasure
statements by Deng Xiaoping, Zhao
Ziyang, and other Chinese leaders that
recent internal developments in China
will not alter the government's commit-
ment to reform policies and keeping
open the door to the outside world.
Why should the United States be
interested in China's modernization? Th|
answer is simple. The flow of goods, pe«
pie, and ideas not only contributes to
China's modernization but also yields
opportunities for American business. Itt
enriches the cultural life of both nation^
and builds American and Chinese const!
uencies supportive of the overall rela-
tionship. We believe that a friendly,
modernizing China will have a greater
stake in regional stability, will be less
vulnerable to outside pressures, and can
better integrate itself into the world
economy. As Secretary Shultz noted
when he spoke before a group of
students at the Dalian Management
Training Center last month:
For China, for the United States, and fo
other nations as well, [the coming] new ... a;
will require, above all else, that we continue
to open our doors to one another. When sue! .
doors are open— when people, goods, and
ideas can flow freely between us— both !
Chinese and Americans can learn from each
other. Through such openness, societies are
better able to stimulate and to take advan-
tage of the inherent dynamism and creativit;
of their peoples.
In sum, it is in our own self-interest
to cooperate with China in its moderniz
tion efforts.
Specific Objectives
Now let me turn to the critical elements
in our relationship and how we would lil
these to develop. Since the topic of this
forum is economic, let me begin in that
area.
Department of State Bullet
ECONOMICS
China and the United States have
ilready forged impressive economic ties.
American companies have invested more
,han $1.5 billion in China, and total
\merican investment stands third, behind
)nly Japan and Hong Kong. We are, in
norn, one of China's most important
narkets, absorbing more than 10% of all
Chinese exports. Our two-way trade, which
vas about $1 billion 7 years ago, has sur-
)assed $8 billion for the past 2 years.
There is still more to be done if we
ire to tap the full potential of trade
)etween our nations. Looking ahead, we
:an single out several areas for special
attention:
• Support China's modernization
irive by further liberalizing our export
iontrols;
• Encourage further integration
)f China's economy into the world
narket through bringing China into
he GATT [General Agreement on
tariffs and Trade];
• Expand opportunities for U.S.
rade and investment in China (we hope,
n this connection, that China will also
eek further to improve conditions for
oreign investors);
• Encourage China to diversify its
■xports to the United States and to
lesist from protectionist measures (such
ts higher tariffs, expanded import licens-
ng, and limited availability of foreign
ixchange) which might provoke a reac-
ion in Congress; and
• Continue efforts to reach under-
tandings on textiles, maritime relations,
he bilateral investment climate, and
lirline traffic rights.
Political Objectives
Similarly, in our political association, we
lope to build upon the foundation which
ve have put in place. We are seeking to:
• Continue regular exchanges of
dews at authoritative levels, such as
)ccurred during the recent trips by
Secretaries Weinberger, Shultz, and
Saldrige to China and during Vice
Premier Yao Yilin's visit to the United
States last year— we expect a high-level
Chinese official to visit soon;
• Develop our bilateral military rela-
:ionship with the P.R.C. in ways that
;ontribute to common security concerns;
• Seek practical cooperation on
A.sian matters, such as Cambodia and
Afghanistan, and our shared goal of
stability on the Korean Peninsula;
• Explain U.S. views on Third
World issues— the Middle East, Central
America, South Africa— where Chinese
and U.S. positions are often at odds, to
provide China with a better understand-
ing of our policies on these matters; and
• Regarding Taiwan, facilitate an
environment in which an evolutionary
process toward a peaceful solution,
worked out by the parties themselves,
can occur.
Conclusion
Thus, we remain hopeful that the
maturity and stability of our current
relationship will allow us to address
ongoing problems in a constructive and
cooperative way. As Secretary Shultz
indicated in his Dalian speech, we are
entering a new age— an age that will
necessitate greater cooperation between
nations than ever before, that will
demand stronger bonds between peoples
of different backgrounds and cultures,
and that will require a more cosmopol-
itan outlook in approaching the world's
problems. In this regard, we applaud
China's reemergence from isolation and
its assumption of an important role as a
responsible world leader.
In this cosmopolitan spirit, let me
conclude with a story from the Latin
poet Virgil. He tells how the Trojan
prince Aeneas was shipwrecked in a
country he feared was inhabited by bar-
barians. But as he looked around and
observed the buildings and gardens
adorned with graceful carvings, he
realized that these men knew the beauty
and "pathos of life, and that mortal
things touch their hearts." And, indeed,
the people— the Carthaginians— proved
friendly and hospitable when at last he
met them.
Similarly, China and the United
States have viewed each other over the
years with many apprehensions and
misconceptions. Our success to date has
been in overcoming such fears. As a
result, like the ancient Trojans and Car-
thaginians, Chinese and Americans alike
have discovered a friendly people upon
each other's shores. The task before us
now is to build upon that friendship, to
expand areas of common interest, and to
resolve disagreements through discus-
sion and negotiation. In so doing,
perhaps we can contribute to bringing
closer the day when all men truly shall
be brothers. ■
OECD Council Meets in Paris
The annual Council of the Organiza-
tion/or Economic Cooperation and
Development (OECD) met in Paris
May 12-13, 1987. The U.S. delegation
was headed by Secretary of the Treasury
James A. Baker III. Following is the text
of the final communique.
The Council of the OECD met on 12 and 13
May at Ministerial level. The meeting was
chaired by Dr. Martin Bangemann, Federal
Minister of Economics of the Federal
Republic of Germany. The Vice Chairmen
were Mr. Uffe Ellemann-Jensen, Minister for
Foreign Affairs, and Mr. Palle Simonsen,
Minister of Finance, of Denmark. And Mr.
Roger Douglas, Minister of Finance, of New
Zealand. On the 40th anniversary of his Har-
vard speech, the Council paid tribute to the
vision of international cooperation framed by
General George C. Marshall.
I. Improving Growth Prospects
The economic strategy of the OECD countries
has, over recent years, brought inflation
down to its lowest level for a generation, at
the same time maintaining positive growth
rates. The long-term effort must be pursued,
taking account of developments, in order to
strengthen the prospects for stable and sus-
tainable growth; to reduce substantially the
levels of unemployment— unacceptably high
almost everywhere; to correct the massive
current account imbalances of the major
countries; to consolidate the improvement in
exchange rate configurations while achieving
greater stability; and to improve the economic
performance of developing countries. The
first and foremost contribution that the
OECD countries can make to world pros-
perity is to foster vigorous economies in an
open multilateral trading system.
In order to achieve these objectives.
Ministers agree upon the following wide-
ranging and mutually reinforcing actions.
They are based on a common will to use to
the full the possibilities of international
cooperation and to exploit for the best the
interactions between macroeconomic and
structural adjustment policies. Improved
policies in both fields are interrelated
elements in the strategy for stronger growth
of output and employment. Both are essen-
tial. Macroeconomic policies stabilize expecta-
tions, build confidence for the medium term,
and strengthen grovrth prospects. Micro-
July 1987
43
ECONOMICS
economic policies create a more dynamic and
responsive environment, in which growth and
adjustment forces are stronger, and macro-
economic policies are more effective.
II. Macroeconomic Policies
Macroeconomic policies must respond
simultaneously to three needs: maintaining
medium-term orientations which contribute to
the stability of expectations and building con-
fidence; unwinding the present exceptionally
large external imbalances of the major coun-
tries; and exploiting to the full the potential
for noninflationary growth and thus for
stronger job creation. International com-
plementary and compatibility of policies are
essential in order that adjustment takes place
in the perspective of growth and of exchange-
rate stability. Each country must make its
contribution to the collective effort. In par-
ticular, the effective implementation of the
commitments in the "Louvre Agreement,"
together with those in the recent communique
of the Group of Seven countries, shall be
achieved quickly, member countries will rein-
force their cooperation, continue to review
the policy requirements of the situation, and
introduce further measures as necessary.
Monetary policies, supported by fiscal
policies, should remain geared toward growth
of monetary aggregates and maintenance of
financial market conditions consistent with
low inflation objectives and real growth
potential. They should also contribute to the
orderly behavior of exchange rates. In view of
the outlook for low inflation in many coun-
tries, a further decline of interest rates in
these countries— in particular a market-led
decline of long-term rates— would be helpful.
Since the possibilities for monetary policy,
by itself, to improve prospects are limited,
these need to be enhanced by further action
on the fiscal front.
In the United States, the process of
reducing the Federal budget deficit— which is
coming down from 5.2% of GNP (gross
national product) in 1986 to less than 4% in
1987— must and will continue in the years
ahead. Holding firm to this course is essential
for external and domestic reasons. The con-
fidence of economic agents, in the United
States and elsewhere, depends heavily upon
it. So do, consequently, the prospects for
moderate interest rates and stable exchange
rates, sound economic activity with an
adequate flow of funds into productive invest-
ment, and resistance to protectionist tempta-
tions. These highly beneficial effects of reduc-
ing the Federal budget deficits should, over
time, outweigh any short-term dumping effect
in the United States. Exchange rate changes
have improved the cost competitiveness of
U.S. products and are having a positive effect
on net exports.
For Japan the objective is to achieve
stronger growth with domestic demand
increasing more rapidly than output, accom-
panied by a rapid growth in imports, consis-
tent with the substantial terms-of-trade gains
which have taken place. The reaffirmation by
the Japanese Government of its intention to
further improve access to its domestic
markets for foreign goods and services is also
welcome. The Japanese authorities will take
further substantial fiscal and other measures
to strengthen the growth of domestic
demand. This will not prejudice medium-term
budgetary objectives of the central govern-
ment. In this regard, it is to be noted that the
recently announced Japanese initiative to
expand domestic demand is part of the far-
reaching longer-term effort to reorient the
Japanese economy.
In Germany, also, the growth of domestic
demand, and particularly of private invest-
ment, must exceed substantially the growth
of potential output. In order to support
growth and external adjustment, the German
Government has already announced that
some scheduled tax cuts will be accelerated to
1 January 1988 and a broader tax reform will
be implemented in 1990. This will have a
favorable influence on investment. In addi-
tion, further measures of structural adjust-
ment, including reduction of subsidies, will be
implemented. Taken together, these actions
will contribute to an increase of the general
budget deficit relative to GNP between now
and 1990. Fiscal prudence over recent years
permits this kind of action. Should there be a
serious risk to the sustained expansion of
domestic demand, especially private invest-
ment, the medium-term strategy for growrth
and higher employment would be adjusted as
a consequence.
Other countries with substantial current
account surpluses should also take appro-
priate action to encourage domestic demand
growth relative to sustainable output.
Some countries face tight constraints
insofar as fiscal policy is concerned. For coun-
tries which have large budget deficits, prio-
rity must continue to be given to correcting
them. There are a few countries in Europe,
however, where budget deficits are not large
but where current account considerations con-
strain policy. Scope for fiscal action on the
part of these countries would be increased
and growth prospects improved if demand
strengthened in their major trading partners.
In this latter respect, and as an example, a
cooperative economic strategy of the EEC
[European Economic Community] countries
could take advantage of their inter-
dependence and be accompanied by other
European countries.
III. Structural Adjustment Policies
Ministers welcome the report on structural
adjustment and economic performance.
Despite progress in recent years, OECD
economies are still hampered by major distor-
tions and rigidities. These compound current
macroeconomic problems and retard growth.
Increasing competition in product markets,
responsiveness in factor markets, and effec-
tiveness in the public sector will contribute
significantly to growth potential in all coun-
tries. Priorities in reforming structural
policies will vary in individual countries,
reflecting differing national situations but
also international requirements. It is thus
essential that concerted action be guided by
common principles. To ensure the greatest
gains from reform, action must be broad,
bold, sustained, and, to the extent possibk-,
built on international economic cooperation.
The effects of such action will emerge mainly
in the medium term. Implementation now. Ii\
expanding opportunities and bolstering con
fidence about the future, will underpin pre-
sent efforts to strengthen noninflationary
growth and to reduce unemployment. Sue
cessful structural adjustment can simultanc
ously increase fairness and offer improving
opportunities for all. Increasing social
dialogue is an integral part of this process.
Industrial subsidies, to the extent they
are a source of domestic and international
distortions and an impediment to structural
adjustment, should be reduced. The work on
industrial subsidies initiated by the organiza-
tion is, therefore, to be encouraged and pur
sued actively.
The conclusions drawn by the Economic
Policy Committee on the report on structural
adjustment were endorsed and will guide
action in the forthcoming years. The Secre-
tary General is requested to report, at api)in-
priate intervals, on the work of the organi: :i
tion on microeconomic and structural issur,-
at subsequent meetings of the Council at
Ministerial level.
Trade Policies. International trade pro-
vides, through competition, the most powerfu
means of promoting economic efficiency and
growth. Measures which impede or distort th
functioning of international markets tend to
impair structural adjustment, preserve out
dated economic structures, damage consumei
interests, weaken incentives for efficient
investment, and thus hinder economic
growth. Therefore, it is of paramount impnr
tance to reverse recent trends toward restric
tive trade measures, notably of a bilateral nr
a discriminatory nature, and to act with
determination to strengthen and extend tin'
open multilateral trading system. The OECIi
will intensify its monitoring of the various
aspects of trade policies.
The Uruguay Round presents a unique
opportunity to create an improved framewdr
for trade in the 1990s and beyond. It is essfii
tial to ensure that renewed signs of protec-
tionism and conflict management on a
bilateral basis should not be allowed to undir
mine confidence in the Punta del Este decia
ration or in the negotiating process it has
initiated. Ministers affirmed the determina
tion of their countries to resist these trends
and to work for rapid, sustained, and substai
tive progress in the negotiations toward a
balanced global result which would be of
benefit to all, developed and developing coun
tries alike. OECD countries will prove this
determination by tabling in the coming
months comprehensive proposals covering th^
various fields of the negotiations, by carrying
out the standstill and rollback commitment.^
they have entered into, and by opposing
domestic protectionist pressures. In keepinu
with the Punta del Este declaration, Ministei-
reaffirmed that the conduct and the imple-
mentation of the outcome of the negotiations
shall be treated as parts of a single undertak-
ing. However, agreements reached at an
44
Department of State BulletiA
ECONOMICS
early stage may be implemented on a provi-
sional or a definitive basis by agreement prior
to the formal conclusion of the negotiations.
Early agreements shall be taken into account
in assessing the overall balance of the
negotiations.
Ministers noted the welcome progress on
trade in services in the Organization. This is
of particular importance in the light of the
inclusion of services in the Uruguay Round.
Further related work will be needed to refine
the concepts for liberalization of trade in serv-
ices as well as continuing efforts to
strengthen the OECD codes of liberalization
3f invisible operations and of capital
movements. This will be pursued actively.
Ministers welcome the agreement
recently reached by the participants in the
arrangement on guidelines for officially sup-
ported export credits in response to directives
from the 1984 and 1985 meetings of the
Council of the OECD at Ministerial level. The
agreement will strengthen substantially the
arrangement and reduce the risk of trade and
lid distortions. Ministers also welcomed the
recent agreement on the related DAC
I Development Assistance Committee] guiding
Drinciples. These are a tangible sign of
: cooperation in a difficult period.
Agriculture. The joint report of the
' Trade and Agriculture Committees (X) was
ipproved. This important work clearly
lighlights the serious imbalances that prevail
n the markets for the main agricultural pred-
icts. Boosted by policies which have pre-
sented an adequate transmission of market
signals to farmers, supply substantially
exceeds effective demand, and the cost of
agricultural policies is considerable, for
government budgets, for consumers, and for
;he economy as a whole. Moreover, excessive
jupport policies entail and increasing distor-
;ion of competition on world markets and run
counter to the principle of comparative
advantage which is at the root of inter-
lational trade and severely damage the situa-
tion of many developing countries. This
iteady deterioration, compounded by tech-
nological change and other factors, such as
5I0W economic growth or wide exchange rate
changes, creates serious difficulties in inter-
national trade, which risks going beyond the
oounds of agricultural trade alone.
All countries bear some responsibilities in
the present situation. The deterioration must
be halted and reversed. Some countries, or
groups of countries, have begun to work in
this direction. But, given the scope of the
• problems and their urgency, a concerted
I reform of agricultural policies will be imple-
mented in a balanced manner.
Reform will be based on the following
principles:
A. The long-term objective is to allow
market signals to influence by way of a pro-
gressive and concerted reduction of
agricultural support, as well as by all other
' appropriate means, the orientation of
agricultural production. This will bring about
a better allocation of resources which will
benefit consumers and the economy in
general.
July 1987
World Trade Week, 1987
PROCLAMATION 5655,
MAY 15, 1987'
Each year. World Trade Week celebrates the
many benefits of international trade to our
country and all countries. This commerce
strengthens our economy in many ways.
Exports expand our business and employment
opportunities: in the growing world
marketplace, over 5 million American jobs are
related to foreign sales. Imports also enrich
our lives. Foreign goods increase consumer
choice both in terms of quality and price.
Competition from foreign producers provides
an important stimulus to American producers
to maintain and enhance the quality of
American-made products.
Americans can be proud of the role our
country plays in international trade. We are
the world's largest participant in interna-
tional commerce. We have also taken a
leading role in ensuring the expansion of
international trade around the world. Our
initiative has made possible successive
monetary and trade agreements that have
integrated world markets and offered unprec-
edented prosperity. We have extended friend-
ship to former adversaries and have seen
them grow into valued trading partners.
Through our impetus, the developing and
newly industrialized countries become fully
accepted into the world trading community.
As increased trade has led to increased
integration of world economies, the growth of
the world economy has become more depend-
ent on achieving better coordination of
macroeconomic policies and continued adop-
tion of sound microeconomic policies to
facilitate structural adjustment. Thus, it is
crucial that cooperative solutions be found to
the problems faced in the international
economy.
For its part, the United States must work
to regain and sustain our competitiveness in
B. In pursuing the long-term objective of
agricultural reform, consideration may be
given to social and other concerns, such as
food security, environment protection, or
overall employment, which are not purely
economic. The progressive correction of
policies to achieve the long-term objective will
require time. It is all the more necessary that
this correction be started without delay.
C. The most pressing need is to avoid fur-
ther deterioration of present market imbal-
ances. It is necessary:
• On the demand side, to improve pro-
spects as much as possible inside as well as
outside the OECD area;
• On the supply side, to implement
measures which, by reducing guaranteed
prices and other types of production incen-
world markets; continue with its efforts to
expand and improve the ground rules of
world trade provided by the General Agree-
ment on Tariffs and Trade; and resist
pressures toward protectionism. The futile
prescription of protectionism would only fuel
inflation; lower economic growth; and invite
retaliatory policies against our exports.
It is also important for our trading part-
ners to do their part— by dismantling protec-
tive barriers around their home markets and
allovdng more open competition; by adopting
fiscal, monetary, and exchange rate policies
that are in line with goals of stable growth
with low inflation; and by helping resolve the
problem of Third World debt.
The challenges we face are difficult. They
require the strong resolve of all nations. We
can and will succeed in these ventures that
offer much for the American people and for
the peoples of the world.
Now, Therefore. I, Ronald Reagan,
President of the United States of America, by
virtue of the authority vested in me by the
Constitution and the laws of the United
States, do hereby proclaim the week begin-
ning May 17, 1987, as Worid Trade Week. I
invite the people of the United States to join
in appropriate observances to reaffirm the
great promise of international trade for
creating jobs and stimulating economic activ-
ity in our country and for generating pros-
perity everywhere.
In Witness Whereof, I have hereunto set
my hand this fifteenth day of May, in the year
of our Lord nineteen hundred and eighty-
seven, and of the Independence of the United
States of America the two hundred and
eleventh.
Ronald Reagan
iText from Weekly Compilation of
Presidential Documents of May 18, 1987.
fives, by imposing quantitative production
restrictions, or by other means, will prevent
an increase in excess supply.
D. When production restrictions are
imposed or productive farming resources
withdrawn by administrative decision, these
steps should be taken in such a way as to
minimize possible economic distortions and
should be conceived and implemented in such
a way as to permit better functioning of
market mechanisms.
E. Rather than being provided through
price guarantees or other measures linked to
production or to factors of production, farm
income support should, as appropriate, be
sought through direct income support. This
approach would be particularly well-suited to
meeting the needs of, amongst others, low-
45
ECONOMICS
income farmers, those in particularly disad-
vantaged regions, or those affected by struc-
tural adjustment in agriculture.
F. The adjustment of the agricultural sec-
tor will be facilitated if it is supported by com-
prehensive policies for the development of
various activities in rural areas. Farmers and
their families will thus be helped to find sup-
plementary or alternative income.
G. In implementing the above principles,
governments retain flexibility in the choice of
the means necessary for the fulfillment of
their commitments.
The Uruguay Round is of decisive impor-
tance. The ministerial declaration of Punta
del Este and its objectives provide for the
improvement of market access and the reduc-
tion of trade barriers in agriculture and will
furnish a framework for most of the measures
necessary to give effect to the principles for
agricultural reform agreed upon by OECD
ministries, including a progressive reduction
of assistance to and protection of agriculture
on a multicountry and multicommodity basis.
As agreed in Paragraph 16, the Uruguay
Round negotiations will be vigorously pursued
and comprehensive negotiating proposals
tabled over the coming months, in this as in
other fields. In the Uruguay Round, appro-
priate account should be taken of actions
made unilaterally.
In order to permit a deescalation of pre-
sent tensions and thereby enhance prospects
for the earliest possible progress in the
Uruguay Round as a whole, OECD govern-
ments will carry out expeditiously their stand-
still and rollback commitments and, more
generally, refrain from actions which would
worsen the negotiating climate. They will,
inter alia, avoid initiating actions which
would result in stimulating production in sur-
plus agricultural commodities and in isolating
the domestic market further from inter-
national markets. Additionally, they will act
responsibly in disposing of surplus stocks and
refrain from confrontational and destabilizing
trade practices.
Agricultural reform is not solely in the
interests of member countries. Developing
countries which are agricultural exporters
will benefit from a recovery on world
markets. Developing countries which are
importers of agricultural produce will be
encouraged to base their economic develop-
ment on more solid ground, by strengthening
their own farm sector.
Agricultural reform poses vast and dif-
ficult problems for member countries.
Strengthened international cooperation is
needed to overcome these problems. The
OECD will continue to contribute to their
solution by deepening further its work. By
updating and improving the analytical tools it
has begun to develop and which will prove
particularly valuable in many respects, by
monitoring the implementation of the various
actions and principles listed above. The
Secretary General is asked to submit a pro-
gress report to the Council at Ministerial level
in 1988.
46
Financial Markets. The process of
liberalization in financial markets and finan-
cial institutions must continue. In order to
secure the clear benefits deriving from this
process and to ensure the viability and stabil-
ity of these markets, efforts will be intensified
in the appropriate fora with a view to increas-
ing compatibility and convergence of policies
regarding prudential supervision of these
markets.
Tax Reform. Most OECD countries have
undertaken or are considering major tax
reforms. Well constructed tax reform can
considerably enhance performance at both
macro and micro economic levels. Tax reform
should focus on simplicity, equity, and reduc-
ing distortions affecting incentives to work,
save, and invest. The competent bodies of the
Organization will actively contribute to reflec-
tion on tax reforms in member countries and
consider the best means of achieving them
with due respect given to international
aspects.
Technological Change. The development
and diffusion of technology is central to the
growth of output, employment, and living
standards. The process of technological
change provides opportunities that must be
grasped. Much work has already been done
within the Organization on analyzing and
interpreting various elements of this process.
It now seems necessary to define an inte-
grated and comprehensive approach to the
different technology-related questions, to
deepen the analysis in order to understand
better, and make better use of, technological
advances. The Secretary General's intention
to develop and carry out such an approach
was welcomed. A progress report will be
made to Ministers at their meeting in 1988.
Employment and Socioeconomic
Reform. In view of the seriousness of
unemployment problems in most countries,
three areas of socioeconomic reform are par-
ticularly important— all involve, in varying
degrees, the private sector and the social
partners as well as governments. First, there
is a pressing need in many countries to
improve the quality of education and training
systems and to adapt them more to the needs
of societies and economies undergoing rapid
structural change. Second, more flexible labor
markets are needed to facilitate access to the
new jobs emerging as structural and technical
change accelerates. Third, employment and
social protection policies need to evolve so
that displaced and unemployed people are
given not only income support but also—
especially through training— opportunities
and incentives to get back into work or other
useful activities such as local employment
initiatives. OECD work in these areas will be
intensified, a key aim being to prepare a new
framework for labor market policies as
agreed at the meeting of the Manpower and
Social Affairs Committee at Ministerial level
in November 1986.
Environment. There is general agree-
ment that environmental concerns have to be
given a high priority in government policies in
order to safeguard and improve the quality of
life as well as to preserve the resource base
needed for sustained global economic develop-
ment. Member countries will develop, within
OECD, approaches and methods for more
systematically and effectively incorporating
environmental considerations into the
policymaking process. Work will be inten-
sified on policies needed to prevent more
effectively the release of hazardous sub-
stances to the environment, including from
large-scale accidents. In this connection inter
national cooperation should be reinforced.
The recently presented report of the World
Commission on Environment and Develop-
ment, "Our Common Future," will be studied
closely in member governments and in the
Organization.
Energy. The past year has seen con-
siderable falls in the prices of oil, gas, and
coal. While lower energy prices have broad
economic benefits, they tend to increase con-
sumption and reduce indigenous production o)
energy. The Chernobyl reactor accident has
underlined the safety aspects of nuclear
power. These developments could intensify
the tightening of energy markets expected
for the 1990s. The Governing Board of the
International Energy Agency, meeting at
Ministerial level on May 11, 1987, agreed to
strengthen existing policies in a number of
areas in order to advance the objectives of
energy policy while continuing to secure the
general benefits of lower energy and oil
prices. These areas include indigenous energj
production, the efficient use of energy, diver-
sification of sources of primary energy par-
ticularly those used in the generation of elec-
tricity, the promotion of free and open trade
in energy, measures to respond to an inter-
ruption in oil supplies, and due recognition of
environmental concerns.
IV. Relations With Developing Countries
In a world characterized by an increasing
level of interdependence, the economic prob-
lems and performance of developing countrie:
have become increasingly diverse. While a
number of developing countries, particularly
in Asia, have made significant progress, man
others have suffered economic setbacks in
recent years. Economic cooperation with
developing countries must respond to varyinu
capacities and needs in the critical areas of
development, trade, debt, and finance.
Developed countries must strive to ensure a
better environment for developing countries'
growth and exports in the interest of these
countries as well as of the international
economy more generally. In this regard, the
implementation of the policy directions and
objectives set out in this communique will
represent a significant contribution by OECD
countries to better global prospects.
Economic policies in developing countries
themselves will remain a major factor in their
own performance. Upon them depend heavily
confidence, savings, and investment, both
domestic and foreign. The wide range of
developing countries presently implementing
economic policy reforms to establish a sound
development process must be supported and
Department of State Bulletii
1
ENERGY
encouraged by all possible means including
improved market access and official develop-
ment assistance. In this regard, it is impor-
tant to maintain and as far as possible
increase the flow of development assistance,
as well as to improve its quality and effec-
tiveness. Those developing countries whose
economic strength is already significant
should progressively play their full part in the
rights and obligations of the multilateral
trading system. It is important that the
potential offered by the private sector be fully
exploited.
Large debt burdens remain a major
impediment to growth in certain heavily
indebted middle-income countries. There is no
feasible alternative today to the cooperative
strategy adopted for the solution of these
problems. Only enhanced cooperative action,
on a case-by-case basis, by all parties
involved— debtor and creditor governments,
the international financial institutions, and
private banks— will permit reducing the
strains in a growth-promoting environment.
For some countries, notable progress has
been made in this process. However, in some
cases, difficulties in the adjustment and
financing processes point to the need for
improvements. The trend towards innovative
and more flexible approaches on the financing
side, both private and official, should play a
key role in making debt burdens more
manageable and restoring capital flows.
Even more constraining are debt prob-
lems among low-income countries. Proposals
have recently been made by OECD countries
for additional action to reduce the debt servic-
ing burden of the poorest countries, especially
in sub-Saharan Africa, undertaking strong
growth-oriented adjustment programs. Early
results from the current discussions among
creditor governments will be urgently sought.
For poorer developing countries, provi-
sion of adequate concessional finance is essen-
tial. OECD countries' record in this respect is
already substantial but should be further
enhanced. The volume and forms of aid must
oe commensurate with the growing require-
ments of policy reform programs and broader
development efforts. The new DAC guiding
principles for using aid to support improved
development policies and programs and
strengthening aid coordination with develop-
ing countries are welcomed.
Commodity dependent developing coun-
tries face difficult problems in view of the
outlook for many commodities. An accelera-
tion in world growth would improve the pros-
pects for these countries. New efforts should
be made to diversify their economies and to
address the structural and development
dimensions of commodity dependence. Action
to remove measures distorting trade in com-
modities will make an important contribution
to export prospects for commodity dependent
developing countries.
UNCTAD VII [the seventh meeting of the
UN Conference on Trade and Development]
provides an opportunity to discuss with
developing countries the major problems and
policy issues in the global economy with a
view to promoting common perceptions and
effective policies for trade and develop-
ment. ■
lEA Governing Board Meets in Paris
The International Energy Agency
(IE A) met at the ministerial level in
Paris May 11, 1987. The U.S. delegation
was headed by Secretary of Energy John
S. Herrington.
Following are Secretary Herring-
ton's statement at that session and the
text of the final communique.
SECRETARY HERRINGTON'S
STATEMENT
Since we last met here 2 years ago, com-
petition in the world energy economy
has brought about a sharp drop in oil
prices, triggering major dislocations and
adjustments. The United States is both
the largest producer and the largest con-
sumer in the lEA. Lower prices benefit
U.S. consumers and the overall
economy. But U.S. producers, and the
industries that depend on them, have
had to adjust to the new market condi-
tions while, in many cases, coping with
taxes and regulations imposed in a
period of higher prices.
At President Reagan's direction,
my Department recently undertook an
in-depth review of our energy security
situation in light of lower oil prices. We
have found that continued reliance on
the market to set prices and allocate
energy supplies and investments is the
best long-term strategy for sustaining a
strong national oil industry, assuring our
economic prosperity, and bolstering oiu"
energy security. We also found that the
economic costs of an oil import fee far
outweigh any security benefits, and,
therefore, an import fee has been
rejected. Instead, we have recommended
measures to adjust the taxation, leasing,
and regulatory regimes to current
market conditions.
We recognize that the world oil
market is not perfectly competitive and
that major suppliers at times can exer-
cise their power in an arbitrary way. But
experience over the past decade also
shows that the market imposes an
underlying discipline that cannot be
ignored. Attempts to fix prices (by pro-
ducers, consumers, or both acting
jointly) will result in inefficiency and
ultimately will exacerbate the instability
they seek to prevent. Therefore, while
we continue to value constructive
bilateral contracts with producers, we
are firmly opposed to multilateral
producer-consumer discussions which
would inevitably lead to discussions of oil
prices and production levels and
misguided efforts aimed at stabilization.
International cooperation is critical
to energy security. Go-it-alone
approaches ignore the reality of increas-
ingly independent markets. We continue
to regard the TEA as the best mecha-
nism for coordinating and concerting
energy policies among the industrialized
democracies.
Energy supply disruptions can
damage our economic prosperity, under-
mine national security, and weaken our
capability to achieve foreign policy objec-
tives. Should a disruption occur, the
early use of strategic stocks can mitigate
the economic damage caused by price
increases. Moreover, a credible strategic
oil stockpile serves as a deterrent to
those who might be tempted to use oil as
a political weapon.
Our challenge is to strengthen our
cooperation on emergency preparedness.
Total TEA stocks today exceed 90 days
of last year's imports, but some cannot
be used without disturbing the normal
operations of the oil industry. In addi-
tion, there are wide disparities among
the stock levels held by member coun-
tries. The United States maintains
government-owned oil stocks in excess
of 515 million barrels, about 100 days of
net 1986 imports. President Reagan
announced last week his support for fill-
ing the strategic petroleum reserve by
100,000 barrels per day in order to meet
by 1993 his goal of a 750-million-barrel
reserve, provided that budget offsets are
made available to cover the costs of this
higher fill rate. This would represent a
tripling of the rate previously planned
for FY 1988.
Other lEA members maintain much
lower total stock levels, much of which
are not under unequivocal government
control. Some member countries do not
even meet the 90-day requirement of the
international energy program.
We recognize that oil demand
restraint is the approach some countries
prefer for addressing the early stages of
a supply disruption. However, the effec-
tiveness of demand restraint measures is
difficult to quantify and predict, and
their implementation will have adverse
economic impacts. Countries relying on
demand restraint have an obligation to
evaluate quantitatively the effectiveness
of their programs and to demonstrate
July 1987
47
ENERGY
their willingness and operational
capability to implement these measures
in a timely fashion.
The lEA has made progress since
our last meeting on procedures for coor-
dinated use of oil stocks and other
measures early in a supply disruption,
but more needs to be done. We are not
seeking a change in the legal require-
ments but rather a renewed political
commitment by net oil importers to
increasing accessible government-
controlled stocks to levels that will
enable member countries to contribute
significantly to early response measures.
We would like to see acceptance, in prin-
ciple, that the objective over time should
be to ensure, at a minimum, that all
stocks that contribute to meeting
members' international energy program
commitments are truly accessible. We
must avoid complacency or the
appearance of inaction that would send
an erroneous signal to those who would
manipulate the market for economic or
political gain. Now is the time for other
nations to do more in taking on their fair
share of building strategic stocks.
Lower oil prices also pose a chal-
lenge for international cooperation on
long-term energy security. More com-
petitive energy markets make more
important than ever before the economic
exploitation of the energy resources of
the Organization for Economic Coopera-
tion and Development (OECD). Protec-
tion of domestic producers by govern-
ment-imposed barriers to energy trade
raises costs, reduces economic efficiency,
and violates our mutual commitment to
collective energy security. The high level
of subsidized coal production in a
number of countries severely restricts
market opportunities for more efficient
lEA coal producers. Open access to low-
cost coal from secure sources fosters
economically sound structural adjust-
ments, limits the prospects of reverting
to oil use as a boiler fuel, and encourages
the continued development of massive
OECD coal resources. These are goals
we should all support.
Long-term energy security will be
strengthened by a continued diversifica-
tion of our energy sources away from oil.
We continue to believe that nuclear
power is a safe and economic alternative
to oil for the foreseeable future. Nuclear
energy has been the fastest growing
energy source in the United States and
is projected to expand by about 7%
annually over the next several years.
Successful nuclear power programs in
OECD countries contribute significantly
to global energy supplies. We must all
recognize the benefits that accrue collec-
tively from the nuclear power programs
of our member states and act to assure
that nuclear power remains a safe
energy option for the future.
Indigenous energy production in
TEA countries has expanded signifi-
cantly during the past decade. Further
growth is important, but the more com-
petitive energy marketplace will require
increased efficiency and productivity of
our energy-producing industries. TEA
governments should be prepared to
review carefully their fiscal and
regulatory systems to assure that they
are consistent with the new competitive
realities. We must seek to reduce
governmental burdens on our energy
industries wherever possible and work to
create favorable investment conditions.
In the United States, we have imple-
mented a number of regulatory reforms
and are pressing for approval of several
key proposals, including repeal of the
windfall profits tax on oil, complete
decontrol of natural gas prices, and
increased access to geologically promis-
ing Federal lands. These measures will
boost domestic U.S. oil and gas produc-
tion significantly.
Lower oil prices in no way reduce
the need for collaboration on energy
research and development efforts.
Indeed, increasingly tight national
budgets make it imperative that we
strengthen our collaboration efforts that
were endorsed at our last ministerial
meeting. We were pleased to sponsor
the 1985 workshop on advanced research
and development on end-use technolo-
gies and renewable energy sources. It is
also important to optimize the utilization
of our financial and intellectual
resources to develop nuclear physics and
fusion technology.
We are deeply committed to the goal
of increased energy efficiency. We
believe that a greater reliance on the
market will promote this goal. Market-
based economic growth engenders a
dynamism that encourages technological
innovation and creates the financial
capital needed for investment in new,
more efficient technology. The new car
fleet in the United States continues to
become more efficient, even with lower
oil prices, and is now close to the effi-
ciency of new car fleets in the rest of the
lEA. We used no more energy in 1985
than in 1973, but GNP has grown by
30%, even though energy prices have
been falling for the past 5 years. Last
week, in his message to Congress on
energy security. President Reagan
reaffirmed his goal of diversification.
The United States is deeply commit-
ted as well to assuring that energy pro-
duction and use are consistent with a
clean environment. Our emission con-
trols for automobiles have long been the
most stringent in the world. New power
plants have had to meet tight national
standards since 1971. In an effort to do
even more, the United States has under-
taken a major research and development
effort to reduce further the environmen-
tal impacts of coal combustion. U.S.
Government and industry expect to
spend more than $5 billion in this effort
during the next few years. International
cooperation on environmental research
and development must remain one of our
top priorities.
Reducing the environmental prob-
lems associated with coal use is impor-
tant for maintaining the momentum of
fuel diversification, but protection of the
environment must also be cost-effective
and take account of energy security
objectives. Our responsibility as energy
ministers is to assure both domestically,
and cooperatively in the lEA, that
energy policy objectives are afforded due
consideration in setting environmental
protection goals.
Recent energy market developments
pose both opportunities and challenges
for all of us. The opportunity is for lower
inflation, reduced oil costs, and
increased growth in output and employ-
ment. While realizing these benefits, we
must also meet the energy security
challenge by further strengthening our
emergency preparedness and making
continued progress toward our long-tern
goals of energy efficiency, fuel diver-
sification, and development of our
secure, indigenous energy resources on
an economically sound basis. Agreement
on freeing up energy trade, continued
expansion of nuclear power, and
strengthened oil stockpiles would, in oui
view, be the most significant contribu-
tion we could make at this meeting.
FINAL COMMUNIQUE
1. The Governing Board of the International
Energy Agency (lEA) met at Ministerial levi
on 11th May 1987 in Paris under the Chair-
manship of the Hon. Marcel Masse, Minister
of Energy, Mines and Resources of Canada.
2. Since TEA Ministers last met in July
1985, there have been considerable falls in th'
prices of oil, gas and coal. The market situa-
tion is unsettled and future developments are
difficult to predict. While lower energy prices
have broad economic benefits, they have
created serious problems for certain coun-
tries, industries and regions. Increased con-
sumption and reduced indigenous production
48
Department of State Bulletin
ENERGY
of energy as a result of lower prices raise con-
icerns about long-term energy security. The
Chernobyl reactor accident has underlined the
safety aspects of nuclear power. These
developments could intensify the tightening
of energy markets expected for the 1990s.
3. The central objective of the energy
policies of the lEA and its Member countries
remains to maintain security of supply in both
the short and long term in order to sustain
economic well-being. The policies pursued by
[EA Member countries since 1974 have been
successful. The decisions reached at the
meetings of the Governing Board at Minis-
terial level on 8th May 1983 and 9th July
1985, remain valid. There is a need for energy
Dolicies for the 1990s which will:
• Maintain energy security through con-
:inued development of indigenous energy
■esources and technologies and improvements
n the efficiency of energy use;
• Secure the benefits for lEA countries
iS a whole, of lower energy and oil prices;
• Promote free and open trade in energy;
md
• Further improve preparedness to deal
vith a disruption in energy supplies.
4. Such policies, implemented on a
^-operative basis, will help to promote
•quilibrium in energy markets, reduce exces-
ive fluctuations in prices and ensure that the
■nergy sector continues to support substan-
ial, non-inflationary growth and reduced
inemployment, which are essential to
■conomic and social well-being.
ndigenous Fuel Production
). Continued investment in energy produc-
ion on an internationally competitive basis,
larticularly in exploration and development
if resources indigenous to lEA countries, is a
ital component in achieving adequate supply
support energy security and economic
Towth.
6. Falling oil prices occasioned con-
iderable industry-wide expenditure cuts in oil
■xploration, development and production in
he IE A area. Ministers noted that this has
lad a generally depressing effect on explora-
ion and development activities for gas and
oal as well. A cautious attitude toward in-
■estment by the oil, gas and coal industries
end the financial institutions supporting them
■emains.
7. Governments and industry are react-
ng to recent market developments to
ounter, in part, the effect of lower prices.
Tax and royalty regimes in many producing
'ountries have been substantially adjusted to
lew conditions, either as a result of automatic
idjustments to lower prices, or following
iehberate policy decisions. Ministers noted
vith particular satisfaction the progress made
n recent agreements concerning development
>f indigenous gas resources of lEA countries,
joal production in a number of countries has
)een further rationalized. Continuing support
)f technical advances is expected to achieve
•eductions in finding costs for oil and gas in
he medium and long term.
8. Ministers agreed that flexible produc-
tion and investment regimes will continue to
be implemented in response to current and
future rather than previous market condi-
tions. Particularly, these efforts should
address regulations which restrict trade,
create imbalanced royalty or fiscal regimes-
including both those for oil and for com-
petitive fuels such as coal or gas— and inhibit
hydrocarbon investments. Production regimes
in lEA countries should thus encourage
investment in and development of indigenous
supplies to assure long-term security. Further
legal or regulatory steps to relax or remove
inhibitions to indigenous fuel production and
to competition should focus, as appropriate,
upon: cumbersome and lengthy leasing and
licensing procedures, limitations on develop-
ment of certain areas and transport and
investment requirements.
9. In addition to the contribution of fossil
fuels discussed above, on a longer-term basis
the development of indigenous renewable
sources of energy will become increasingly
important.
Efficiency in the Use of Energy
10. All lEA countries attach high importance
to energy conservation through increases in
the efficiency with which energy is used.
Greater efficiency will limit the demand for
energy and thus lessen the impact of any
future tightening of the energy market. It
will reduce the environmental consequences
of energy production and use. In addition,
increasing energy efficiency brings financial
advantages to undertakings and individuals
and thus stimulates economic activity; in
turn, general economic growth stimulates
improved energy efficiency through higher
levels of investment and technological
innovation.
11. Since 1974, due to high energy prices
and to conservation policies, there has been a
significant improvement in the efficiency wath
which energy is used in lEA countries. A
large potential remains for further improve-
ments on an economic basis. Ministers agreed
to promote, in a way best suited to circum-
stances in each of their countries, coherent
and forceful strategies to realize this potential
in all the main sectors of consumption, includ-
ing the removal of market distortions which
prejudice such a valuable objective. They will,
together with other government and industry
leaders, each make a major effort to publicize
and explain the advantages of efficient
energy use and the ways in which it can be
achieved. They will support the strategies by
such measures as viade-ranging information
and education activities, fiscal incentives and
the development of innovative methods of
private financing of energy conservation
investments; voluntary or mandatory energy
efficiency standards; the systematic and
vigorous pursuit in all public sector activities
of efficiency in energy use on an economic
basis; and the dissemination of new, proved
technologies in accordance with their conclu-
sions on research, development and demon-
stration. The various organizations in both
the public and private sectors concerned with
efficient use of energy, particularly the
energy producing and consuming industries,
should be actively involved in these activities.
Electricity
12. Electricity is basic to economic growth
and a high standard of living in lEA coun-
tries. There is important potential for improv-
ing the efficiency with which electricity is
used, generated and transmitted. Neverthe-
less, new capacity will be needed in many
countries in the 1990s to meet increasing
demand and to replace existing obsolete
capacity. lEA governments and utilities need
to take action to ensure that electricity supply
remains adequate in the long term and that
electricity economics continue to improve.
13. Ministers noted that substantial prog-
ress has been made in diversifying the
sources of energy in electricity generation
and reducing the use of oil. This has been
achieved largely by increased use of coal and
nuclear energy, which in 1986 accounted for
43 per cent and 21 per cent respectively of
electricity production in OECD countries, and
thereby strongly contributed to energy supply
security. Ministers agreed that, for the
future, it was essential for lEA countries to
continue to reduce dependence on oil and to
diversify the other sources of energy used in
this sector. Where economic, multi-fuel
generating plants enable consumers to take
advantage of competition between fuels.
14. Ministers noted that:
(a) Coal and other solid fuels will con-
tinue to be major sources of primary energy
for electricity in many lEA countries. Fur-
ther work is in hand in the lEA on long-term
trends in coal demand (both in electricity
generation and other sectors), as well as in
coal supply and prices. Existing technologies
can- substantially reduce emissions from the
burning of coal without increasing cost to a
point which renders it uneconomic. New
technologies are being developed and
demonstrated which will improve both the
competitiveness and the environmental
impact of using coal. It is essential that no
time be lost in making these new technologies
commercially available to utilities.
(b) Gas is used in electricity generation in
some lEA countries. Substantial additional
demand for gas would involve faster depletion
of IE A gas reserves or require additional sup-
plies from non-IEA countries. Such additional
supplies would, in accordance with the Con-
clusions adopted at the meeting of the
Governing Board at Ministerial level on 8th
May 1983, be obtained from as diverse
sources as possible.
(c) Hydropower can make an important
contribution to additional generating capacity
in some countries. The development of other
renewable sources of energy can provide
important new options in the longer term in
relation both to electricity generation and
energy supplies generally and should be
actively pursued.
(d) Nuclear energy. After the Chernobyl
accident, which was specific to a particular
type of plant, those Member countries for
July 1987
49
ENERGY
which nuclear energy is a relevant option
have carefully assessed the safety of types of
reactors used in their countries. A group of
countries, which account for the bulk of elec-
tricity generation in the OECD region, con-
sider that the standards of safety in their
reactor systems and procedures are so high
that the risk of major accidents is too remote
to justify a change in policy. They therefore
intend to continue their nuclear power
generation programmes in order to secure the
economic and environmental advantages
which flow from them. A few countries still
have their programmes under review. Other
countries have decided not to produce nuclear
power either because they have other non-oil
resources available or because they consider
the long-term environmental impacts and the
residual risks of nuclear energy production,
even under the highest safety standards, to
be unacceptable. One country has decided to
discontinue its existing nuclear programme
by early in the next century.
15. A significant limitation of any of
these options, in particular of coal or nuclear,
for the IE A as a whole would increase
demand for other energy sources and thus the
costs of achieving energy security. The lEA
will continue and deepen its analysis of the
different options for electricity generation.
However, each lEA country will have to
decide on the mix of fuels used in generating
stations best suited to its particular cir-
cumstances. All will, howevei', seek to achieve
a mix which takes into account considerations
of energy security, environment, safety and
the possible effects of their decisions on other
countries. Ministers noted that, despite differ-
ing perceptions about the appropriate
balance, many and useful international con-
sultations and information exchanges about
these decisions were taking place.
16. The safety issues associated with the
production of electricity are of fundamental
importance, particularly in the case of nuclear
energy. lEA countries have already made
important progress in this area and will con-
tinue their efforts to ensure the highest
standards of safety in all aspects of waste
management and of the planning, design, con-
struction, operation and dismantling of
nuclear installations. They will give full
political and technological support to arrange-
ments for international co-operation on
nuclear safety which exist, or are being
developed, particularly within the Nuclear
Energy Agency of the OECD and the Inter-
national Atomic Energy Agency.
Emergency Response Measures
17. Ministers reaffirmed the high priority
given to the lEA emergency preparedness
system, including both international energy
program oil sharing and the co-ordinated
early response stipulated in the Governing
Board Decision of Uth July 1984. Total
stocks held in lEA countries are not
equivalent to more than 160 days of 1986 net
imports, which is considerably more than the
minimum legal obligation of 90 days by each
country. Ministers welcomed the further
50
progress made since they last met in July
1985. Procedures to co-ordinate, carry out
and monitor stockdraw and other measures
early in an oil supply disruption are being fur-
ther enhanced. However, a small number of
countries is still required to continue efforts
to achieve their individual obligations.
Ministers emphasized the necessity of comply-
ing with the legal obligation of the lEP con-
cerning emergency oil stocks and demand
restraint measures.
18. Ministers reconfirmed that the cur-
rent oil market situation does not offer any
room for complacency, that it presents a
valuable opportunity both for strengthening
lEA emergency preparedness and for nar-
rowing the disparities between Member coun-
tries in this regard and that efforts should be
continued to ensure security against a supply
disruption. In addition to emphasizing the
necessity of complying with the legal obliga-
tions of the international energy program
concerning emergency oil stocks and demand
restraint measures. Ministers welcomed
action by individual countries to increase
stock levels and to improve the ability to
bring about stockdraw by government initia-
tive. While the international energy program
requirements already make allowance for
stocks not available for use, Ministers
acknowledged the benefits of having stocks
held against the international energy pro-
gram requirements in excess of that
allowance fully available for use. They noted
that additional progress in this regard would
further enhance emergency preparedness.
Ministers also acknowledged that further
enhancement of emergency response
measures, including demand restraint,
increased supplies of synthetic fuels as appro-
priate and stock holding, will provide yet
greater protection against vulnerability to oil
supply disruptions.
19. lEA governments will maintain
emergency response programmes, including
stock levels that would be available at the
instance of governments, under clear and
definite authority so as to assure their ability
to implement these programmes in an oil
supply disruption, in accordance with national
law or policy.
20. Net oil importing countries should
take advantage of the present situation to
actively increase their level of emergency
preparedness, including stock levels. It has
been noted with satisfaction that a significant
improvement of emergency preparedness in
the lEA region as a whole is taking place
because some countries are increasing the
level of government and public entity stocks.
Ministers welcomed the continuation of these
efforts and encouraged other Member coun-
tries to make improvements to the level of
their stocks.
21. Net oil exporting countries should
further contribute to the general protection of
the IE A group against an oil supply disrup-
tion, by such means as surge production,
stock drawdowns, demand restraint or other
appropriate measures.
22. Further improvements of the overall
contribution of effective demand restraint
measures and stockholdings are justified, par-
ticularly for countries whose degree of
emergency preparedness is relatively low.
Ministers asked the Governing Board to con-
clude within one year whether and, if so,
what steps should be taken within this con-
text to further improve lEA Member coun-
tries' capacity, both individually and collec-
tively, to contribute effectively to early
responses, including the level and availability
of stocks and demand restraint.
23. Ministers agreed on the usefulness of
periodically training personnel and testing the
emergency response system. Mutual
exchange of information and experience and
the new round of emergency response
reviews would also identify areas for further
improvements in the effectiveness of national
demand restraint programmes.
Barriers to Trade, Energy Prices
and Taxation
24. Energy markets can only function prop-
erly if lEA countries avoid barriers to energy
trade and follow sound price and taxation
policies. Significant progress has been made
in implementing the 1985 Ministerial Com-
munique commitment to oil product trade on
the basis of supply and demand without
distortions. lEA countries will resist new pro-
tectionist measures relating to energy
imports, such as import fees and other trade-
distorting measures. They will also continue
to reduce, with a view to eliminating, remain-
ing trade barriers, including subsidies, norms i
or other government controls which impede
trade, recognizing that other policy considera*
tions, including social and regional ones, mayi
make it necessary to deal gradually with som*
of these barriers.
Energy Research, Development
and Demonstration
25. Technology continues to have a major
role to play in providing alternatives for a
more balanced and diversified energy mix to
ensure medium- and long-term energy secu-
rity. In light of recent trends in oil prices and(
of reductions in private and public research,
development and demonstration expenditures
in many countries, it is essential that those
activities on which energy security depends
should not be prejudiced. Ministers therefore'
re-emphasized their commitment to pursue
the development of economically sound and
environmentally acceptable energy tech-
nology options. They will also seek to improvf
collaboration between government and indus^
try in research, development and demonstra-
tion of energy supply and end-use tech-
nologies, both at the national and at the inter
national level.
26. Research, development and demon-
stration for the development of indigenous
hydrocarbon supplies has traditionally been
provided by the private sector. A number of
projects may now be delayed or curtailed witl
implications for longer-term energy security.
Governments should be aware of these
developments and will examine how they can
work with industry to ensure continuity.
Department of State Bulleti]
ENERGY
27. Ministers agreed to pursue the
development of technologies for improved
energy efficiency on a national and
multilateral basis including through lEA
collaboration agreements. They also stressed
the importance of such activities as analytical
and information programmes to facilitate a
wide dissemination of successfully demon-
strated end-use technologies, which deserve a
geographically broader market penetration.
28. Ministers agreed to seek further
opportunities to advance the development of
renewable energy technologies through joint
activities, while recognizing at the same time
that priorities in this area have to be iden-
tified by individual countries since resource
availability, economics and institutional bar-
riers are in general highly dependent on local
circumstances.
29. The transportation sector, where
technology has been slow to provide new
economic options, is still essentially
dominated by petroleum-based liquid fuels.
Ministers agreed that more attention should
be focused on research and development
efforts to promote a higher degree of diver-
sification in this sector.
30. Based on the above considerations,
Ministers decided to extend the active pursuit
of enhanced international collaboration,
through joint consultations at an early stage
of research and development planning, to new
fields, including end-use efficiency, new
renewable technologies and diversification of
transportation fuels.
31. Finally, Ministers stressed the impor-
tance of continued international collaboration
to optimize the use of the very considerable
resources still needed for the development of
nuclear fusion technology.
Energy and the Environment
32. Energy production and use should be car-
ried out in an environmentally acceptable
manner. Ministers reaffirmed their commit-
ment to promote actively in their energy
policies those lines of action which advance
the objectives of both energy and environ-
mental policy on the lines set out in the Con-
clusions on Energy and the Environment
adopted at their meeting in July 1985. Solu-
tions to the environmental problems
associated with energy are fundamental to
the maintenance of adequate, economic and
secure supplies. Ministers also again empha-
sized that just as the formulation of energy
policy should give due weight to environmen-
tal considerations, so should environmental
policy give due weight to energy policy con-
siderations. The lEA has already given much
attention to following up these decisions. The
decisions taken at the current meeting on
efficiency in the use of energy, on electricity
generation and on research, development and
demonstration, including work on renewable
energies and transportation, wA\ all advance
the objectives of both energy and environ-
mental policies. It is important that a proper
balance be maintained between energy and
environmental policies which at the same time
stimulates research, development and com-
mercialisation of new cleaner energy
transforming and using technologies.
33. The increase of the atmospheric con-
tent of carbon dioxide, due to a large extent
to the burning of fossil fuels, may have poten-
tially serious consequences on the environ-
ment and specifically on climate, agriculture
and sea levels. A well co-ordinated multina-
tional research effort is essential to assess the
likelihood, extent and timing of such conse-
quences. The lEA will follow progress and
evaluate its implications on energy policy.
Relations With Non-IEA Countries
34. Developments and policy decisions in
developing countries and other non-IEA coun-
tries will have an increasingly important
effect upon global energy balances, and thus
upon the energy future and economic well-
being of all countries. Continuing constructive
contacts between parties concerned to gather
and exchange information about energy
developments and to promote understanding
can contribute to sound energy policy actions
both inside and outside the lEA.
35. lEA countries will give increased
attention to sound investments in exploration
and development activities of developing
countries with significant potential for future
hydrocarbon supply. Ministers will support
activities of international organisations to
help improve investment regimes or to help
finance investment in energy sectors of
developing countries, as well as bilateral
development aid projects directed toward
energy.
Implementation
36. Regular monitoring of progress both by
the IE A and its Member governments is
essential to the successful implementation of
these decisons. This work will be helped by
the regular exchange of information and
experience. Ministers instructed the Govern-
ing Board at official level to review and
where necessary strengthen the arrange-
ments for such monitoring and exchanges. ■
Energy Security
MESSAGE TO THE CONGRESS,
MAY 6, 1987'
Pursuant to Section 3102 of the Consolidated
Omnibus Budget Reconciliation Act of 1986
(Public Law 99-509; 100 Stat. 1889), I am
transmitting my views and recommendations
on the energy and national security concerns
related to oil import levels. These views and
recommendations take into consideration the
findings in "Energy Security; A Report to the
President of the United States." That report
was prepared under the direction of
Secretary of Energy John S. Herrington at
my request and in satisfaction of require-
ments of Public Law 99-509.
My Administration has done a great deal
to build the Nation's foundation for long-term
energy security and to strengthen the
domestic oil industry. Price and allocation
controls on oil have been eliminated; the
Strategic Petroleum Reserve (SPR) has been
increased nearly fivefold to more than 500
million barrels and, with our encouragement,
our allies have built up their stockpiles by
about 350 million barrels; several important
energy tax incentives were retained in the
Tax Reform Act and full-cost accounting pro-
visions for independent producers were
preserved; and I have recently forwarded to
the Congress a $2.5 billion clean coal initia-
tive. Because of these actions, the United
States is now capable of withstanding a
supply interruption comparable to the 1973
and 1979 interruptions without experiencing
the same economic distress.
More remains to be done. Secretary Her-
rington's recent report on energy security
points out three major concerns: (1) our
increasing dependence on imported oil; (2) the
sudden decline in oil prices in 1986, which has
harmed significant segments of the U.S.
petroleum industry; and, (3) the serious impli-
cations for national security raised by both of
these events. The Department of Energy
study concludes that by the mid-1990s we
may be importing more than half our oil.
Capital expenditures for oil exploration and
development have dropped significantly, as
has employment and U.S. oil production.
Coupled with this production decline is
increased consumer demand for oil, which
together have resulted in a rise of one million
barrels per day in oil imports. In recent
months, while market prices have rebounded
to some extent, the industry remains under
pressure and the outlook is uncertain.
We must take steps to better protect
ourselves from potential oil supply interrup-
tions and increase our energy and national
security. My goals in this area are to:
• Maintain a strong domestic oil industry;
• Increase our domestic stockpiles, which
we can draw down in the event of a supply
interruption;
• Expand the availability of domestic oil
and gas resources;
• Continue conservation and progress
toward diversification of our energy
resources; and
• Promote among our allies the impor-
tance of increasing their stockpiles.
I have already proposed a number of
significant steps on which the Congress has
failed to act. If these policies had been in
place, our domestic oil industry would not be
so seriously impaired today. I again urge the
Congress to act quickly in adopting my pro-
posals to improve our energy security and
strengthen the domestic oil industry,
including:
• Repeal of the Windfall Profit Tax;
• Comprehensive natural gas reform, in-
cluding wellhead price decontrol, mandatory
contract carriage, and demand restraint
repeal;
• Approval of the Department of the
Interior's five-year offshore oil and gas leas-
ing plan;
July 1987
51
ENVIRONMENT
• Permitting environmentally sound
energy exploration and development of the
Arctic National Wildlife Refuge; and
• Ensuring the future viability of nuclear
power through nuclear licensing reform,
reauthorization of the Price-Anderson Act,
and progress in development of a nuclear
waste repository.
Secretary Herrington and I will continue
to push hard for higher levels of oil stockpiles
among our allies, particularly at the
Ministerial Meeting of the International
Energy Agency and the Venice Economic
Summit. The Vice President is also leading
the Task Force on Regulatory Relief to look
at unneeded regulatory barriers to greater
energy security, including evaluating
regulatory changes to facilitate the use of
alternative fuels for the transportation sector.
In addition, today, I am urging the Con-
gress to consider several steps that will lead
to more exploration and development, reduce
early well-abandonment, and stimulate addi-
tional drilling activity. I am suggesting the
Congress consider two tax changes of a
relatively technical nature: increasing the net
income limitation on the percentage depletion
allowance from 50 percent to 100 percent per
property; and repealing the transfer rule to
permit use of percentage depletion for proven
properties that have changed ownership.
These changes will be of significant value but
avoid reopening basic issues considered in tax
reform. To continue our efforts to build a
stockpile protecting us against supply inter-
ruptions, I am prepared to support an SPR
fill rate of 100,000 barrels per day, which will
achieve by 1993 my goal of an SPR of 750
million barrels, provided that budget offsets
are made available to cover the higher costs
of this fill rate. I am also reducing the
minimum bid requirement for Federal off-
shore leases from $150 per acre to $25 per
acre, which will encourage exploration and
development by reducing the up-front costs.
I believe all these measures are important
steps toward ensuring that our Nation has a
strong domestic oil and gas industry and
substantial protection against oil supply inter-
ruptions. They would, taken together,
increase production and make a significant
contribution to our national security interests.
I am also instructing the Secretary of
Energy to provide, through the Domestic and
Economic Policy Councils, periodic assess-
ments of our energy security risks. It may be
necessary to consider a variety of options for
encouraging exploration and production if our
U.S. industry continues to be diminished and
national security risks increase. 1 will con-
sider further actions as warranted.
Ronald Reagan
The Environmental Agenda
and Foreign Policy
'Text from Weekly Compilation of
Presidential Documents of May 11, 1987.
Following are addresses by John D.
Negroponte, Assistant Secretary for
Oceans and International Environmen-
tal and Scientific Affairs, and by
Richard E. Benedick, Deputy Assistant
Secretary for Environment, Health and
Natural Resources, before the State
Department Symposium on the Environ-
mental Agenda and Foreign Policy on
April 16, 1987.
ASSISTANT SECRETARY
NEGROPONTE
It is a pleasure for me to welcome you all
here for this symposium on the environ-
mental agenda and foreign policy. I
would like to thank [Director of the
Office of Public Programs] Sam Fry for
his introduction. His suggestion that this
gathering take place and the widespread
interest demonstrated by your participa-
tion tells me that environmental issues
have truly come of age at the Depart-
ment of State and deserve to be
recognized as an integral element of
American foreign policy.
It has been especially gratifying, in
the nearly 2 years that I have served as
Assistant Secretary, that the Secretary
of State has consistently expressed
interest in the critical issues with which
we are involved and has encouraged me
to pursue agreements on an interna-
tional level which serve to maintain this
nation as a leader in the field of environ-
mental protection. The personal interest
of Secretary Shultz was evident earlier
this year when he and the Mexican
Secretary of External Affairs held a
ceremony in this building to implement
annexes on hazardous waste and air
pollution as part of the U.S. -Mexico
Border Environment Agreement.
Responsibilities of OES
Many of you work with us regularly on
issues of mutual concern. To those of
you from environmental organizations,
the business community, and Capitol Hill
especially, we look forward to hearing
your views this morning. For others of
you, this gathering may be your first
contact with OES, the Bureau of Oceans
and International Environmental and
Scientific Affairs. Therefore, I would
like to sketch for a moment the global
range of issues we cover.
OES is comprised of four divisions
plus the Office of the Coordinator of
Population Affairs and an Executive
Directorate.
52
• My deputy, Richard Benedick, is
responsible for Environment, Health,
and Natural Resources— the areas our
panels will cover today.
• Oceans and Fisheries Affairs is
another responsibility of OES, one which
is frequently involved in conservation
and resource management issues. This
division supports U.S. participation in
the Antarctic Treaty, the International
Whaling Commission, the North Atlantic
Salmon Conservation Organization, and
the International Maritime Organization,
to name a few examples. It also works
on an entire range of issues related to
the law of the sea, including, of course,
protection of the marine environment.
• Our division of Nuclear Energy
and Energy Technology Affairs deals
with issues of nonproliferation, nuclear
safeguards, and nuclear energy coopera-
tion. It was very much involved in the
Department of State's response to the
accident at Chernobyl and also par-
ticipated in the International Atomic
Energy Agency deliberations which led
to the adoption last fall of agreements
on notification and emergency assistance
in case of nuclear accidents. We continm
to be interested in the accidents.
• Oversight and coordination of
international scientific cooperation is th»
principal function of our division of
Science and Technology Affairs. There
are dozens of government-to-govern-
ment science cooperation agreements
between this country and others, rein-
forced by literally hundreds of direct
agency-to-agency cooperative arrange-
ments. These relationships are valuable
not only for the science which they pro-
mote but also for the good will they can
create and the access they can develop
to important segments of other societies
Science and technology agreements hav
proven to be particularly beneficial with
such diverse nations as China, India,
Yugoslavia, and Israel. At this very
moment, an effort is underway to bolste
our science relations with Brazil; and I
am pleased to report that, at OES's sug-;
gestion, the U.S. side plans to propose
environmental science as one of the
areas of concentration.
Another important function of the
science division is to provide support to
the 42 full-time science officers at em-
bassies abroad whose job it is, among
other things, to serve as our eyes and
ears on science-related developments in
other countries.
• The Coordinator of Population
Affairs provides foreign policy guidance!
Department of State Bullet!
ENVIRONMENT
in the formulation and implementation of
U.S. policy on population. Clearly, there
is a relationship between demographic
pressure and environment which is evi-
dent in such issues as the destruction of
tropical forests to accommodate popula-
tion growth or the pollution and health
problems caused by urban overcrowding.
Turning now to environmental
issues, I note from the morning's pro-
gram that you will be receiving quite
complete exposure to the Bureau's
environmental agenda. But let me make
a few introductory observations.
U.S. Environmental
Role and Priorities
First of all, how do we define our role
and shape our priorities? I am sure it
comes as no surprise to you that we have
no greater claim to control over events
than any other agency. So even with the
best of motives and intentions, much of
what we do is driven by external cir-
cumstances. The Chernobyl reactor acci-
dent was a case in point. Likewise, we
have only limited influence over how and
when our most immediate neighbors will
raise or, for that matter, create environ-
mental issues with which we must deal.
Having said that, I think it is useful
to distinguish in our work between
environmental issues driven by bilateral
or regional considerations, on the one
hand, and global environmental ques-
tions, on the other. Sometimes the
distinctions become difficult to make,
and, on other occasions, the local and
global issues can become intertwined.
But I am sure you will agree that the
environmental impact of Tijuana's
sewage, as destructive to the local
environment as it may be, is a qualita-
tively different issue from the destruc-
tion of the planet's stratospheric ozone
layer— unless, of course, you happen to
live in San Diego. However, an environ-
mental policy official disregards localized
problems at his own peril. And, indeed,
issues of water and air quality have been
on our bilateral agenda with Mexico and
Canada going back many decades.
Bilateral and Regional Concerns.
So I would suggest to you that the first
and, in many respects, the most politi-
cally sensitive set of international
environmental concerns this country has
is with its immediate neighbors to the
north and south. I won't elaborate exten-
sively on them at this point. Perhaps we
can go into some during the question
period. But a partial listing would serve
to illustrate my point.
• First, there is the issue of acid
rain with Canada. In January 1986, two
specially appointed envoys— one Cana-
dian and one American— issued a report
detailing recommendations designed to
foster a long-term solution to this
serious environmental and political prob-
lem. President Reagan fully endorsed
the envoy's recommendations shortly
thereafter and reaffirmed this commit-
ment at his most recent summit meeting
with Prime Minister Mulroney in
Ottawa. The President also agreed to
consider Canadian proposals for an acid
rain accord.
• Turning south of the border, the
U.S. -Mexico Border Environment
Agreement of 1983 has successfully
addressed serious problems of trans-
boundary environmental quality between
our two countries, such as air pollution
from copper smelters and transboundary
shipment of hazardous waste. It has
been cited by both sides as a model for
cooperation between us, which can be
extended to other worrisome border
issues such as re-use of waste water for
irrigation.
• Finally, in a completely different
area of concern, the United States and
Canada recently completed a successful
negotiation on principles for the manage-
ment of the porcupine caribou herds
whose migratory range extends across
both of our territories.
I could cite numerous other
endeavors, but the thought I wish to
leave with you today is the commonsen-
sical notion that these transboundary
environmental questions are ones we
cannot afford to neglect. What is more,
our success in coping with the more
immediate, and frequently more
politically urgent, environmental matters
affects our credibility when dealing with
global issues.
Global Issues and Cooperation. On
the global scene, I would like particularly
to cite the fine work of the UN Environ-
ment Program (UNEP) in these types of
issues. An outstanding example is the
regional seas program. Most recently we
participated in concluding a convention
on the South Pacific environment.
Again, the political and environmental
sides of things meshed nicely because
our signing of the South Pacific Regional
Environmental Convention turned out to
be a bright spot in our relations with the
Pacific island states.
Another major UNEP initiative is
the ongoing international negotiation on
protection of the ozone layer. This is a
high-priority issue. In my opinion, an
opportunity is in our grasp to achieve
significant protection for future genera-
tions at relatively low cost to ourselves
today. On the related but broader matter
of global warming, we know that exten-
sive monitoring is needed to develop a
scientific consensus on the extent and
impact of the problem, and we,
therefore, strongly support UNEP's
Global Environmental Monitoring
System.
Another global environmental con-
cern is represented by the Convention on
International Trade in Endangered
Species (CITES) and the well-received
U.S. initiative to develop a strategy to
protect and conserve the rapidly disap-
pearing population of rhinos in Asia and
Africa. Finally, I should mention this
Bureau's involvement in efforts to
influence the multilateral development
banks to protect tropical forests and
preserve biological diversity.
There is clearly much that remains
to be done in the field of international
environmental protection. The raising of
environmental consciousness throughout
the world is a complex political,
economic, and cultural challenge. Instill-
ing environmental values in economically
deprived societies is a task whose enorm-
ity, I suspect, people from as fortunate
circumstances as ourselves can only
begin to appreciate. And yet, increased
environmental understanding in Third
World countries will be essential in
addressing some of the most critical con-
cerns of our day, such as global chmate,
biological diversity, and tropical forests.
Effects of Budget Cuts
Unfortunately, in the face of these
challenges, the funds available to the
State Department, including those for
international environmental efforts,
have been reduced in the ongoing budget
stringency. Secretary Shultz has
testified eloquently before numerous
congressional committees about the
damage to our international influence if
we are forced to continue cutting pro-
grams to meet unrealistic budget
targets. Support for environmental pro-
grams makes up only a fraction of the
foreign affairs budget, which itself is
only a very small portion of the Federal
budget. I want to lend my support to the
Secretary's message and make the point
to this audience that our ability to con-
tribute to international environmental
programs is directly related to the State
Department's ability to secure adequate
funding.
The Role of Nongovernmental
Organizations and Congress
I am very gratified that so many of you
here today represent nongovernmental
environmental organizations. Because
just as you have supported us in our
environmental agenda of the past
several years, so, too, do I believe you
can even further promote linkages and
networks with like-minded private
Julv 1987
53
ENVIRONMENT
organizations throughout the world,
especially in countries which lack that
particular type of private sector
experience.
Let me suggest that one especially
ripe target for expanded nongovernmen-
tal organization activity is right in our
own hemisphere. With the dramatic
opening toward democracy in Latin
America and the corresponding accept-
ance of a more pluralistic way of doing
things, the opportunities for effective
action by private organizations have
been substantially increased. Let me
urge that you do what you can to take
advantage of these new opportunities.
Despite what I believe to be signifi-
cant progress in international environ-
mental protection over the past 2 years,
we must not become complacent merely
because we can negotiate sound interna-
tional agreements. These agreements
must be ratified both by the U.S. Senate
and by a sufficient number of other
countries for them to enter into force
internationally. I am pleased to note that
the Senate acted quickly on the Vienna
Convention on Protection of the Ozone
Layer and on the Ramsar Convention on
Conservation of Wetlands. However,
Congress does not always act so expedi-
tiously. Take the example of liability and
compensation for the damaging oil spills
from tankers that occur each year,
resulting in millions of dollars in
economic losses to commercial fishermen
and beachfront property owners, as well
as environmental damage and expensive
cleanup costs to Federal, state, and local
governments.
If a spill on the order of the Amoco
Cadiz— which marine insurers estimate
will eventually be settled in the range of
$180-$300 million— were to occur in the
United States, neither existing state nor
Federal statutes would be adequate to
cover the cleanup costs and to fully com-
pensate legitimate claimants. For this
reason, in 1984 the United States took
the lead in negotiating two protocols to
the 1969 Civil Liability and the 1971
Fund [The International Convention on
the Establishment of an International
Fund for Compensation for Oil Pollution
Damage] Conventions. These
agreements would provide up to $254
million for victims who suffer pollution
damage from
oil tanker accidents. President Reagan
transmitted these protocols to the
Senate in November 1985 with a request
for expeditious advice and consent. The
99th Congress failed to act, and the
Administration must continue to press
for advice and consent in the current
congressional session. Your support for
such congressional action is essential if
we are to follow through on the types of
important international initiatives we
are discussing here today.
Conclusion
So, in conclusion, let me stress that— as
the few examples I have cited here so
clearly illustrate— effective international
action on the environmental front is,
indeed, a complex process involving
coordinated action between the public
and private sectors both here and
abroad. Its success requires energy and
commitment at every level— from the
grassroots to the capitals of the world.
The organizations you represent are a
dynamic part of this process. We look
forward to continuing to work with you
in pursuit of our common environmental
goals.
DEPUTY ASSISTANT
SECRETARY BENEDICK
Now that you've been exposed to a
whole morning of discussion of interna-
tional environmental issues, there seems
little left for me to add. In pondering
how I might close this useful inter-
change, the thought occurred to me that
I might talk a bit about the process by
which we develop and implement a U.S.
position on the international stage. I use
the theatrical metaphor advisedly
because the process involves many
actors, occasionally has too many direc-
tors, and has its moments of high drama
(and sometimes farce). I know that it is
not always clear to you— the audience-
how this process works, so I will try
today to draw the curtains apart.
Policy and Process
in Environmental Issues
The State Department is, as you may
know, the smallest U.S. Government
department, as measured by budgetary
size. Also, in terms of personnel, it is
literally dwarfed by most agencies in this
town. We do not have tens of millions of
dollars to fund research or assistance
programs. Especially during the recent
hard times, it is often difficult for us
even to find travel funds to send some-
one to an international conference. We
also do not have, as some of our sister
agencies do, an array of world-class
scientists operating at the frontiers of
knowledge.
What we do offer is experience with
the world outside our borders, an under-
standing of the nuances of negotiating in
a foreign or multilateral context, and a
sense of the relationships between
domestic concerns and foreign policy.
As Ambassador Negroponte pointed
out earlier today, international
environmental issues may involve either
bilateral relationships (i.e., with one
other country) or global subjects,
generally discussed in a multilateral
framework. But bilateral issues for our
Bureau go beyond our immediate neigh-
bors to the north and south. Last winter,
for example, we worked together with
the U.S. Fish and Wildlife Service on a
ban on wildlife imports from Singapore,
which resulted in that country joining
the Convention on International Trade
in Endangered Species and prohibiting
trade in rhinoceros and its byproducts.
Turning to multilateral relations, the
Organization for Economic Cooperation
and Development (OECD) is essentially
our forum for discussions among the
Western industrialized nations on
environmental issues, ranging from
safety in biotechnology to prevention
and management of chemical accidents.
The UN Environment Program is the
primary North-South forum, dealing
with such global issues as protection of
the ozone layer and trade in toxic
chemicals. The UN's Economic Commis-
sion for Europe (ECE) is the place for
East- West discussions of such issues as
transboundary air pollution from sulfur
dioxide or, currently in process, nitrogen
oxides. And we also work, among othera
with the UN Food and Agriculture
Organization on pesticides and on
tropical forests, with the World Health
Organization on efforts to control the
AIDS epidemic, and with the World
Meteorological Organization on global
climate change.
Often there is a merging of the
bilateral and multilateral contexts. Our
differences with Canada over acid rain
influenced the U.S. position on an ECE
treaty on sulfur dioxide. An agreement
with the Soviet Union for cooperative
research on climate change and on
stratospheric ozone has clear implica-
tions for ongoing discussions in
multilateral fora.
Many of the issues we deal with
arise from, or are influenced by,
grassroots concerns. Private environ-
mental organizations, for example,
aroused congressional interest in
multilateral development bank lending
policies, which in turn galvanized the
Treasury and State Departments and I
the Agency for International Develop- I
ment to undertake a worldwide cam- I
paign to heighten environmental I
awareness in these banks. Citizens' I
groups in California played an important
role in our negotiations with Mexico ove
54
Department of State Bulleli
ENVIRONMENT
Tijuana sewage. Similarly, in Alaska,
state and native American groups
iniHuenced the U.S. position with Canada
on conservation of the porcupine caribou
herd. Our successful negotiation of a
South Pacific environmental convention
had to take account of the independent
voices of three U.S. Pacific trust ter-
ritories and three flag territories. And
private industry and industrial associa-
tions find an open door at the State
Department, as they strive to reconcile
environmental responsibility with
balance sheets and employment.
In short, the domestic constituencies
;are important actors in our drama—
indeed, they are sometimes actually on
stage, or at least in the wings, as observ-
srs and counselors, for example, in cur-
,rent international negotiations on the
Dzone layer and on hazardous chemicals.
Developing a
U.S. Policy Position
Dnce an environmental issue comes onto
)ur agenda, the first task for us is to
levelop a State Department position.
This may involve consultations with the
•egional bureaus for political guidance,
vith the legal counselor on questions of
nternational law and precedence, and
vith bureaus specializing in economic
md business affairs or international
)rganizations. For scientific policy
idvice, we will look to the OES Bureau's
)wn distinguished Science Advisory
Committee and to the research expertise
)f such agencies as the National
\.eronautic and Space Administration
NASA), the National Oceanic and
Atmospheric Administration (NOAA),
he Food and Drug Administration
FDA), or the Environmental Protection
Vgency (EPA). And we may involve the
Secretary of State or the Deputy
Secretary on issues of high prominence,
'.uch as acid rain, ozone, or the Mexican
, )order agreement. Often, we will use
)ur U.S. embassies abroad to seek views
)f other governments as we develop our
;houghts on an issue.
Then comes the challenging task of
)rchestrating a government-wide posi-
;ion. This may involve liaison with just
)ne agency— e.g., the Department of
nterior's Fish and Wildlife Service on
;he porcupine caribou issue— or it may
nvolve 12-18 different agencies, as in
;he case of ozone or the question of
3cean disposal of radioactive wastes
jonder the London Dumping Convention.
To illustrate the extent of the
required interagency coordination, let
me just quickly list some of the U.S.
agencies we deal with on a regular basis,
with only a partial sampling of issues
connected with that particular agency:
EPA— Mexican and Canadian issues,
ozone, regional seas;
Treasury— multilateral bank lending
policies;
Interior— rhinos and other
endangered species;
NASA— ozone;
NOAA— climate change;
Navy Department— ocean disposal of
radioactive wastes;
Department of Commerce— hazard-
ous chemicals;
National Science Foundation— bio-
technology;
FDA— pharmaceuticals;
National Institutes of Health— AIDS;
Department of Agriculture— tropical
forests;
U.S. Trade Representative— trade
aspects of international regulations;
Agency for International Develop-
ment—biological diversity;
Department of Energy— acid rain;
and
Various White House offices,
including OMB [Office of Management
and Budget], the President's Science
Adviser, the Council of Economic
Advisers, the Domestic Policy Council,
the National Security Council, and so on.
The U.S. Government position on an
issue is usually forged through inter-
agency meetings, personal consultations,
and drafting groups. Differences among
agencies' viewrpoints must be resolved at
higher political levels, sometimes involv-
ing the Cabinet and, occasionally, even
the President— as was the case in the
recent evolution of our acid rain policy.
Building Domestic and
International Support
The result is a formal position, which
must now be sold, at home and abroad.
Now a different kind of negotiating
strategy comes into play. We often
return to the environmental groups, to
the industrial associations, and to Con-
gress. We testify; we hold workshops;
we give press interviews to explain and
justify a position.
Turning the focus overseas, we again
rely on our embassies, utilizing their con-
tacts with governments to transmit our
cabled instructions and to seek foreign
allies for our point of view. Often, we
will call in foreign representatives from
their embassies here in Washington,
individually or— as in the case of
biotechnology and ozone— for group
meetings to discuss the U.S. position.
We may also send special teams to
foreign capitals for bilateral consulta-
tions at ministerial or subcabinet level,
such as the mission I led in February-
comprising also representatives of EPA
and NASA— to Brussels, Paris, and Lon-
don on the ozone issue. We may also try
to use the media, through press con-
ferences and interviews, to amplify our
persuasive voice. In a recent variation of
this theme, NASA senior scientist Bob
Watson and I utilized the United States
Information Agency's "Worldnet" inter-
active video interview technology to
reach audiences all over Europe on the
ozone issue— a process which we will be
repeating next week for Japan and later
on for Latin America.
And, as this process unfolds, the
U.S. negotiators— your negotiators-
venture forth to try and achieve a
reasonable international agreement, one
that balances our responsibility to
safeguard human health and ecology
with the political and economic realities
which affect both domestic and foreign
policy. We hope that we succeed; we
know that we must, in any case, answer
for our efforts.
Conclusion
In all of this, our motto might well be
the words of Francis Bacon, written
over 300 years ago: "Nature, to be com-
manded, must be obeyed."
I hope that this little survey may
enable you to better understand those of
us enmeshed in the drama of interna-
tional environmental protection—
perhaps to share somewhat the rare
moments of exhilaration when we can
see the culmination of work well planned
and well done, as well as those moments
of frustration when we go home to a cold
supper after yet another inconclusive
late-night interagency meeting.
In conclusion, I hope that this sym-
posium has been as useful to you as it
has been for me and my staff. On behalf
of OES and our panelists, let me thank
you for your interest and attention and
your participation this morning. We will
continue to welcome your ideas and
counsel. ■
55
EUROPE
Visit of French Prime IVIinister
■a
k
Prime Minister Jacques Chirac of the
French Republic made an official work-
ing visit to the United States March
29-April 1, 1987, to meet with President
Reagan and other government officials.
Following are arrival remarks made
by President Reagan and Prime Minister
Chirac on March 31.'-
President Reagan
Nancy and I offer you our warmest
welcome to the United States, to
Washington, and to the White House.
And we greet you, Mr. Prime Minister,
not only as the head of government of
the French Republic, our nation's oldest
ally in war and peace, but as a represen-
tative of the people of France, for whom
the people of the United States have
long had a special affection.
We only have to look around us this
morning if we could, to look beyond the
White House lawn to the graceful monu-
ments of George Washington and
Thomas Jefferson, to be reminded [of]
the historic struggles for freedom and
liberty which have bound our nations
together for generations. Indeed, the
park directly across the street from the
north entrance of the White House bears
the name of a brave Frenchman who, as
a young man, became a trusted aid and
almost a son to George Washington,
Lafayette.
As you know this year we Americans
are celebrating the 200th anniversary of
our Constitution. In doing so, we're
rededicating ourselves to the aspirations
of all men to live in freedom and peace,
aspirations captured in that ageless
document. It was written by Americans,
of course; but today it is only right to
point out that they were Americans-
James Madison, Alexander Hamilton,
and others— who had been influenced by
the great names of the French
Enlightenment, like Montesquieu, for
one, and by the hopes for liberty and
human rights so ardently expressed by
the French people themselves.
Some months ago our two great
nations celebrated the 100th anniversary
of the Statue of Liberty, a gift from the
people of France to the people of the
United States. Lady Liberty, now
beautifully refurbished, her torch
rekindled, has rightly become cherished
throughout the world as a symbol of
human freedom. But even Lady Liberty,
as magnificent as she is, would be
nothing but an empty symbol had not the
American and the French peoples, time
and again, joined together in moments of
peril, joined together in common
sacrifice to preserve and defend freedom
itself.
Three years ago I stood on the windy
beaches of Normandy and, as French-
men and Americans, recalled together
the most perilous days of the Second
World War. And this spring Americans
will join in celebrating the 70th anniver-
sary of the arrival in France of the
American expeditionary force of World
War I. Indeed, from Yorktown to
Belleau Wood, from Normandy to
Beirut, Frenchmen and Americans have
stood together and, yes, died together in
the name of peace and freedom.
Today we continue to face grave
challenges together as we seek to ensure
a safer world and a more prosperous
future, one in which our peoples and
those of other nations can live in still
greater prosperity and freedom. We
both understand that to achieve that end
our friendship must remain deep, our
alliance strong and bold. And we both
believe that today it is the forces of
freedom that are on the march.
You have a very busy day ahead of
you, Mr. Prime Minister, one that I do
not intend to delay. Nancy and I hope
during your all too brief visit to talk of
. our common goals, but also to deepen
the personal friendship with you and
Madame Chirac and with your col-
leagues. Once again, we offer you and
Madame Chirac our warmest welcome.
And on behalf of all Americans, soyez lest
bienvenus aux Etats-Unis [welcome to
the United States].
Prime Minister Chirac^
Let me tell you how really delighted my
wife and I are to be here with you today
among our American friends and our
French friends. And let me first thank
you, Mr. President, for having invited
me to come on an official visit to the
United States, where I stayed and
worked, some 30 years ago, alas, when 1
was a young student just discovering
this New World. And finally, let me con-
vey to the American people the feelings
of friendship, brotherhood, and admira-
tion and affection that the French peopl*
have for them and also, Mr. President,
the affection that the French people
have toward you yourself and Mrs.
Reagan. Feelings of brotherhood, yes,
because our two countries have always
been side by side in crucial moments of
their history.
Three years ago, as you mentioned,
you came to France to commemorate D-
Day in Normandy and to honor the
resting places of so many young
Americans who gave their lives to free
France and Europe. And last year you
celebrated, as you recall, the 100th anni-
versary of the Statue of Liberty, a gift
of the French people, and especially a
symbol of the American dream and of
American reality. This year, almost 70
years to the day after the United States^
non^rtmpnt nf State
EUROPE
ivent to war alongside France and its
Allies of World War I, I have come to
tell you this: France has not forgotten.
When I go and pay tribute during my
Drief stay in Washington to the memory
)f General Pershing— a great man, a
jreat soldier, and a great American— I
shall be paying tribute to all of the
American boys who fell on France's soil
:o defend my country against all kinds of
legemonies in 1917 and again in 1944.
And now that I am here in the United
States, there is something I want to tell
/ou with all my heart, and that is this:
;hank you, America. France has not
"orgotten. France remembers.
But I have not come solely to convey
;his message of remembrance. I have
■ome to tell you that we continue to
iphold the same ideals of freedom, to be
Iriven by the same will, to face the
langers that confront us all together:
errorism, war, hunger, poverty, new
mseases, drugs, and yet other dangers.
In the face of so many trials, so many
threats, we are resolved, as you are
yourselves, to go on fighting and affirm
the importance of our ideals. We are side
by side in all these great struggles.
Today, as we set forth on a
technological adventure to conquer new
fields of intelligence— biology and
space— we must work together in an
ever-growing spirit of trust, cooperation,
and true market competition. We have
to work together to face the challenge of
the future. With these feelings and in
this spirit, I am entering into these 2
days of talks that will enable us, I am
sure, to find together with American
leaders, common guidelines for future
action on the scale of the ambitions we
share.
'Text from Weekly Compilation of
Presidential Documents of Apr. 6, 1987.
-Prime Minister Chirac spoke in French,
and his remarks were translated by an inter-
preter. ■
^ATO Nuclear Planning Group
VIeets in Norway
The Nuclear Planning Group of the
'^orth Atlantic Treaty Organization
NATO) met in Stavanger, Norway,
4ay U-15, 1987. The United States was
■epresented by Secretary of Defense
Jaspar W. Weinberger. Following is the
'inal communique issued on May 15.
'he NATO Nuclear Planning Group (NPG)
net in ministerial session at the invitation of
he Norwegian Government in Stavanger,
■Jorway, on 14th and 15th May 1987. We
liscussed a wide variety of security matters,
ncluding the status of NATO's nuclear
orces, current arms control negotiations, the
tatus of implementation of the December
979 dual-track and 1983 Montebello deci-
ions, the work of several study groups, and
uture NPG work programs.
Deterrence of any aggression continues to
le the central objective of the Alliance. To
hat end, in this the year of the 20th anniver-
;ary of the adoption of the strategy of flexible
•esponse, we noted that this strategy has
itood the test of time and remains an essen-
ial and sound basis for the future security of
. ill Alliance members. While improving
NATO's conventional forces, we will maintain
ind improve the nuclear forces necessary to
;arry out that strategy. In that context, we
loted with concern the existiiig imbalances
jetween Alliance and Warsaw Pact nuclear,
;onventional, and chemical forces as well as
;he unabated expansion of Warsaw Pact
Tiilitary capabilities across the board.
Efforts to secure equitable and effectively
."erifiable reductions in military forces, both
:onventional and nuclear, are an integral ele-
ment of our security policy in seeking to
achieve a more stable and secure environment
at lower levels of armaments. It is in our
security interests that agreements ensure
detailed, specific arrangements providing for
effective verification; we reject generalized
undertakings on verification as an acceptable
basis for sound agreements.
During our continuing consultations
on INF [intermediate-range nuclear
forces] arms control, we welcomed the
improved prospects for a longer-range
INF (LRINF) agreement between the
United States and the Soviet Union
encompassing significant reductions in
nuclear forces. We reaffirmed that
appropriate global constraints on
shorter-range missile systems are indis-
pensable. We stressed the requirement
to eliminate all United States and Soviet
LRINF missiles and called upon the
Soviet Union to drop its demand to
retain a portion of its SS-20 force. A
global zero outcome, a long-standing
NATO objective, would further reduce
the Soviet threat, and greatly facilitate
verification.
We accepted with pleasure the invi-
tation of the U.S. Government to hold
our next Nuclear Planning Group mini-
sterial meeting in the United States in
the autumn of 1987.
Greece expressed its views in a
statement included in the minutes. ■
31st Report on Cyprus
MESSAGE TO THE CONGRESS,
APR. 21, 1987'
In accordance with Public Law 95-384, I am
submitting to yoy a bimonthly report on prog-
ress toward a negotiated settlement of the
Cyprus question.
During this period U.S. Secretary General
Perez de Cuellar continued his efforts to
restore momentum to the search for a
peaceful Cyprus settlement. On his instruc-
tions, U.N. Under Secretary General
Goulding visited Cyprus February 4-7 to
discuss with the Greek and Turkish Cypriot
sides procedural ideas that could help move
the negotiating process forward. Mr.
Goulding proposed the holding of separate,
exploratory talks in Nicosia between U.N.
officials and representatives of the two sides.
These discussions would be informal and non-
binding and were intended to help the
Secretary General carry forward his good
offices mission.
In mid-March, the two Cypriot sides
reviewed the Secretary General's proposals
with the Secretary General's Acting Special
Representative on Cyprus. The Greek Cypriot
side said its general position on the proposal
was positive, although this did not imply any
change in its view on the necessity for prior-
ity discussion of the issues of importance to
it, or in its support for the convening of an
international conference. The Turkish Cypriot
side expressed its concern that the proposed
procedure could undercut the Secretary
General's March 1986 draft framework agree-
ment, which the Turkish Cypriot side had
accepted and the Greek Cypriot side had not.
As of this date, U.N. Secretariat officials are
continuing their contacts with the two sides
on the proposal advanced by Mr. Goulding.
In both public statements and private
discussions during this period, Administration
officials have stressed our continuing support
for the U.N. Secretary General's Cyprus mis-
sion. We have also been urging those directly
involved with the Cyprus issue to seek every
opportunity to improve the atmosphere on the
island so as to enhance the prospects for
progress toward a negotiated settlement.
Sincerely,
Ronald Reagan
'Identical letters addressed to Jim
Wright, Speaker of the House of Represent-
atives, and Claiborne Pell, chairman of the
Senate Foreign Relations Committee (text
from Weekly Compilation of Presidential
Documents of Apr. 27, 1987). ■
57
MIDDLE EAST
U.S.S. stark Hit by Iraqi IVIissiles
SECRETARY'S STATEMENT,
MAY 17, 1987'
At approximately 2:10 p.m., Washington
time, the U.S. Navy frigate, the U.S.S.
Stark, was hit by two missiles fired from
an Iraqi F-1 Mirage aircraft. At the time
of the attack, the Stark was located
about 70 miles northeast of Bahrain. The
ship, at last report, was dead in the
water, and the entire crew was being
taken off. There have been serious
casualties.
The United States regards this
attack with grave seriousness. The
President was informed at once, of
course, and is following the situation
closely. I've been in touch with
Secretary [of Defense] Weinberger,
White House Chief of Staff Baker, and
national security adviser Carlucci.
We have called in the Iraqi Ambas-
sador here in Washington and issued the
strongest protest and demanded a full
accounting. Our Ambassador in Baghdad
has been instructed to deliver our pro-
test there, and we are in continuous con-
tact with our Embassies in Baghdad and
Bahrain.
This event underscores once more
the seriousness of the Iran-Iraq war, not
only to the countries directly involved
but to others. It shows how easily it
escalates, and it underlines once more
the seriousness of the tensions that exist
in the Middle East and the importance of
trying to do something about them.
But I want to assure you that we
take this event with the utmost seri-
ousness. We know the source of this
missile that hit our ship, and we demand
a full accounting, and as we have more
information, of course, we will be
meeting on it and seeing what further
action may be necessary.
PRESIDENT'S STATEMENT,
MAY 18, 1987^
I know and I share the sense of concern
and anger that Americans feel over the
yesterday's tragedy in the Persian Gulf.
We have protested this attack in the
strongest terms and are investigating
the circumstances of the incident. When
our investigation of the facts is com-
pleted, I will report to the American
people about this matter and any further
steps that are warranted. For that
reason, I have convened a meeting of tht
President Reagan asks a question during a Situation Room briefing by Gen. Robert T.
Herres, Vice Chairman of the Joint Chiefs of Staff, on the condition of the missile frigate
U.S.S. Stark. Defense Secretary Weinberger looks on.
? photo by Pete Souza)
MIDDLE EAST
national security planning group to
review the entire situation in the Persian
Gulf.
In the meanwhile, I want to express
my deepest sympathies to the families of
the brave men killed and injured yester-
day aboard the U.S.S. Stark. Their loss
and suffering will not be in vain. The
mission of the men of the U.S.S.
S^arfr— safeguarding the interests of the
United States and the free world in the
gulf— remains crucial to our national
security and to the security of our
friends throughout the world.
The hazards to our men and women
I in uniform in the defense of freedom can
I never be understated. The officers and
crew of the U.S.S. Stark deserve our
highest admiration and appreciation.
And I would also like to express my
sincere gratitude to Saudi Arabia and
Bahrain for their prompt assistance in
responding to the stricken U.S.S. Stark.
j This tragic incident underscores the
I need to bring the Iran-Iraq war to the
' promptest possible end. We and the rest
of the international community must
redouble our diplomatic efforts to hasten
the settlement that will preserve the
sovereignty and territorial integrity for
both Iran and Iraq. At the same time,
we remain deeply committed to support-
ing the self-defense of our friends in the
gulf and to ensuring the free flow of oil
through the Strait of Hormuz.
WHITE HOUSE STATEMENT,
MAY 18, 1987^
President Reagan met with the national
security planning group in the Situation
Room from 2:30 until 3:45 this afternoon
to discuss the status of the attack on the
U.S.S. Stark in the Persian Gulf. The
President has ordered a higher state of
alert for U.S. vessels in the area. The
belligerents in the war, Iran and Iraq,
will be formally notified today of this
change in status. Under this status, air-
craft of either country flying in a pattern
which indicates hostile intent will be
fired upon, unless they provide adequate
notification of their intentions.
The Administration will consult with
Congress on these changes and related
issues.
We have issued a vigorous protest to
the Government of Iraq. We have noted
the profound regrets issued by the Iraqi
Ambassador in the name of his Foreign
Minister and Iraqi President Saddam
Hussein. However, we are awaiting
official notification of this statement. We
expect an apology and compensation for
the men who died in this tragic incident.
I We also seek compensation for the ship.
The President shares the sense of con-
cern and anger that Americans feel at
this time. We will monitor the situation
on a continuing basis.
ASSISTANT SECRETARY
MURPHY'S STATEMENT,
MAY 19, 1987^
I appreciate the opportunity to meet
with you today to discuss the Adminis-
tration's policy toward the continuing
war between Iran and Iraq and toward
problems related to international ship-
ping in the gulf.
Our meeting takes place against the
background of the attack by Iraqi air-
craft on the U.S.S. Stark Sunday, with
tragic loss of life. We extend our deepest
condolences to the families of those
brave American sailors who died or were
injured in the attack. We greatly
appreciate the assistance provided by
Saudi Arabia and Bahrain in the rescue
and evacuation operation.
Yesterday morning, the President
expressed his concern and anger over
Sunday's tragedy in the Persian Gulf
and noted that we had protested the
unprovoked attack in the strongest
terms to the Government of Iraq.
Yesterday afternoon, the President of
Iraq apologized for the unintended
attack and made clear Iraq had no
hostile intentions whatsoever toward the
United States. He expressed his deepest
regrets and profound condolences. We
have agreed to an immediate joint
investigation of the incident to avoid any
future mistakes.
This tragic accident brings home
starkly the increasing danger of the
Iran-Iraq war and the urgency of bring-
ing the conflict to an end. The United
States is actively engaged in seeking this
goal.
This Administration, like its prede-
cessors, regards the gulf as an area of
major interest to the United States and
is committed to maintaining the free
flow of oil through the Strait of Hormuz.
Consistent with our national heritage, it
attaches great importance to the princi-
ple of freedom of navigation. The Admin-
istration is also firmly committed as a
matter of national policy to support the
individual and collective self-defense of
the Arab gulf states. These longstanding
U.S. undertakings flow from the strate-
gic, economic, and political importance
of the region to us.
U.S. Policies
Toward the Gulf War
Over the past 3 months, the President
has reaffirmed the direction of our long-
term policy. Given the increasing
dangers in the war, with its accompany-
ing violence in the gulf, we have taken a
series of specific decisions designed to
ensure our strategic position in the gulf
and reassert the fundamental U.S.
stabilizing role. Frankly, in the light of
the Iran-contra revelations, we had
found that the leaders of the gulf states
were questioning the coherence and
seriousness of U.S. policy in the gulf
along with our reliability and staying
power. We wanted to be sure the coun-
tries with which we have friendly
relations— Iraq and GCC [Gulf Coopera-
tion Council] states— as well as the
Soviet Union and Iran understood the
firmness of our commitments. On
January 23 and again on February 25,
President Reagan issued statements
reiterating our commitment to the flow
of oil through the strait and U.S. support
for the self-defense effort of the gulf
states. He also endorsed Operation
Staunch, our effort to reduce the flow of
weapons from others to Iran.
While neutral toward the Iran-Iraq
war, the U.S. Government views the
continuation of this conflict, as well as
its potential expansion, as a direct threat
to our interests. We are working inten-
sively for the earliest possible end to the
conflict, with the territorial integrity and
independence of both sides intact. As the
President asserted in his February 25
statement on the war, we believe that
"the time to act on this dangerous and
destructive war is now." He urged an
intensified international effort to seek an
end to the war, and we have taken a lead
in UN Security Council (UNSC) consulta-
tions to achieve this aim. As we
announced May 7, the United States is
"ready in principle to support the
application of appropriate enforcement
measures against either party which
refuses to cooperate with formal UNSC
efforts to end the war."
While there remains much work to
be done in New York, I believe that an
international consensus is growing that
this war has gone on too long— the
suffering of the Iraqi and Iranian
peoples has been too great— and the
threat to international interests is so
direct that more active measures are
required. As you know, Iraq has long
shown its willingness to end the fighting;
Iran remains recalcitrant.
59
MIDDLE EAST
Operation Staunch has been pursued
in recent months with new vigor. I
beHeve its effectiveness has not been
seriously impaired, as many expected, by
the Iran revelations.
Shipping Problems
in the Persian Gulf
In addition to the inherent tragedy and
suffering in Iraq and Iran, as the fighting
drags on, with mounting casualties and
drains on the economies of these two
nations, so grows the threat of the war
spilling over to nearby friendly states in
the gulf. The fresh threats to interna-
tional shipping are one example of such
spillover effect.
In the past 18 months, attacks on
neutral shipping passing through the
Strait of Hormuz have increased in
intensity. A total of nearly 100 vessels
were hit by Iran and Iraq in 1986; in the
first 3 months of this year, some 30
ships were attacked, including a Soviet
merchant ship. Since the first of May,
Iran has attacked 5 ships of nonbellig-
erent countries, virtually all in com-
merce with Kuwait. Attacks now occur
at night as well as day, by sea as well as
air, by small boats armed with light
weapons as well as by helicopters
launched from Iranian warships. While
Iran has yet to sink a ship, most of those
attacked have suffered damage, some
seriously, and innocent lives have been
lost.
The May 17 attack on the U.S.S. ^
Stark was the first attack on a U.S. war-
ship in the war. This tragic accident
gives emphasis to our caution to both
belligerents that the war in the gulf
could lead to mistakes and miscalcula-
tions; it must be ended.
We have increased the state of alert
of U.S. Navy ships in the gulf and
warned belligerent states (i.e., Iran and
Iraq) that our ships will fire if one of
their aircraft should approach in a man-
ner indicating possible hostile intent— as
did the Iraqi F-1 which attacked the
U.S.S. stark.
The recent Chinese delivery to and
testing by Iran of Chinese Silkworm
antiship missiles at the Strait of Hormuz
present a potentially serious threat to
U.S. and other shipping. With their
85-ki),ometer range and 1,100-pound
warhead, these missiles can span the
strait at its narrowest point and repre-
sent, for the first time, a realistic
Iranian capability to sink large oil
tankers. Whatever Iran's motivation for
procuring such threatening missiles,
their presence gives Iran the ability both
to intimidate the gulf states and gulf
shippers and to cause a real or de facto
closure of the strait. The Chinese deci-
sion to sell such weaponry to Iran is
most unwelcome and disturbing. We
have made clear to both Iran and China
the seriousness with which we consider
the Silkworm threat. Other concerned
governments have done the same. It is
our hope that a sustained international
diplomatic campaign will convince Iran
not to use the Silkworms.
For the past year, Iran has been
using a combination of military action,
attacks on gulf shipping, and terrorism,
as well as shrewd diplomacy, to intimi-
date the gulf states not involved in the
war. It has tried to impress upon gulf
states the hopelessness of their looking
to the United States for help and to
divide the gulf states one from the other.
Since last summer, Kuwait has been
a particular target of Iranian threats.
While not a belligerent, Kuwait's size
and location make it highly vulnerable to
intimidation. The Iranian regime has
inspired terrorist and sabotage incidents
within Kuwait, fired missiles on Kuwaiti
territory on the eve of the January
Islamic summit, and attacked over 24
vessels serving Kuwaiti ports since last
September. The most recent example of
the active intimidation efforts was the
explosion at the TWA office in Kuwait
city, May 11, which killed one employee.
Over the last 3 years, Iranian-influenced
groups have attempted a series of bomb-
ings and attacks, including on the ruler
of Kuwait himself, in an attempt to
liberate terrorists being held in Kuwait
who were convicted of bombing the U.S.
and French Embassies.
Several months ago, Kuwait and
other GCC states expressed to us their
concern about the continuing attacks by
Iran on tankers. Kuwait asked for our
assistance, fearing potential damage to
its economic lifeline. Consistent with
longstanding U.S. commitment to the
flow of oil through the gulf and the
importance we attach to the freedom of
navigation in international waters, as
well as our determination to assist our
friends in the gulf, the President decided
that the United States would help in the
protection of Kuwaiti tankers. In the
context of these developments, Kuwait
asked to register a number of ships in its
tanker fleet under U.S. flag. We
informed Kuwait that if the vessels in
question met ownership and other
technical requirements under U.S. laws
and regulations, they could be registered
under the U.S. flag. This is in accord-
ance with our established position on
qualifications for U.S. flag registration
of commercial vessels in general. We
also informed the Kuwaitis that by vir
tue of the fact that these vessels would
fly the American flag, they would
receive the U.S. Navy protection given
any U.S. flag vessel transiting the gulf.
The U.S. Navy has always had the mis-
sion to provide appropriate protection
for U.S. commercial shipping worldwide
within the limits of available resources
and consistent with international law.
Kuwait welcomed our response, ami
we have together proceeded with the
registry process. "The Coast Guard has
begun inspection of the vessels in order
to determine their conformity with U.S.
safety and other technical standards.
We view the reflagging of Kuwaiti
tankers in the United States as an
unusual measure to meet an extraord-
inary situation. It would not, however,
set a precedent for the normal conduct
of commercial shipping or affect the
broad interests of the U.S. maritime
industry. U.S. flagging procedures
minimally require that only the captain
of each vessel be a U.S. citizen. Because
these vessels will not be calling at U.S.
ports, there is no requirement that they
carry U.S. seamen or other U.S. crew-
members. These new U.S. flag vessels
will be sailing in areas where other U.S.
flag vessels have generally not fre-
quented since the war began.
To date, Iran has been careful to
avoid confrontations with U.S. flag
vessels when U.S. Navy vessels have
been in the vicinity. U.S. Military Sealif*
Command and other commercial U.S
flag vessels have transited the gulf eachi
month under U.S. Navy escort without
incident. We believe that our naval
presence will continue to have this deter
rent effect. Iran lacks the sophisticated
aircraft and weaponry used by Iraq in
the mistaken attack on the U.S.S. Stark
Moreover, we will make sure in advance
that Iran knows which ships have been
reflagged and are under U.S. protection
Our response to Kuwait demon-
strates our resolve to protect our
interests and those of our friends in the
region, and it has been warmly
welcomed by those governments with
which we have had traditionally close
ties. Our goal is to deter, not provoke;
we believe this is understood by the par-
ties in the region— including Iran. We
will pursue our program steadily and
with determination.
In providing this protection, our
actions will be fully consistent with the
applicable rules of international law,
which clearly recognize the right of a
neutral state to escort and protect ships
I
npnartmpnt nf .'^tatp Rii
MIDDLE EAST
flying its flag which are not carrying
contraband. In this case, this includes
the fact that U.S. ships will not be car-
rying oil from Iraq. Neither party to the
conflict will have any basis for taking
hostile action against U.S. naval ships or
the vessels they will protect.
Our judgment is that, in light of all
the surrounding circumstances, the pro-
tection accorded by U.S. naval vessels to
these U.S. flag tankers transiting inter-
national waters or straits does not con-
stitute introduction of our armed forces
into a situation where "imminent
involvement in hostilities is clearly
indicated." The War Powers Resolution,
accordingly, is not implicated by our
actions. On the contrary, our actions are
such as to make it clear that any pros-
pect of hostilities is neither imminent or
clearly indicated. I repeat that our inten-
tion is to deter, not provoke, further
military action. We will, however, keep
the situation under careful review-
particularly in light of the May 17 attack
on the U.S.S. Stark— and keep Congress
closely informed.
Kuwait has also discussed with other
maritime powers commercial charter
arrangements in the interest of deter-
ring further Iranian attacks on its
vessels. We understand that Kuwait
broached this issue with all permanent
members of the UN Security Council and
has entered into an agreement with the
Soviet Union to charter three long-haul,
Soviet flag vessels to transport some of
its oil out of the gulf.
A constant of U.S. policy for decades
has been U.S. determination to prevent
enhanced Soviet influence and presence
in the gulf. We do not want the Soviet
Union to obtain a strategic position from
which it could threaten vital free- world
interests in the region. We beheve our
arrangement with Kuwait will limit
Soviet advances in the region; they
would have welcomed the opportunity to
replace us and used this position to try
to expand further their role in the gulf.
We understand that their commercial
charter arrangement for long-haul
charters out of the gulf does not
necessitate an increase in the Soviet
naval presence or establishment of
facilities in the gulf. This we would not
welcome and have made our position
clear.
I want to be frank to acknowledge,
however, that the disturbing trend in the
war— its spread in geographic terms and
its increasing impact on third parties
like Kuwait— creates the circumstances
in which the Soviets may find more
U.S. Food Aid Program for Lebanon
DEPARTMENT STATEMENT,
APR. 28, 1987'
The U.S. Agency for International
Development (AID) recently approved an
emergency $8.4 million grant food
assistance program to Lebanon.
Through this program, the United
States will provide the Lebanese people
with 15,683 metric tons of basic food
commodities (rice, lentils, instant corn,
soy milk, and vegetable oil) valued at
$5.5 million. This food will be distributed
to approximately 100,000 needy dis-
placed and war-affected families in all
parts of Lebanon, regardless of confes-
sional affiliation. Nutritionally
vulnerable groups such as children and
the elderly are target beneficiaries.
Under this grant, food rations will be
distributed to families registered by
Save the Children Federation during a
period of 6 months. The food com-
modities are scheduled to arrive in
Lebanon in July 1987. A $1.9 million
grant will cover ocean freight costs of
the program.
In consultation with the Government
of the Republic of Lebanon, this pro-
gram will be implemented through Save
the Children Federation and, under its
supervision, will also involve distribution
through other local private voluntary
organizations. AID is making a separate
grant of $1 million for costs of distribu-
tion of food and other relief aid.
We hope this special food program,
which augments other relief and
rehabilitation assistance from the
American people, will help alleviate
hardships of those Lebanese most
economically deprived due to prevailing
economic and security conditions.
'Read to news correspondents by Depart-
ment spokesman Charles Redman. ■
Officials gather for the announcement approving an AID emergency grant food assistance
program to Lebanon. Left to right are Gerald Kamens, Director of the Office of the Middle
East, Europe, and North Africa, AID; Sulayman Rassi, Counselor of the Embassy of
Lebanon; Neal Keny, Save the Children foundation; Ambassador Abdallah Bouhabib of
Lebanon; and Richard W. Murphy, Assistant Secretary for Near Eastern and South Asian
Affairs. (Department of State photo)
61
MIDDLE EAST
opportunities to insert themselves. The
U.S.S.R. plays a fundamentally different
role in the gulf and is viewed by Iran as
directly threatening to Tehran. Aside
from the long northern border, Soviets
occupy Afghanistan to Iran's east and
are Iraq's primary source of arms. The
unescorted Soviet ship recently attacked
had, in the past, carried arms to Iraq.
The Soviets sent warships into the gidf
for the first time last fall after Iran
boarded and searched a Soviet arms-
carrying vessel. Iran should ponder this
development as it maintains its intran-
sigent war policy. We certainly believe
the Soviet actions in the gulf and their
attempts to enhance their presence there
further emphasize the need to bring this
war to an end.
Conclusion
In conclusion, the Administration is
following a clear and consistent set of
policies in support of our national
interests in the gulf. Our policies are
carefully conceived— and they focus on
steps needed to end the war. They are
calm and steady in purpose, not pro-
vocative in intent; they should help deter
Iranian miscalculations and actions that
would require a strong response. By sup-
porting the defensive efforts of the
moderate gulf states, including the sale
of appropriate defensive arms, we help
to enable them to defend the interests
we share in the gulf and to reduce the
prospects for closer ties with the Soviet
Union as well as any inclination to
accommodate Iranian hegemony.
We want the Congress to be fully
aware of what we are doing. That is why
we provided, in March and April, a
number of briefings on our gulf policy
and what we intend to do to help
Kuwait, including briefings to the House
Foreign Affairs Committee and Senate
Foreign Relations Committee. That is
why the President has, on several occa-
sions, issued public statements explain-
ing our policy. We have a coherent and
effective policy in the gulf region. We
seek your support and that of the U.S.
public for our efforts. We believe it is
important for the United States to work
more actively to end the Iran-Iraq war,
to be prepared to defend the principle of
the free flow of oil and meet our long-
standing commitment to assist the gulf
Arab states in their self-defense, and to
continue to work to constrain Soviet
designs. We will advise Congress on the
evolution of our discussions with Kuwait
and the continuing security situation.
62
DEPARTMENT STATEMENT,
MAY 20, 1987"
Just prior to the Iraqi Mirage F-1 attack
on U.S.S. Stark on Sunday, two Royal
Air Force F-1 5s were scrambled from
their base at Dhahran and ordered by
Saudi authorities to fly a combat air
patrol (CAP) mission over the Saudi
coastline. This is a routine action based
on prior agreement to defend our
AWACS [airborne warning and control
system] and Saudi facilities.
Once it was clear that the Stark had
been attacked, the U.S. Air Force
AWAC8 and the Saudi controller aboard
the E-3A asked the Saudi sector com-
mand center at Dhahran for authority to
commit the Saudi F-15s to intercept the
Iraqi F-1 with the intention of forcing it
down in Saudi territory. The Saudi chief
controller on the ground advised that he
did not have the authority to authorize
such action and immediately sought
approval from higher authority. Before
such approval could be obtained, the
Iraqi aircraft was well on its way back to
its base. In addition, the Saudi F-1 5s
were low on fuel and had to return to
base.
It should be noted there is no pre-
arranged plan for the Royal Saudi Air
Force to come to the aid of U.S. vessels
in the gulf. There was no official U.S.
Government request for the Saudi Air
Force to intercept the Iraqi aircraft.
Throughout the incident, the Saudi
personnel aboard the AWACS and the
F-15 crews were eager to run the inter-
cept; the initiative originated with them
and the U.S. personnel aboard the
AWACS. However desirable an inter-
cept of the attacking aircraft might have
been, the incident does illustrate the
discipline of the Saudi Air Force's com-
mand and control system.
Finally, it should also be noted that
Saudi officials immediately launched
helicopters to assist in the search-and-
rescue effort and dispatched a Saudi
naval vessel to close on Stark to lend
assistance. The Saudi military hospital at
Dhahran also was placed on disaster
alert to assist with casualties if needed.
SECRETARY'S LETTERS
TO THE CONGRESS,
MAY 20, 1987^
For nearly forty years, the United States has
maintained a limited naval presence in the
Persian Gulf for the purpose of providing for
the safety of U.S. flag vessels in the area and
for other reasons essential to our national
security. This has been done pursuant to the
authority of the President under the Constitu
tion as Commander-in-Chief, and the duty tn
provide protection for U.S. forces and U.S.
vessels that are engaging in peaceful activi
ties on the high seas. Congress has been fully
and repeatedly advised of our policy.
Our naval presence in the Gulf has been
fully within our rights under international
law, and we have respected all the relevant
international rules of conduct. We have
remained neutral in the Iran-Iraq war, and
our vessels have taken no action that could
provide any basis for hostile action against
them by either country. Until this past Sun-
day, no U.S. warship or other U.S. flag vessel
in the Gulf had been the object of any attack
from any source.
Shortly after 2 pm (EDT) on May 17, an
Iraqi Air Force F-1 Mirage launched an
Exocet missile, which struck the USS Starl<,
causing heavy damage. Within the hour, the
USS Stark was stopped and listing, but
damage control parties were able to stabilize
its condition, and the vessel has now returin'i
to port. At this time, a total of 37 member.^ u
the crew are reported dead or missing, and
two more are seriously injured.
The United States immediately contacted
the Iraqi Government through diplomatic
channels, to protest in the strongest terms
and demand an explanation of the incident
and appropriate compensation. President
Saddam Hussein sent a letter expressing
deepest regret over this tragic accident and
his condolences and sympathy to the families
of the victims, explaining that Iraqi forces
had in no way intended to attack U.S. vessels
but rather had been authorized only to attack
Iranian targets. A joint U.S. -Iraq review has
been agreed upon to determine more pre-
cisely the circumstances surrounding the Irai
attack, and to ensure that there is no
recurrence.
Our naval forces in the area have been in
structed to assume a higher state of alert
readiness in carrying out the standing Rules
of Engagement. Ship commanders continue
to have the authority to take such steps as
may be necessary to protect their vessels
from attack. However, we have no reason at
this time to believe that Iraqi forces have
deliberately targeted U.S. vessels, and no
reason to believe that further hostile action
will occur.
Our forces are not in a situation of actual
hostilities, nor does their continued presence
in the area place them in a situation in which
imminent involvement in hostilities is indi-
cated, although we are mindful of recent Ira-
nian statements threatening U.S. and other
ships under protection. In accordance with hi
desire to keep the Congress fully informed,
the President nonetheless has asked that I
provide this account to the Congress of what
has transpired, and has directed that the rele
vant Committees and leadership of Congress
be fully briefed on these events.
Quite apart from the Iraqi attack on the
USS Stark, Iran continues publicly and
privately to threaten shipping in the Gulf. It
is this basic Iranian threat to the free flow of
oil and to the principle of freedom of naviga-
tion which is unacceptable. The frequent and
Department of State Bulleti;
i
MIDDLE EAST
accelerating Iranian attaclts on shipping have
spread the war geographically to the lower
Gulf and have heightened the risk to all lit-
toral states. The Stark incident provides no
reason for altering the policy which we have
adopted in the Gulf area of being prepared to
defend U.S. vessels and U.S. interests when
necessary. We intend to proceed with plans to
iprovide protection for ships flying the U.S.
flag in the Gulf, including certain Kuwaiti
tankers which have applied for U.S. registry.
It is not our intention to provoke military
action, but to deter it. Sunday's incident,
although regrettable and tragic for our
courageous seamen aboard the USS Stark,
ioes not suggest that either of the countries
nvolved in the war have decided to attack
U.S. vessels in the Gulf.
At the same time that we are taking these
I steps, we want to assure you that the Admini-
;tration is actively pressing for comprehen-
sive and effective international action, includ-
ng at the United Nations, to bring this
)loody, wasteful and dangerous war to an
;nd. We will of course keep the Congress
ully informed of any further developments in
hese matters.
I Sincerely yours,
George P. Shultz
'Opening statement to an address
lelivered before the American Israel Public
Vffairs Committee (see page 7).
^Text from Weekly Compilation of
'residential Documents of May 25, 1987.
^Assistant Secretary Richard W. Murphy
nade this statement before the Subcommittee
m Europe and the Middle East of the House
''oreign Affairs Committee. The complete
ranscript of the hearings will be published by
he committee and will be available from the
Superintendent of Documents, U.S. Govem-
nent Printing Office, Washington, D.C.
:0402.
■•Read to news correspondents by Depart-
nent spokesman Charles Redman.
^Text of identical letters addressed to
Jeorge Bush, President of the Senate, and
im Wright, Speaker of the House of
lepresentatives. ■
Meeting With
Arab League Delegation
Left to right: Ambassador Mohamad Kamal (Jordan), Ministry of Foreign Affairs Under
Secretary Wassam Zahawi (Iraq), Deputy Prime Minister and Foreign Minister Abd
al-Karim al-Iryani (Yemen Arab Republic), Secretary Shultz, Ambassador Ghazi al-Gosaibi
(Bahrain), Ambassador Prince Bandar bin Sultan (Saudi Arabia), and Clovis Maksoud
(Arab League representative to the United States). (Department nf .state photo by Ann Thomas)
SECRETARY'S REMARKS,
MAY 7. 1987'
As you can see, there is a very
distinguished delegation here. And I am
very pleased to have a chance to
welcome them and to talk with them
about our concerns about the Iran-Iraq
war and our efforts to do everything we
can to bring peace to the region.
We are concerned, of course, first of
all about the vast human suffering that
is taking place because of this war. Peo-
ple are killed, maimed, wounded— young
people; it's a tragedy, and our hearts go
out to all the people involved. This is a
matter of primary concern for us. Along
with many others, we have called again
and again for Iran to join Iraq in
negotiations designed to bring peace to
the region.
Unfortunately, so far Iran has not
seen fit to join such negotiations.
Therefore, we must continue our
effort— which has been going on for
many years— to do everything we can to
deny arms to Iran, since it is these arms
that they use to pursue the war. Our
effort to do this is an intense one, and it
will continue while we also press, in
every way we can, the international com-
munity to try to exert joint efforts to
bring about negotiations. We will not
relent in these efforts.
As the President said earlier this
year, "The time to act on this dangerous
and destructive war is now." So I want
to commend greatly the members of this
delegation and their governments for
their efforts, as illustrated by their visit
here to the United States and to other
countries in an effort to call attention to
the urgent need to bring an end to this
war and the importance of a concerted
international effort to do so.
'Press release 101.
63
MIDDLE EAST
The Persian Gulf: Stakes and Risks
by Richard W. Murphy
Statement before the Senate Foreign
Relations Committee on May 29, 1987.
Ambassador Murphy is Assistant
Secretary for Near Eastern and South
Asian Affairs.'^
The U.S. Policy Interest in Brief
The Administration welcomes this oppor-
tunity to appear before your committee
as part of our ongoing consultations with
the Congress on developments in the
gulf. The United States today has three
overriding objectives in the Persian Gulf:
to galvanize the international community
to press for a just end to the Iran-Iraq
war, to motivate the Iranian leadership
to agree to cease their aggressive
posture and rejoin the ranks of peaceful
nations, and to prevent a strategic gain
by the Soviet Union in the region. None
of these tasks is easy, but both the stakes
and the risks to major U.S. and free
world interests are extremely important,
making it equally important to pursue
these tasks. Over the coming weeks we
will be working intensively with both our
allies and our friends in the gulf to
obtain support for this critical effort. At
the same time we will be completing our
plans for the protection of U.S. flag
vessels in the gulf and for keeping the
Strait of Hormuz open to the free flow
of oil. No action will be taken to imple-
ment this protective regime until the
President is satisfied that we will be able
to do it properly and until the Congress
has been fully consulted.
The Context
Until the fall of 1986, the Iran-Iraq war
was remarkably contained. It was
destructive, bloody, and wasteful, but
the inherent dangers of the war's
spillover to third countries in the Persian
Gulf were largely unrealized. Since 1983,
there had been a tanker war, to be sure,
but despite the many vessels hit, crews
killed and injured, and commerce dis-
rupted, the international community and
the shipping industry had lived with the
problems. Insurance rates went up;
crews got high-risk compensation;
overland trade routes were expanded;
but there seemed no imminent threat to
the basic flow of trade into and out of
the gulf.
In retrospect, a series of decisions
taken by Iran during 1986 has changed
that false impression. The Iranians
negotiated for and began to receive
Chinese-origin Silkworm land-to-ship
missiles; the first was test fired, from its
site within the narrow Strait of Hormuz,
in February 1987. It is important to
remember that Iraq has no direct access
to shipping; its oil is exported via
pipelines through Turkey and Saudi
Arabia. The Iranian Navy stopped,
searched, and took a Soviet arms carrier
to Bandar Abbas port in August. Though
that ship was eventually released, by
September the Soviet Navy had
responded by introducing a frigate on
prolonged patrol into the gulf for the
first time.
There are now seven Soviet ships
present in the gulf— and just outside it in
the Gulf of Oman. Also, during the fall,
Iranian direct pressures and intimidation
efforts against Kuwait increased sub-
stantially. These efforts have con-
tinued—with special emphasis just before
the Islamic summit in January in Kuwait
and again recently.
The Iranian Dilemma
While we cannot be sure of Iranian
motivation for these steps, they seem to
have been based on false assumptions.
The Iranians may have calculated that
both the international community and
nonbelligerent third parties in the gulf
would accommodate to these moves to
expand Iranian influence and clout as it
sought to put pressure on supporters of
Iraq.
Iran's war effort has not gone well
since its success in seizing the southern-
most tip of Iraq at al-Faw in February
1986. It has made almost no headway
since; even its limited advance near
Basra in January-February 1987 cost it
tens of thousands in lives and enormous
materiel losses, yet yielded little. Fur-
ther, Iran's defenselessness was
highlighted during the July-November
1986 period when Iraqi jets daily ham-
mered at Iran's critical economic infra-
structure. As a result, crude exports
plummeted to well below 1 million bar-
rels per day; Iran had to import substan-
tial, and costly, amounts of petroleum
products during the fall. National income
was radically reduced— perhaps to an all-
time low of $6.5 billion vice $15 billion in
1985. Foreign exchange reser/es were
largely depleted. Domestic unemploy-
ment was high— despite having almost
1 million men mobilized and under arms
and having suffered enormous casualties
during the war.
Thus, despite Iran's apparent ability
to sustain enthusiasm for the war effort
among its population, by any objective
standard the Iranians have not made
significant advances on the ground in
the past 15 months. And the ground wa
is where Iran has its strength. It is vir-
tually a nonplayer in the air war. This
leaves only the shipping war— and intim
idation against Arab governments who
support Iraq.
This may explain the Iranian deci- ,.
sion to spend $700 million on the
Silkworm missile system, for possible
use in blocking the Strait of Hormuz, in
a year of extraordinary belt-tightening.
It may also explain the sustained intim-
idation of Kuwait— most recently the
fires this last weekend at the Kuwaiti oi
refineries.
But the Iranian calculations have
been incorrect: the outside world has
taken steps to protect its interests. We
have; the British and the French have.
For their part, the Soviets have moved
both to protect their shipping and explo ,
new opportunities to advance their inte
ests. The Kuwaitis, smarting under
Iranian threats and intimidation, have
turned to outside powers for demonstrs
tions of support. Iranians have reacted
to these developments with fresh
threats. They are clearly unhappy with i
the trends— no success on the battlefiel
a growing outside naval presence in the
gulf, growing international diplomatic i
pressure to end the war, and, most
importantly, no signs of weakening of
Iraqi defenses.
U.S. Interests: A Consensus
As Secretary Shultz noted to this com-
mittee in his testimony of January 27,
"American interests in the Persian GuJ
have long been readily defined."
• We have a vital economic stake ii
seeing that the region's supply of oil to
the free world continues unimpeded.
• We have a strategic interest in
denying the Soviet Union either direct
control or increased influence over the
region or any of its states.
• We have major political interests
in the nonbelligerent gulf states, both ii
their own right and because of their
influence within the gulf and beyond.
Let me elaborate briefly on the sub-
ject of Persian Gulf oil. The United
npnartmpnt nf ■'^tatP R.illel
MIDDLE EAST
states and, particularly, its allies are
substantially dependent on oil imports
oday, much of which comes from the
rulf. This dependency will sharply
!xpand in the future. In 1986, 46% of
;he oil imports of OECD [Organization
'or Economic Cooperation and Develop-
'nent] Europe was from the gulf; the
•omparable figure for Japan was 60%.
ATiereas only 15% of our total imports
)f 5.2 million barrels per day originated
n the gulf in 1986, that level will rise
;ignificantly in the years ahead as our
iverall imports rise and supplies from
ither sources decline. Most of the
ivorld's oil resources and excess capacity
|ire located in this area.
' We are working closely with our
.Hies and friends in the International
[Inergy Agency to reduce the vulner-
bility of our economies to oil supply
lisruptions. And we are being suc-
essful. But we must not forget that only
i mall supply disruptions— or threatened
lisruptions— can have major adverse
irice impacts because of short-term
isychological factors. The supply disrup-
ions of 1973-74 and 1978-80 were less
han 5%, but they led to a quadrupling of
il prices in the first instance and more
han a doubling in the second. Even a
luch smaller price hike caused by a real
r perceived supply threat could levy a
ubstantial cost on our economy.
Thus, I think those who argue that
thers, not the United States, have the
il problem or should be concerned about
he gulf situation miss the point. Our
conomic well-being is involved, par-
icularly since our economy is the most
il intensive of the major industrialized
ations. That others may suffer more is
; ,ot a persuasive argument for us to do
1 5ss than our interests require.
Iran is an important element of our
onsiderations as we pursue these multi-
ple interests. That country has been, and
fill remain, a major factor in the region,
loth because of its size and strength and
lecause of its strategic location
longside the Soviet Union and Soviet-
'Ccupied Afghanistan. Iranian policy has
. direct impact on our strategic,
lolitical, and economic stakes in the gulf,
^nd the current Iranian Government
lirectly affects us in another way:
hrough terrorism, which it continues to
iUpport and export as an instrument of
tate policy.
Our various interests in the region
nve the United States an obvious stake
n better relations with Iran. The Presi-
ient has said that the United States
•ecognizes the Iranian revolution as "a
:'act of history." We look to an eventual
mprovement in U.S. -Iranian relations,
but our interests are directly threatened
by the Iranian Government's pursuit of
its belHcose and terrorist policies.
Changes in Iran's pursuit of its war with
Iraq, its sponsorship of terrorism, and
its collusion with terrorist forces
elsewhere in the region will be a neces-
sity before our bilateral relations can
begin to improve.
The tragic and unanticipated Iraqi
attack on the U.S. S. Stark on May 17
has refocused national attention on the
question of our interests and the policies
we have structured for pursuing them.
What is noteworthy about the current
reassessment and debate, in the public
media and in Congress, as well as within
the Administration, is that U.S. interests
in the region and in helping to end the
war are not challenged. The debate is
focused on how we go about protecting
and promoting those interests. It is
useful to recognize this fact, and it is an
important message this hearing will send
to this critical region: our internal
debates do not reflect any discord over
our goals, which enjoy wide bipartisan
support.
Ending the War
The United States is actively pursuing
diplomatic efforts to get the war ended.
Aside from the bloodshed and waste of
this conflict— now in its seventh year— it
is the continuation of the war which
creates circumstances in which:
• Soviet influence and presence con-
tinue to grow;
• Threats to nonbelligerent third
parties, like Kuwait, increase; and
• Threats to U.S. interests mount.
As the President noted in his two
key statements on the war in January
and February, it is time now for the
international community to become more
active to end this conflict. We have
repeatedly called for an immediate
cease-fire, withdrawal to borders, and
comprehensive negotiations. We are tak-
ing an active role on this issue at the UN
Security Council, and the war will be a
subject of discussion at the upcoming
Venice summit.
The Soviets
While the Soviets have said that they
favor an early end to war, they are a
principal supplier of arms to Iraq, and
their friends in Eastern Europe and
North Korea are suppliers of armaments
to Iran. They have been able to manip-
ulate the natural anxieties of the
nonbelligerent states of the region to
their benefit and are pressing actively
for increased diplomatic, commercial,
and miHtary relations. It is important to
remember that the Persian Gulf has long
been a strategic object of intense Soviet
interest, but the Soviets have been
largely excluded from playing a signifi-
cant regional role because of the views
of most of the littoral governments.
The Soviets have steadily pursued a
campaign of disinformation, contending
that the United States works to further
enflame the war in order to better
establish our military presence in the
gulf. This is irresponsible and out-
rageous propaganda. But if the Soviets
have convinced themselves that it is
true, I have a straight-forward challenge
for them: join us and the international
community in concrete steps to end this
war now.
What would those steps be?
Focus on Iran
Iranian willingness to consider and
discuss an end to the war is the missing
link in all diplomatic strategies address-
ing the problem. Thus, by virture of its
own intransigence and stubborn commit-
ment to the war, Iran invites interna-
tional opprobrium and action.
One key method we have revived is
our Operation Staunch— our effort to
inhibit military resupply to Iran from our
friends and allies. It has been successful
in many ways— it complicates, delays,
and makes more expensive Iranian arms
procurement. With the exception of
China, Iran has not been able to gain
access to a steady supply of high-tech-
nology military equipment from any
major producer, although there is a
supply of conventional weaponry to Iran
from North Korea and East European
state-run arms industries as well as a
wide variety of Western sources.
The Soviets could do much more to
close down and/or complicate these
supply channels. So could some of our
friends and allies. With concerted inter-
national efforts, Iran's logistic ability to
pursue the war could be further con-
stricted. It is internationalizing this
effort that is the new element in our
Security Council initiative.
Though Iran may seem impervious
to outside pressures, its war effort is
highly import dependent. Iran's
domestic arms industry is unable to pro-
duce what Iran needs to prosecute this
war. Thus, should Iran continue to prove
unwilling to engage in negotiations, in
our view, it is rightly subject to an inter-
nationally mandated arms embargo.
.A..
65
MIDDLE EAST
Iraq
Iraq for years has been willing to
negotiate an end to the war. It has
accepted virtually all reasonable interna-
tional efforts to pursue negotiations and
mediation of the war, including the key
UN Security Council resolutions. We do
not see it in our interest to have either
belligerent gain a victory in this war,
and we support the territorial integrity
and independence of both countries.
However, because of our interest in see-
ing the Iranian revolution contained
within Iran, the United States has an
important stake in Iraq's continuing
ability to sustain its defenses.
Our bilateral relations with Iraq
have expanded substantially since
diplomatic relations were reestablished
in 1984. It is because of our ability to
communicate clearly and frankly with
each other that a dangerous tragedy,
like that of the attack on the U.S.S.
Stark, has been kept in context and
managed so as to preserve our larger
relationship with Iraq. Iraqi willingness
to promptly accept responsibility for the
unprovoked attack, its agreement, in
principle, to provide compensation, and
its suggestion that a joint U.S. -Iraqi
team investigate the attack all reflect a
forward movement in a relationship
which was severely strained in
November when information about our
previous approach to Iran became public.
Without compromising the content
of that investigation, I might add that
the U.S. team received good cooperation
while in Baghdad. We both are commit-
ted to ensuring that such a mistake not
recur.
Kuwait
Kuwait is the nonbelligerent gulf state
which is receiving the brunt of Iran's
public and private pressures. Kuwait's
location, its proximity now to Iranian
troops occupying al-Faw in southern
Iraq, and its small size have made it a
target of opportunity for the Iranians.
Iranian efforts to sway Kuwait from its
policy of support for Iraq run the full
gamut of pressures: assassination
attempts, sabotage of economic infra-
structure, training of subversives,
attacks on shipping, as well as public and
private threats and ultimatums. Iran
presumably calculates that Kuwait is the
weakest link on the Arab side of the
gulf. If Iran is successful in coercing a
change in Kuwaiti policies, it will no
doubt target other gulf states.
The Shipping Problem
Thus there is a very large stake involved
in the Iranian effort to intimidate
Kuwait— as is now most evident in the
shipping attacks. Iran's attacks on
nonbelligerent shipping and emplace-
ment of the Silkworm missiles at the
narrow Strait of Hormuz violate prin-
ciples of freedom of navigation and
threaten the free flow of oil through the
Strait of Hormuz. Because Kuwait has
turned to both the Soviet Union and the
United States for help and support in the
face of these attacks, the Iranian actions
have also created circumstances in which
both superpowers were asked by the
beseiged Kuwaitis for protection.
We have longstanding commitments
to the security and stability of friendly
regional states, including Kuwait. In
addition, Iranian attacks threaten to
cause the further spread of the war;
Kuwait happens to be the first target
after Iraq. Additionally, we know that
the Soviets were more than willing to
take the opportunity created by the
Iranians to thrust their own presence
into a previously unwelcoming gulf.
Thus, in the view of the Administration,
it is consonant with our policy to agree
to engage in discussions with the
Kuwaitis on some measures of protec-
tion. Those have been ongoing for the
past few months and are nearing fruition.
Heightened Risks
There is no doubt that the developments
of the past 9 months in the Persian Gulf
have heightened the risks of a spread of
the war to third parties. Miscalculations
on the part of Iran— and Iran's inability
to make headway on the ground war-
have created circumstances in which the
previous limitations on the conflict-
geographic, political, and strategic— are
eroding. Despite these immediate mat-
ters of concern, there is a bright side to
this change— Iran's growing frustration
at Iraq's ability to sustain its defenses.
But that is a positive development only
in the longer term, and we have an
immediate need to deter Iran from mak-
ing cheap gains through intimidation and
blockage of shipping in the gulf.
U.S. Purposes
The United States first deployed a naval
presence in the Persian Gulf in 1949.
Over the decades this presence has
demonstrated the continuity of U.S.
interests in this resource-critical region.
And, while we are determined to main-
tain our presence in the Persian Gulf—
and to assist our friends when they neea
it and ask for appropriate assistance—
our posture is defensive of legitimate
interests in access to the region. We
have no interest in provoking any power
Our immediate goals are deterrence of
attacks on shipping and bringing an end
to the war.
We will not carry our desire to be
unpro vocative, however, to the extreme
sought by Iran. The Iranians have been
clear that their strategic goal is to keep
us, as well as the Soviets, out of the gul)
Jel
The Need for Allied Support
It is critical to Western interests that
the complex and dangerous situation
evolving in the Persian Gulf be resolved
in ways which promote the long-term
stability of that region. This requires,
among other things, the containment of
the Iranian revolution within Iran and
the blocking of further Soviet strategic
access to the area. The only way to
accomplish these basic goals is to bring
about an end to the Iran-Iraq war. As it
continues— especially in its trends of the
past year— it creates an environment
where peaceful, moderate regimes are
increasingly at risk, where Iranians wh(
want to export their revolutionary mod*
by any means gain ascendancy in
Tehran, and where nervous and anxious
moderate regimes invite Soviet involve-
ment, especially when they are uncertai
about our involvement and staying
power. The result is an explosive and
dangerous mix of colliding national inte
ests, growing insecurity, tactical
miscalculations, and cynical strategic
manipulation.
Since the interests of the entire
Western world are involved in the gulf,
the United States would welcome-
indeed, expects— renewed expressions c
public support and assistance from our
allies in Western Europe and Japan.
These allied efforts can take many and
varied forms— diplomatic initiatives
designed to bring about an end to the
belligerency, agreements to further
monitor and restrict the flow of arms to
Iran as the recalcitrant party, and
cooperation of naval units present in an
near the gulf.
iC
66
DeDartmerT^^tat^ulletji
NUCLEAR POLICY
?he Gulf Cooperation
Council States
Ve may well need further support from
he GCC states. While the specifics of
uch requirements remain under study,
/e will actively and forthrightly seek
uch facilitation of our efforts, which
lave to be joint if they are to be suc-
lessful. We are willing to assume our
llobal responsibilities and do the job.
lut we must be sure we have the
ecessary means to accomplish our
bjectives— and this includes appropriate
nd active support from allied and
-iendly governments whose interests
re as heavily involved, if not more so,
lan ours in this strategic region.
onsultations With Confess
.s the Secretary stated in his letters to
ongress followdng the attack on the
tark, the President has directed that
le relevant committees and leadership
1 Congress be fully briefed. As we go
)rward with the efforts I have outlined,
e intend to keep the Congress fully
formed and will take no action to
iplement the protective regime with
uwait until the President is satisfied
lat we will be able to do it properly, in
)nsultation with Congress.
Nonproliferation and the Peaceful
Uses of Nuclear Energy
•The complete transcript of the hearings
ill be publisned by the committee and will be
'ailable from the Superintendent of Docu-
ents, U.S. Government Printing Office,
'ashington, D.C. 20402. ■
by John D. Negroponte
Address before the Orange County
World Affairs Council in Santa Ana,
California, on May 20, 1987. Ambas-
sador Negroponte is Assistant Secretary
for Oceans and International Environ-
mental and Scientific Affairs.
Just a few weeks ago the world marked
the first anniversary of the nuclear
disaster at Chernobyl. Those of us with a
professional interest in civil nuclear
power have devoted a good deal of our
time during the past year to assessing
the implications of the Chernobyl acci-
dent for the future of civil nuclear
energy. I am, in fact, a firm advocate of
the peaceful uses of nuclear energy. I
believe that reliance on nuclear power in
a prudent mix of energy resources is
essential if we are to have a secure
energy future.
But it is not my purpose this evening
to plead the case for peaceful nuclear
energy. I would like, rather, to discuss
the conditions and controls under which
civil nuclear power must operate if it is
to retain the public's confidence. In view
of my position as head of the State
Department bureau responsible for most
aspects of peaceful nuclear energy
affairs, I will, of course, be addressing
these conditions and controls in their
international dimension.
There are, it seems to me, two broad
areas that need to be looked at.
• One pertains to the operational
safety of nuclear facilities. This con-
sideration is generally uppermost in the
minds of the public. The very notion of
nuclear power has traditionally stirred a
vague sense of unease in the minds of
many people, perhaps as a legacy of the
earliest use of atomic power for military
purposes and the vivid and indelible
impression such use has left in our
imaginations. Dramatic accidents at civil
nuclear installations, like those at
Chernobyl and Three Mile Island, have
also, no doubt, played a part in provok-
ing a certain skepticism regarding the
claims of the peaceful atom.
• The other area of concern has to
do with preventing the spread of nuclear
explosives to additional countries. This is
the realm of nuclear nonproliferation.
The very inelegance of the term perhaps
has something to do with its relatively
weaker hold on the public imagination,
as compared to questions of nuclear
safety. To some extent it has been over-
shadowed by the issue of nuclear
weapons reductions or nuclear disarma-
ment by the superpowers. And perhaps,
too, the very success of our nonprolifera-
tion efforts over the years has tended to
relegate those efforts— which quite
literally produce "non-events"— to the
back pages of the newspapers.
It is often forgotten that in the early
1960s, commentators were warning of a
world with 15 or 20 nuclear- weapon
states by 1975. In the early 1970s, com-
mentators were predicting as many as
25 nuclear-weapon states by the mid-
1980s. But consider what has actually
happened. In the past 20 years, only one
new country has tested a nuclear device,
and that country— India— has gone an
additional 13 years without testing
another.
Nevertheless, proliferation remains a
very real possibility in a number of coun-
tries. The spread of nuclear weapons
would lead to a world that is far less
stable and far more dangerous than the
one we know today. It is frightening to
contemplate the prospect of such
weapons coming into the hands of
aggressive and unstable leaders or of bit-
ter regional conflicts taking on a nuclear
dimension. The consequences for our
own national security and that of our
allies and friends would be enormous.
And that is why the prevention of
nuclear proliferation has been and must
remain, as President Reagan has called
it, a fundamental national security and
foreign policy objective.
These, then, are the two foreign
policy issues I'd like to discuss with you
this evening— international efforts to
improve the safety of civil nuclear power
and international efforts to prevent the
spread of nuclear explosives to addi-
tional countries under the guise of civil
nuclear programs.
Nuclear Safety
Let me turn first to the question of
safety. The months since the accident at
Chernobyl have been a time for serious
reflection on nuclear power safety, both
within the United States and within the
international community. Chernobyl
made real what had previously been only
NUCLEAR POLICY
a theoretical possibility— a major acci-
dent at a nuclear powerplant with
significant numbers of fatalities and
injuries, massive disruption of life in the
surrounding area, and large-scale emis-
sions of radioactive debris that dispersed
across international boundaries within a
few days, affecting the ecologies and
economies of many different countries.
The disaster posed a daunting
challenge to Soviet authorities in pro-
viding medical help for the casualties,
entombing the shattered reactor, dispos-
ing of radioactive contamination, and
restoring some semblance of normality
to life in the affected areas. It also posed
a challenge to those responsible for the
civil nuclear programs of other nations.
It was imperative that information about
the accident be acquired, that it be care-
fully analyzed, and that appropriate con-
clusions be drawn.
From the very start, the United
States played an active role in prodding
the Soviet Union to fulfill its interna-
tional responsibilities by following up its
initially quite meager and delayed
account of the accident with a full and
complete disclosure of the facts. The
Soviets themselves soon recognized the
wisdom of this course, and their subse-
quent reports, while lacking in some
details, were generally open and
forthcoming.
There was general agreement that
the International Atomic Energy
Agency (IAEA)— a highly respected
international body with headquarters in
Vienna, Austria— should be the primary
forum for receiving, analyzing, and
disseminating available information on
the accident. The United States con-
tributed a great deal of expertise to this
task and strongly supported the agency
in its endeavors relating to the accident.
These efforts proved to be timely,
thorough, and effective.
A special meeting of the agency's
Board of Governors was convened in
May 1986. It commissioned a postacci-
dent assessment, directed that an expert
working group consider ways of improv-
ing international cooperation in nuclear
safety, and set the agency's secretariat
on preparation of plans and proposals
for an enhanced IAEA nuclear safety
and radiation protection program. Later
in the year, the organization hosted a
postaccident review, during which the
Soviet Union provided a thorough brief-
Nonproliferation Agreement
With Allies
WHITE HOUSE STATEMENT,
APR. 16, 1987'
The President is pleased to announce a
new policy to limit the proliferation of
missiles capable of delivering nuclear
weapons. "The U.S. Government is adopt-
ing this policy today in common with the
Governments of Canada, France, the
Federal Republic of Germany, Italy,
Japan, and the United Kingdom. These
nations have long been deeply concerned
over the dangers of nuclear prolifera-
tion. Acting on this concern, these seven
governments have formulated guidelines
to control the transfer of equipment and
technology that could contribute to
nuclear-capable missiles.
This initiative was completed only
recently, following several years of
diplomatic discussions among these
governments. The fact that all seven
governments have agreed to common
guidelines and to a common annex of
items to be controlled serves to prevent
commercial advantage or disadvantage
for any of the countries. Both the
guidelines and its annex vidll be made
available to the public.
The President wishes to stress that
it is the continuing aim of the U.S.
Government to encourage international
cooperation in the peaceful use of
modern technology, including in the field
of space. The guidelines are not intended
to impede this objective. However, such
encouragement must be given in ways
that are fully consistent with the non-
proliferation policies of the U.S.
Government.
The United States, and its partners
in this important initiative, would
welcome the adherence of all states to
these guidelines in the interest of inter-
national peace and security.
'Text from Weekly Compilation of
Presidential Documents of Apr. 20, 1987.
ing on the causes of the accident and
allowed its representatives to be ques-
tioned by international nuclear safety i
experts. |^
U.S. Government agencies, using
independently available data as well as
data supplied by the Soviets, have, of ^
course, also examined the causes and
consequences of the accident. Now, a
year later, it is possible to draw some
conclusions regarding the lessons of
Chernobyl for the safety of other civil
nuclear power programs.
• The accident happened in the wa^
it did both because of serious operator
errors and because of certain peculiar-
ities in the design of the Soviet reactor,
which— unlike most Western power reai
tors— lacked a true containment vessel
and also had a propensity to surge in
power as coolant was lost. A reactor of
this type could not have been licensed t
operate in the United States or, prob-
ably, any other Western country. It is
clear, at this point, that the technical
lessons of Chernobyl have little rele-
vance to civil nuclear powerplants in th
West.
• The proximate cause of the acci-
dent was, no doubt, as the Soviets have
maintained, a series of human errors.
Human error is possible in anyone's
nuclear power program, and the examj
of Chernobyl thus stands as a cautionai
tale for all of us.
• The physical consequences of
Chernobyl, while stark enough, will
clearly not approach the level originalb)
feared by many. The economic and
psychological consequences, however,
have been profound. Opposition to civil
nuclear power has increased significam
in some countries, particularly in
Western Europe, and doubts about the
safety of civil nuclear energy productioi
in general have emerged in numerous
quarters.
In view of the widespread concern,
let me note the steps that are being
taken, or have been taken, to ensure th
safety of peaceful nuclear energy.
• The IAEA has undertaken a pro<
gram of expanded cooperative activitie
in nuclear safety. The agency's plans c:
for increased visits by its Operational
Safety and Review Teams, composed o
technical experts from a number of
member states to countries requesting
safety assistance. Both recipient gover
ments and participating experts find
these to be very valuable in ferreting o ,
what we call "possible precursors" of
accidents. Plans also call for improved
incident reporting and analysis and
68
npnartmpnt nf qtato Riillpi_
NUCLEAR POLICY
reviews of nuclear safety standards as
they apply to severe accidents.
• Two international conventions, on
nuclear accident notification and on
emergency assistance, have been negoti-
ated and have been signed by more than
50 nations, including the United States
and the Soviet Union. The entire process,
from initial proposals by the agency's
Board of Governors to opening of the
documents for signature, took less than
5 months— a near-record pace by the
usual standards for activities in inter-
national bodies. The two conventions
have entered into force for signatories
that have ratified them. For our part,
the President has submitted them to the
Senate with a request for their early
approval.
• While the current generation of
nuclear power reactors in the West is
extremely safe, a major challenge for the
longer term will be the design of a new
generation of nuclear reactors, relying
on immutable physical principles rather
than on engineered safety devices to
ensure that they come to safe shutdown
automatically in the event of a serious
malfunction. The United States and
other nations are studying a number of
reactor concepts along these lines.
Events such as those at Chernobyl
and Three Mile Island are, fortunately,
the rare exception, not the rule. The
safety record of nuclear power is, on the
whole, extremely good. But accidents at
nuclear powerplants, rare though they
are, have a potential for inflicting
damage far beyond that which might be
caused by a conventional generating
plant. The standards must, therefore, be
stricter; the concern for safety more pro-
nounced. A tragedy such as Chernobyl
can be salutary in one respect, if it
prompts all of us to renew our commit-
ment to ensuring that nuclear power
reactors will be designed and operated
with the utmost dedication to safety. In
my estimation, the disaster at Chernobyl
has had this positive effect in the months
since it occurred.
Nonproliferation
ill The second topic I would like to address
this evening is nonproliferation. Like all
U.S. administrations since the very
beginning of the nuclear age, the present
Administration regards the prevention
of the spread of nuclear explosives to
additional countries as vital to U.S.
national security. We have made and
continue to make a very vigorous effort
to strengthen and improve the interna-
tional nonproliferation regime, which
i.Ji]lv1QR7
stands as a bulwark against the pro-
liferation danger.
We have made every effort to encour-
age wider adherence to the Treaty on
the Non-Proliferation of Nuclear
Weapons, or NPT, and the Treaty for
the Prohibition of Nuclear Weapons in
Latin America, known as the Treaty of
Tlatelolco. The NPT, with 135 parties, is
the most widely adhered-to arms control
agreement in history. It is an excep-
tionally important instrument for ensur-
ing peace and stability in the world
community. Under the NPT, non-nuclear-
weapon states are bound not to manufac-
ture or acquire nuclear explosives and to
accept international safeguards on all
their civil nuclear activities. Nuclear-
weapon states are bound not to transfer
nuclear explosives to any other state and
not to assist non-nuclear-weapon states
to manufacture or acquire nuclear
explosives. All parties also undertake, as
part of the basic bargain, to facilitate
nuclear commerce for peaceful purposes
and to cooperate, where possible, in con-
tributing to the further development of
peaceful nuclear energy.
We have worked hard to strengthen
the International Atomic Energy
Agency and, in particular, to improve its
indispensable system of international
safeguards. This system entails the use
of materials accounting, containment,
and surveillance to detect and, by
creating the risk of detection, to deter
the diversion of nuclear material in
peaceful activities to nonpeaceful
purposes.
We have tightened up our own con-
trols over exports of nuclear material,
equipment, and technology, and we have
worked together with other nuclear sup-
plier countries to strengthen and more
closely coordinate our common non-
proliferation export policies and prac-
tices. Coordination is achieved through
two multilateral supplier groups. The
Non-Proliferation Treaty Exporters
Committee, often referred to as the
"Zangger Committee," has established
common procedures to ensure that
specified nuclear exports will be covered
by IAEA safeguards in accordance with
obligations arising under the NPT. The
other group, the Nuclear Suppliers
Group, including supplier countries not
party to the NPT, has established
guidelines for nuclear exports that go
beyond NPT obligations, including a
common policy to exercise restraint in
the transfer of sensitive nuclear technol-
ogies. Each group has developed a
detailed list of controlled items, or "trig-
ger list," so called because the export of
a listed item triggers the application of
international safeguards. The United
States is a founding member of both
groups and has consistently supported
efforts to preserve and enhance the
effectiveness of their guidelines.
Export controls make a major con-
tribution to the overall nonproliferation
effort by multiplying the technical
obstacles a potential proliferant country
must overcome to establish and maintain
a nuclear explosives program. In the
end, however, they must be supported
by broader approaches aimed at elim-
inating the root causes of proliferation.
In this connection, the United States has
sought, through comprehensive diplo-
matic efforts, to reduce the regional and
global tensions that can motivate states
to consider acquiring nuclear explosives.
And we have worked to restore U.S.
credibility as a consistently reliable
cooperating partner in the peaceful uses
of nuclear energy under adequate safe-
guards and controls, thereby enhancing
our ability to exercise our influence,
through consultation and persuasion,
over the peaceful nuclear programs of
other countries.
Cooperation With Other Nations
Perhaps I might dwell for a moment on
the U.S. role as a nuclear suppher to
other countries and the way this role
supports our overall nonproliferation
efforts. Under U.S. law, a formal agree-
ment for cooperation in the peaceful
uses of nuclear energy is required if we
are to engage in significant nuclear
trade with another nation. "Significant"
items for which an agreement is
required include nuclear reactors, major
reactor components, and reactor fuel.
The agreement sets forth the terms and
conditions for such cooperation. Such
agreements, therefore, do more than
merely facilitate nuclear commerce; they
impose conditions on such commerce,
and most especially nonproliferation
conditions.
When the U.S. Nuclear Non-Prolifer-
ation Act, or NNPA, became law in
1978, it established new, more stringent
nonproliferation conditions for inclusion
in new agreements for cooperation and
required the President to initiate a pro-
gram to seek to update existing agree-
ments to include the new standards.
Since 1978 we have negotiated or
renegotiated 13 agreements meeting all
requirements of the NNPA. Just
recently, in January, we reached ten-
tative agreement with Japan on the text
of a new agreement which is now under-
going internal review in the U.S. and
Japanese Governments. This proposed
new agreement would contain all the
69
consent rights and guarantees required
by U.S. law. At the same time, it would
provide Japan with certain advance,
long-term U.S. consents regarding the
use and storage of nuclear material sub-
ject to the agreement, thus affording
Japan a more predictable basis for plan-
ning its long-range energy program.
We expect that, when brought into
force, this agreement will strengthen the
international nonproliferation regime by
setting a new standard for rigorous non-
proliferation conditions and controls in
agreements for peaceful nuclear coop-
eration. It will provide a basis for the
United States to work closely with Japan
in ensuring application of state-of-the-art
safeguards concepts and physical protec-
tion measures, thus affording us an
important measure of influence over the
future of one of the world's fastest
growing civil nuclear programs. And it
will reaffirm the U.S. intention to be a
reliable nuclear trading partner, thi>3
helping to ensure the continuation and
growth of our nuclear exports to Japan.
These exports include uranium enrich-
ment services with an average annual
value of close to $250 million and compo-
nent exports whose value is also very
substantial.
Conclusion
Civil nuclear power today is increasingly
relied upon by many countries as an
important energy resource. Properly
managed from a safety and nonprolifera-
tion point of view, it has the potential to
play a critical role in satisfying world
energy needs until well into the next
century. The key, of course, is proper
management. Civil nuclear energy is
safe, but it must be made even safer. It
is safeguarded against the possibility
that it will be turned to nonpeaceful pur-
poses, but the safeguards must be fur-
ther improved. This is the challenge
ahead of us. I believe that good progress
has been made in meeting this challenge,
and we are determined to persevere in
our efforts. ■
REFUGEES
Refugees and Foreign Policy:
Immediate Needs and Durable Solutions
by Jonathan Moore
Address at the John F. Kennedy
School of Government at Harvard in
Cambridge on April 6, 1987. Ambassador
Moore is U.S. Coordinator for Refugee
Affairs and Director of the Bureau for
Refugee Programs.
For a long time it has bothered me to
hear people talking about how important
it is to keep their favorite cause out of
politics— currently, as in: "We can't let
humanitarian assistance to refugees be
dominated by foreign policy interests."
And both in my political experience
before coming to the Institute of Politics
and the Kennedy School and in my
reflection while here, I have come to be
extremely wary of single issue, special
interest groups— but what do I do now
that I'm involved with one? Even though
I know what is meant about politics cor-
rupting goodness and the value of con-
centrated advocacy, I have tended to
view politics as a necessary way of get-
ting from here to there and to be more
comfortable approaching public policy as
the reconciliation of a variety of contend-
ing needs.
I've been trying to work out in my
own mind what refugee policy should be,
if there is such a thing, and, more par-
ticularly, what role it plays within larger
international contexts; what the relation-
ship is, reciprocally, between refugees
and foreign policy. Perhaps we can start
to test two principles which I have in
mind at the outset:
First, that the commitments we
engage and the insights we gain from
attending to some of the urgent needs of
refugees and enriching our society by
bringing some of them here can help
enlighten our foreign policy as a whole;
and
Second, that there can be found
more affinity and mutual reinforcement
than conflict or contradiction among the
various components constituting a com-
prehensive U.S. approach to the world's
challenges.
So I will take a brief look at the
causes, characteristics, programs, and
trends of refugee problems; then con-
sider the efforts undertaken to address
the immediate needs of refugees in place
and the three so-called durable solutions
to deal with refugee populations over the
longer run; and, finally, examine what
needs to be done to get at the root
causes which generate and perpetuate
refugees— where the refugee-foreign
policy relationship is fully revealed and
challenged.
Defining the Refugee Problem
It has been said that refugees are
"human rights violations made visible."
They live in dislocated, deprived,
marginal, ambiguous circumstances with
bleak futures. Most remain victims of
violence— in the countries they have fled
and the wars they sometimes bring with
them, from hostile local populations and
their own incipient factionalism. They
usually go to countries which are
extremely impoverished themselves— the
average per capita GNP [gross national
product] for the primary nations of first
asylum is $822.
An ambitious international system o:
multilateral and bilateral programs,
utilizing a huge, far-flung array of col-
laborators, administers crucial assistanc"
to refugees. These services include life-
sustaining support, food, water, shelter,
medical supplies and health aid, educa-
tion, protection and security, develop-
ment and impact assistance, representa-
tion and negotiation to improve
immediate and future treatment of
refugees, and resettlement. The partner
in the effort include multilateral agen-
cies led by the UN High Commissioner
for Refugees (UNHCR); international
organizations such as the International
Committee of the Red Cross and the
Intergovernmental Committee for
Migration; a multitude of nonprofit,
nongovernmental, voluntary agencies
with enormous commitment and skill;
and nation states that receive refugees
in first asylum, donate money, resettle
refugees, and even, in some instances,
facilitate their return. The United Statei
has sustained its leadership in providing
humanitarian assistance across the globe
through a traditional, bipartisan commit
ment as a major donor and resettlement
state, having welcomed well over a
million refugees since 1975. This interna
tional enterprise has saved and con-
tinues to save millions of lives and sup-
ports the continued provision of first
asylum. It is heroic, absolutely essential,
and inadequate.
70
Department of State Buljetij
REFUGEES
Trends in refugee affairs include:
• A "tightening up" of formerly
pen and generous policies by many
irst-asylum countries;
• Increasing pressure on states
osting large numbers of refugees for
carce resources and services;
• A tailing off of admissions and
anding by resettlement and donor coun-
"ies, including the United States;
• A proportional increase of
conomic migrants and illegal
nmigrants— aided by better communica-
ons and transportation technology
•ossing increasingly distant
oundaries— as distinct from victims of
ersecution per se;
• A downward yet continuing flow
f refugees from Vietnam, Afghanistan,
ad Ethiopia;
» A shift of emphasis from reliance
oon resettlement to pressing for
;patriation of refugees;
• Increased arrivals of Third World
sylum-seekers into Western Europe
nd North America; and
• A continuation of population
icreases outstripping development.
We can expect a rise in international
migration, during the balance of this
fentury and beyond, of people seeking
rnployment and physical safety.
When a flood of humanity surges
zross a border, it matters little whether
pe persons arriving are legally eligible
() be considered refugees, or displaced
arsons, or persons of concern under the
igh Commissioner for Refugees'
rtended mandate, or just plain hungry,
ck, fearful people. The response is to
ire for them; provide them the
scessities of life itself; and sort out
[entities, priorities, and criteria later,
ut the question of how to define a
jfugee is a major concern, as it has
nplications for a country's immigration
nd asylum policies as well as for its atti-
ide toward refugee assistance. Defini-
ons are subject to the political interest
f various parties, and people of similar
rigins and in similar conditions may be
t baled differently. Definitions tend,
timately, to be more prescriptive than
■escriptive.
The most commonly held definition
f a refugee is that found in the 1951
reneva convention and its accompanying
967 protocol, which define a refugee as
person outside his or her country of
abitual residence who cannot or will not
aturn "because of a well-founded fear
f persecution on account of race, reli-
ion, nationality, membership in a
articular social group, or political
pinion." This is the definition that the
United States adheres to when consider-
ing an individual for admission to the
United States as a refugee. Other defini-
tions are considerably more inclusive.
For example, the Organization of African
Unity extends beyond the "well-founded
fear of persecution" criterion to include
"every person who, owing to external
aggression, occupation, foreign domina-
tion or events seriously disturbing public
order in either part or the whole of his
country of origin or nationality, is com-
pelled to seek refuge in another place
outside his country or nationality."
This broader definition is important,
given the need to provide immediate
assistance and to continue to provide
care and protection for an extended
period of time. Our own laws facilitate
this definition, allowing international
assistance funds from the United States
to flow flexibly. Our Migration and
Refugee Assistance Act of 1962 provides
the authority for assistance in place, as
opposed to resettlement, without defin-
ing refugees specifically but allowing, for
instance, contributions to the UNHCR
for assistance to "refugees under his
mandate or persons on behalf of whom
he is exercising his good offices" and for
"meeting unexpected urgent refugee
and migration needs."
Addressing Refugee Needs
The international refugee community
concentrates its efforts— not exclusively,
but primarily— on immediate assistance
to refugees in place, in first asylum,
where the need for help occurs first and
is the most acute. The capacity to pro-
vide this help effectively has improved in
recent years and can be the difference
between life and death, although, in
some instances, access to the suffering
populations can't be achieved, and in
others, the help provided is very meager.
What are the barriers and the limits to
such assistance? What are the pressures
and dangers of refugee life in camps and
settlements, and how permanent are
these "temporary" sanctuaries? Most
refugees want, above all, to return to
U.S. Coordinator for Refugee Affairs,
Director, Bureau for Refugee Programs
Jonathan Moore was
born in New York on
Sept. 10, 1932. He
received a bachelor's
degree from Dart-
mouth (1954) and a
master's degree in
public administration
from Harvard (1957).
He began his govern-
ment service in 1957
as a public affairs
assistant with the U.S. Information Agency
in Bombay and later Monrovia. He served in
the Office of International Security Affairs
(Department of Defense), 1961-64, for a time
as special assistant to the Assistant Secretary
of Defense. He was special assistant to the
Assistant Secretary of State for Far Eastern
Affairs 1964-66. He was executive assistant
to the Under Secretary of State in early 1969.
Ambassador Moore was assistant to the
minority leadership, U.S. Senate, in 1959;
Legislative Assistant to Sen. Leverett
Soltonstall (R.Mass.) 1959-61; and chief
foreign affairs adviser on the national cam-
paign staff of Gov. George Romney 1967-68.
He was also foreign policy adviser on the
national campaign staff of Gov. Nelson
Rockefeller (1968).
Mr. Moore has held assignments as
Deputy Assistant Secretary of State for East
Asian and Pacific Affairs (1969-70);
Counselor to the Department of Health,
Education and Welfare (1970-72); and special
assistant to the Secretary and Deputy
Secretary of Defense (1973). From June to
November 1973, he was Associate Attorney
General, Department of Justice.
Previous to his current position, Mr.
Moore was Director of the Institute of Politics
and lecturer in public policy at Harvard's
John F. Kennedy School of Government for
12 years.
In addition Mr. Moore has served on the
advisory committee, National Institute of
Law Enforcement and Criminal Justice
(1974-76); consultant. President's committee
on the accident at Three-Mile Island (1979);
member of the Secretary of Health, Educa-
tion and Welfare's ad hoc group on the future
strategy of the Department of Health and
Human Services (1980); member of the Cape
Cod National Seashore Advisory Commission
(1982-85); and member of the Secretary of
State's panel on Indochinese refugees
(1985-86). In Oct. 1984, he was a consultant
to the Agency for International Development
in a field assessment of the U.S. economic
assistance program for the Philippines.
Mr. Moore was sworn in as U.S. Coordi-
nator and Ambassador at Large for Refugee
Affairs on Sept. 12, 1986, and was appointed
Director of the State Department's Bureau
for Refugee Programs on Mar. 5, 1987. ■
REFUGEES
their homes, yet conditions of safety and
stability enabUng them to do so remain
elusive.
The behavior of the receiving coun-
try is the most significant variable. The
response of the international commu-
nity—advanced by the UNHCR— is next,
but usually is available and reliable.
Receiving countries have security, politi-
cal, economic, and cultural interests and
values which, together, will determine
what their response will be Often it is
most generous and patient. Naturally,
internal political stability, conflicts with
neighboring states, the relationship of
the given refugee population to insur-
gency ambitions or apprehensions, old
ethnic rivalries, contrasts in standard of
living, and consideration of foreign
alliances and assistance will play a role
in determining the refugee policies of
the host nation.
The whole experience of refugees is
an intense mix of dedication and exploi-
tation, and this is where it begins. Per-
ceptions of first asylum are sometimes
determined by distance— what looks like
a politically persecuted refugee from far
away may appear more like an illegal
immigrant up close, or, as a hard-boiled
American politician of local reknown
once put it: "It's easier to be liberal fur-
ther away from home."
The negative economic and political
impact on local goods, services, and
populations, despite substantial imports
of outside assistance— the burden on the
host country of large refugee influxes
staying for long periods— is intensive,
divisive, and destabilizing. Consider the
effect of having well over 2 million
needy Afghans settle "temporarily" in
Pakistan for over 6 years, where, even
before their arrival, the per capita GNP
was less than $400.
To try to soften the impact of mas-
sive refugee influxes, the United States
and the international community have
developed a variety of programs aimed
at encouraging self-sufficiency among
refugee populations and providing assist-
ance to local populations disrupted by
the refugees' arrival. These programs
range from reforestation, irrigation, and
road-building projects with the World
Bank in Pakistan to water projects and
direct food supplements to affected
villages in Thailand. In El Salvador and
Uganda, U.S. aid programs help repatri-
ated refugees and returned displaced
persons in resettlement and agricultural
self-sufficiency projects. In Lebanon, UN
agencies offer food and medical supplies
to needy local communities, in addition
to those suffering within the refugee
camps.
What are the conditions of the
refugees who stay in camps or set-
tlements for protracted periods of time?
Their situation can differ widely. For
some, refugee camps are closed— that is,
the refugees are not allowed to leave the
camps and are densely concentrated. For
others, they may be distributed in more
open settlements and permitted to have
some access to the markets and jobs of
the host country. The psyche shrivels
and the morale wanes faster, of course,
in the former instance. The fabric of life
generally in refugee camps is character-
ized by all sorts of pathology, despite the
courage, will, and resilience of their
inhabitants: disruption and disorienta-
tion, dependency, apathy, powerlessness,
loss of self-esteem, claustrophobia,
pressure on the family, deterioration of
authority structures, and the random
violence which follows. The longer
refugees remain refugees, the more
these characteristics are intensified,
moral strength is sapped, frustration
sets in. Anger and hate can grow and
multiply, and the potential for "Pal-
estinization"— a profoundly tragic term,
even if the phenomenon was never
repeated— increases, as, perhaps, in the
case of the 260,000 Khmer displaced per-
sons along the Thai border, the 2.8
million Afghans in Pakistan, or even the
400,000 Oromo and ethnic Somalis from
Ethiopia in Somalia since 1979.
So immediate "emergency and tem-
porary" assistance is critical. We can
never fail to provide it, and for as long
as it takes, but it cannot become perma-
nent; it's a wasting option, and its
unrelieved, unliberated continuance is
both unacceptable and probable.
Promoting Durable Solutions
What happens next? Are there effective
possibilities which lie between taking
care of the emergency and attacking the
root causes of refugee problems? This
brings us to the three classical "durable
solutions" which the international com-
munity relies on as long-run alternatives
to immediate assistance in place:
Repatriation— the voluntary return
to the country from which the refugees
fled;
Local integration— establishing new
homes in the country of first asylum; and
Third-country resettlement— trans-
porting and transplanting refugees to a
distant country where there is the oppor-
tunity to begin a new life.
How dynamic, how viable, how extensive
are they?
Resettlement to a third country,
ideally, should be the last option to be
considered. This is difficult for the
strongest among us— extremely so for
refugees who often lack the resources,
education, or adaptability for a new
environment. To make such a transition
a success requires a tremendous effort
both on the part of the refugees and
those taking them in. The process is dif-
ficult, it is expensive, and many cannot
meet the restrictive eligibility require-
ments necessary to qualify for perma-
nent admission to third countries. There
is also the risk that resettlement itself
will be seen as a route for migration, a
"magnet effect" which attracts further
refugee flows.
This is not to say that resettlement
does not remain a viable option for a
limited few, a necessary component in
the mix of solutions needed to cope with
problems as we seek other solutions. It is
not to say that many refugees do not
make the transition successfully and
flourish in their new homes. The United
States has been the world's leader in
resettling refugees from distant lands—
particularly Indochina, from where over
800,000 refugees have arrived in the
past 1 1 years, adding rich new thread to
the fabric of the American tapestry.
But as a solution with broad appli-
cability, resettlement has reached a
plateau and will fall off. We will continU'
to resettle refugees, as will other coun-
tries who have generously opened their
doors to those in need. About one-third
of the U.S. refugee assistance budget of
$340 million for fiscal year 1987 goes foi
resettlement of roughly 65,000 refugees
in this country— and about two-thirds fo;
international assistance for roughly 10
million refugees in place. Resettlement
can be a solution for only about 1% of
the world's refugees.
First-asylum countries around the
world are currently among the poorest
in their own right and are often strug-
gling under the burden of newly arrived
populations in need of assistance.
Although their response has been
remarkable, in the long run they are
unlikely to be able to provide significant
opportunities for the second durable
solution— permanent local integration-
of large numbers of refugees. Excep-
tions where hospitality has been warm
and in-country integration has worked
well can be found, especially in Africa
where hundreds of thousands of refugee
have found new homes in Burundi,
Rwanda, Sudan, Tanzania, Uganda,
Zaire, and Zambia. But even in Africa,
things are beginning to constrict, coun-
tries are becoming less willing or their
^>f^r^ortrr■^r.^ r^l Ct^t^ n..ll^ti
REFUGEES
agile economies less able to bear the
eight of new populations. In Southeast
sia, where first-asylum countries, sup-
Drted by efforts of the UNHCR and the
settlement countries, have granted
;fugees asylum for more than a decade
ith no end in sight, there are accumu-
ting pressures, and early prospects for
fugees settling in the region are not
•ight.
Voluntary repatriation, the most
jsirable traditional durable solution, is
BO often the most difficult to achieve.
or a person to be willing to return
)me, the conditions which forced him or
jr to become a refugee in the first place
ust be resolved. All too frequently, the
luses of refugee flight are intractable
id unlikely to disappear soon.
Some repatriation is taking place,
id the UNHCR is taking the lead with
tempts at cooperation by certain
embers of the international commu-
ity. As a goal, we believe that more
Ituations where repatriation is possible
lUst be encouraged and will develop. In
frica, again, voluntary repatriation is a
itural and active phenomenon. Over a
9zen different repatriations there are
(curring now or have recently, either
Kontaneously or assisted by the
(JHCR or other organizations. Large
limbers of refugees have repatriated to
Ithiopia from Sudan, Somalia, and
iibouti; to Chad from the Central
(frican Republic, Sudan, and Cameroon;
«d to Uganda from Rwanda, Sudan,
lid Zaire. So there are ebbs as well as
)ws— although they are not symmetri-
.1, given the stubborn disruptions
ross major portions of the continent,
id Africa is an exception in this respect
begin with.
What is key to recognize is that the
ree classical durable solutions, while
iportant and valuable options in
anaging refugee situations, are, today,
nited and insufficient in and of them-
Ives. If we are really serious about
ding people who have reached such a
ate of fear and discouragement that
fey are willing to abandon everything,
e must not only "manage" refugees
ice they arrive in first asylum and
ress all three durable solutions but also
^d ways to achieve conditions which
flow them to stop being refugees and to
fevent them from becoming refugees in
16 first place.
hterrelationship of Foreign
blicy and Refugee Problems
'^e have come to the final and funda-
lental two questions. Do nation states.
individually and in concert, have the
imagination and the political will to
address effectively the root causes of the
refugee problem? Can refugee issues be
reconciled with other forces and inter-
ests in the formulation of U.S. foreign
policy? "Wouldn't it be pretty to think
so?" said Jake to Lady Brett in response
to her excessively romantic characteriza-
tion of life in the last line of The Sun
Also Rises.
We have already confronted and
accommodated many juxtapositions of
refugee issues and foreign policy needs
in getting to this stage of our discussion,
but in addressing root causes, the inter-
relationship—which is a complex,
dynamic, inevitable, and critical one— is
most tested. Refugee consequences tend
to be the result, rather than the aim, of
foreign policy thrusts. Refugees tend to
become a foreign policy issue when they
happen; they are not deliberately pro-
voked. They tend not, as an original mat-
ter, to be a significant factor in policy-
making— the fact that they can become a
horrendous byproduct may suggest this
should change.
Foreign policy strategies affect
refugee interests, and refugee realities
infect foreign policy in a variety of ways;
refugees tend to be highly impactful in
international relations. The decision to
be a refugee is a political statement dif-
ferentiating between countries, and the
decision to grant asylum, aside from
humanitarian motivation, can be seen as
a hostile act by a neighbor. The same
nation-states which are providing signifi-
cant humanitarian assistance to refugees
may, at the same time, be pursuing
policies that have the effect of
generating refugees.
Refugees are volatile, sometimes
prone to destabilizing activity; they are
vulnerable, sometimes subject to
destructive exploitation. They are
burdensome and intrusive in terms of
economic and social progress, affecting
international resource competition and
allocation. They often participate in
insurgencies which are international by
the fact of their location on the other
side of an international border and by
the support they may receive from
foreign sources, posing crucial foreign
policy decisions. The fact that they are
freedom fighters does not mean that
they aren't also refugees— the definitions
are frequently combined or blurred; and
the relatives and camp followers are
even harder to type— are they co-con-
spirators, hapless pawns, or innocents,
and what should be done with them?
External aggression creates refu-
gees which then have to be dealt with, as
in Afghanistan and Cambodia. Refugee
populations may themselves become
powerful factors in regional struggles,
such as the Palestinian refugees. Inter-
ested countries have to decide what
weight to give aid to refugees or to
refugee-affected states; whether to try
to change or prevent change in govern-
ments tied up with refugee problems, to
support or oppose refugee insurgencies,
to press for first asylum or repatriation
at the cost of other interests. Trade
policies, security needs, deficit-fighting
initiatives— all can influence or be
influenced by refugees.
Addressing the Root Causes
of the Refugee Problem
So much for the interdependence; what
are the root causes which our foreign
policy would have to address in order
that refugee phenomena be radically
alleviated? It is an intimidating list, par-
ticularly if you even pause to consider
what might actually be done about its
entries, which essentially divide into
three clusters, each threatening, con-
stant, and widespread:
• War and violence— a huge number
of continuing armed conflicts in various
areas of the world;
• The brutal violation and abuse of
human rights, systematic and particular,
in most of the countries of this planet;
and
• The ruthless disparity of rich and
poor or, more precisely, grinding pov-
erty brought on by various natural and
manmade causes, again suffered by most
of the world's peoples.
As a hypothetical exercise— calcu-
latingly if not redemptively indulgent of
refugee needs— if foreign policy could
work magic, what would it effect? What
if those of us seized with refugee issues
could have our druthers and behave as if
they were the only problems we had to
worry about? What if we did not have to
contend with conflicting policy interests,
if foreign policy was, in fact, refugee
policy— which, of course, is not so. What
other interests might be served and
problems lessened if it were so?
We would try to bring to an end
insurgencies and military occupations—
in Afghanistan and Cambodia, in
Mozambique and Angola, in Nicaragua
and El Salvador. We would try to ter-
minate the traffic in arms around the
world. We would press closed societies
harder for legal emigration accords
eliminating the need for dangerous flight
73
SCIENCE & TECHNOLOGY
and for agreements providing safe volun-
tary repatriation. We would greatly
increase our economic development aid
to help remove the seeds both of eco-
nomic migration and the kinds of dis-
equilibriums that bloom into refugee-
generating situations. Radical efforts
would focus on aiding those countries
wallowing in economic morass to build
viable economies capable of providing
opportunities for their people, staving
off both the specter of true hunger and
the hunger for a better life elsewhere. If
this, our Panglossian mission, were suc-
cessful, citizens in all countries would be
provided access to the political institu-
tions which influence their destiny; fear
of persecution and repression would
have no place in the human condition;
and true democracy, religious tolerance,
and economic freedom would reign.
So much for dreaming— although it
does reveal the profoundness of our
problems, the near-daunting challenge
even of how to begin to address them,
the commonality of refugee and other
less esoteric aspirations, and how
improbable it is that all this will come
about. In order to advance refugee
policy, not at the expense of but within
the pluralism of foreign policy, what is
required is elevation and integration.
Refugee values should play a more
influential role at the higher levels of
macro-policymaking and in the competi-
tion of forces which determines its
shape. Refugees are just one facet in the
multifaceted competition among legiti-
mate interests which must be coordi-
nated and reconciled in the molding of
foreign policy. To move toward affecting
those conditions so as to bring relief to
the world refugee situation, refugee
interests should become more— not less-
political, more relevant and less isolated,
if they are to influence the scale of
foreign policy decisionmaking in their
favor.
Specifically, this must be achieved in
deliberations with those officials respon-
sible for regional and bilateral relation-
ships in the State Department and with
the National Security Council staff; in
representations with nations abroad and
with multilateral agencies; in program
design and budget planning across the
executive branch; in intensive consulta-
tions with Congress; in public education;
and, finally, in relations with voluntary
agencies, churches, state governments,
resettlement communities, and ethnic
organizations. Accepting the narrow
view or the narrow management of
refugee interests is self-defeating in two
ways: it denies reality and falsely
inflates expectations, and it locks into a
74
parochialism where you are constantly
chasing your tail and losing ground.
To come back from where we started
tonight, we must seek affinity and
mutual benefit— this is both idealistic
and sophisticated, and it had better be
both. The task is extremely arduous,
almost futile, requiring affirmation and
resoluteness, rejecting complacency and
cynicism. First, by actively inserting
refugees into the fray of competing
interests with influential actors, there is
a higher possibility of arriving at a polic
that will be less likely to generate or
exacerbate refugees. Second, if a policy
is decided upon which has refugee const
quences, it will be with foreknowledge,
and responsible officials will be better
prepared to deal with the results. Third
engagement with these humanitarian
concerns will serve to enlighten policy-
makers generally at a level where criti-
cal decisions are made, presumably to
the benefit of other interests as well. ■
World Radio Conference Concludes
U.S. Ambassador Leonard H. Marks has
expressed "satisfaction" over the out-
come of the second session of an interna-
tional conference on planning procedures
for high-frequency (shortwave) radio
broadcasting.
Speaking to reporters in Geneva
March 7, as the 5-week World Admin-
istrative Radio Conference (WARC) on
the allocation of the high-frequency (HF)
bands for broadcasting came to a close,
the head of the U.S. delegation said a
"compromise" had been reached at the
conference which met U.S. goals.
"The compromise reached here
should enable the Voice of America,
Radio Free Europe/Radio Liberty, and
private shortwave broadcasters licensed
by the Federal Communications Commis-
sion (FCC) to continue modernizing their
facilities and to begin preparing for new
transmission techniques that could, in
the next century, dramatically increase
their already substantial audiences
around the world," he said.
The conference is held under the
auspices of the International Telecom-
munication Union (ITU), the Geneva-
based UN agency specializing in the
most effective use worldwide of
telecommunications.
It follows on from a high-frequency
WARC, held in 1984 to try to solve the
problem of congestion and poor quality
shortwave broadcasts resulting from
increasing use of the HF band.
Marks said "the essential fact
remains that there are too few frequen-
cies to meet the demand" of shortwave
users.
He summed up the results of the
second session of the conference as
follows.
• It called for a new conference,
probably in 1992, to consider increasing
the number of channels available for
I
broadcasting on the shortwave band,
particularly in the popular six and sevei
megaherz (49- and 41-meter) bands. He
said the next conference might considei
freeing up more space for broadcasting
on the shortwave band by moving non-
broadcasting uses— such as aeronautica-
and maritime mobile, safety services,
military, etc.— to other locations.
• It called on the manufacturers ot.
shortwave radio transmitters and
receivers to begin developing equipmer
by the end of 1990, suitable for single-
side band (SSB) broadcasting as well as
by the current double-side band (DSB)
techniques. (SSB takes up about one-hj
the band space of DSB.) "Worldwide
conversion to the SSB mode of transm
sion could potentially double the numb<*
of channels available for broadcasting,'
Marks said. He added that the con-
ference has set a tentative target date
2015 for such conversion, but this wou]
be subject to the pace of introduction o
the new SSB equipment around the
world during the 1990s.
• It agreed to carry out a further
round of computer tests on a new
automated procedure for planning shoii
wave broadcasting. Since 1959 the ITl
has used a U.S. -sponsored voluntary
coordination procedure to find the
optimal broadcasting frequencies for
countries within the limited amount of
frequency space available for shortwav
broadcasting. At the first session of th|
conference in 1984. a computer-auto-
mated international frequency assign-
ment planning system was developed. '
found to be successful, it would eventui
ally replace the voluntary coordination'
procedures. However, Marks said that
computer tests of the new system
showed that 25% of the broadcast
requirements of countries were not
satisfied, and 25% of the countries wei
provided a signal of minimum quality
and not really usable for broadcast pur
poses. Therefore, the current conferen
Deoartment of State Bulle,
L
50UTH ASIA
ladi' "very substantial changes" to the
oni| niter plan, which— after 3 years of
iiftw are development and testing— will
e i\ viewed at a future conference,
roliablyin 1992.
• It adopted a U.S. resolution—
upported by Canada, Western Europe,
nd other nations— to continue the ITU's
HHiitdring of "harnxful interference," or
imining, by countries of other nations'
international radio broadcasts. "No
automated planning system can effec-
tively be implemented as long as jam-
ming continues," Marks said, noting that
the ITU's monitoring had identified the
Soviet Union, Poland, and Czechoslo-
vakia as the worst offenders when it
comes to jamming foreign radio broad-
casts. ■
>outh Asia and the United States:
Vn Evolving Partnership
If Michael H. Armacost
Address before the Asia Society on
pril 29, 1987. Ambassador Armacost is
nder Secretary for Political Affairs.
. is a particular pleasure to address the
sia Society of Washington tonight. I
ive had a long and happy association
ith this organization, for the most part
connection with previous duties in
ast Asia. This is a welcome and timely
jportunity to share with you some
loughts on our relationship with South
sia— that quarter of the world that lies
itween Iran on the west and Burma on
le east.
One measure of the growing impor-
.nce of South Asia to the United States
the time and attention which senior
dministration officials— myself
eluded— devote to the policy challenges
id opportunities in this important
•oup of countries. By that standard-
deed, by any standard— the region is
;ry important, indeed.
.S. Interest in South Asia
Tiat happens in South Asia is a matter
:' consequence to Americans. Our stake
. the subcontinent was first expressed
our support for the independence of
outh Asia from British rule. We saw
lat states free from outside domination
ould be the best guarantors of regional
;curity. We appreciated the size and
versity of the populations of the region
id its potential for rapid and equitable
'Gnomic growth. We especially
^cognized the democratic aspirations
nd achievements of the peoples of
outh Asia, the vitality of their intellec-
lal and cultural traditions, and— more
scently— the key roles these countries
ave come to play in international and
Third World fora and their significance
in East- West and North-South
relationships.
This interest has been articulated by
every American Administration since
World War II. Yet the scope of our
involvement, the relative emphasis given
to security versus economic concerns,
and the priority accorded to particular
countries within the region have varied
with changes in international circum-
stances and in the rhythm of American
politics. Continuity has not always been
our strongest suit as we have sought to
balance our regional interests in South
and Southwest Asia with our global con-
cerns about the expansion of Soviet
power.
Some Administrations have pursued
close ties with Pakistan, to the detri-
ment of relations with India; others
have sought to augment our ties with
India at the expense of relations with
Pakistan. The Reagan Administration
has attempted to forge closer relations
simultaneously with both nations. We
recognize, of course, the importance of
the other countries of the region, and we
have also sought to develop further our
bilateral ties with them.
Our goals in the area are to:
• Restore Afghanistan's
independence;
• Avert a nuclear arms race in the
subcontinent;
• Encourage a reduction of tensions
between Pakistan and India;
• Stem the drug trade and forge
closer international cooperation against
terrorism;
• Preserve national integrity in the
face of separatist demands; and
• Support moves toward democracy
and regional and economic cooperation,
including the impressive strides made by
the South Asian Association for
Regional Cooperation (SAARC).
Recent Developments
Let me comment briefly on recent
developments in some of these areas,
and then outline for you the policy prin-
ciples that mark the Administration's
approach to each.
Afghanistan. The essentials of the
Afghan conflict have not changed in
recent months. The Soviets have been
unable to translate their massive
military involvement into stable political
arrangements in Kabul. Resistance to
the Soviet presence and its client
government continues to grow; and
international support for the resistance
has never been stronger.
While the Soviets have not taken
decisive actions to end their military
involvement in Afghanistan, there have,
nonetheless, been some significant
developments in recent months, some of
which enhance the possibilities for a
political settlement.
• While the tempo of military action
in Afghanistan remains very high, Soviet
efforts to shift the burden of combat to
Afghan units have largely foundered on
the inefficiency and uncertain loyalty of
the Afghan military.
• Despite wishful claims to the con-
trary, attempts to broaden the political
base of the Najibullah regime, to coopt
or coerce the mujahidin into giving up
their struggle, and to disrupt the infra-
structure of the resistance have failed.
• The Soviets have, more and more
emphatically, declared their intention to
withdraw from Afghanistan. They claim
that the Soviet Army has completed its
mission there and that a schedule for its
withdrawal has been set. Yet the minor
withdrawals implemented to date have
been of no military consequence, and the
cease-fire proposed by Kabul last
January was understandably spurned by
the resistance because it did not address
the underlying cause of the conflict-
namely, the occupation of the country by
some 120,000 Soviet troops.
• The Geneva proximity talks con-
tinue, the last having taken place in
March. Differences on the central ques-
tion of a timetable for withdrawal of
Soviet troops have narrowed somewhat.
In the most recent round, the Kabul
regime proposed an 18-month timetable;
Pakistan responded by indicating its will-
ingness to accept a 7-month withdrawal
period.
• The Soviets have belatedly
acknowledged that a serious process of
national reconciliation must include
those who have taken up arms against
the regime, the refugees who have been
SOUTH ASIA
driven from their country, and promi-
nent individuals associated with previous
Afghan governments. But Moscow's cur-
rent approach appears to envisage a
coalition government built around and
led by the Communist Party of Afghani-
stan, while including elements of the
resistance— a political arrangement that
the resistance rejects because it will not
work.
• Political consultations among
resistance parties have intensified in
recent months. The resistance alliance
has maintained a common front in reject-
ing the legitimacy of the Najibullah
government. However, differences
evidently persist among the alliance par-
ties with respect to who should lead an
interim government and how it can best
be created.
• While Pakistan continues, with
courage and magnanimity, to open its
doors to nearly 3 million Afghan
refugees, this burden has become much
more onerous politically in the face of
Soviet efforts to harass and intimidate
Pakistan by bombarding border villages,
sowing disinformation, and engaging in
sabotage designed to fan ethnic and com-
munal rivalries.
• In our conversations with Moscow,
we have reminded Soviet leaders
repeatedly of the heavy burden their
presence in Afghanistan imposes on
U.S. -Soviet relations and the salutary
impact an early political solution would
have on our ability to move forward on
other aspects of the East-West agenda.
Yet we remain uncertain of Soviet inten-
tions. On the one hand, they have per-
mitted a more open public and media
discussion of their policy in Afghanistan,
with General Secretary Gorbachev
having taken the lead in declaring before
the 27th Party Congress that the war
has been a "bleeding wound." On the
other hand, they have dramatically
increased their attacks against innocent
Pakistanis and Afghans.
We do hope that when all is said and
done, the Soviet leadership recognizes
the rising cost of their present involve-
ment in Afghanistan. They do now
appear to see that their original aims are
unattainable through military force and
that continuing to pursue an inconclusive
struggle could seriously jeopardize Mr.
Gorbachev's domestic agenda as well as
his efforts to create a more flexible
Soviet foreign policy. What remains is
for them to take the tough decisions that
will facilitate an early resolution of the
conflict. We will certainly be ready to
respond positively if they do.
Indo-Pakistani Nuclear Tensions.
Nuclear proliferation in the subcontinent
is a matter of both regional and interna-
tional significance. Both India and
Pakistan possess impressive scientific
and technical capabilities in the field of
nuclear technology. Both have strong
economic incentives to develop civil
nuclear power programs. Neither has
signed the Nuclear Nonproliferation
Treaty, and both have unsafeguarded
facilities.
The Reagan Administration certified
to the Congress last October its judg-
ment that Pakistan did not possess a
nuclear device. Despite recent press
stories, we have not changed this assess-
ment. Yet concerns about a drift toward
the competitive acquisition of nuclear
weapons in South Asia are growing—
both here and in the region.
• There is some public support for
"going nuclear" in both India and
Pakistan— a support based on what we
believe to be a lack of appreciation of the
costs, risks, and dangers associated with
nuclear proliferation and a regional
nuclear arms race. Some public figures
in both countries now openly advocate
nuclear weapons programs.
• The strains of distrust in the
overall political relationship between
New Delhi and Islamabad have inter-
rupted a nascent dialogue about nuclear
issues, delaying the consummation of a
promising agreement not to attack one
another's nuclear installations and stall-
ing consideration of other confidence-
building measures in this field.
• Increased congressional concerns
about these developments have been
registered by committee action in both
the House and the Senate to reduce the
Symington amendment waiver provi-
sions from 6 years to 2 for the next
assistance program proposed for
Pakistan and to acknowledge explicitly
in the law the need for regional coopera-
tion to prevent nuclear proliferation.
As technical limitations on the
capacity of Pakistan and India to acquire
nuclear weapons diminish, the impor-
tance of developing more effective
political constraints against crossing the
nuclear threshold increases. Fortunately,
the leaders of both countries recognize
the great dangers and costs they would
suffer if India and Pakistan were pro-
pelled into a nuclear arms race. We are
working to help them build upon this
understanding.
Indo-Pakistani Relations. Since
independence, tensions between India
and Pakistan have complicated our own
relations with both countries. While our
assistance has been substantial (more
than $20 billion), help to one has fre-
quently been seen as a source of dangei
to the other.
In recent years. New Delhi and
Islamabad have established mechanism:
for normalizing and managing their
bilateral relationship. During the last
year, however, this process has been
subject to great strain and again has
stalled. Troop movements and exercise
along the Indo-Pakistani border in
January led to an upsurge in mutual
suspicions. And, while the immediate
crisis was resolved, the incident served
further to complicate the efforts of the
two nations to expand bilateral trade
and other exchanges, to resolve the
Siachin Glacier dispute, and to bridge
differences between Pakistan's propos<
no-war pact and India's proposed peac<
and friendship treaty.
The ability of India and Pakistan t<'
forge stronger bilateral ties is fundame-
tally hampered by mutual suspicions.
Each fears that its neighbor is fanning
ethnic rivalries. Each is wary of the
external defense relationships of the
other with outside powers. While
legitimate security concerns are at
stake, such perceptions are often exag
gerated and inflamed by hyperbolic
rhetoric.
Despite these problems, the leader
of both India and Pakistan appear det<
mined to prevent a deterioration in re;
tions. Their periodic meetings have be'
marked by cordiality and candor. Inde
summits of the South Asian Associatic
for Regional Cooperation, to which bo
are dedicated, now provide additional
opportunities where they— and the oth
leaders of the subcontinent— can discu
bilateral issues.
«
National Integrity. Since the for
mation of independent states in Southi
Asia 40 years ago, ethnic, subregional
linguistic, and other separatist
movements have threatened the nation
integrity of the new polities. These
movements are dangerous in principle
and dangerous in practice. For examp
the formation of an independent state
Khalistan, as demanded by some Indie "^i
and foreig^n Sikhs, would not only viol; e
the principle of national integrity but
would also create a vulnerable and ind
fensible entity lacking international si •
port and strategic depth. This is true :
well of other separatist movements. F •-
thermore, the multiethnic nature of m .t
South Asian states sustains suspicions
that neighboring countries are seekinj
to exploit unrest among competitive
ethnic groups for the purpose of weak i-
SOUTH ASIA
ng regional rivals. India, for example,
las charged Pakistan with helping Sikh
nilitants. Pakistan has made similar
Jlegations about Indian assistance to
he Sindhis. We oppose disruptive
novements of this kind.
Most disturbingly, violence in Sri
janka has escalated tragically in recent
reeks, as militants calling for a Tamil
lomeland have initiated a series of
»rutal bombings and other armed
ncidents— thus precipitating renewed
nilitary confrontation in both the north
,nd the east. The Jayewardene govern-
nent has responded forcefully. Some
ivilians have been caught in the
rossfire, exacerbating the conflict.
This upsurge of violence has further
lardened the polarization of political
orces in Sri Lanka, strengthened the
lands of those within the insurgent
aovement and government camps who
.dvocate a military solution, and may
ave reduced the leverage of India over
'amil militants. We certainly support
he efforts of India to bring the insur-
ents to the bargaining table so that
Dng-delayed political negotiations can be
lesumed.
Regional Cooperation. It is
pparent to any observer that the region
aces a daunting agenda of political and
ecurity challenges, but the states of
South Asia are determined to confront
hem and have been looking for ways to
luild bridges to their neighbors. We
lave recently witnessed the development
if an innovative instrument to encour-
.ge communication and cooperation in
he area— the South Asian Association
or Regional Cooperation, established in
985. SAARC is a living memorial to the
' idsdom and vision of its advocate, the
ate President Ziaur Rahman of
Bangladesh.
This regional association has quickly
established impressive, firm roots by
;oncentrating pragmatically on eco-
jiomic, cultural, and environmental
cooperation that brings tangible benefits
the peoples of the region. The estab-
:,ishment of a meteorological research
;enter, the opening of an agricultural
i nformation center, and collaboration in
j'ields such as telecommunications all
•epresent excellent beginnings. SAARC
; summit meetings have served as fora for
, liscussing arrangements for regional
;:ooperation, and they have also provided
opportunities for bilateral meetings
inicing leaders.
Elements of U.S. Policy
jIn sum, the current scene in South Asia
reflects elements both of hope and of
SOUTH ASIA
danger. Our task is to nurture the
possibilities of an Afghan settlement,
encourage Indo-Pakistani reconciliation,
and lend support to the growth of
democratic institutions and regional
cooperation on such matters as drug con-
trol and coping with terrorism, while
seeking to diminish the risks of nuclear
competition and ethnic violence in the
subcontinent. With these broad aims in
mind, let me comment briefly on the
policy efforts we have undertaken in
recent months.
Supporting the Cause of Afghan
Independence. With respect to
Afghanistan, there are those who say
that we seek to keep the Soviets in
Afghanistan in order to "bleed" them; that
we covet the use of Afghan territory for
strategic purposes; or that our aim is to
achieve "historic revenge" for Vietnam.
These self-serving misreadings of our
objectives could not be further from the
truth. Rather, our objectives in Afghani-
stan are to get Soviet forces out, to per-
mit the Afghan refugees to return home,
to allow the Afghans to determine their
own political future, and to restore the
country to its traditional status as a
neutral, nonaligned buffer. There are
two key elements to a political
settlement:
First, a timetable providing for the
rapid and complete withdrawal of all
Soviet forces; and
Second, political arrangements
inspiring sufficient confidence among
the Afghan refugees to induce them
voluntarily to return home.
-J"i"-'°°"7
77
SOUTH ASIA
The first issue— that of a timetable
for Soviet withdrawal— is the only
unresolved issue remaining in the "prox-
imity talks" conducted in Geneva under
the auspices of Diego Cordovez, the UN
Secretary General's special represent-
ative. He has displayed admirable
dedication in moving these negotiations
along, and some progress has been
achieved. More is needed. A lengthy
withdrawal period would serve only as a
device to demoralize and undermine the
resistance while the Soviet Union for-
tifies its client regime in Kabul. It is for
this reason that we support Pakistan's
call for a timetable that is framed in
months rather than years.
As for the second issue (which is
essentially not part of the agenda at
Geneva)— that of political arrange-
ments—the Soviets maintain that the
process of national reconciliation has
been launched. They claim that it is mak-
ing dramatic progress— that, at the
grassroots, they are gaining the coopera-
tion of resistance leaders who are giving
up the struggle to become local govern-
mental authorities, and that, at the
national level, they are attracting
resistance leaders and other Afghans
into a coalition arrangement.
In fact, the mujahidin have
exhibited little interest in a government
of national reconciliation constructed by
the Soviets around the current Kabul
regime. No significant resistance com-
mander has defected to the regime; no
prominent Afghan exile has joined the
government; and no significant element
of the Afghan refugee community has
responded to Najib's entreaties to
return. The resistance insists— and
appropriately so— that priority should be
given to removing foreign troops from
Afghan territory. It dismisses the idea
that Najib can serve as a credible agent
of reconciliation. It prefers interim
governmental arrangements led by those
with well-established nationalist
credentials.
If the Soviets are as confident as
they profess of Najib's capacity to forge
local accommodations, they should
promptly withdraw. If they harbor
doubts about his staying power, let them
work for the establishment of an interim
government headed by Afghans enjoying
broader support among their own
people.
The Soviets express concern that a
rapid withdrawal could result in a
"bloodbath" directed against their
friends in Afghanistan. Although the
Russians have exhibited little
squeamishness about the more than 1
million Afghans who have died during
more than 7 years of war, their concerns
in this regard should not be dismissed
out of hand. No one wishes to see fur-
ther bloodletting. The most reliable
guarantee against the settling of old
scores, however, is the prompt establish-
ment of political arrangements enjoying
broad popular support in Afghanistan.
We call upon Moscow to move beyond
vain efforts to broaden the base of the
existing government and to support a
genuine process of national reconcilia-
tion. The Pakistanis are prepared to sup-
port such a process. So, too, are we.
Pending the achievement of a settle-
ment, of course, we will continue to sup-
port our friends. To the freedom fighters,
we pledge our humanitarian assistance
and other support. To the Pakistanis, we
pledge our continuing aid to the
refugees, our help in modernizing con-
ventional defenses (particularly air
defense), our political support for their
territorial integrity, and our diplomatic
support in promoting a settlement that
takes into account the legitimate inter-
ests of all the parties. In so doing, we
are not alone. Scores of other govern-
ments stand behind the resistance.
Promoting Nuclear Nonprolifera-
tion. Nuclear proliferation issues touch
fundamental questions of national
strategy and prestige; efforts to pursue
them perforce are difficult and sensitive.
Nonetheless, we have made nonprolifera-
tion a central feature of our policy
concerns worldwide ever since World
War II.
In the South Asian context, we have
for many years encouraged both India
and Pakistan to sign the Nonprolifera-
tion Treaty, to accept IAEA [Interna-
tional Atomic Energy Agency] full-scope
safeguards, or to enter into binding
regional nonproliferation arrangements.
All these remain valid objectives. Our
proximate aims also include, however,
fortifying current constraints against the
acquisition and testing of nuclear devices
and obtaining reliable assurances that
weapons-grade nuclear materials are not
produced.
Some believe these goals can best be
accomplished by adding new certification
requirements to existing legislation on
U.S. assistance to Pakistan and
threatening a reduction or elimination of
economic or security assistance if such
conditions are not met. The Administra-
tion has resisted such an approach for
the following reasons.
First, we believe that efforts to alter
the conduct of proud and powerful
nations through legislative ultimata that
are seen as discriminatory in character
will be ineffective, if not counterproduc
tive; we know from experience.
Second, reducing U.S. economic
assistance and security support and con
pounding existing uncertainties about it
continuity would only strengthen the
hands of those who argue that reliance
upon foreign support is inherently risky
This, in turn, could lend credence to the
view that only an indigenous nuclear
capability will assure an adequate deter
rent over the long haul.
Thus, the Administration has
opposed additional certification
requirements. It has, however, accepte<
a 2-year waiver of the Symington
amendment in lieu of the 6-year waiver
passed in 1981 and a provision in the
House and Senate bills that would set
this waiver aside in the event India
applies safeguards to its nuclear pro-
gram and Pakistan does not.
This should not imply that we are
complacent about the nuclear issue. Thi
debate in Washington is not over objec-
tives but means. The acid test of policy
is in the results. The United States can
claim some genuine successes in non-
proliferation policies over the years. Av
we must continue to devote an all-out
effort to the task. This subject will
remain a central feature of our policy
agenda with both Pakistan and India.
We make no secret of our concerns.
Indeed, our Ambassador in Islamabad,
Deane Hinton, has underlined these co:
cerns with a candor uncommon for a
diplomat. We believe Pakistani leaders
fully comprehend the seriousness with
which we would regard illegal procure
ment of sensitive nuclear materials in
our country, the testing of nuclear trig
gering devices, or the stockpiling of
nuclear materials that could be readily
converted to weapons. I need hardly ac
that they also understand that existing
laws would compel a termination of U.l
assistance if they were to acquire or te
a nuclear device.
While we have a facilitative role to
play on this issue, the burden of a solu-
tion must rest on the countries in the
region itself. They must work on a brof.
front to develop a pattern of reciprocal
restraints and confidence-building
measures; for, if a nuclear weapons cor
petition develops, it is their security th;
will be diminished.
We have encouraged a regional
dialogue on the nuclear issue, and we
have seen some tentative steps in this
direction. Pakistan has announced its
willingness to sign the Nonproliferatioi
Treaty, to accept full-scope safeguards!
to permit reciprocal inspections of its
I
78
ripnartmpnt nf .Citato Riilloi-
SOUTH ASIA
luclear facilities, to join a South Asian
luclear-free-zone agreement, and to con-
emplate other confidence-building
neasures if India is willing to follow suit
imultaneousiy. These are welcome
nitiatives whose seriousness would be
einforced by Pakistan's ratification of
he Limited Test Ban Treaty— a step
/hich India has already taken. The
ndian authorities have tended to dismiss
hese Pakistani proposals as tactical
loys. Yet the ideas have merit, and if
Jew Delhi is not prepared to embrace
hese initiatives, we would hope they
?ould put forward alternative ideas of
tieir own.
It is vital that the two countries
fork together in high-level discussions
D develop an understanding of the
lutual dangers that would result from a
uclear arms race. We thus urge
slamabad and New Delhi to complete a
romising bilateral agreement not to
ttack one another's nuclear installations
nd to consider, as a step toward
roader cooperation, an agreement not
) acquire or test nuclear weapons. This,
1 short, is a time for measures that will
isure mutual restraint and generate
lutual confidence.
Bolstering Relations With India
nd Pakistan. The United States has, of
jurse, limited influence on relations
etween Pakistan and India— and prop-
rly so. We have important but quite
ifferent interests in India and Pakistan.
le do not equate the two; we value our
plationship with each; and we resist any
lation that our ties with India and
laMstan are a zero-sum game. The
kagan Administration's efforts to
liprove relations simultaneously with
3th Islamabad and New Delhi have
emonstrated results; and they shall
)ntinue.
Since the unusually successful visit
f Rajiv Gandhi to the United States in
p85, Indo- American relations have— to
Mote the Prime Minister— improved
[tremendously." Our trade with India
las flourished; joint ventures have pro-
ferated; and high-technology transfers
ave been promoted by streamlined
iixport control procedures. We have
Durred cooperation in the defense sec-
)r as well as in preventing Sikh ter-
- wrists from operating in the United
.8 tates. Cultural ties have been solidified
nrough the Festival of India, and the
'.S. -India Fund has been estabhshed to
apljort joint research and exchange
rograms. Our official dialogue on inter-
ational political issues continues to
lature. 'These developments reflect our
hared determination to build a very
trong relationship.
With Pakistan as well, our coopera-
tion has grown, and U.S.-Pakistani rela-
tions, as illustrated by Prime Minister
Junejo's visit here last year, are strong,
productive, and increasingly diverse. We
have completed our initial long-term
assistance effort and have negotiated
another agreement that foresees the pro-
vision of roughly $670 million annually
for the next 6 years. We are continuing
to supply substantial support to the
Afghan refugees in Pakistan; we are
working closely with Pakistan to cope
with a growing narcotics problem; and
we have supplied consistent support to
Pakistan's efforts to promote a political
resolution of the Afghan conflict.
The challenge of our policy is to
improve ties with both countries in a
way that will help New Delhi and Islama-
bad reduce tensions between themselves.
Without intruding into their affairs, we
have consistently encouraged them to
address strains in their bilateral rela-
tions in a constructive way.
India continues to be concerned that
Pakistan intends to use U.S. arms to
strengthen its position against India.
Our defense cooperation with Pakistan is
designed to modernize its conventional
defense capabilities in the light of Soviet
pressures in Afghanistan. Our interest is
for Pakistan to possess plausible conven-
tional defense forces as an alternative to
the nuclear option. It would serve
neither our interest nor, I believe,
Pakistan's to provide defense capabilities
that could threaten India. But we are
aware of Indian concerns. Without
yielding a veto to anyone over our
defense cooperation with Pakistan, our
equipment sales will continue to focus on
capabilities that respond to the
immediate dangers to which Pakistan is
exposed on its Afghan border and other
modest and reasonable self-defense
requirements. The immediate priority is
upon augmented air defense capabilities
in the light of stepped-up air attacks. We
are urgently addressing recent requests
for an airborne early warning platform.
Preserving National Integrity.
America's ability to reduce communal
tensions in South Asia is extremely
limited, yet we have worked closely with
the states of the region on issues that
affect their national integrity. On the
question of Sikh violence, for example,
the Federal Bureau of Investigation and
other government agencies have joined
with Indian officials to detect and appre-
hend terrorists before they act. This
cooperation is necessarily quiet and
unpublicized, but it is producing results.
Furthermore, we must continue to
remind the Sri Lankan authorities that
military solutions to the Tamil problem
are unlikely to work— even as we urge
the Tamil militants to recognize that ter-
rorist tactics will only harden opposition
to their political aspirations. We reiter-
ate our call to all parties— particularly
the Tamil militants— to come together to
achieve a political solution within the
framework of a united Sri Lanka.
Thanks to the statesmanship of Presi-
dent Jayewardene and the constructive
efforts of the Indian Government, con-
siderable progress was made prior to the
recent violent attacks. We hope that pro-
gress can be resumed, and we are pre-
pared to help Sri Lanka rebuild after the
violence subsides.
Advancing South Asian Regional
Cooperation. The South Asian Associa-
tion for Regional Cooperation is, in our
judgment, a flourishing concern. Its
members have already identified 10
areas of cooperation, and the ground-
work has been laid for specific projects.
The long-range value of such ventures is
that they build working relations. Over
time, these will help reduce the distrust
among countries of the region.
We offer our encouragement and our
support. The President, in his message
to the inaugural SAARC summit in
Dhaka in 1985, applauded the foresight
and initiative of its leaders and stated
that the United States "stands ready to
provide appropriate assistance at your
request in launching programs of
regional cooperation." Secretary Shultz,
in hosting a luncheon for the SAARC
Foreign Ministers in New York in 1986,
repeated the President's offer. We par-
ticularly value the potential for coopera-
tion on narcotics eradication, combating
terrorism, and improving weather
forecasting during the monsoon cycle.
Although we do not want to push
ourselves on the organization, we do
stand ready to help if the countries of
the region so desire. That is the stand
we propose to take.
Conclusion
As this brief survey shows, the nations
of South Asia face daunting problems.
However, they possess considerable
human and material resources, and we
are pleased that— with the tragic excep-
tion of Afghanistan— they have made
major strides in achieving stable and
secure societies, able to meet the urgent
needs of their people and to play respon-
sible roles in the world community. We
are proud to have assisted the states of
South Asia in these efforts from their
WESTERN HEMISPHERE
earliest days as independent countries. It
is, and has been, a cause worthy of our
own heritage and our own interests.
If there is one thought I want to
leave with you tonight, it is that we have
tried— and will continue trying— to con-
struct a durable and a balanced policy
toward South Asia, one that reflects
rather complex interests: the strategic
independence of the subcontinent; nas-
cent cooperation within the region;
recognition of the great importance of
India, as well as the legitimate needs of
Pakistan and others for support and con-
fidence in their security; recognition of
the democratic legacy we share with
most South Asian states; our deep con-
cern about nuclear nonproliferation; the
bright prospects for expanded trade and
growth through more market-oriented
economies; and our determination to rid
ourselves of the scourge of drugs.
While we inevitably have our dif-
ferences with South Asian countries on
one issue or another, we believe that the
fundamental interests of this country are
in harmony with the aspirations of the
South Asian nations. We seek no favored
or dominant position for ourselves or
bases for our forces; but we resist the
efforts of others outside the region to
threaten the lives and hopes of the more
than 1 billion people who live there. It is
for these reasons that I am optimistic
about the future. I believe that the evolu-
tion of cooperation between the United
States and the nations of South Asia wall be
recognized as one of the major accomplish-
ments of the Reagan Administration. ■
The Spirit Behind the IVIonroe Doctrine
by Elliott Abrams
Prepared address before the James
Monroe Freedom Award dinner at the
Department of State on April 28, 1987.
Mr. Abrams is Assistant Secretary for
Inter-American Affairs.
I would like to thank the James Monroe
Memorial Foundation on behalf of Presi-
dent and Mrs. Reagan, who regret that
they could not be here tonight. I also
thank you on behalf of the Department
of State for your gracious loan of the
portrait of President Monroe. It is fit-
ting that the first public display of this
historic work of art be in the State
Department's Diplomatic Reception
Rooms. For Monroe himself was not only
a great president but a military hero
during the Revolution and a diplomat
who worked abroad to further the
national interest of our new democracy.
Monroe the Revolutionary
When President Monroe enunciated
what later became known as the Monroe
Doctrine, Austria's Metternich called it
"a new act of revolt . . . fully as audacious,
no less dangerous than the former." The
"former" Metternich was referring to
was the American Revolution of 1776.
Metternich was right. The Monroe Doc-
trine—like the Revolution— was danger-
ous. It was dangerous to the despotic
European powers of that time who
sought to expand their empire into the
Western Hemisphere.
The doctrine was also audacious.
Compared to the European superpowers
of the time, the United States was
weak— both economically and militarily.
But we had a strength that Metternich
and the rest of the continental elites—
with rare exceptions— did not under-
stand. That is the strength all free peo-
ple have when they defend their nation
and their ideals against the impositions
of a foreign power.
This point is sometimes overlooked
by those who focus on the importance of
the British Navy to the doctrine's enforce-
ment. Effective diplomacy does require
power. And though nowadays some peo-
ple seem to forget that more often than I
would wish, the point I wish to stress
here is that diplomacy also requires
ideas. And the idea behind the Monroe
Doctrine is not one to be overlooked.
Monroe's vision was not rooted in
the European tradition of power politics.
The Monroe Doctrine was not an attempt
to substitute one form of colonialism for
another. The new, emerging United States
was opposed to colonialism in principle,
not just to European colonialism. The
year 1776 had given political life to the
ideal of human rights and democracy.
This uniquely powerful ideal was as
natural as the fundamental aspiration
for the rugged but unshaped societies of
the New World. Just a few years ago, in
a famous phrase in its charter, the
Organization of American States cap-
tured the essence of this ideal, without
which the Monroe Doctrine could never
have existed: "The mission of America is
to offer man a land of liberty."
The reference here is to all America-
to the entire New World, not just to the
United States. So strong was the appeal
of freedom that, by the time Monroe
spoke in 1823, the rest of the Western
Hemisphere was already caught up in
the struggle for freedom. Inspired by tht
democratic doctrines projected by the
American and French Revolutions, Latir
American patriots had risen up to throw
off the shackles of European colonialism
But colonialism was not dying easily
Tupac Amaru had rebelled in Peru in
1780. By 1823, the battle of Ayacucho
that was to mark the end of Spanish nil*
in South America was still a year away;
full-fledged wars of independence had
been underway throughout Spanish
America for more than a decade. The
struggle was proving long and costly.
And there were fears tl'St the European
powers would seek to reimpose colonial
rule even if they lost.
The new United States was militaril
and economically weak, but the emerg-
ing states to its south were even weaker
Colonialism had created a social and
economic order dependent on Europe.
War had drained their resources. The
Latin American states would have been
unable to defend themselves against a
concerted effort on the part of outside
powers to again carve up the region.
Once Great Britain accepted it, there
fore, the Monroe Doctrine gave the new
Latin American states both the moral
support and the time they needed to cor
solidate their paths to independence
Is the Monroe Doctrine Still Relevant
As the 19th century progressed, fears
that the Eui'opean powers would look f(
opportunities to reimpose colonialism
turned out to be real enough. The Britis
took advantage of their naval power to
preserve their Caribbean colonies and b
reassert their claims to the Falklands. I
the 1860s, when civil war caused the
United States to turn its attention and
military resources inward, France brief
imposed a colonial government in Mexic
and Spain tried to reassert its claim to
Peru.
With the new century, however, a
new question began to be posed. In the
minds of many, the United States had
replaced Europe as a potential colonial
threat. The Roosevelt corollary sought '
justify the use of U.S. military force.
Had the Monroe Doctrine simply becom
a pretext for the imposition of U.S.
hegemony in the Western Hemisphere?
Historians differ about the economi
and political motivations for the use of
U.S. Marines to intervene in Latin
80
nQnartmont nf Qtato RiillotI
WESTERN HEMISPHERE
merica in the early part of this cen-
iry. At least in some countries,
jwever— and it is hard to keep from
linking of Nicaragua or Haiti— the long-
irm prospects for democracy were cer-
linly not enhanced. And this, in turn,
eakened the legitimacy of the doctrine.
And so it has been commonplace for
;ars to hear that the Monroe Doctrine
an anachronism. And, of course, it is
ue that the geopolitical context has
langed entirely.
Latin America has changed. The
)untries of Latin America are no longer
I weak. Some, like Brazil, are world
;onomic powers. All have strong
ipirations.
Western Europe has changed. Its
wernments are democratic, not
spotic, and their interests in Latin
merica are similar to ours. They want
play a positive, constructive role in
itin America: to build trade and com-
ercial relations with Latin American
ates and to help the Latin Americans
tablish and strengthen democratic
ilitical and free market economic
stitutions.
In fact, the United States has changed,
0. The current political and ethical
imate in the United States makes it dif-
ficult for a president to use U.S. troops
in a foreign country without being able
to demonstrate a clear and direct threat to
the United States or its vital interests.
Additionally, there is a growing recogni-
tion that the best first line of defense
against outside threats is not an outside
protector like the United States but the
existence of strong, viable democracies
in Latin America.
The Soviet Challenge
Does this mean that the Monroe Doctrine
is now irrelevant and anachronistic? No, for
there is still one European power whose
intentions toward Latin America are not
benign, indeed, a power that seeks to
implant its alien system in the Americas.
The czars are gone, but their despot-
ism and coloniahst impulses live on in
the Soviet Government today. Czarist
despotism was overthrown only to be
replaced by the much more thorough
tyranny of the Soviets, who unhappily
have vastly more resources than their
predecessors— and vastly more interest
now in Latin America.
In the last decade, the Soviet Union
has developed a diplomatic, cultural,
media, or military presence in every
South American country except Chile
and Paraguay. They have invested heavily
in bringing young Latin Americans to
the Soviet Union. In 1979, less than
3,000 Latin American and Caribbean
students were studying in the U.S.S.R.;
by 1985, that figure had increased to
over 9,000. The Soviets have sold
modern military jet fighter-bombers,
tanks, and missiles to Peru, whose
armed forces have become increasingly
dependent on Soviet technology. And
the Soviet Union has expanded its com-
mercial activities. Soviet purchases of
grain from Argentina made it that coun-
try's largest export customer during
1980-85.
Not all of the Soviet Union's activities
have been as subtle and in keeping with
the accepted norms of international rela-
tions. We know, and we believe most Latin
Americans also realize, that one must
deal with the Soviets with both eyes open.
That the Soviets are using orthodox
diplomacy in some of their dealings with
Latin American countries does not mean
they have abandoned their support of ter-
rorism or subversion when it suits them.
Monroe Portrait Unveiled
ti Secretary Shultz
Excevpts from remarks made on the
casion of the unveiling of the Monroe
rrtrait at the James Monroe Memorial
oundation birthday reception and anni-
Tsary dinner at the Department of
'.ate on April 28, 1987.^
. Since the American Revolution, this
;misphere has stood for something— for
jportunity, for the chance to start over,
ir tolerance, for freedom to choose
le's own leaders and way of life,
ealities have often fallen tragically
lort of these ideals, but the vision and
■inciples contained in the Monroe Doc-
ine remain the standard for U.S. pohcy
this hemisphere.
Over the years, the United States
is defended that standard against alien
5wers which sought a foothold in the
mericas. In President Monroe's day,
lis country responded to the threat that
le Holy Alliance would reestablish
lonarchies in countries that had
declared their independence of Spain
and Portugal. Later Presidents, too,
would deter aggressors seeking
weaknesses here, from the imperialists
of the 1800s to the Nazis and com-
munists of our own century.
. . . Since 1824 we have refused to
leave our neighbors at the mercy of alien
powers and would-be tyrants. To aban-
don them now would violate our prin-
ciples and do violence to our own inter-
ests. Instead we must hold fast to the
policy that bears Monroe's name, a
policy that is particularly responsible for
the security and relative freedom that
most of the peoples of this hemisphere
enjoy today. May this portrait of Monroe
continue to remind us of the role he
envisaged for our country and of our
obligations to confront the strategic and
moral challenges of our own day.
'For full text, see press release 94 of Apr.
29, 1987. ■
This portrait of .James Monroe, by Rem-
brandt Peale, is on loan to the Department
of State from Mary Washington College.
(Dept. of state photo by Ann Thomas)
81
WESTERN HEMISPHERE
In August of 1986, Chilean authorities
uncovered huge hidden arms stockpiles-
guns and grenades sufficient to support
a guerrilla force of at least 3,000. The
type and quantities of weapons found
could only have been provided by the
Soviet bloc. Because South America is
now overwhelmingly democratic, the
Soviets probably decided they could
afford to support violence against the
Pinochet government without harming
diplomatic efforts elsewhere. In fact, of
course, the Soviets strengthened General
Pinochet. By making it clear that the
communist threat was real, the Soviets
weakened Chile's democrats and created
additional difficulties for the efforts of
the Latin American, European, and U.S.
democratic communities to encourage a
peaceful transition to democracy in Chile.
The fact is that Soviet interests in
this hemisphere are as antithetical to
democracy as were those of the czars in
the times of James Monroe. For over a
quarter of this century, the most tangi-
ble example of the Soviet presence in
our hemisphere has been in Cuba. The
Soviets have helped Castro turn that
unhappy land into a bankrupt but heavily
militarized island fortress.
Is Castro, with his repressive political
system and dependence on an outside
power for economic subsidies and military
protection, any less a functionary of a
foreign power than the viceroys of Spanish
colonial days?
Cuba is a good example of the aggres-
sive nature of the new colonialism.
Cuban troops have lost their lives fight-
ing in Africa for causes that are of
benefit to the Soviet Union, not to Cuba
or Latin America. Castro has been an
apologist for the Soviets in many inter-
national fora. From Castro's earliest
days, Cuba has been a conduit for sup-
port for Latin American insurgents.
Now, another country, Nicaragua, is
on the way to being turned over to the
Soviet Union by its rulers. A people who
sacrificed so much to attain liberty in
1979 saw their revolution betrayed and
now see a communist group using Soviet
arms and advisers to impose communism
in their country. Small wonder Nicaraguans
are fighting back, and small wonder our
President has said, "Yes, we will help
their fight."
In Nicaragua the Soviet presence
already is quite visible in the form of
Soviet-made tanks, helicopter gunships,
and other weapons. The U.S.S.R. poured
in half-a-billion dollars in military aid last
year alone. We do not believe they are
bolstering the Sandinistas out of some
sudden benevolent impulse.
82
Much of the threat to U.S. interests
posed by the presence of Soviet client
states in the hemisphere is obvious. The
more the United States is forced to con-
centrate its attention and resources on
Latin America, the more the Soviets
would benefit in having greater freedom
of action in other parts of the world.
Already, Cuba's proximity to vital sea-
lanes in the Gulf of Mexico and the
Caribbean means that U.S. defense plan-
ning in the event of hostilities has been
seriously complicated.
The more immediate threat, however,
is not to the United States but to Latin
America's democracies. Cuba and Nicara-
gua both support insurgent groups in
democratic countries. This support goes
far beyond rhetorical expressions of revo-
lutionary solidarity to include providing
the insurgents with arms and ammuni-
tion, training, safe haven, and propaganda.
The Soviets' claim that they have nothing
to do with the actions of their client
states is supreme cynicism. It certainly
did not prevent Soviet Army Chief of Staff
Ogarkov from boasting 4 years ago that
"... over two decades ago, there was only
Cuba in Latin America, today there are
Nicaragua, Grenada, and a serious battle
is going on in El Salvador."
Of course, Grenada no longer counts
itself among this group. On October 23,
1983, less than 8 months after Ogarkov's
statement, Grenada's leadership had
brought on such a bloody state of anar-
chy that the Organization of Eastern
Caribbean States felt compelled to
request formally that the TJnited States
and other Caribbean states help them
restore order there. Two days later, a
combined U.S. -Caribbean force landed
on the island— to the great relief of the
vast majority of Grenadians. All U.S.
combat troops were withdrawn by
December 15, 1983. And, on Decem-
ber 3, 1984, 84% of the voters turned
out to vote in Grenada's first parliamen-
tary elections since 1976.
The United States does not seek to
prevent the nations of this hemisphere
from dealing with the Soviet Union.
There are many risks inherent in such
relations, but it would violate the very
intent of the Monroe Doctrine to believe
that the Latin American nations are not
free to carry on diplomatic and commer-
cial relations with whomever they please.
The Monroe Doctrine affirms the free-
dom and the right of sovereign states to
make their own choices without outside
interference. If General Secretary Gor-
bachev is invited to visit the Americas,
so be it. He will learn something from
Latin America. He will have the chance
to see the thirst for liberty that charac-
terizes Latin America today. And he wil
see that the Soviet economic model and
the Soviet political model have been
thrown on the dustbin of history by free
peoples seeking to maintain democracy
and economic growth.
The Democratic Response
There are still areas of the world— some
of them in Latin America— where the
possibilities for economic and social
improvement through honest work so
taken for granted here do not exist.
Insurgents, terrorists, and dogmatic
Marxist politicians have sought to
exploit the legitimate grievances of pec
pie cut off from hope. They have playec
on the justifiable outrage against inflex
ble and repressive social, political, and
economic systems to build support for
their revolutions, which in the end will
produce a system more repressive than
the one replaced.
The emergence of guerrilla groups
supported by an outside power represen
a diJEferent type of threat to the hemi-
sphere than that faced in the 1820s. In t:
19th century, the threat to Latin Amer
ica's nascent states was from the reim-
position of colonialist rule through dire
military intervention by a European powi
That threat was easily recognized and
could be dealt with using established
military or diplomatic methods.
The threat from subversion, especia
subversion supported by an outside pow
for its own political ends, is less easily
recognizable. The long history of revoli
tionary violence in many Latin Americ
countries makes the presence of exterr
support for political violence less notict
able, especially in its early stages. Subv
sives often try to hide their foreign tie:
and legitimize themselves by claiming t
mantle of a nationalist hero; that is wh
the communists in Nicaragua call them
selves Sandinistas. Whenever dominan
power groups equate reform movemen
with communist plots, they also make i
easier to disregard evidence of the invol
ment of the Soviets or their clients.
Guerrilla wars and other violent
threats cannot be countered without th
use of some force, but they are also no
likely to be ended by military means
alone. Without a change in the social,
political, and economic conditions that
spawned the insurgencies, any purely
military solution would prove temporal
That is why the objective of U.S. foreif
policy is to eliminate the social and eco
nomic conditions that contribute to violer
and social protest. While public attenti
has focused on the shooting, the Unitei
Dfinarlment nf .cttatP Riillf
WESTERN HEMISPHERE
tates has quietly spent three times
lore resources on health, education, and
conomic survival and development in
'entral America than on military assist-
nce. In fact, thanks to our help, the
uerrilla-plagued democracies have made
ir more progress toward meeting the
;onomic, political, and social needs of
leir people than either Nicaragua or Cuba.
But if the reigning intellectual ortho-
Dxies that promote stagnation and
[justice persist unaltered, then even
nprovements in material conditions will
3t be enough. And U.S. efforts alone
-e surely not enough. There has to be a
)mmitment by the Latin American
ates which are fighting insurgents both
1 prosecute the war effectively without
olating the rights of civilians and
stitute the economic and institutional
^forms necessary to allow the integra-
on of disaffected members of the
)pulation fully into the society.
Those who wish to protect their privi-
ged position in a social and economic
der that is no longer viable are also
lemies of democracy. To people caught
such situations, all change— social,
ilitical, or economic— becomes a threat.
)metimes calling themselves democrats,
id invariably wrapping themselves in
e mantle of anticommunism, they seek
impose a despotism that is more indig-
lous than Marxism but is no less at odds
ith the spirit of the Monroe Doctrine.
The Monroe Doctrine rejects despot-
m and repression, whether it be justified
the name of communism or in the name
anticommunism. Monroe and his revolu-
jnary compatriots realized that democ-
cy and individual liberty were unique
omises of the New World. Our Found-
g Fathers' ideals may have had their
ots in the philosophies of the ancient
reeks and Enlightenment thinkers, but
e establishment of strong lasting
imocracy was a New World phenom-
lon— really a phenomenon of all
mericans in the broadest sense.
Today democracy and the ideal of
oerty are again on the march. Democ-
.cy has traveled from America to the
Id World and back again. Western
• urope has adopted and adapted democ-
cy, which in recent decades has over-
ime the last military governments:
3ain, Portugal, Greece, and Turkey,
emocracy is taking hold in varied socie-
3s in Asia, just as it did decades ago in
i(ipan. And in this hemisphere about 90%
ti all Latin Americans now live in demo-
atic countries, more than ever before.
Conclusion
I would like to leave you with one final
thought. When James Monroe formu-
lated his doctrine, the United States was
weak economically and weak militarily.
But it made up for those weaknesses
with the power of ideas. Today the
United States is strong economically and
strong militarily. But still today our
greatest strength lies in the fact that we
are the homeland of liberty. This is what
Monroe understood and what he asked
our nation to protect by trying to protect
the Americas from the old, alien
despotism of other continents.
Today, as in his day, we are called
upon to face up to the threat, to protect
our own freedom, and to help our neigh-
bors protect theirs. If we understand
what Monroe saw a century and a half
ago, if we are true to our ideals and our
history, we will meet this test as he met
those of his day. And the Americas will
remain free. ■
Central America:
What Are the Alternatives
by Elliott Abrams
Address before the University of Kan-
sas in Lawrence on April 21, 1987. Mr.
Abrams is Assistant Secretary for Inter-
American Affairs.
Whether you date it from the spring
1977 assassination of El Salvador's
moderate Foreign Minister by leftist
thugs or from the January 1978
assassination of Nicaragua's greatest
journalist by rightist thugs, the Central
American crisis is now about a decade
old.
So it should be possible to step back
for a moment from the headlines and
look at the fundamentals of our policy—
the history, the people, our interests,
and what we expect to achieve. As you
will see, my fundamental prescription
has implications that reach even beyond
this hemisphere. But I would like to
start by focusing on Nicaragua.
The History
In 1979, the dictator Somoza fled into
exile to the rejoicing of an overwhelming
majority of Nicaraguans and of free men
and women everywhere.
The people of Nicaragua are not the
first in our time to overthrow an unpop-
ular tyrant in the name of freedom.
The people of Nicaragua are also
not the first to see their hopes for
freedom— hopes they had entrusted to a
coalition government— dashed by a
minority relying on armed force to
impose a partisan agenda. Similar
tragedies took place throughout Eastern
Europe after World War II. In just a
few years after the Allied victory over
Hitler, coalition governments which
were to bring democracy were subverted
by communist minorities.
The recipe for the takeovers was
simple and efficient. The communist
minorities started by gaining control
over the interior ministries and the
secret police. Using "salami tactics" to
slice off the opposition bit by bit, they
were then in a position to censor
newspapers and radio stations, harass
the church, arrest democratic political
activists, and rig elections. Before long
the coalition governments were replaced
by dictatorships loyal to Moscow. The
tragic result is the division of Europe
that still exists today— a split that denies
freedom to millions of Europeans and
threatens the security of our allies.
The imposition of communist rule in
Eastern Europe did not take place
without a reaction. In Hungary in 1956,
a strong popular uprising threatened to
replace the pro-Soviet government with
an independent one, but the people were
brutally suppressed by the Red Army.
Hungary's spirit of freedom could not be
killed, but it had to yield to the power of
Soviet tanks.
In 1957, a young Nicarag^an com-
munist named Carlos Fonseca went to
Moscow. He was so enraptured that he
returned to Nicaragua and wrote a book
about his experience: A Nicaraguan in
Moscow. Fonseca's book did not dwell on
the Stalinist past or on Soviet brutality
in Hungary just months before his visit.
Instead, Fonseca wrote a gushing
appraisal of the Soviet economic system.
"Now," he wrote, "the answer is the
state."
In 1959, a young Cuban, Fidel
Castro, took power in his country. He
did not take power as a communist. His
revolution against tyranny was adver-
tised to Cuba and the world as demo-
cratic. And it seemed democratic; it
LuhzJ.Qfi?
83
WESTERN HEMISPHERE
included many democrats in leadership
positions, and Fidel's rhetoric was mild.
The revolution only succeeded because it
attracted broad middle class support.
But Castro's actions in power were
brutal; he jailed and executed his oppo-
nents in large numbers. Even veterans
of his guerrilla war were jailed when
they spoke up against the emerging dic-
tatorship. "All criticism is opposition; all
opposition is counterrevolutionary,"
Castro explained.
The Cuban people saw their hopes
for freedom dashed by a new tyrant who
elevated repression to new heights. But
for Tomas Borge, a second young
Nicaraguan communist, it was "a flash
of light that shone beyond the simple
and boring dogmas of the time." Today
Borge is in charge of the secret police in
communist Nicaragua.
In 1961, with Castro's help, Tomas
Borge and Carlos Fonseca joined to
found the National Liberation Front—
the party that runs Nicaragua today. At
the last minute, worried that calling
themselves a pure and simple "liberation
front" would give away their communist
allegiances, they added the word "San-
dinista" to make themselves sound
nationalist. Borge, Fonseca, and their
comrades robbed banks and businesses
to fund their movement, they argued
endlessly over strategy, and they har-
assed the National Guard's forces in
sporadic shootouts in the countryside.
Fonseca was killed in one such battle in
1976. Lacking popular support, their
revolution was stuck in the mud, even
against an unpopular dictator.
This changed one morning in
January 1978. A national hero who had
fought against the Somoza dictatorship
with both pen and sword, the newspaper
editor Pedro Joaquin Chamorro, was
murdered in Managua while on his way
to work. Chamorro' s newspaper. La
Prensa, was the main outlet for opposi-
tion to Somoza. Chamorro' s death
galvanized the Nicaraguan people; it
transformed scattered unrest into
powerful national sentiment against
Somoza.
The Sandinistas saw their chance.
They played down and then concealed
their communist beliefs. They forged
alliances with Nicaraguan businessmen,
unionists, and democrats generally. By
July of 1979, the Somoza dictatorship
dissolved under the combined pressure
of Nicaraguan revulsion and interna-
tional condemnation. A broad coalition
government came to power, promising
democracy, a mixed economy, and an
independent policy of nonalignment in
world affairs. Well-known democrats like
Alfonso Robelo and Arturo Cruz and
Violeta Chamorro, Pedro Joaquin's
widow, were in the new government.
This was a period of hope.
But Nicaragua was about to play out
the same sad drama that occurred in
Cuba, Hungary, and Czechoslovakia.
Over the next 2 years, the democrats
were forced out by communists who con-
trolled the secret police, the armed
forces, and the propaganda apparatus.
Nicaraguans had fought for freedom,
but they got a new dictatorship; they
had fought for independence but instead
found themselves depending on the
Soviet Union, with so-called advisers
from Cuba and East Germany in charge.
As for the Sandinistas, they were soon
standing shoulder to shoulder with com-
munists the world over, from Cuba to
Bulgaria, opposing the Solidarity labor
movement in Poland and supporting
Soviet crimes in Afghanistan.
Today the Sandinistas are hard at
work cementing their dictatorship. The
Sandinista police are silencing voices of
opposition throughout the country.
So-called Sandinista Defense Commit-
tees operate in every neighborhood,
watching the movements of citizens and
enforcing politically correct behavior.
These block committees can punish dis-
sent by turning people in to the police or
by taking away the ration cards people
need to obtain the staples of daily life.
The Sandinistas draft Nicaraguan
youth into the largest army in Central
America. But it is not the Nicaraguan
national army, it is the Sandinista party
army. There is no such thing as conscien-
tious objection. There is no such thing as
free expression, either: La Prensa, is
closed. The Catholic Church radio station
is closed. Were it not for radio and
television from outside the country,
Nicaraguans would get their only news
from the Sandinista press, Sandinista
radio, and Sandinista television.
Farmers and businesses cannot set
prices, move capital, or buy equipment
without the state's permission. The
"salami tactics" that brought dictator-
ship to Eastern Europe in the 1940s are
being put to work in Managua today.
Nicaragua, in short, is beginning to
look less and less like a part of Latin
America and more and more like the
Soviet Union which Carlos Fonseca so
admired three decades ago. And as in
Eastern Europe, communist repression
has given rise to a powerful reaction.
Denied self-determination, 20,000
Nicaraguans have taken up arms to fight
for the freedom they thought they had
won in 1979 when they got rid of the old
dictatorship.
I
Why Central America Matters
to the United States
Why should their fight matter to the
United States? Why should we care whs
happens in Central America?
Let us start with doing what is righ
The thousands of Nicaraguans who
resist the Sandinistas, whether in the
civic opposition or in armed rebellion,
are defending the sacred rights of the
individual that we Americans have
fought and died for ever since we won
our own independence. They are fightin
for our values, for democracy and inde-
pendence. We have every moral right t(
help people free themselves from
repressive rule.
But there is a second case to be
made; it concerns our security. The
Nicaraguan resistance is fighting for
Nicaragua's freedom and Nicaragua's
independence, but their success will
serve our security interest as well. We
owe it to ourselves, and to future
generations of Americans, to help them
succeed.
The challenge to American security
in Nicaragua is not yet a direct one.
Rather, it is indirect and building only
gradually. But it is, nonetheless, a
serious challenge with many dimension
The first part of the threat is San-
dinista subversion of our friends and
allies in this hemisphere. The Sandi-
nistas have said openly that their revol
tion reaches beyond Nicaragua's bor-
ders. Just as Cuba became a base for U
ror and subversion, the Sandinistas ha\
helped other violent radicals throughou
Central America and even in South
America and the Caribbean. The head-
quarters of the Salvadoran communist
guerrillas remains in Managua. San-
dinista aid to South American guerrilla
continues. Communist subversion of
Latin America's new democracies is a
fact.
The second part of the threat is the
the Sandinistas will permit their ter-
ritory to become a base for the projec-
tion of Soviet military power. Again,
Cuba is an example. Castro's military
relations with the Soviets were slow to
develop, but they have developed stead
ily. And they have developed in spite o'
the Kennedy-Khrushchev agreements
that ended the missile crisis. Today Cu
is an important base for the Soviet
military. Soviet aircraft patrol our
Atlantic coast from Cuban bases. Sovie
submarines call regularly at Cuban
ports. A huge Soviet espionage facility
Cuba, the largest in the world outside
the U.S.S.R., intercepts U.S. military
and civilian communications. The Sovie
ent of
c^tatP R^l
WESTERN HEMISPHERE
ise tens of thousands of Cuban troops to
ight their battles in Africa. Cuban
oldiers are fighting and dying in
lefense of the communist dictatorship in
■Jicaragua.
Will Nicaragua follow this Cuban
attern? The Soviets are certainly
nvesting in Nicarag^ua's future. They
upply all of Nicaragua's oil, and they
hipped more military supplies to
Nicaragua during 1986 than in any
irevious year-23,000 tons, worth $500
lillion. The Sandinistas have built an
irbase with a runway longer than
ecessary for any plane in their air force
qventory but which can serve any air-
raft in the Soviet inventory. From this
ase, the Soviets could patrol our west
oast— a new capability Cuba does not
ive them.
From a geostrategic perspective, the
ottom line is simple: the Sandinistas
ffer the Soviets an opportunity to pro-
:ct Soviet power on the American main-
md and in the Caribbean basin. The
oviets know that if they can bring new
lilitary bases or political instability to
lis area, they can divert our attention
pd our defense resources from other
irts of the globe. This would directly
iduce our capacity to defend NATO or
Ither Western interests, and it would
^present a major Soviet strategic
uccess.
To defend our interests against this
(ew challenge, we are moving to support
|ie development of democratic govern-
(lents in Central America and through-
Kit the hemisphere. Democracies do not
rce their citizens to revolt against
^lem. Democracies do not attack or
libvert their neighbors. And there is
till another, even more critical fact: the
ictator Castro was preceded by the dic-
itor Batista. The dictator Ortega was
freceded by the dictator Somoza. The
kying of the pendulum to the antidemo-
ratic right sets up the swing to the anti-
jemocratic left. The time has come to do
bmething to stop the swing of the
■endulum before it begins. The time has
ome to strengthen democratic political
Iorces against all extremes, of the right
s well as the left.
And that is what the United States
,as been doing, often without much
redit, for two administrations. Under
"'resident Carter, support for human
ights was the guiding principle. Under
'resident Reagan, the emphasis has
iroadened to support for democratic
)rinciples and procedures in general,
"iut one common thread has held
Vmerican policy together over the last
,0 years: throughout Latin America,
military governments and dictatorships
know that they cannot claim the support
of the United States.
When Argentine military officers
mutinied against President Alfonsin last
week, the one charge no one made was
that they had U.S. support. In fact, the
U.S. Embassy, the Department of State,
and the White House all publicly sup-
ported President Alfonsin and the con-
stitution from the very start. And
Argentina today is the rule, not the
exception. Argentine generals who once
thought they were above the law have
been replaced by an elected civilian; so
have the Salvadoran generals— and the
Uruguayan, the Brazilian, and the Boliv-
ian. Even Haiti is taking the first steps
toward democracy after Duvalier. The
only survivors of the once militant
authoritarianism of the right are the
Governments of Chile and Paraguay.
And U.S. policy seeks a transition to
democracy in both countries.
In Central America 10 years ago,
Costa Rica was the only democracy.
Today, new civilian-led democracies have
emerged in Guatemala, El Salvador, and
Honduras. Nicaragua's communist dic-
tatorship is the exception, the only coun-
try in the region where the president
wears a military uniform.
A secure future for Central
America— a future of freedom, peace,
and development— depends on bringing
democracy to Nicaragua. As long as the
Sandinista dictatorship lasts, it will con-
tinue to produce repression and conflict
at home and subversion abroad. And
that's what Nicaragua's civil war is all
about: democratic political change. The
change could take many forms. It could
take the form of overthrow. It could take
the form of internal collapse. It could
take the form of power-sharing by
negotiated formula. It could take the
form of restored political rights and
freedoms accompanied by an end to the
Sandinista monopoly over the security
forces. It could combine elements of all
the above. But one thing is certain: it
must be the product of Nicaraguans
agreeing among themselves to create the
democracy they glimpsed in 1979.
The Nicaraguan church, the civic
opposition, the armed resistance, the
Contadora nations, and the Central
American democracies have all called for
a dialogue among Nicaraguans to bring
peace and freedom to Nicaragua. But
the Sandinistas refuse to negotiate.
Democracy need not be brought by war;
a negotiated settlement could work if the
Sandinistas would open the political
system to the many different groups of
Nicaraguans they have driven into
opposition. But until the Sandinistas
keep those promises, there will be no
peace because the Nicaraguan people
will keep on fighting. Their cause is just.
And as long as they fight for that cause,
the policy of the United States must be
to support them.
Containment as an Alternative
Some propose that the United States
reverse course in Central Am.erica and
end support for the Nicaraguan
democratic resistance. The basic idea is
this:
• Stop supporting the resistance
fighters, disband them, and treat them
as refugees;
• In return, try to get an agreement
with the Sandinistas in which they agree
to stop subverting other countries and
break their ties to the Soviet bloc;
• Increase aid to the Central
American democracies;
• Deal with the political question-
how to get freedom in Nicaragua— later,
if at all.
Some of those who call for this
change in course expect that if the
pressure is removed from the San-
dinistas, then the Sandinistas will ease
their repression at home and stop their
subversion of neighboring democracies. I
believe this is a complete misreading of
history.
Others are simply resigned to the
inevitability of an unfree Nicaragua
throughout our lifetimes and beyond.
This is short-sighted defeatism that
poses serious long-term dangers.
If we end our support for the
resistance, three important results
would follow immediately.
First, the U.S. policy which won
bipartisan congressional support in the
fall of 1986 would be reversed less than
1 year later. The policy would be
reversed, not on the merits, not because
the policy itself failed, but because of a
scandal in the United States. People in
Central America would not count on us
to sustain any policy for more than 6
months at a time. They would be right.
Second, our policy to promote
freedom in Nicaragua would be to hope
for the best. This is a retreat even from
the Contadora objectives, which call for
settlements reached through internal
dialogue and establishing democracy.
Third, refugees would flee an
assured communist future— droves of
refugees. Salvadoran and Guatemalan
refugees have begun to return to their
sJulv 1987
85
WESTERN HEMISPHERE
countries. But about a quarter million
Nicaraguans have left their country
since the Sandinistas took over. These
would abandon all hope of return. We
can only guess at the dimensions of the
new wave that would surely join them.
But remember that a million refugees
have fled communist Cuba— an island.
Nicaragua is not an island.
So that sets the context. Central
America would be shaken by the realiza-
tion that communism was in Nicaragua
to stay. And our own next moves would
be made as a nation whose reliability is
doubted and whose spirit is depleted.
Consider the following chain of events.
• With the contras cut off, the San-
dinistas would be free to devote their
resources and attention to the task of
subversion.
• The top priority issue for the
Governments of Honduras, Costa Rica,
El Salvador, and Guatemala would shift
from democratic development to
renewed fear for security.
• As the moderates lose U.S. sup-
port, the extreme right would reassert
itself in preparation for a strengthened
communist left.
• Communist guerrillas would get a
shot in the arm: psychologically, because
of our retreat and materially, from the
Soviet bloc, including Cuba and
Nicaragua.
Pan American Day and Week, 1987
PROCLAMATION 5629,
APR. 9, 1987'
The nations of the Americas enjoy a rich
cultural and historical diversity, yet are bound
together by a common dedication to the prin-
ciples of democracy; to respect for the rights
of the individual; and to the opportunity to
enjoy creative, productive, and prosperous
lives. Pan American Day each year has served
to remind us of these mutual goals.
The Organization of American States is
the forum in which our governments labor to
make these ideals and aspirations a reality in
our daily lives. For decades, the Inter-
American System has been utilized across a
broad range of common concerns: to maintain
the peace throughout this Hemisphere: to
encourage both political and economic
freedom for every citizen; to promote
development and provide opportunity for both
men and women, of all races and all creeds;
and to defend the human rights of all against
repression and threats to their dignity.
The Organization has a truly remarkable
record as a defender, and a beacon, for all
peoples whose rights have been trampled
upon and denied, especially for the peoples of
this Hemisphere. It has now taken up the
challenge against yet another menace— drug
abuse and trafficking— that threatens the
future of our children, the well-being of our
peoples, and even the stability of our govern-
ments. The newly created Drug Abuse Con-
trol Commission offers a common meeting
place where all of us can join forces to defeat
this latest enemy to freedom and democracy.
On September 2 of this year, the nations
of the Americas will celebrate the fortieth
anniversary of the signing of the Inter-
American Treaty of Reciprocal Assistance, in
which they pledged to preserve their security.
This Rio Treaty, born of the totalitarian
threat to the region before and during World
War II, has been strengthened ever since by
resolute defense, against repeated attacks, of
our common determination that this
Hemisphere shall be a land of liberty.
This is a time when the vision of
democracy and freedom in all our countries,
to which we are committed in the Charter of
our Organization, shines forth as never
before. So Pan American Day of 1987 is an
especially welcome occasion for the people of
the United States of America to extend a
warm and fraternal hand to our neighbors in
the Americas. We renew our commitment to
the spirit of hemispheric solidarity, to the pur-
poses of the Inter-American States as the
embodiment of our high aspirations for this
Hemisphere.
Now. Therefore, I, Ronald Reagan.
President of the United States of America, by
virtue of the authority vested in me by the
Constitution and laws of the United States,
do hereby proclaim Tuesday, April 14, 1987,
as Pan American Day, and the week of April
12 through April 18, 1987, as Pan American
Week. I urge the Governors of the fifty
States, and the Governor of the Common-
wealth of Puerto Rico, and officials of other
areas under the flag of the United States of
America to honor these observances with
appropriate activities and ceremonies.
In Witness Whereof. I have hereunto set
my hand this ninth day of April, in the year of
our Lord nineteen hundred and eighty-seven,
and of the Independence of the United States
of America the two hundred and eleventh.
Ronald Reacan
'Text from Weekly Compilation of
Presidential Documents of Apr. 20, 1987.
• The result of this renewed
polarization between extremes of left
and right would be increased violence. A
resurgence of the military would be
inevitable; coups might follow.
• Faced with military governments
and a reversal of the democratic prog-
ress so painfully earned in these recent
years of cooperation with Central
America, the U.S. Congress would
withdraw its support and cut aid to Cen
tral America.
This scenario suggests that to aban-
don the resistance is to follow a recipe
for certain disaster in the region within
2 years. It is to hand the Sandinistas
their principal strategic objective
without further effort on their part and
to make it impossible to sustain the
progress achieved in the rest of the
region.
Some say this scenario is too
extreme. They agree that without
political change in Managua, the only
alternative becomes containment in
some form. But they argue that we
should support an agreement with the
Sandinistas limited to security matters
and that we should at the same time
increase measures to protect
Nicaragua's neighbors. Militarized
borders, garrison states, and increas-
ingly militarized countries would becom
the norm in a region where we are try-
ing to build democracy and reduce the
relative weight of the military in
national affairs. It would cost a great
deal of money. But, its proponents say,
it would save lives and bring peace.
The problem with this approach is
that this would probably not even pro-
duce stalemate. Containment in Centra
American conditions would be an extrac
dinarily expensive way of solving
nothing.
An agreement calling for political
change— elections, free press, freedom
assembly— would be easy to verify. But
how would we verify an agreement on
security issues only? Consider that the
immediate threat is not a massive cross
border invasion, nor is it the sudden
emplacement of Soviet strategic forces-
both of which could be observed. Rathe
it is in actions that are unobservable
even by thousands of border guards— a
few dozen guerrillas trained in Nica-
ragua, a few dozen infiltrated into othei
countries; vehicles and boats carrying
hidden weapons and explosives; Cubans
remaining behind in military, political,
and intelligence roles; a gradual buildu]
of conventional forces helping to screei
and defend the export of violence to
neighboring countries.
86
WESTERN HEMISPHERE
If one observes a violation, how will
re respond? First we will argue about it;
1 the event we decide to act, the choice
5 between direct action on our part or
reaction at all. The Nicaraguans who
ad been fighting to free Nicaragua
rom the Soviet bloc will have long since
een disbanded.
Nor would containment lead to
reedom inside Nicaragua. Quite the con-
rary: for the Sandinistas there would be
more use for the pretense of freedom,
more use for even a weakened inter-
al opposition. Comandante Bayardo
jce says these vestiges of the old order
re needed "for display purposes." The
eed for display would be gone. All hope
)r human rights in Nicaragua would be
)St.
We do not have to face a choice
etween direct U.S. intervention and
jntainment. An alternative is available.
i is to follow our current policy, to con-
nue to help the thousands of Nicara-
uans who are fighting to bring democ-
icy to their nation. Freedom may not
Dme in a few months; it may not come
lis year, but it will come. One day the
ficaraguan democratic resistance will be
p strong that the Sandinistas will face a
hoice: to live up to their democractic
iromises or yield to a movement that
tII end their dictatorship and put more
spresentative leaders in charge.
>fhy Our Policy Will Work
et me explain why we should be confi-
1 ent our policy will work— why we need
ot retreat to the illusions and defeatism
f containment.
First is the power of ideas and
alues. Ideas still matter in this world,
'reedom, nation, land, church, and
imily— these are powerful ideas in Cen-
tal America, and they are all on the side
f the Nicaraguan resistance. The San-
inistas win no loyalty when they close
a Prensa, when they push communist
octrine, confiscate farms, persecute the
hurch, or mortgage the nation's future
3 the Soviet bloc.
Second, the resistance is a political
Iternative that embodies Nicaragua's
ational values and is worthy of support,
'ime and again its various groups have
jsued political programs that explain
he terms under which they are prepared
negotiate, the way a transition to
emocracy can be made, and the rights
hat will be guaranteed in a democratic
■licaragua. The strong debate now
ccurring in the resistance is a sign of
trength, not weakness. It is precisely
he debate that would be happening in
Managua right now— if the Sandinistas
would allow it. Only the dictators and
the would-be dictators are absent from
the discussion.
Third, the resistance has a powerful
new means to tell its story to the
Nicaraguan people. In January, Radio
Liberacion began broadcasting to
Nicaragua. It is a new and welcome
source of information for a people weary
of government propaganda. In an atmos-
phere of repression, it calls for
democracy. Amid the tensions of war, it
carries a message of hope and reconcilia-
tion. The Sandinistas are so insecure in
their own political position that they are
doing all they can, including jamming, to
stop people from listening to Radio
Liberacion. As happens elsewhere in the
Soviet bloc, the more the government
complains, the more people will listen.
Fourth, renewed American military
aid has helped the resistance to counter
the Sandinistas' Soviet guns. We are
training troops, and supplies are flowing.
The resistance has more than doubled
the number of fighters inside Nicaragua
since late last year. These fighters are
throughout the country, increasing the
pressure on the Sandinistas and showing
the people that the current dictatorship,
like the previous one, is not invincible.
Fifth, our support is steady. Some
assume that because of the Iran con-
troversy Congress is about to cut off aid
to the resistance. As someone who talks
to Congress day in and day out, I
suspect this is wrong. Members of Con-
gress know that our country has impor-
tant interests at stake in Central
America. I believe that when they con-
sider the alternatives, they will realize
that in the absence of a decent settle-
ment that brings democracy to Nica-
ragua, a policy that abandons the
resistance would amount to a sellout that
leaves the future of Central America in
Soviet hands.
Sixth, the resistance benefits from
increasing international disillusionment
with the Sandinistas. More and more,
the world is understanding the true
nature of the Sandinista dictatorship.
The Sandinistas' political fortunes can-
not long survive the stark contrast
between Central American democracy
and Sandinista dictatorship.
Lastly, the Nicaraguan democratic
resistance has an important ally in
geography. Cuban military advisers are
critical to the effectiveness of the San-
dinista army. But unlike Eastern
Europe, when the Sandinista coman-
dantes reach the breaking point, there
will be no Soviet tanks and no Soviet
troops there to save them.
MBMu
At that moment, the people of
Nicaragua will end a long, sad chapter in
their history and begin a period of peace
and national reconciliation— at home, as
the Nicaraguan family is united and
healed, and in their neighborhood, as
Nicaragua leaves the Soviet bloc to take
its place in a solidly democratic Central
America. When that happens. Central
America as a whole will be delivered
from a period of danger and deep
uncertainty.
Today thousands of brave
Nicaraguan men and women are fighting
to reach that moment. Some are in the
mountains with arms; others are caring
for the wounded; many remain in the
cities, working in every way they can to
keep the flame of civic resistance alive.
They have one thing in common— they
are risking all they have for their coun-
try, for their children's future. As
Americans we should be proud to have
friends such as these. When peace and
democracy come to Nicaragua, we will
be proud that we made the right deci-
sions at the right time to help friends in
their hour of greatest need. ■
Proposed Sale of
F-5s to Honduras
by Elliott Abrams
Statement before the Subcommittees
on Western Hemisphere Affairs and on
Ainns Control, International Security,
and Science of the House Foreign Affairs
Committee on May 19, 1987. Mr. Abrams
is Assistant Secretary for Inter-
American Affairs. '
I am pleased to have this opportunity to
appear before you to discuss the Admin-
istration's proposal to sell 12 F-5 air-
craft to Honduras. Since many of you
have undoubtedly visited Honduras over
the last 2 or 3 years, you are probably
aware of several important facts about
this key U.S. ally. The first is that Hon-
duras is currently faced with the
greatest threat to its national security in
its history as an independent nation. The
second is that the Honduran Armed
Forces are miniscule by comparison with
those of its neighbors. Third, as the
poorest nation in Central America, Hon-
duras cannot afford to engage in a costly
arms race; instead it must seek a cost-
effective means of defense. To provide
that defensive capability, the Hon-
durans, for several decades now, have
depended on air superiority.
87
WESTERN HEMISPHERE
The threat I refer to emanates from
Nicaragua whose Sandinista regime has
conducted a mihtary buildup unprece-
dented in Central America. Sandinista
armed forces now number 75,000 men,
plus unmobilized reserves and militia for
a potential of close to 120,000 men; the
entire Honduran Armed Forces consist
of a mere 16,750 troops. In addition to
numerical superiority of troops,
Nicaragua has received from the Soviet
bloc a substantial quantity of sophisti-
cated weaponry. A sampling includes 10
MI-24 attack helicopters, 110 T-55
tanks, and at least 350 SA-7 ground-to-
air missiles. It is critical to note that
much of this buildup is of conventional
forces and weapons— not those needed to
combat an insurgency but those such as
the T-55 tanks which directly threaten
Nicaragua's neighbors. To deter the
threat posed by this aggressive military
buildup, Honduras relies almost exclu-
sively on its air force whose mainstay is
a fleet of 1950s-vintage Super Mystere
aircraft.
There can be no doubt that the San-
dinista arsenal threatens Honduras;
there is ample proof of the Sandinistas'
hostile intentions toward Honduras.
Throughout this decade, the Sandinistas
have repeatedly attempted to create an
insurgency in Honduras. In 1981 and
1982, the Sandinistas and the Cubans
provided military training to Hondurans
who attempted to infiltrate and establish
insurgencies in Olancho Province in 1983
and El Paraiso Province in 1984. In both
instances, the Honduran security forces
contained the threat. The Sandinistas
have also supported and instigated
countless acts of terrorism. While these
attempts have failed to destabilize Hon-
duras, it has not been for want of trying
but rather because the Honduran people
far prefer their present democratic
system of government.
Subversion is only one of the Sandi-
nistas' methods of attack. They have
themselves committed literally hundreds
of acts of aggression against Honduras
in the form of border violations and
cross-border artillery shelling. The scale
of the border incursions escalated
dramatically in March 1986 when at
least 1,500 Sandinista troops penetrated
several miles inside Honduras. Another
large-scale attack occurred in December
1986, confirming that Sandinista aggres-
sion against Honduras is not accidental
or inadvertent but a deliberate campaign
to intimidate a weaker neighbor.
The Hondurans have demonstrated
that the Super Mysteres currently in use
are an effective deterrent to Sandinista
aggression. In September 1985, in
response to sustained shelling of Hon-
duran territory by Sandinista artillery,
the Honduran Air Force launched an
attack on Nicaraguan targets. In one
sortie. Super Mysteres and A-371s hit
an artillery emplacement and a
helicopter near Wiwili, Nicaragua. San-
dinista forces immediately suspended the
sheOing. In December of 1986, San-
dinista ground forces overran Honduran
border outposts in the Las Vegas salient.
After warning the regime in Managua to
remove its forces from Honduras, at
Argentine Military Rebellion
WHITE HOUSE STATEMENT,
APR. 19, 1987'
One of the pillars of President Reagan's
foreign policy is to support democratic
institutions in Latin America. The
United States is deeply disturbed by any
development which threatens civilian
constitutional and democratic rule in
Argentina. We strongly urge that these
officers desist in their defiant attitude
and abide by the law.
The return of Argentina in 1983 to a
system of representative government
was applauded by democrats
everywhere. Since 1983, and throughout
the current incident, the Argentine
people have repeatedly manifested their
firm commitment to democracy through
free elections and the full exercise of
their constitutional rights. Under the
leadership of President [Raul] Alfonsin,
impressive gains have been made in the
consolidation of democracy and the
economic development of Argentina. We
have supported Argentine democracy
from its restoration in 1983, and we
strongly reaffirm our support of Presi-
dent Alfonsin and the continued rule of
law in Argentina.
I
'Text from Weekly Compilation of
Presidential Documents of Apr. 27, 1987.
least two sorties were made by the
Super Mysteres and other aircraft
against Nicaraguan positions inside Hon
duras. This action helped prompt
withdrawal of Sandinista forces.
Faced with this security challenge,
the Honduran desire to maintain and
modernize the backbone of its defensive
capability seems eminently reasonable.
We have worked with the Honduran
Armed Forces over a period of several
years to analyze their needs and
capabilities with respect to a replace-
ment aircraft. We are convinced that th
F-5 is the appropriate plane.
Since the mid-1970s, Honduras has
had uncontested air superiority in Cen-
tral America. Given the small size of its
armed forces, Honduran air superiority
has provided balance to a regional
military power equation which would
otherwise be weighed heavily against
that nation. The Hondurans currently
rely on 13 Super Mystere aircraft for
this defense. The planes are increasingl
difficult to maintain, and spare parts ar
virtually nonexistent— they are no longc
available on the world market. Through
our military assistance program (MAP),
we have refurbished eight of the planes
and acquired a limited stock of spare
parts. Despite these efforts, the aircraf
will lose their operational capability in
approximately 4 years— barely enough
time to acquire and put into service a
new aircraft.
The proposed sale of ten F-5E and
two F-5F aircraft is designed to replac
the Super Mystere with a comparably
modern follow-on plane. The F-5 is the
most logical choice for Honduras becau
it is inexpensive and easy to maintain
and provides the necessary interceptor
and ground attack capabilities. The sale
is valued at $75 million and would be
funded by MAP. In addition to the
planes, the package includes pilot and
technician training and some spare
parts.
The objection most frequently raise
to this sale is the spectra of an arms ra»
or military imbalance in Central
America. Let me address that concern.
The F-5 does not represent a new
capability for Honduras; rather it is an
incremental improvement of an existinj
one. Maintaining that capability is
especially important given the Soviet-
sponsored military escalation in
Nicaragua. Careful analysis went into
our decision to propose the sale of F-5s
and it is based on Honduran needs and
capabilities. Honduras cannot afford to
consider matching Nicaragua man-for-
man or gun-for-gun. Instead it must op
for the most cost-efficient means of
I
88
Department of State Bulle<^:;
TREATIES
fending its sovereignty. For Honduras
it means air superiority that deters
en bolder Sandinista attacks than the
es we've witnessed to date.
The possibility of Nicaraguan acqui-
ion from the Soviet Union or Eastern
ic of MiGs or other high performance
craft is also presented as an objection
the sale. As I have emphasized, the
5 is a replacement for the Super
rstere and as such provides no
tification for introduction of high per-
mance aircraft into Nicaragua. It is
t the Honduran Air Force that poses a
■eat to Central American stability; the
ssive Sandinista military buildup is
: real threat to regional peace. The
ministration has made clear to the
vnet Union and Nicaragua that it
uld find acquisition of advanced jet
hters by Nicaragua unacceptable.
The other Central American
nocracies are aware of the proposed
5 sale. Neither Guatemala nor Costa
;a has expressed to us any objections
;he sale nor do we expect that they
1 do so. As a result of a traditional
airy, latent fears about the Honduran
Force's capability are still a factor in
vadoran thinking. At present, how-
;r, the Salvadorans are more con-
ned with the consequences of the
ional balance shifting in Nicaragua's
or. While we cannot rule out the
.sibility of El Salvador requesting F-5
Dther similar aircraft, we are
pared to say that the Salvadoran Air
-ce does not, under current cir-
nstances, require such aircraft.
In closing, I want to reiterate that it
lOt the intention of the Administra-
1 to destabilize Central America or to
alate tensions there. To the contrary,
have carefully avoided any action
ich might do so. In this case, the Hon-
an defensive capability and the
ional balance of power will seriously
eriorate if Honduran air superiority is
maintained. The United States has
de a commitment to assist Honduras
iefending its national sovereignty;
5 sale contributes to fulfillment of that
■mise. I strongly urge the members of
subcommittees to support the provi-
1 of F-5 aircraft to the Honduran Air
t *ce.
'The complete transcript of the hearings
be published by the committee and will be
ilahle from the Superintendent of
unu-nts, U.S. Government Printing
ice, Washington, D.C. 20402. ■
Current Actions
MULTILATERAL
Antarctica
Recommendations relating to the furtherance
of the principles and objectives of the Antarc-
tic Treaty (TIAS 4780). Adopted at Tokyo
Oct. 30, 1970. Entered into force Oct. 10,
1973, for VI 1-7 and VI 11-15; Nov. 1, 1982,
for VI-9. TIAS 7796.
Notification of approval: U.K., Apr. 8, 1987
for VI-10.
Entered into Force: Apr. 8, 1987 for VI-10.
Recommendations relating to the furtherance
of the principles and objectives of the Antarc-
tic Treaty (TIAS 4780). Adopted at
Washington Oct. 5, 1979.
Notification of approval: U.K., Apr. 8, 1987.
Entered into force: Apr. 8, 1987, except for
X-1 and X-9.
Recommendations relating to the furtherance
of the principles and objectives of the Antarc-
tic Treaty (TIAS 4780). Adopted at Buenos
Aires July 7, 1981.'
Notification of approval: U.K., Apr. 8, 1987,
for X-1 through XI-3.
Recommendations relating to the furtherance
of the principles and objectives of the Antarc-
tic Treaty (TIAS 4780). Adopted at Canberra
Sept. 27, 1983.'
Notification of approval: U.K., Apr. 8, 1987.
Recommendations relating to the furtherance
of the principles and objectives of the Antarc-
tic Treaty (TIAS 4780). Adopted at Brussels
Oct. 18, 1985.'
Notification of approval: New Zealand,
Apr. 7, 1987; Fed. Rep. Germany, Apr. 14,
1987.2
Atomic Energy
Agreement extending the agreement of Feb.
11, 1977 (TIAS 9046), and addendum of Sept.
30, 1977 (TIAS 9047), in the field of gas-
cooled reactor concepts and technology.
Effected by exchange of letters at
Washington and Bonn Jan. 20 and Apr. 7,
1987. Entered into force Apr. 7, 1987; effec-
tive Feb. 11. 1987.
Parties: France; Fed. Rep. of Germany;
Switzerland; U.S.
Containers
International convention for safe containers,
1972, as amended. Done at Geneva Dec. 2,
1972. Entered into force Sept. 6, 1977; for
the U.S. Jan. 3, 1979. TIAS 9037, 10220.
Ratification deposited: Austria, Aug. 28,
1986; effective Aug. 28, 1987.
Diplomatic Relations
Vienna convention on diplomatic relations.
Done at Vienna Apr. 18, 1961. Entered into
force Apr. 24, 1964; for the U.S. Dec. 13,
1972. TIAS 7502.
Accession deposited: Burkina Faso, May 4,
1987.
[1987
Fisheries
Eastern Pacific ocean tuna fishing agreement
with protocol. Done at San Jose Mar. 15,
1983.' [Senate] Treaty Doc. 98-3.
Ratifications deposited: Costa Rica, Jan. 15,
1987; Honduras, June 4, 1985.
Marine Pollution
International convention on civil liability for
oil pollution damage. Done at Brussels Nov.
29, 1969. Entered into force June 19, 1975.^
Accession deposited: India, May 1, 1987.
1984 Amendments to the annex of the pro-
tocol of 1978 relating to the international con-
vention for the prevention of pollution from
ships, 1973. Adopted at London Sept. 7, 1984.
Entered into force: Jan. 7, 1986.
Narcotic Drugs
Single convention on narcotic drugs. Done at
New York Mar. 30, 1961. Entered into force
Dec. 13, 1964; for the U.S. June 24, 1967.
TIAS 6298.
Ratification deposited: Liberia, Apr. 13, 1987.
Convention on psychotropic substances. Done
at Vienna Feb. 21, 1971. Entered into force
Aug. 16, 1976; for the U.S. July 15, 1980.
TIAS 9725.
Accession deposited: Qatar, Dec. 18, 1986.
Pollution
Convention for the protection of the ozone
layer, with annexes. Done at Vienna Mar. 22,
1985.' [Senate] Treaty Doc. 99-9.
Ratification deposited: U.K., May 15, 1987.
Property — Intellectual
Convention establishing the World Intellec-
tual Property Organization. Done at
Stockholm July 14, 1967. Entered into force
Apr. 26, 1970; for the U.S. Aug. 25, 1970.
TIAS 6932.
Accession deposited: Paraguay, Mar. 20,
1987.
Refugees
Protocol relating to the status of refugees.
Done at New York Jan. 31, 1967; for the U.S.
Nov. 1, 1968. TIAS 6577.
Accession deposited: Maurit.ania, May 5,
1987.
Satellite Communications System
Agreement relating to INTELSAT, with
annexes. Done at Washington Aug. 20, 1971.
Entered into force Feb. 12, 1973. TIAS 7532.
Accession deposited: Benin, May 12, 1987.
Operating agreement relating to INTELSAT,
with annex. Done at Washington Aug. 20,
1971. Entered into force Feb. 12, 1973. TIAS
7532.
Signature: Office des Postes et Telecom-
munications de la Republic Populaire du
Benin, May 12, 1987.
Telecommunication
Inter- American radio agreement, with annex,
appendices, declaration, resolution, and
recommendations. Done at Washington July
9, 1949. Entered into force Apr. 13, 1952.
TIAS 2489.
Notification of revocation: Mexico, Apr. 28,
1987; effective Apr. 28, 1988.
89
TREATIES
International telecommunication convention,
with annexes and protocols. Done at Nairobi
Nov. 6, 1982. Entered into force Jan. 1, 1984;
definitively for the U.S. Jan. 10, 1986.
[Senate] Treaty Doc. 99-6.
Ratification deposited: Yemen (Sanaa),
Mar. 11, 1987.
Terrorism
International convention against the taking of
hostages. Adopted at New York Dec. 17,
1979. Entered into force Jan. 6, 1985.
Accession deposited: Mexico, Apr. 28, 1987.
Trade— Textiles
Protocol extending arrangement of Dec. 20,
1973, regarding international trade in textiles
(TIAS 7840). Done at Geneva July 31, 1986.
Entered into force Aug. 1, 1986.
Acceptances deposited: Jamaica, Feb. 26,
1987; Poland, Mar. 3, 1986.
Treaties
Vienna convention on the law of treaties,
with annex. Done at Vienna May 23, 1969.
Entered into force Jan. 27, 1980.3
Accession deposited: Bulgaria, Apr. 21, 1987.
Wheat
Wheat trade convention, 1986. Done at Lon-
don Mar. 14, 1986. Entered into force July 1,
1986.'' [Senate] Treaty Doc. 100-1.
Ratification deposited: Tunisia, May 15, 1987.
Women
Convention on the elimination of all forms of
discrimination against women. Adopted at
New York Dec. 18, 1979. Entered into force
Sept. 3, 1981.3
Accession deposited: Paraguay, Apr. 6, 1987.
BILATERAL
Australia
Agreement concerning fishing by U.S. vessels
in waters surrounding Christmas Island and
Cocos/Keeling Islands pursuant to the South
Pacific fisheries treaty. Effected by exchange
of notes at Port Moresby Apr. 2, 1987.
Entered into force Apr. 2, 1987.
Bahrain
Investment incentive agreement. Signed at
Manama Apr. 25, 1987. Entered into force
Apr. 25, 1987.
Belgium
Extradition treaty. Signed at Brussels
Apr. 27, 1987. Enters into force on the first
day of the second month after the exchange
of instruments of ratification.
Botswana
Grant agreement for workforce and skills
training project. Signed at Gaborone May 13,
1986. Entered into force May 13, 1986.
Canada
Memorandum of understanding on the
reciprocal training of reserve officers
between the Canadian Land Forces Command
and Staff College and the U.S. Marine Corps
Command and Staff College. Signed Nov. 4,
1985. Entered into force Nov. 4, 1985.
Memorandum of understanding on aviation
cooperation. Signed at Washington and
Ottawa Mar. 20 and Apr. 9, 1987. Entered
into force Apr. 9, 1987.
China
Agreement amending agreement of Aug. 19,
1983, as amended, relating to trade in cotton,
wool, and manmade fiber textiles and textile
products. Effected by exchange of notes at
Washington Mar. 16 and 18, 1987. Entered
into force Mar. 18, 1987.
Cyprus
Memorandum of understanding concerning
the operation of the INTELPOST service,
with details of implementation. Signed at
Nicosia and Washington Mar. 12 and Apr. 3,
1987. Entered into force May 6, 1987.
Czechoslovakia
Agreement on cooperation in culture, educa-
tion, science, technology, and other fields,
with annex. Signed at Prague April. 15, 1986.
Entered into force Apr. 15, 1986.
Program of cooperation and exchanges in
culture, education, science, technology, and
other fields for 1986 and 1987, with annex.
Signed at Prague Apr. 15, 1986. Entered into
force Apr. 15, 1986.
El Salvador
Agreement regarding trade in cotton textiles.
Effected by exchange of notes at San
Salvador Mar. 2 and Apr. 30, 1987. Entered
into force Apr. 30, 1987.
France
Memorandum of understanding for joint
development of the TOPEX/POSEIDON
(oceanographic satellite) project. Signed at
Washington Mar. 23, 1987. Entered into
force Mar. 23, 1987.
Germany, Dem. Rep.
Agreement relating to trade in cotton textile
products, with annexes. Effected by exchange
of notes at Berlin Dec. 10, 1986, and Feb. 27,
1987. Entered into force Feb. 27, 1987; effec-
tive Jan. 1, 1987.
Greece
Agreement extending the memorandum of
understanding of Apr. 28, 1986 on air serv-
ices. Effected by exchange of notes at Athens
Apr. 23-24, 1987. Entered into force Apr. 24,
1987; effective Apr. 25, 1987.
Guatemala
Grant agreement for balance of payments
assistance. Signed at Guatemala City Apr. 13,
1987, with amended deposit account agree-
ment. Entered into force Apr. 13, 1987.
Iceland
Memorandum of understanding concerning
the operation of the INTELPOST service,
with details of implementation. Signed at
Reykjavik and Washington Mar. 5 and Apr.
1987. Entered into force May 6, 1987.
Italy
Mapping, charting and geodesy exchange,
and cooperative agreement, with annexes.
Signed at Rome Apr. 30, 1987. Entered intc
force Apr. 30, 1987.
Japan
Agreement extending the agreement of
May 1, 1980 (TIAS 9760), as extended on
cooperation in research and development in
science and technology. Effected by exchan
of notes at Tokyo Apr. 28, 1987. Entered ir
force Apr. 28, 1987; effective May 1, 1987.
Korea
Memorandum of understanding concerning
operation of U.S. Air Force aircraft at Taej
Signed at Osan Mar. 26 and Apr. 9, 1987.
Entered into force Apr. 9, 1987.
Macao
Agreement amending and extending agree-
ment of Dec. 28, 1983, and Jan. 9, 1984,
relating to trade in textiles and textile proc
ucts. Effected by exchange of letters at Ho
Kong and Macao Apr. 14 and 28, 1987.
Entered into force Apr. 28, 1987.
Mauritius
Agreement amending agreement of June 3
and 4, 1985, as amended, concerning trade
cotton, wool, and manmade fiber textiles a
apparel. Effected by exchange of notes at
Port Louis Mar. 31 and Apr. 13, 1985.
Entered into force Apr. 13, 1987.
Mexico
Agreements amending agreement of Feb. '
1979 (TIAS 9419), as amended, relating to
trade in cotton, wool, and manmade fiber t
tiles and textile products. Effected by
exchanges of notes at Washington Mar. 18
and 24 and Apr. 15 and 17, 1987. Entered
into force Mar. 24 and Apr. 17, 1987.
Agreement regarding the consolidation am-
rescheduling of certain debts owed to,
guaranteed by, or insured by the U.S.
Government and its agencies, with annexe:
Signed at Washington Apr. 9, 1987. Enter'
into force May 21, 1987.
Pakistan
International express mail agreement, witl
detailed regulations. Signed at Islamabad J
Washington May 11 and 30, 1987. Entered
into force May 1, 1987.
Papua New Guinea
Agreement concerning fishing by U.S. vesils,
in Papua New Guinea's archipelagic water;
pursuant to the South Pacific fisheries tre; '.
Effected by exchange of notes at Waigani A
Port Moresby Mar. 4, 5, and 25, 1987.
Entered into force Mar. 25, 1987.
90
Iment of State
LBullibi
PRESS RELEASES
freement amending agreement of Jan. 3,
85, relating to trade in cotton, wool, and
inmade fiber textiles and textile products,
fected by exchange of notes at Lima
ir. 19 and Apr. 8, 1987. Entered into force
)r. 8. 1987.
negal
^eement regarding the consolidation and
icheduling of certain debts owed to,
aranteed by, or insured by the U.S.
vernment and its agencies, with annexes,
rned at Washington Apr. 10, 1987. Entered
o force May 18, 1987.
nzania
Teement regarding the consolidation and
!cheduling of certain debts owed to,
aranteed by, or insured by the U.S.
vernment, and its agencies, with annexes,
^ed at Dar es Salaam Mar. 18, 1987.
tered into force Apr. 27, 1987.
rkey
reement amending agreement of Oct. 18,
!5, as amended, concerning trade in certain
tile products. Effected by exchange of
•es at Washington Jan. 22 and Mar. 25,
VI. Entered into force Mar. 25, 1987.
reement regarding the consolidation and
cheduling of certain debts owed to,
iranteed by, or insured by the U.S.
i^ernment and its agencies, with annexes.
Tied at Kinshasa Apr. 9, 1987. Entered
5 force May 18, 1987.
o.
Date
96
5/1
97
5/5
•Not in force.
^Except for XIII-10 through 13.
'Not in force for the U.S.
*In force provisionally for the U.S.
Department of State
Press releases may be obtained from the
Office of Press Relations, Department of
State, Washington, D.C. 20520.
Subject
Shultz: luncheon toast in honor
of Japanese Prime Minister
Nakasone, Apr. 30.
Foreign Relations of the United
States, 1955-1957, Vol. VI,
American Republics:
Multilateral, Mexico, Carib-
bean, released.
Shultz: remarks before the
Bureau of International Nar-
cotics Matters Coordinators'
Conference, May 4.
Shultz: remarks at dedication of
the memorial plaque. Foreign
Service Day, May 1.
Statement on behalf of Secretary
Shultz on death of former CIA
Director William Casey.
Shultz: remarks after his
meeting with Arab League
delegation.
Program for the official working
visit of Guatemalan President
Vinicio Cerezo Arevalo, May
12-15.
Shultz: news briefing, the
Homestead, Hot Springs, Va.,
May 8.
Shultz: remarks before the Coun-
cil of the Americas conference.
Shultz: remarks to the study
commission on global perspec-
tives in education.
Shultz: remarks before the India-
U.S. Business Council, U.S.
Chamber of Commerce.
Special program to provide tem-
porary resident status for indi-
viduals who have worked in
seasonal agriculture in the U.S.
Frank Crigler sworn in as
Ambassador to Somalia
(biographic data).
98 5/5
*99 5/5
101 5/7
102
5/11
103
5/11
104
5/11
105
5/11
106
5/12
107
5/14
108
5/15
109 5/18 Shultz: address and question-and-
answer session before the
American Israel Public Affairs
Committee (AIPAC), May 17.
*110 5/18 Shultz: remarks upon receiving
the David Ben-Gurion Peace
Prize from the David Ben-
Gurion Centennial Committee,
New York City, May 17.
Shultz: address at the Stanford
University cornerstone centen-
nial, Stanford, May 14.
Shultz; dinner toast in honor of
Chinese Vice Chairman Yang
Shangkun, May 18.
Shultz: luncheon remarks in
honor of Austrian Chancellor
Franz Vranitzky.
Festival of Indonesia, 1990-91.
Shultz: remarks before the Anti-
Defamation League of B'nai
B'rith on the occasion of the
presentation of an Elijah Cup,
May 20.
116 5/27 Foreign Relations of the United
States, 1955-1957, Vol. VII,
American Republics: Central
and South America, released.
117 5/27 Shultz: remarks on the occasion
of the 40th anniversary of the
Marshall Plan, May 26.
'118 5/27 Commemoration of 25th anniver-
sary of AID and 40th anniver-
sary of the Marshall Plan-
special philatelic cancellation
service.
119 5/28 Shultz: remarks before Wilson
Center's seminar on Southeast
Asia, May 27.
Ill
5/18
112
5/19
113
5/20
114
5/21
115
5/21
• Not printed in the Bulletin.
,ilv 1 Pfi7
91
PUBLICATIONS
Department of State
Free single copies of the following Depart-
ment of State publications are available from
the Correspondence Management Division,
Bureau of Public Affairs, Department of
State, Washington, D.C. 20520.
President Reagan
Promoting Freedom and Democracy in Cen-
tral America, American Newspaper
Publishers Asso., EUis Island, N.Y., May 3,
1987 (Current Policy #952).
Secretary Shultz
Meeting the Challenges of Change in the
Pacific, Stanford University Cornerstone
Centennial Academic Convocation, Stan-
ford, May 14, 1987 (Current Policy #956).
Working for Peace and Freedom, American
Israel Public Affairs Committee (AIPAC),
May 17, 1987 (Current Policy #957).
Africa
African Development: An Administration
Perspective, Deputy Secretary Whitehead,
Carnegie Corporation, May 7, 1987 (Cur-
rent Policy #960).
Initiative to End Hunger in Africa (GIST,
May 1987).
Arms Control
Improving the Balance of Conventional
Forces in Europe, Deputy Assistant
Secretary Hawes, National Defense Univer-
sity symposium, Mar. 27, 1987 (Current
Policy #939).
Effective Arms Control Demands a Broad
Approach, Ambassador Rowney, U.S. Air
Force Academy, Colorado Springs, Apr. 27,
1987 (Current Policy #955).
Department
Challenges Facing the Foreign Service,
Under Secretary Spiers, Foreign Service
Day, May 1, 1987 (Current Policy #951).
Economics
U.S. Agriculture and the Global Context: A
Time for Action, Under Secretary Wallis,
National Association of Wheat Growers,
Mar. 18, 1987 (Current Policy #950).
U.S. Trade Policy (GIST, May 1987).
European Community (GIST, May 1987).
Environment
The Environmental Agenda and Foreign
Policy, Assistant Secretary Negroponte and
Deputy Assistant Secretary Benedick, State
Department symposium, Apr. 16, 1987
(Current Policy #943).
Europe
Moscow and the Peace Movement: The Soviet
Committee for the Defense of Peace, May
1987 (Foreign Affairs Note).
U.S. -Soviet Agreement on Embassy Con-
struction in Washington, May 1987 (Public
Information Series).
Soviet Military Withdrawals (GIST, May
1987).
General
Foreign Relations Machinery, Apr. 1987
(Atlas of U.S. Foreign Relations).
Budgetary Resources and Foreign Policy,
Under Secretary Derwinski, Subcommittee
on Foreign Operations, House Appropria-
tions Committee, Mar. 19, 1987 (Current
Policy #933).
America's First Line of Defense: An Effec-
tive Foreign Policy, Assistant Secretary
Keyes, World Affairs Council of Reading
and Berks County, Wyomissing, Pa.,
Mar. 31, 1987 (Current Policy #938).
The Foreign Affairs Budget Crisis: Questions
and Answers, May 1987 (Public Information
Series).
Conducting Our Foreign Relations: An
Investment in America's Future, May 1987
(Public Information Series).
Narcotics
The Drug Problem: Americans Arrested
Abroad (GIST, May 1987).
International Narcotics Control (GIST, May
1987).
Narcotics in Latin America (GIST, May 1987).
Refugees
Refugees and Foreign Policy: Immediate
Needs and Durable Solutions, Ambassador
Moore, John F. Kennedy School of Govern-
ment, Harvard, Cambridge, Apr. 6, 1987
(Current Policy #945).
South Asia
South Asia and the United States: An Evolv-
ing Partnership, Under Secretary Ar-
macost, Asia Society, Apr. 29, 1987 (Cur-
rent Policy #953).
Terrorism
International Terrorism (GIST, May 1987).
Western Hemisphere
The Spirit Behind the Monroe Doctrine,
Assistant Secretary Abrams, James Monroe
Freedom Award Dinner, Apr. 28, 1987
(Current Policy #949). ■
Background Notes
This series provides brief, factual summarie
of the people, history, government, econom;
and foreign relations of about 170 countries
(excluding the United States) and of selectei
international organizations. Recent revision
are:
Canada (Mar. 1987)
Haiti (Apr. 1987)
Honduras (Feb. 1987)
The Holy See (Mar. 1987)
Italy (Apr. 1987)
Japan (Feb. 1987)
Korea, South (Apr. 1987)
Maldives (Apr. 1987)
New Zealand (Mar. 1987)
Norway (Mar. 1987)
Pakistan (Mar. 1987)
Singapore (Feb. 1987)
Sweden (Feb. 1987)
Tunisia (Feb. 1987)
United Kingdom (Jan. 1987)
Venezuela (Apr. 1987)
A free copy of the index only may be
obtained from the Correspondence Manage
ment Division, Bureau of Public Affairs,
Department of State, Washington, D.C.
20520.
For about 60 Background Notes a year,
subscription is available from the Superinte
ent of Documents, U.S. Government Printi
Office, Washington, D.C. 20402, for $14.00
(domestic) and $17.50 (foreign). Check or
money order, made payable to the Superin
tendent of Documents, must accompany
order. ■
npnartmfint ni .qtatP RiilliQ.
PUBLICATIONS
■oreign Relations Volumes Released
OLUME VI,
MERICAN REPUBLICS'
he Department of State on May 5,
)87, released Foreign Relations of the
nited States. 1955-1957, Volume VI,
merican Republics: Multilateral; Mex-
o; Caribbean. This volume presents
)cuments on U.S. overall policy toward
itin America, regional policy toward
e Caribbean, and bilateral relations
ith Mexico, Cuba, the Dominican
spublic, and Haiti.
The Eisenhower Administration's
tention was increasingly focused on
itin America and the Caribbean during
ese years. On one occasion, President
senhower remarked to Secretary of
ate Dulles that he had probably writ-
n Dulles "more often on the subject of
exico than any other single matter."
A recurring theme was the question
U.S. aid and support to strongly anti-
immunist authoritarian regimes. "In
e long run," said President
senhower, "the United States must
ck democracies." The President was
io keenly aware of the problem of
pendence created by excessive
ipments of U.S. arms to the countries
the region.
An especially acute concern was the
owing political instability in the Carib-
an. Beginning in late 1956, Haiti
derwent a series of governmental
heavals, culminating in the disputed
'Ction in September 1957 of Francois
ivalier as President. In Cuba the
Ltista government contended with
med opposition from a variety of
oups, particularly the 26th of July
)vement led by Fidel Castro, the stu-
nt revolutionary movement in Havana
d other urban centers, and a third
oup based in the United States and
aded by former President Prio Socar-
s. By the end of 1957, the Department
State and the Embassy in Havana had
emulated a multiphase plan designed
pressure Batista and the opposition
oups into ending the civil strife and
'Iding free elections.
Foreign Relations, 1955-1957,
)lume VI, which comprises 997 pages
previously classified foreign affairs
cords, was prepared in the Office of
e Historian, Bureau of Public Affairs,
epartment of State. This authoritative
ficial record is based upon the files of
e White House, the Department of
State, and other government agencies.
Documentation on U.S. policy toward
Central and South America will be
published soon in Foreign Relations,
1955-1957, Volume VII.
Copies of Volume VI (Department of
State Publication No. 9503, GPO Stock
No. 044-000-02147-1) may be pur-
chased for $28.00 (domestic paid) from
the Superintendent of Documents, U.S.
Government Printing Office,
Washington, D.C., 20402. Checks or
money orders should be made payable to
the Superintendent of Documents.
VOLUME VII,
AMERICAN REPUBLICS^
The Department of State on May 27,
1987, released Foreign Relations of the
United States, 1955-1957, Volume VII,
American Republics: Central and South
America. Although American foreign
policy was oriented toward peace-
threatening crises elsewhere in the
world, U.S. policymakers were aware of
the mounting economic problems and
political unrest in Central and South
America. The demands of Latin peoples
for social improvements and material
progress were matters of concern to
American diplomats.
The Eisenhower Administration's
main attention in Central and South
America in the period 1955-1957
focused on developments in Argentina,
Brazil, Guatemala, and Panama. Faced
with a new government in Argentina
after the overthrow of President Juan
Peron in September 1955, the United
States quickly recognized the successor
military governments. The National
Security Council was advised that
Argentina would probably look to the
United States for aid. Indeed, the
diplomatic exchanges in 1956 and 1957
chronicle a series of requests by Argen-
tina for financial assistance and U.S.
efforts to deal positively with them.
Similar concerns dominated U.S.
relations with Guatemala and Brazil.
While President Castillo Armas brought
relative stability to Guatemala after the
ouster of leftist President Arbenz in
1954, the need for U.S. assistance to
help maintain an equilibrium in the coun-
try continued unabated. In Brazil contin-
uing inflation, large deficits, and a
chronic dollar shortage all contributed to
a precarious situation. The United States
provided some assistance, but urged a
program of economic reform to stabilize
the country.
In Panama the relationship revolved
around the canal question. Egyptian
nationalization of the Suez Canal evoked
a sympathetic response in Panama which
presented a memorandum on the prob-
lems associated with the canal and the
canal zone. Without surrendering
sovereignty over the canal, the United
States did address some of the basic
Panamanian complaints.
Foreign Relations, 1955-1957,
Volume VII, which comprises 1,171
pages of previously classified foreign
affairs records, was prepared in the Of-
fice of the Historian, Bureau of Public
Affairs, Department of State. This
authoritative official record is based on
the files of the White House, the Depart-
ment of State, and other government
agencies. Documentation on U.S. policy
toward Mexico, the Caribbean area, and
on multilateral relations was published in
Foreign Relations, 1955-195'?,
Volume VI.
Copies of Volume VII (Department
of State Publication No. 9513, GPO
Stock No. 044-000-02149-1) may be
purchased for $29.00 (domestic postpaid)
from the Superintendent of Documents,
U.S. Government Printing Office,
Washington, D.C. 20402. Checks or
money orders should be made payable to
the Superintendent of Documents.
'Press release 97.
2Press release 116 of May 27, 1987.
93
Atlas of United States
Foreign Relations
The Atlas of United States Foreign Relations,
December 1985, provides basic information
about U.S. foreign relations for easy refer-
ence and as a educational tool. This is the
second, revised edition of the atlas (first
published in 1983). For this edition, most of
the displays have been revised or updated,
and some have been expanded or recast to
reflect recent developments. Comprising 100
pages with 90 maps and charts, it is divided
into six sections dealing with:
■ Foreign relations machinery;
■ International organizations;
■ Elements of the world economy;
■ Trade and investment;
■ Development assistance; and
■ U.S. national security.
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vJDEX
uly 1987
olume 87,
No. 2124
fghanistan. South Asia and the United
States: An Evolving Partnership
(Armacost) 75
Tica. African Development: An
Administration Perspective (Whitehead) . 15
nerican Principles
mr"^■ Portrait Unveiled (Shultz) 81
^ ill 11 'ting Freedom and Democracy in Cen-
tral America (Reagan) 1
f Spirit Behind the Monroe Doctrine
Abrams) 80
jrking for Peace and Freedom (Shultz) ... 7
gentina. Argentine Military Rebellion
Wliite House statement) 88
ms Control
iiefits of an INF Agreement (Shultz) 17
fective Arms Control Demands a Broad
Approach (Rowny) 22
proving the Balance of Conventional
i^orces in Europe (Hawes) 18
^FR Talks Resume (Department
■-tatement) 19
]i|ir(iliferation Agreement With Allies
Wliite House statement) 68
clear and Space Arms Talks Open Round
i)ight (Kampelman, Reagan) 24
5. Arms Control Initiatives: An Update .27
■;. Soviet Nuclear and Space Arms
s'tt;iitiations (Reagan) 25
^.. Soviet Union to Establish Nuclear
ii.-^k Reduction Centers (White House
taiement) 21
ina. U.S. Policy Priorities for Relations
Vith China (Sigur) 41
mmunications. World Radio Conference
Concludes 74
ngress
ergy Security (message to the Congress) 51
3 Persian Gulf: Stakes and Risks
Murphy) 64
; •'i\ Sale of F-5s to Honduras
Ills) 87
piirt on Cyprus (message to the
oll^l•ess) 57
V Soviet Agreement on Embassy Con-
iriiction in Washington (Spiers) 34
vS Stark Hit by Iraqi Missiles (Murphy,
veayan, Shultz, White House and Depart-
iient statements) 58
prus. 31st Report on Cyprus (message to
he Congress) 57
partment & Foreign Service
allenges Facing the Foreign Service
Spiers) 30
5. -Soviet Agreement on Embassy Con-
struction in Washington (Spiers) 34
St Asia. ASEAN: A Model for Regional
Cooperation (Shultz) 10
onomics
iEAN: A Model for Regional Cooperation
Shultz) 10
■eting the Challenges of Change in the
Pacific (Shultz) 4
;CD Council Meets in Paris (final
-ommunique) 43
lergy
lergy Security (message to the Congress) 51
A Governing Board Meets in Paris
Herrington, final communique) 47
Environment. The Environmental Agenda
and Foreign Policy (Benedick,
Negroponte) 52
France. Visit of French Prime Minister
(Chirac, Reagan) 56
Honduras. Proposed Sale of F-5s to Hon-
duras (Abrams) 87
Industrialized Democracies. OECD Council
Meets in Paris (final communique) 43
Japan
Secretary's News Briefing of May 8
(excerpt) " 13
Trade With Japan (Reagan, proclamation,
memorandum, White House fact sheet) . . 35
Visit of Japanese Prime Minister Nakasone
(Nakasone, Reagan, Shultz, joint
statemerlt) 37
Lebanon. U.S. Food Aid Program for
Lebanon (Department statement) 61
Middle East
Meeting With Arab League Delegation
(Shultz) 63
The Persian Gulf: Stakes and Risks
(Murphy) 64
Working for Peace and Freedom (Shultz) ... 7
U.S.S. Stark Hit by Iraqi Missiles (Murphy,
Reagan, Shultz, White House and Depart-
ment statements) 58
Military Affairs
Improving the Balance of Conventional
Forces in Europe (Hawes) 18
U.S.S. Stark Hit by Iraqi Missiles (Murphy,
Reagan, Shultz, White House and Depart-
ment statements) 58
Monetary Affairs. OECD Council Meets in
Paris (final communique) 43
Nicaragua
Central America: What Are the Alternatives?
(Abrams) 83
Promoting Freedom and Democracy in
Central America (Reagan) 1
North Atlantic Treaty Organization
Improving the Balance of Conventional
Forces in Europe (Hawes) 18
NATO Nuclear Planning Group Meets in
Norway (final communique) 57
Nuclear Policy
Nonproliferation Agreement With Allies
(White House statement) 68
Nonproliferation and the Peaceful Uses of
Nuclear Energy (Negroponte) 67
Pacific. Meeting the Challenges of Change
in the Pacific (Shultz) 4
Pakistan. South Asia and the United States:
An Evolving Partnership (Armacost) .... 75
Presidential Documents
Energy Security (message to the Congress) 51
Nuclear and Space Arms Talks Open Round
Eight (Kampelman, Reagan) 24
Pan American Day and Week, 1987
(proclamation) 86
31st Report on Cyprus (message to the
Congress) 57
Trade With Japan (Reagan, proclamation,
memorandum, White House fact sheet) . .35
U.S. -Soviet Nuclear and Space Arms
Negotiations 25
Visit of French Prime Minister (Chirac,
Reagan) 56
Visit of Japanese Prime Minister Nakasone
(Nakasone, Reagan, Shultz, joint
statement) 37
World Trade Week, 1987 (proclamation) ... 45
Publications
Background Notes 92
Department of State 92
Foreign Relations Volumes Released 93
Refugees. Refugees and Foreign Policy:
Immediate Needs and Durable Solutions
(Moore) 70
Security Assistance. Proposed Sales of
F-5s to Honduras (Abrams) 87
South Africa. Working for Peace and
Freedom (Shultz) 7
Trade
Meeting the Challenges of Change in the
Pacific (Shultz) 4
OECD Council Meets in Paris (final
communique) 43
Secretary's News Briefing of May 8
(excerpt) 13
Trade With Japan (Reagan, proclamation,
memorandum, White House fact sheet) . . 35
World Trade Week, 1987 (proclamation) . . .45
Treaties. Current Actions 89
U.S.S.R.
Benefits of an INF Agreement (Shultz) .... 17
Effective Arms Control Demands a Broad
Approach (Rowny) 22
MBFR Talks Resume (Department
statement) 19
Nonproliferation and the Peaceful Uses of
Nuclear Energy (Negroponte) 67
Nuclear and Space Arms 'Talks Open Round
Eight (Kampelman, Reagan) 24
The Spirit Behind the Monroe Doctrine
(Abrams) 80
U.S. Arms Control Initiatives: An Update .27
U.S. -Soviet Nuclear and Space Arms
Negotiations (Reagan) 25
U.S., Soviet Union to Establish Nuclear Risk
Reduction Centers (White House
statement) 21
Western Hemisphere
Central America: What Are the Alternatives?
(Abrams) 83
Monroe Portrait Unveiled (Shultz) 81
Pan American Day and Week, 1987
(proclamation) 86
Promoting Freedom and Democracy in Cen-
tral America (Reagan) 1
The Spirit Behind the Monroe Doctrine
(Abrams) 80
Name Index
Abrams, Elliott 80, 83, 87
Armacost, Michael H 75
Benedick, Richard E 52
Chirac, Jacques 56
Hawes, John H 18
Herrington, John S 47
Kampelman, Max M 24
Moore, Jonathan 70
Murphy, Richard W 58, 64
Nakasone, Yasuhiro 37
Negroponte, John D 52, 67
Reagan, President 1, 24, 25, 35, 37, 45,
51, 56, 57, 58, 86
Rowny, Edward L 22
Shultz, Secretary 4, 7, 10, 13, 17, 37,
58, 63, 81
Sigur, Gaston J., Jr 41
Spiers, Ronald I 30, 34
Whitehead, John C 15
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Departmettt
-m of state -m-m ^ ^
^ huUeUn
le Official Monthly Record of United States Foreign Policy / Volume 87 / Number 2125
August 1987
Economic Summit
Venice 1987
Department of State
bulletin
Volume 87 / Number 2125 / August 1987
The DEPARTMENT OF STATE
BULLETIN, published by the Office of
Public Communication in the Bureau of
Public Affairs, is the official record of
U.S. foreign policy. Its purpose is to pro-
vide the public, the Congress, and
government agencies with information
on developments in U.S. foreign rela-
tions and the work of the Department of
State and the Foreign Service. The
BULLETIN'S contents include major
addresses and news conferences of the
President and the Secretary of State;
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U.S. Mission to the United Nations; and
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other supportive material (such as maps,
charts, photographs, and graphs) are
published frequently to provide addi-
tional information on current issues but
should not necessarily be interpreted as
official U.S. policy statements.
GEORGE P. SHULTZ
Secretary of State
CHARLES REDMAN
Assistant SecretJiry
for Public Affairs
PAUL E. AUERSWALD
Director,
Office of Public Communication
NORMAN HOWARD
Chief, Editorial Division
PHYLLIS A. YOUNG
Editor
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CONTENTS
FEATURE
^fP^/,9P,
1 Venice Economic Summit
(President Reagan, Secretary Shultz, Statements,
Declaration)
!ie President
Visit to Vatican City and West
Germany
fie Vice President
NATO: The Best Investment in
Peace
ne Secretary
Visit to Asia and the Pacific
Interview on "Meet the Press"
News Briefing of June 2
U.S. Business and the World
Economy
Narcotics: A Global Threat
Irica
The U.S. and Southern Africa:
A Current Appraisal
(Michael H. Armacost)
i rms Control
Germany's Decision on Proposed
INF Reductions
(President Reagan)
I ast Asia
! The U.S., Japan, and Asian
Pacific Security in Perspective
(Michael H. Armacost)
Japan— A Profile
U.S. -Japan Semiconductor Trade
(President Reagan)
Economics
56
57
Competitiveness in America:
Is Protectionism the Answer?
(Douglas W. McMinn)
Trade With Romania, Hungary,
and China (White House
Statement)
Europe
59 North Atlantic Council Meets in
Iceland (Secretary Shultz,
Final Communique)
63 NATO Defense Planning
Committee Meets in Brussels
(Final Communique)
64 Visit of Austrian Chancellor
(President Reagan)
65 Recent Developments in Europe
(Rozanne L. Ridgway)
67 40th Anniversary of the Marshall
Plan (President Reagan,
Secretary Shultz)
72 40th Anniversary of the Truman
Doctrine (President Reagan)
Human Rights
U.S. Human Rights Policy:
Origins and Implementation
(George Lister)
Human Rights and U.S. Foreign
Policy (Richard Schifter)
The Human Rights Issue in Korea
(Richard Schifter)
73
75
77
l\/liddle East
78 U.S. Policy in the Persian Gulf
and Kuwaiti Reflagging
(Michael H. Armacost)
80 Arms Sale to Saudi Arabia
(President Reagan)
81 Persian Gulf
(President Reagan)
Military Affairs
82
SDI Report to Congress
(White House Statement)
Terrorism
83
85
Terrorism and the Rule of Law
(L. Paul Bremer. HI)
West Germany to Prosecute
Terrorist (White House
Statement)
Western Hemisphere
86 President Meets With Costa
Rican President
(White House Statement)
87 Visit of Guatemalan President
(Vinicio Cerezo Arevalo,
President Reagan)
Treaties
87 Current Actions
Press Releases
89 Department of State
Publications
90 Department of State
Index
_
President Reagan in Venice.
Department of State Bui tin
ECONOMIC SUMMIT
VENICE 1987
Venice Economic Summit
^resident Reagan attended the 13th economic summit of the industrialized nations
in Venice June 8-10, 1987, which was hosted by
Italian Prime Minister Amintore Fanfani.
The other participants were Prime Minister Brian Mulroney (Canada);
President Francois Mitterrand (France);
Chancellor Helmut Kohl (West Germany);
Prime Minister Yasuhiro Nakasone (Japan);
Prime Minister Margaret Thatcher (United Kingdom);
Jacques Delors, President of the European Communities; and
Belgian Prime Minister Wilfried Martens representing
the Presidency of the European Communities.
esident's
Departure Remarks,
ijne 3, 19871
you know, Nancy and I are leaving
lay for the economic summit in
nice. Many of you have helped me
jpare for this meeting, and I'm most
ateful. Others of you will, in the
)nths ahead, join with me in helping to
art the course, not only for our
onomy but, in large measure, for the
tire world's economy. Of course, I'm
)king forward to continuing our com-
Dn work.
But for a moment, rather than
dress you, the men and women who
e my partners in shaping our nation's
licies for the future, I would like to
rect my words to some very special
lests, to those of you here today who
e the future, you graduates of James
adison High School.
The man your school was named for,
imes Madison, has been called the
itiier of our Constitution, and he was
so our fourth President. And, no, I was
|)t one of his staff or advisers,
laughter] But in his first inaugural
Idress, Madison said these simple and
profound words: "It has been the true
glory of the United States," he said "to
cultivate peace by observing justice."
This is a particularly good moment for
remembering that wisdom.
On this trip, I will commemorate the
40th anniversary of the Marshall Plan.
Yes, 40 years ago the United States said
that if Europe were ever to see an end
to the specter of war that had haunted
that great continent for over two cen-
turies, all of its people would have to
know freedom, democracy, and justice.
And so we extended both to allies and
former enemies a helping hand, a hand
of compassion, and a hand of hope.
The Soviet Union declined to take
part in the Marshall Plan, as did the
countries under its control, but to the
rest of Europe, we gave help. What we
know now as Western Europe was
rebuilt. And today, in part as a result of
the Marshall Plan, those countries and
the United States as well as Japan have
known the longest period of general
peace in this century and the greatest
prosperity in the history of man.
At this economic summit, I will look
around the table and see, thanks in part
to the generosity and wisdom of our
nation over the past 40 years, not the
leaders of broken, desperate and
despotic nations but the leaders of
strong and stable democracies, countries
that today are our partners for peace on
the world stage. Next week each leader
at that table will be asking the same
questions. How can we help make the
next 40 years as prosperous as the last
40? How can we help our peoples live in
a world of even greater opportunities in
the next decade and the next century?
Some of the answers to these ques-
tions are clear. Our countries should
move forward to end unsustainable trade
imbalances, to reform agricultural
policies, and restore stability to the
interational currency markets. The
major economic powers of the world
must also work to eliminate inequities in
the international trade environment
to keep markets open and to keep com-
merce flowing. Economic growth and
free markets are everybody's business.
At Venice we'll talk about how to
improve East- West relations. We will
discuss arms reductions, human rights
problems, regional conflicts, and
bilateral cooperation. Our discussion in
Venice will help strengthen Western
solidarity, which is indispensable to
progress on issues of contention between
the East and West. We will also address
lugust 1987
various regional issues and other prob-
lems, such as international terrorism,
where we can point to stepped-up and
increasingly effective Western efforts,
especially after last year's summit in
Tokyo.
Despite this long agenda, we won't
find all the answers to those questions
about our future at this summit— not by
a long shot. In fact, many of the answers
will come from where mankind's great-
est energy and vision have always come:
from you, from those like you through-
out the world, from the hope that lives in
the hearts of free people everywhere.
But we will take steps; we will continue
the work of, as Madison said, cultivating
peace by observing justice. And as I sit
at that table and remember Madison's
words, I will see not just the faces of
those other leaders but your faces as
well.
President's
Radio Address,
Venice,
Junes, 19872
I'm speaking to you from one of the
most beautiful cities in the world,
Venice, Italy, where I'll be meeting soon
with the other leaders of the seven
largest industrialized countries of the
free world. It's time for our yearly sum-
mit conference on international eco-
nomic issues.
Now, all of this— foreign leaders
talking economics in the city of canals
and gondolas— may sound a bit distant
from your daily concerns, but take it
from me, the issues we'll be discussing
next week directly affect your lives and
your future. That's because continued
economic expansion and growth
throughout the world are crucial to our
prosperity at home.
When I attended my first summit
back in Ottawa in 1981, the global
economy was in grave danger. We had
inflation running at 10% in industrialized
countries, not to mention high interest
rates, excessive tax burdens, and too
much government everywhere. Worse
than all of this, there was no clear con-
sensus among world leaders about how
to set ourselves back on the road to
recovery.
In the 6 years since that conference,
the United States has made tremendous
progress. With the American economy
leading the way, we showed what can be
achieved with economic policies based on
less government and more personal
freedom. As we reduced the taxes, cut
inflation, and brought down interest
rates, we demonstrated that economic
growth can be vigorous and sustained.
So, too, the world leaders in Venice
next week can look back on a solid
record of accomplishment. Today infla-
tion remains low, while interest rates
are moderate, and prospects are
favorable for growth to continue for a
fifth year. So, you see, we did find that
consensus for economic renewal and
growth, a consensus that relied not or
government but the dynamism of free
peoples.
But there are challenges ahead, ai
what we do next week to meet those
challenges will have a direct impact oi
all Americans. Those of you who listei
these broadcasts will know, for examp
how often I've stressed the threat tha
high tariffs and other trade barriers p
to economic progress. Some of us whc
lived through the hard times of the
1930s can tell you about that danger.
When one nation decides to erect thes
barriers, it leads inevitably to retaliati
by other nations. Soon the trade war i
underway. Markets shrink all over the
world, and the result is economic
slowdown and the loss of millions of jc
That's why a summit conference
with our major trading partners can b
helpful. It's a chance to reaffirm our
Department of State Bull m
ECONOMIC SUMMIT
VENICE 1987
lief in free and fair trade, talk over the
oblems of protectionist legislation, and
Ip provide a climate for the free flow
goods and commerce. It also gives us
■hance to talk over other issues, like
r goal of extending prosperity to the
veloping nations of the world. Right
w the international community is help-
r these developing nations deal with
serious problem of heavy debt
rdens. And just as this summit is
Ipful in coordinating our trade policies
d our efforts to help spread prosperity
the rest of the world, our discussions
Venice will permit us to address such
/erse topics as agricultural problems,
Torism, drug abuse, and the AIDS
:quired immune deficiency syndrome]
idemic.
So, too, the relationship between the
!e nations of the world and the Soviet
)C will be much on our minds. You
Dbably know, for example, some very
rious negotiations on arms reductions
8 reaching a critical stage. These
gotiations affect our allies, so it's
sential that we maintain our commit-
mt to their security as well as our
'n. We also need to reaffirm our
jdge to a strong defense while exert-
r pressure on the Soviets for progress
such areas as regional conflicts, like
■ghanistan, and human rights.
The agenda next week is a full one.
it certainly one source of encourage-
ent is our record of accomplishment
)t only for the past few years but dur-
g the past four decades. Forty years
;o this week, then Secretary of State
!orge Marshall announced an economic
covery plan for the European nations
ivastated by World War II. The plan
as not a giveaway program; it was,
stead, an incentive-oriented effort to
it European nations to work together
id build a new prosperity, a prosperity
lilt on self-help and mutual love of
eedom. It's this same idea of freedom
hich has kept much of the world at
iace for four decades and brought ris-
ig standards of living to the average
srson. That's what we'll be seeking to
dvance further in Venice. Our goal now
., together, to build on this record of
rowth and opportunity for the future,
s we've done in the past.
Statement on
East-West Relations,
Junes, 19873
1. We, the Heads of State or Government of
seven major industrial nations and the
Representatives of the European Community,
have discussed East-West relations. We reaf-
firm our shared principles and objectives and
our common dedication to preserving and
strengthening peace.
2. We recognize with pride that our
shared values of freedom, democracy and
respect for human rights are the source of the
dynamism and prosperity of our societies. We
renew our commitment to the search for a
freer, more democratic and more humane
world.
3. Within existing alliances, each of us is
resolved to maintain a strong and credible
defense which threatens the security of no
one, protects freedom, deters aggression and
maintains peace. We shall continue to consult
closely on all matters affecting our common
interest. We will not be separated from the
principles that guide us all.
4. Since we last met, new opportunities
have opened for progress in East-West rela-
tions. We are encouraged by these develop-
ments. They confirm the soundness of the
policies we have each pursued in our deter-
mination to achieve a freer and safer world.
5. We are following with close interest
recent developments in the internal and
external policies of the Soviet Union. It is our
hope that they will prove to be of great
significance for the improvement of political,
economic and security relations between the
countries of East and West. At the same
time, profound differences persist; each of us
must remain vigilantly alert in responding to
all aspects of Soviet policy.
6. We reaffirm our commitment to peace
and increased security at lower levels of
arms. We seek a comprehensive effort to
lower tensions and to achieve verifiable arms
reductions. While reaffirming the continuing
importance of nuclear deterrence in preserv-
ing peace, we note with satisfaction that
dialogue on arms control has intensified and
that more favourable prospects have emerged
for the reduction of nuclear forces. We
appreciate US efforts to negotiate balanced,
substantial and verifiable reductions in
nuclear weapons. We emphasize our deter-
mination to enhance conventional stability at
a lower level of forces and achieve the total
elimination of chemical weapons. We believe
that these goals should be actively pursued
and translated into concrete agreements. We
urge the Soviet Union to negotiate in a
positive and constructive manner. An effec-
tive resolution of these issues is an essential
requirement for real and enduring stability in
the world.
7. We will be paying close attention not
only to Soviet statements but also to Soviet
actions on issues of common concern to us. In
particular:
• We call for significant and lasting prog-
ress to human rights, which is essential to
building trust between our societies. Much
still remains to be done to meet the principles
agreed and commitments undertaken in the
Helsinki Final Act and confirmed since.
• We look for an early and peaceful
resolution of regional conflicts, and especially
for a rapid and total withdrawal of Soviet
forces from Afghanistan so that the people of
Afghanistan may freely determine their own
future.
• We encourage greater contacts, freer
interchange of ideas and more extensive
dialogue between our people and the people of
the Soviet Union and Eastern Europe.
8. Thus, we each seek to stabilize military
competition between East and West at lower
levels of arms; to encourage stable political
solutions to regional conflicts; to secure
lasting improvements in human rights; and to
build contacts, confidence and trust between
governments and peoples in a more humane
world. Progress across the board is necessary
to establish a durable foundation for stable
and constructive relationships between the
countries of East and West.
Statement on Terrorism,
June 9, 19873
We, the Heads of State or Government of
seven major democracies and the Represen-
tatives of the European Community assem-
bled here in Venice, profoundly aware of our
peoples' concern at the threat posed by
terrorism;
• Reaffirm our commitment to the
statements on terrorism made at previous
Summits, in Bonn, Venice, Ottawa, London
and Tokyo;
• Resolutely condemn all forms of ter-
rorism, including aircraft hijackings and
hostage-taking, and reiterate our belief that
whatever its motives, terrorism has no
justification;
• Confirm the commitment of each of us
to the principle of making no concessions to
terrorists or their sponsors;
• Remain resolved to apply, in respect of
any State clearly involved in sponsoring or
supporting international terrorism, effective
measures within the framework of interna-
tional law and in our own jurisdictions;
• Welcome the progress made in inter-
national cooperation against terrorism since
we last met in Tokyo in May 1986, and in par-
ticular the initiative taken by France and Ger-
many to convene in May in Paris a meeting of
Ministers of nine countries, who are responsi-
ble for counter-terrorism;
• Reaffirm our determination to combat
terrorism both through national measures and
through international cooperation among
ourselves and with others, when appropriate,
and therefore renew our appeal to all like-
minded countries to consolidate and extend
international cooperation in all appropriate
fora;
• Will continue our efforts to improve the
safety of travellers. We welcome improve-
ments in airport and maritime security, and
encourage the work of ICAO [International
Civil Aviation Organization] and IMO [Inter-
national Maritime Organization] in this
regard. Each of us will continue to monitor
closely the activities of airlines which raise
security problems. The Heads of State or
Government have decided on measures,
annexed to this statement, to make the 1978
Bonn Declaration more effective in dealing
with all forms of terrorism affecting civil
aviation;
• Commit ourselves to support the rule of
law in bringing terrorists to justice. Each of
us pledges increased cooperation in the rele-
vant fora and within the framework of
domestic and international law on the investi-
gation, apprehension and prosecution of ter-
rorists. In particular we reaffirm the principle
established by relevant international conven-
tions of trying or extraditing, according to
national laws and those international conven-
tions, those who have perpetrated acts of
terrorism.
Annex
The Heads of State or Government recall that
in their Tokyo Statement on international ter-
rorism they agreed to make the 1978 Bonn
Declaration more effective in dealing with all
forms of terrorism affecting civil aviation. To
these ends, in cases where a country refuses
extradition or prosecution of those who have
committed offences described in the Montreal
Convention for the Suppression of Unlawful
Acts against the Safety of Civil Aviation
and/or does not return the aircraft involved,
the Heads of State or Government are jointly
resolved that their Governments shall take
immediate action to cease flights to that coun-
try as stated in the Bonn Declaration.
At the same time, their Governments will
initiate action to halt incoming flights from
that country or from any country by the
airlines of the country concerned as stated in
the Bonn Declaration.
The Heads of State or Government intend
also to extend the Bonn Declaration in due
time to cover any future relevant amendment
to the above Convention or any other aviation
conventions relating to the extradition or pros-
ecution of the offenders.
The Heads of State or Government urge
other governments to join them in this
commitment.
Statement on Iraq-Iran War
and Freedom of
Navigation In the Gulf,
June 9, 19873
We agree that new and concerted interna-
tional efforts are urgently required to help
bring the Iraq-Iran war to an end. We favour
the earliest possible negotiated end to the
war with the territorial integrity and
independence of both Iraq and Iran intact.
Both countries have suffered grievously from
this long and tragic war. Neighbouring coun-
tries are threatened with the possible spread
of the conflict. We call once more upon both
parties to negotiate an immediate end of the
war. We strongly support the mediation
efforts of the United Nations Secretary-
General and urge the adoption of just and
effective measures by the UN Security Coun-
cil. With these objectives in mind, we reaffirm
that the principle of freedom of navigation in
the gulf is of paramount importance for us
and for others and must be upheld. The free
flow of oil and other traffic through the Strait
of Hormuz must continue unimpeded.
We pledge to continue to consult on ways
to pursue these important goals effectively.
Secretary's News Briefing,
June 9, 19874
We're in the midst of a summit meeting
with the usual wide range of subjects
under review, and I think a genuine
sense of continuity as we go from one
year to the next with an evolving pat-
tern of effectiveness. Let me outline
where we are and where we are going.
First of all in East-West relations,
we've had a strategy of strength, of
realistic assessment of the Soviets and
their allies, and a readiness to negotiati
We see in our hands now with increasir
firmness a pattern of agreements emer
ing. There is greater and greater conse
sus now coming forward on INF [inter-
mediate-range nuclear forces]. And I
expect, as we reflect on what was said
here and have the full foreign ministers
meeting in Reykjavik, that such a con-
sensus on how we respond to the latest
moves— important moves— will be
established.
Beyond that, there is a clear recogi
tion of where the next steps lie. They li
in conventional weapons, they lie in
chemical weapons, and in following up
on the broadly agreed changes in
strategic arms.
The participants in the summit aga
emphasized something of profound
importance in East- West relations,
namely the underlying importance of
human rights as necessary in itself and
as a gauge to the quality of a relation-
ship that's possible. We note that some
moves have been made. They are encoi
aging. There is a great deal more to be
done. There was considerable discussio
of this among the heads of state and
others reflecting on what is going on.
And, of course, regional issues
remain a problem, and at the top of the
list in the discussions here, Afghanistai
So, the heads call upon the Soviet Unio
to do better in these areas. But in
general, we see a working strategy
before us gradually getting someplace.
Next, terrorism; that subject has
been around for awhile in these summit
meetings, and, imfortunately, the prob-
lem is all too much around. However, w
have seen increasing coherence, increas
ingly operational methods of cooperatic
between countries involved, the exten-
sion of various ways of dealing with ter
rorism once again illustrated in the con
munique this time, and we see more am
more emphasis of no concessions, no
place to hide. States sponsoring ter-
rorism can expect trouble from us. We
see some success. We see worldwide tei
rorism incidents down by about 6%, as
compared with last year. We see them
down about 33% in Europe. We see the
emergence of the rule of law more and
more— a very important development
noted in the statement. There were two
Department of State Bullet
ECONOMIC SUMMIT
VENICE 1987
Summit participants from left to right: Prime Minister Martens, President Delors, Prime Minister Nakasone. Prime
Minister Thatcher, President Reagan, Prime Minister Fanfani, President Mitterrand, Chancellor Kohl, and Prime
Minister Mulroney.
ackings in 1986. That's the lowest
el since 1968, when this was being
icked, to begin with.
Let me mention two cases handled
the rule of law which have a special
:nificance— interesting significance,
le is the Hindawi case involving the
-ercepted effort to plant a bomb in an
Al plane— successfully prosecuted,
id the other is the case of two Sikhs
Dsecuted in Canada for an effort to
)w up an airplane.
Now the application of the rule of
V is one aspect of this. A second
pect is that in both cases, through
/estigative work involving more than
e country interacting, the intent of the
rrorist was found before the damage
was done. The people were caught—
caught with the goods— prosecuted and
put in the slammer where they belong.
That's the kind of thing we want to see.
There's a communique; those are words,
they mean something. And this is an
illustration of what they mean.
As far as the Persian Gulf is con-
cerned, as it turned out, people came
here with pretty much the same view-
recognizing the great importance of the
gulf and recognizing the importance of
deterring any threat to the principle of
freedom of navigation.
We, of course, have taken steps
ourselves. We feel that our force can do
the job set out for it very well, but I
want to emphasize— and it was certainly
manifest here that we are not alone in
this by a long shot. For example, the
British so far this year have escorted
104 vessels in the gulf— British vessels
as they come in and out. We recognize
that the heart of the problem, of course,
is the war— the continuing Iran-Iraq
war. And so the countries here joined in
supporting the Secretary General's
initiative and join in calling on the
Security Council— and three of the per-
manent members are represented here-
to call for a cease-fire at international
borders and to call for it to be done in an
effective way— effective meaning that
we and other countries here advocate
mandatory sanctions on sales of military
goods to either country if there is one
that declines to go along with the
cease-fire.
We will go to the Security Council,
and we will put it to the Soviets and put
it to the Chinese, as the other two per-
manent members, to join in this action
designed to get at the root of the prob-
lem, namely the war in the gulf— the war
between Iran and Iraq, which has a
spillover in the gulf.
Finally just a comment on overall
atmospherics. As people come to know
each other as individuals better and bet-
ter through this process, the discussion
flows very easily, takes on its own
momentum. Sometimes it's a little hard
to predict what people are going to talk
about, but they have a capacity to dig
into the subjects that are on the top of
their minds and out of it comes a
sharpened perception of what is going on
and a better and more operational way
of dealing with outstanding problems.
This is an economic summit. I, of
course, have emphasized the security
and political aspects. The whole after-
noon and much of the morning today
was spent on economic matters by the
heads, and they'll be doing that again
tomorrow as they work on the communi-
que, which was worked over consider-
ably this afternoon, and that will be
issued tomorrow and interpreted
tomorrow.
Q. In the statement on the gulf,
the seven leaders urged the adoption
of what they called "just and effective
measures" by the Security Council. Is
an arms embargo what you mean, and
if it is what you mean, why don't the
seven specifically say they support the
British and the Americans in wanting
to deny arms to Iran?
A. It says "effective measures," and
I told you what effective means. That
was clear in our discussions. It means
that we call for a cease-fire, and if
either country declines, then we will
follow that up in our view— the view of
the countries represented here— with a
call for mandatory sanctions on the sale
of arms. Now whether the Soviets will
join in that or whether the Chinese will
join in that, we don't know yet. But
that's what we're going to take into our
discussions in the Security Council.
Q. But what do you do now with
an embargo on arms sales to Iran?
Why do you have to wait to muddle
through a very —
6
A. We don't. We don't. As far as
we're concerned, we have an embargo
on, and so do the other countries. But in
order to make the maximum impact in
trying to bring this war to an end, the
broader that embargo can be, the more
meaning it will have. And that is why we
have said beyond what the countries may
do individually, there is the intent to go
to the United Nations, broaden it to the
permanent members of the Security
Council, and then hopefully broaden it to
all other countries.
Q. Are you going to try to get
stronger language in this statement,
like "enforceable"? We've been hear-
ing from the other delegations that we
wanted it to be tougher, and that we
really —
A. All sorts of words were talked
about, and the word "enforceable" was
talked about. The point was made that
it's redundant, that's what "effective"
means, and so we spelled it out, what
"effective" means as we see it. Every-
body agreed on that, so we got what we
think is necessary here.
Q. A lot of people on Capitol Hill
have said our allies have got to do
more to help us physically in the gulf,
that American boys ought not to be
there at risk for oil for other people.
Did you ask for, and if so, did you get,
any promise or commitment t)f more
physical help in the gulf?
A. The states that are capable of
providing it are doing it. We are, and
we'll do a little more as necessary. We'll
be able to take care of ourselves well.
The British are, and I've told you the
number of escorts they've already pro-
vided this year. I didn't realize they'd
done that much already. It's interesting.
The French are; they have two ships per
week in the gulf and they have others
around. Two of the major states are not
in the position to use military power in
the gulf, so there are limitations.
The principal thing here is to sup-
port the diplomatic moves which are
stronger in terms of what we will seek in
the Security Council, and we have put
forward before. Although we have been
seeking mandatory sanctions, I think we
have a real potential push here in that
direction. So I think that we have done
basically what we want.
k
Now, as far as the Persian Gulf pn
viding oil to other people is concerned,
think, myself, that the figures are a lit
deceptive. The fact of the matter is the
oil is a commodity that flows around ai
is easily exchanged. It's not that dif-
ferent from one place to another. So y(
have to think in terms of a pool of oil.
The largest consumer of oil in the
world is the United States. The largest
importer of oil in the world is the Unit
States. We have a stake in the flows oJ
oil from wherever it comes, even thou|
it may be that oil from a particular pla.
doesn't flow directly to us. If it were
interrupted, then the whole pattern
would rearrange itself very rapidly.
Q. What about Italy? What did
they say about providing some physi*
help or support?
A. I told you the countries that ar
in a position to provide the help are
doing so. It isn't help, it's the things
they were doing and we are doing, anc
those things will suffice. This has beer
successful enterprise, and it will con-
tinue to be so.
Q. On the terrorism statement,
you talked about how the rule of law
has come to bear in certain cases. Ai'
I'd like to ask you about one case
where it currently has not so far con-
to bear with the Hamadei case in Wt
Germany. You mention in the state-
ment about trying or extraditing tho"
who have perpetrated acts of ter-
rorism. How does that relate to the
Hamadei^ case? And in your discus-
sions with the Germans at this sum-
mit, was there any discussion of
what's going to happen?
A. As far as the Hamadei case is
concerned, I don't have the slightest
doubt— and I think I'm reasonably wel
informed— that the Germans will hand
this in a correct and stiff way.
Q. What does that mean?
A. We'll see what it means. I'm ju
telling you how they're going to do it,
Q. How does that relate to the
statement? Was that language —
A. Doesn't have any particular rel
tion to the statement. Germany is a
country that has experienced terrorisn
understands the menace of it, has deal
with it in a very, very tough way. So
i
!«
ECONOMIC SUMMIT
VENICE 1987
hey don't need any lessons on the ques-
ion of handling terrorism. They're good
t it, they're determined about it, and
'm sure they'll handle this case
■roperly.
Q. The Tokyo statement on ter-
orism had a specific passage about
(Ot selling or exporting arms to ter-
orist nations. It's not repeated in that
anguage in this statement. Could you
ell us why?
A. No particular reason. That is our
olicy, and that was particularly geared
3 Libya. And that happened, and the
ituation with Libya, I might note, is
lery different today than it was a year
go.
Q. Was this related to the Iran
irms sale? The omission of this —
A. No, no. No particular rationale.
Q. Similarly, there are words in
ere that were not in the Tokyo state-
lent, particularly when it refers to
he principle of no concessions to ter-
orists or their sponsors. Some
bservers here are saying that this is
T reference to what the Administra-
ion did with regard to arms and
ostages. Was it inserted over your
bjections?
A. No. I think that subject has been
problem. That problem is behind us.
Avi this represents our long-held policy
nd it's stated here in a very crisp,
njiortant way— no concessions.
Q. Shouldn't the Russians be
raised rather than condemned for
elping Kuwait and others maintain
reedom of navigation in the gulf?
Ve're hearing two different answers
n that.
A. As far as we're concerned, the
•ulf is the place from which a very large
iroportion of the energy to the free
/orld comes. That is so today, it has
leen so for some decades, and it cer-
ainly is going to be so in the future,
'hat oil flows to the West. We do not
vant to have that lifeline, in any way,
inder the hand of a country that is not
lecessarily friendly to us.
Q. Aren't they doing this for
lefarious purposes while we're doing
t for freedom of navigation?
A. I'm not going to speculate on
what they're doing or why they're doing
it. Obviously, they want to play a role in
the gulf. But as far as we're concerned,
this oil flows to the West, and we are
perfectly capable of keeping these inter-
national waterways open. And we will
defend that principle as it says in the
statement.
Q. On the subject of the East- West
statement, why is there no specific
endorsement — or mention even — of the
U.S. position on INF? The subject is
completely glossed over. Is this a
lukewarm statement?
A. No, the statement welcomes the
U.S. positions in Geneva. And as far as
INF is concerned, of course, that's
basically something handled in our con-
sultations with our NATO allies, but we
talked about it a great deal with all the
countries, including Japan. And I think
by and large as far as the LRINF, the
SRINF, the effort we're making in
verification and so on, everybody is
basically on board. But we'll want to go
through that carefully in Reykjavik. And
the President will make his decision on
what our position will be in Geneva. But
it actually— as I said in my opening
statement— it's going very well. And
this, I think we have to put down as an
example of a very important success.
Starting back in 1979—1 might say a
bipartisan success and a multinational
success— starting in 1979, with a dual-
track decision which said to the Soviet
Union: Take out your SS-20s, and we're
ready to bargain with you about that.
And if you don't, we will deploy.
And we did bargain. And we did
deploy. And they bullied and tried hard
to prevent that deployment, but the
alliance went ahead and deployed. They
walked out of the bargaining. They said
they wouldn't come back until we took
the missiles out. We kept on with our
deployment schedule. The cohesion, the
strength of the alliance was evident. So
they came back to the bargaining table,
and now an agreement hasn't been
reached yet, but it is very clearly possi-
ble that it is completely in line with our
objectives, both in the long-range and
short-range INF missiles. So this is a
stunning success for a strategy of
strength, realism, and readiness to
negotiate— it works. You can see it.
Q. How are you going to resolve
the issue of conventional forces as
they relate to the INF response, as
was brought out — the difficulties, as
they were brought out at the dinner
last night between Britain and
Germany?
A. There are lots of different prob-
lems in the strategy that is referred to in
this statement of seeking to maintain
our strength and our capacity to deter
aggression in.sofar as it is possible at
lower and lower levels of armaments. So
you take it a piece at a time, but you
have in your mind the way the pieces
relate to each other. One piece is INF.
It's an important piece, but it's only a
piece. There is nothing about conven-
tional arms in INF. That is about certain
classes of missiles.
As you imagine, a world with a
somewhat lesser— not much less, but a
little less as a result of the INF— nuclear
missilery, it obviously highlights not only
the importance of doing something about
the conventional arms asymmetry but
also about chemical weapons. And that is
said explicitly in here. Of course, it also
highlights the importance of getting the
strategic arms, which are much more
numerous and very threatening. We
want to work on START [strategic arms
reduction talks].
There is an integrated set here. It's
very much in people's minds, and we
deal with one problem, we recognize the
others. The importance of conventional
arms has been highlighted in NATO
discussions, and I expect that it will be
again, and it's highlighted in the
communique.
Q. With all due respect, the com-
munique does not endorse the U.S.
positions in Geneva. It doesn't even
make mention of Geneva, and it only
talks about U.S. efforts to negotiate
and, in fact, praises the dialogue that
is continuing. It seems to me that after
the discussion last night, the people
here in Venice were more concerned
with Gorbachev's changes in policy
and so on — a lot of discussion of
that— and not so interested in specific
U.S. position on medium-range
missiles and short-range missiles.
A. We have talked about the INF
problem endlessly. We see this process
\ugust 1987
working; there's nothing to argue about
with respect to INF as such. There are
the other aspects of the arms control pic-
ture which are referred to in the state-
ment, and I thinl< it's very strong and
supportive and clear. The fact that the
heads spent a lot of time among them-
selves talking about what is going on in
a direct, realistic, informed way is the
kind of thing, if it can happen in a
meeting like this, that I think is very
good.
It's just the kind of thing you hope
will happen. That these people who have
the responsibility for leadership in the
free world sit down and they talk to each
other candidly as human beings about
what's going on over there. And they
are realistic enough to say, "Yes, there
are problems. Yes, there are changes.
We're interested in those changes."
And, "What do you think about them?"
and so on— that kind of sharing of infor-
mation. It's exactly what these kind of
meetings are for, and it's working very
well.
Q. Following up on the European
concerns about conventional and tac-
tical nuclear weapons, were you able
to give the Europeans any assurances
or tell us of any plans to seek any kind
of commitment from the Soviet tJnion
about a date, for instance, for new
kinds of talks? I understand it won't
be related to the INF agreement, but
what are your plans for these next
steps that you're describing?
A. The subject of conventional arms
is one that we've been discussing in
NATO, and the concept of an Atlantic-
to-the-Urals scope which was proposed
by us has been accepted as "the scope
concept." And we are working to find
the right kind of procedure to use in pro-
ceeding. I expect that we'll continue the
discussion of that in Reykjavik. But I'm
sure that a forum will be produced that
will discuss conventional arms, given
that concept, probably out of the Vienna
CSCE [Conference on Security and
Cooperation in Europe] meeting. There
will also be a continuing effort in what is
called "CDE" [Conference on Security-
and Confidence-Building Measures and
Disarmament in Europe], that is the sort
of thing discussed in Stockholm, as well
as, of course, within CSCE, the major
emphasis on human rights. And it's very
important to keep that subject on the
front burner. These subjects work them-
selves along, and we struggle, and we
want to get it done right, and that's
what we're in the process of doing.
Q. Given what happened to the
U.S.S. Stark not too long ago, one
wonders why there wasn't from the
allies an expression of support for the
American policies that the American
military held in the Persian Gulf.
A. With respect to the Stark, of
course, the President has received, and I
have received from my counterparts,
very strong support of— letters and let-
ters of condolence. And I think the fact
that the President asserted our deter-
mination to continue doing what we're
doing there was very much welcomed
and all of that has been said. It's very
personal and, of course, these tragedies
touch everybody. We feel it and so do
our friends and they are very
sympathetic.
Q. Why was there no recognition
of American policies in the gulf, given
what we are doing there in expanding
our participation—
A. I think that the statement is a
recognition of exactly what we've been
saying. It's a recognition of the fact, this
is important. It's got to be done. There's
a principle here. There's the basic oil
here. The United States is there. So are
other countries. We need to work at it
through looking hard at the Iran-Iraq
war. All of those things are there, and I
think it's exactly what you would want
to have.
Q. Was there any discussion or
any mention of U.S. arms sales to
Iran? And can you tell us if any of the
countries here now sell arms to Iran?
A. There was no mention that I
heard— or have heard of— of our arms
sales to Iran and the problems that
we're having. People didn't bring that
up and, as far as our friends around the
world are concerned, they hope we get
that problem out of the way, and they're
interested in where we go from here as
illustrated by these statements. That's
where their focuses of attention are.
Q. Are any of the countries which
have been involved in this summit now
selling arms to Iran?
A. Not that I know of.
Q. Could you explain why the
leaders did not discuss the Persian
Gulf at all at dinner last night, given
the statement that was put out today
and the extent to which it has been a
topical issue?
A. It was discussed in the various
bilaterals, and it was discussed in other
meetings and discussed by the heads thi
morning. Why they didn't talk about it
last night? I don't know; I wasn't pres-
ent. But as I have had the meeting
described to me by the President, they
got going on the subject of comparing
notes on what's going on in the Soviet
Union and Mr. Gorbachev and so on. It'
a very interesting subject and it sort of
carried through. There were various
other things that they talked about, and
that's the sort of thing that happens
sometimes at a meeting. It isn't as
though somebody's got an agenda at a
dinner and says, "Wait a minute, one,
two, three, four, five." These are heads
of state. They come together periodicall
and they want to talk to each other
about these things and they did. It's
working fine.
Q. Why do you think there's some
prospect of success with the UN
Security Council of resolution when
the nation that provides the Silkworn;
is a member of the Security Council
and has the veto power there?
A. Whether we will be successful, I
don't know, but we are going to work a
it, try at it, and call the strategy
involved to everyone's attention, all the
countries involved. Maybe there comes ;
time when people say we've got to pitch
in and do this. I can't speak for the oth€
countries, but I think we're in a very
strong position, coming out of this
meeting, to go to the United Nations in
very powerful way— and it isn't only the
permanent members of the Security
Council which are talking here, it's also
other countries that count for a lot in tb
world and the European Community
represented here, and so on.
I think that we just have more push
on the subject. That doesn't mean that
we'll necessarily succeed because there
Department of State Bullet!
ECONOMIC SUMMIT
VENICE 1987
President Reagan with Prime Minister Fanfani at the welcoming ceremony.
IS been a reluctance. But you never
low when you break through things,
's important to keep working at it
icause this Iran-Iraq war has been
)ing on for some 6 or 7 years now. The
imber of people who have been killed
id injured is way over a million. It's a
■ry bloody, disheartening thing to have
)ing on on this planet. You can't help
It want to see it end.
It does have its spillover effect which
e're contending with. But I think that,
some point, somebody needs to blow
le whistle on this thing and that's what
e're trying to do.
Q. Will you just tell us about
lliott Abrams [Assistant Secretary
for Inter-American Affairs]? How can
you keep him on? How you can keep
him on after he misled Congress?
A. For this reason. Elliott Abrams
has been doing and is now doing an
extraordinarily difficult job with great
energy, with great skill, and with great
dedication. It's a hard job, that job of
Assistant Secretary, and he drives him-
self, and he has accomplished a great
deal. So he's done well.
He made a mistake. He failed to dis-
close a solicitation he knew about and
had made in a setting where he very
quickly realized afterward that he should
have. And he went back and corrected
that mistake long before these hearings
took place. So I think that that mistake
doesn't change the quality of the work
that he's done. It doesn't change the
importance— at least as I judge it and he
judges it and the President judges it, as
a majority of the Senate and House
judged it last year when they voted.
To support people who are willing to
fight for freedom and independence in
Nicaragua and to work hard through
that route, through the negotiating
route, through other means that we can
find to try to find our way to a more
stable situation in Central America—
that's what Elliott Abrams has dedicated
himself to. And that's what we're trying
to achieve.
ugust 1987
It is very apparent that as long as
you have a totalitarian, Soviet-
dominated regime in Nicaragua, you're
not going to have peace and stability in
Central America. Elliott has dedicated
himself to that job. He's been doing it
with great skill and energy. It is that
effort and the determination involved in
it, that is why I support Elliott Abrams.
He's doing very well.
Q. If they don't trust him, how can
he be effective?
Q. You didn't mention that among
his mistakes and he's acknowledged it.
A. I can't even hear your question.
He is effective at doing what he's doing.
He made a mistake. He said he made a
mistake. And I think people can reflect
on that a little bit and let a little time
pass and reflect also on the things that
he's done that are the hard, energetic
efforts of a very patriotic American and
a tremendous public servant. This is a
good man.
Q. Are you the only one in the
Administration who supports him?
A. The Administration supports him
from top to bottom. And that's been
made clear.
Q. Is he going to obey the law
from now on?
A. Elliott Abrams has violated no
laws. He made a mistake in his response
or lack of response to a question which
he corrected. He has not violated any
laws.
Statement on
Political Issues,
June 10, 1987
The Venice summit has provided us with the
opportunity for a useful exchange of views on
the main international political issues of the
moment. Our discussions took place in the
same spirit of constructive cooperation which
inspired yesterday's statements on East- West
relations, the gulf conflict and terrorism and
confirmed a significant unity of approaches.
In the field of East- West relations, par-
ticular attention was paid to a number of
regional issues.
On the subject of Afghanistan, emphasis
was placed once again on the need to keep up
pressure so that the Afghan people can very
soon determine their own future in a country
no longer subject to external military
occupation.
It was noted that the presence in Kam-
puchea of foreign troops continues to be an
obstacle to the peace and tranquillity of
South-East Asia.
In the Pacific, newly independent island
states are faced with difficult economic situa-
tions. We have stressed the need to support
their development process in conditions of
complete freedom from outside political
interference.
In Asia, we agreed that particular atten-
tion should be paid to the efforts for economic
reform undertaken by China. We reviewed
the situation in the Korean Peninsula, in the
belief that the next Olympic Games may
create a climate favourable to the develop-
ment of a more open dialogue between North
and South. In the Philippines, the democratic
government is involved in a courageous
attempt at economic and social renewal which
deserves our support.
As regards Africa— a continent with enor-
mous potentialities but facing extremely
serious economic, social and poHtical
problems— we viewed the situation in South
Africa with particular concern. We agreed
that a peaceful and lasting solution can only
be found to the present crisis if the apartheid
regime is dismantled and replaced by a new
form of democratic, non-racial government.
There is an urgent need, therefore, to begin a
genuine dialogue with the representatives of
all the components of South African society.
At the same time, we noted the importance of
humanitarian assistance initiatives for the vic-
tims of apartheid and of supporting the
efforts by SADCC [Southern African
Development Coordination Conference]
member states to develop and strengthen
their own economies.
Serious concern was expressed at the con-
tinuing dangerous tensions and conflicts in
the Near and Middle East and at the absence
of concrete progress toward a solution to the
Arab-Israeli dispute. The need for action to
create conditions for a just, global and lasting
peace was reaffirmed.
Concern was also expressed at the situa-
tion in the occupied territories.
The situation in Lebanon, with its serious
internal tensions and the persisting problem
of the Palestinian camps, continues to give
cause for concern. In this connection, we reaf-
firmed our hope that genuine efforts be made
towards national reconciliation.
With regard to Latin America, the discu jiJ
sion highlighted the need to promote appro- H
priate initiatives aimed at supporting
democratic governments and encouraging tl
return to democracy and its consolidation
throughout the continent. There was also
agreement that efforts toward regional inte
gration will help open up a fruitful and con-
structive dialogue with the West: they, ther
fore, deserve support.
With regard to developments in Central
America, it is hoped that the forthcoming
summit to be held in Guatemala can play a
positive role in paving the way to peace and)
stability.
Finally, we turned to the problems of tlf
LInited Nations Organizations and, in par-
ticular to its current financial difficulties an
considered possible ways of overcoming the
Statement on AIDS,
June 10, 1987
On the basis of the concern already shown :
the past for health problems (London chair-
man's oral statement on cancer and Bonn
chairman's oral statement on drugs), the
Heads of State or Government and the
representatives of the European Communil
affirm that AIDS [acquired immune defi-
ciency syndrome] is one of the biggest pote
tial health problems in the world. National
efforts need to be intensified and made mo
effective by international cooperation and
concerted campaigns to prevent AIDS fron
spreading further and will have to ensure t
the measures taken are in accordance with
the principles of human rights. In this conn
tion, they agree that:
• International cooperation will not be
improved by duplication of effort. Priority
will have to be given to strengthening exist
ing organizations by giving them full politic
support and by providing them with the
necessary financial, personnel and adminis
trative resources. The World Health Organ
zation (WHO) is the best forum for drawing
together international efforts on a worldwi
level to combat AIDS, and all countries
should be encouraged fully to cooperate wil
the WHO and support its special program <
AIDS-related activities.
• In the absence of a vaccine or cure, t
best hope for the combat and prevention of
AIDS rests on a strategy based on educatir
the public about the seriousness of the AID
10
ECONOMIC SUMMIT
VENICE 1987
i()ideniic, the ways the AIDS virus is trans-
.'itted and the practical steps each person
I in take to avoid acquiring or spreading it.
ippropriate opportunities should be used for
I'xhanging information about national educa-
m campaigns and domestic policies. The
;ieads of State or Government and the
■presentatives of the European Community
■elcome the proposal by the U.K. govern-
ent to co-sponsor, with the WHO, an inter-
itinnal conference at ministerial level on
iblic education about AIDS.
• Further cooperation should be pro-
ottd for basic and clinical studies on preven-
'11. treatment and the exchange of informa-
on (as in the case of the EC program). The
eads of State or Government and the
■presentatives of the European Community
I elcome and support joint action by
■searchers in the seven countries (as in the
ise of the joint program of French and
merican researchers, which is being
ilarged, and similar programs) and all over
le world for the cure of the disease, clinical
•sting on components of the virus and the
^velopment of a successful vaccine. The
eads of State or Government and the
■presentatives of the European Community
elcome the proposal by the president of the
rench Republic aiming at the creation of an
iternational committee on the ethical issues
lised by AIDS.
Jtatement on Drugs,
lune 10, 1987
'he Heads of State or Government have
xamined the drug abuse problem, which
auses a tragic loss of human life and now af-
ects people all over the world, especially the
oung and their families. They emphasize the
mportance of undertaking a strategy in sup-
lort of national, regional and multilateral
ampaigns in order to overcome this problem,
"hey intend to continue their fight against
llegal production and distribution of drugs
ind to create all necessary conditions for
nore effective international cooperation,
'hey will also work for the eradication of
llegal cultivation of natural drugs and for its
eplacement with other types of production
I'hich will further the aims of social and
conomic development. The leaders welcome
he agreements already reached on bilateral
nd multilateral bases, and look forward with
onfidence to a successful International Con-
erence on Drug Abuse and Illicit Trafficking,
'hich the United Nations is convening next
^eek in Vienna.
Economic Declaration,
June 10, 1987
Introduction
1. We, the Heads of State or Government of
the seven major industrialized countries and
the representatives of the European Com-
munity, have met in Venice from 8 to 10 June
1987, to review the progress that our coun-
tries have made, individually and collectively,
in carrying out the policies to which we com-'
mitted ourselves at earlier summits. We
remain determined to pursue these policies
for growth, stability, employment and pros-
perity for our own countries and for the world
economy.
2. We can look back on a number of
positive developments since we met a year
ago. Growth is continuing into its fifth con-
secutive year, albeit at lower rates. Average
inflation rates have come down. Interest
rates have generally declined. Changes have
occurred in relationships among leading cur-
rencies which over time will contribute to a
more sustainable pattern of current account
positions and have brought exchange rates
within ranges broadly consistent with
economic fundamentals. In volume terms, the
adjustment of trade flows is under way,
although in nominal terms imbalances so far
remain too large.
Macroeconomic Policies and
Exchange Rates
3. Since Tokyo, the summit countries have
intensified their economic policy coordination
with a view to ensuring internal consistency
of domestic policies and their international
compatibility. This is essential to achieving
stronger and sustained global growth,
reduced external imbalances and more stable
exchange rate relationships. Given the policy
agreements reached at the Louvre and in
Washington, further substantial shifts in
exchange rates could prove counterproductive
to efforts to increase growth and facilitate
adjustment. We reaffirm our commitment to
the swift and full implementation of those
agreements.
4. We now need to overcome the prob-
lems that nevertheless remain in some of our
countries: external imbalances that are still
large; persistently high unemployment; large
public sector deficits; and high levels of real
interest rates. There are also continuing
trade restrictions and increased protectionist
pressures, persistent weakness of many
primary commodity markets and reduced
prospects for developing countries to grow,
find the markets they need and service their
foreign debt.
5. The correction of external imbalances
will be a long and difficult process. Exchange
rate changes alone will not solve the problem
of correcting these imbalances while sustain-
ing growth. Surplus countries will design
their policies to strengthen domestic demand
and reduce external surpluses while maintain-
ing price stability. Deficit countries, while
following policies designed to encourage
steady low-inflation growth, will reduce their
fiscal and external imbalances.
6. We call on other industrial countries to
participate in the effort to sustain economic
activity worldwide. We also call on newly
industrialized economies with rapid growth
and large external surpluses to assume
greater responsibility for preserving an open
world trading system by reducing trade bar-
riers and pursuing policies that allow their
currencies more fully to reflect underlying
fundamentals.
7. Among the summit countries, budgetary
discipline remains an important medium-term
objective and the reduction of existing public
sector imbalances a necessity for a number of
them. Those summit countries which have
made significant progress in fiscal consolida-
tion and have large external surpluses remain
committed to following fiscal and monetary
policies designed to strengthen domestic
growth, within a framework of medium-term
fiscal objectives. Monetary policy should also
support non-inflationary growth and foster
stability of exchange rates. In view of the
outlook for low inflation in many countries, a
further market-led decline of interest rates
would be helpful.
Structural Policies
We also agree on the need for effective struc-
tural policies especially for creating jobs. To
this end we shall:
• Promote competition in order to speed
up industrial adjustment;
• Reduce major imbalances between
agricultural supply and demand;
• Facilitate job creating investment;
• Improve the functioning of labor
markets;
• Promote the further opening of internal
markets;
• Encourage the elimination of capital
market imperfections and restrictions and the
improvement of the functioning of interna-
tional financial markets.
ugust 1987
11
Multilateral Surveillance and Policy
Coordination
9. We warmly welcome the progress achieved
by the Group of Seven finance ministers in
developing and implementing strengthened
arrangements for multilateral surveillance
and economic coordination as called for in
Tokyo last year. The new process of coordina-
tion, involving the use of economic indicators,
will enhance efforts to achieve more consist-
ent and mutually compatible policies by our
countries.
10. The Heads of State or Government
reaffirm the important policy commitments
and undertakings adopted at the Louvre and
Washington meetings of the Group of Seven,
including those relating to exchange rates.
They agree that, if in the future world
economic growth is insufficient, additional
actions will be required to achieve their com-
mon objectives. Accordingly, they call on
their finance ministers to develop, if
necessary, additional appropriate policy
measures for this purpose and to continue to
cooperate closely to foster stability of
exchange rates.
11. The coordination of economic policies
is an ongoing process which will evolve and
become more effective over time. The Heads
of State or Government endorse the under-
standings reached by the Group of Seven
finance ministers to strengthen, with the
assistance of the International Monetary
Fund (IMF), the surveillance of their
economies using economic indicators includ-
ing exchange rates, in particular by:
• The commitment by each country to
develop medium-term objectives and projec-
tions for its economy, and for the group to
develop objectives and projections, that are
mutually consistent both individually and col-
lectively; and
• The use of performance indicators to
review and assess current economic trends
and to determine whether there are signifi-
cant deviations from an intended course that
require consideration of remedial actions.
12. The Heads of State or Government
consider these measures important steps
towards promoting sustained non-inflationary
global growth and greater currency stability.
They call upon the Group of Seven finance
ministers and Central Bank governors to:
• Intensify their coordination efforts with
a view to achieving prompt and effective
implementation of the agreed policy under-
takings and commitments;
• Monitor economic developments closely
in cooperation with the managing director of
the IMF; and
• Consider further improvements as
appropriate to make the coordination process
more effective.
■t
ff
ifri
President Reagan with Treasury Secretary James A. Baker, III, and
Secretary Shultz during the summit.
Iict
Trade
13. We note rising protectionist pressures
with grave concern. The Uruguay Round can
play an important role in maintaining and
strengthening the multilateral trading
system, and achieving increased liberalization
of trade for the Isenefit of all countries.
Recognizing the interrelationship among
growth, trade and development, it is essential
to improve the multilateral system based on
the principles and rules of the General Agree-
ment on Tariffs and principles and rules of
the General Agreement on Tariffs and Trade
(GATT) and bring about a wider coverage of
world trade under agreed, effective and en-
forceable multilateral discipline. Protectionist
actions would be counterproductive, would in-
crease the risk of further exchange rate in-
stability and would exacerbate the problems
of development and indebtedness.
14. We endorse fully the commitment to
adopt appropriate measures in compliance
with the principles of stand-still and rollback
which have been reaffirmed in the ministerial
declaration on the Uruguay Round. It is
important to establish in the GATT a multi-
lateral framework of principles and rules for
trade in services, trade-related investment
measures and intellectual property rights.
This extension of the multilateral trading
system would also be beneficial to developing
countries in fostering growth and enhancing
trade, investment and technology transfers.
15. Basing ourselves on the ministerial
declaration on the Uruguay Round and on the
principles of the GATT, we call on all con-
tracting parties to negotiate comprehensively,
in good faith and with all due dispatch, with a
view to ensuring mutual advantage and
increased benefits to all participants. Canada,
Japan, the United States and the European
Community will table a wide range of sub-
stantive proposals in Geneva over the coming
months. Progress in the Uruguay Round will
be kept under close political review. In this
context the launching, the conduct and the
implementation of the outcome of the negotia-
tions should be treated as parts of a single
undertaking; however, agreements reached at
an early stage might be implemented on a
provisional or definitive basis by agreement
prior to the formal conclusion of the negotia-
tions, and should be taken into account in
assessing the overall balance of the
negotiations.
16. A strong, credible, working GATT is
essential to the well-being of all trading coun-
tries and is the best bulwark against mount-
ing bilateral protectionist pressures. The
12
Department of State BulletiJ
ECONOMIC SUMMIT
VENICE 1987
inctioning of the GATT should be improved
iinuijh enhancing its role in maintaining an
lull multilateral system and its ability to
lanajie disputes; and through ensuring bet-
?r coordination between the GATT and the
■MF and the World Bank. We consider that it
■ould be useful to have, as appropriate, in the
lurse of the negotiations, a meeting of the
radt' Negotiating Committee at the
linisterial level.
.griculture
7. At Tokyo we recognized the serious
ature of the agricultural problem. We
greed that the structure of agricultural pro-
uction needed to be adjusted in the light of
'orld demand and expressed our determina-
1111 to give full support to the work of the
'ECU [Organization for Economic Coopera-
on and Development] in this field. In doing
1, we all recognized the importance of
griculture to the well-being of our rural com-
I lunities. In the past year, we have actively
ursued the approach outlined at Tokyo, and
•e take satisfaction from the agreement in
le ministerial declaration adopted in Punta
el Este on the objectives for the negotiations
n agriculture in the Uruguay Round.
18. We reaffirm our commitment to the
nportant agreement on agriculture set out in
ie OECD ministerial communique of May 13,
987; in particular, the statement of the scope
! nd urgency of the problem which require
lat a concerted reform of agricultural
' olicies be implemented in a balanced and
exible manner; the assessment of the grave
nplications, for developed and developing
ountries alike, of the growing imbalances in
upply of and demand for the main agricul-
ural products; the acknowledgment of shared
' esponsibility for the problems as well as for
heir equitable, effective and durable resolu-
ion; the principles of reform and the action
equired. The long-term objective is to allow
larket signals to influence the orientation of
gricultural production, by way of a progres-
ive and concerted reduction of agricultural
upport, as well as by all other appropriate
neans, giving consideration to social and
'ther concerns, such as food security, envi-
on mental protection and overall
■mployment.
19. We underscore our commitment to
vork in concert to achieve the necessary ad-
ustments of agricultural policies, both at
lome and through comprehensive negotia-
« ions in the Uruguay Round. In this as in
ither fields, we will table comprehensive pro-
losals for negotiations in the coming months
hf conducted in accordance with the man-
'iate in the ministerial declaration, and we
ntend to review at our next meeting the
iriiyi-ess achieved and the tasks that remain.
20. In the meantime, in order to create a
climate of greater confidence which would
enhance the prospect for rapid progress in
the Uruguay Round as a whole and as a step
towards the long-term result to be expected
from those negotiations, we have agreed, and
call upon other countries to agree, to refrain
from actions which, by further stimulating
production of agricultural commodities in
surplus, increasing protection or destabilizing
world markets, would worsen the negotiating
climate and, more generally, damage trade
relations.
Developing Countries and Debt
21. We attach particular importance to
fostering stable economic progress in develop-
ing countries, with all their diverse situations
and needs. The problems of many heavily
indebted developing countries are a cause of
economic and political concern and can be a
threat to political stability in countries with
democratic regimes. We salute the coura-
geous efforts of many of these countries to
achieve economic growth and stability.
22. We underline the continuing impor-
tance of official development assistance and
welcome the increased efforts of some of our
countries in this respect. We recall the target
already established by international organiza-
tions (0.7 percent) for the future level of
official development assistance and we take
note that overall financial flows are important
to development. We strongly support the
activities of international financial institu-
tions, including those regional development
banks which foster policy reforms by bor-
rowers and finance their programs of struc-
tural adjustment. In particular:
• We support the central role of the IMF
through its advice and financing and encour-
age closer cooperation between the IMF and
the World Bank, especially in their structural
adjustment lending.
• We note with satisfaction the contribu-
tion made by the eighth replenishment of the
International Development Association (IDA).
• We support a general capital increase
of the World Bank when justified by
increased demand for quality lending, by its
expanded role in the debt strategy and by the
necessity to maintain the financial stability of
the institution;
• In the light of the difference of contribu-
tions of our countries to official development
assistance, we welcome the recent initiative
of the Japanese Government in bringing for-
ward a new scheme which will increase the
provision of resources from Japan to develop-
ing countries.
23. For the major middle-income debtors,
we continue to support the present growth-
oriented case-by-case strategy. Three
elements are needed to strengthen the
growth prospects of debtor countries: the
adoption of comprehensive macroeconomic
and structural reforms by debtor countries
themselves; the enhancement of lending by
international financial institutions, in par-
ticular the World Bank; and adequate com-
mercial bank lending in support of debtor
country reforms. We shall play our part by
helping to sustain growth and expand trade.
A number of debt agreements have allowed
some resumption of growth, correction of
imbalances, and significant progress in restor-
ing the creditworthiness of some countries.
But some still lack adequate policies for struc-
tural adjustment and growth designed to
encourage the efficient use of domestic sav-
ings, the repatriation of flight capital,
increased flows of foreign direct investment
and, in particular, reforms of financial
markets.
24. There is equally a need for timely and
effective mobilization of lending by commer-
cial banks. In this context, we support efforts
by commercial banks and debtor countries to
develop a "menu" of alternative negotiating
procedures and financing techniques for pro-
viding continuing support to debtor countries.
25. Measures should be taken, particu-
larly by debtor countries, to facilitate non-
debt-creating capital flows, especially direct
investment. In this connection, the
Multilateral Investment Guarantee Agency
(MIGA) should begin to serve its objectives as
soon as possible. It is important to maintain
flexibility on the part of export credit agen-
cies in promptly resuming or increasing cover
for countries that are implementing com-
prehensive adjustment programs.
26. We recognize the problems of
developing countries whose economies are
solely or predominantly dependent on exports
of primary commodities, the prices of which
are persistently depressed. It is important
that the functioning of commodity markets
should be improved, for example through bet-
ter information and greater transparency.
Further diversification of these economies
should be encouraged, with the help of the in-
ternational financial institutions, through
policies to support their efforts for improved
processing of their products, to expand oppor-
tunities through market access liberalization
and to strengthen the international environ-
ment for structural change.
27. We recognize that the problems of
some of the poorest countries, primarily in
sub-Saharan Africa, are uniquely difficult and
need special treatment. These countries are
characterized by such features as acute
poverty, limited resources to invest in their
own development, unmanageable debt
burdens, heavy reliance on one or two com-
modities and the fact that their debt is owed
August 1987
13
for the most part to governments of indus-
trialized countries themselves or to interna-
tional financial institutions. For those of the
poorest countries that are undertaking adjust-
ment effort, consideration should be given to
the possibility of applying lower interest rates
to their existing delit, and agreement should
be reached, especially in the Paris Club, on
longer repayment and grace periods to ease
the debt service burden. We welcome the
various proposals made in this area by some
of us and also the proposal by the managing
director of the IMF for a significant increase
in the resources of the Structural Adjustment
Facility over the three years from January 1,
1988. We urge a conclusion on discussions on
these proposals within this year.
28. We note that UNCTAD VII [UN Con-
ference on Trade and Development] provides
an opportunity for a discussion with develop-
ing countries with a view to arriving at a
common perception of the major problems
and policy issues in the world economy.
Environment
29. Further to our previous commitment to
preserve a healthy environment and to pass it
on to future generations, we welcome the
report by the environment experts on the
improvement and harmonization of tech-
niques and practices of environmental
measurement. Accordingly, we encourage the
United Nations Environment Program
(UNEP) to institute a forum for information
exchange and consultation in cooperation
with the International Organization for Stand-
ardization (ISO) and the International Council
of Scientific Union (ICSU), assisted by other
interested international organizations and
countries, so that continuing progress in this
important field can be ensured. The experts
in their report should receive full attention.
30. We underline our own responsibility
to encourage efforts to tackle effectively
environmental problems of worldwide impact
such as stratospheric ozone depletion, climate
change, acid rains, endangered species, hazard-
ous substances, air and water pollution and
destruction of tropical forests. We also intend
to examine further environmental issues such
as stringent environmental standards as an
incentive for innovation and for the develop-
ment of clean, cost-effective and low-resource
technology as well as promotion of interna-
tional trade in low-pollution products, low-
polluting Industrial plants and other environ-
mental protection technologies.
31. We welcome the important progress
achieved since Tokyo, particularly in the
14
International Atomic Energy Agency, in
enhancing effective international cooperation,
with regard to safety in the management of
nuclear energy.
Other Issues
32. We welcome the initiative of the Human
Frontier Science Program presented by
Japan, which is aimed at promoting, through
international cooperation, basic research on
biological functions. We are grateful for the
informal opportunities our scientists have had
to take part in some of the discussions of the
feasibility study undertaken by Japan. We
note that this study will be continued, and we
would be pleased to be kept informed about
its progress.
33. We welcome the positive contribution
made by the Conference of High Level
Experts on the future role of education in our
society, held in Kyoto in January 1987.
34. We shall continue to review the
ethical implications of developments in the
life sciences. Following the conferences spon-
sored by summit governments— by Japan in
1984, by France in 198.5, by the Federal
Republic of Germany in 1986 and by Canada
in 1987— we welcome the Italian Govern-
ment's offer to host the next bioethics con-
ference in Italy in April, 1988.
Next Economic Summit
35. We have agreed to meet again next year
and have accepted the invitation of the Cana-
dian Prime Minister to meet in Canada.
President's
News Conference,
June 11, 19876
I have an opening statement first. I'd
like to begin by serving as a sort of unof-
ficial spokesman for all of us who've
been here this week. I'm sure we all
agree our stay in Venice has been com-
fortable and productive, and I want to
express our thanks to the Italian
Government and especially the people of
this lovely and historic city.
Although this may come as a partial
surprise to some, this has been a summit
on economic issues. For all the attention
certain international developments have
received, I think important steps were
taken in the economic sphere. "The sum-
mit seven have put the capstone on a
new process for enhanced cooperation
and coordination and have agreed jointly
to take the policy steps necessary to
assure sufficient world growth.
Implicit in all of this is our common
commitment to principles that mark a
turning point in public policy. I refer
here to our growing desire to seek
economic growth and opportunity
through less government and more per-
sonal freedom. And we've seen two
direct applications of these principles at
this summit. First, our resolve to work
together against protectionism by cor-
recting the imbalances which are the
real cause of our trade deficit— trade
barriers and protectionism can only
bring about contraction of international
markets and a slowing of economic
growth. And second, we've taken fur-
ther steps toward reducing government
subsidization of agriculture and moving
toward a day when market signals deter-
mine the supply and demand.
I said last year that the Tokyo sum-
mit was one of the most successful I'd
attended, because we had launched new
initiatives in the areas of trade,
agriculture, and economic policy coor-
dination. If that's the case, then Venice
must be seen as going one better,
because it put form, substance, and
institutional framework on those ini-
tiatives and locked in a process which
will better enable us to navigate the
dynamic new world of international
economics.
Let me add that, in addition to these
economic matters, we also had an
opportunity to deal with two other press-
ing international issues. First, I'm
pleased with the support our allies have
shown for a united position in the Per-
sian Gulf. Actually, a commitment to
keeping the sealanes open in that area is
a vital strategic objective. As many of
you know, America's allies have a very
sizeable presence in the gulf. Great Brit-
ain, for example, has nearly 18% of its
naval vessels committed there and has
escorted more than a hundred ships
since the beginning of this year through
the strait. France, too, has a strong
naval commitment there. And all of our
allies have reaffirmed their support for
keeping the trade routes open, the oil
flowing, and moving toward a negotiated
resolution of the Iran-Iraq war.
Department of State Bulletin
if:
ECONOMIC SUMMIT
VENICE 1987
As most of you also know, we're cur-
'itly engaged in a highly sensitive
^ciission with the Soviets that could
mI ti) a historic arms reduction treaty
; I'.S. and Soviet intermediate-range
' ssilfs. Progress has been made here in
\ nil c. And today and tomorrow Secre-
v Shultz will be meeting with the
HT( ) Foreign Ministers in Reykjavik,
i 1)0 anxious to have his report about
c ' views and recommendations of our
3 es. I'm particularly grateful I had this
: jortunity in Venice, not only to dis-
;s these arms reduction efforts with
; allies but to agree again on the
I portance of reminding the Soviet
I ion of the progress that needs to be
r de in other arms negotiations,
t lecially the reduction of strategic
ei'continental nuclear forces.
S(i, too, it's absolutely essential that
■ iiiiUinue to seek progress from the
; v'iets in the human rights area as well
£ regional conflicts, especially
J jhanistan. As we said in our state-
I nt. the new expressions of openness
1 m the Soviets are welcomed, but it's
t le to see if their actions are as
f thcoming.
Q. Not to be a downer, but back
I me in recent congressional hearings,
i o key witnesses. General Secord and
i bert Hakim, testified that they were
I der the firm belief that Colonel
I rth and the NSC [National Security
( uneil] acted with your blessing and
I der the full authority of you. Did
1 ;y dream this up?
A. However they got that
i pression— and I've heard some of the
t itimony, also, and so much of it was
I irsay— one person saying about the
c ler that I thought they had. I told you
i the truth the first day after
( srything hit the fan: that how we had
( ened the negotiations that led to the
t ngs that were going on there, having
1 thing to do with the contras or the
;' 'edom fighters in Nicaragua, and that
• )rd had come to me that I had not been
.,pt informed. So, evidently, maybe
ne people were giving the impression
It they were acting on orders from
'. 1 wasn't giving those orders,
cause no one had asked or had told me
lat was truly happening there.
Q. You took the oath twice to
faithfully execute the laws of the
United States. Do you think that the
law barring direct or indirect military
aid to the contras applied to you?
A. I not only think it didn't, but I
don't think that the law was broken.
We're talking about a case of people
who, on their own— individuals and
groups in our country— sought to send
aid to the freedom fighters. And this has
gone on for quite a long time in other
areas; we can go clear back to the Lin-
coln Brigade in the Spanish Civil War. I
did not solicit anyone ever to do that. I
was aware that it must be going on, of
course, but never solicited either coun-
tries or the other, and would point to the
law that is being cited— one of the five
versions of the Boland amendment— that
specifically suggested that the Secretary
of State should solicit help from our
friendly neighbors.
Q. You knew nothing about
Colonel North's involvement in send-
ing these arms and all of these airlifts
and the airstrip and so forth?
A. No.
Q. Has this summit and the
expected arms endorsement by NATO
ministers in Reykjavik increased pros-
pects for a superpower summit this
year?
A. You trapped me a little bit there,
because my long years in sports and
sports announcing and all made me very
superstitious about calling the pitcher as
doing a no-hitter before the game was
over. I hesitate to make optimistic
statements— always have— but at the
same time, I can't deny that I believe
there is an increased opportunity for a
summit conference and an increased
opportunity for actual reductions of
armaments, particularly of the nuclear
kind.
Q. We understand that prelim-
inary talks are already underway to fix
a date for a summit this year with Mr.
Gorbachev. Can you tell us— would
September be a good guess for that?
A. I can't give you a guess. All I
know is that we have made it plain that
they have the invitation, and we're
waiting for them. We believe that they
should state what would be the most
appropriate or easiest time for them.
Q. Assistant Secretary of State
Elliott Abrams repeatedly misled Con-
gress, and yet Secretary of State
Shultz says that he's a good man and
he can keep his job. Is Shultz right?
Can Elliott Abrams keep that job as
long as he wants?
A. I know the statement that was
made by the Secretary of State, and that
is the Administration's position. And I
know the reference that you're making
to the particular point in which he
himself volunteered that he had made a
misstatement, but I accept the
Secretary's statement on this.
Q. I'm not sure I understand. I
mean, you're the President, and in the
end, Mr. Abrams works for you. A cou-
ple of specifics: He specifically misled
Congress about whether or not he had
solicited money from Brunei. He told
Congress that that downed flyer. Gene
Hasenfus,' had no tie to the U.S.
Government. He did. I mean, you're
the boss; are you comfortable with him
working for you?
A. I have told you that is the Admin-
istration's position.
Q. Before you came here, many
people on Capitol Hill said that they
wanted you to ask our allies to help
with more physical help in the Persian
Gulf, and many of your officials said
that you would do that. Did you
specifically ask any of the leaders to
give us more help in the way of ships
or money to keep the sealanes open in
the Persian Gulf?
A. We spoke of the need for having
a kind of single approach to maintaining
the international waters and so forth,
and we're gratified completely by the
response. I think it has been excellent
that there was no criticism from any of
our allies about this. And as I've said
here in my opening statement, England
and France which have forces there-
two of the allies, it is true, are bound by
their constitutions and could not do
anything of that kind. But there was
complete support for what we're trying
to do, because they understood we're not
trying to provoke any kind of hostility.
We are trying to maintain peace, and
jgust 1987
15
we're all solidly together in our desire to
bring about an end to the Iran-Iraq war.
Q. But if I may, I take it, then, the
answer to my question is no. You did
not specifically ask the allies for more
physical help in the gulf.
A. No, we were very satisfied with
what they're prepared to do.
Q. I'd like to turn to economics,
since we are at an economic summit.
Vd like to ask you if you discussed
with Alan Greenspan, the next Chair-
man of the Federal Reserve, the future
course of interest rates. And in that
discussion, or at anytime, have you
agreed that you think they should
remain low, or do you think perhaps
they should rise in order to combat
inflation and the fall of the dollar?
A. Frankly, most of us believe that
the dollar should remain stable. It could
be within reason that there could still be
some lowering of the value in relation to
other currencies. But we do want to con-
trol inflation, continue to control it.
We've had a miraculous 50-odd months
of bringing inflation down. Now there is
something of a little surge again, in
large part, precipitated by energy price;
But I have perfect confidence in Alan
Greenspan and his philosophy and that
what he would do would be used to curb
that and not let inflation get out of ham
again.
Q. Also at this summit, in a com-
munique, there are three different
references to the countries that have
big federal deficits, that they should
do more in order to reduce those
deficits. What new initiative, new
President Reagan takes questions from news correspondents during his news conference
of June 11.
16
Department of State Bulle jji;
ECONOMIC SUMMIT
VENICE 1987
pproaches, will you take to reduce
le U.S. Federal budget deficit?
A. I would like to continue and be
lore successful with the old methods
Kit we've been trying, and that is to
)nvince the Congress of the United
tates that our government is over-
jending. Our total tax burden is 19% of
ross national product, and our total
sending is 24% of gross national prod-
:t. Now, if you go back through history,
3U will find that even in prosperous
mes, and when deficits weren't large,
)% was the tax burden. It is the spend-
g that has gotten out of line.
But I would also say that when this
atter was mentioned in our discus-
ons, and with regard to our very great
1 ?ficit, our allies weren't aware that in
)83 our deficit was 6.3% of gross
^ itional product. Today it is only 3.9%
' gross national product— that we have
ade an 18% cut in that deficit this
ear— $40 billion or more. Very likely
e'll make something of the same size
>xt year. But also they were interested
learn that our deficit was much lower
; a percentage if we used their method
' counting. In the other countries, they
,ke total government spending, and
■ceipts; in our country, our deficit is
st the Federal Government. But if we
,ke into account Federal, State, and
cal spending and taxing, our deficit is
ily 2V2% of gross national product.
Q. Since we've been in Venice,
)ur Chief of Staff has identified the
oviet Union, along with the United
tates, as cotrustees for peace in the
ersian Gulf. Do you share that view,
id if so, what is the role the Soviet
nion can play, in your view, in the
•ea?
A. The Soviet Union has some
?ssels there and has made it plain
ley 're going to escort their own
lips— mainly carrying oil. And
lerefore, they have a stake, too, in
jaceful shipping and the openness of
le international waters.
Q. Then how do they serve as co-
ustees for peace, and also do you
jtivision any sort of coordinated role
ietween the United States and the
oviet Union in escorting ships
irough the region?
A. We would like to ask them,
because we have appealed to the UN
committee in which they are a member.
We have appealed to the United Nations,
to ask for, or demand, a peaceful settle-
ment of this war that's been going on
too many years, and that if there is not a
peaceful settlement, that all of us will
take action such as sanctions and so
forth against them.
Q. Does that mean that you are
endorsing a role for the Soviets in the
Persian Gulf as coguarantors with the
United States?
A. No, I've never thought of them
that way at all. But I think it should be
pointed out that they are also there,
because they have ships transiting that
in commercial shipping. And this is what
we're talking about.
Q. Mikhail Gorbachev seems to
have had an enhanced image here
among some of the other summit
leaders who've met with him. And in
late European polls, people seem to
outrank him as a man of peace — out-
ranking you, in their opinion, as a man
of peace. Why do you think that he has
that very positive public image in
Europe and you don't?
A. Maybe all of you could have
helped change that— [laughter]— if you
worked a little harder at it.
Q. Looking at the record, why do
you think that —
A. Maybe because it's so unusual.
This is the first Soviet leader, in my
memory, who has ever advocated
actually eliminating weapons already
built and in place. And I shouldn't
perhaps go out of the way to say that the
thing that he himself has proposed, the
zero-zero of intermediate-range missiles,
that I proposed that 4 years ago and got
in trouble with my then Secretary of
State— not the present one- for saying
such a foolish thing. But maybe most
people have forgotten that we've been
trying to get this for years. And I'm glad
that he has suggested this. And we're
going to continue, and we believe, as I
said before, that we have a good chance
of bringing about the beginning of reduc-
ing and eliminating nuclear weapons.
Q. Do you trust this opinion of
Gorbachev? Do you think he is a man
of peace and that he does want to
sincerely reduce weapons and that a
verifiable treaty can be reached?
A. As you know, I've had meetings
with him. And I do believe that he is
faced with an economic problem in his
own country that has been aggravated
by the military buildup and all. And I
believe that he has some pretty practical
reasons for why he would like to see a
successful outcome.
Q. Do you trust him?
A. Do I trust him? He's a personable
gentleman, but I cited to him a Russian
proverb— I'm not a linguist, but I at least
learned that much Russian— and I said to
him, Dovorey no provorey. It means
trust, but verify.
Q. Have you found that the
disclosures of the Iran affair and your
efforts to get the American hostages
out of Lebanon have harmed you here
in Europe in efforts to extradite Mr.
Hamadei from Germany and, in
general, in trying to get the Europeans
to take strong action against
terrorists?
A. No, as a matter of fact, we have
all been united, and we've even
strengthened our purpose since we've
been here with regard to terrorism. But
with regard to Hamadei in West
Germany— who has been arrested there,
as you know, for carrying some
ammunition— [Chancellor] Helmut Kohl
and I have had some talks about this.
And I think it's interesting to note that
the only question that remains is: Will
Hamadei be tried for murder and hijack-
ing in the United States or will he be
tried for murder and hijacking in Ger-
many? Because that is what they intend
to do. There's been no decision made yet
as to whether there would be extradition
or not. But whichever way, he is going
to be tried for the crime of killing our
young Navy man in that hijacking.
Q. Your spokesman told me yester-
day that Mr. Kohl had, in fact,
rejected the plea for extradition and
that Mr. Hamadei would be tried for
murder, but in West Germany. Was he
incorrect in saying that?
.ugust 1987
17
A. I do not know whether there's
been a decision. He has never said
outright to me, "No extradition." He
said this is what remains to be deter-
mined: just where is he going to be tried.
But I have not attempted to put any
pressure on him, either.
Q. You said there was no criticism
of the other summit leaders of your
Persian Gulf policy, but a French
Government spokesman said that your
policy was so confusing they didn't
know what you are asking them to
support. Can you tell us what your
military policy in the g^ulf is, and does
it include the possibility of a preemp-
tive strike if Iran does deploy the
Silkworm missiles?
A. I don't thinlc they feel that way
after they've had a chance to talk to me
and hear what I'm saying about it. Why,
I'm saying that all of us have a stake in
maintaining that body of international
water open to trade. It is of vital impor-
tance to a number of countries, more so
than to us, because of their needs in the
energy field. But also I think they are
assured now that we're not there to, as I
say, provoke some kind of increased
hostility. We're there to deter that very
thing.
Q. What about the deployment of
the missiles? Would that make you
consider the possibility of a preemp-
tive strike?
A. When you get down to actual tac-
tics and things that might be done,
you're in a field that I can't answer, nor
do I think I should answer. This is like
talking about tactics before—
Q. Your Chief of Staff said it
would be considered a hostile act and
would run the risk of reprisal.
A. As I say, I'm just not going to
answer questions on that.
Q. Robert McFarlane, your former
national security adviser, testified that
the plan to bribe — in the words of the
White House, to rescue the American
hostages in Beirut that involved the
DBA [Drug Enforcement Administra-
tion] — had not been the subject of an
intelligence finding. My question then,
is why do you feel, if you approved it,
that operation did not require a find-
ing or notification of Congress?
18
A. All I knew about that particular
thing was that I was told that there was
something going on in which it might be
possible to free one or more hostages of
ours and they would be delivered to the
beach north of Beirut if we were able to
take them off that beach. And I said, of
course, with the Mediterranean fleet
there, you bet we can take them off. And
it wasn't until all of this exposure that
then I heard that what it was about was
supposedly some money for bribing some
people that they thought could effect the
rescue of one or more of our hostages
and that had to be the thing. But it
never happened, and no one ever arrived
on the beach north of Beirut.
Q. Something else you also may
not have heard, during the testimony it
became clear that Colonel North, in
addition to spending money that had
been raised, presumably, for the con-
tras, also, apparently, was about to
receive — or arrangements had been
made for him to receive $200,000 from
the Secord-Hakim operation. Do you
believe that North was on the take?
Whether or not you do, do you believe
he's still an American hero?
A. One cannot quarrel with his
military record, and it established him as
such with the awards that he received
for his heroism in combat. But I'm going
to wait until he's had his day in court,
also, and I'm not going to prejudge on
the basis of all that has been going on
for these countless hours.
Q. Did you find it uncomfortable
or difficult to talk to your summit
partners about not selling weapons to
Iran and Iraq when everyone at the
table knew that the Administration
had done just that in the case of Iran?
A. We were not dealing with the
Government of Iran. And again, I want
to point out that I did not believe— I still
feel as I always have— you do not ran-
som hostages and thus create a market
for more hostages. We had been
approached by individuals, some in the
Government of Iran, but who said that
they were trying to establish a relation-
ship with the United States that could go
into effect when and if there was a suc-
ceeding government to Khomeini. And
as a matter of fact, we were given to
believe that they thought that might be
sooner rather than later. And they asked
for— it was almost, in comparison to the
normal sales of weapons, a token— first
of all, that would prove our sincerity in
this but also, they frankly admitted,
would enhance their ability to have the
help of the military if and when this timeL
came. And this was how we settled upon
the $12 million worth of arms.
But never— and this has been, I'm
afraid, misportrayed to many— we were
not doing business with Khomeini's
government. As a matter of fact, the
operation was covert, because we
believed that the people who were tryingfej
to contact us— their lives would be in
danger if it was ever found out in their
home country what they were doing.
Q. But nonetheless, there was the
distinct possibility — or is the distinct
possibility that those weapons did end! ||
up as part of the war effort against
Iraq. So, again, the question is how
can the United States come to a
meeting like this and ask other people) Ik
not to do what it actually did?
A. And because we won't do this
anymore— but as I say, we were— that
amount of arms— as nearly as we can
determine, in the last few years, coun-
tries involving the communist bloc, othe- ^
countries in Europe and Asia, have prob jg
ably provided $10 billion worth of arms
to Iran and some $34 or $35 billion
worth to Iraq. And we have been all of
this time trying to bring the war to an
end. And we're going to continue to try,
and as I've said, this thing that did not
come to fruition— a new government ano
so forth. No, we will not engage in arms
sales, nor do we think anyone else
should. And we believe that if the UN
Security Council should take the action
that we're all asking them to take— but
then there should be sanctions against
any nation that does sell arms to either
of the combatants.
[oi
ii
ly
Q. You challenged the summit
partners the other day to try to
eliminate agriculture subsidies from
the world by the year 2000. And I
wondered if you are going to continue
to press them to do that, and how are
you going to convince them to do that;
ECONOMIC SUMMIT
VENICE 1987
A. We're all very much agreed in
his meeting on the fact that
omething— as we decided a year ago in
'okyo— something must be done
worldwide with regard to agriculture,
hat governments, all of us, are subsidiz-
lu overproduction. There is no market
or much of what is being produced. And
he total subsidies— our allies and
urselves right here in the summit— total
-round $140 billion a year to bring this
bout. We are determined to go forward,
.nd this, we have all agreed, will be con-
inued at the Uruguay round of talks,
he GATT talks that are going on. And
his will be a major subject as to how we
an bring back the marketplace as the
eterminer of production and price in
arming.
Q. But how do you rate the chance
if accomplishing the end of subsidies
<y the year 2000—13 years from now?
A. The only reason we set a figure
lown the road was because all of us
ecognized that having for several
lecades now accustomed agriculture to
:overnment subsidies of various kinds
•nu can't just suddenly pull the rug out
rom under them. It wouldn't be fair,
lUd we're not going to do that. But we
i.re going to move toward— and with
)lenty of warning to them— that the day
s coming when the marketplace will
letermine the price and what is needed.
Q. As you know, the joint state-
nent on the Persian Gulf did not men-
ion the possibility of imposing sane-
ions on countries that violated the
jroposed Security Council resolution,
i'our Secretary of State told us that it
ivas a common understanding among
.he seven heads of state that in fact
v'ou were talking about mandatory
sanctions, but other spokesmen for
Dther governments say that's not the
ease. What is your understanding, and
if you all did mean to endorse man-
datory sanctions, why didn't the com-
munique or the statement say so?
A. A discussion came up between
the choice of the words "enforceable"
and "effective." And it was decided— a
case in semantics here— it was decided
that "effective" meant the other, and we
didn't need the other word. So, it was
agreed that we would use "effective"
measures.
August 1987
Q. But would you say that you still
have some persuading to do with the
other countries before you get them to
agree to this idea of sanctions?
A. Not among the seven who are
here. We're pretty united on it.
President's Address
to the Nation (Excerpt),
June 15, 19873
I've just returned from Venice, Italy,
where I met with the leaders of the
other six industrialized democracies of
our yearly economic summit. You've
been hearing and reading reports that
nothing was really accomplished at the
summit and the United States, in par-
ticular, came home empty-handed. Well,
this was my seventh summit and the
seventh time I've heard that same
chorus.
You know— it might be
appropriate— a noted bullfighter wrote a
poem, a few lines of which do seem
appropriate: "The bullfight critics
ranked in rows fill the enormous plaza
full. But only one is there who really
knows, and he's the one who fights the
bull."
The truth is we came home from this
summit with everything we'd hoped to
accomplish. And tonight I want to report
to you on decisions made there that
directly affect you and your children's
economic future. I also have a special
message, one that's about our own
economy, about actions that could
jeopardize the kind of progress we made
toward economic health last week in
Venice as well as the prosperity that,
during the last 6 years, all of us here in
America have worked so hard to achieve.
But before beginning, I must make a
personal note about something we saw
on the last day of our journey when we
stopped in Berlin to help celebrate the
750th anniversary of that noble city. I
know that over the years many of you've
seen the pictures and news clips of the
wall that divides Berlin. But believe me,
no American who sees firsthand the con-
crete and mortar, the guardposts and
machinegun towers, the dog runs and
the barbed wire can ever again take for
granted his or her freedom or the
precious gift that is America. That gift
of freedom is actually the birthright of
all humanity; and that's why, as I stood
there, I urged the Soviet leader, Mr.
Gorbachev, to send a new signal of open-
ness to the world by tearing down that
wall.
I can tell you tonight that this year's
economic summit in Venice was not only
successful on a number of specific issues
but that the spirit of consensus shown by
world leaders there was particularly
strong. I'm sure you remember that
back in 1981, the year I attended my
first summit, our own economy, as well
as the global economy, was then in grave
danger. We had inflation running at 10%
or more in industrialized countries, not
to mention high interest rates, excessive
tax burdens, and too much government
regulation and interference. Worse than
all of this, there was virtually no agree-
ment among world leaders on how to
deal with this looming crisis.
In the intervening years, we've
made progress. With the American
economy leading the way, we started an
international movement toward more
economic growth and greater individual
opportunity by lowering taxes and cut-
ting government regulation. We brought
down interest rates, cut inflation,
reduced unemployment, and confounded
the experts by showing that economic
growth could be sustained not just for 1
or 2 years but steadily for more than 4
years.
And last week in Venice, I saw over-
whelming evidence that this consensus
for less government and more personal
freedom continues to grow throughout
the world. Indeed, part of our official
discussions were about how to encourage
economic development in the less-
affluent nations of the world and help
the millions of people in developing
nations achieve higher standards of liv-
ing and more productive economics.
And let's remember that this inter-
national movement toward economic
freedom has made a very real difference
in the daily lives of each of us here in
America. AH of us can remember only a
few years ago when government taxa-
tion was consuming more and more of
the take-home pay of American workers
19
Chancellor Kohl joins President Reagan aboard Air Force One for the trip back to Bonn.
at the very moment that double-digit
inflation was eating up savings and
becoming a special burden on the poor
and the elderly. Today, in contrast, we
are now in our 54th month of economic
growth. Real family income is growing
while poverty's been declining. And
we've been creating an astonishing
250,000 new jobs a month in this nation;
that adds up to over 13 million jobs in a
little over 4 years.
Obviously, keeping this kind of prog-
ress going on at home was very much on
my mind in Venice, and that's why I was
pleased with many of the decisions we
made there. In addition to reaffirming
the broad consensus for economic
growth, we agreed to continue working
against trade barriers, like high tariffs,
that over the long run shrink world
markets, stop growth, and reduce the
number of new jobs.
In the area of agricultural subsidies
as well, we made significant progress.
I've been saying for some while now it's
time to get speculators who merely want
to take advantage of government sub-
sidies out of the agricultural business
and give farming back to the farmers. I
think it's notable that so many American
farmers today would like to see agricul-
ture in the United States and abroad
return to the free market basis. They
know government subsidies in other
countries are causing a worldwide glut
of farm products and a shrinking market
for American goods. Our aim should be
to eliminate farm subsidies by the year
2000, and I will continue to press for this
commitment.
But it was a real step forward to get
this issue on the summit agenda, and I
think the fact our urgings were heeded
indicates the kind of responsiveness our
summit partners showed toward Ameri-
can concern. They know how much we
rely on each other; and they're aware of
how much their own future depends on
what we do here in the United States,
how important keeping America eco-
nomically sound and strong is to them.
They know, too, that the economic prog-
ress we've made together has enabled
20
Department of State Bulletin
ECONOMIC SUMMIT
VENICE 1987
e democracies to rebuild their
jfenses, keep peace in the world, and
rengthen our alliances.
I was particularly gratified, for
ample, for the support our allies gave
our Persian Gulf policy; it was
tended without hesitation. Our allies
low the strategic value of this area and
e hard at work there for the same pur-
)ses as our own. In fact, Great Britain
is committed a higher proportion of its
et to the gulf than we have and since
inuary has provided protection to over
1)0 U.K. flag vessels. France, too, has
mmitted naval strength to the gulf,
ermany and Japan, while they can't
institutionally deploy military forces,
ce also working actively to seek other
ays to be helpful.
Our own role in the gulf is vital; it is
protect our interests and to help our
iends in the region protect theirs. Our
^mediate task in the gulf is clear and
lould not be exaggerated. It is to escort
S. flag vessels, a traditional role of the
avy and one which it has carried out in
le gulf as well as in other areas.
Most recently there's been some con-
oversy about 11 new U.S. flag vessels
jat've been added to our merchant
pet. Let there be no misunderstanding:
If e will accept our responsibility for
"lese vessels in the face of threats by
•an or anyone else. If we fail to do so
mply because these ships previously
ew the flag of another country, Kuwait,
e would abdicate our role as a naval
Dwer, and we would open opportunities
)r the Soviets to move into this choke-
3int of the free world's oil flow. In a
ord: If we don't do the job, the Soviets
ill. And that will jeopardize our own
ational security as well as our allies.
Our current dealings with the Soviet
Union were also discussed in Venice, and
I think every American can be gratified
by the sense of unity and support our
allies expressed. As most of you know,
we're currently engaged in highly sen-
sitive negotiations with the Soviets that
could lead to a historic arms reduction
treaty on intermediate-range missiles, or
as we say, INF. This matter was also
discussed last week with the NATO
Foreign Ministers in Iceland. I have
received Secretary Shultz's report on his
NATO meeting, and I'm pleased to tell
you that we and our allies have reached
full consensus on our negotiating
position.
Six years ago the United States pro-
posed a step called the zero option, the
complete elimination of U.S. and Soviet
land-based, longer range INF missiles.
At the time, many labeled it ridiculous
and suggested the Soviets would never
accept it. We remained determined, and
this year the Soviets adopted a similar
position. So, tonight I can tell you that,
with the support of our allies, the United
States will also formally propose to the
Soviet Union the global elimination of all
U.S. and Soviet land-based, shorter
range INF missiles, along with the deep
reductions in— and we hope the ultimate
elimination of— longer ranger INF
missiles. I am now directing our INF
negotiator to present this new proposal
to the Soviet IJnion as an integral ele-
ment of the INF treaty, which the
United States has already put forward in
Geneva.
And as we and our allies pursue this
historic opportunity, let's keep in mind
the favorite word of a great lawmaker
and great member of the Democratic
Party, the late Senator "Scoop"
Jackson: that word is "bipartisanship."
For it's only with the support of Con-
gress, as well as the help of our allies,
that we will be able to accomplish those
historic arms reductions.
There was also strong agreement in
Venice on the importance of pressing the
Soviet Union for progress on other
important arms negotiations, such as our
effort to cut 50% in strategic forces. So,
too, we were agreed on the need for
Soviet progress in the human rights area
as well as regional oonflicts, especially
Afghanistan. And while we welcomed
the new expressions of openness from
the Soviets, we said it's time to see if
their actions are as forthcoming.
'Text from Weekly Compilation of
Presidential Documents of June 8, 1987.
^Recorded on June 5 at the Villa Con-
dulmer in Veneto, Italy (text from Weekly
Compilation of Presidential Documents of
June 15).
'Text from Weekly Compilation of
Presidential Documents of June 22.
"Press release 125 of June 11.
^Mohammed Ali Hamadei is a Lebanese
Shi'ite Moslem accused of perpetrating the
1985 hijacking of TWA flight #847 and the
murder of Rooert D. Stethem.
^Held on the grounds of the Hotel
Cipriani in Venice (text from Weekly Com-
pilation of Presidential Documents of June
22).
'Eugene Hasenfus was a crewmember on
a plane that was shot down in Nicaragua. He
was charged by the Nicaraguan Government
with supplying the Nicaraguan democratic
resistance with military supplies. ■
21
THE PRESIDENT
Visit to the Holy See
and West Germany
President Reagan had a private audience with
His Holiness Pope John Paul H on June 6, 1987.
He visited Berlin and Bonn on June 12 before
returning to the United States.
President's Remarks
After Meeting With
His Holiness,
The Vatican,
June 6, 1987»
Your Holiness, I am truly grateful for
the opportunity to visit with you again in
this place of peace. You've always said
that the power of love for our fellow
man is stronger than the evils that befall
humankind. And one feels the power of
that strong moral force here in this holy
city of St. Peter, just as we see it in your
courageous and compassionate
leadership.
Your Holiness, on my last visit here,
I urged you to carry your ministry to the
southern and western sections of the
(White House photo by Bill Fitz-Patrick)
United States, and you graciously
agreed, and I know that all America
looks forward to your arrival in
September. You will find in our country
a deeply religious people, a people
devoted to the same ideals and values
you so eloquently champion: a striving
for peace and justice, human rights, and,
above all, our duty as fellow creatures of
God to love one another.
Not long ago, Your Holiness, you
visited Canada where you spoke pas-
sionately of the moral obligation of the
wealthier nations to share with those
less fortunate. Recently, I also traveled
to Canada and said it's time that we take
up the challenge, to share our prosperity
with the underdeveloped nations, with
generous aid, yes, but also in the most
effective way we know: by sharing the
conditions that promote prosperity.
You have spoken eloquently of "the
moral causes of prosperity," among
them hard work, honesty, initiative,
thrift, spirit of service, and daring. In
many countries today, we see economic
revolutions founded on this basic tenet:
that the sources of prosperity are moral
ones, that the spirit and imagination of
man freed of statist shackles is a revolu-
tionary force for growth and human
betterment.
In your travels, you've inspired
millions, people of all races and all
faiths, who have felt the intensity of
your desire for peace and brotherhood
among men. As you embark on a pas-
toral visit to the land of your birth,
Poland, be assured that the hearts of the
American people are with you. Our
prayers will go with you in profound
hope that soon the hand of God will
lighten the terrible burden of brave peo-
ple everywhere you yearn for freedom,
even as all men and women yearn for th<
freedom that God gave us all when he
gave us a free will.
We see the power of the spiritual
force in that troubled land, uniting a
people in hope, just as we see the power-
ful stirrings to the East of a belief that
will not die despite generations of
oppression. Perhaps it's not too much to
hope that true change will come to all
countries that now deny or hinder the
freedom to worship God. And perhaps
we'll see that change comes through the
reemergence of faith, through the irre-
sistible power of a religious renewal. Fo
despite all the attempts to extinguish it,
the people's faith burns with a pas-
sionate heat; once allowed to breathe
free, that faith will burn so brightly it
will light the world.
Your Holiness, when I last visited
you, our representative in Vatican City
was a personal envoy. Now, I'm happy
to say, America is represented here by a
full-fledged diplomatic mission at the
ambassadorial level. The consequence of
our efforts deserves nothing less, for we
join with the Holy See in our concern fo)
a world of peace, where armaments are
reduced and human rights respected, a
world of justice and hope, where each of
God's creatures has the means and
opportunity to develop to his or her full
potential.
Your Holiness, I'm reminded of the
passage from the Bible of St. Peter
walking out on the water after Christ.
We know that as long as he kept his eye
on our Savior, as long as his faith was
strong, he was held up, but as soon as
his faith faltered, he began to sink. Your
Holiness, with gentle chidings and
powerful exhortations you have con-
22
Department of State Bullet!
THE PRESIDENT
inually directed our thoughts to the
spiritual source of all true goodness and
happiness.
At the opening of the Second
Vatican Council, in which you played
such an important role, Pope John XXIII
spoke of the duty of every Christian to
"tend always toward heaven." In your
^eat courage and compassion, in your
piety and the boundless energy with
which you carry out your mission, you
have set an example for the world. It's
an example that challenges us all to live
a life of charity, to live a life of prayer,
to work for peace, and, in that beautiful
phrase of John XXIII, to "tend always
toward heaven."
I know that today marks the begin-
ning of a very important time for you
personally and for the people of your
faith, for it's this day that you begin the
Dbservance of a year of prayer and devo-
tion to the Virgin Mary with a world-
wide prayer for peace. I wish you great
joy, happiness, and fulfillment in the com-
ing months.
And I thank you. Your Holiness, and
may God bless you.
President's Address,
Brandenburg Gate,
West Berlin,
June 12, 1987^
Twenty-four years ago President John
F. Kennedy visited Berlin, speaking to
the people of this city and the world at
the City Hall. Well, since then two other
presidents have come, each in his turn,
to Berlin. And today I, myself, make my
second visit to your city.
We come to Berlin, we American
presidents, because it's our duty to
speak, in this place, of freedom. But I
must confess, we're drawn here by other
things as well: by the feeling of history
in this city, more than 500 years older
than our own nation; by the beauty of
the Grunewald and the Tiergarten; most
of all, by your courage and determination.
Perhaps the composer, Paul Lincke,
understood something about American
presidents. You see, like so many
presidents before me, I come here today
because wherever I go, whatever I do:
Ich hab noch einen Koffer in Berlin. [I
still have a suitcase in Berlin.]
Our gathering today is being broad-
cast throughout Western Europe and
North America. I understand that it is
being seen and heard as well in the East.
To those listening throughout Eastern
Europe, I extend my warmest greetings
and the good will of the American peo-
ple. To those listening in East Berlin, a
special word: although I cannot be with
you, I address my remarks to you just as
surely as to those standing here before
me. For I join you, as I join your fellow
countrymen in the West, in this firm,
this unalterable belief: Es gibt nur ein
Berlin. [There is only one Berlin.]
Berlin and Freedom
Behind me stands a wall that encircles
the free sectors of this city, part of a
vast system of barriers that divides the
entire Continent of Europe. From the
Baltic south, those barriers cut across
Germany in a gash of barbed wire, con-
crete, dog runs, and guard towers. Far-
ther south, there may be no visible, no
President Reagan at Brandenburg Gate, West Berlin.
August 1987
23
THE PRESIDENT
obvious wall. But there remain armed
guards and checkpoints all the same-
still a restriction on the right to travel,
still an instrument to impose upon ordi-
nary men and women the will of a totali-
tarian state.
Yet it is here in Berlin where the
wall emerges most clearly; here, cutting
across your city, where the newsphoto
and the television screen have imprinted
this brutal division of a continent upon
the mind of the world. Standing before
the Brandenburg Gate, every man is a
German, separated from his fellow men.
Every man is a Berliner, forced to look
upon a scar.
President von Weizsaecker has said:
the German question is open as long as
the Brandenburg Gate is closed. Today I
say: as long as this gate is closed, as long
as this scar of a wall is permitted to
stand, it is not the German question
alone that remains open but the question
of freedom for all mankind. Yet I do not
come here to lament. For I find in Berlin
a message of hope— even in the shadow
of this wall, a message of triumph.
In this season of spring in 1945, the
people of Berlin emerged from their
air-raid shelters to find devastation.
Thousands of miles away, the people of
the United States reached out to help.
And in 1947, Secretary of State— as
you've been told— George Marshall
announced the creation of what would
become known as the Marshall Plan.
Speaking precisely 40 years ago this
month, he said: "Our policy is directed
not against any country or doctrine but
against hunger, poverty, desperation,
and chaos."
In the Reichstag, a few moments
ago, I saw a display commemorating this
40th anniversary of the Marshall Plan. I
was struck by the sign on a burnt-out,
gutted structure that was being rebuilt. I
understand that Berliners of my own
generation can remember seeing signs
like it dotted throughout the western
sectors of the city. The sign read simply:
"The Marshall Plan is helping here to
strengthen the Free World."
A strong, free world in the West,
that dream became real. Japan rose
from ruin to become an economic giant.
Italy, France, Belgium— virtually every
nation in Western Europe saw political
and economic rebirth. The European
Community was founded.
In West Germany and here in Berlin,
there took place an economic miracle,
the "Wirtschafiswunder. " Adenauer,
Erhard, Reuter, and other leaders
understood the practical importance of
liberty— that just as truth can flourish
24
only when the journalist is given
freedom of speech, so prosperity can
come about only when the farmer and
businessman enjoy economic freedom.
The German leaders reduced tariffs,
expanded free trade, lowered taxes.
From 1950 to 1960 alone, the standard
of living in West Germany and Berlin
doubled.
Where four decades ago there was
rubble, today in West Berlin there is the
greatest industrial output of any city in
Germany— busy office blocks, fine homes
and apartments, proud avenues, and the
spreading lawns of parkland. Where a
city's culture seemed to have been
destroyed, today there are two great
universities, orchestras and an opera,
countless theaters and museums. Where
there was want, today there's abun-
dance—food, clothing, automobiles— the
wonderful goods of the Ku'damm.
From devastation, from utter ruin,
you Berliners have, in freedom, rebuilt a
city that once again ranks as one of the
greatest on Earth. The Soviets may have
had other plans. But, my friends, there
were a few things the Soviets didn't
count on— Berliner Herz, Berliner
Humor, Ja, und Berliner Schnauze.
[Berliner heart, Berliner humor, yes, and
Berliner cheek.]
In the 1950s, Khrushchev predicted:
"We will bury you." But in the West
today, we see a free world that has
achieved a level of prosperity and well-
being unprecedented in all human his-
tory. In the communist world, we see
failure, technological backwardness,
declining standards of health, even want
of the most basic kind— too little food.
Even today, the Soviet Union still can-
not feed itself. After these four decades,
then, there stands before the entire
world one great and inescapable conclu-
sion. Freedom leads to prosperity.
Freedom replaces the ancient hatreds
among the nations with comity and
peace. Freedom is the victor.
And now the Soviets themselves
may, in a limited way, be coming to
understand the importance of freedom.
We hear much from Moscow about a
new policy of reform and openness.
Some political prisoners have been
released. Certain foreign news broad-
casts are no longer being jammed. Some
economic enterprises have been permit-
ted to operate with greater freedom
from state control.
Are these the beginnings of pro-
found changes in the Soviet state? Or
are they token gestures, intended to
raise false hopes in the West or to
strengthen the Soviet system without
changing it? We welcome change and
openness. For we believe freedom and
security go together— that the advance
of human liberty can only strengthen the
cause of world peace. There is one sign
the Soviets can make that would be
unmistakable, that would advance
dramatically the cause of freedom and
peace.
General Secretary Gorbachev, if you
seek peace, if you seek prosperity for the
Soviet Union and Eastern Europe, if you
seek liberalization: come here, to this
gate. Mr. Gorbachev, open this gate. Mr.
Gorbachev, tear down this wall.
Efforts To Reduce Arms
I understand the fear of war and
the pain of division that afflict this
continent— and I pledge to you my coun-
try's efforts to help overcome these
burdens. To be sure, we in the West
must resist Soviet expansion. So we
must maintain defenses of unassailable
strength. Yet we seek peace. So we must
strive to reduce arms on both sides.
Beginning 10 years ago, the Soviets
challenged the Western alliance with a
grave new threat— hundreds of new and
more deadly SS-20 nuclear missiles,
capable of striking every capital in
Europe. The Western alliance responded
by committing itself to a counterdeploy-
ment unless the Soviets agreed to nego-
tiate a better solution— namely, the
elimination of such weapons on both
sides. For many months, the Soviets
refused to bargain in earnestness. As the
alliance, in turn, prepared to go forward
with its counterdeployment, there were
difficult days— days of protests like those
during my 1982 visit to this city— and
the Soviets later walked away from the
table.
But through it all, the alliance held
firm. And I invite those who protested
then— I invite those who protest today—
to mark this fact: because we remained
strong, the Soviets came back to the
table. And because we remained strong,
today we have within reach the possibil-
ity, not merely of limiting the growth of
arms, but of eliminating, for the first
time, an entire class of nuclear weapons
from the face of the Earth.
As I speak, NATO ministers are
meeting in Iceland to review the prog-
ress of our proposals for eliminating
these weapons. At the talks in Geneva,
we have also proposed deep cuts in
strategic offensive weapons. And the
Western allies have, likewise, made far-
reaching proposals to reduce the danger
of conventional war and to place a total
ban on chemical weapons. While we pur-
sue these arms reductions, I pledge to
THE PRESIDENT
lyou that we will maintain the capacity to
deter Soviet aggression at any level at
which it might occur. And in cooperation
with many of our allies, the United
States is pursuing the Strategic Defense
Initiative— research to base deterrence
not on the threat of offensive retaliation
but on defenses that truly defend; on
systems, in short, that will not target
populations but shield them.
Promoting Liberty and Openness
By these means, we seek to increase the
safety of Europe and all the world. But
we must remember a crucial fact: East
and West do not mistrust each other
because we are armed. We are armed
because we mistrust each other. And our
differences are not about weapons but
about liberty. When President Kennedy
spoke at the City Hall those 24 years
ago, freedom was encircled, Berlin was
under siege. And today, despite all the
pressures upon this city, Berlin stands
secure in its liberty. And freedom itself
is transforming the globe.
In the Philippines, in South and
Central America, democracy has been
given a rebirth. Throughout the Pacific,
free markets are working miracle after
miracle of economic growth. In the
industrialized nations, a technological
revolution is taking place— a revolution
marked by rapid, dramatic advances in
computers and telecommunications.
In Europe, only one nation and those
it controls refuse to join the community
of freedom. Yet in this age of redoubled
economic growth, of information and
innovation, the Soviet Union faces a
choice. It must make fundamental
changes, or it will become obsolete.
Today thus represents a moment of
hope. We in the West stand ready to
cooperate with the East to promote true
openness— to break down barriers that
separate people, to create a safer, freer
world. And surely there is no better
place than Berlin, the meeting place of
East and West, to make a start.
Free people of Berlin: today, as in
the past, the United States stands for
the strict observance and full implemen-
tation of all parts of the Four-Power
Agreement of 1971. Let us use this occa-
sion, the 750th anniversary of this city,
to usher in a new era— to seek a still
fuller, richer life for the Berlin of the
'i future. Together, let us maintain and
develop the ties between the Federal
Republic and the Western sectors of
Berlin, which is permitted by the 1971
agreement.
750th Anniversary of Berlin
PROCLAMATION 5665,
JUNE 8, 1987^
Berlin, one of the world's gi-eat cities and the
largest German city, this year observes its
750th anniversary. This is cause for celebra-
tion for Berliners and for all Germans, and
also for the people of the United States and
the rest of the world.
The history and character of Berlin and
its people give powerful testimony about
human nature and its capabilities. After
three-quarters of a millennium and many
shocks and reversals through the ages, Berlin
is yet a young city— young with all the capac-
ity of the human spirit to renew itself, to
strive and to seek, to build anew and create,
and, most of all, to hope. Time and again,
Berlin has overcome desolation and isolation
with will, energy, and courage. Even now, its
spirit towers over the wall that presently
divides the city.
Today Berlin remains close to the
spiritual center of the Western world.
Americans have a special affinity for Berlin
that goes beyond formal political or economic
ties, because we feel a kinship with its spirit
of strength and creativity and because we see
our own hopes and ideals mirrored in the
deep attachment of its people to freedom and
its blessings. Thousands of Americans-
scholars, service men and women and their
families, business people, diplomatic person-
nel, and so on— live in Berlin and make vital
contributions to the life of the city. We have
helped Berlin grow, and we have shared its
spirit.
As we near the end of the 20th century,
we see that Berlin, though ancient, is a city of
the future. We know that the courageous and
freedom-loving spirit that has guided so much
of Berlin's past will help ensure a future of
freedom for all mankind in the years to come.
"Berlin bleibt dock Berlin— BerWn is still
Berlin."
Now, Therefore. I, Ronald Reagan.
President of the United States of America, by
virtue of the authority vested in me by the
Constitution and laws of the United States,
do hereby recognize Berlin's 750th Anni-
versary, 1987. 1 call upon the people of the
United States to join in celebrating and
honoring Berlin's 750th anniversary with
appropriate ceremonies and activities.
In Witness Whereof. I have hereunto
set my hand this eighth day of June, in the
year of our Lord nineteen hundred and
eighty-seven, and of the Independence of the
United States of America the two hundred
and eleventh.
Ronald Reagan
And I invite Mr. Gorbachev: let us
work to bring the Eastern and Western
parts of the city closer together so that
all the inhabitants of all Berlin can enjoy
the benefits that come with life in one of
the great cities of the world.
To open Berlin still further to all
Europe, East and West, let us expand
the vital air access to this city, finding
ways of making commercial air service
to Berlin more convenient, more comfort-
able, and more economical. We look to
the day when West Berlin can become
one of the chief aviation hubs in all Cen-
tral Europe.
With our French and British part-
ners, the United States is prepared to
help bring international meetings to
Berlin. It would be only fitting for Berlin
to serve as the site of UN meetings, or
world conferences on human rights and
arms control, or other issues that call for
international cooperation.
There is no better way to establish
hope for the future than to enlighten
young minds, and we would be honored
to sponsor summer youth exchanges,
cultural events, and other programs for
young Berliners from the East. Our
French and British friends, I'm certain,
will do the same. And it's my hope that
an authority can be found in East Berlin
to sponsor visits from young people of
the Western sectors.
One final proposal— one close to my
heart. Sport represents a source of
enjoyment and ennoblement, and you
may have noted that the Republic of
Korea— South Korea— has offered to per-
mit certain events of the 1988 Olympics
to take place in the North. International
sports competitions of all kinds could
take place in both parts of this city. And
what better way to demonstrate to the
world the openness of this city than to
offer in some future year to hold the
Olympic games here in Berlin, East and
West?
August 1987
25
THE PRESIDENT
Berlin's Voice of Affirmation
In these four decades, as I have said, you
Berliners have rebuilt a great city.
You've done so in spite of threats— the
Soviet attempts to impose the East-
mark, the blockade. Today the city
thrives in spite of the challenges implicit
in the very presence of this wall. What
keeps you here?
Certainly there's a great deal to be
said for your fortitude, for your defiant
courage. But I believe there's something
deeper, something that involves Berlin's
whole look and feel and way of life. Not
mere sentiment— no one could live long
in Berlin without being completely dis-
abused of illusions— something, instead,
that has seen the difficulties of life in
Berlin but chose to accept them, that
continues to build this good and proud
city in contrast to a surrounding
totalitarian presence that refuses to
release human energies or aspirations.
Something that speaks with a powerful
voice of affirmation, that says yes to this
city, yes to the future, yes to freedom.
In a word, I would submit that what
keeps you in Berlin is love— love both
profound and abiding.
Perhaps this gets to the root of the
matter, to the most fundamental distinc-
tion of all between East and West. The
totalitarian world produces backward-
ness because it does such violence to the
spirit, thwarting the human impulse to
create, to enjoy, to worship.
The totalitarian world finds even
symbols of love and of worship an
affront. Years ago, before the East Ger-
mans began rebuilding their churches,
they erected a secular structure— the
television tower at Alexander Platz.
Virtually ever since, the authorities have
been working to correct what they view
as the tower's one major flaw, treating
the glass sphere at the top with paints
and chemicals of every kind. Yet even
today when the sun strikes that
sphere— that sphere that towers over all
Berlin— the light makes the sign of the
cross. There in Berlin, like the city itself,
symbols of love, symbols of worship, can-
not be suppressed.
As I looked out a moment ago from
the Reichstag, that embodiment of Ger-
man unity, I noticed words crudely
spray-painted upon the wall— perhaps by
a young Berliner— "This wall will fall.
Beliefs become reality." Yes, across
Europe, this wall will fall. For it cannot
withstand faith. It cannot withstand
truth. The wall cannot withstand
freedom.
And I would like, before I close, to
say one word. I have read, and I have
been questioned since I've been here,
about certain demonstrations against my
coming. And I would like to say just one
thing, and to those who demonstrate so.
I wonder if they have ever asked
themselves that if they should have the
kind of government they apparently
seek, no one would ever be able to do
what they're doing again.
President's Departure
Remarks,
Bonn,
June 12, 19873
My talks with Chancellor Kohl and his
colleagues have fulfilled all my expecta-
tions. They confirm, as his words here
have confirmed today, that relations
between the United States and the
Federal Republic are those of close allies
and friends.
Chancellor Kohl and I, together with
other allies and partners, have already
had the opportunity in Venice to address
many of the major issues confronting the
world today. There, important steps
were taken to ensure the continued
economic progress and freedom for our
nations.
Here in Bonn, we talked, in par-
ticular, about progress in arms reduc-
tions and East- West relations.
Chancellor Kohl and I agree fully on the
necessity of continuing our close con-
sultations as we pursue our common
goals of reducing the danger to Europe
posed by the threatening policies and
military might of the Warsaw Pact. We
share deep satisfaction with NATO's
1979 double-track decision on inter-
mediate nuclear forces— INF.
It was controversial when the
alliance first agreed upon it, yet time is
proving it an unequivocal success. We
hope to reach agreement with the Soviet
Union before the end of 1987, which
would drastically reduce and possibly
eliminate a class of nuclear weapons that
poses a particular threat to our friends
and allies in Europe and Asia.
As we proceed in our quest for a
safer and more stable peace, I look for-
ward to continuing close cooperation and
consultation with Chancellor Kohl and
his government.
And I would like to add something
here also. Much is said each year about
these economic summits wdth the heads
of state of seven countries and our
meetings and whether they accomplish
much or whether they don't. I have to
tell you, they would accomplish much if
we did nothing but meet and just talk to
each other— because we have become
close friends. We use our titles in public
as protocol requires. But when we meet
together we're on a first-name basis, and
we're not meeting as much as heads of
states, as we're meeting as close, per-
sonal friends who look forward to renew-
ing our friendship with these meetings
and with others in between when we can
manage it.
So this has been a wonderful several
days for us to be here, to be in Venice,
then to be in Berlin earlier today and to
be here, and to know that we're with
dear friends. And so, we say goodbye to
all of you, and we say a very personal
goodbye to our dear friends. Chancellor
Kohl and Mrs. Kohl, and the others whom
we've met. .
And God bless all of you, and may
we all soon meet again. 'Thank you.
'Made in the Papal Library at the Pon-
tifical Palace (text from Weekly Compilation
of Presidential Documents of June 22, 1987).
^Text from Weekly Compilation of
Presidential Documents of June 22.
'Made at Koln-Bonn Airport (text from
Weekly Compilation of Presidential
Documents of June 22). ■
26
Department of State Bulletin
THE VICE PRESIDENT
NATO: The Best Investment in Peace
ExcBTTpts from an address by Vice
President Bush at the University of New
Hampshire commencement in Durham
on May 23, 1987.
Whether you're going on to graduate
school, on to a career, or still considering
your next step, today is your day. It's
for you to reflect back on what you've
done, or maybe what you haven't done.
And it's a day for you to think ahead to
the challenges that each of you will face
once you leave Durham.
The 1990s will bring a dramatically
new set of challenges from the ones we
faced in the 1970s and 1980s. You're
moving into a society based on informa-
tion and knowledge, an economy fully
integrated into the global market, and a
world where change is the rule, not the
exception.
Yet through all of this, some things
should never change. Just north of here
lies the Canadian border, the longest
unguarded border in the world between
two countries, symbolizing the long friend-
ship between our two countries. To me,
it's a reminder of a broader point:
America's role in the world. We are part
of a great worldwide coalition of democ-
racies. This is a tremendous achievement
because this alliance of free nations has
maintained world peace and security for
four decades. It's something all of us— we
and our allies— are enormously proud of.
Our strong alliance is a blessing all
of you should appreciate. The alliance
has been fundamental to ensuring that
the United States remains a land of
opportunity— your opportunity. And as
you go forward into the world, it will be
your generation's responsibility to main-
tain and strengthen the alliance.
When the Atlantic alliance was
formed nearly 40 years ago, its purpose
was to protect freedom and prevent a
war in Europe between the West and
the Soviet Union. It has succeeded. The
past four decades represent the longest
period of peace Europe has enjoyed in
this century.
Arms Control Negotiations
And if the democracies maintain their
strength and their solidarity, there are
more successes ahead. We're engaged
now with the Soviet Union in important
negotiations on arms control. Previous
negotiations tried to put a cap on the
arms race or tried to slow it down, but
they didn't even succeed at that very
well. Today we may be on the verge of a
truly historic agreement that mutually
and verifiably reduces a whole category
of nuclear weapons.
In our current arms control negotia-
tions with the Soviets, our objective is
carefully defined: we seek the best possi-
ble agreement, consistent with the secu-
rity of the free nations. An agreement
that leaves the democratic nations less
secure is no triumph; in fact, it's against
America's interest.
We should never make a deal simply
for the sake of making a deal. And we
will never sign an agreement that puts
at risk the interests or security of our
allies— and that includes our allies in
Asia in addition to our allies in Europe.
The Soviets say they want to reduce
nuclear weapons. Well, that was our goal
before it was theirs. The United States
will certainly meet halfway on any treaty
that calls for equitable, verifiable, and
stabilizing reductions. But in Europe,
the Soviets clearly have unstated
political objectives.
First, they want to decouple
Western Europe from the United States.
Second, they want to weaken NATO
defenses.
America's response is clear: NATO
is the cornerstone of our national secu-
rity policy, our strategy for peace. We
will not allow the Soviets to split or
weaken the alliance.
For 20 years, the defense strategy of
the Atlantic alliance has been based on
the principle of flexible response— having
the capability to deter a Soviet challenge
at any level of force. That's the right
strategy, and we must maintain it.
American troops will continue to be
committed, alongside allied forces, on
West European soil— backed up by the
American nuclear guarantee. The
alliance needs to enhance its conven-
tional strength. And the United States
needs to continue its modernization of
strategic forces and other nuclear forces
that are the backbone of the NATO
deterrent.
Right now, the focus of the negotia-
tions is on INF— American and Soviet
intermediate-range nuclear forces. When
the Soviets, 10 years ago, started
deploying their SS-20 missiles, with
multiple warheads aimed at our allies in
Europe and Asia, NATO decided to
deploy a counterweapon— and to offer
negotiations to eliminate or reduce those
weapons on both sides. In February
1983, 1 traveled to five countries in
Western Europe to consult our allied
leaders and to tell the people of Europe
about our willingness to ban all INF
weapons or, failing that, our willingness
to help them by deploying our own INF
missiles. The Soviets said "no" to get-
ting rid of the weapons— so the NATO
countries began deployment.
Our allies showed enormous political
courage in doing so, facing down emo-
tional protests from the radicals. Some-
times the protests got violent. When I
returned to West Germany in July 1983,
demonstrators stoned the motorcade and
literally attacked the car that Chancellor
Kohl and I and our wives were riding in.
It was an ugly incident. And it brought
home to me just how steadfast our allies
had been to persevere.
Those were tense times. The Soviets
boycotted all nuclear arms talks for a
year and a half, trying to magnify the
domestic pressures on Western govern-
ments. But in the end, the West showed
its determination to maintain the vital
military balance that has kept the peace.
The Soviets had tried to get NATO to
disarm unilaterally. But when they saw a
unified Atlantic alliance, they came back,
in 1985, to serious negotiations on
mutual reductions.
NATO Strength and Solidarity
There's an important lesson in all this.
Strength and solidarity are the keys to
success. Strength and solidarity are
what brought the Soviets back to the
bargaining table to negotiate arms
reduction seriously.
And that's where we are today. We
are close to an agreement that will result
in both the United States and the Soviet
Union reducing their stockpiles of INF
weaponry. Just how much we can achieve
remains to be seen.
But, agreement or not, the Soviets
have not abandoned their political
strategy. The Soviets enjoy a vast
superiority in conventional arms in
Europe. The Warsaw Pact has 50%
more combat divisions than NATO. Get-
ting rid of all nuclear weapons makes
moral sense, as our President has said,
but only if we also correct the conven-
tional arms imbalance and strengthen
deterrence in other ways.
Today we're consulting closely with
our allies on all the issues of the INF
negotiation. It's a real consultation; we're
not pushing our own preference. After
all, the weapons being negotiated are on
European soil and involve their defense.
AuQUSt 1987
27
THE VICE PRESIDENT
Whatever consensus we arrive at, I
can assure our allies that America has no
intention of "decoupling" or weakening
our commitment to the European defense.
NATO is the best investment in peace
we have ever made.
Strategic Defense Initiative
Today we are making a new investment
in peace for tomorrow's world. I am
referring to our Strategic Defense Initi-
ative (SDI). For a generation, nuclear
deterrence has been based on the threat
of offensive retaliation. This offensive-
based strategy has been referred to as
"mutual assured destruction," or
"MAD" for short. Wouldn't it be better
to base deterrence on systems that pro-
tect human lives instead of threatening
them— on mutual assured survival.
Successful research on SDI can lead
to an effective defensive shield, one that
lifts from the shoulders of mankind the
fear of nuclear annihilation. It is both
moral and logical to look for a solution
that is better than mutually assured
destruction. The Strategic Defense Initi-
ative has strong moral underpinnings.
The whole idea behind SDI is to put
weapons at risk, not people. A deterrent
strategy based on strategic defenses-
coupled with deep reductions in offen-
sive forces— could offer us the most
stable and secure environment of all.
Preserving Freedom and Peace
A few moments ago, I mentioned my
trip to West Germany in 1983. While I
was in Germany, I also visited a small
village called Moedelreuth on the eastern
border.
I'll never forget that town. Down
the main street ran a high concrete wall
topped with densely packed barbed wire.
On one side of that wall, the communist
side, everything was done with a cold,
military precision. Machinegun-toting
soldiers patrolled the streets, and attack
dogs ran on chains along the wall. On
our side of the wall, the villagers were
peacefully going about the ordinary
business of their daily lives— women at
the market shopping for their families;
children ran in the streets and played
ball in a grassy meadow; men went
about their chores with a robust energy.
Our side of the wall was alive. And
their side of the wall was lifeless, gray-
hopeless. The guns were trained on their
own side to keep their own people from
running to freedom. The contrast was
absolutely chilling. And that experience
brought home to me the importance of
what John Kennedy called the "long
twilight struggle."
The challenge before us in the future
is to continue to defend freedom and
champion democracy around the world.
We must keep the peace. That's what
it's all about.
In the future— if we don't turn our
backs on the world, but remain engaged;
if we resist the temptations of isola-
tionism and protectionism; if we remain
true to our values and ideals and resist
paralyzing self-doubt— then I believe we
can look at the years ahead with con-
fidence and hope. We can set foreign
policy goals that include resolving some
of the major conflicts of world affairs—
not simply managing them but actually
resolving them.
The future can find the United
States and the Soviet Union, although
still adversaries, nevertheless having
found a path toward deep reductions in
nuclear arms, as well as having banned
those insidious chemical and biological
weapons from the face of the earth. We
can make the world a safer place.
Now, you may be wondering what all
of this talk about alliances and missiles,
walls, and angry demonstrators has to
do with your being here in this lovely
setting. In the broadest sense, what I've
been talking about has everything to do
with you and the tremendous opportuni-
ties that lie open to you.
When your fathers and uncles gradu-
ated from high school or college, they
faced the draft. You don't have that
obligation. You have the opportunity to
serve proudly in our armed forces, but
only if you choose to. Your range of
choices is so wide open, in large part,
because our alliance has kept the peace
and helped bring an unprecedented
period of global prosperity.
I sincerely hope some of you will
choose careers in public service. But
whatever path you choose, dwell for a
moment on the fact that where we are
today and the blessings that we enjoy
have not just happened.
The democratic nations have pre-
served and protected freedom and peace.
This is a process which must continue if
your children, when they graduate from
college, will take part in an America that
is every bit as proud and as prosperous
as we are today. ■
28
niE SECRETARY
Secretary's Visit to Asia and the Pacific
Si'cretaT^ Shultz visited the Philip-
mux (June 13-17), Singapore
I II III' 17-20) to participate in the
[ss.iriation of South East Asian Nations
ASl-'AN) postministerial conference,
1 iistralia (June 20-23), and Western
'(uiioa (June 22).
Following are his statements and
■Ill's conferences made on various occa-
Iniis during the trip.
IRRIVAL STATEMENT,
MANILA,
UNE 13, 1987'
am very pleased to be back again in the
'hilippines. Much has happened since
:iv last visit almost 1 year ago. In that
hort time, Filipinos have made
emarkable progress in the process of
.emocratic renewal. A new constitution,
/hich provides the framework for
emocratic government and protects
idividual freedoms, is now in place. A
lew congress, chosen in perhaps the
reest and fairest election in modern
'hilippine history, will convene in July,
onipleting the reestablishment of fully
lemocratic government institutions at
he national level. I understand that the
inal step in the process will be elections
or local government to take place later
his year. Filipinos continue to set an
xample for the world by their deep com-
nitment to democratic elections. The
oter turnout in both last February's
ilebiscite on the constitution and in last
nonth's congressional elections was
emarkable. It surpassed by far the
;tandards of most Western democracies.
Ne in the United States continue to
Iraw inspiration from the vitality of
Philippine democracy.
Progress in the Philippines in the
ast year has not been limited to the
tolitical sphere. There has also been
ajiiii progress on the economic front.
^'icim all indications, the market-
)riented economic reforms now in place
ire resulting in the best economic per-
ormance for the Philippines since 1982.
The United States remains con-
/in<-ed that our interests— as well as
hiise of the Philippines— can best be
iil\ anced by continuing to act as a
reliable partner of our Philippine ally. As
President Reagan told President Aquino
during her justly acclaimed visit to the
United States last September, the
United States is committed to support-
ing our relationship by encouraging U.S.
investment, strengthening our trade
ties, and providing significant levels of
economic and military aid.
I look forward to my discussions
with President Aquino and members of
her government. I see my visit as an
opportunity to build on the close and
productive relations which already exist
between the United States and the
Philippines.
SIGNING CEREMONY
STATEMENT,
MANILA,
JUNE 16, 1987^
I take great pleasure in signing today a
$175 million economic assistance
package for the Philippines. This latest
element in the expanded American
economic assistance program is designed
to enhance government revenues and
contribute significantly to development
in the countryside.
The assistance is part of the overall
American economic assistance program
for this year of $368 million in grant aid.
Several weeks ago, our governments
signed an agreement covering another
major element of that program— $150
million in budget support to help
advance the Philippine Government's
economic reform program.
The package that we have signed
today has four important components:
• $33 million for continuation of two
projects to design and implement the
highly successful small-scale rural
development program which funds proj-
ects focusing on increasing rural income
and productivity;
• $15 million for the purchase of
heavy engineering equipment to
facilitate road grading and other essen-
tial services in rural areas;
• $51 million program for larger
scale development projects which will
respond to needs in transportation,
telecommunications, and rural elec-
trification; and
• Two grant food assistance
agreements totaling $76 million in wheat
which will strengthen both the balance
of payments and government revenues
in this critical first year of vigorous
economic growth.
I am pleased to note that last week,
we were able to increase this food
assistance by $13 million to provide the
appropriate quantity and type of wheat,
despite recent price increases.
We have also been able to provide
significant increases in military equip-
ment and supplies in the past few weeks.
The U.S. forces have delivered 10 utility
helicopters to the Armed Forces of the
Philippines to assist in the priorities of
medical evacuation and ground mobility
in the countryside. Moreover, I can
announce that we have completed
delivery of the final segment of the $10
million in emergency medical equipment
and supplies which President Reagan
pledged to President Aquino during her
visit to the United States.
We are pleased to be able to provide
assistance for the innovative and
ambitious economic reform program now
underway. Emerging growth in trade
and investment, in combination with
these enlightened economic policies and
expanding economic assistance, should
assure recovery and strong growth in
the years ahead.
It's a great privilege for me to par-
ticipate in this ceremony and again to
have a chance to shake hands with you in
the spirit of looking to the future.
NEWS CONFERENCE,
MANILA,
JUNE 16, 1987'
First, I'd like to express my appreciation
to President Aquino and other members
of the Philippine Government and the
Philippine business community who have
treated me with great cordiality here.
It's a pleasure to come again and to see
first-hand and hear first-hand about the
great accomplishments that have taken
place since I last visited the Philippines.
And, of course, they're making an
honest prophet out of me when I said
over a year ago I was bullish on the
Philippines. Here they have produced a
5V2% real growth rate, important con-
stitutional changes, the election of a new
legislative body, and a great variety of
good things. There are many problems
ahead, we all know. But it is a most
impressive performance. So I'd like to
say again: I'm still bullish on the
Philippines.
August 1987
29
THE SECRETARY
Q. At the palace today in your
toast, you said something about the
Phlippines having the responsibility to
solve their insurgency problem, but in
a way acceptable to all of the Filipino
people. Do I detect in that a note of
caution from the United States that its
help will be a contingent on the Philip-
pine Government observing basic
human rights and a cautionary word,
in particular, about the vigilantes?
A. That wasn't intended as a cau-
tionary word in any sense. But I think
one of the outstanding things about the
way President Aquino has gone about
the effort to get at the insurgency is the
process of inviting them, in the context
of a new environment and a new govern-
ment and a new attitude, to come out of
the hills and join in the society— and her
effort at reconciliation, her effort at
negotiation. All of these things represent
a hand out to the people in the insur-
gency. At the same time, unfortunately,
there are too many in the insurgency
who use methods of violence. It is clear
enough, and President Aquino has put it \
very well, that the government must use
its capacity, by its strength, to enforce
law and order.
As far as the citizens groups are con-
cerned, as I understand it, these are
being organized within the framework of
governmental authority. They aren't
sort of free-floating vigilante groups.
President Aquino has supported that
approach, and we support what she's
standing for there.
Q. Is this the $176 million part of
the $900 million pledged by Ronald
Reagan in connection with the revised
Military Bases Agreement?
A. I couldn't hear the question,
although I think I— you are asking
whether the $175 million for which I
signed today is part of the already
announced program, is that the
question?
Q. Is this part of the 1983 pledge
of Ronald Reagan regarding — in con-
nection wdth the Military Bases Agree-
ment? The $900 million?
A. There was a pledge of best
efforts for the period from 1985 through
1989 for a total of security and
associated economic assistance of $900
million. And I think when the date
arrives, it will turn out that the amount
will be over a billion dollars. So the
United States will meet fully the com-
mitment to use our best efforts to get
that sum of money.
Q. So the $176 million is not part
of the $900 million?
A. No, those are part of— those are
economic support funds and they are
part of it.
Q. The economic support fund is
part of the $900. Is—
A. I'm sorry, I just can't understand
what—
Q. The $176 million, you said, is
part of the economic support fund
which, from my studies, it is part of
the $900 million pledged by Ronald
Reagan in 1983. So then the $176
million is part of the $900 million.
A. The way it \Vorks is that there
was a commitment on the part of the
United States to use its best efforts to
support, to the tune of $900 million, for
the period of time I identified. That's a
general pledge. As time goes along, pro-
posals are made by the President as part
of our budget to Congress. The Congress
considers our requests and it's actually
the Congress that appropriates funds;
and they do that from year to year. And
as funds are appropriated, then pro-
grams are put together jointly between
the Philippines and the United States as
to exactly what it is that's going to be
supported. Then the particular projects
that are identified, or in some cases it's
general support, are then funded. So
what I signed today was part of that
process.
Q. Some members of the Philip-
pine congress have expressed a
preference for an arrangement on the
bases that would be a pure rental
agreement. What is your approach to
that proposal?
A. First, as I have said, the best-
efforts pledge of the United States will
certainly be fulfilled— more than fulfilled.
But as far as the idea is concerned, the
concept— that the concept should be one
of rent; that is, the Philippines makes
certain bases available to the United
States and the United States pays rent
for its use of them. I don't think that's a
good concept. The idea that we have
been working from all over the world is
that the presence of U.S. forces in a par-
ticular area is viewed by both the United
States and the country involved— in this
case the Philippines— as a contribution to
stability in that country and in that part
of the world.
We have forces, for example, in
many countries of Europe as part of our
joint effort with our European friends to
deter aggression and maintain peace in
Europe. And it's a joint enterprise. In
some cases, there are economic and
security assistance payments in connec-
tion with that, and in the case of a few
countries, mostly the countries involved,
pay for the maintenance of the bases, as
is also true in Japan. It's also true, in
certain respects, in Korea.
That is the basic concept, that we
should be doing something that's
mutually beneficial. And I think in the
case of the bases at Clark Field and
Subic Bay, the presence of the United
States there is something that con-
tributes to stability here and stability
throughout the region.
I'm going from here to a meeting of
the ASEAN countries, and I know each
year, as I talk with the foreign ministers
of those countries— conscious as they are
of the increased Russian presence in
Vietnam, Cambodia, Cam Ranh Bay, and
the strength of the Chinese— they're in-
terested in having the U.S. presence
because they feel that it contributes to
stability.
That is the concept, not a rental con-
cept. It's something that's viewed as
mutually beneficial, but which, in the
light of the capabilities of the United
States, is accompanied by funds to sup-
port the security assistance and the
economic development of the country.
Q. Do I take it then that the U.S.
Government is not amenable to a
nuclear-free zone for the region?
A. Our view is that the nuclear-free
zones are basically not a good idea at
this point. And the reason is this: Peace
in the world depends upon our ability,
along with others but primarily our abil-
ity as a major nuclear power, to deter
aggression, and it's the deterrent
capability that maintains the peace.
When you place restrictions and
declare more and more ideas around the
world nuclear-free zones— I might say,
restrictions which, if we sign, the United
States would observe, although others
that have nuclear capability might not
observe. But when you declare more and
more places nuclear-free zones, you
erode the ability to deter aggression and
deter war. Since we all have a stake in
peace and stability, anything that
weakens the deterrent capability is
destructive of peace and stability. That's
why we oppose the nuclear-free zones.
Q. I'd like to find out about the
military aid. There was $50 million
that was approved during the visit of
President Aquino in the United States.
And then there was another talk about
$50 million under consideration in the
House of Congress. Can you give us
the latest on this? Is it approved?
A. We are seeking to add to our
security assistance for the fiscal year
1987— that's the year we're now in— by ^.|
$50 million. The President proposed that ||
30
Department of State Bulletirl
THE SECRETARY
as part of a supplement to the FY 1987
budget. We persuaded the House of
Representatives in committee to put it
into that budget, but in the action on the
floor of the House of Representatives, it
got knocked out— not because of any lack
of support for the Philippines but
because of various legislative
maneuverings.
In the Senate, in effect, this money
has been put into their bill— it's struc-
tured in a little different way, but
basically it's there. And so, now, when
the Senate bill goes to conference with
the House bill, it is our hope— and we are
working to try to help bring it about—
that the House will accept the Senate
version, and in which case, basically the
money would be forthcoming. But it's
part of a general bill the Philippine part
of which is not controversial, but there
are other aspects of the bill that are
controversial.
You don't know just how all of this is
going to come out. But the main point is,
there is broad support in the Congress
for help to the Philippines as well as, of
course, the President's own proposal.
That being the case, I hope that in one
way or another, we can bring it forward,
but the legislative situation is com-
plicated enough so that I can't stand
here and say for sure that that will
happen.
Q. This is a followup question to
your point about the anti-nuke zone in
the region. We were able to get a
secret document which quoted several
American officials as saying that they
would be against the ASEAN Foreign
Ministers coming up with a strong
statement on the nuke provision in the
postministerial meeting in Singapore,
and that should they decide to do so.
to implement, to establish such a zone,
ASEAN access to this American
market would be affected. Any reac-
tion to this?
A. I don't know about secret
documents, so I can't comment on
whatever it is that you've obtained. I
doubt that there is such a document, and
that's not the approach that we would
take. You don't have to have a secret
document to know the position that we
have. I've just said it here, on-the-
record. And as far as our relationship
with the ASEAN countries is concerned,
it's strong with each country. We have
supported the ASEAN organization, and
we will continue to do that. We'll work
out our problems. As a matter of fact,
I'm a little surprised that all the
emphasis on this here, because quite a
few of the ASEAN Foreign Ministers
have told me that they are opposed to
this proposal.
Q. With regard to the bases: Your
meeting this morning with the
congressmen-elect, they mentioned
that you were insistent on using the
term "aid" rather than "rental." If
the Philippines insists on using the
term "rental," is there any possibility
or will there be any moves on the part
of your government to pull out from
the bases?
A. I've tried to explain why it is
that I think an idea other than rental is
more appropriate. After all, we're talk-
ing here about two independent, large,
important, sovereign countries. And we
have a working arrangement between us
that is mutually satisfactory. The pres-
ent arrangement runs until 1992, and
there will be a time before long when
discussions will start about what to do
when that date arrives. What positions
people will take is something that
remains to be seen, and I don't want to
make unequivocal statements of one kind
or another here.
But I do want to make it clear that I
think the statement, the concept, of
doing something that is mutually benefi-
cial is the right concept— not one in
which one party rents something from
another party, implying that the party
that does the renting is really not too
happy about it, that it's just a matter of
finance. It isn't a matter of finance; it's
a matter of security and mutual benefits,
and that's the way I think it should be
looked at.
STATEMENT,
ASEAN POSTMINISTERIAL
CONFERENCE,
SINGAPORE,
JUNE 18, 1987"
This year's meeting between ASEAN
and its dialogue partners has special
meaning. You will celebrate ASEAN's
20th anniversary when your heads of
government gather in Manila in
December. These 20 years have seen a
remarkable transformation in the land-
scape of Southeast Asia, and ASEAN
has been largely responsible for making
that transformation one of peace and
growing prosperity.
We have a long and, what looks to
be, a productive agenda, reflecting the
wide range of interests our countries
share. Before we begin our discussion,
however, I would like to focus on several
of the issues before us.
The tragic conflict in Cambodia con-
tinues, threatening regional security and
prolonging the agony of the Khmer peo-
ple. Your steadfast stand against Viet-
namese aggression has been a bulwark
in preserving stability in this region, and
it has offered hope to the Cambodian
people. We all agree it is imperative to
keep pressure on the Vietnamese to end
their occupation. Essential to this effort
is continued support to the noncom-
munist resistance. Also essential is the
continued isolation of Vietnam. That
isolation is a result of its own policies.
Without a change in those policies, its
people will continue to pay a heavy price.
Our position on diplomatic and
economic ties with Hanoi remains
unchanged: We will not move toward
normalizing relations with Hanoi until a
settlement has been reached, acceptable
to ASEAN, which involves the with-
drawal of Vietnamese forces from
Cambodia.
In recent months, we have all
noticed signs of what we hope suggest
movement toward a settlement. Those
signs are fitful, vague, and sometimes
mutually contradictory. Perhaps no one
knows what really lies behind them. By
all rational standards, Hanoi's own inter-
est should lead it to begin withdrawing
its forces from Cambodia, but to date
the Vietnamese appear to have taken no
concrete steps in that direction. The
next move is up to Hanoi. Nevertheless,
we need to consider what we can do to
move things toward a settlement. We all
want to see a just settlement which pro-
vides for Khmer self-determination and
ensures that Pol Pot and the Khmer
Rouge do not return to power.
I'd like to turn to an issue of intense
concern to the United States— the
POW/MIA issue. The hopeful process of
cooperation with Vietnam on the
POW/MIA issue was halted by the Viet-
namese last year. President Reagan has
named Gen. Vessey [retired Chairman,
Joint Chiefs of Staff] as his special
emissary, in an effort to resolve this
tragic legacy of the war. We are
prepared to move forward when we have
established a firm foundation that will
assure progress without linkage to other
differences between us. We appreciate
ASEAN's efforts urging them to
cooperate, recognizing, as we do, that it
is in Vietnam's best interests as well.
Delay will bring them no advantage. It
can only separate our peoples further.
Refugees
In the years since 1975, the ASEAN
countries have been generous and
humane in providing asylum to those
fleeing oppression in Indochina. At the
same time, the United States and others
represented here have responded by
opening their doors and their pocket-
books to resettle the vast majority of
Auaust 1987
31
THE SECRETARY
those who originally arrived in first
asylum. In spite of our respective
responses, the problem remains: People
are still forced from their homelands by
repressive policies and cruel occupation.
There is growing concern in some first-
asylum countries that the resolve of the
resettlement countries is beginning to
wane. There is growing concern in the
United States and other resettlement
countries that the principle of first
asylum may be in danger.
I want first to reassure you that the
commitment of the United States to
resolving the Indochinese refugee prob-
lem is as strong today as it has ever
been; and second, to urge all of you to
reaffirm your own commitment to that
same goal. It has become clear to all of
us that the refugee problem in this part
of the world is an enduring one, and we
must realize that solving it will be a
long-term process for all of us.
For our part, we will continue to
resettle refugees in substantial numbers.
We will continue our financial and moral
support of those organizations which
provide protection and assistance to
refugees and displaced persons in the
region. We will encourage other coun-
tries to maintain their share of the reset-
tlement effort as we work to find lasting
solutions which will make resettlement
itself less necessary. But just as donor
nations must reconfirm their commit-
ment to humanitarian aid to refugees,
first-asylum states must reconfirm their
commitment to humanitarian treatment
of all seeking asylum. Those countries
which have screening and repatriation
agreements already in place should make
every effort to make them function ef-
fectively and humanely, with the con-
tinued involvement of the UN High
Commissioner for Refugees (UNHCR).
While the countries of asylum and
the countries of resettlement have our
roles to play, we should never lose sight
of the fact that the cause of this problem
we are all forced to deal with does not lie
with any of us. Rather it lies squarely
inside Indochina, and it will not be
resolved until the Vietnamese play a con-
structive role in resolving it. I would
urge every one of you here today,
especially our ASEAN colleagues, to
engage Hanoi actively in this problem.
In particular, you can be helpful in mak-
ing clear to the Vietnamese that allow-
ing broader access to smoothly function-
ing orderly departure programs would
be welcomed by ASEAN as a gesture of
good faith. This is in the interest of the
refugees, the settlement countries,
ASEAN, the Vietnamese themselves,
and stability and progress in the region.
32
I might say parenthetically that, as I
came here from Manila, a fact well-
known in our Congress, I received a let-
ter from two Republican and two Demo-
cratic Senators welcoming the fact that
the refugee problem was clearly on the
agenda and stating their support for the
points that I have just made to you. I
make the point that I speak not only for
the Adminstration but for the broad
bipartisan consensus that has stood
behind this program and made it so
strong in the United States.
Economic Issues
Several of us at this table have just come
from the Venice summit, and economic
issues are very much on our minds. We
want to brief you on the results of the
summit, but we also need to get your
views on other economic matters. In par-
ticular, I would like to discuss what we
can do to bring about a more open
trading environment.
All of us depend, to a greater or
lesser extent, on foreign trade for our
economic health, and we are faced with
protectionist pressures from many direc-
tions. Let me just say, in that connec-
tion, that people refer to protectionist
pressures in the United States. There is
a difference between pressures for pro-
tection and protection itself. We in the
United States resist the pressures, we
hope will be able to do so successfully,
and we call upon those who already have
excessive protection to bring it down.
An outstanding way to do that is
through the Uruguay Round, and we
have worked together to begin the
Uruguay Round, and we must continue
to cooperate to help the GATT [General
Agreement on Tarrifs and Trade] talks
bear fruit.
I know the ASEAN countries are
worried about the adverse effects on
proposed protectionist legislation in my
country and in the other dialogue part-
ner countries. It is important that you
keep the pressure on all of us. It is also
important, however, to recognize the
drastic changes afoot in the international
economy. Export-led growth has worked
well for many nations, including those in
ASEAN. But the mature economies of
the world are beginning to face painful
problems of restructuring. New infor-
mation-based industries and services are
supplanting more traditional manufac-
turing processes and products of inter-
national commerce. Moreover, the U.S.
economy will, inevitably, make the
adjustments necessary to move from a
deficit to a surplus trade balance in
order to service our growing foreign
debt. In my view, this will happen more
rapidly than many observers now
predict.
I'd like to just take note of the fact
that the huge U.S. trade deficit has
emerged not because of a flaw in U.S.
exports but because of soaring U.S.
imports. So the market, so to speak, in
which the United States has to compete
effectively, is the U.S. market. And we
do speak that language. At any rate, I
think the consequences, the strategy—
the universal strategy of aggressive
export-led growth— is becoming less
effective. It is not arithmetically possible
for every country in the world to be a
net exporter at the same time. And the
huge U.S. deficit which we all decry has
been, in a sense, the place into which
everyone's export-led strategy for
growth has gone. The huge surpluses of
Japan and Germany have fed on this
deficit. So something will have to give
here, and it will be, possibly, a traumatic
experience.
Beyond that, demand has slackened
for many commodities, and competition
is widening and intensifying in the
export of agricultural products, textiles,
steel, autos, and consumer electronics.
And, most serious of all, the efforts of
many nations to expand exports, while
maintaining barriers to protect their
own domestic markets, are a powerful
stimulus to destructive protectionism
everywhere.
'Thus, while you must keep up
pressure on us to eschew protectionist
policies, you must act, too. I can do a
better job of convincing the Congress to
leave our door open to imports if more ol
our trading partners open their doors
wider. This year, we have seen real
progress in this regard. For example, I
am especially gratified at the forward
movement some of you have made in
extending intellectual property rights
protection since we last met in New
York in October. I hope that this
momentum, built up so rapidly in the last
year, will continue and that you can take
other steps needed to compete in today's
emerging international economy.
STATEMENT.
ASEAN-U.S. DIALOGUE,
SINGAPORE,
JUNE 19, 1987'
There are many things which Americans
admire about the ASEAN countries and
the organization you have so successfully
nurtured and strengthened. Perhaps the
most attractive attribute to us is your
sense of pragmatism. ASEAN was born
with high hopes; the ideals which you
Department of State Bulletin
THE SECRETARY
espouse are far-reaching. This is good,
for all human endeavor needs a noble
vision to strive for. But your successes
have come in areas where you have
measured your capabilities realistically,
decided your priorities wisely, and
expended your efforts to the fullest
within those priorities.
The best example is your resonse to
the Vietnamese invasion of Cambodia.
You saw your security— your very
existence— threatened when overwhelm-
ing Soviet-supported force was used to
bring about political change in your own
backyard. You knew that aggression
could not go unchallenged. But you were
faced with an army of over a million
men, flush with victory within Vietnam
and then in Cambodia. Clearly, you were
not able to repel the invaders yourselves.
So what did you do? Each of you
had, and still has, different perspectives
on Vietnam and its eventual place in the
region. Yet you have managed, in the
face of the clear threat posed by invasion
and occupation of a close neighbor, to
come together and forge a common posi-
tion. You undertook practical action at
the United Nations, in other interna-
tional organizations, and with other
interested parties, designed to show
Hanoi that the world does not and will
not accept aggression. At the same time,
you have been tireless in pursuit of a set-
tlement which will protect the interests
of all parties involved and reflect the will
of the Cambodian people. You have sus-
tained this position now for 8 years, flex-
ible in your approach, but adamant in
resisting efforts to weaken your resolve.
The Cambodian issue is not over yet,
but, as we discussed yesterday, there are
signs things might be moving in the
right direction. When a peaceful settle-
ment does come to Cambodia, it will be
due, in no small measure, to the clear-
headed, consistent, and practical ap-
proach which you in the ASEAN coun-
tries have taken.
In the economic field, while your
achievements so far have been more
limited, you have also shown a prag-
matism which has allowed your efforts
to continue and build momentum toward
a time when greater cooperation will
benefit all and, therefore, be possible.
Your economies, for reasons of geog-
raphy, history, and plain chance, are
largely competitive. This limits the scope
for common action like investment
exchange or freer trade.
And so you have focused your efforts
in areas where cooperation is more feas-
ible, for example, adopting a common
front in dealing with the rest of the
world. You have worked closely together
in commodity negotiations, as we in the
United States have discovered to our
chagrin at times. By combining together,
you have multiplied your impact in the
GATT, becoming a strong, positive force
in the Uruguay Round. You work
together effectively to influence the
policies of the dialogue partners. By con-
centrating your efforts on doing the
do-able and avoiding extravagant
schemes with no chance of success, you
have enhanced your credibility and
drawn the admiration, and sometimes
envy, of the rest of the world. You have
also built a base for doing more in the
future.
Your flexibility and pragmatism will
be challenged, perhaps, as never before,
as your opening statement suggested,
over the next few years as the world
economic system adjusts to the inev-
itable, and in my view, possibly rapid
decline in the U.S. trade deficit. Given
the importance of exports, particularly
exports in manufactures, to all of your
countries, you are going to have to work
hard to diversify your markets. While
you may be able to maintain your cur-
rent market share in the United States,
you clearly will not be able to look to the
United States to take major increases in
your exports— not necessarily because of
U.S. protectionism but simply because of
the adjustments the U.S. economy will
have made in order to service our large
and growing external debt.
ASEAN's achievements have been
remarkable. Other countries in other
parts of the world have tried what you
are doing and have foundered. It may be
that differences among them are too
great to overcome or they have been
held back by too ideological an approach.
Of course, the countries of ASEAN have
also not been able to do everything you
have wanted. Poverty and hunger still
exist in the region. War continues in
Cambodia, and a large and hostile army
remains on Thailand's border. But you
have succeeded where others have failed.
You know where you are going, and you
know what it takes to get you there. You
know the magnitude of the obstacles you
face, and you know what you can and
must do to overcome them. The spirit of
pragmatism permeates your work; it is
what makes ASEAN the unique
organization it is today.
We are always happy to come to
these annual dialogue partner meetings
and, perhaps of more significance, happy
throughout the year, day-to-day, month-
to-month, to work with each country
here, as well as with the ASEAN group
as a group.
NEWS CONFERENCE,
SINGAPORE.
JUNE 19. 1987'
First, I want to express my appreciation
to my host, the Foreign Minister of
Singapore, Mr. Dhanabalan, and to all of
the people of Singapore for their very
cordial and hospitable reception. I am
very pleased to have had a chance to
participate in this 20th postministerial
dialogue partners meeting. This is my
fifth go-around on these meetings. They
are always interesting, and they are
always productive, businesslike, worth-
while discussions. We have had
exchanges on many subjects, most par-
ticularly the questions of Cambodia, of
Indochinese refugees, and various
aspects of the international economic
scene. I expressed firm support of the
United States for ASEAN's efforts to
keep the pressure on Vietnam to end its
occupation of Cambodia and support for
ASEAN's efforts to bolster the noncom-
munist resistance and to bring about
self-determination for the Cambodian
people.
As far as refugees are concerned, I
expressed the continuing readiness on
the part of the United States to help
resolve this human tragedy, no matter
how long it takes. Of course, we must
remind ourselves that the reason for
these refugees is the nature of the
Government of Vietnam. That is what is
producing the problem.
I reaffirmed our commitment to an
open international trading system. We
worked together very effectively with
the ASEAN countries in the Uruguay
Round, in getting it started, and now
that it is going on. Of course they are
concerned, as I am and everyone is,
about the problems of protection around
the world, including in the United
States. We will, of course, be fighting
against that. All-in-all, these discussions
have been very productive and I am
pleased to have had a chance to take
part in them.
Q. On the airplane the other day
you said something which we would
like you to follow up on. You said on
Cambodia that the Soviets have been
developing their presence in Cam-
bodia. Can you tell us more about that?
Can you put any numbers on it?
A. I can't put any numbers or preci-
sion on it, but it is a general impression
having to do with port facilities, but I am
not able to pin it down more than that.
Q. Can you say what kind of a
presence it is? Is it military advisers?
33
THE SECRETARY
A. No, it is more, I believe, a ques-
tion of having access to facilities which
can be very useful to them. It is
something that we just see like a cloud
on the horizon.
Q. The South Korean Government
is reported to be contemplating mar-
tial law to deal with the demonstra-
tions there. Do you think that is a
good idea?
A. We have, of course, been con-
cerned about the difficult problems that
we now see in Korea, and we have been
in close touch with the Korean Govern-
ment. Our advice is to somehow resume
the process of dialogue between the
government and the opposition so that a
method of establishing a democratic
tradition can be worked out in a
mutually agreeable way. It is a difficult
but extremely important matter for the
people of Korea to see accompanying
their marvelous economic performance a
continuation of the transition to a more
democratic form of government. It is a
tricky, difficult problem, and we want to
help in every way we can to see them do
it. The resumption of dialogue, I think, is
a key.
Q. You have heard a presentation
from the ASEAN on the concept of a
nuclear-free zone— nuclear-weapon-
free zone in Southeast Asia. Did they
make you understand better why they
want to have this treaty?
A. I think the reasons are reasons
that we all share. We are all concerned
about nuclear weaons. President Reagan
has said that his dream is to see the day
when we can get rid of them. The Presi-
dent has been conducting a process of
arms control different from any process
of nuclear arms control that has ever
gone on before, namely, a process
designed to reduce the level of nuclear
arms. We share those concerns and
share that outlook.
However, it is also the case that the
basic peace in the world, not that there
haven't been important conflicts, but the
basic peace in the world has been kept
through nuclear deterrence. As long as
the Soviet Union has massive nuclear
weapons, it is essential that the United
States be able to have the weapons
needed to deter aggression. Therefore,
we are very reluctant to see the spread
of so-called nuclear-free zones, because
they tend to lessen the ability to keep
the peace through our deterrent capabil-
ity. That is the main point.
Q. You seem to have emphasized
the U.S. support for noncommunist
factions in Cambodia. Is there an
international effort to eliminate the
Khmer Rouge, and if there is one.
would the United States support a
joint effort to get rid of Khmer Rouge?
A. The problem with Pol Pot and his
supporters is that they have a track
record in government that is a very
reprehensible one. We can never support
a return to power by that group. We
support the noncommunist resistance,
joining ASEAN in that effort.
Q. Did you discuss about the U.S.
bases and insurgency problems in the
Philippines?
A. When I was in the Philippines,
we discussed the economic growth that
has returned to the Philippines following
their economic reforms. They have got
their economy now growing. For the
first time in several years, it is estimated
at a little over a .5% rate.
We discussed the fact that through
an arduous process of 16 months, the
Philippine Government has put into
place a new constitution and people
elected to a legislative, as well as, of
course. President Aquino, clearly
legitimated by virtue of the consent of
the Philippine people. I think it is by now
quite clear to everyone that the com-
munist insurgency, however desirable it
may be to entice people out of the hills to
join in the new situation on a nonviolent
and democratic basis, the communist
insurgency, nevertheless, is strong and
completely ready to use violent means to
overthrow or otherwise affect this very
legitimate and strong governmental
process that the people of the Philippines
have put there.
We certainly discussed that, and, of
course, the United States has supported
the efforts of President Aquino and her
government to improve the professional-
ization and the general capabilities of the
Philippine Armed Forces and to put it in
a position to take this insurgency on and
put it down.
Q. How about U.S. bases?
A. The U.S. base question really
hasn't come up in any strong way. They
are there. We have an agreement that
continues until 1992. It will be reviewed
next year, and that's something for the
future.
The only question that has come up
is a conceptual one. And that is, what to
call the flow of funds from the United
States to the Philippines, in the light of
the fact that we have the privilege of
using the bases. Some argue that it
would be good to call that flow of money
"rent." We, in the United States, are
reluctant to use that term and that con-
cept, and we don't use it anywhere in
the world. We believe that it is more in
keeping with the dignity of two sover-
eign states and more in keeping with the
genuine nature of what the bases are
about; to regard our presence there with
the Philippine Government as being
something that works to the mutual
advantage of both governments. It helps
the United States to be there, and it
helps the people of the Philippines in
their security, as well as the people of
the ASEAN region of which the Philip-
pines are a part, to have the U.S.
presence there. It's a matter of mutual
advantage.
At the same time, in the light of the
circumstances of the two countries, the
United States has pledged its best
efforts to see that a certain specified
flow of funds goes forward. And I think
that when the period from 1985 to
1989— during which the United States
pledged to use its best efforts to have a
flow of about $900 million-when 1989 is
through with, and you look back on that
period, I feel quite confident that the
flow will exceed a billion dollars. We will
have more than met the best efforts
pledged. But that's the only question
that's come up, and is strictly a concep-
tual one, but one that's important to the
sense of purpose and sovereign dignity
of both countries.
Q. There have been some renewed
calls on Capitol Hill for sanctions in
South Korea, in light of all the prob-
lems they are having there. How do
you feel about that, and I'd like to ask
if you could assess what impact these
demonstrations are having on the abil-
ity of this dialogue to be started?
A. There are difficulties in South
Korea, but I think it is entirely inap-
propriate every time there are dif-
ficulties somewhere for people to start
screaming about sanctions. The problem
is quite the reverse: to work with the
people of South Korea and the various
leaders of South Korea, to help them
find their way back to the dialogue that
can produce the constructive result that
we want and that they want, recognizing
that it's not easy, that they're trying to
do something that they've never done
before. We need to exercise a strong
sense of purpose and go about it that
way. That's what we're doing. They are
in no doubt about our views and our
readiness to help in this process.
Q. And on the assessment of the
demonstrations?
A. I've said, I think, that they are
obviously having a difficult time. Just
how to assess the breadth of the
demonstrations is a little— apparently
narwjmc
Ryllalm
THE SECRETARY
there is quite a lot of uncertainty about
how widespread they are, but at any rate
it's clear that they are in difficult times.
Q. Can you assess the impact of
what the United States is trying to do
in South Korea and on the prospects
for resuming the dialog^ue if the South
Korean Government was to declare
martial law?
A. There are various gradations of
actions that the South Korean Govern-
ment can take to deal with the problem
of potential violence. Just what they're
going to do, I'm not sure. We see
various rumors and of course, we,
through our Ambassador, Mr. Lilley, are
in very close touch with their authorities.
But what we think is necessary is a set
of processes that contain the potential of
violence and are consistent with restart-
ing the dialogue that we think is a
desirable component of this process.
Q. What's your response to Mr.
Dhanabalan's remarks this morning on
the ASEAN-U.S. initiative?
A. This is an initiative involving or
proposing a discussion between ASEAN
and the United States about economic
matters, the kind of structured and
systematic examination of the way we
interact, the nature of problems and how
to deal with them, and to examine
whether or not there aren't some addi-
tional things that we could do that would
operate to our mutual advantage. Our
reaction to that is a very positive one.
We will work at this. We do have a lot of
continuing contact between the United
States and ASEAN throughout the year,
and it's highlighted each year by this
dialogue partner meeting. But we have
meetings in Washington and New York
and various other places, so it's a contin-
uing dialogue. But I have designated the
Under Secretary of State for Economic
and Agricultural Affairs, Mr. Wallis,
who is here, as a person ready to lay out
the works, so-to-speak, on this initiative
and I invited Mr. Dhanabalan to desig-
nate somebody, and I'm sure that he'll
do so, and we'll get to work on this. It's
a constructive idea.
Q. Can you tell us, in your discus-
sions with Mr. Dhanabalan, did you
touch on either the topic of press
freedom in Singapore and the action
that Singapore has taken against Time
magazine and the Asian Wall Street
Journal, or on the subject of the 16
detentions made recently in Singapore
on allegations of a Marxist conspiracy?
A. We— to use your phrase— touched
on both of those. In fact, we discussed
those issues rather extensively, and we
have expressed our views involving
freedom of the press. The other matter
of the 16 people you mentioned is
something that is taking place within the
framework of the laws of Singapore and
the courts, and I am not going to make
any comment on it.
Q. I was wondering if you could
discuss just briefly what you will be
raising in your forthcoming Australian
visit by yourself and Mr. Weinberger
[U.S. Secretary of Defense] and also
perhaps the current concerns of the
United States in the South Pacific
region, particularly in regard to New
Zealand and its withdrawal from the
ANZUS alliance?
A. This meeting that we will be hav-
ing in Sydney this year is something we
do annually. At one time, we did it with
Australia, New Zealand, and the United
States. Since New Zealand has basically
opted out of ANZUS, the United States
and Australia do it together. Last year
we did it in San Francisco and this year
in Sydney. And we have a useful and
traditional agenda. We look at security
matters and developments in this part of
the world carefully together. The Aus-
tralians have put out a new defense pro-
gram. We talked about that last year,
and we will talk about that again. We
share views about economic devel-
opments in this part of the world and,
more generally, throughout the world.
That is the general nature of the
discussion.
It has been a very useful kind of
exchange and, as I say, been scheduled a
long time. I always look forward to it,
particularly when I come to Australia, a
country that I know rather well.
Q. Given the coup in Fiji and the
type of Soviet and Libyan activity in
the region, will there be more empha-
sis on security issues, or do you expect
some new element in the talks?
A. Of course when we talk about
security issues, we talk about the South
Pacific area. And we have done that.
The United States, as you know, has had
a long process of negotiations going on
for several years, finally culminating
successfully in negotiating a tuna fishing
agreement with the island states. We
are very pleased to have that completed,
and we share views about what is taking
place. I make a point each year as I
come here to stop at one of the island
states to let people see our interest and
concern and readiness to be helpful. Our
naval ships call, as do Australian ships.
This is an exchange that helps us as to
the information base that we are both
working from and allows us to coordi-
nate our efforts to a degree, as we do
with other countries. For example, I
have discussed this whole subject
carefully with Mr. Kuranari, the Foreign
Minister of Japan, and followed with
great interest his trip through the South
Pacific several months ago. That is a
very useful thing to do. I am sure that
the problems in Fiji will come out, and
we will want to explore them.
Q. Does the United States support
continued French nuclear testing in
the South Pacific and the French
Government's proposals for a self-
determination referendum in New
Caledonia? Is the United States con-
cerned at the widespread hostility
which these French actions have
aroused in and around the South
Pacific?
A. We are concerned about the
hostility. At the same time, the French
nuclear capability is part of the deter-
rent force that I spoke of earlier. If you
are going to have operative nuclear
weaons, you have to have a place to test
them. Now, we are, of course, very
interested to see and hear assurances
from France that its testing program is
totally safe and is completely consistent
with undertakings that there be no possi-
ble venting or anything that is
dangerous as a result of its test.
From the standpoint of the United
States, we do not test in this region; we
test in our own country. As far as the
other main concern that I have heard
expressed— namely, the question of
waste— neither we nor France nor Brit-
ain make any waste disposals in the
Pacific at all.
As far as the French handling of
New Caledonia is concerned and the
questions around it, that is something
for the parties concerned to work out.
Obviously, there is a great appeal to the
idea of self-determination, let people
vote and decide what they wish. At any
rate, we will see how this process
proceeds.
Q. Does the United States accept
that the French tests are safe?
A. Yes.
Q. The Government of Vietnam
has changed and put some new
people — or rather, some old people in
charge. Are you more or less opti-
mistic or pessimistic at this change?
A. As far as we can see, the nature
of the people who have now emerged
seems to snuff out what seemed like
possible, potential flexibility in the situa-
tion. It does not seem to be consistent
with their known postures. So it is a
rather discouraging matter.
August 1987
35
THE SECRETARY
Nevertheless, the strategy that we
and ASEAN have, I think, remains
absolutely the correct strategy. That
strategy is: number one, to support the
noncommunist resistance; number two,
to do everything we can to isolate the
aggressor, Vietnam, economically and
diplomatically. That is being done suc-
cessfully; and number three, if there
comes a time and when there comes a
time that Vietnam is ready to talk
sense— and sense meaning to get their
troops out of Cambodia and participate
in arrangements whereby the people of
that country can establish their own
government— if it gets to the point
where it is ready to talk about that, be
ready to do so. That is the strategy. It is
a good strategy. Sooner or later, it will
work.
I cannot help but believe that in the
recent travel of the Soviet Foreign
Minister through this part of the world,
as he went to Bangkok and he went to
Jakarta and went to Hanoi, that the
price the people of Vietnam are paying
for what they are doing is extraordinar-
ily high. You just have to visit the cities
and see for yourself. And of course, the
message of the refugees, people voting
with their feet, is a message about the
nature of the regime and the undesirabil-
ity of what it is doing.
Q. You mentioned the economic
isolation of Vietnam. To what extent
are you concerned that some countries
in the West, notably Japan, and some
ASEAN countries, notably Singapore,
are doing big trade with Vietnam and
perhaps eroding this isolation policy?
A. I don't think that it is taking
place on any particular scale. And to the
extent that it takes place at all, it is not
sanctioned by the policies of the govern-
ments concerned. They are opposed to it.
I think there is a consistent support for
the policy of economic and diplomatic
isolation on the part of these govern-
ments. Of course, the votes in the United
Nations each year are stunning affirma-
tions of the world's view that Vietnam
has no business occupying Cambodia and
should get out.
STATEMENT,
U.S.-AUSTRALIA
BILATERAL TALKS,
SYDNEY,
JUNE 22, 1987'
Thank you very much for your welcom-
ing remarks. I am very pleased to join
Secretary Weinberger in bringing you
the greetings of President Reagan and
the warm good wishes of the American
36
people. We always look forward to
visiting Australia, and particularly this
beautiful city, and I must say. Bill
[Foreign Minister Hayden], you've
turned the weather on this morning, and
I can only fault you for having this
meeting indoors, rather than looking out
over this wonderful harbor.
ANZUS continues to be a key link in
the global network of alliances that has
kept the peace for over four decades.
Important as these alliances are in deter-
ring aggression, their strength, in the
final analaysis, derives from a common
recognition that peace is indivisible and
that collective efforts are necessary to
ensure the common good.
I have just come from meeting with
our NATO allies halfway around the
world. The cohesion and strength of that
alliance has been a critical factor in
achieving progress toward what we hope
will be the first major reduction in the
nuclear arsenals of the superpowers,
leading to a safer and more secure
world. As I pointed out in a press con-
ference in Reykjavik, that cohesion is
based on the fact that we have had a
strong pattern of consultation, and we
take each other's concerns into account.
Just as the NATO alliance— one of
the most successful the world has ever
seen— emerged from the lessons of
World War II, the ANZUS alliance grew
out of cooperative defense links forged
in a common struggle to ensure the
security of this region. Thirty-five years
later, our commitment to security here
in the South Pacific remains as strong as
in Europe.
Despite the severe test that ANZUS
has faced over the years, it remains an
effective security structure reflecting
our pattern of close consultations and
our mutual respect for each other's
concerns.
We continue to regret New Zea-
land's absence from these councils and
await the time when its policies will per-
mit restoration of a full role in ANZIJS.
To this end, we have sought to keep the
ANZUS framework intact to facilitate a
return to trilateral defense cooperation
when circumstances permit.
Fortunately, the South Pacific has
been a region of relative tranquility in a
turbulent world. This has provided an
environment within which the newly
emerging states have been able to foster
democratic institutions free from the
threat of outside interference.
However, this is not a time for com-
placency. Recent developments in Fiji
have demonstrated that we cannot take
the stability of local governments for
granted.
We also share your rejection of
political opportunism and destructive
interference by outside forces in the
South Pacific. As your government has
been so effective in pointing out, the
efforts by Libya to sow discord and
subversion within the region should be a
cause of concern to regional govern-
ments. Your recognition of the unwel-
come role Libya has begun to play in the
region was demonstrated by your firm
action in closing the Libyan People's
Bureau and expelling Libyan diplomats.
Nor can we forget that the Soviet
Union, which has used its support for
Vietnamese armed intervention in Cam-
bodia to establish in Cam Ranh Bay the
largest Soviet military base outside the
Soviet Union, is engaged in a fishing
expedition in the South Pacific aimed at
increasing its regional presence. What
are they fishing for? We can assume that
the Soviet Union will go on taking
diplomatic, commercial, intelligence, and
other initiatives in the region, aimed in
part at undercutting vital alliance inter-
ests in the Pacific.
In short, the demand for clear-
sightedness in recognizing potential
sources of instability in the region are
greater than ever before. Moreover, the
efforts by outside powers to influence
regional developments provide a con-
stant reminder that the peace of this
region cannot be separated from the
quest for peace elsewhere in the world.
Thus the significance of ANZUS for both
our countries, and for gobal security, is
as great as it ever has been.
Your recently completed defense
review testifies to your clear vision in
recognizing the security challenges we
face. We noted, in particular, the high
value the defense white paper attaches
to our alliance partnership and your
clear recognition that regional defense is
part of global defense. We share that
assessment. Our cooperation retains its
larger significance. Our joint facilities
enhance the deterrence of nuclear war
through providing for strategic early
warning. These same facilities allow us
to verify arms control agreements, thus
making arms control possible. By keep-
ing the peace in this region, we can only
strengthen world peace.
We also work together in military
exercises, improving the capability of
our forces to operate separately or
jointly in the event of a threat to peace.
We particularly value our ship and air
access to Australia, which enables us to
play a stabilizing role in the Western
Pacific and the Indian Ocean, far beyond
Australia's shores. We note, with
satisfaction, the warm hospitality you
THE SECRETARY
extended during the recent Midway bat-
tle group visit and the mutual benefits
accruing from such a deployment.
Australia's thoughtful role in arms
control efforts lends added weight to
your views on these issues. We value the
frank exchanges we have on such issues
as the NST talks [nuclear and space
arms talks]. We appreciate your support
on the START [strategic arms reduction
talks] treaty and the excellent work you
are doing in the negotiations on a com-
prehensive chemical weapons stand.
While we disagree on occasion, you are
aware from our close contact how
seriously we value your views.
Since we last met, we've made prog-
ress on resolving some impediments to
our good relations in the South Pacific.
The signing of the fisheries agreement
was a positive step in which you played a
constructive role.
We also applaud Australia's con-
tribution to achieving consensus in the
South Pacific Forum. Your active role in
seeking a resolution to the crisis in Fiji,
in offering to share intelligence on
regional security threats, and in securing
full forum membership for the Marshall
Islands and the Federated States of
Micronesia attests to the interest we
share in regional stability.
Australia's economic and trade con-
cerns continue to hold our attention as
we grapple with our own budgetary and
trade difficulties. We will continue to
work with you in international fora to
resolve these issues equitably, especially
on the agricultural trade issue where our
objectives are congruent. There are
some hopeful signs of progress in the
Uruguay Round that should help ease
the current friction in worldwide
agricultural trade. As you know. Presi-
dent Reagan reiterated our shared view
on the urgent need for world
agricultural reform at the Venice
summit.
Bill, Kim [Australian Defense
Minister Beazley], Cap and I are pleased
to be with you again. Our consultations
are always useful in strengthening
mutual suport and frankly facing up to
problems when they arise. We look for-
ward to continuing this process in
today's talks.
On the eve of your bicentennial
celebration, we can take satisfaction
from our close cooperation in the past.
We look to the future with certainty that
our ties will grow even stronger based
on the willingness of democratic peoples
to make common cause in defense of our
principles and way of life.
]ust 1987
ARRIVAL STATEMENT.
APIA.
JUNE 22, 1987«
It is a great pleasure for me to be back
in Apia after 44 years. I have many fond
memories of Western Samoa and its peo-
ple, and I have for years wanted to
revisit a place where people made me
welcome in the midst of World War II. I
cannot think of a better time to do so
than right now, as you celebrate you
25th anniversary of independence.
The United States and Samoa have
been friends since the early days of our
Republic. This friendship has been
recognized formally since 1878, when
our country signed a treaty of friendship
with the Great Chiefs of Samoa. In the
Second World War, America and Samoa
joined hands in the common effort to
preserve freedom in the Pacific.
Since that terrible time, the Pacific
has been at peace. This remarkable
record is proof that the Pacific way has
lessons in it for the whole world. You
deserve the highest respect for having
developed a set of regional institutions
that work according to your own tradi-
tions to preserve peace and harmony.
My visit is a sign of the importance
the United States places on its friend-
ship with the independent nations of the
South Pacific. Shortly, I will call on your
head of state to express the friendship
that President Reagan and the American
people feel for the people of Western
Samoa. Then I will meet with your
Prime Minister, who will be acting not
only in his capacity as Prime Minister
but as chairman of the South Pacific
Forum. We place high value on our con-
tinuing dialogue with the Pacific nations,
and we listen carefully to the views of
their distringuished leaders.
Today the nations of the Pacific face
new challenges. In addition to pursuing
the traditional goals of economic and
social development, the region must
determine its response to efforts by
countries not traditionally part of the
Pacific scene to carve out a role for
themselves. In addressing this issue, the
leaders of Western Samoa have
understood a basic fact— that one must
consider carefully the motives of nations
that do not share our traditions of
democracy and consensus. The United
States appreciates Western Samoa's
support for our efforts to keep great
power rivalries from affecting the
stability of the Pacific.
To the Samoan people, I offer my
warmest congratulations on achieving
years of peace, freedom, and respect for
human dignity. The American people will
do what we can to help you as you seek
to preserve those values and develop
your nation.
iPress release 131 of June 16, 1987.
^Press release 133 of June 17.
'Press release 134 of June 18.
^Press release 141 of June 22.
^Press release 142 of June 22.
•"Press release 143 of June 22.
'Press release 146 of June 24.
'Press release 150 of July 6. ■
Secretary's Interview on "Meet the Press'
Secretary Shultz was interviewed on
NBC-TV's "Meet the Press" on June 28,
1987, by Chris Wallace, NBC News;
David Gergen, U.S. News & World
Report; and Robert Kaiser, The
Washington Post.'
Q. The story coming out of Seoul
today is that the government is going
to propose a series of new concessions
to try to end the violence there. Is it
your sense that one of those conces-
sions will be constitutional reform
before the next presidential election?
A. I don't want to try to comment
on particular details. The important
thing to notice is the fact that the
dialogue has resumed between the Chun
government and the opposition. That is a
very encouraging development;
something that we have worked for for a
long time.
Q. You say the dialogue has
resumed. In fact, the opposition says it
is not sure whether or not it is willing
to hold negotiations, because they're
concerned it will just be more talk and
nothing specific. Isn't that a
legitimate fear on their part?
A. All fears are legitimate, tac-
tically. The fact is that there have been
meetings, the government has shifted its
ground on some important matters, and
they are engaging. This all is part of a
very long-term effort on our part and,
more importantly, on the part of the
Korean people.
President Reagan addressed the
Korean National Assembly in 1983. He
set out very clearly there our objectives,
and presumably their objectives, to find
their way to a peaceful change of power
through democratic means. That's
something they had never been able to
37
THE SECRETARY
do. I think just as the Koreans have per-
formed an economic miracle, at least
there is a fair chance that they'll be able
to perform this really political miracle.
We want to help them do it.
Q. You seem optimistic then that
the situation is getting better.
A. There are problems, as you have
pointed out. I think there are bound to
be problems when you see the process of
changing power, of dispersing power, in
a situation that's been accustomed for
many, many years to having it all held in
one place. So it's a traumatic time; it's a
difficult time. It's also a very promising
time if the Korean people can bring this
off.
Q. Let me move this a little to the
west, in the Persian Gulf. On this pro-
gram 2 weeks ago, we had unusual
bipartisan agreement. Sam Nunn and
Henry Kissinger both said that reflag-
ging Kuwaiti tankers is a bad idea.
They said you didn't really have a
policy there. Would you answer them
and also tell us what's going to happen
if one of these Kuwaiti tankers under
an American flag gets attacked by
Iran? What are we going to do?
A. The policy that we have in the
Persian Gulf is longstanding and solid.
It's based on the fact that area has the
basic reserve of oil that the West uses.
The United States is the biggest user of
oil. The United States, today, is the big-
gest importer of oil. Oil flows basically
into a pool, and all of the users take
from that pool. So we have had, do have,
and will have in the future a gigantic
stake.
In the Persian Gulf area, there is a
war going on between Iran and Iraq. It's
been going on a long time. Iran has suc-
cessfully stopped Iraq from shipping
directly through the gulf, although their
oil flows in other ways. Iran ships a lot
out of the gulf. That's its main way of
shipping oil out from its country.
We think that assurance of the flow
of nonbelligerent oil out of the gulf is
something important to us. So when the
Kuwaitis early in the year asked us to
help them and proposed the idea of
reflagging their ships, we responded
favorably. I might say, at the time we
couldn't even get Members of Congress
to listen as we tried to brief them. But I
think it's a sensible thing to do.
We will have adequate naval forces
there to protect themselves and protect
ships. And I think this is the point being
overlooked— to provide a deterrent
force. It's basically deterrence— that is,
the capacity to do something that has
kept the peace. I think we'll do the job in
the Persian Gulf.
Q. Isn't Kuwait, though, an active
ally of Iraq, and by doing this aren't
we sidling up to Iraq in that war and
losing our neutrality?
A. Kuwait is not a belligerent
power.
Q. But it is an ally, isn't it, of
Iraq?
A. It has its relationships with Iraq.
There are lots of countries that have
relationships with Iraq. There are lots of
countries that have relationships with
Iran. But they're not belligerents. The
belligerents are Iran and Iraq, and we
are neutral insofar as that war is
concerned.
Let me say also that there has been
going on for quite a while— and it's very
active right now— a strong diplomatic
effort which, I think, taking a little issue
with your opening comment, does have a
large support. The President made a lot
of headway in Venice in consolidating
that.
On the diplomatic track, in the
United Nations, we now have agreement
of the five permanent members of the
Security Council for a strong cease-fire
resolution. We are working on the
followup to that should either party not
go along with t'ne cease-fire. So there's a
strong diplomatic effort going along
with the effort on our part and of our
friends and allies to see that the oil con-
tinues to flow from the Persian Gulf.
Q. On this program 2 weeks ago,
it was demonstrated that there was
sharp disagreement in this country on
both sides of the aisle. Secretary Kiss-
inger opposed the policy; Senator
Nunn opposed the policy. There's now
mounting pressure in Congress, as you
know, to delay the reflagging, to look
for alternatives to settle the land war
through the United Nations. Are you
opposed to delaying the reflagging and
supporting an alternative?
A. Absolutely. I think it would be a
very bad thing to do from the standpoint
of the United States. A very bad thing to
do. I think you're not stating correctly
the situation in Congress. The situation
in Congress is that they're in betwixt
and between.
Q. They can't make up their own
minds.
A. They can't make up their minds.
But that's what you need a President
for. The President has to decide
something, and he has. He has shown
the leadership and the positive thrust
here that's needed.
Q. The President also said that it's
very important to keep the Soviets out
of the gulf. Senator Moynihan wrote
recently in The New York Times that it
was the Administration's arms sales to
Iran that sent the Kuwaiti a-scurrying
to the Soviets, looking for help on the
reflagging and that, in effect, the
Administration's arms sales to Iran
brought the Soviets into the gulf. Do
you accept that view?
A. I don't accept that, although it is
the case that the Kuwaitis did approach
the Soviets not long after the arms sales
were revealed. On the other hand, what
the Soviets had been asked to do and are
doing is nowhere near as extensive as
what we're doing and what our historic
role in the gulf has been. I think it is
important, as Senator Moynihan said— I
read that article; it was a good article— it
is important for us to maintain ourselves
there. The worst thing in the world that
could happen, or one of the bad things,
would be to find the Soviet Union astride
the supplies of oil to the free world. That
doesn't make any sense at all.
Q. You say it would be a bad idea
to delay the reflagging and the escort-
ing. Do you have any idea at this point
when the U.S. escorting of those
Kuwaiti ships is going to begin?
A. I'm not sure precisely, but it will
be some time in the next month. Maybe
in the first half of the next month. I
don't think there is any particular date
set. We want to do it when we have the
presence there that is considered by our
naval officers to be adequate to do the
job. We're assembling that, and we'll do
it properly and in good time.
Q. And despite these calls for a
delay, it's full-speed ahead?
A. I think that the worst thing in
the world that can happen to the United
States is to be pushed out of the Persian
Gulf. That's a bad thing.
Q. Let me switch, if I may, to
arms control. We keep hearing that
you and Soviet Foreign Minister
Shevardnadze are going to hold a
meeting in the next week or so to try
to speed up completion of an arms deal
on medium-range missiles, and yet we
still don't get an official announce-
ment. Where does that stand?
A. The reason you don't get an^
official announcement is there hasn't
been any date set. On the other hand,
Mr. Shevardnadze and I have agreed
that as soon as it's useful to have a
meeting, we'll have one. It basically isn't
a big problem to arrange people's dates.
We accommodate each other easily that
way. There has been discussion of a
meeting some time in the near future,
but there hasn't been anything set yet.
38
Department of State Bulletin^
THE SECRETARY
As soon as there is something set, it will
be announced.
Q. The biggest remaining
difference — or certainly one of the big-
gest remaining differences — seems to
be this question of whether or not Ger-
many should keep its Pershing I#A
short-range missiles, for which the
United States keeps the nuclear
warheads. Is that a potential deal
buster?
A. The German missiles, which are
part of a cooperative program that we
have with them, are not on the
intermediate-range missile negotiating
table. The things that are on that table
are exclusively Soviet systems and U.S.
systems. No third-country systems, no
cooperative systems, are on that table.
Q. And what if the Soviets say,
"No deal unless we get rid of those
systems"?
A. They're not on the table, so
we're not discussing them in that
framework.
Q. Let me move to the Iran-confra
affair. Judging by a lot of the com-
ments of the members of these con-
gressional committees, there's at least
a danger now that your era as the
presider over American foreign policy
is going to be remembered for decep-
tion of Congress, for avoiding con-
stitutional requirements, for privatiz-
ing diplomacy. What's your response
to those charges? Is that fair, and are
you embarrassed at all about this por-
trait of American diplomacy in this
period that's coming out in those
hearings?
A. This is not a portrait of
American diplomacy. It's a portrait of
what happened in a particular instance.
Some of the things that have been
revealed I find sickening. However, from
the standpoint of our broad diplomacy
worldwide. President Reagan's leader-
ship and efforts and initiatives have
yielded great benefits for the interests of
America. I think that those things will
be focused on.
I am a great believer, myself, that
you must behave yourself in a constitu-
tional and proper way. To the extent of
my ability, I've always upheld those
principles.
Q. Didn't some members of your
Administration avoid those principles,
though, and negate them?
A. I think that the basic picture is
one of respect for law, respect for the
Constitution, and respect for the notions
of doing things through properly
accountable methods.
August 1987
Q. What did you find sickening
then, specifically?
A. I'm going to be testifying myself
on this pretty soon, but I found, for
example, the idea that people who were
representing themselves as in some way
speaking for America would talk about
the Dawa prisoners in Kuwait as
something we would be willing to
discuss. That is totally wrong, totally
against the President's policy, and I
found that just a terrible thing for them
to do.
Q. What about the cover-ups?
What about all the top officials in your
Administration, some of your col-
leagues, lying to Congress, lying to
each other?
A. From my standpoint I have taken
my stand within the Administration and
publicly. I have made information that I
happen to have available to all investi-
gating committees from the beginning
and have asserted myself. I have been
called to testify and asked to allow 2
days to do so. I'll save myself for that
testimony.
Q. Do you have further reflections
on how this policy on Iran in regard to
the contras slipped out of control,
away from the State Department?
A. I have some reflections on that,
but, again, I'll save them for my con-
gressional testimony.
Q. There was a startling observa-
tion by an Assistant Attorney General
this last week that he would now,
after questioning Oliver North earlier,
he would not believe Oliver North's
testimony under oath. Would you?
A. This is for the committee to deal
with. It's a problem.
Q. Let me ask you a credibility
question. Everybody involved in this
seems to have gotten a little mud on
their fingers. You said on October 8
that the Eugene Hasenfus airplane
was hired by private people who "had
no connection with the U.S. Govern-
ment at all." Do you regret that state-
ment now?
A. That statement was made as a
result of assurances to me that that was
the case.
Q. So you were lied to?
A. So I was lied to.
Q- By?
A. [Assistant Secretary for Inter-
American Affairs] Elliott Abrams was
lied to. I remember— I can't specify the
date, but I have a record of it— when
Elliott came into my office in a state of
great distress and said, "We have been
lied to, and what we have been saying is
wrong." We then sought to get that
corrected.
Q. I want to talk, if I may, about
Elliott Abrams, because he's under
tremendous fire in Congress. You sent
a letter to Congress this week defend-
ing him and saying, "Well, if he mis-
led Congress about soliciting funds
from Brunei, it was because he had
made a pledge of confidentiality to
Brunei." Is it really more important
that he —
A. That's not what I said. I said that
Elliott Abrams made a mistake in that
case. He realized that he made a
mistake.
Q. Two questions, if I may. One, is
it more important to keep faith with
Brunei than it is to tell the truth to
Congress?
A. You don't have to make that
choice. There are all kinds of things that
could have been said under those cir-
cumstances: that there was a solicitation
from a third country. It was perfectly
proper, legally authorized by the Con-
gress, and, Mr. Chairman— or whoever
you're talking to— we have made this
solicitation with a pledge of confidential-
ity. I don't want to say the name of the
country— or something like that. But
nobody should lie. He didn't lie. He just
didn't come forward with the
information.
Q. All the President will say at
this point is that he accepts your
support — "accepts" your support for
Abrams. That sounds awfully
lukewarm.
A. I've talked to the President
about it. He is a great supporter of
Elliott Abrams. People hear different
things. I happened to be sitting next to
the President at the Venice summit, and
somebody shouted a question at him
about Elliott Abrams. He gave a very
strong statement, but I've never seen it
printed any place.
Q. And Elliott Abrams can stay on
the job as long as he wants?
A. Elliott Abrams is doing a very
good job, and he's done an extraordinary
job. He's a very capable person, not only
in the present job but in his previous job
as Assistant Secretary for Human
Rights, and, from all indications I have,
in his previous jobs as a staff member
for senators.
iPress release 148 of June 29, 1987.
39
THE SECRETARY
News Briefing of June 2
Secretary Shultz held a news briefing
at the Old Executive Office Building on
June 2, 1987.''
It might be useful to start, as we look to
Venice, at some of the things that have
happened in the past year related to
statements made in Tokyo. Each year,
there is, of course, discussion of security
issues and East-West issues. I think it
has been a very important thing that
each year the countries involved express
their firmness and cohesion and strength
and readiness to negotiate.
Between Tokyo and Venice, we will
see that a great deal of headway has
been made in the intermediate-range
missile discussions. That is beginning to
take shape in the form of a possible
agreement— still a lot left to be done—
but nevertheless, a great deal of head-
way there. Also, the respective positions
in the strategic arms talks have moved
quite substantially, although we are not
anywhere near as close to an agreement
in that area.
At the Tokyo summit, for the first
time, the leaders focused on the prob-
lems in agriculture, and a strong state-
ment was made. Similarly, as in past
summits, the problem of protection was
highlighted and the importance was
pointed to of the Uruguay Round or what
became the Uruguay Round. So since
that time, that round has gotten started.
There is a considerable emphasis on
agriculture. An OECD [Organization for
Economic Cooperation and Develop-
ment] statement just about a month ago
moved that ball forward some more, and
I'm sure it will come in for worthwhile
discussion at Venice. So in that area
you've seen progress.
In the field of terrorism there was a
very strong statement in Tokyo. It
singled out Libya. Since that time, Libya
has taken quite a beating, justifiably,
and there have been interesting develop-
ments in the field of terrorism. This
most recent year, as compared with the
year past, has seen a decrease by 33% in
international acts of terrorism in
Europe. And we've seen the emergence
of the rule of law as one useful tool, an
important tool in combatting terrorism.
Just to give a sample of cases: in Britain
in November, we had the Hindawi trial;
45 years was the sentence. Hindawi's
brother was tried in Berlin also in
November, with a 14-year sentence. In
Canada in January, two Sikh terrorists
were apprehended as a result of a very
40
fine piece of cooperation between the
FBI [Federal Bureau of Investigation]
and the Royal Canadian Force, and they
were given life sentences. In Paris in
March, we had the Abdullah trial out of
which came a life sentence.
In Japan in April, the Supreme
Court upheld a verdict of some years
ago. It was a life verdict involving ter-
rorists. In Italy in May, the court upheld
the sentences involved in the Achille
Lauro case. So we see the rule of law
emerging here in the field of terrorism.
No doubt that subject— it's all too true
that the problem still is present and that
subject will be discussed further.
I'm sure Secretary Baker will
develop the sense in which we have
increased intensity of economic coordina-
tion, and we see the emergence of the
G-7 [Group of Seven finance ministers
from U.S., U.K., Canada, Italy, Japan,
France, and West Germany]. Tradi-
tionally at these meetings there has been
a review of regional issues. It's been
useful, and no doubt at the Venice sum-
mit that will take place again, and there
will be some special emphasis and inter-
est in the Iran-Iraq war and some of the
implications of it.
So I just thought in previewing what
might be discussed in Venice, it's worth-
while to take a look back at the last year
and see where we've come as a way of
looking ahead to where we may be
going.
Q. What do we want the allies to
do in terms of supporting us in the
gulf?
A. Of course, we want to have peo-
ple recognize the importance of the prin-
ciple of freedom of navigation, the
importance of keeping the strait open,
the stake that we all have in it, and
insofar as particular countries are con-
cerned, we are trying to think out what
in particular individual countries might
do. No doubt they are thinking them-
selves about that, and we'll have to be in
touch with them as we have some
specific things to talk about.
Q. Are they supportive — generally
supportive, or do they seem to be
reluctant to be engaged?
A. I think everyone is supportive of
the notion that we want to keep the
strait open. Nobody has any difference
of opinion about that. Some countries
are quite active. The British, for exam-
ple, have two frigates and a destroyer in
the gulf; the French have ships in the
vicinity; and other countries are simi-
larly concerned. But those are the ones
that have military forces there. There is
a major role to be played by diplomacy.
We are working in the United Nations.
We have some progress there, some dis-
appointments there, but nevertheless,
we are working to do everything we can
to bring an end to the war. That's the
basic solution.
Q. What do we want from the
allies in terms of arms control, and
how do you assess the coalition
statement — I mean, the West German
Government statement on Thursday in
terms of the INF [intermediate-range
nuclear forces]?
A. After the Soviets made their
most recent proposals on so-called short-
range INF systems, which were made to
me in Moscow, we have had a very broad
and careful process of consultation with
our allies. There's been a great deal of
discussion back and forth, and various
governments have been expressing
themselves. The German Government
expressed itself after a lot of thought
and consultation yesterday, and no doubt
this will be discussed in Venice and at
Reykjavik.
I think what we see here now is the
alliance, a free alliance, through a proc-
ess of genuine and open consultation and
consideration, reaching a consensus
which the President will consider, and
which no doubt will be the basis for our
position in the INF talks. And I think
what we see is progress toward having
that picture gel, and progress toward a
potential agreement.
Q. But do the Germans have reser-
vations that might be troublesome?
A. No, I don't think so. They have
certain problems, others have little bit
different problems, and the way you deal
with these things is you talk about them
and have the patience to consult with
free governments and come to a consen-
sus, which we seem to be in the process
of doing.
Q. You talked about the year since
Tokyo, but one of the things that hap-
pened in Tokyo was while you were
talking and the United States was
pushing for a strong position on ter-
rorism, it also turned out that behind
the backs of the allies, you were sell-
ing arms to the Iranians, and, of
course, it has also been revealed that
you were lied to or misled by some
other of your colleagues at the Tokyo
summit about that. What is the residue
of these surreptitious selling of arms
to the Iranians? What kind of residue
Department of Stale Bulletin
THE SECRETARY
does that have in terms of our
credibility of making this argument
with our allies?
A. I think we have gotten over that
hump. It has been a problem, but I think
the merits of the case of not selling arms
to Iran, given the fact that Iran is the
intransigent party, are evident on their
face. So I think that's what carries the
argument. Not that we have been totally
successful at the United Nations; we
haven't been. We seek mandatory sanc-
tions on whichever country refuses a
cease-fire at international borders; that
is basically what we're seeking. Coun-
tries have agreed to call for the cease-
fire, and we're having difficulty with the
sanctions as we have before. But I think
what countries around the world want is
not to see a United States kind of dead
in the water over this issue. They seek a
United States that's continuing to show
leadership, and we are.
Q. Does the United States— do you
and the President have any problems
at all, or feel any embarrassment about
going in and making this argument to
the allies, given the fact that this
country was selling arms to Iran a
year ago?
A. No.
Q. Going back to the gulf for a
moment, as far as allied cooperation is
concerned, have you any ideas for a
joint command, a multilateral control
of some kind, better liaison, coordina-
tion? How would this work? What are
you actually looking for? In the
specific, what are you looking for?
A. You look for different things
with different countries. Let's take Iraq.
It's important that we have an improved
method of communication so that they
don't misidentify ships— just to take an
example. And, no doubt, discussions
with Saudi Arabia about the use of the
AW ACS [airborne warning and control
system]— their flight patterns and the
cover for them and so on— those are the
types of things to be discussed. What
coordination is needed insofar as, for
example, British ships in the gulf and
ours, I'm not so sure that any special
thing needs to be done, but this is
something the military people are
reviewing.
Q. Do you see any merit in the
notion of escort fees that was sug-
gested here at the White House by
several Senators— Senator [Pete]
Domenici and others?
A. Exactly what the right way to
share the burden is is something to work
through. That is an idea. There are a
number of others and there hasn't been
any conclusion about that. But, certain-
ly, this is a responsibility that we have
had in front of us for many years. We've
been in the gulf a long time. It is a vital
area. It's where a big proportion of the
world's oil is. I might say that oil is an
internationally traded commodity, and
without regard to who gets what par-
ticular oil, it in a sense flows in to a
world oil pool and we are the biggest
consumer of oil in the world, and we are
the biggest importer of oil in the world.
So we have a big stake in all of this.
Q. On the INF point that was men-
tioned before, do you expect a state-
ment from this meeting to be issued
that could— from the allies — that could
provide the basis for a reply to the
Soviet offer?
A. I don't think the summit group is
the appropriate one to try to reply on
INF. This is a negotiation formally
between the United States and the
Soviet Union. We do not discuss third-
country systems, only our own systems.
And, of course, in INF— since it inti-
mately involves the Europeans in par-
ticular and also our friends in Asia— we
have an intense pattern of consultation.
But in the end, you come back to NATO.
So I think the Reykjavik meeting has the
breadth of NATO participation and, no
doubt, we'll be discussing it there, and
then in the end it is up to the President
to make a decision about the U.S. posi-
tion in Geneva.
Q. On the gulf what argument is
the President going to make that the
allies haven't already thought of
themselves? I mean, what new
[inaudible],
A. I think the arguments are pretty
well-known. They are fundamental. That
is, this is a source of energy for the free
world that is of vital importance now. I
think it is reasonably clear that the oil
pool that comes from the gulf is likely to
be more important in the future rather
than less important, and, therefore, the
free world has a major stake in maintain-
ing its ability to see that nobody else can
dominate that oil pool. That is the basis
for this position.
Q. Is there concern with the West
Germans and reports that they are try-
ing to deal on Hamadei, the terrorist,
and how do we approach them on that
subject given the strong summit
statements on terrorism?
A. We have been dealing with the
Government of Germany all along on
that case, and we, of course, would like
to see extradition to the United States.
Germany has to consider whether it
wishes to do that or wishes to try him in
their own courts for crimes committed
under their law, and that process of con-
sideration is very much underway.
Q. Can you confirms news reports
that they are trying to make a deal
where they would give him a token
sentence?
A. No, I can't confirm that. I don't
know that that is so at all. You see
things printed around, but as far as we
know, the problem is being addressed in
a serious and proper way.
Q. I wasn't quite clear on one
thing about your remarks regarding
the Persian Gulf. Do you foresee the
need for a greater military presence by
the allies?
A. What we are— not necessarily,
particularly so. We had a very thorough
discussion of what we plan to do with
the President and the Joint Chiefs.
Admiral Crowe [Adm. William J. Crowe,
Jr., USN] presented, in a very com-
prehensive way, the military thinking on
that. What is needed, as is always the
case when you have a threat that you
have to contend with— what is needed is
an adequate force to deter— to deter the
use of force against us. When people see
that there is a capacity to deal with the
threat, that has a deterrent value. And
that is what we need to put there. It's
defensive and it's deterrent, and prob-
ably you have to look at the size of the
number of ships you have to be sure that
you have an adequate number.
Q. But from a political standpoint,
wouldn't it be helpful to you, par-
ticularly here with questions about
U.S. policy, to have a greater allied
military presence and more com-
munications with the United States?
A. Of course, there is a British
presence already. But I suppose if you
computed it in terms of their presence as
related to their GNP [gross national
product] or their population or their
navy or something, you'd have to say is
more than ours proportionately. It's
been an area of traditional concern to
the British, and they are there. As I say,
I don't stand here as a military expert
and ready to declaim on exactly what are
the right patterns of coordination
between the parties. The French are also
in and around the area, and they're
always effective. They always have their
own way and their own ideas in this as
in other areas. But in the end, in the
clutch, the French always come through
on these matters. So we know that;
we've had that experience.
August 1987
41
THE SECRETARY
As to what other military forces of
the allies might be there, I think that's a
question because the capacities
elsewhere are not so great. But we need
to look at things that others might do,
and one or two ideas have already been
expressed here, and we'll have to see
where we go.
Q. The Germans insist on keeping
the Pershings 1-A. Do you support
this position?
A. Our position has been from the
outset and remains in Geneva that the
negotiations are between the United
States and the U.S.S.R. and concern,
exclusively, systems that are the
systems of those respective countries.
Third-country systems are not on the
table— not British systems, not French
systems, and not the Pershings.
Q. But the warheads are under
American control.
A. That's true. At the same time,
the reason why they're under American
control is not that the Germans don't
have the money to own them them-
selves, but because of the kind of a tradi-
tional reluctance to put nuclear war-
heads into their hands without some sort
of dual key arrangement. So I think that
the rationale for that has perhaps a
broad appeal.
Q. In what way can the Japanese
contribute to the effort to keep the oil
flowing and the sealanes open?
A. They can contribute diplomat-
ically as they do and work at. They can
probably make contributions of a
displacement sort, and perhaps
indirectly of an economic sort. And that
is a matter that we are trying to think
out, and I assume the Japanese are as
well. What specifics there may be, we'll
take up with Prime Minister Nakasone.
Q. The hearings on Capitol Hill
will be going on while the President is
in Venice. Now, that hasn't originally
been the case. How much is that going
to be a distraction for the President
and for yourself while you're over
there?
A. I don't suppose it's any more of
a distraction than when we're there. The
hearings are going on and they are deal-
ing with matters of concern, and we
keep track of them.
Q. Is it a distraction to you now,
then?
A. It's some distraction. I don't
watch the hearings. I don't have time;
I'm too busy. But it's a—
42
Q. But I'm thinking in terms of
substance —
A. But it's something that's going
on and you try to keep track of it,
certainly.
Q. Today you won't watch?
Q. For example, today, your
assistant, Mr. Abrams [Assistant
Secretary for Inter-American Affairs
Elliott Abrams], is going to be up
there. Are you concerned that he's
much more involved than you initially
might have thought?
A. I have complete confidence in
Assistant Secretary Abrams, and he will
be testifying and we will all see his
testimony. But he's a person of tremen-
dous energy, integrity and I'm sure that
he will appear in that light.
Q. Can a multilateral effort to
ensure the freedom of navigation in
the gulf succeed without some sort of
coordination with the Soviet Union? I
mean, after all, they are in the gulf
now and they are helping the Kuwaitis
to ship their oil. Is it possible — can
you envisage some sort of at least
tacit, or open coordination with the
Soviets?
A. I don't know that there's any
particular coordination of a special sort
necessary. We do have, and have had for
some time, talks with the Soviets
about— I think they're called the
"incidents at sea" talks that basically set
out understandings about how our ships
will relate to each other and presumably
that can govern. I don't know that
there's any need for anything special
beyond that.
Q. Given the great deal of head-
way in the INF negotiations, has the
United States and the Soviet Union
begun discussing the broader agenda
for the next summit meeting and have
you begun discussing dates for that
summit meeting?
A. We haven't had any really
definitive discussions about dates and a
next summit meeting and so on. But we
have had a lot of discussion about the
possible content. And I think both the
President and General Secretary Gor-
bachev agree that we want a meeting to
be reflective of genuine substance. So we
look at various possible things that could
constitute that substance. INF is clearly
a candidate. The Nuclear Risk Reduction
Centers that have been basically agreed
on are a definite item that could be
included. The movement in START
[strategic arms reduction talks] that was
accomplished basically in Reykjavik and
followed up on since in Geneva— we've
tabled, as you know, a full draft treaty in
Geneva— those discussions are going on
strongly.
To what extent progress in those
negotiations and in the space talks can
be reflected by some sort of a statement
remains to be seen. But that, of course,
needs to await where we are as we
approach a summit, if we do have one.
We believe, of course, that there is a
broad agenda that needs to be reflected
in any summit. We need to have things
to say about human rights. We need to
have things to say about regional issues.
The President pushes on those on occa-
sions, as do I. So there are a broad set of
things that we all work at, and we'd like
to see as much as possible reflected in
substance by the time, whatever time it
turns out to be, that there may be
another summit meeting.
Q. To what extent is the new
policy in the gulf, and the escorts and
the shipping protection also, an effort
by the Administration, or seen by the
Administration as a need to blunt
Soviet influence there? Do you see a
growing Soviet threat in the Persian
Gulf, and is this one of the reasons for
your policy?
A. Certainly we don't want to see
the Persian Gulf become a place where
the Soviet Union has any major role.
That oil flows to the West. Maintaining
the ability of that oil to flow is some-
thing that we need to step up to. I think
it's very important to recognize that and
not to have it in any sense fall under the
umbrella in any way of the Soviet Union.
That's a very important point.
Q. But do you think the allies will
accept making this sort of an East-
West issue rather than a regional
Mideast issue?
A. It's not primarily an East- West
issue, but there is an East- West dimen-
sion, and so let's recognize that.
On the other hand, we've had
numerous discussions about the Iran-
Iraq war with the Soviet Union. I've had
quite a few with Foreign Minister
Shevardnadze myself, and there are
many aspects of work on that particular
conflict where we see things in a rather
parallel way. It isn't a kind of classic
East- West proposition, rather to the
contrary. We have at least in major
respects parallel objectives there. We
want to try to work at it as much as we
can in tandem. That's the way we
approached it in the Security Council at
the United Nations in asking for a joint
call for a cease-fire, and in asking for
mandatory sanctions on whichever coun-
try, if either does refuse to engage in the
cease-fire.
Department of State Bulletin
THE SECRETARY
Q. We seem to be getting a
somewhat different message from you
than from the President as to whether
this government wants more allied
military support in the gulf. The Presi-
dent yesterday made a very forceful
statement that he did not want the
United States to be alone, as he put it,
in the gulf, and he urged the Euro-
peans to be brave and come on in. You
just said that not necessarily do we
need allied military backup in the gulf.
Which is it?
A. There is no difference. We aren't
alone; we don't want to be alone. We
think it's important that the West
generally, including Japan— if I can use
that word with respect to Japan, and I
think it fits in this case— have a unified
view about this matter, and that people
do the things that they can do. Countries
are positioned in different ways in terms
of their capabilities, and we have to
recognize that and what it is expected
that different countries do. The fact of
the matter is that we are not alone in
the gulf right now. The British are
there, we have a collaborative pattern
with Saudi Arabia involved and so on. I
think that needs to get enhanced
somewhat, and we'll be working on that
in Venice. There isn't any daylight to be
found between me and the President.
Q. You said that there was coor-
dination on incidents at sea with the
Soviets, since they're going to be fly-
ing a flag over their vessels and — for
the Kuwaitis — and we're going to be
doing it, why don't we — wouldn't it be
possible for us to get together with
them on a method of operation so that
we — they would have a strong enough
force there and a strong enough
method of operation whereby that
would deter people from attacking
both countries' vessels?
A. They have to decide what they're
going to do with respect to any under-
takings they've made. We're doing the
same. As I said, the discussions of inci-
dents at sea provide a forum and have
set out rules and perhaps that is as far
as it needs to go. I don't want to— again,
I'm not appearing here as a naval expert
in declaiming on that subject, but that's
the way it would appear to me.
Q. But don't you think you might
save some lives and prevent attacks if
the two of you got together real —
much on —
A. I think the presence of our
forces, let alone theirs, will be a very
impressive deterrent force. And I expect
that that will be looked at and looked at
with a lot of respect by anybody who
might think of attacking ships we're
convoying.
'Press release 123 on June 3, 1987.
U.S. Business
and the World Economy
Secretary Shultz 's address before the
Council of the Americas 18th Washington
Conference for Corporate Executives on
May 11. 1987.'^
I think your discussions about the
various aspects of business opportunities
and problems in Latin America needs to
be set in the context of what I regard as
a world economy just bursting with
opportunities and changes where advan-
tage will go to the people who have a
sense of what they are and what they
mean, but, at the same time, a world
that is beset by problems that have to be
grappled with well, or otherwise the
problems will cause us to miss these
opportunities. I am very fearful right
now that the mood in the United States
is such that it may cause us to drop balls
that we don't need to drop. So that's a
summary of my remarks.
August 1987
Technology Changes and the
Information Age
But, now, as to what is taking place in
the world, I think it is a moment of
tremendous change. The change is
driven primarily by the emergence of
new technology that is rearranging the
meaning and use of information, causing
the way we do things— whether it is
managing a business, handling a produc-
tion enterprise, understanding the func-
tion of selling, handling diplomacy, or
whatever it is— it has moved us into an
age where the key ingredient is
knowledge and ability to handle it.
That is accompanied in the informa-
tion technology area by all sorts of other
changes, some of them quite relevant to
Latin America. I'll give a couple of
examples.
I think we're seeing a shift in the
meaning of raw materials, because we
see in area after area how the
knowledge about processes is changing
the meaning of what you need by way of
raw materials to do a certain task.
1 understand now, for example, in
the area of telecommunications, that we,
in this country— and that's a big tonnage
user of copper— we, in this country, use
about half the amount that we did 4 or 5
years ago, and probably the use is declin-
ing. Why? Because we're substituting
fiberoptics which has a negligible raw
material base, so to speak, for copper.
That has a lot of bearing on the kind of
ore body— copper ore body— that you
might consider exploiting. Or, to put it
another way, unless it is an exceptionally
rich ore body, it isn't going to pay out.
But more generally, I think, we have
to ask, what is happening to the meaning
of raw materials as a result of changes
in the processes by which we achieve our
end results— copper, nickel, iron ore, et
cetera?
A second point has to do with
agriculture— feeding ourselves. It's clear
enough that Malthus by now has been
stood on his head. We don't have too lit-
tle food. We have an abundant capacity
to produce it, and that capacity has been
enhanced by two good things and by one
bad thing.
The good things are huge changes in
biotechnology which led us into much
more productivity per whatever it is that
you want to measure, and a recognition
in governments who used to think that
the right way to handle the price of food
was to be sure it was kept below the cost
of producing it. And somewhat to their
chagrin, they discovered that that
doesn't encourage production, and so
they see that you have to let the price of
food reach a level— perhaps even a
world-market level— that will encourage
production. And as soon as they do, the
results are practically instantaneous.
Look what has happened in China.
Look what is happening in Africa. Africa
last year could feed itself. It wasn't
distributed right, so there are still big
problems, but that's a result of, you
might say, the managerial awakening-
government managerial awakening to
commonsense and the inevitability of
how a market operates. These things are
leading to the production of more food
all around the world.
And the third thing, which is bad, is
that the big industrial economies have
loaded onto them— here I'm talking
about Europe, the biggest original sin-
ner, but also the United States and
Japan— have loaded onto our systems
subsidy programs that put very high
43
THE SECRETARY
prices, way more than is necessary to
encourage the necessary production, and
so those prices are bringing forth very
heavy surpluses which are being placed
on the world markets below the price
that brought them forth to begin with.
And so it was that in Tokyo last year
in the declaration that the summit heads
made, they identified this problem as a
very severe one that had to be tackled,
and it is being worked on, and I hope
we'll get somewhere with it.
But, anyway, my point is not to
argue that, but just to say there are big
changes coming around. There are
changes in the structure of the world
economy as to the relative importance of
countries. Wliile the global GNP [gross
national product] grows, its distribution
is changing.
I think that you operate in an
environment that is already drastically
changed and is going to change more. I
have said, and I believe it, that just as
we in the United States long ago left the
agricultural age, although we produce
plenty of food, we also have left the
industrial age, although we do plenty of
manufacturing. But nobody around says
that the symbol of our industrial might is
the blast furnace and the assembly line
any more.
We are in a different age, a knowl-
edge age, an information age, or
whatever you want to call it, and I think
a person doing business in Latin
America or anywhere else has to bear
this in mind.
That's an area, I think, of great
opportunity for American businessmen,
because American businessmen tend to
be relatively quick and creative and
ready to do things in different ways, sub-
ject to competition. If you're a little slow
on your feet, there's a new competitor
out there who isn't that jazzes you up.
That's our system, and it has worked
very well, and I think it will continue to
work, and this will work well for us.
Managing the Debt Problem
Now, what about the problems? Of
course, the environment that we all
want, and that is absolutely necessary if
we're to continue to manage the debt
problem at all adequately, is an environ-
ment of economic growth. And we have
to say, as we look at what's been going
on for the last 3 or 4 years or so at least,
that the engine of growth has been the
U.S. economy, and particularly so
because we have run an extremely large
and unprecedented trade deficit. That
trade deficit has provided, you might
say, the effective demand on which a lot
of the rest of the world— particularly
Latin America, if you look at the
statistics— managed to put together a
program of growth.
Now, there are two things that
threaten it aside from the normal
business cycle kinds of problems that
you tend to encounter. First of all— and I
think this is inevitable, myself— the U.S.
trade deficit will decline, I think, fairly
rapidly, although I don't spend my time
as much as I used to in the good old days
when I was a businessman like you,
thinking about these things. But I think
it's inevitable that this trade deficit will
decline, perhaps rapidly.
The reason is quite simple. The
reason is that the almost arithmetic, you
might say, counterpart of the big trade
deficit is a big inflow of funds to the
United States. Those funds flow in here,
seeking a risk averse rate of return, and
it's because people are willing to spend
money here that we are able to consume
more than we produce. That's what
we're doing as a country. And as we now
are a net debtor at a very large level, we
are financing that debt by borrowing
more.
There comes a time when you can't
finance your debt by borrowing more,
or, to put it another way— more like
David [Rockefeller] might put it— there
comes a time when peoples' concerns
about the relative nominal rate of return
is adjusted by the risk— the exchange
rate risk makes them need a rate of
return that causes you to say, "That's
too high. The burden is too great." Or,
to put it another way, the burden
reflects itself into the kind of interest
rates that have to emerge in this coun-
try, and those interest rates may not be
in tune with where we want to go in
terms of our own economic growth. But
there is an inevitable market reaction
that's bound to set in. And so what is the
alternative to borrowing in order to
service your debt?
How many people know the answer
to that question? Nobody? The answer is
pretty obvious. The answer is that you
have to run a trade surplus to service
your debt. When the United States goes
from $150 to $160 billion or so of deficit
that everybody is feeding off. to a large
surplus, or even a vastly diminished
deficit, then the need for other places in
the world, Latin American places, to
have a more self-sustaining pattern of
internally generated growth is very big.
Now, there are differing ways in
which this change can come about— and
some of them are desirable, in my opin-
ion anyway, and some are very unde-
sirable. But the path of least resistance
around in our Congress seems to be that
you do it by protecting our markets, by
shutting off the capacity of other coun-
tries to send stuff here that people want
to buy. And people observe the fact that
our big trade deficit is not the result of a
sudden decline in our exports; we are the
biggest exporter in the world. The big
trade deficit results from a huge surge of
imports into the United States.
People are always saying, "You
know, the U.S. businessman has to learn
how to export if you're going to solve
the trade deficit." That is an incorrect
statement. The U.S. businessman has to
learn how to compete in the United
States in order to solve the trade deficit,
in the sense of addressing yourself to
what it is that caused it to emerge. And
I think that's probably an easier prob-
lem, given what's already happened to
the relative exchange rates.
But the answer of solving it by pro-
tecting the markets will lead the world
to a catastrophe. We saw what happened
in the 1930s, and we see the contrast of
what happened in the post- World War II
period emerging after the work of some
really terrific statesmen on our part and
on the part of some other countries put
together a world economic system based
on the idea that we were going to have
growth and openness in trade. The open-
ness in trade sustained the growth and
vice versa, and it worked— it worked to
our benefit and everybody else's benefit.
The approach of protecting markets in
the 1930s didn't work. It didn't work for
us, and it didn't work for anybody else.
So why it is so insistently sought in Con-
gress to go back to that world is beyond
me, but that is where they are trying to
Protectionism
Beyond that, I have a real concern that
the United States is drawing back from
the world just at its moment of greatest
opportunity, the greatest thrust of
freedom politically, the greatest thrust
of freedom economically. In the light of
all of these advances, what are we
doing? I mentioned protectionism.
We are very self-righteous about
what happens in any place in the world
and so we tend to want nothing to do
with things we don't like. But more than
that, we are cutting brutally the amount
that we budget to support our efforts in
foreign affairs— and I mean brutally, to
the point where we have to literally haul
down the flag around the world, because
there just isn't the money to support the
consulates and embassy work that we
need to do, let alone provide the security
44
Department of State Bulletin
THE SECRETARY
and economic assistance to countries
that need it and to which it is in our inter-
est, our security interest, to provide it.
Right now, the United States is
reacting to the opportunities that I sug-
gested to you at the beginning in a very
perverse way, and I believe that we
should turn that around. I have been
making this same speech to absolutely
no avail, I'm afraid; but I think it is
extremely important that the United
States continue to be a positive force in
the world and be engaged.
We saw what happened before
World War I when the United Stated
climbed into its shell. We saw what hap-
pened from the 1930s when the United
States climbed into its shell; and we have
seen what has happened since World
War II when the United States recog-
nized that it must be not only a respon-
sible partner but a leader and take on
the responsibilities of being the leader—
we shouldn't get tired, we shouldn't get
frustrated. We should recognize how
much in our interest it is to assume that
role.
And as businessmen who are out
around, I think that you all are terrific
ambassadors for us. You go out around
the world and into Latin America, and
you do things that are so good that peo-
ple are willing to pay for them and leave
you a little profit in addition. So, that's a
great recommendation for the quality of
service that's rendered. And so I pay my
respects to you and welcome your
presence here, and your willingness to
listen to my plea that you help this coun-
try to maintain its responsible and
leadership role in the world, as we
should and we must.
'Press release 104.
Narcotics: A Global Threat
Secretary Shultz's address before the
INM [Bureau of International Narcotic
Matters] Narcotics Coordinators Con-
ference on May 4, 1987.^
I'm delighted to be able to speak to you
this morning. This is an issue of impor-
tance. It's one that I've been struggling
with as a government official since I was
Director of the Budget, and I remember
way back in those days. I do feel that
somehow we are finally beginning to get
somewhere. I feel that more now than I
did way back then, and there are many
reasons for that.
I'd have to say one of the reasons is
the very effective work that our First
Lady Nancy Reagan has been doing,
because whOe I'm going to focus here in
my remarks on the overseas elements of
our program, we all know that it has to
be a two-way proposition— we have to be
getting at the use of drugs. Nancy has
really led the way with her efforts, and
the "Just Say No" is catching on. I feel
as though this battle can be won, so that's
very encouraging for all of us, I think.
I have the opportunity to speak today
to our Foreign Service community about
an international issue which has so much
impact on our everyday lives. Narcotics
control is a special job, performed by
special people. It benefits all of us, and it
makes our world a better, safer place to
live. Drug abuse is both a moral insult
and a national security threat.
August 1987
In my meetings with leaders of
democratic nations, I hear that drug
trafficking and abuse are undermining
democracy and social institutions. Elected
leaders fear that drug traffickers can
and will buy elections. Democracy is at
stake.
In the United States, drugs are kill-
ing our athletes, corrupting our values,
and threatening our society. Front page
news photos of stockbrokers being led
away in handcuffs, charged with trading
cocaine for insider information on
stocks, drives home the point— drugs are
a threat to every sector of our society.
No one is safe.
From the boardroom to the locker
room, from the classroom to the
operating room, someone you may not
know, but who could make a difference
in your life, may be on drugs. He invests
your money. He pilots an airplane. He
teaches your children. He performs
surgery. He is your child's best friend.
He is your son.
In the crucial narcotics control jobs
you hold overseas, fighting the business
of drugs is something you do every day.
Many of you go into opium or coca fields
and see the acres and acres of crops that
will be processed into the heroin or
cocaine that end up on our streets. Many
of you work with officials whose motives
are not beyond reproach. (See how diplo-
matic I'm being.) Many of you see, day
after day, the toll that drug production,
trafficking, and abuse take on develop-
ing societies.
We see it at home, too. Drug avail-
ability is unacceptably high. Drugs are
our number one foreign import. Narcotic
profits fuel a huge criminal network
reaching into our country from the
jungles of Bolivia and Colombia, Laos
and Burma. The network involves
peasants from Peru, hill tribe farmers
from Thailand, chemists from Hong
Kong, shipowners from Panama. It has
ensnared students on our campuses, job-
less young people, Hollywood stars,
housewives and halfbacks, rich and poor
alike.
Even the producing countries are
seeing their citizens fall victim to addic-
tion, just like Americans and Europeans.
Lima and Bangkok and Karachi have as
many victims now as New York and
London, Rome and Detroit. Many of the
victims are only children.
Just the other day, I read a news
story about a 9-year-old Nigerian boy
who was being used as a mule by heroin
smugglers. When he was arrested, no
one came forward to claim him. He was
carrying $3-million worth of heroin. Like
so many other children enmeshed in the
narcotics network, he has become a
victim.
Someone told a story the other day
about a school teacher in The Bahamas
who asked the children in her class what
they wanted to be when they grew up.
Twenty percent said drug traffickers.
This isn't a chapter from a Dickens
novel. It's real life, 1987.
I've said on many occasions that nar-
cotics trafficking is the modern-day ver-
sion of piracy. And it's getting worse,
when lawless, greedy drug traffickers try
to hold entire countries hostage. They
are joining forces with terrorists and
guerrillas to pillage and plunder whole
societies, destroying the values and insti-
tutions of decent people. They have
killed scores of judges in Colombia. They
tracked down Ambassador Parejo,
Colombia's former Justice Minister, in
Budapest but failed to silence his elo-
quence in defense of human values. Traf-
fickers have killed one of our drug
agents, murdered journalists, threatened
the wives and children of courageous
officials.
But the traffickers have discovered
that they can no longer get away with
murder. The countries under assault are
fighting back. International law is being
rewritten to arrest the traffickers,
separate them from their wealth, and
put them in prison. Colombia's extradi-
tion of Carlos Lehder to the United
States proved to Latin American traf-
fickers that no one— not even a kingpin
of the Medellin cocaine cartel— can
45
THE SECRETARY
escape justice when nations work
together in defending their people.
We have no illusions. The real war
against drugs, an international struggle,
is just beginning. The stakes are high,
and the challenges are great. This terri-
ble threat is not insurmountable. Right is
on our side, and also realistic effort is on
our side.
The worldwide supply of drugs is
vast. The toll of addicts grows daily.
Drug dealing is too profitable. Many
officials have been corrupted, but
millions of good people everywhere have
had enough. Today 20 countries are
eradicating narcotics crops. The United
States actively assists 14 of them with
funding, equipment, and personnel chan-
neled through State's INM Bureau.
More countries are looking to their
neighbors for help, and joint vigilance is
the watchword. Regional cooperation is
beginning to bear fruit.
The United Nations, the Organiza-
tion of American States (OAS), ASEAN
[Association of South East Asian
Nations], SAARC [South Asian Associa-
tion of Regional Cooperation], and the
EEC [European Economic Community]
have all taken on drug control as a grave
international issue. The newly organized
OAS antinarcotics commission just met
here in Washington. We look to the OAS
to organize concrete actions to reduce
both the supply and demand for drugs in
our hemisphere.
Next month, the UN International
Conference on Drug Abuse and Illicit
Trafficking will be held in Vienna. This
will be a historical gathering of
ministerial-level officials from all over
the world to study concrete actions for
dealing with a worsening global problem.
The United Nations is also drafting a
new convention against narcotics traf-
ficking that will strengthen international
efforts to halt this corrupting trade.
Both the conference and the convention
are examples of the fine work the United
Nations can do and proof that mutual
interests can be secured by international
cooperation. Both projects are based on
the growing realization that no single
country can defend itself against nar-
cotics alone.
Regional defense is another area of
progress in drug control. The Andean
nations of Colombia, Peru, Ecuador,
Bolivia, and Venezuela signed the Lara
Bonilla treaty last year, pledging to
work together against trafficking and to
adopt more effective antinarcotics
legislation.
In Asia, countries like Burma and
Thailand, India and Pakistan have joined
the United States and Mexico in frankly
discussing the narcotics problem as a
serious bilateral issue which affects
nations sharing common borders. Let me
assure you that as we look overseas for
international cooperation against drugs,
we're looking for it at home, too. We
must put our own house in order. Last
November, President Reagan called 21
of our ambassadors home to tell them
how the United States is dealing with
our drug problem. The national strategy
incorporates law enforcement, treatment
and rehabilitation, research, prevention,
and international cooperation— in other
words, a comprehensive program.
The United States has set ambitious
goals to get rid of drugs in our schools,
our workplaces, our transportation sys-
tem, our public housing— in other words,
to get rid of drugs in our country.
Last fall, the President signed the
Anti-Drug Abuse Act of 1986, the most
comprehensive antidrug legislation on
the books. Title IV of the act expands
the Department's international narcotics
cooperation program, and the Bureau of
International Narcotic Matters received
a budget of $118 million for its work this
year, nearly double what it received in
1985.
And I must say, when you attract
some money, Ann [Ann Wrobleski, Assist-
ant Secretary for International Narcotic
Matters], you attract a lot of attention.
And all the other bureaus are coming
around saying, we're working on drugs,
and we can use a little of your money,
but you don't give a dime out unless you
get your money's worth, do you?
As diplomats, we have a special role
to play as part of the national and inter-
national strategy. When I met with our
ambassadors at the White House a few
months ago, I made specific recommen-
dations for action. I asked them:
First, to stress the U.S. commitment
to fighting narcotics in their meetings
with foreign officials, and I do that, too;
Second, to use the range of available
tools, such as extradition treaties,
mutual legal assistance treaties to com-
bat narcotics trafficking;
Third, to support the work in the
United Nations, particularly the upcom-
ing world conference and draft convention;
Fourth, to encourage other nations
to support the UN Fund for Drug Abuse
Control;
Fifth, to establish a dialogue among
ambassadors to explore regional
cooperation on the narcotics issue, shar-
ing information and expertise;
Sixth, to encourage other countries
to learn from the American drug experi-
ence. I told them that we learned the
hard way, but we can help other coun-
tries to avoid the same mistakes we
made; and
Seventh, I urge all of them to raise
the issue of congressional budget cuts in
their appearances before American
audiences. I asked our ambassadors to
make the point repeatedly that false
economizing undermines our campaign
against drugs.
Without essential MAP [military
assistance program] and IMET [inter-
national military education and train-
ing] funding, adequate development
assistance and ESF [economic support
fund] funding, our efforts to control
narcotics production and trafficking can
be rendered meaningless. U.S. foreign
assistance helps strengthen democracies.
Strong countries can better resist drug
traffickers and offer alternatives to their
citizens. In the long run, America bene-
fits, as does the rest of the world, from
our foreign assistance programs.
In his speech on September 14,
President Reagan said:
When we all come together united, striv-
ing for this cause, then those who are killing
America and terrorizing it with slow but sure
chemical destruction will see that they are up
against the mightiest force for good that we
know. Then they will have no dark alleys to
hide in.
You are a part of this "mightiest
force for good." It's hard work. You're
on the front lines, day after day, facing
discouragement and fighting an uphill
battle. But your work is deeply appreci-
ated by the Department of State and by
the entire U.S. Government. You are
helping to build a climate of outspoken
intolerance, as Mrs. Reagan urged in her
September speech, against those who
live outside the law. We're all depending
on you and your work, because you are
making the world a better place to raise
our children and the generations to
follow.
iPress release 98 of May 5, 1987.
46
Department of State Bulletir
AFRICA
The U.S. and Southern Africa:
A Current Appraisal
by Michael H. Armacost
Address prepared for delivery before
the World Affairs Council in Cleveland
on June 15, 1987. Ambassador Armacost
is Und£r Secretary for Political Affairs.
We live in a dangerous world— a world
of conflicts among nations and values; a
world in which we and a few other
nations possess frightening destructive
power, yet often find it impossible to
order events. It is a world that is subject
to radical shifts in technology and com-
munication, to bewildering movements
of peoples, currencies, and markets; and,
while the interdependence among coun-
tries is growing, nationalism still
triumphs over all competing ideologies.
Terrorism may be a weapon of the weak,
but it is a potent weapon, and it is too
often employed. The need for interna-
tional cooperation has never been
greater; yet the United Nations seems
stymied by events, confined to a spec-
tator's role with respect to most of the
world's trouble spots.
In such a world, our ideals and our
interests are plainly at risk. Our
strength, our consistency, and our for-
titude remain crucial to the global
balance of power, to the independence of
our allies, and to the future prospects of
democratic politics and market econom-
ics throughout the world. We cannot
defend our interests if we retreat from
the world.
Hans Morgenthau used to say that
the trouble with the Americans was that
they refused to accept the world on the
world's terms. That, in fact, is both a
blessing and a curse. Our involvement in
the world has been directed toward the
improvement of its conditions. Yet in
foreign affairs, our influence is limited.
And failure to have our way or to
achieve our aims has had a way of
prompting Americans to throw up their
hands in frustration and to disengage.
We see both these tendencies at
work in America's approach to southern
Africa— the impulse to play a reformist
role, to stand at the side of those
struggling for freedom; yet also, the
frustration that change comes slowly
and the temptation to walk away from
an area plagued by intractable problems.
There is much in southern Africa
that we might like to turn away from.
One sees racism, poverty, violence.
August 1987
Marxism and Soviet meddling, disturb-
ing demographic trends, and chronic
underdevelopment. But this does not
mean that there are many threats and
no opportunities in southern Africa.
"The United States has important
interests in southern Africa, interests
that can be promoted as we defend
historic American values. Let me discuss
southern Africa then in these terms:
• It is an area where we seek to pro-
mote human rights;
• It is an area where we are encour-
aging economic development; and
• It is an area where American
diplomatic leadership and problem-
solving techniques can have a special
relevance.
Promoting Human Rights
in Southern Africa
In the past, it may have seemed suffi-
cient to put our name to international
documents that spoke loftily of human
rights. That is not enough. We want to
work, beside other people and govern-
ments, to protect and enhance the dig-
nity of the individual.
In pursuing a human rights policy,
we must, of course, always keep in mind
the limits of our power and of our
wisdom. We must be realistic in our
strategy even as we are idealistic in our
goals. Our country can only achieve our
objectives if we shape what we do to the
case at hand.
Broad human rights concerns
animate U.S. policy toward South
Africa.
First, our country is united on the
goal of ending apartheid and playing an
active role in helping bring about a new.
democratic South Africa that respects
the rights and promotes the oppor-
tunities of all its people.
Second, this process of change and
negotiation cannot be accomplished by
outsiders. It must be built by South
Africans themselves— even as we offer
our encouragement and support. The
new South Africa we hope to see must
be based on a process of reconciliation
founded on a genuine accommodation of
interests— not upon a reaction to one
injustice with another.
Third, our diplomacy must encour-
age dialogue and communication—
despite the difficulties posed by distrust
and polarization across racial lines. We
have a unique interest in communicating
with all parties. We should urge them to
create new openings for reconciliation
and constructive change.
Fourth, working with our allies, we
will continue to assert a Western vision
of what we favor as the outcome in
South Africa. It is not enough to cam-
paign "against" apartheid. South
Africans must know what the West
stands for as that country redefines
itself politically. Above all, we are for a
solution that has the consent of the
governed; that includes all those who
consider themselves South African as
citizens of the state; that accords equal
rights, privileges, and protections to
those citizens; and that has a constitu-
tional structure that permits the exercise
of democratic liberties.
Apartheid presents one of the most
difficult challenges facing U.S. diplo-
macy today. All Americans reject it. It
must go. The questions are: How? And
what shall replace it?
This question of how apartheid ends
preoccupies us because we know from
our own history that the process of
change can determine the substance of
change. If violence is the steward of
change, there will be one outcome in
South Africa; if change comes about
largely through peaceful means, there
will be another, presumably happier
outcome. How can we use our limited
influence to enhance the prospects for
peaceful change? Can additional sanc-
tions impose the kind of shock therapy
that will produce results? Will they
merely exacerbate racial polarization,
hardening the resistance of those in con-
trol while deepening the economic
distress of the black community?
Such questions animated last year's
debate over sanctions against South
Africa. The Reagan Administration
opposed sanctions because it felt such
sanctions would complicate rather than
expedite the dismantling of apartheid.
The debate was about means, not ends.
It was a debate worth having. It ended
when Congress passed the Comprehen-
sive Anti-Apartheid Act.
Economic sanctions directed against
South Africa are now the law of our
land. The Administration is rigorously
implementing that law. In so doing, we
have found ourselves hoping that this
shock treatment would produce results.
47
AFRICA
The verdict is not yet in, but the
evidence to date, while not conclusive, is
not particularly encouraging.
What have been the results? The
government of P.W. Botha has used the
intervening months to devise means of
circumventing the sanctions, shifting the
economic burdens they have wrought
onto weaker neighbors, mobilizing the
defiance of the white community against
sanctions, and refining the tools of
repression against blacks. Meanwhile,
the American corporate presence has
shrunk appreciably. Our relationship
with the South African Government has
been prickly; our contacts with elements
of the black community have been
expanding. But we are not a "major
player" on the internal scene.
Some in the United States now pro-
pose still further sanctions— indeed, a
total trade embargo— and some are
recommending total disinvestment from
South Africa. This is a formula for total
American withdrawal.
Unfortunately, apartheid will not go
away just because we do. The course
more consistent with American prin-
ciples is to stay involved as a force for
peaceful change. The alternative to an
eventual radical and violent end to apart-
heid is a negotiated political accommoda-
tion now, before it is too late. The
moral— and the practical— course is to
use our influence, whatever its limits, to
encourage a peaceful transition to a just,
postapartheid society. Cheering from the
sidelines as a race war erupts in South
Africa is not a role worthy of Americans.
Nor is a race war inevitable. Black
resistance to the white minority govern-
ment in South Africa has claimed some
2,500 lives over the last 3 years. This is
a terrible toll; unchecked it could become
much more. Tragic examples abound; we
should not forget that up to 1 million
died in the Algerian war. And growing
violence is not inevitable. The only
responsible course is to bend every
effort to hasten the end of apartheid
without a bloodletting.
This worrying tendency to disengage
from South Africa is matched elsewhere
in the region. There are voices in this
country who would like us to punish or
turn away from other governments in
southern Africa. While some Americans
want us to have no contact with South
Africa, others want us to isolate our-
selves from governments in Mozam-
bique, Zimbabwe, or other front-line
states. They see evidence of Soviet
involvement, internal conflict, economic
difficulties, and human rights problems,
and they ask why we should lend any
support to these governments. We see
these problems, to be sure, but we also
48
see governments trying to move away
from reliance on Moscow; of govern-
ments turning away from collectivist
economic policies to those favoring a
freer market; of governments attempt-
ing to cope with serious political and
economic problems not exclusively of
their own making.
Two cases deserve mention here.
Some see a contradiction between our
application of the Reagan doctrine— a
doctrine that seeks to promote self-
determination and freedom from com-
munist rule around the world— in Angola
and Mozambique. There is no contradic-
tion. Our purpose is the same: to oppose
efforts by the Soviet Union to undermine
the independence of these countries or to
use them for strategic advantage and to
create circumstances in which they can
move peacefully toward a future of true
independence, liberty, and prosperity.
The Governments of Angola and
Mozambique have responded to our
initiatives in southern Africa in different
ways, and the opposition movements in
these countries are, likewise, a study in
contrasts. This explains our differing
approaches in these two cases.
In Mozambique, the government
has steadily improved its relations with
the West. President Chissano recently
made highly successful visits to Great
Britain and Italy; Mrs. Thatcher
increased aid to Mozambique by $75
million and enlarged the scope of the
existing military training program.
Mozambique has joined the IMF [Inter-
national IVIonetary Fund] and moved
away from Marxist-inspired economic
policies. It has played a constructive role
in southern Africa negotiations, denied
the Soviets base rights, broken with the
Soviet line on Afghanistan and Cam-
bodia, sought peace with South Africa,
and— as a consequence of its policies-
seen a decline in Soviet military aid. We
recognize the Government of Mozam-
bique and enjoy constructive relations
with it.
The insurgent movement in Mozam-
bique, RENAMO (Mozambique National
Resistance Movement], was created by
the former government of Ian Smith in
Rhodesia and has, in recent years,
received arms and training from South
Africa. It is politically fragmented and
lacks a political program. It has demon-
strated its ability to destroy and disrupt
but not to build or to pursue constructive
solutions to the country's conflicts. It
walked away from cease-fire negotia-
tions with the government in 1984 and
pursues a military strategy that appears
more responsive to South African than
Mozambican interests.
In Angola, by contrast, the MPLA
[Popular Movement for the Liberation of
Angola] regime has deepened its close
relationship with the Soviet Union and
its allies, joined the Council for Mutual
Economic Assistance, become ever more
dependent for its survival on the Cuban
forces that installed it, received increas-
ing supplies of Soviet weaponry, sup-
ported SWAPO [South West Africa Peo-
ple's Organization] violence in Namibia,
and granted the Soviet Union base
rights. For these reasons, we, like the
Ford and Carter Administrations, do not
recognize the MPLA regime. UNITA
[National Union for the Total Independ-
ence of Namibia], in contrast to
RENAMO, has decades-old, anticolo-
nialist and nationalist credentials;
charismatic, cohesive leadership; a credi-
ble political program; a functioning
system of authority in areas it controls;
a clearly articulated and realistic objec-
tive of a negotiated settlement with the
MPLA; and longstanding, widespread
popular support within Angola.
These distinctions in the circumstan-
ces are important. They account for the
different approaches we have pursued in
Mozambique and Angola.
Economic Development
in Southern Africa
Over the past several years, we have
responded as more governments in the
region have made courageous decisions
to turn from collectivist solutions to the
free market. Here again, our values havt
found appeal where they were once
rejected. This positive trend traces to
our willingness to engage with— and not
isolate— those who disagree with us.
Since 1981, we have contributed roughly
$175-$200 million annually in food and
economic assistance to the states of
southern Africa.
Our goals have been audacious; we
want to help build a southern Africa:
• That is free of apartheid, a system
whose economic implications display all
the evils of socialism and protectionism
even as it rests on an economic base that
can be described as feudal;
• That spreads the virtues and
benefits of a market economy to South
Africa's blacks;
• That receives greater value added
from its mineral and agricultural
production;
• That is self-reliant in food;
• That manufactures more of its
own capital goods and generates some
internal capital from locally owned
companies;
Department of State Bulletii
pr
iof
• That is able to offer new employ-
ment and increased incomes to a skilled
workforce, a workforce that can move
across borders in search of employment;
and
• That has diverse economies, yet is
interlinked through efficient transporta-
tion and communication systems, with
substantial and balanced regional trade.
This kind of vision is not Utopian. It
could be realized in our lifetimes. Yet it
faces formidable challenges, challenges
that led President Reagan last year to
propose a new multiyear Initiative for
Economic Progress in Southern Africa.
We asked Congress for $93 million in
additional assistance to southern Africa,
to be committed over the next 18
months. Congress is on record support-
ing assistance to the front-line states in
the Comprehensive Anti-Apartheid Act
3f 1986.
A substantial portion of the initiative
ivas to be channeled to South Africa's
disadvantaged majority. In the Anti-
'^.partheid Act, Congress authorized $40
Tiillion over 2 years for the South Africa
Drogram. When the Reagan Administra-
;ion took office in 1981, no U.S.
economic assistance was aimed at South
yrica's blacks. Today we provide
•oughly $25 million each year for educa-
,ion and training of South African blacks
n such fields as labor, higher education,
entrepreneur ship, medicine, community
ievelopment, and social work. Twenty-
"ive million dollars injected each year
nto South Africa's $80-billion economy
nay not seem like much, but over the
'ears it can support the training of
.housands of black South Africans,
equipping them with skills they can use
omorrow, when they can take their
•ightful place in a multiracial society.
Our official assistance complements
he much more substantial efforts of
\merican businesses, which have con-
.ributed several hundred million dollars
'or humanitarian projects since the
nception of the Sullivan code more than
LO years ago. Reverend Sullivan has
earned the respect of all Americans
through his impressive record of achieve-
Tient in South Africa. Yet his recent
decision to call for total disinvestment by
J.S. companies and a generalized trade
Doycott is regrettable. Reverend Sullivan—
1 man of great integrity and moral
weight— recently described the Sullivan
Drinciples as:
I. . . a tremendous force for change in
South Africa. When the Sullivan Principles
.vere introduced ten years ago, a black man
lid not even have the legal status as a worker
n South Africa. The Principles broke new
jjround for black rights in South Africa that
had not existed for 300 years. They have
caused a revolution in industrial race rela-
tions for black workers in that country.
I would hope the substantial and
tangible gains Reverend Sullivan prop-
erly cites would not now be rejected— or,
worse yet, reversed— because the effort
of U.S. firms has not brought apart-
heid's complete demise.
The impulse to retreat shows up also
in proposals to reduce oui- assistance to
the other nations of southern Africa. I
referred earlier to the many economic
problems confronting southern Africa's
black-ruled states. Some of these have
been of their own making, mainly the
result of poor national economic policies
based on misguided socialist philoso-
phies. Some of them reflect such factors
as drought and low export prices. All of
them have inhibited growth and oppor-
tunity.
Many southern African governments
are turning away from collectivist prac-
tices to the free market. We want to
encourage this by providing help in mak-
ing this welcome transition. This is why
the President proposed new multiyear
funding for southern Africa to Congress
last year.
Congress' response to the Presi-
dent's assistance proposal, however, has
not been encouraging. The level of funds
requested will, at best, be greatly
reduced; at worst, it could be completely
eliminated. This bad news has been
compounded, however, by tacking on
political amendments that set impossible
and irrelevant criteria for the intended
recipients of our assistance. Some of the
amendments added in the House and
Senate are intended to bar aid to all the
countries of the Southern Africa
Development Coordination Conference—
a result that is perverse and unjustifiable
in terms of our national interests.
Resolving Disputes Through
Negotiation
Many observers in and outside southern
Africa regard present trends in the
region with despair. In South Africa,
they see an inevitably bloody resolution
as positions harden over the central
question of political power. This is a
grimly deterministic scenario that sees a
racial civil war as the only solution. In
southern Africa, they see continuing
cross-border raids, civil wars, Soviet and
South African interventions, and eco-
nomic decline as reasons for steering
clear of catastrophe.
Southern Africa is surely at a
dangerous and delicate stage, and
AFRICA
moderate voices must struggle to be
heard. It would be irresponsible for us to
conclude, however, that we have nothing
to offer southern Africa or that the best
way for us to help is to pick up our
marbles and come home. I have already
indicated ways in which we can help in
the important areas of human rights and
economic development. Let me turn now
to another way we can help, namely, by
encouraging the resolution of conflict
through negotiation.
There is an alternative to civil war in
South Africa and to violence in the
region, the alternative presented by
peaceful transition through negotiations.
This is not an unrealistic alternative.
There is harsh resistance to change on
the right in South Africa, but there are
other voices also. The recent elections
for the white parliament can be read
several ways. We do not have to accept
the South African Government's defini-
tion of change to say— as we do— that we
see continuing movement. There is a
dynamism that the government does not
control completely and that could pro-
duce openings for negotiations.
It is misleading to talk about a status
quo in South Africa. No party in the
recent white elections accepts the status
quo. Roughly 30% of whites voted for
the Conservative Party on the right.
This was a vote for change in the direc-
tion of further racial separation and
geographical partition. In contrast, rul-
ing National Party voters generally
accept or actively favor a new constitu-
tion, less separation, and black-white
negotiations. For National Party voters,
change is coupled with tough security
measures, but it is change, nevertheless.
Further left on the spectrum, the white
voters had a number of choices, includ-
ing boycotting the election altogether.
However fragmented their voices, all
want faster movement toward the dis-
mantling of apartheid and negotiating
constitutional change. There is a com-
parable diversity of views, one suspects,
among blacks, though their opportunities
to express their views are sharply
circumscribed.
In short, change is everyone's expec-
tation. The question is whether key
elements on the political spectrum are
prepared to negotiate it.
At present in South Africa, no party
seems ready for broad political negotia-
tions; nor has any side asked the United
States to mediate. And yet, we and
other Western nations have good access
to all contenders to the dispute in South
Africa. We are in a position to encour-
age all parties to move closer together
on the central questions of political
[August 1987
49
ARMS CONTROL
power and constitutional guarantees and
to accommodate contending points of
view. Demonstrating that the West
intends to remain involved can itself help
to create conditions and attitudes among
all contenders that will make our
diplomacy more powerful.
In other words, making clear what
we are for an expressing our willingness
to help can, over time, affect the
balance of forces to the benefit of those
who favor negotiation and moderation.
By underscoring the necessity for com-
promise and our interest in results, as
distinguished from mere postures, we
can let all South Africans know that only
they can make the decisions that will
shape their future and that the failure to
decide will also shape that future. It was
for these reasons that Secretary Shultz
met with ANC [African National Con-
gress] leader Oliver Tambo in January.
The Secretary encouraged Mr. Tambo to
discuss his vision for South Africa con-
cretely and to recognize that violence
will not produce a solution. We think the
exchange between Mr. Shultz and Mr.
Tambo will produce a greater realism
both on the part of the ANC and on the
part of the South African Government.
This is the message being carried to
all South Africans by our very able
ambassador, Ed Perkins, and his staff.
You can be proud of the activism and
commitment of your country's diplomats
stationed in South Africa. They face a
formidable challenge in what may be the
most difficult diplomatic post abroad,
but they know the stakes are high and
their mission is an honorable one.
In the region, meanwhile, negotia-
tions over Cuban and South African
troop withdrawal, leading to an end to
the civil war in Angola and Namibian
independence, have recently resumed. A
successful outcome would confer benefits
regionwide. Desirable in their own right,
solutions to these two related problems
will reduce Soviet influence and regional
violence. A spirit of accommodation and
compromise will also again be vindi-
cated, an essential attitude if a climate
of moderation and stability is to prevail
in southern and South Africa.
A Final Word on Consensus
The United States has had a consistent
commitment to peace with justice in
southern Africa. This is demonstrated
by:
• Our positive emphasis on what we
are for, as well as what we are against,
in southern Africa;
50
Germany's Decision on
Proposed INF Reductions
PRESIDENT'S STATEMENT,
JUNE 4. 1987'
I welcome the statement today by the
Government of the Federal Republic of
Germany to the Bundestag supporting
deep reductions in an entire class of
nuclear weapons. This decision sets the
stage for establishing a common NATO
position at the coming foreign ministers'
meeting in Reykjavik.
The position which our country takes
with the Soviet Union on SRINF [short-
range intermediate-range nuclear forces]
affects both the security of the NATO
alliance and the entire West. I am confi-
dent that based on discussions within
NATO and those that will occur here in
Venice, a foundation will be laid for
equal and verifiable global constraints on
U.S. and Soviet SRINF missiles in the
near future. Once that is established, I
will instruct our negotiators in Geneva
to incorporate this into the U.S. position.
NATO actions on INF represent a
major success story. The alliance has
been resolute in responding to the
deadly new threat to the West sparked
by the Soviet deployment of new triple-
warhead SS-20 missiles targeted against
our allies. NATO has steadfastly imple-
mented its 1979 double-track decision
which countered this threat. It is the fact
that NATO was willing to deploy its own
INF missiles, while simultaneously seek-
ing a balanced and verifiable arms reduc-
tion agreement, that brought the Soviets
back to the negotiating table in 1985 and
gave us the opportunity to achieve— for
the first time in history— deep reductions
in, and possibly the elimination of, an
entire class of nuclear weapons.
Our actions on INF have always
been characterized by close consultations
with our friends and allies in both
Europe and Asia. Chancellor Kohl's
announcement today should be seen in
that context. I commend the Chancellor
on the leadership he has shown on this
issue. I am determined to continue work-
ing closely with our allies on these issues
and to sustain the strength of our
alliance.
'Text from Weekly Compilation of
Presidential Documents of June 22, 1987.
• Forthright Insistence that an
effective American policy must be based
on a diplomatic effort; sanctions by
themselves do not represent a policy;
• Strong conviction that American
business and investment can play a con-
structive role in South Africa and the
region;
• Substantial U.S. regional
assistance, including the President's new
southern Africa aid initiative; and
• A clear challenge to all the leaders
of southern Africa to build a better
future rather than destroy the region
through a self-defeating descent into
violence.
Africa's leaders know— as do you
and I— that the United States and the
West are uniquely relevant to the prob-
lems of southern Africa. For us to have
the greatest positive impact in southern
Africa, however, we must build a
national consensus behind policy toward
the region— a consensus that assures
continuity and purpose in our diplomacy
Consensus does not happen spon-
taneously. It must be nurtured; it grows
from knowledge and experience. We
need to decide what we are for and know
what means are available to achieve our
goals. And we will achieve neither con-
sensus nor results if our public discourse
is divorced from facts and from a
realistic understanding of the problems
at hand.
I see no reason why a consensus
behind our southern African policy
should elude us. The themes I have
described tonight— those of human
rights, economic development, and the
resolution of conflict through
negotiation— derive from American
experience and American values. We
should pursue them proudly as we help
southern Africa come to terms with its
problems. ■
EAST ASIA
The U.S., Japan, and Asian Pacific
Security in Perspective
by Michael H. Armacost
Address before the 1987 Mansfield
Conference in Missoula. Montana, on
May 29, 1987. Ambassador Armacost is
Under Secretary for Political Affairs.
It is a great honor to speak at the
Mansfield Center and to address a sub-
ject close to Mike Mansfield's heart.
Montanans, like all Americans, are justly
proud of Mike. To his distinguished
careers as a teacher and a legislator, he
has added the luster of exemplary serv-
ice as a diplomat.
In Washington, Mike has long been a
legendary figure. And for good reason.
During lengthy service in a profession
noted for hyperbole and circumlocution,
he was famous for his spare, cogent, and
straightforward remarks. In a city full of
grandstanders, he acquired authority
while shunning the limelight; he concen-
trated on results and achieved them.
During a time when many obtained
notoriety by cutting corners, Mike
established a reputation for rectitude
and integrity which all admired and few
could match. In a political environment
dominated by the daily headlines, he
brought a historian's feel for long-term
trends, and he insisted that we remain
true to our values and our unique destiny
as a nation.
As an ambassador, Mike has become
a legend in Japan as well. This is not
because of his rhetoric, though he can
speak with great eloquence when he
warms to a subject. It is not a tribute to
his durability, though the Japanese
rt's|iect age, and Mike recently sur-
passed Joseph Crew's record as our
longest sitting ambassador in Tokyo.
The Japanese refer to Mike as "Otaishi"
or ' 'Sensei ' ' because they recognize in
him those qualities required by great
diplomats. Americans sometimes regard
diplomacy as synonymous with duplicity,
double-dealing, and deceit. Mike has
reminded people— here and in Japan-
that the consummate diplomatist
requires honesty, precision of language,
mastery of substance, fidelity to the
objectives of his own nation, and sen-
sitivity to the interests of others. Mike
faithfully represents what is best of
America to Japan. He also represents
Japan with empathy and understanding
to Americans. He is an invaluable asset
i Auc
to both countries. A biologist who
crossed a leopard with a parakeet said of
the result of his experiment: "When it
talks, I listen." I would say the same of
Mike Mansfield.
The U.S. -Japan Relationship
If Mike were here today, I am sure he
would affirm several propositions which
have been central to his own apprecia-
tion of the U.S. -Japan relationship.
• The 21st century will be the age of
the Pacific.
• The U.S. -Japan relationship is our
most important bilateral relationship and
is taking on added significance with each
passing day.
• The value of that relationship is
measured not merely by the benefits it
brings to our two nations but in the
capacity we possess jointly to ameliorate
and resolve regional and international
problems.
These are important truths. It is
useful to remember them at a time when
trade disputes dominate virtually all
discussions of our relationship. The air
seems filled with accusations, threats,
and recriminations. In this country. Con-
gress is contemplating a plethora of pro-
tectionist bills aimed at Japan, most con-
taining threats of sanctions. Organized
labor and many businessmen speak of
Japanese competition with awe, irrita-
tion, anger, a sense of grievance, a con-
viction that Americans do not enjoy
"fair" access to Japan's market, and
fear of a rising tide of imports not only
in the manufacturing sectors but in high-
technology products where America has
long enjoyed a comparative advantage.
In Japan, meanwhile, impatience with
what is perceived to be the inconsistency
of American policy is increasing. And
frustration with what are considered as
high-handed American pressure tactics is
growing— even among those Japanese
who reluctantly concede that without
pressure, change comes too slowly.
Yet our relations with Japan go well
beyond the current trade frictions. The
political and economic interdependence
between our countries has grown dra-
matically in recent years. Concerns
about the equitable sharing of the
burdens as well as the benefits of this
relationship are natural and inevitable.
But a fair judgment of those equities is
possible only if we consider the wider
August 1987
dimensions of our interaction with
Japan. It is that bigger picture to which
I should like to devote my remarks this
afternoon.
Japan's Growing
Weight in the World
Historians of the future are likely to
regard Prime Minister Nakasone as a
towering figure. He has guided Japan
through a series of administrative and
economic reforms designed to prepare
his nation for the next century while
assuming a wider range of international
responsibilities now. Japan's industrial
and commercial prowess is universally
respected. Less than 20 years ago,
Japan's per capita GNP [gross national
product] was twentieth in the world;
today it matches our own. Japan alone
produces fully one-tenth of the world's
GNP.
As a trading nation, Japan has few
peers. In 1986, it ran a current account
surplus of $86 billion. The Japanese are
not only America's major overseas
trading partner, they also surpass all
others in their bilateral trade with vir-
tually every Asian country. Japanese
companies are increasingly transna-
tional. In 1985, Japan's nine top trading
companies achieved over $80 billion in
offshore sales; that is to say, more than
the total of their exports from Japan
itself. Japanese industries are building
much of their new manufacturing capac-
ity outside Japan in order to capitalize
on locally available raw materials and
lower wage rates. In the process, they
are spurring the export-led growth of
many neighbors and are becoming a pro-
vider as well as a beneficiary of
technology transfers.
Japan has also become a major
source of overseas investment, the yen
a major international currency, and
Tokyo a key financial center in the
world economy. Yen-denominated
Eurobonds now account for 15% of all
the Eurobonds issued. Twelve percent of
international bank loans last year were
denominated in yen— a threefold
increase over 1982. Seven of the 10
largest commercial banks in the world
are Japanese. It is the world's leading
creditor nation, holding roughly $500
billion in overseas assets. More than one-
fifth of that total may currently be
invested in U.S. Government securities,
thereby helping to finance the U.S. fiscal
deficit. Total capitalization of the Tokyo
Stock Exchange exceeds that of the New
York Stock Exchange. Nomura Secu-
rities, Ltd. is now the largest securities
51
EAST ASIA
broker in the world. The lure of Japa-
nese funds has proven so attractive that
last month the Chicago Commodities
Exchange initiated night trading several
times a week to improve access for
Japanese investors to U.S. commodities
markets. Predictably, as Japan's finan-
cial power has increased, its stake in the
economic stability and prosperity of
other nations has grown.
So has Japan's influence on inter-
national economic policy deliberations.
Tokyo launched the GATT [General
Agreement on Tariffs and Trade] round
of tariff reductions in the 1970s, is a key
participant in the summit meetings of
the industrial democracies, and has been
a prime mover in organizing the upcom-
ing Uruguay Round of multilateral trade
talks. It is a central player in the G-5
financial club and has established a
prominent presence wherever central
bankers gather.
Japan has become a major provider
of assistance to developing countries.
Its foreign aid budget has steadily
expanded. Over the last 5 years, apart
from the United States, Japan has been
the largest aid donor in the OECD
[Organization for Economic Cooperation
and Development]. Last year, the
Japanese Government announced its
intention to double foreign aid by 1992.
Recently, it revised that target to 1990.
At this pace, if budgetary constraints on
our own programs persist, Japan could
overtake the United States as the
largest provider of development
assistance by the early 1990s. In the
past, Japan's aid effort was character-
ized by critics— with some justification—
as an export subsidy program. Increas-
ingly, its assistance efforts are directed
toward humanitarian and political aims,
as well as commercial objectives and the
improvement of the global economic
environment in which Japan— along with
the rest of us— must live and work.
Japan, finally, is also gradually
assuming larger security responsibili-
ties. To the relief of its neighbors, it
continues to forswear the role of a great
military power. Yet, stimulated by
awareness of its growing economic
status, buoyed by a sense of national
pride, sensitive to U.S. pressures for a
more equitable sharing of mutual
defense burdens, and aroused by the
continuing Soviet military buildup in
Asia, Japan has steadily increased its
defensive military capabilities to assume
responsibility for the conventional
defense of its homeland.
Today Japan's defense expenditures
rank seventh in the world. In January,
52
the Japanese abandoned their traditional
1% of GNP ceiling on defense spending.
While its Self-Defense Forces remain
short on readiness and sustainability,
they possess state-of-the-art equipment
for command and control and maritime
and air defense systems. The Japanese
deploy more tactical fighter aircraft than
do U.S. forces in Asia; their navy fields
more destroyers than does the U.S.
Seventh Fleet; they are developing a
new frontline fighter aircraft.
The Japanese have broadened their
self-defense missions to include defense
of sealanes up to a thousand nautical
miles south of Tokyo. They have
embarked on a cautious but steady
defense buildup aimed at acquiring the
capabilities necessary to fulfill somewhat
more ambitious roles and missions. Most
importantly. Prime Minister Nakasone
has clearly placed Japan within the
Western camp. In 1981, inclusion of the
word "alliance" in a communique issued
at the end of a visit by Prime Minister
Suzuki to Washington nearly brought
about the downfall of his government.
At the Williamsburg summit meeting in
1983, Prime Minister Nakasone asserted
that "Japan is now firmly a member of
the West."
There are other indicators of the
growing impact of Japan upon the world
and the world upon Japan. Twice as
many Japanese travel abroad now as did
so a decade ago. The number of bus-
inessmen working overseas has more
than tripled, as has the number of
Japanese scientists serving abroad. The
numbers of foreign businessmen, stu-
dents, and teachers residing in Japan
have, likewise, increased in a comparably
dramatic fashion.
What is clear, I believe, is this:
Japan is no longer merely reacting to the
vicissitudes of the external environment.
It has become a powerful player on the
international political and economic
scene. It has identified itself with the
Western industrial democracies. It is
becoming "internationalized" in the
sense that it recognizes not only that it
has responsibilities to the international
community but also that its self-interest
requires it to meet those responsibilities.
Impact on U.S. -Japan Relations
This transformation of Japan's interna-
tional role is welcome, though some
Americans appear to believe it is "a day
late and a dollar short." I will not
attempt a comprehensive analysis of the
implications of these changes on our
bilateral relationship. A few comments
must suffice.
The biggest changes have come in
the economic area, where the relative
balance of power has shifted most
dramatically. Even there, the impact has
been mixed. For one thing, there is
universal admiration for the quality of
Japanese products. Consumers vote with
their pocketbooks, and Japanese
manufacturers have won a resounding
endorsement. Then, too, an infrastruc-
ture for supporting imports from Japan
has emerged involving those in market-
ing distribution, service and mainten-
ance, and financial institutions. They
have an active and tangible interest in
keeping the U.S. market doors open.
The strength of Japan's trading position
and the size of its bilateral trade surplus
with the United States has provoked
strong reactions, stimulated a searching
look at Japanese trading practices at
home and abroad, and fueled protec-
tionism—particularly in the unions, in
the business community, in the Demo-
cratic Party, and in Congress. Hypoth-
eses regarding the root causes of the
trade imbalance abound. They range
from crude shibboleths to sophisticated
theories. The former frequently domi-
nate public discussions. The Administra-
tion has shunned both simplistic explana-
tions and simple-minded remedies. It has
been guided by the foUowdng general
premises.
• Trade deficits of the magnitude
we have run in recent years are neither
politically nor economically sustainable;
adjustments must and will be achieved.
• In promoting a more balanced
trade, we should rely on measures which
expand rather than contract commercial
exchanges.
• We should preserve open markets
and shun the regulation or cartelization
of trade.
In keeping with this approach, the
Reagan Administration has undertaken
a variety of efforts to redress the
bilateral trade deficit.
• Voluntary export restraints were
instituted to cope with the rapid expan-
sion of Japanese car imports in the early
1980s. Voluntary restraints have also
been utilized to protect critical industries
like machine tools and steel.
• In 1985, we initiated a series of
sectoral negotiations— the so-called
MOSS [market-oriented, sector-selective]
talks— designed to open up the Japanese
market in fields such as telecommunica-
tions, forest products, electronics, phar-
maceuticals, and medical equipment-
products in which the United States is
competitive if the playing field is level.
Department of State Bulletin
EAST ASIA
Last year, exports in these sectors were
up by 12%.
• Major efforts have also been
devoted to achieving greater market
access in Japan for leather and tobacco
products and semiconductors. Sanctions
have been invoked to induce compliance
with an agreement on semiconductors.
• Of greater significance, the United
States has worked to encourage adjust-
ments in the relationship between the
dollar and the yen— a factor which
affects our trade competitiveness across
the board. Since 1985, the yen has
appreciated by 60% against the dollar.
While the expected impact on our trade
deficit has been slow in appearing, major
adjustments are inevitable, and recent
statistics suggest they have begun to
occur.
• As concern about the trade imbal-
ance has grown, the Administration's
attention has tui-ned increasingly to
structural imbalances in our respective
economies which affect our trading rela-
tions. Of paramount importance in Japan
is the imbalance between the rate of
domestic savings, which remains very
high, and domestic investment, which is
relatively low. This persistent imbalance
reinforces Japan's time-honored reliance
upon the export sector to sustain high
growth. Japanese economists and offi-
cials have belatedly acknowledged this
imbalance. The highly regarded
Maekawa report concludes that the
•lapanese Government should shift to a
Ljicater reliance on domestic demand for
L;i'o\vth. While the report occasioned
lauilatory editorials, its conclusions are
only now beginning to be implemented
by policymakers.
During Prime Minister Nakasone's
recent visit, he foreshadowed a
$35-billion supplemental budget request
to stimulate domestic demand. News
reports this morning indicate Cabinet
approval of a slightly higher fiscal
stimulus package, to the tune of $42
billion in increased public works spend-
ing and a tax cut.
• We know, of course, that our own
fiscal deficit has an impact on our com-
petitiveness in international markets.
The Gramm-Rudman-Hollings legislation
reflects congressional awareness of this
problem, as well as their selection of a
blunt instrument for coping with it. The
Administration certainly recognizes that
the fiscal deficit must be brought under
control. And it has begun to address
systematically how adjustments of public
policy in other areas (e.g., education,
research and development policy) can
help restore American competitiveness.
Japan— A Profile
Geography
Area: 377,765 sq. km. (145,856 sq. mi.);
slightly smaller than California. Cities:
Capital— Tokyo. Other major cities-
Yokohama.. Nagoya, Sapporo, Osaka, Kyoto.
Terrain: Rugged, mountainous islands.
Climate: Varies from subtropical to
temperate.
People
Nationality: Noun and adjective— Japanese.
Population (Dec. 1985 est.); 121,180,000.
Annual growth rate (1985); 0.6%. Ethnic
groups: Japanese; Korean 0.6%. Religions:
Shintoism and Buddhism; Christian 0.8%.
Language: Japanese. Education:
Literacy— 100%. Life expectancy (1983)—
males 74.2 yrs., females 79.8 yrs. Work force
(58.0 million, 1985); Agriculture-d.5%.
Trade, manufacturing, mining, and
construction— Si .1%. Services— 'iS.l % .
Government— 5.9%.
Government
Type: Parliamentary democracy. Constitu-
tion: May 3, 1947.
Branches: Executive— prime minister
(head of government). Legislative— hicamera\
Diet (House of Representatives and House of
Councillors). Judicial— CivW law system with
Anglo-American influence.
Subdivisions: 47 prefectures.
Political parties: Liberal Democratic
Party (LDP), Japan Socialist Party (JSP),
Democratic Socialist Party (DSP), Komeito
(Clean Government Party), Japan Communist
Party (JCP). Suffrage: Universal over 20.
Flag: Red sun on white field.
Economy
GNP (1985): $1,322 trillion. Real growth
rate: 4.5% 1985; 4.3% 1975-85. Per capita
GNP (1985): $10,922.
• Finally, we have joined with Japan
and others to promote the Uruguay
Round of GATT trade negotiations. And
we have seen to it that the issues of
greatest concern to us— i.e., services
trade, high-technology goods, and
agriculture— are high on the agenda of
those negotiations.
These efforts have not yet succeeded
in restoring a balanced trade with Japan.
The underlying problems are being
addressed, however, and the steps taken
are beginning to produce results.
Natural resources: Negligible mineral
resources, fish.
Agriculture: Products— rice, vegetables,
fruits, milk, meat, silk.
Industry: Tj/pes- machinery and equip-
ment, metals and metal products, textiles,
autos, chemicals, electrical and electronic
equipment.
Trade (1985): £a;por«s-$175.6 billion;
motor vehicles, machinery and equipment,
electrical and electronic products, metals and
metal products. Major markets— \]S 37.1%,
EC 11.4%, Southeast Asia 18.9%, communist
countries 9.2%. Imports— $129. b billion; fossil
fuels, metal ore, raw materials, foodstuffs,
machinery and equipment. Major suppliers—
US 19.9%, EC 6.9%, Middle East 23.1%,
Southeast Asia 23.4%, communist countries
6.5%.
Fiscal year: April 1-March 31.
Exchange rate (Sept. 1986); About
155 yen = US$1.
Total net official development
assistance: $3.8 billion (1985 disbursements
0.29% of GNP).
Membership in
International Organizations
UN and several of its specialized and related
agencies, including the International
Monetary Fund (IMF), International Court of
Justice (ICJ), General Agreement on Tariffs
and Trade (GATT), International Labor
Organization (ILO); International Energy
Agency (lEA); Organization for Economic
Cooperation and Development (OECD);
INTELSAT.
Taken from the Background Notes of Feb.
1987, published by the Bureau of Public Af-
fairs, Department of State. Editor; Juanita
Adams. ■
A second major adjustment in our
economic relations is occurring as a
result of the growing volume of cross-
border investment. Japanese investment
in production facilities in the United
States is growing rapidly; American
investment in Japan is also increasing,
albeit at a slower clip. This two-way flow
of investment funds creates jobs, blunts
protectionist pressures, familiarizes the
peoples in each country with the man-
agement practices and labor relations
traditions of the other. It is breaking
August 1987
53
EAST ASIA
down economic barriers and should, in
time, dampen some of the tensions
stimulated by trade frictions.
Japan's status as a major aid donor
is a third development affecting our
bilateral relationship. Japan's aug-
mented assistance efforts increasingly
compensate for recent shortfalls in our
own foreign aid budget. The Japanese,
who recognize the constraints on their
ability to assume a major military role,
regard their economic assistance as a
contribution to Western security, since it
enhances the stability of critically impor-
tant Third World countries. Japanese
assistance to important Asian nations
like Korea, the Philippines, Indonesia,
and Thailand, as well as nations farther
afield (e.g., Pakistan, Turkey, Egypt,
Zambia, Zaire, Kenya, Jamaica, and
Honduras) represents evidence of this
"comprehensive security" policy
approach in action. The drastic congres-
sional cuts in U.S. foreign assistance
have made Japan's rapidly expanding
economic assistance all the more critical
to developing countries facing crushing
debt burdens.
Finally, as Japan's defensive
capabilities grow, our mutual security
arrangements with Japan have become a
more operationally relevant feature of
the balance of power in East Asia. U.S.-
Japan defense cooperation has grown
impressively in recent years. Host nation
support for U.S. forces in Japan has
increased dramatically. Japan provides
homeporting for the only U.S. carrier
battle group based abroad. Joint
planning— virtually unthinkable in the
early 1970s— has become routine. Joint
exercises have increased in number and
scope. Technology-sharing agreements
have been negotiated which assure a
two-way street in defense research and
development efforts. Professional rela-
tions between our military establish-
ments have been placed on a firm
footing.
WTiile Japan has assumed more
ambitious self-defense roles and mis-
sions, the broad contours of our strategic
division of labor remain intact. The
United States supports Japan by extend-
ing a nuclear umbrella, by protecting
long-distance sealanes of communication
and trade, and by maintaining a military
presence in the western Pacific to assure
an adequate regional deterrent. Japan,
meanwhile, has assumed responsibility
for its own conventional defense, is pro-
viding growing financial and other sup-
port for our residual military presence—
thereby facilitating the efficient and
cost-effective projection of American
power into East Asia and the western
Pacific and Indian Oceans— and is con-
tributing to mutual security interests by
extending generous aid to other
American allies (e.g., South Korea, the
Philippines, and Thailand) and front-lme
states (e.g., Pakistan and Turkey).
Defense and international political
cooperation has grown, despite the
accumulation of frictions.
Our Present Dilemma
The United States and Japan have
increasingly interdependent economies.
Our strategic dependence on one another
has grown. Our mutual commitments are
so extensive that we have virtually no
alternative but to muddle through any
present difficulties. But clearly, we are
going through a rough patch. Mainly,
this reflects the fact that American
expectations of a new pattern of interna-
tional burdensharing have outpaced the
rate at which Japan has taken on new
international responsibilities. The result
is frustration, a preoccupation with ques-
tions of fairness, and a harder look at
who is getting a "free ride."
Within the U.S. -Japan alliance, we
have constantly had to reconfigure the
distribution of the political burdens of
our relationship. In the past, Americans
shouldered a disproportionate share of
those burdens. We were willing to do so.
But the bilateral balance of economic
strength has changed. A growing trade
deficit, the political pressures stimulated
by intense Japanese competition, and the
stringencies of our Federal budget have
all increased pressures for more rapid
adjustments in the redistribution of
international burdens than the Japanese
political system has produced.
In Japan, meanwhile, growing eco-
nomic strength encourages a more ambi-
tious vision of Japan's international
role, yet also fuels resistance to criticism
and advice from abroad— particularly
when such advice is offered publicly. The
Japanese have also begun to offer more
forthright expressions of their own
assessments of our economic perform-
ance and our international strategy. The
potential for friction grows as our inter-
dependence expands. This is natural, but
the adjustments are no less difficult.
Japan has achieved remarkable
stability through reliance on consensus-
building techniques of policymaking.
Opposition to new initiatives is worn
down, coopted, encircled, and enveloped.
The results have been impressive. But it
is a time-consuming process, and we are
an impatient people. The heaviest
burdens of adjustment tend to fall to the
strong. With its growing strength, it is
natural to expect some acceleration in
the pace at which it takes on broader
responsibilities.
The Future Agenda
Over the past several decades, we have
created an elaborate superstructure for
consultations with the Japanese. We talk
a great deal with each other. Contacts
have proliferated between our respective
bureaucracies. At the highest level, our
political leaders not only know each
other, they like each other. Given the
importance of our relationship to both
countries and to the worid, it is essential
that we reach some broad understand-
ings on key issues through mutual give
and take.
Bilateral Trade. The deficit will be
reduced. The only question is whether
the reduction is accomplished in a man-
ner which strengthens or weakens our
broader relationship. On the U.S. side, it
is important that we resist the tempta-
tion to legislate ill-considered protec-
tionist measures. While protectionism
may offer temporary relief to some pro-
ducers, it will also reduce opportunities
for American consumers to buy high-
quality products at reasonable prices;
remove the spur of competition from our
industry; encourage inflation; invite
retaliation; introduce rigidities into the
international trading system; and exac-
erbate tensions among the Western
democracies at a time when unity and
cooperation are needed.
We must deal forthrightly with our
huge buget deficit. Market-opening
efforts with Japan and others will not
bring benefits to the United States
unless our businesses do their homework
and aggressively work to sell their prod-
ucts in one of the most sophisticated
markets in the world. And we need to
restore the sources of our competitive-
ness in the field of trade.
On Japan's side, it is essential that
wider access to its market be promptly
extended. It always takes time to
translate professions of intent into
results. But now is the time for action,
particulariy with respect to Prime
Minister Nakasone's proposed $42-bilhor
fiscal package to stimulate domestic
demand and spur higher growth. The
sooner it is enacted, the better. Its
prompt implementation will provide an
acid test of Japan's commitment to
diminish reliance upon export-led
growth.
54
Department of State Bulletir^
Aid and the Debt Problem. As our
budget deficit has grown, congressional
support for our foreign aid has dimin-
ished. Over the past 3 years, Congress
has cut our international affairs budget
by more than 25%. These cuts are
unwise and imprudent. They are penny
wise and pound foolish. They offer little
immediate budgetary relief while
jeopardizing long-term interests. This is
our problem. We must deal with it. We
will, but it may take time.
In the meantime, Japan's aid efforts
become all the more critical. We wel-
come the large prospective increases in
Japan's foreign assistance budget in
Japan. We hope to see the concessional-
ity of loan terms improved even further,
along with increase in the grant compo-
nent of Japanese aid. Anticipating a
doubling of overall assistance levels
within the next few years, we hope that
a disproportionate share of the increases
will be devoted to areas other than Asia,
which currently absorbs 70% of all
Japanese aid. Asia is important. Japan's
assistance programs have contributed to
the remarkable growth and stability of
that area. But the vitality and resilience
of the Pacific basin permits increased
attention to other, less fortunate
regions. In particular, we believe that
expanded efforts are warranted in:
Central America, where fledgling
democracies are struggling to con-
solidate recent political and economic
reforms;
Southern Africa, where the "front-
line countries" are vulnerable to
economic sanctions from Pretoria; and
The Middle East, where declining
economic fortunes in countries like
Egypt and Jordan pose challenges to
regional stability.
Japan, moreover, is well-positioned
to take a larger leadership role in deal-
ing with Third World debt problems.
Indebtedness of developing countries is
growing. Efforts to reduce our own
trade deficit may impinge on their
export earnings. Reductions in our aid
budget reduce our ability to encourage
needed policy reforms. Austerity has
eroded the political framework that
enabled Third World leaders to accord
priority to debt servicing over domestic
growth. Japan's role in augmenting its
own growth, opening its markets, and
expanding capital transfers to the less
developed is crucial.
Japan's recently announced plan to
make $20 billion of foreign exchange
earning available to debtor nations
through a combination of untied export
credits, increased contributions to
multilateral development banks, and
loans jointly financed by government
and private institutions is particularly
timely. We shall await details with inter-
est and, I might add, a certain amount of
envy.
Mutual Security. We must continue
to deepen our defense cooperation. In
this area, Americans remain deeply
ambivalent. Some apparently wish to see
a Japan with sufficient military power to
counter the Russians yet without so
much as to reawaken the fears of
neighbors like the Chinese and Koreans.
This is a difficult trick to pull off.
Undoubtedly, there is more Japan can do
to improve its defenses. One percent of
GNP was a very modest ceiling for
defense spending. We need have no fear
that breaching it will revive Japanese
militarism. We devote 7% of our own
GNP to defense. The accelerated fulfill-
ment of Japan's midrange plans for
augmented self-defense capabilities is
EAST ASIA
fully justified. It poses no threat to
Japan's neighbors.
Yet Asian nations do have their own
concerns about the magnitude of Japan's
defense effort. And the Japanese are
appropriately sensitive to those con-
cerns, as we should be. That means,
above all, that we should continue to sus-
tain a strong alliance with Japan. We
should not encourage Japan to assume
overseas military responsibilities; neither
Tokyo nor its neighbors desire this. We
should remain attentive to Japanese
interests as we pursue our own arms
control negotiations with the Soviet
Union. We should continue to support
Japan's historic experiment in attaining
economic superpower status while main-
taining relatively modest military
capabilities. Since Japanese defense
expenditures are limited, and inter-
operability of equipment is critical to
close U.S. -Japan defense coordination,
we shall continue to encourage cost-
effective decisions on major defense pro-
curement items such as the FX fighter.
U.S. -Japan Semiconductor Trade
PRESIDENT'S STATEMENT,
JUNE 8, 1987'
As we open this economic summit, one
of our primary concerns must be the
removal of barriers that seek to maintain
trade imbalances and lead to protec-
tionism. Our pledge should be to free
competition in a fair market
environment.
Almost 6 weeks ago, I signed an
order placing sanctions on Japanese
products resulting from their failure to
comply with our antidumping and
market-access agreement on semicon-
ductors. The clear message was that we
intend to be serious about fair trade;
equally clear was our desire to lift these
sanctions just as soon as the data
showed "clear and continuing evidence"
of compliance. Japan is a major
economic partner as well as a staunch
friend and ally, and we want to make
every effort to resolve our differences as
rapidly as possible.
Unfortunately the initial review of
the data relating to the semiconductors
is not sufficient for me to remove the full
range of sanctions which were imposed.
However, in one area, there are strong
indications that third-country dumping
of DRAMS [an advanced type of semi-
conductor] has declined. Clearly there
has been marked improvement in this
one area.
I am aware of congressional concern
that there be consistent, positive move-
ment toward compliance. Therefore, I
have today ordered a proportional
response. DRAMS account for 60% of
the $135 million in sanctions related to
dumping. The data for DRAMS show an
increase from 59% to 85% compliance
with fair market value, or more than
halfway to an acceptable goal. I am
directing a sanction release of $51
million, a 17% reduction in the total
value. This release is strictly propor-
tional to progress to date.
The Japanese Government has given
me assurances that this positive pattern
with respect to third country dumping
will continue. If this does not prove to be
the case, I will not hesitate to reimpose
the partial sanctions that have been
lifted.
'Text from Weekly Compilation of
Presidential Documents of June 22, 1987.
55
ECONOMICS
International Political Issues.
Finally, we should broaden further our
consultations with Japan on interna-
tional political issues. In areas like the
Persian Gulf, we are stepping up to our
responsibilities because we are a global
superpower with an enduring interest in
protecting an extremely valuable inter-
national waterway free from encroach-
ment by the Soviet Union. This will
entail some added costs and risks for the
United States. Others will benefit.
Indeed, Japan has large interests in the
gulf. Japan's Constitution and its politics
deprive it of any military role in the gulf.
But its political influence can be brought
to bear along with other Western
nations to encourage restraint and to
promote a resolution of the Iran-
Iraq war while perhaps making nonmili-
tary contributions to Western efforts to
protect free navigation in the gulf.
Conclusion
I have spoken long enough. I have sug-
gested that an ambitious agenda awaits
Americans and Japanese who are inter-
ested in preserving and deepening the
cooperation which has served both our
nations so well for more than a genera-
tion. I am confident that our friendship
and cooperation will be sustained. The
best means of assuring this will be to
take to heart Jean Monnet's wise dictum
that, instead of sitting across the table
from each other arguing and complain-
ing, we should sit beside one another,
place the problem on the other side of
the table, and work together to find a
mutually acceptable solution. That would
be in keeping with the spirit in which
Mike Mansfield has approached the
relationship. ■
Competitiveness in America:
Is Protectionism the Answer?
by Douglas W. McMinn
Address before the National Associa-
tliiii <if M(t nnfrteturers' Crmqress of
Aitiirii-iiii h'lihistrii >•„ Mail J7. 1987. Mr.
McMuin t$ Assistanl Si'minry for
Economic and Business Affairs.
I need not tell you . . . that the world situation
is very serious. That must be apparent to all
intelligent people. I think one difficulty is that
the problem is one of such enormous complex-
ity that the very mass of facts presented to
the public by press and radio make it exceed-
ingly difficult for the man in the street to
reach a clear appraisement of the situation.
With these words, 40 years ago next
week. Secretary of State George C. Mar-
shall launched a great endeavor. We
undertook to "assist in the return of nor-
mal economic health in the world,
without which there can be no political
stability and no assured peace." The
Marshall Plan made available $13 billion
of bilateral assistance to Europe. Simul-
taneously, the United States led the way
in dismantling the restrictive trade and
monetary systems that nearly destroyed
international commerce and ravaged the
world economy in the 1930s.
Forty years ago, our policies and our
actions sprung from generosity, a firm
sense of purpose, and, above all, an
unshakable self-confidence. Consider the
postwar world— of the major countries
only the United States emerged from the
war with its economy intact. We had
fully half of the world's productive
capacity in industry and agriculture, the
bulk of the world's treasure, the
reference currency; in short, our
economic power was unchallenged. How
did we use that power? We undertook to
reestablish Western Europe's prewar
strength and to foster in Japan an
economy that would make her a strong,
stable, and friendly force in the Pacific.
In the best tradition of the American
frontier spirit, we did not shy away from
the fact that restoring "normal economic
health in the world" would eventually
make strong competitors of countries
that shared our political and economic
values.
Today Marshall's vision is reality.
Europe, Japan, and many of the develop-
ing countries took full advantage of
America's self-confident policy. We no
longer dominate the international
economic scene— Europe reconstructed,
reorganized, and prospered; Japan
experienced amazing economic growth
and developed a formidable array of
export-oriented industries; and many
poor countries are rapidly industrializ-
ing. In essence, we have real com-
petitors out there.
The United States is reassessing its
role in this new world economy in which
the impoverished of 40 years ago are
becoming the wealthy of today and the
economic environment has changed. The
emergence of large trade deficits is
unnerving. The notion that the United
States of America could be a debtor
country seems an affront to our national
pride. Our political process has handed
us budget deficits so large that we can-
not comprehend their meaning or
magnitude.
The stakes are high; no doubt about
it. But we're still the leader, the role
model for the world. Others find
inspiration— good and bad— in our
actions. All we need do is look around-
global financial market deregulation;
competition among airlines, even in
Europe; tax reform in Germany, Japan,
Canada, the developing world; new
prominence for markets and private
enterprise. All of these developments
happened first in the United States.
We really have no reason to practice
self-doubt. In the 1980s, the U.S.
economy has demonstrated its strength
and capacity for growth. This perfor-
mance is a credit to the economy's flex-
ibility, openness, and our entrepreneur-
ship. Our success has been based to a
large degree on a spirit— a spirit of
America. It's the spirit of drive, deter-
mination, and self-confidence that tamed
America's frontiers. It's the spirit which
all of you here have.
The New Competitive Frontier
What is our new competitive frontier? It
is the tough, globally competitive market
that promises big rewards for firms and
workers that determine how to deal witb
it successfully and penalties for those
who do not. It is a changed economic
environment characterized by greater
economic parity among the major
players, rapid advances in technology
and communication, and enormously
complex market interdependence.
The international business world is
far more interrelated now than many
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ECONOMICS
people, especially in government, realize.
Joint ventures, global financial markets,
instantaneous communications, tech-
nology-sharing, and international inte-
gration increasingly characterize the
business environment. We have passed
the time when we can think strictly in
terms of national competition. Imposing
barriers to imports often forces produc-
tion offshore where inputs are cheaper;
restricting our firms' abilities to sell
technology simultaneously threatens the
ability of other firms to buy foreign
technology.
I would like to turn to the question
you have asked me to address: "Com-
petitiveness in America: Is Protec-
tionism the Answer?" This question can
help us formulate our response to the
competitive challenges of today's world
economy. But first, we need to clear
away the cobwebs that have been spun
around two perfectly good words: com-
petitiveness and protectionism.
Competitiveness
"Competitiveness" is burdened with con-
flicting meanings. It is so broadly used
that virtually any policy stance— from
down-with-government libertarianism to
thoroughgoing, statist industrial
policy— can be hailed as contributing to
American competitiveness.
Simply put, an economy is competi-
tive when it uses its resources fully and
effectively to raise the living standards
of its people. This definition does not
refer to anything about what other coun-
tries are doing. Various measures of
relative efficiency may be instructive
and may serve to spur us on to greater
efforts. However, the key to enhancing
competitiveness, and the responsibility
for doing so, lies in our own hands.
The foundation of competitiveness is
productivity. Productivity is determined
by the skills and motivation of the
workforce, the size and newness of the
capital stock, the pace of technical
innovation, and the expertise of manage-
ment. Productivity also is enhanced by
concentrating our efforts on the produc-
tion of goods and services which we pro-
duce relatively more efficiently, while
acquiring, through trade, goods others
can produce relatively more efficiently.
In more concrete terms, this prescription
means that exporting firms can produce
relatively low-cost, high-quality items
while import-competing firms must
adjust to lower foreign costs.
Advancements in production pat-
terns, whether caused by technological
Trade With Romania,
Hungary, and China
WHITE HOUSE STATEMENT,
JUNE 2, 1987'
The President is forwarding to the Con-
gress his determination to continue
most-favored-nation (MFM) tariff status
for Romania, Hungary, and the People's
Republic of China. MFN is a basic ele-
ment in the development of bilateral
trade relations with each of these coun-
tries and is an important aspect of our
political relationships as well. The Presi-
dent concluded that extension of MFN
status to these countries for another
year, in accordance with the Jackson-
Vanik amendment, would serve the
economic and foreign policy interests of
the United States.
The decision to continue Romania's
MFN status was exceptionally difficult.
The issue was addressed at the highest
levels of the Administration. All options
were seriously considered. The President
carefully weighed the strong criticisms
that have been made of Romania's
human rights record. He shares the con-
cerns expressed in the Congress and by
private citizens about violations of basic
human rights in Romania, despite the
Romanian Government's freely under-
taken commitments under the Helsinki
Final Act and other international instru-
ments. He found reports concerning
limitations on religious freedom and
discriminatory treatment of national
minorities particularly distressing. He is
sympathetic to the plight of the Roman-
progress or international trade, are the
engine that keeps productivity increas-
ing and maintains our competitiveness.
Changes in production and trade pat-
terns keep the economy growing.
A commitment to competitiveness
requires a receptivity to change, a
readiness to redeploy resources, and an
acceptance of open markets. Viewed in
this light, some of the fallacies and
misperceptions concerning "com-
petitiveness" can be exposed. One of
them is particularly troublesome to
me-that trade deficits are evidence of
declining competitiveness.
ian people who endure a very harsh
economic and political reality. The Presi-
sent also has been disappointed by the
Romanian Government's very limited
response to our numerous expressions of
concern.
However, after weighing all the fac-
tors, the President decided that we
should continue the MFN relationship
with Romania as long as it enables us to
help substantial numbers of people. Over
the years, MFN has stimulated increased
Romanian emigration and made possible
the reunification of thousands of divided
families. MFN has also enabled us to
have an impact on Romania's human
rights practices and to help strengthen
the conditions for religious observance
there. We are not prepared to place at
risk these benefits. They are more
modest than we would like but,
nonetheless, important in human terms.
For the President, the humanitarian
considerations were most compelling in
deciding to renew Romania's MFN
status. He has taken the position that it
is better to direct our efforts to improv-
ing conditions that arouse our concern
than to abandon the principal means of
influence we now have and walk away.
As noted in his report to the Congress,
the President has instructed Secretary
Shultz to pursue our human rights
dialogue with Romania with renewed
vigor.
'Text from Weekly Compilation of
Presidential Documents of June 8, 1987.
Competitiveness and the Trade Deficit
Is our trade deficit the result of a fun-
damental lack of competitiveness? In the
first place, I don't believe it is credible to
argue that the underlying determinants
of U.S. competitiveness— technology,
research and development, investment,
management skills, and the like— could
have deteriorated so much in the 1980s
as to bring about the extraordinary
trade deficits of the past 4 years.
Indeed, these recent deficits have
other causes. The essence of the matter
is that consumption by government.
57
ECONOMICS
industry, and private citizens has con-
sistently outpaced production in recent
years, and thus the large trade deficits.
In our case, investors in slower growing
foreign countries recognized the advan-
tages of investing here— supplementing
our pool of savings. Borrowing abroad is
not a problem if it finances productive
investment and creates the means to ser-
vice the loans.
As members of this audience under-
stand as well as anyone, the adjustments
associated with trade deficits are pain-
ful. In the early 1980s and until quite
recently, manufactured exports did not
grow while manufactured imports
boomed. Now our manufacturers are
beginning to benefit from a competitive
exchange rate that reflects diminished
borrowing. By all accounts, American
industry is well-positioned to meet the
growing demand for U.S. products.
But I won't stand here and tell you
that there is no trade problem. There is
a problem. We are experiencing the
largest trade deficits in our history.
These massive trade deficits, and the
even larger Federal budget deficits, are
serious and must not be ignored.
To reduce the trade deficit, we must
continue to work to restore a better
balance between the demand for capital—
our public and private investment—
and the domestic supply of capital— the
savings generated by households,
businesses, and government. We can
invest less or save more.
We must take action to deal with our
deficits and the concerns they generate.
We must rebuild that important but
eroding coalition of farmers, consumers,
businessmen, politicians, and academics
that has helped shape our trade policy.
At the same time, we must guard
against false solutions that will make
matters worse.
Protectionism
That brings me to the question of protec-
tionism. While we have loaded up "com-
petitiveness" with too many concepts
and ideas, we risk stripping "protec-
tionism" of any meaning. We all want to
be competitive, but few advocate protec-
tionism anymore. Instead, some seem to
be engaged in an effort to convince
themselves that taking away the Presi-
dent's discretion in trade, making
retaliation mandatory, subsidizing
exports, and the like are not protec-
tionist in and of themselves but, rather,
will help us move to "fair trade" or
"level the playing field."
I would argue that, if these kinds of
policies were implemented on a larger
scale, the result would be a reduction in
world trade. Sure, we want fair trade.
Yes, we want a level playing field. But
the critical question is what is it we need
to be doing that will contribute to, not
detract from, an improvement in our
nation's competitiveness; to an improve-
ment in our nation's well-being.
There is another aspect of fairness
that I think deserves attention. Too
often, the unspoken definition of fairness
is "our industry always wins." Loss of
market share abroad automatically
translates into an unfair practice by a
competitor. The trade deficit is seen as
proof that American business is facing
unfair competition. Fairness does not
mean that every U.S. industry always
prospers. Fairness means we all play by
the same rules. We don't want guaran-
teed success; but we do insist on the
opportunity to succeed.
But where unfairness exists, how
should we deal with it? Retaliation-
restricting access to the U.S. market-
comes quickly to mind. There are two
problems with retaliation.
First, it hurts our own economy.
Second, it invites an escalating and
dangerous spiral of counterrestrictions.
Now, despite the risks, retaliation
may be necessary in some cases. When it
is, you have to act, and we have done so.
What we shouldn't do, though, is base
our policy on the concept of retaliation.
Protection, whether it is wrapped in
neoprotectionist or traditional protec-
tionist rhetoric, is not about improving
national competitiveness. It is not about
the nation's welfare. It is about
Americans taking income and wealth
away from other Americans. In the proc-
ess it lowers economic growth and effi-
ciency. Protection diminishes com-
petitiveness, because it taxes efficient
businesses and subsidizes inefficient
ones.
All governments, including our own,
have been very good at erecting trade
barriers for any number of "nonprotec-
tionist" reasons, but the effect has been
to restrain trade and restrict competi-
tion. We need authority to negotiate
these barriers out of existence. The
world needs updated and expanded trade
rules. We need to be vigorous and firm
in getting greater market access for our
manufacturers and in getting ever-
expanding world trade. We are working
toward this in shaping new trade legisla-
tion and in pursuing negotiations in the
Uruguay Round. What we do not need
are politically motivated solutions that
would impede that progress and invite
retaliation at a time of increasing U.S.
export growth.
Policies To Stay on the Frontier
What should the United States— its
government, businesses, and workers-
be doing to stay on the competitive fron-
tier and keep pushing it out?
First, we must bring down our fiscal
deficit. I should repeat that: we must
bring down our fiscal deficit.
Second, we must work to eliminate
the damaging rigidities that we have
built into the economy. We must resist
calls for increasing regulations once
again— for example, on airlines, banking,
and securities markets. The benefits to
society of any new regulations must
clearly exceed the potential harm to our
long-term competitiveness. We should
also continue to remove impediments to
labor mobility, and we should make sure
that the restrictions we maintain on
high-technology exports to protect our
national security take adequate and
increasing account of today's economic
realities and our own industrial
competitiveness.
Third, we must restore the quality
of our primary and secondary educa-
tional systems. In a world in which
technical skills— and the willingness to
upgi-ade them periodically— will be para-
mount, we are in danger of releasing
into the labor force millions of young
people who cannot function with even a
minimal mathematical capability and
cannot write at a level sufficient to com-
pete for well-paying jobs.
Fourth, too many of our firms and
workers still refuse to recognize that
they are in the middle of a tough, glo-
bally competitive market. We simply
cannot turn back the clock to the days of
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EUROPE
adversarial labor and management rela-
tions and single-product firms using a
mature and static technology. In fact,
market pressures are inducing important
changes in the way we organize our
business, through risk-taking, joint
ventures, technology-sharing, and
improved labor-management relations,
learned in no small part from our foreign
competitors. Indeed, these may be the
most valuable imports we have ever had.
Still, we need m.ore creativity in manage-
ment, manufacturing, and marketing.
Future competitive strength will demand
flexibility and cooperation, not new bar-
riers to adaptation and learning.
Since 1945, America has contributed
enormously to the construction of a safe
and prosperous world. I think that we
should be proud of that achievement.
The industrial country allies are all
friendly, democratic countries— an out-
come for which our postwar leaders
could only dream and hardly expect to
accomplish. We should welcome that
world. We should ask the allies forth-
rightly if we or they really want to turn
the clock back. In that spirit, it seems to
me we can bargain better, compete more
aggressively, and ultimately share
responsibilities more equally. ■
North Atlantic Council
Meets in Iceland
Secretwr-y Shultz attended the regular
semiannual session of the North Atlantic
Council ministerial meeting in
Reykjavik June 11-12, 1987. Following
are the texts of the final communique and
the Secretary's news conference.
FINAL COMMUNIQUE,
JUNE 12, 1987
1. Our meeting has taken place at a time
when developments in East- West relations
suggest that real progress may be possible,
particularly in the field of arms control. We
welcome these developments and will work to
ensure that they result in improved security
and stability. We note some encouraging
signs in Soviet internal and external policies.
In assessing Soviet intentions, we agree that
the final test will be Soviet conduct across the
spectrum from human rights to arms control.
We reaffirm the validity of the com-
plementary principles enunciated in the
Harmel report of 1967. The maintenance of
adequate military strength and Alliance cohe-
sion and solidarity remains an essential basis
for our policy of dialogue and co-operation— a
policy which aims to achieve a progressively
more stable and constructive East- West
relationship.
2. Serious imbalances in the conven-
tional, chemical and nuclear field, and the
persisting build-up of Soviet military power,
continue to preoccupy us. We reaffirm that
there is no alternative, as far as we can
foresee, to the Alliance concept for the
prevention of war— the strategy of deter-
rence, based on an appropriate mix of ade-
quate and effective nuclear and conventional
forces, each element being indispensable. This
strategy will continue to rest on the linkage
of free Europe's security to that of North
America, since their destinies are inextricably
coupled. Thus the US nuclear commitment,
the presence of United States nuclear forces
in Europe' and the deployment of Canadian
and United States forces there remain
essential.
3. Arms control and disarmament are
integral parts of our security policy; we seek
effectively verifiable arms control agreements
which can lead to a more stable and secure
balance of forces at lower levels.
4. We reiterate the prime importance we
attach to rapid progress towards reductions
in the field of strategic nuclear weapons. We
thus welcome the fact that the US and the
Soviet Union now share the objective of
achieving 50 percent reductions in their
strategic arsenals. We strongly endorse the
presentation of a US proposal in Geneva to
that effect and urge the Soviet Union to
respond positively.
August 1987
We reviewed the current phase of the US-
Soviet negotiations in Geneva on defence and
space systems which aim to prevent an arms
race in space and to strengthen strategic
stability. We continue to endorse these
efforts.
5. We note the recent progress achieved
at the Geneva Conference on Disarmament
towards a total ban on chemical weapons. We
remain committed to achieving an early
agreement on a comprehensive, worldwide
and effectively verifiable treaty embracing
the total destruction of existing stockpiles
within an agreed timeframe and preventing
the future production of such weapons.
6. Recognising the increasing importance
of conventional stability, particularly at a
time when significant nuclear reductions
appear possible, we reaffirm the initiatives
taken in our Halifax statement and Brussels
declaration aimed at achieving a comprehen-
sive, stable and verifiable balance of conven-
tional forces at lower levels. We recall that
negotiations on conventional stability should
be accompanied by negotiations between the
35 countries participating in the CSCE [Con-
ference on Security and Cooperation in
Europe], building upon and expanding the
confidence- and security-building measures
contained in the Helsinki Final Act and the
Stockholm agreement. We agreed that the
two future security negotiations should take
place within the framework of the CSCE
process, with the conventional stability
negotiations retaining autonomy as regards
subject matter, participation and procedures.
Building on these agreements, we took the
decisions necessary to enable the high-level
task force on conventional arms control,
which we established at the Halifax minis-
terial, to press ahead with its work on the
draft mandates to be tabled in the CSCE
meeting and in the conventional stability
mandate talks currently taking place in
Vienna.
7. Having reviewed progress in the
negotiations between the United States and
the Soviet Union on an INF [intermediate-
range nuclear forces] agreement, the Allies
concerned call on the Soviet Union to drop its
demand to retain a portion of its SS-20
capability and reiterate their wish to see all
long-range land-based missiles eliminated in
accordance with NATO's long-standing objec-
tive. They support the global and effectively
verifiable elimination of all US and Soviet
land-based SRINF [short-range INF] missiles
with a range between 500 and 1,000 km as an
integral part of an INF agreement. They con-
sider that an INF agreement on this basis
would be an important element in a coherent
and comprehensive concept of arms control
and disarmanent which, while consistent with
59
EUROPE
NATO's doctrine of flexible response, would
include:
• A 50 percent reduction in the strategic
offensive nuclear weapons of the US and the
Soviet Union, to be achieved during current
Geneva negotiations;
• The global elimination of chemical
weapons;
• The establishment of a stable and
secure level of conventional forces, by the
elimination of disparities, in the whole of
Europe; and
• In conjunction with the establishment
of a conventional balance and the global
elimination of chemical weapons, tangible and
verifiable reductions of American and Soviet
land-based nuclear missile systems of shorter
range, leading to equal ceilings.
8. We^ have directed the North Atlantic
Council in permanent session, working in con-
junction with the appropriate military
authorities, to consider the future develop-
ment of a comprehensive concept of arms
control and disarmament. The arms control
problems faced by the Alliance raise complex
and interrelated issues which must be
evaluated together, bearing in mind overall
progress in the arms control negotiations
enumerated above as well as the require-
ments of Alliance security and of its strategy
of deterrence.
9. In our endeavor to explore all oppor-
tunities for an increasingly broad and con-
structive dialogue which addresses the con-
cerns of people in both East and West, and in
the firm conviction that a stable order of
peace and security in Europe cannot be built
by military means alone, we attach particular
importance to the CSCE process. We are,
therefore, determined to make full use of the
CSCE follow-up meeting in Vienna.
The full implementation of all provisions
agreed in the CSCE process by the 35 par-
ticipating states, in particular in the field of
human rights and contacts, remains the fun-
damental objective of the Alliance and is
essential for the fruitful development of East-
West relations in all fields. Recalling our con-
structive proposals, we shall persist in our
efforts to persuade the Eastern countries to
live up to their commitments. We will con-
tinue to work for a substantive and timely
result of the conference.
10. Those of us participating in the
MBFR [mutual and balanced force reductions]
talks reiterate our desire to achieve a mean-
ingful agreement which provides for reduc-
tions, limitations and effective verification,
and call upon the Warsaw Pact participants in
these talks to respond positively to the very
important proposals made by the West in
December 1985 and to adopt a more construc-
tive posture in the negotiations.
11. In Berlin's 750th anniversary year, we
stress our solidarity with the city, which con-
tinues to be an important element in East-
West relations. Practical improvements in
inner-German relations should in particular be
of benefit to Berliners.
12. It is just 40 years since US Secretary
of State Marshall delivered his far-sighted
speech at Harvard. The fundamental values
he expressed, which we all share, and which
were subsequently embodied in the Marshall
Plan, remain as vital today as they were then.
13. We reiterate our condemnation of ter-
rorism in all its forms. Reaffirming our deter-
mination to combat it, we believe that close
international co-operation is an essential
means of eradicating this scourge.
14. Alliance cohesion is substantially
enhanced by the support of freely elected
parliamentary representatives and ultimately
our publics. We, therefore, underline the
great value of free debate on issues facing the
Alliance and welcome the exchanges of views
on these issues among the parliamentarians
of our countries, including those in the North
Atlantic Assembly.
15. We express our gratitude to the
Government of Iceland, which makes such a
vital contribution to the security of the
Alliance's northern maritime approaches, for
their warm hospitality.
16. The spring 1988 meeting of the North
Atlantic Council in ministerial session will be
held in Spain in June.
SECRETARY'S NEWS
CONFERENCE,
JUNE 12, 1987'
We have just concluded an especially
productive and forward-looking
ministerial meeting. I think it is quite
significant now that, having had a very
wide and thorough process of consulta-
tion—including many personal contacts
between President Reagan and his
counterparts, direct consultations with
foreign ministers and governments one
by one, now had the meeting here in
Reykjavik considering the range of INF
issues, and we have been able to hear
from all of the governments, from their
foreign m 
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