Skip to main content

Full text of "Department of State bulletin"

See other formats

■ ■: \ : -r . ' ■ ; . ,' 

Superintendent of Documents 
U.S. Government Printing Office 
Washington, D.C. 20402 


Postage and Fees Paid 

Department of State 


Second Class 

Subscription Renewals: To insure uninterrupted service, please renew your subscription promptly when you 
receive the expiration notice from the Superintendent of Documents. Due to the time required to process 
renewals, notices are sent out three months in advance of the expiration date. Any problems involving your 
subscription will receive immediate attention if you write to: Superintendent of Documents, U.S. Government 
Printing Office, Washington, D.C. 20402. See inside front cover for subscription rates and mailing address. 

Departmen t 


he Official Monthly Record of United States Foreign Policy /Volume 81 / Number 2052 

July 1981 

•M* * 

IU»purtmvnt of S1ui<> 


Volume 81 / Number 2052 / July 1981 

Cover Art : 

President Reagan, President Lopez Portillo. 

and Italia Morayta (interpreter) 

at Camp David luncheon. 

(White House pholo by Michael Evans) 

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 provide 
the public, the Congress, and 
government agencies with information 
on developments in U.S. foreign 
relations and the work of the 
Department of State and the Foreign 

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; 
special features and articles on 
international affairs; 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. 


Secretary of State 


Assistant Secretary for Public Affairs 



Office of Public Communication 


Acting Chief, Editorial Division 




Assistant Editor 

The Secretary of State has determined that 
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 Management and 
Budget through January 31. 1986. 

NOTE: Contents of this publication are not 
copyrighted and items contained herein 
may be reprinted. Citation of the 
Department of State Bulletin as the 
source will be appreciated. The Bulletin is 
indexed in the Readers' Guide to Periodical 

For sale by the Superintendent of 

Documents, U.S. Government Printing 

Office, Washington, D.C. 20402 

Price: 12 issues plus annual index — 

$19.00 (domestic) $23.75 (foreign) 

Single copy— $3.25 (domestic) $4.10 (foreign) 

Index, single copy— $2.25 (domestic) $2.85 (foreig 



1 Visit of Mexican President Lopez Portillo (President Reagan, President Lopez 

4 The United States and Mexico (Everett E. Briggs) 

5 Mexico— A Profile 

"he Secretary 


Peaceful Progress in Developing 

News Conference of May 22 
Secretary Participates in St. 

Louis Town Hall Forum 
Secretary Participates in Foreign 

Policy Conference 

ast Asia 

l Khmer Relief Efforts 


4 International Ecomomic Policy 
Priorities (Robert D. Hormats) 

8 U.S. Subscription to the World 

Bank (Ernest B. Johnston) 

9 S.708: A Viable Foreign Corrupt 

Practices Act (Ernest B. 
International Investment Issues 
tJuhn T. McCarthy) 


2 Strategic Petroleum Reserve 

(Robert D. Hormats) 
4 U.S. Competition in International 

Coal Trade (John P. Ferriter) 




23d Report on Cyprus 
(Message to the Congress) 

First and Second Reports on Cy- 
prus (Message to the Congress) 

West German Chancellor Visits 
United States (Joint Statement) 

Middle East 

45 U.S. Asks Libyans to Close Peo- 

ple's Bureau; Travel Advisory 
Issued (Department Statement) 

Military Affairs 

46 Requirements of Our Defense Pol- 

icy (Caspar W. Weinberger) 


48 U.S. Policy and the Law of the 
Sea (James L. M alone) 

Security Assistance 

51 Arms Transfers and the Na- 
tional Interest (James L. 

United Nations 

54 Infant Formula Code (Elliot 

Abrams, M. Peter McPher son) 

Western Hemisphere 

56 U.S. Assistance to El Salvador 

(Foreign Relations Outline) 


57 Current Actions 


60 May 1981 

Press Releases 

60 Department of State 
60 U.S.U.N. 


62 International Law Digest, 1978 
62 Department of State 



North Atlantic Council Meets in 
Rome tiling. Final Communi- 
que, Minutes Extract, Declara- 
tion on Terrorism) 

NATO Defense Planning Commit- 
tee Meets in Brussels (Final 
( 'ommunique) 

SPECIAL (See Center Section) 

Atlas of United States Foreign Relations: Economics— Part 1 



EN1 OF [iQCUivlcNlb 

| i i\_/*-' 

I 1981 



Presidents Reagan and Lopez Portillo at 
White House Welcoming Ceremony. 

The President with John Gavin. U.S. Ambassador to Mexico, and President Lopez Portilli 
following the afternoon's horseback ride at Camp David. 

President Reagan greets President Lopez 
Portillo before the evening barbeque at 
tamp David. 

Presidents Reagan and Lopez Portillo exchange toasts during the evening barbeque. 

(Whits HuUSl- pi - lij Mii'harl Kvans) 


Visit of Mexican President Lopez Portillo 

Mexican President Jose Lopez Por- 
illo y Pacheco made an official visit to 
he United States June 7-9, 1981. Follow- 
ng are remarks made at the arrival 
eremony on June 8, an exchange of 
uncheon toasts on May 9, and President 
leagan's remarks made on the departure 
f President Lopez Portillo on May 9. 


UNE 8, 1981 1 

'resident Reagan 

warmly welcome President Lopez Por- 
illo on Behalf of the people of the 
Jnited States. But I also want to convey 
iy personal greetings because of my 
ersonal respect and affection. The rela- 
ionship we've built as individuals is in- 
icative of a new dimension that we are 
ringing to the friendship between our 
wo countries. 

Our planned meeting of 2 months 
go, which I was looking forward to 
dth great anticipation, was abruptly 
ancelled. And I want to thank you for 
le consideration you've shown in 
isiting us here in Washington. You've 
one us a great honor in your visit to 
le White House. 

You will recall the last time we met 
has in the Museum of Art, part of Mex- 
;o's rich cultural past — that was in 
'iudad Juarez. We were surrounded 
lere by magnificent pieces of art, part 
f Mexico's rich cultural past. It was ap- 
ropriate that we should meet in such a 
lace, for art transcends time and 
mterial consideration. 

The same is true of the friendship 
etween the peoples of Mexico and the 
Jnited States. In a world filled with 
eighbors who resort to violence, 
eighbors who've lost sight of the shared 
alues and mutual interests, the goodwill 
etween Mexico and the United States is 
- blossom whose beauty we meet here to 
herish and protect. 

God made Mexico and the United 
Utates neighbors, but it is our duty and 
he duty of generations yet to come to 
hake sure that we remain friends. I 
j/elcome you today with the pledge that 
his Administration will sincerely and 
iiligently strive to maintain a relation- 
hip of mutual respect and cooperation 

between our two nations, and the deci- 
sions which affect both sides of our 
border will be made only after the 
closest consultation between our govern- 

Our very proximity is an opportunity 
to demonstrate to the world how two 
nations, talking together as equals, as 
partners, as friends, can solve their 
problems and deepen their mutual 
respect. You are a scholar, a man of art, 
and a political leader of a proud and in- 
dependent nation. There are many items 
of importance on our agenda. I look for- 
ward to a far-reaching exchange of 
views that will cement the ties between 
us. The personal friendship we're 
developing must be equaled by the 
closeness between our two peoples. 

President Lopez Portillo 2 

Under the sign of friendship which 
began in Ciudad Juarez, it is now for me 
a great pleasure to be here in the capital 
city of your great country. We are very 
sorry that we did not see you in Tijuana 
as we had planned. But I am very happy 
that we are meeting now here at the 
White House, and it also pleases me 
enormously to see that you have totally 
recovered from the attempt that was 
brought on by absurd violence. I am 
very happy to see that you have enor- 
mous capacity of recovery. And in your 
health and in your strength, I can see 
the good health and the strength of your 

There are few countries in the world 
that have so many items to deal with 
among themselves as the United States 
and Mexico. We are not only neighbors, 
we are also the representatives of two 
worlds. Literally and geographically 
speaking, we represent the north and 
the south along 3,000 kilometers of 
border. Therefore, there are structural 
matters between us that have been 
shaped by our history and our 

We also represent the relationship 
between the developing world and the 
world that has already been developed. 
And we are also immersed in a regional 
context that shapes our relationship. 

I come here now as a friend without 
any prejudice to talk over these matters 
with you and to prove with my coming 
that there can be friendship among 
friends and that this friendship can have 

as its main pillar and basis the rule of 
reason. In an absurd world, the 
reasonable thing to do can be the possi- 
ble thing to do. And what is reasonable 
is based on respect and on the law. 

There are many problems that we 
have to deal with. We will be very happy 
to find our similarities. And when we do 
not have coinciding opinions, and it is 
very possible that in this world of 
plurality there may be times when we do 
not have coinciding opinions, then we 
will talk things over without arrogance. 
Arrogance is a very dangerous deviation 
of those who are in a weaker position. 
The other very dangerous aspect is sub- 
mission. We will select the road of 
respect and the rule of reason without 
any submission and without any ar- 

I believe that few times in our 
history has there been an opportunity 
for good understanding as there is today 
to understand each other well and to 
deepen and make headway in our rela- 
tionship. I feel that you have great good 
will and a friendly feeling. I feel that 
you are a decent individual and an 
honest one. I shall make a great effort 
to respond to the kindnesses that you 
have with me. 

We have established a friendship 
which no doubt will be both symbolic 
and solid. I am absolutely certain that 
we will be able to achieve what our two 
peoples and nations want of us. We 
want to be understood, and, in turn, we 
want to understand. We want to 
respect, and we want to be respected. 
We want a solid relationship that will 
seek out the mutual interest of two 
countries that are neighbors and friends. 
I am very certain that if we go beyond 
rhetoric and prejudice, we shall be able 
to achieve our goals. And this will be for 
the good of both countries. 

JUNE 9, 198F 

President Reagan 

Some years ago when I was Governor of 
California, I was inspecting areas in our 
State which had been enormously 
damaged by one of those natural 
catastrophies that we sometimes see on 
the Pacific Coast — great mud slides that 
can sweep away a man's home in a mat- 
ter of moments. 

lulv 1981 


One of these belonged to an old 
gentleman from your country who was 
standing in the middle of what, before 
the slide, had been his living room. We 
were both knee-deep in mud. It must 
have been heartbreaking for him 
because his home had obviously been 
newly furnished. Now it was a scene of 
ruin. With quiet dignity and the utmost 
sincerity, he said: "Governor Reagan, mi 
casa es su casa," — my house is your 
house. I was deeply moved, and I real- 
ized that I was a witness to what was 
purely and traditionally Hispanic — per- 
sonal pride and courage in the face of 

Today, the entire nation is happy to 
have you with us here in the White 
House, and since this house belongs to 
all of them, may I say on behalf of my 
fellow citizens, mi casa es su casa. [Ap- 

From the moment of our meeting on 
the Friendship Bridge at Ciudad Juarez 
last January, I was certain that we 
would make our relationship more than 
symbolic, not only because our peoples 
expect certain cordiality between their 
leaders but because the leader of the 
Mexican people exemplifies so well the 
proud culture and heritage of his people. 

When you took that highly symbolic 
step across the boundary to grasp my 
hand, I knew that our future relation- 
ship would be that of personal friends. 
Your concern and good wishes during 
my period of hospitalization were deeply 
appreciated. The Vice President told me 
of your concern for my health and of 
your most generous offer to travel to 
Washington for this meeting even 
though protocol called for me to visit 

At your first meeting, you gave me 
a splendid example of your own artistry, 
drawings of horses etched on glass, 
drawn by you that are now proudly 
displayed behind my desk in the Oval Of- 
fice, and I value greatly the volumes on 
beautiful art of your country. But it 
would be difficult to match the gift that 
arrived at our ranch shortly before my 
inauguration— El Alamino, a magnifi- 
cent horse, your personal mount. That 
was more than friendship, you took me 
into your family. [Laughter] 

But I remember, too, that you 
presented me with a bound volume of a 
book that you wrote on Quetzalcoatl. It 
has much to say about your people. It 

The President and guests are entertained by the Army Strolling Strings during a White 
House luncheon. 

also says much about the man who leads 
them today. I found especially relevant 
to your land the words of Quetzalcoatl 
to his new-born son: "You are made with 
the fibers of joy and sorrow, of laughter 
and tears. You are at the edge of all the 
possibilities and soon you will have the 
strength to choose. You will be the 
course and the measure of the richness 
and the misery. You will be the eagle 
and the serpent. With your pain, you 
will maintain the conscience of the 
universe, with your laughter, the dignity 
of Man." 

Later in the book, Quetzalcoatl, 
perplexed by the problems of governing, 
said something we can both relate to: 
"Despite its regularity, this world is a 
confused sphere of arbitrary things." 

The art of politics is sometimes 
frustrating, but there are other times of 
confidence and optimism and your visit 
has been such a time. I listened very 
carefully to you in our meetings, noting 
the content and the spirit with which 
you spoke. Your presence inspires con- 
fidence that we can calm any of the ten- 
sions that inevitably arise between two 
such close neighbors. During your elec- 
tion campaign in 1976, you traveled 
through all 31 of Mexico's states, 
spreading new hope. The message you 
brought to the Mexican people is 
something that can serve as a cor- 
nerstone for our relationship as well. If 
problems arise between us, we must 
always remember we are the solution. 
There is nothing that with mutual 
respect and honest communication we 
cannot work out together. 

I look forward to our next meeting 
in Cancun, Mexico, in October. In 
saluting you today, I thank you for your 
generosity, but more, I thank you for 
the continued good will between our two 
peoples that your visit represents. And 
so I ask all of you to join me in a toast 
to Jose Lopez Portillo, the President of 

President Lopez Portillo 2 

I must confess that I am moved. I must 
confess that I have spoken before an 
auditorium in this same place three 
times before, and I have never been so 
moved as I feel today. It is true that 
I had always been sincere but also 
cautious. I had always spoken frankly, 
but I have always measured the weight 
of each one of my words because the 
relationship, for some reason or another 
had always been a tense one. A relation- 
ship between neighbors that are so dif- 
ferent are always difficult. It is difficult 
for the one side and for the other. But I 
confess for the first time now I have felt 
totally relaxed. For the first time a 
President of the United States has used 
with me that very generous formula of 
"my home is your home." [Applause] 
And for we who understand the 
greatness and dignity that are behind 
that expression, what I have heard from 
the President today has deeply moved 
me. As I can understand very well that 
he felt deeply moved also when he hearc 
that old man who had no roof over his 
head and who was offering him his 
home, because a home is the environ- 
ment of respect for the intimacy of the 

Department of State Bulletir 


luman being. And when one gives one's 
ntimaey in friendship, it is that that he 
s giving. 

We understand this to be so, and we 
hank you for this. But I must also say 
hat it has not only been the external 
>ehavior but also the substantive part of 
>ur relationship that has always been 
jenerous, kind, and affectionate. 

If all the powerful people in the 
/orld were to truly understand what 
espect means to the weak people, the 
rorld would totally change. It is not on- 
i to give, not only to help; the most im- 
ortant thing of all is to respect. He 
'ho gives without respect is usually of- 
ensive. Very frequently I am reminded 
tnd I remind others that the first civic 
xpression that we learn as children is 
he one that was said by one of our 
reat men and presidents, the counter- 
art, so to speak, of Abraham Lincoln, 
[e said: "Respect for the rights of 
thers is peace." The first word that we 
llexicans learn in our civic behavior is 
le word "respect." And this is the way 
hich we have been treated. We have 
|sen treated with respect and with 
•iendship, and these are basic qualities 
> us. 

On that basis, everything can be 
ailt. One can coincide, one can be sent, 
jman beings are made in many and 
| irious different ways and shapes. And 
i our plurality, we should learn to coex- 
k and to tolerate one another. 
. olerance in itself is respect. And when 
human relationship is built on respect, 
is indestructable. We have spoken 
oout many things. Fortunately, we 
ive agreed on most of them. We have 
ssented on some. But with the 
reatest respect we have agreed to talk 
oout the matters on which we dissent 
; order to find appropriate solutions. 
Intolerance has not come to cancel 
it opportunity, and that is very impor- 
fcnt for a good relationship between 
juntries such as ours. It is important 
^cause it is a representative sample of 
hat is happening in the world — the 
ilationship between the countries that 
ave been able to develop and the 
eveloping nations. And in a geographi- 
il analogy, we could say that this is an 
Impression of the North-South relation- 
. lip. We are the most significant rela- 
onship between the North and the 

South. That is why I have felt so happy 
and so grateful that you have accepted 
our invitation to come to Cancun; 
because we do not only have concepts in 
mind, but we have direct experiences 
and reciprocal experiences. I am very 
certain that the special characteristics of 
our relationship — North-South relation- 
ship, that is, United States-Mexico — can 
be taken to generalization and that it 
will be useful, that it can be useful, and 
this is what we fervently wish — it can 
be useful for the rest of mankind. 

We want appropriate communica- 
tions so that political will can be ex- 
pressed. And political will has been ex- 
pressed here and now today in the 
United States as regards to Mexico and 
with reference to Mexico as regards to 
the United States with an environment 
of good will, peace, respect, and con- 
sideration for each other. 

I believe that in Cancun we can be a 
stimulating example to help and par- 
ticipate in the detente of this world 
which is so complex and at times so ab- 
surd, because if the disasters brought on 
by nature that creates all these thing for 
human beings are absurd in them- 
selves—these disasters that leave old 
men without a roof over their heads but 
still with their dignity, nature, in that 
case, as nature has its own strength and 
will, cannot be controlled by us. But 
there is something that leaves man 
without a roof over his head and which 
is not nature, and I'm talking about pas- 
sions, ambition, intolerance, vio- 
lence — vices all of human will. And it is 
up to the will of the human being to cor- 
rect these mistakes. Perhaps we can do 
nothing against nature, but we can do a 
great deal with our will if we're talking 
about good will, and I do believe that 
good will is possible. And I believe that 
in Cancun, we shall have the opportunity 
to say that it is possible and to confirm 
that we're speaking the truth. 

I would hope that we will know how 
to lay bridges that will make it possible 
for all men and women in the world to 
say to each other: "My friends, this is 
your home." To the health of President 

Reagan and his beautiful wife; to the 
friendship of Mexico and the United 
States; to your health. 

JUNE 9,1981 J 

I just want to express my appreciation 
for President Lopez Portillo's changing 
his schedule and coming to Washington 
to accommodate us. The talks that we've 
had were frank, they were valuable, and 
they led to a closer relationship between 
our two countries. In addition to that, 
I'm very proud, personally, to say that 
we have a warm and a close personal 
relationship between the two of us. 

Our frank agreement or discussion 
revealed basic agreement on the need to 
strengthen the economies of the less- 
developed nations, to bring about social 
and economic development of their 
peoples. We agreed that this was the 
best way to assure the region's future 
stability, and we'll be exchanging ideas 
on how best to bring about such develop- 
ment. We agreed that the special nature 
of our relations required a special 
framework for doing business. We de- 
cided to form a bilateral foreign 
secretary's commission to assure in- 
tegrated handling of matters of common 
concern. It will be cochaired by 
Secretary Haig and Secretary 
Castaneda. They will submit a report by 
December 31, 1981. 

Because trade problems are essen- 
tially and especially urgent, we also 
decided to set up immediately a Cabinet- 
level trade committee to recommend 
how to go about dealing with outstand- 
ing bilateral trade questions. The com- 
mittee will be cochaired by the Mexican 
and United States Secretaries of Com- 
merce and the U.S. Trade Represen- 
tative. The committee will begin work as 
soon as possible. 

We also agreed to address outstand- 
ing fisheries problems on a similar 
urgent basis. An important agreement 
providing for supply of substantial quan- 
tities of U.S. grain to Mexico during 
1982 was signed by Secretary Block for 
the United States and Secretary de la 
Vega for Mexico. Attorney General 
Smith briefed the Mexican party in 
detail on the various options we're now 
considering to deal with the un- 
documented migrant problem. And I 
assured the President that the United 

uly 1981 


States would take Mexico's interest in 
this problem fully into consideration, as 
well as the interests and rights of the in- 
dividual migrants themselves. 

I had the great pleasure of inform- 
ing the President that the legislature 
has acted— the Congress has acted— and 
we are going forward with construction 
of the Otay Mesa additional border 
crossing to relieve the logjam that we 
have at the San Ysidro crossing there. It 
is badly needed on the California Baja 
border. And we agreed that it would be 
an important boost to tourism in both 

President Lopez Portillo formally in- 
vited me to participate in a meeting of 
heads of government, an international 
meeting to be held in Cancun, Mexico, in 
October, and I happily accepted that in- 
vitation. I look forward to the informal 
discussion of North-South questions 
which will occur at that meeting and as 
well as additional meetings that we have 
spoken of. 

The United States and Mexico 

'Made on the South Lawn of the White 
House (text from White House press release). 

President Lopez Portillo spoke in 
Spanish, and his remarks were translated by 
an interpreter. 

3 Made at a luncheon in the East Room of 
the White House (text from White House 
press release). 

4 Made on the North Portico of the White 
House (text from White House press 
release). ■ 

by Everett E. Briggs 

Statement, prepared for delivery 
before the Subcommittee on Inter- 
American Affairs of the House Foreign 
Affairs Committee on June 10, 1981. Mr. 
Briggs is Acting Deputy Assistant 
Secretary for Inter-American Affairs. 1 

The just-concluded 2-day session at 
Camp David and at the White House is 
the fifth presidential-level meeting for 
the United States and Mexico in the 4V2 
years Jose Lopez Portillo has been in of- 
fice. It is the second time this year that 
President Reagan has met with his Mex- 
ican counterpart, and the two expect to 
be meeting again later this year at a 
time and place to be determined. 
Since January 20 there have been 
several telephone exchanges, as well as 
visits by special emissaries. 

The frequency of these high-level en- 
counters and the pace of diplomatic ac- 
tivity reflect a new appreciation of the 
intensity and importance of the unique 
relationship between our two countries. 
This relationship is as complex, exten- 
sive, intertwined, and interdependent as 
any for the United States. 

There is scarcely an agency of our 
government that is not involved in pro- 
grams which directly or indirectly affect 
the relationship. Contacts between ex- 
perts on both sides are constant; in- 
dividual agencies have a wide variety of 
agreements and arrangements with their 
counterparts on issues ranging from 
housing and health to culture, tourism, 
aviation, narcotics control, customs 
cooperation, environmental protection, 
science and technology, to name just a 
few. Our Embassy in Mexico is the 
largest in the world because so many 
agencies find it necessary to be repre- 
sented there: 11 in all. 

There exists a long-time, active rela- 
tionship between our Congress and the 
Mexican legislature, and within a few 
days a delegation of distinguished 
American Congressmen and Senators 
will go to Mexico for the annual meeting 
of the U.S. -Mexico Interparliamentary 
Commission — that in addition to fre- 
quent visits back and forth by individual 
members or delegations interested in 
specific issues. 

Under the leadership of Governor 
Clements of Texas, periodic meetings of 
border governors from both sides are 

now taking place — a development we 
welcome and which contributes directly 
to improved understanding and in- 
creased possibilities for cooperation at 
the local level. 

There are literally thousands of bina- 
tional organizations; hardly a week goes 
by without a conference on U.S. -Mexi- 
can relations sponsored by academia, 
foundations, or private enterprise. Tran- 
sit — tourism and business — between the 
two countries is the heaviest in the 
world: over 800,000 persons legally 
cross the border daily. This accounts for 
the fact that 12% of our worldwide con- 
sular resources are dedicated to Mexico, 
at our Embassy and 10 consulates. 

We now have upward of 12 million 
Americans of Mexican extraction, and 
the historical, cultural, and political im- 
pact of this fastest growing portion of 
our population is a fact of life neither 
legislators nor policymakers can ignore. 

Such is the environment within 
which U.S. -Mexican relations prosper as 
well as occasionally encounter dif- 
ficulties, as is inevitable, given that we 
are both proud, individualistic, and 
independent-minded nations, each with i 
role to play on the world scene and our 
own ideas of our national interests. But 
as next-door neighbors with a shared in- 
terest in prosperity and progress, we 
share a common determination to 
cooperate where possible, to minimize 
and isolate differences where they can- 
not be avoided, and to consult closely or 
all issues which arise between us. This i: 
the Administration's approach. 

The bilateral component in our rela- 
tionship overshadows all else, and the 
three main categories are economic rela 
tions (principally trade), migration, and 
border relations. I should like to addres: 
each of these, as well as regional issues, 
a component of secondary importance t( 
the overall relationship, but one which 
requires special sensitivity on both sides 

Trade and Investment 

During the past few years, trade be- 
tween the United States and Mexico ha: 
grown dramatically. It increased 50% 
from 1979 to 1980, reaching almost $28 
billion, and making Mexico our third- 
ranking trading partner after Canada 
and Japan. Trade has tripled in 4 years 
and if the upward swing continues, as 

Department of State Bulletii 


/e have every right to expect, Mexico 
rill be in second place. 

Considering the size of this trade 
nd its rapid growth, we have had few 
erious problems. Because Mexico is not 
member of the General Agreement on 
ariffs and Trade (GATT) and has not 
dhered to the negotiated code of con- 
uct on countervailing duties and export 
ubsidies of the multilateral trade 
egotiations (MTN), and given our own 
rade laws and our traditional, 
uiltilateral approach to foreign trade, 
lere is the potential for serious trade 
isputes to arise between us. If these oc- 
ur, there may be some interruption of 
-ade in specific products, but overall 
-ade should continue to grow. 

According to U.S. Department of 
ommerce statistics, U.S. exports to 
|[exico in 1980 reached $15.1 billion, up 
; 3% over 1979. U.S. imports increased 
) $12.5 billion, up 42%, with oil and 
atural gas accounting for slightly over 
3%. The main U.S. exports were 
,^ricultural products, capital goods, and 
itermediate goods. The U.S. bilateral 
i ade surplus was $2.6 billion, up from 
II billion in 1979. For Mexico, total ex- 
; jrts of goods and services generate 
i ore than 15% of GDP, and almost two- 
lirds of Mexico's trade is with us, so 
! lr trade policy has a tremendous im- 
kct on the Mexican economy. As Mex- 
<o's export potential grows, market ac- 
;ss issues and export promotion 
easures (such as export subsidies) will 
;come increasingly important to 
.S. -Mexican relations. 

U.S. agricultural exports to Mexico 
st year swelled to $2.5 billion, more 
lan doubling from a year earlier. Mex- 
o became our third largest agricultural 
(port market, accounting for 7% of our 
>tal agricultural exports. Grain and 
) ;her bulk commodities were crucial in 
lis increase. These exports took place 
lader a bilateral U.S. -Mexico grain 
^reement, negotiated in early 1980, ex- 
inded later in the year, and renewed 
l)r 1981. We have agreed to enter into a 
1 milar pact for 1982. Under the agree- 
ment, the U.S. Government facilitates 
I le purchase of agreed-upon quantities, 
Mainly by offering tenders. The two 
lovernments cooperate on resolving 
iransportation problems — getting the 
Brain across the busy border and 
D trough congested ports. 

The Mexican Government decided 
list year that the time was inopportune 
pr it to join the GATT or the subsidies 
ijode, noting that these would place un- 
jue restraints on Mexican development 

policy, without the nontariff measure 
codes of conduct and the MTN trade 
concessions offering sufficient advan- 
tages to outweigh these restraints. 

What this means, under our own 
laws, is that U.S. petitioners requesting 
the imposition of countervailing duties 
on Mexican products need only to prove 
the existence of subsidies and not that 
these subsidies cause or threaten injury. 
Such findings then trigger the imposi- 
tion of countervailing duties. The indica- 
tions are that barring some bilateral 
agreement or Mexican adherence to 
GATT, several Mexican subsidies will be 

In fact, on April 10, 1981, counter- 
vailing duties of 5% were levied on im- 
ports of leather wearing apparel from 
Mexico. The U.S. Department of Com- 
merce determined that Mexican 
manufacturers of leather wearing ap- 
parel are receiving subsidies from the 
Government of Mexico. Mexican exports 
to the United States of this product be- 
tween January 1979 and May 31, 1980, 

were worth $26 million. We are con- 
sulting with Mexico on this problem. 

Mexico is worried about U.S. 
graduation policy. Graduation refers to 
the phasing out and eventual elimination 
of special and differential trade treat- 
ment for advanced developing countries. 
It has been U.S. policy to apply gradua- 
tion to the Generalized System of 
Preferences (GSP— the system by which 
certain listed products from Mexico and 
other developing countries enter the 
United States duty free, unless those 
products are especially sensitive or ex- 
tremely competitive). Mexico ranks 
fourth among the 140 beneficiaries of 
the U.S. GSP program. Its utilization of 
GSP has doubled over the last 5 years, 
increasing to $509 million in 1980. 
Graduation this year eliminated GSP on 
two Mexican items worth only $14 
million; petitions on other items were 
turned down. Mexico regained eligibility 
on over $14 million in previously ineligi- 
ble products and gained eligibility on 47 
items newly added to the list, 3 of which 

Mexico— A Profile 


Area: 764.000 sq. mi. Capital: Mexico D.F. 
(pop. 15 million, 1980 est.). Other Cities: 
Guadalajara (2.4 million), Monterrey (2 
million), Cuidad Juarez (680,000), Puebla 


Population: 69 million (1980 est.). Annual 
Growth Rate: 2.7%. Ethnic Groups: Indian 
Spanish (mestizo) 60%, American Indian 
30%, Caucasian 9%, other 1%. Religion: 
Roman Catholic 97%. Language: Spanish. 
Literacy: 74%. Life Expectancy: 65 yrs. 


Official Name: The United Mexican States. 
Type: Federal republic. Independence: First 
proclaimed Sept. 16, 1810; republic estab- 
lished 1822. Constitution: Feb. 5, 1917. 
Branches: Executive — President (Chief of 
State and Head of Government). Legisla- 
tive— bicameral Congress (66-member Senate 
and 300-member Chamber of Deputies). 
Judicial — Supreme Court, local and federal 
systems. Political Parties: Institutional 
Revolutionary Party (PRI), National Action 
Party (PAN), Popular Socialist Party (PPS), 
Authentic Party of the Revolution (PARM); 
three other parties — the Socialist Workers 
Party (PST), the Mexican Democratic Party 
(PDM), and the Mexican Communist Party 

(CPM)— and four political associations 
registered. Suffrage: Universal over age 18. 
Administrative Divisions: 31 states and the 
Federal District. 


GDP (1980): $128 billion. Per Capita GDP: 
$1,800. Annual Growth Rate: 7.4%. Annual 
Inflation Rate: 28%. Natural Resources: 

Petroleum, silver, copper, gold, lead, zinc, 
natural gas, timber. Agriculture: Corn, cot- 
ton, coffee, sugarcane, vegetables. In- 
dustries: Food processing, chemicals, basic 
metal and metal products, petroleum. Trade: 
Exports — $15.3 billion: petroleum, coffee, cot- 
ton, fruits and vegetables, sulfur. Partners — 
U.S. (64%), EC, Japan. Imports— $18.6 
billion: grains, machinery, equipment, in- 
dustrial vehicles, intermediate goods. Part- 
ners— U.S. (65%), EC, Japan. Average Ex- 
change Rate (1980): 23.5 pesos = US$1.00 

Membership in International Organizations 

U.N., International Atomic Energy Agency, 
International Civil Aviation Organization, 
Seabeds Committee, Inter-American Defense 
Board, Organization of American States, 
Latin American Free Trade Association, 

Principal Government Officials 
Mexico: President — Jose Lopez Portillo; 

Minister of Foreign Relations— Jorge 
Castaneda de la Rosa; Ambassador to the 
U.S.— Hugo B. Margain. United States: 

Ambassador to Mexico— John Gavin. ■ 

llulv 1981 


should result in substantia] Mexican ex- 
ports to the United States. 

Another important trade and invest- 
ment area has been the in-bond industry 
program, initiated by the Mexicans in 
1965 to reduce serious border unemploy- 
ment aggravated by the 1964 termina- 
tion of the bracero program. Par- 
ticipating factories produce articles in 
Mexico, primarily from imported U.S. 
components, and are given tax, duty, 
and regulatory exemptions. Assembled 
goods — 70% electronic and 10% ap- 
parel — are exported mainly to the 
United States, under sections 807.00 and 
806.3 of the U.S. tariff system subject 
only to duties on the value added abroad 
on U.S. goods exported for assembly or 
processing. Value added in these plants 
in Mexico in 1980 reached $778 million. 

The program is controversial. 
American labor contends that the pro- 
gram costs U.S. jobs, but defenders of 
the program contend that it exports only 
the most labor-intensive part of produc- 
tion, reserving for U.S. workers the best 
paying portion of the production cycle. 
Moreover, there are often "twin plants" 
on the U.S. side of the border, providing 
jobs in otherwise somewhat depressed 
areas. Finally, the wages paid to in-bond 
plant workers are often spent on the 
U.S. side of the border. 

Energy is an important part of our 
trading relationship with Mexico. Last 
year, oil and natural gas accounted for 
over 50% of U.S. imports from Mexico. 
The United States received an average 
of 560,000 barrels per day (b/d) of crude 
and gas liquids, worth a total of $6 
billion, and an average of 300 million 
cubic feet per day of natural gas, worth 
approximately $500 million annually. 

The United States will likely receive 
more Mexican oil this year than ever 
before. In 1981, weather permitting, 
Mexican oil exports to the United States 
will probably reach 744,000 b/d by the 
second quarter, out of total oil exports 
of 1.5 million b/d. Production, now near 
2.6 million b/d, might reach 2.9 million 
b/d by summer, with the yearly average 
to be slightly above 2.75 million b/d. 
Production and export figures could 
vary, of course, if the present softness 
in the world oil market continues. 

Mexico has followed OPEC 
[Organization for Petroleum Exporting 
Countries] pricing patterns for crude oil. 
U.S. oil companies deal directly with 
PEMEX, the Mexican national oil com- 
pany, with no direct U.S. Government 
involvement, an arrangement our com- 
panies and PEMEX prefer. Mexican 

natural gas sales take place under a 
government-to-government framework 
agreement negotiated in 1979. Under 
the agreement, a consortium of U.S. 
companies imports 300 million cubic feet 
per day at a price set according to the 
price of a basket based on crude oil 
prices. Over most of the last year, under 
an Energy Regulatory Administration 
ruling, Mexico has received a price equal 
to the border price of Canadian gas. 

Mexico's energy policy has empha- 
sized careful control of production and 
export levels, so that oil revenues will 
not exceed the capacity of the economy 
to absorb them. The Mexican national 
energy program (announced in late 
1980) sets export limits through 1990 of 
1.5 million b/d for oil and 300 million b/d 
for gas. The program is less explicit on 
production levels but seems to dis- 
courage sharp increases in production of 
oil and gas. 

Mexican leaders have emphasized 
their belief that Mexico must diversify 
its oil markets to avoid making any one 
country (meaning the United States) 
overly dependent on Mexican oil. The 
national energy program says that oil 
exports to one country will not exceed 
50%. of total oil exports. They have also 
tried to use oil to gain technology, in- 
vestment, and trade on favorable terms 
from other countries, including France, 
Sweden, and Japan, while exempting the 
United States from this linkage. 

U.S. investment is important in 
Mexico's economy. Out of total foreign 
investment in Mexico of approximately 
$7.5 billion, the U.S. share is worth over 
$5 billion, or 69%. The U.S. share has 
remained fairly constant over the last 
few years, with the U.S. total growing 
to match sharp increases in the overall 
total. Mexico has strict regulations 
governing foreign investment, but has 
tried to utilize those regulations with 
sufficient pragmatism so that develop- 
ment is encouraged, not discouraged. 


The question of illegal immigration is 
one of the most sensitive and complex of 
U.S. -Mexican issues. The Administration 
has been studying the problem. It has 
exchanged views with the Mexican 
Government on a frequent basis at the 
diplomatic and technical levels. In 1977 
the Carter Administration proposed a 
legislative package to deal with immigra- 
tion issues. There was no concensus at 
the time, and Congress established a 

select commission to review immigration 
and refugee policy. The commission's 
report, published in February 1981, 

• Legal status for those here illegal- 
ly, based on criteria such as length of 
residence and absence of grounds for ex- 

• Enforcement of strenghtened im- 
migration laws and regulations; and 

• Enactment of sanctions against 
employers of illegal aliens. 

The Reagan Administration has set 
up a task force to examine the commis- 
sion's recommendations and to advise 
the President on structuring the Ad- 
ministration's policy. The task force's 
conclusions are expected momentarily. 

We have reviewed extensively 
with the Mexicans both the select com- 
mission's findings and the various alter- 
natives open to us and explored in a 
general way the possibility of some joint 
actions both to improve legal travel and 
curtail illegal movement. We expect 
these exchanges will continue. 

One of the most difficult aspects of 
the migration problem is the lack of 
reliable or consistent data. Estimates of 
the number of illegal aliens in the Unitec 
States range from 500,000 to 12 million, 
and the annual flow probably has rangec 
from half a million to several million. 
We also lack firm information about 
length of stay, type of jobs, etc. Some 
recent studies conclude that more and 
more illegal immigrants are taking 
skilled employment, meaning Mexico 
may be losing some of those whom it 
needs for its own development. One 
thing seems certain: Mexicans constitute 
the largest proportion, probably well 
over a half, of illegal migrants. 

Border Relations 

In general, these can be characterized a; 
excellent. Citizens' groups along the 
border regularly proclaim that they 
understand each other and are able to 
resolve most local problems without in- 
terference from the bureaucrats in the 
distant capital cities who are out of 
touch with reality. In fact, we in the 
capitals are intensely interested in the 
welfare of our border citizens and work 
cooperatively with State and local 
authorities as well as with our Federal 
counterparts in seeking solutions to sue 

Department of State Bulleti 


[iverse problems as river use; flood con- 
rol; joint energy development and alter- 
Late energy sources; environmental pro- 
ection and pollution control; improve- 
nent of sanitation; cooperative law en- 
orcement efforts, including narcotics, 
tolen vehicles, tourism, etc. I should 
ike to concentrate on two areas, nar- 
otics and tourism, as illustrative of this 

Narcotics. Our antinarcotics pro- 
gram with Mexico has been marked by 
is high a degree of cooperation as with 
iny country anywhere. While it has not 
>een possible to wipe out the problem 
dtogether, the program has made 
remendous progress in lessening the 
Irug flow from Mexico to the United 

Illicit production of opium and 
leroin in Mexico became a serious prob- 
em for the United States in 1974-75, 
vhen Mexican production grew to meet 
he demand created by disruption of the 
French connection." By 1975, 90% of 
he heroin consumed in the United 
[States was from Mexico. 

The U.S. -Mexico cooperative an- 
inarcotics program has stressed two ap- 
' iroaehes: the most extensive has been 
J 'he effort to eradicate illicit opium pop- 
pies in the fields; a parallel approach has 
ioeen bilateral law enforcement coopera- 
liion in exchange of intelligence, joint in- 
'estigation, interdiction, and prosecu- 

The eradication campaign, primarily 
i Mexican effort, has met with much 
success. At first, the Mexicans used 
Tianual cutting, but met difficulty in 
-emote mountain areas. In 1975 the 
Mexicans began to use aerially applied 
lerbicides. Mexico spends approximately 
£40 million on the program, mainly for 
lerbicides and other operational costs. 
The State Department provides approx- 
imately $9 million per year in assistance 
funds, mainly to purchase and maintain 
reconnaissance and spray aircraft for 
the Mexican Attorney General's office. 

The amount of Mexican heroin 
entering the United States has fallen 
from 6 tons per year to 1.5 tons, 45% of 
the total entering the United States. 
Deaths from overdose from brown 
heroin have dropped dramatically. This 
law enforcement cooperative program 
has immobilized many international nar- 
cotics traffickers. 

Tourism. Tourism earnings are im- 
portant to both countries. Revenues 
from tourism have accounted for almost 
7% of Mexico's export earnings. U.S. 
visitors provide between 60% and 70% 
of Mexico's total earnings from tourism. 
Tourism income is only 5% of U.S. ex- 
port earnings, but approximately 25% of 
U.S. tourism earnings come from Mex- 
ican tourists. Under our bilateral 
tourism agreement with Mexico, we 
have been working with the Mexicans on 
exchange of statistics, training, develop- 
ment of third-country tourism, and 
tourism facilitation. We have also agreed 
to open a new border crossing at Otay 
Mesa near San Diego and Tijuana, now 
scheduled for completion in 1985. 

A recent trend has been that Mex- 
ican tourism to the United States is in- 
creasing faster than U.S. tourism to 
Mexico. Inflation in Mexico and the 
overvaluation of the Mexican peso have 
lessened Mexican competitiveness in 
tourism. We have suggested that lower 
airfares and stopover rights for U.S. 
carriers (carrying U.S. passengers be- 
tween certain points in Mexico) might 
encourage U.S. tourism there, and we 
will be pursuing this approach. 

Border Trade. As to the border 
itself, along the 2,000 miles from 
Brownsville to San Diego most of the 
goods in our bilateral trade pass. Rail 
and truck traffic across the border has 
expanded enormously in the last 3 years 
and presents both countries with new 
challenges which will have to be met 
very soon. Additional border crossing 
facilities are needed. We are ap- 
proaching these questions in the 
cooperative spirit that characterizes our 
border relations. 

Regional Issues 

Although Mexico shares our regional 
goals of self-determination, democracy, 
stability, and peaceful, political resolu- 
tion of conflicts, we have had sometimes 
well-publicized differences over the best 
means to achieve those shared goals. 
The Administration has exchanged 
views on a close and frequent basis with 
Mexico on regional developments, 
especially concerning the Caribbean 
Basin area, and we intend to continue to 
do so. 

Mexico's decision to break relations 
with the Somoza regime in May 1979 

signaled a new Mexican activism in the 
region and Mexico has taken several ac- 
tions to influence events in Central 
America, including: 

• Firm support for the Sandinista 
regime in Managua; 

• Extensive travel by President 
Lopez Portillo, including to Cuba; 

• Encouragement to leftist political 
groups opposing the Duarte government 
in El Salvador (while keeping diplomatic 
ties with the junta); and 

• Generous economic assistance to 
the region through a joint petroleum 
financing facility with Venezuela. 

This last point merits further com- 
ment. The purpose of the Mex- 
ican/Venezuelan oil facility is to help the 
oil-poor countries of Central America 
and the Caribbean (except Cuba, which 
is not included). Under this arrange- 
ment, oil is sold at market prices with 
concessionary loans financing 30% of 

We have had differences with the 
Mexicans. They have publicly voiced op- 
position to U.S. military support for the 
Duarte government in El Salvador. They 
have questioned our suspension of aid to 
the Nicaraguan Government and they 
have continued to maintain cordial rela- 
tions with Castro (Mexico never broke 
relations with Cuba, even when the rest 
of the Organization of American States 
did). Mexico has, however, stated its op- 
position to any form of hegemony in the 
hemisphere and is strongly opposed to 
interference from outside. Mexico shares 
our belief that economic and social prob- 
lems are at the roof of regional dif- 
ficulties; its oil facility, which has been 
extended to such countries as El 
Salvador, Guatemala, Nicaragua, 
Panama, and Jamaica, has been aimed 
at helping ease those problems. 

The question is how Mexico and the 
United States can emphasize the many 
values which unite us in our separate 
views of the Caribbean Basin. We are 
working on this. These are the issues 
that concern both countries and the 
bounds within which we seek to main- 
tain and enhance a strong and healthy 
relationship with Mexico based on 
mutual respect and a realization that our 
fates and our futures are inextricably 
bound together. 

■The complete transcript of the hearings 
will be published by the committee and will 
be available from the Superintendent of 
Documents, U.S. Government Printing Of- 
fice, Washington, D.C. 20402. ■ 

July 1981 


Peaceful Progress in Developing 

Commencement address at Fairfield 
University in Fairfield, Connecticut on 
May 2k, 1981. 

All of us pray today for the Holy 
Father's full and speedy recovery. Only 
a few weeks ago, it was my great 
privilege to have an audience with His 
Holiness when I visited Rome for the 
NATO meeting. Our conversation 
covered many subjects. We talked about 
the search for restraint and reciprocity 
in East-West relations, efforts to rein- 
vigorate the Atlantic alliance, and the 
President's economic proposals. I was 
struck by the Pope's knowledge of inter- 
national politics and especially by his 
keen interest in the people of the 
developing countries. 

Much of the world today is engaged 
in the drama of development and the 
search for social justice. That this strug- 
gle for a better life merits both our sym- 
pathy and our support cannot be in 
question. Its outcome affects our vital in- 
terests and, at the same time, con- 
stitutes a moral imperative. I want to 
explore today our approach to this 
challenging situation. 

Recent American policy toward the 
developing countries has been influenced 
by three distortions: first, that we have 
nothing to offer beyond material 
assistance; second, that we are defend- 
ers of the status quo; and third, that in- 
tervention by the Soviet Union and its 
surrogates does not really matter. 

American Principles 

Does America actually have anything to 
say to the developing world? We some- 
times hear it argued that our political in- 
stitutions and economic system are ir- 
relevant to the modernizing experience. 
There could be no greater mistake. 
America is important to developing 
countries. Our principles speak to their 
aspirations. Our accomplishments speak 
to their future. 

Our own history demonstrates that 
independence, economic development, 
and individual liberties thrive together. 
The American Revolution was the first 
modern struggle for colonial independ- 
ence. Once free, our diplomacy was 
dedicated to keeping us free. For these 

reasons, we Americans should under- 
stand the sensitivity of newly independ- 
ent nations to anything that com- 
promises their sovereignty. 

We should also recognize that the 
process of modernization means more 
than simply anticolonialism. It includes 
the building of political institutions 
which are the best guarantee of the 
achievement of human potential. Here 
the United States offers a successful ex- 
ample of individual liberty, government 
by the consent of the governed, and a 
society under the rule of law. We believe 
that these principles foster the develop- 
ment of the individual, free to dream his 
own dreams and to work for a better 
future. This is no idle fantasy; our 
fathers and forefathers made it a 

Another argument we often hear is 
that the United States opposes change, 
that we are interested only in the pres- 
ervation of our prerogatives. But a 
status quo of poverty and injustice must 
be repugnant to us as it should be to all 
nations. Thus we must recognize that 
historic change may be as desirable as it 
is inevitable. And we should also 
recognize that this change is most effec- 
tive when it is allowed to occur in an en- 
vironment of peace and stability. 

Soviet Intervention 

The third distortion — that Soviet inter- 
vention does not really matter — bears 
directly on this question of peaceful 
change in the developing world. 

Some would argue that a policy to 
promote peaceful progress in the 
developing countries through economic 
and humanitarian assistance is enough. 
We are told that the developing nations 
will eventually turn to the West for the 
help they need — help that only the West 
can provide. We are urged to ignore 
Soviet intervention on the grounds that 
Soviet influence cannot last. It is, there- 
fore, convenient to conclude that 
America can afford to be passive in the 
face of Soviet interventionism. 

The trouble with this view is not 
with the facts but with the conclusion 
drawn from the facts. Yes, the position 
of the West will improve as the develop- 
ing states turn from their memories of 
colonialism to their prospects for the 

future. This trend has already begun, 
and we are ready to foster it. But we 
cannot sit idly by in the face of illegal 
Soviet intervention which seeks actively 
to reverse this trend. There are compel- 
ling reasons for our actions in this 

Reasons for U.S. Action 

First, we must be active because we 
want development to succeed. Develop- 
ment is one of the first victims of 
conflict. Scarce resources are devoted to 
arms. Energies better spent in building 
up are wasted in tearing down, and 
progress toward social justice is halted. 

All local disputes are obviously not 
made in Moscow. Yet the Soviet Union 
has manifested a peculiar interest in 
conflict. Internal political struggle in the 
developing states calls forth the arms 
that Moscow produces in abundance, 
bringing an otherwise unattainable 
political influence. But the costs — and 
the human suffering — are paid by the 
local parties. Can we ignore such suffer- 
ing today while waiting for the Soviets 
to lose their influence tomorrow? 
Restraining Soviet intervention is an 
urgent act — a task of humanitarian con- 

Second, we cannot ignore Soviet ac- 
tivity in the developing nations because 
our passivity alters the calculations of 
other countries. It makes further Soviet 
expansion or Soviet-backed destabiliza- 
tion appear to be inevitable. It gives the 
appearance — and it is no more than an 
appearance — that Marxism in the Soviet 
mode is the wave of the future. This has 
several implications for the policies of 
the developing states. Domestically, 
Marxism is seen as the vehicle for 
development, when in fact it is little 
more than a vehicle for keeping political 
control in the hands of a small elite. In 
foreign policy there is a tendency to 
adopt the slogans and positions of the 
Soviet Union as a form of accommoda- 
tion to what is believed to be the wave 
of the future. We must challenge these 

Third, we must also recognize that 
Soviet interventions and meddling are 
not random. Moscow displays a keen in- 
terest in regions where there are 

Department of State Bulletin 

The Secretary 

strategic resources or routes vital to the 
economic well-being and political in- 
dependence of the West. When the 
Soviet Union exploits local conditions for 
its own strategic aims, the problem is no 
longer local but a strategic threat to our 
own survival. We cannot ignore this 

Fourth, illegal Soviet intervention 
calls into question the whole range of 
our relations with Moscow. It violates 
the restraint and reciprocity we seek in 
our relations and makes a world order, 
governed by the rule of international 
law, all the more difficult to achieve. 

We are, therefore, concerned by 
Soviet intervention because: 

• It harms the prospects for 

• It takes a terrible toll of human 

• It alters the calculations of other 

• It threatens our strategic in- 
terests; and 

• It makes unachievable a just and 
^sponsible relationship with the Soviet 
Union itself. 

Ultimately, what is in jeopardy is 
;he dream of an international system 
-narked by peaceful change and the 
^solution of disputes short of war. 

And as we assess these realities in 
the context of the dynamics of the 
developing world, our perceptions have 
sometimes been clouded by an artificial 
distinction between the goal of security 
and the goal of development. In fact, 
they reinforce each other. Security is the 
best environment for peaceful progress. 
Peaceful progress is the best antidote 
against outside exploitation of injustice 
or discontent. Our concern with security 
is an essential element of our commit- 
ment to peaceful progress. 

It will not be easy to establish a 
iimore effective and responsible relation- 
ship with the Third World. And it is a 
mistake to pretend that we have all of 
the answers. But we must seek a more 
•active and realistic policy, based on the 
relationship between security and 

This relationship— between security 
; and development — is a reflection not 
just of American interests but of fun- 
i damental truths about human, political, 
and economic development. We are a liv- 
ing, vibrant example of how the human 
spirit grows. Our legacy to each other 
and to the developing world must be to 
provide an environment in which such 
growth can occur worldwide. We must 

meet challenges to that growth with 
firmness and steadfastness. 

As you assume the burdens of 
leadership — and you will be 
leaders — you will become the trustees of 
this legacy. I hope you will retain the 
unity of right reason and faith that you 
have learned at Fairfield. I hope you will 
remember, as university graduates, that 
America is a place where politics and 
freedom of the mind are compatible. 
And when you think of your country 
and its place in the world, I hope you 
will be guided by the words of Abraham 
Lincoln, who sought to discover the 
great principal or idea that had pre- 
served this nation; it was, he concluded, 
"that sentiment in the Declaration of In- 
dependence which gave liberty not alone 
to the people of this country, but hope 
to all the world, for all future time." 

Press release 155.1 

News Conference 
of May 22 

I want to say I just left Chancellor 
Schmidt, and I'd like to reiterate some 
of the observations he made to me, 
which I received his permission to do, 
before this group. The first comment 
would be that the Chancellor emphasized 
that he was 100% satisfied with the out- 
come of his visit here to Washington. He 
stated that he found no surprises which 
is a confirmation of the already intense 
level of consultation between Washing- 
ton and Bonn. He said he found the 
President to be the man he thought he 
was: a thoughtful man of deep convic- 
tion; a man who recognizes the essen- 
tiality of sound, intimate relationships 
on a bilateral basis between Bonn and 
Washington; recognition of the impor- 
tance of the alliance; and a keen recogni- 
tion of the necessity to maintain an 
East- West dialogue in the period ahead. 

I think the essential bottom line of 
this visit was a convergence of views be- 
tween the two leaders. The question of 
Western policies, vis-a-vis the Third 
World, was explored in detail between 
the two leaders and among the staffs of 
the two sides, and there was a complete 
convergence there. 

The question of the two tracks, the 
decision of December 1979 was dis- 
cussed — the equal weight to both tracks 
and the confirmation that the United 
States would proceed and was already 
undertaking preliminary talks with the 

Soviet Union on the arms control track; 
the confirmation by the Chancellor that 
he was in full agreement and endorsed 
totally the contents of the Rome com- 
munique with respect to the two tracks. 

I think the area of German defense 
contributions to alliance security was 
thoroughly explored. It is recognized 
that, while in general we in the United 
States would like to see all parties to the 
alliance do more in the face of worsen- 
ing military trends, we also, clearly, 
recognize the great and continuing con- 
tributions of the Federal Republic of 
Germany to Western defense needs. 
This is an historic reality of over 10 
years' duration. 

Lastly, I think the Chancellor was 
able to effectively raise his concerns that 
we in Washington, as we undertake the 
revolutionary economic program of the 
Reagan Administration, do so with a 
clear awareness of the impact of 
American economics and economic 
policies on our Western family of na- 
tions. I think that this was successfully 
done and that President Reagan assured 
the Chancellor that we were keenly 

This is the essence and the bottom- 
line issues that were touched upon in the 
intensive 2 days of discussions, all of 
which are delineated in more specific 
and in very detailed terms in the joint 
statement which has been issued earlier 

Q. In the recent time you have 
been talking to Ambassador Dobrynin 
three times, and as we understand it, 
you have been touching in those con- 
versations the subject of theater 
nuclear forces (TNF) talks with the 
Soviet Union. Could you enlighten a 
little bit what your impression was 
about the response of Mr. Dobrynin in 
those three talks? 

A. I wouldn't limit it to three talks. 
I've had quite a few more discussions, 
informally, with the Soviet Ambassador, 
Mr. Dobrynin. It was the last talk that 
was held about a week ago that I had in 
which I debriefed him on the outcome of 
the Rome discussions of the NATO min- 
isterial and laid out in specific terms the 
program for the initiation of TNF 
negotiations, which we view as compati- 
ble with reality in the context of prepar- 
ing ourselves, not only on the U.S. side 
but within the NATO family as well. 
And, as you know, there are some 
studies that we hope to have concluded 
before formal negotiations commence. 

I emphasize that I will discuss the 
specifics, the modalities, and the timing 

July 1981 

The Secretary 

for the formal negotiations with Foreign 
Minister Gromyko at the United Na- 
tions, and nothing in those discussions 
would suggest that the Soviet side is not 
ready and willing to participate on that 
schedule, all with a view toward having 
formal negotiations commence by the 
end of the year. Of course, this is a two- 
sided situation. We can't just lay out 
categorically on our side when these 
talks will start. It will take a con- 
vergence of views, and I'm sure there 
are considerations on the Soviet side as 

Q. One of your recent congres- 
sional visitors quoted you as saying 
there's been a massive flow of arms in- 
to El Salvador again. Is this true? Is 
he quoting you accurately? And are 
you doing anything or do you plan to 
do anything about cutting it off at the 

A. I think in the first place, that's 
what I'd call a straw-man attack on a 
straw man because I never made such a 
statement. There were only two occa- 
sions when such a statement might have 
been made: one was a meeting before 
the House Foreign Affairs Committee, 
and it did not occur there. Another was 
a breakfast for a group of Republican 
members, and what I did say was that 
the flow of arms into El Salvador 
dropped off after the highlighting of that 
flow and certain actions that the U.S. 
Government took. 

Then the major level of that flow 
from Nicaragua to El Salvador, especial- 
ly the airlift of those arms, had dropped 
off or perhaps terminated, and that 
there were now signs that different 
routes were being used to introduce 
arms into El Salvador, not at a massive 
level — and no one has said such a 
thing — and that there is also some in- 
dication that there is a fragmentation of 
the flow, that it is not just going ex- 
clusively to El Salvador, but we find it 
going into other target areas: Honduras, 
Guatemala, and recently the revelations 
about Colombia are very clear to all. I 
also made the point that the level of 
arms flowing into Nicaragua itself was 
substantial and had not terminated. 

Q. When you say that the Presi- 
dent is about to maintain the East- 
West dialogue, is that restricted to 
talks about strategic weapons, the 
TNF talks which are about to begin, 
or do you mean by that a wider scope 
of dialogue with the Soviet Union? 
And, if so, could you please tell us 
what the scope of it would be? 

A. I don't think it's good diplomacy 
to lay out the content of exchanges con- 
ducted in diplomatic channels. But I will 
suggest to you that we have already, 
Mr. Dobrynin and myself, been engaged 
in a number of discussions involving a 
number of substantive issues, and there 
are very few that have not been dis- 
cussed in the context of the affairs that 
concern the United States and the 
Soviet Union, both bilaterally and in 
East- West terms in a broader sense. 

Q. Could you tell us what the 
preparations are concerning future 
SALT [Strategic Arms Limitation 
Talks] talks, which are of interest in 
context of the TNF talks? 

A. The question was "What is being 
done about future SALT talks?" And the 
answer to that is that the U.S. side — 
and the Soviet Union is aware of this — 
is engaged in an intensive overall review 
of the broad strategic arms limitation 
subject. That review has not been con- 
cluded; and until such time as it is con- 
cluded and approved specifically by the 
President, we are not prepared to enter 
into bilateral discussions with the Soviet 

Q. Last week you said that time 
was running out in the Lebanese 
crisis. Now the President is quoted as 
saying that Mr. Habib has made con- 
siderable progress on his mission. 
Has, in fact, the crisis in Lebanon sub- 
sided? And, if so, how did this come 

A. No, the crisis has not subsided. 
It is clear it remains very, very delicate. 
It is also clear that there are time con- 
straints for a solution. It is also clear 
that we continue to maintain a level of 
hope that a peaceful solution will be ar- 
rived at. 

The great difficulty of situations of 
this complexity is that public statements 
by one side or the other, or of officials 
who are participating in providing good 
offices or whatever term you care to ap- 
ply to the U.S. effort, sometimes compli- 
cate the outcome you seek. And that 
hasn't changed with respect to the Mid- 
dle East situation. So we are being 
necessarily very circumspect about how 
we express publicly the details of the 
talks that have been underway. May I, 
finally, say that as long as the 
President's emissary is active in the 
region, we have hopes that a peaceful 
outcome is achievable. 

Q. It has been widely understood 
that you and Secretary Weinberger 

presented a well-documented picture 
of the Soviet threat to the NATO 
assembly recently in Brussels and in 
Rome. My question is: Wouldn't it be 
possible and helpful for public opinion 
in Europe to publish on the same scale 
a well-documented threat assessment 
in the same way that may be more suc- 
cessful than the white book on El 
Salvador that was published? 

A. I think this is a question that in- 
volves alliance policy. It is a question, of 
course, that requires a consensus among 
the member states of the alliance, and, 
as you know, it's not a new issue in 
NATO. During my incumbency I recall 
that it came up repeatedly. I do recall 
also that — I think it was 1977 — we had 
some very detailed briefings presented 
in each of the capitals, that were pre- 
pared by the intelligence branch of the 
NATO staff in Brussels, with a very 
high impact on those who witnessed it 
and saw the facts as they were pre- 

I think in this case I would not want 
to get out in front of our NATO col- 
leagues and impose my views publicly 
but rather suggest to you that this issue 
has been under discussion. 

Q. This morning it was reported 
that the State Department had con- 
ducted some kind of a review of the 
charges that Dr. Lefever [Ernest W. 
Lefever, designate for Assistant Sec- 
retary for Human Rights and Humani- 
tarian Affairs] was involved in some 
element of a conflict of interest. Toda; 
we were told the State Department 
had not conducted any such review, 
and I'm wondering why not if, indeed, 
there are members of the U.S. Senate 
who believe that there is an evident 
conflict of interest in his case? And 
what is your position on his appoint- 
ment at this time? 

A. Clearly, Dr. Lefever is the Presi- 
dent's candidate for the important post 
he's been nominated for, and we con- 
tinue to have confidence in Dr. Lefever 
and hope that he will be duly confirmed. 

With respect to your other question, 
I'm not fully up to date on it. I did see 
the article. We are concerned when alle- 
gations are made, whether they are 
substantiated or not, and I can assure 
you that we are very much aware of 
them and are not investigating in the 
context of the question that you asked 
or the article, but we are fully aware of 
them and looking into them. 

Q. We learned this morning that 
on his way back to Bonn, Chancellor 


Department of State Bulletir 

The Secretary 

Schmidt would make a touchdown in 
Paris. Do you want any special 
message to be conveyed to [French] 
President Mitterrand, or are you pre- 
paring yourself to go to Paris yourself 
very soon? 

A. First, I think the President 
[Reagan] at the request of the 
Chancellor provided him a message. I 
would leave unpublic if it hadn't been 
stated so already, so the Chancellor has 
already asked the President if he could 
convey some message. Clearly, I am 
very anxious at the earliest possible time 
when my counterpart is announced and 
appointed — and I think that happened 
today, did it not? It was supposed to — to 
meet with my counterpart at the earliest 
possible time, but I had nothing 
definitive on that other than to suggest 
that your question is both timely and 

Q. There has been an undercur- 
rent of criticism from this Administra- 
tion of some of the European allies on 
the grounds of an alleged rise of 
pacifism or antiatomic-weapon feeling 
in Europe. Is that still a concern of 
the Administration? Was that issue 
addressed when the President met the 
Chancellor, and is there a greater 
sense of sureness of our allies' 

A. I don't like to indulge in value 
judgments about the internal affairs of 
allied countries. I have seen some of the 
speculation, as have you, and, incidental- 
ly, we have some of that in this country. 
It's associated with a number of issues, 
from peaceful uses of nuclear energy, to 
the MX-basing controversy. It's not 
unusual in open, democratic societies. 

I think the answer to your question 
is that we have a Rome communique 
which addresses those aspects of this 
issue that involve Western European 
security, which is evidence of the 
unanimity of view and the dedication of 
the member governments of the alliance 
to proceed with the necessary moder- 
nization of our theater nuclear 
capabilities, along with the other aspect 
of the dual track that we've already 
touched upon. 

While no one is complacent about 
both justified concerns in opposition and 
those that are not justified, I don't see 
any reason for us to be unduly alarmed 
at this juncture. And I don't think there 
was any excess laboring with that prob- 
lem during this visit. 

Q. The Chancellor in Washington 
raised the prospect or the proposal or 

the idea of the United States initiating 
a new Marshall Plan for the assistance 
and help of the countries in Central 
America and the Caribbean, with the 
support of Venezuela and Mexico, 
under the condition that those coun- 
tries which would be assisted would 
not accept arms from the Soviet Union 
or Cuba. I wonder how your Ad- 
ministration is reacting to that idea. 

A. You're talking about the com- 
ments of the Chancellor in the Con- 

Q. Yes. 

A. The Chancellor spoke to me 
about this issue, and I think he had 
discussed it with the President of Brazil 
during that President's visit to Bonn last 
week. It is very compatible — although I 
don't want to get ahead of reality 
here — with our thinking here in the 
State Department and in the inter- 
Departmental deliberations on this geo- 
graphic region that have already taken 
place and have been underway for a 
period of about, I think, 12 weeks now. 
We will have something on this in the 
very near future which will, again, show 
some convergence of attitude. 

Q. Since we last met, we have had 
a visit from the Prime Minister and 
Foreign Minister of Japan. After go- 
ing back home, our senior ally in Asia 
lost its foreign minister because of the 
word "alliance" being used in the com- 
munique. And there has been a series 
of disclosures about American nuclear 
weapons in Japan. Could you address 
yourself now as to what the United 
States expects of Japan in the way of 
this alliance and to these stories that 
the United States, in violation some- 
how of our commitments, had placed 
nuclear weapons in Japanese waters? 

A. I think, first, I would like to 
describe this controversy as an internal 
matter in Japan, primarily and ex- 
clusively. That doesn't mean that certain 
unfortunate coincidences of events have 
not converged to complicate and perhaps 
intensify this problem. 

I don't think it serves any useful 
purpose for me here in Washington to, if 
you will, intervene in an important, in- 
ternal political situation and debate in 
Japan other than to underline for you 
that it was not, according to my under- 
standing of the information we have 
received officially, a consequence of the 
term "alliance" in the joint statement. It 
had to do with the timing and the 

release of that statement and some in- 
ternal difficulties within the Japanese 

The point I would like to make in 
answer to your question is this: We still 
consider that the visit of the Prime 
Minister to the United States was a 
highly successful one, that the term 
"alliance" itself underlines the com- 
patibility of outlook with respect to our 
basic values, those in Japan and here in 
the United States. I believe that the 
period ahead is going to demonstrate a 
continuing improvement in strengthen- 
ing the Japanese-American relationships, 
despite the current problems inside 

Q. Would you address yourself to 
these stories about the nuclear 

A. I will, to the degree that I play 
for you that famous old record of every 
Administration official that has ever 
been asked this question since the period 
of the 1960s, I think perhaps it was that 
Mr. Ellsberg [Daniel Ellsberg, former 
Defense Department official] or some- 
body recalled, I think it was just yester- 
day, and that is that we do not discuss 
the presence of nuclear weapons on 
foreign territory. 

Q. Would you consider to speed 
up the timetable of negotiations with 
the Soviet Union if this would make it 
easier for Western European govern- 
ments to implement a decision? 

A. That is a question that really has 
no fiber. The simple facts are that if we 
had started the talks with the Soviet 
Union, we have a lot of preliminary 
work to do, both here in the United 
States unilaterally and within the NATO 
family — the two studies that were 
agreed to be conducted in the Rome ses- 
sion. And, clearly, we're after concrete 
results, not artificially established time- 
tables. I think that this pace that has 
been agreed upon and the broad outlines 
of it, which is rather flexible at the far 
end, as you know — it says "by the end of 
the year" — provides for the necessary 
flexibility for the two sides to decide 
jointly when and where they want to 
start the formal negotiations. 

Q. On that same point, do you see 
any problem in the modalities for the 
TNF talks? For example, would the 
United States have any objection to 
the inclusion of forward-based 

July 1981 


The Secretary 

systems, as a matter of discussion? 
Would we like the Backfire bomber to 
be included on the Soviet side? 

A. Your very question underlines 
the importance of lining up, if you will, 
not only the U.S. approach to these and 
other equally vexing and complicated 
questions, but to do so in a way that our 
European partners who have a stake in 
the outcome are fully cognizant and 
comfortable with the approach we make. 

You will notice that we, again, 
underline that these negotiations would 
be conducted within the framework of 
SALT. It is, indeed, those "gray area" 
systems, as some have referred to them, 
that make the conduct of the theater 
nuclear discussions intimately related to 
discussions which will ultimately take 
place in strategic systems. But I can't 
answer your question today because, 
quite frankly, we have not concluded 
how we will approach these questions. 

Q. Do you see a problem? Certain- 
ly, you must have a position on 
whether you would like to have the 
forward-based systems included or 
not, or is that still a question in your 

A. I wouldn't say it is a question or 
it isn't a question, and I just don't want 
to get ahead of our ultimate position 
which will be presented to the President 
for his approval. 

Q. There seems to be a widening 
gap developing in Europe between 
public opinion there and formulation 
of U.S. foreign policy here in Foggy 
Bottom. How do you expect to bridge 
that gap without publishing some of 
your assessments of the so-called 
"common danger" of the Soviet inten- 

A. Not to be too curt or too brash, I 
think as you know, over the last 5 years 
that I was in Europe, there was hardly a 
speech I gave that didn't touch upon 
that subject and the worsening trends 
between East and West in the military 

I think there is a plethora of 
material available. That's not to belittle 
your question because it was raised over 
here as well, and it's a serious question. 
I think one of the great problems we 
have is avoiding the dangers of exag- 
geration of Soviet military power and 
painting them in 10-foot-tall proportions 
or in underestimating what have been 
very serious worsening trends between 
ourselves in the West and Soviet 

capabilities. I think the Atlantic Associa- 
tion, just yesterday, published something 
touching upon that concern, and with 
some data to support it. I recall not so 
long ago, Bonn publishing a white paper 
on this subject — very detailed, very 
specific. I think it was in 1978, as I 
recall. It hasn't changed too much since 
then. It has just continued at the same 
level of increased spending on the part 
of the Soviets. 

Q. I think the question is, does 
the public buy your view? 

A. I can't answer that question. It 
has always been controversial. I 
remember my arrival in NATO in 1975 
when not only would people question 
whether or not there was an increase in 
Soviet capability, they questioned 
whether there was a threat at all. 

As I look back, I would say there 
has been considerable progress in both 
public and official recognition of the 
situation. I only refer you again to the 
NATO communique emanating from 
Rome and the comparable defense 
ministers' communique from Brussels. I 
think this issue is highlighted une- 
quivocally. It has the support of all the 
member nations. 

Q. As I understand, the Soviets 
have suggested an international con- 
ference on Lebanon. Do we have any 
interest in participating in such a con- 
ference? And if not, can you tell us 
something about what is the current 
level of American-Soviet contact over 
that problem? 

A. First, I think we are interested 
in an international conference which 
would focus on the Soviet presence in 
Afghanistan. That's the first order of 
business, and that's our major concern 

Secondly, we have discussed the 
situation in Lebanon with the Soviet 
Union. We have been in communication 
with them on it. It's too early to say 
whether they make a constructive or a 
counterproductive contribution to the 

Thirdly, I think our effort in 
Lebanon is designed first and foremost 
to quiet the situation down and to play a 
role which would permit the parties to 
return to a status quo ante, if you will, a 
situation that has prevailed in Lebanon 
from 1976 until very recently. And that 
is not an overly ambitious effort, but it's 
a vitally important one, which would 
permit longer term efforts in the direc- 
tion of a return to normalcy in Lebanon 

and hopefully and always, from the U.S. 
point of view, the strengthening of the 
central government of Lebanon and its 
ultimate control. 

Q. You don't see any use in having 
a conference on Lebanon now? 

A. No. 

Q. The Chancellor and you and the 
President discussed also the situation 
in Poland. The Chancellor seems to 
have a fairly pessimistic view on this 
situation. I wonder what your assess- 
ment is also in projection toward the 
Polish Party Congress? 

A. Yes. I wouldn't necessarily join 
the premises of your question that the 
Chancellor necessarily has a pessimistic 
view of the situation. I don't know. That 
may be so; it may be not. There was, of 
course, extensive discussion of the situa- 
tion in Poland between the President 
and the Chancellor, and also between 
the Chancellor's colleagues in the 
Foreign Office and elsewhere, and me 
and my colleagues. 

Clearly, the bottom line of the conse 
quences of those discussions are 
reflected in the joint statement, and thai 
is that this is a situation that remains 
delicate and of great, great significance, 
a profound significance, and that we are 
strenuously opposed to outside interven- 
tion in this situation. 

There are various benchmarks, one 
of which you mentioned, which could 
reflect raising levels of tensions once 
again. But it remains to be seen, and I 
don't think anyone has an assured 
assessment on that. 

Q. By saying in your last answer 
before one that the United States 
wanted a return to the status quo 
ante, you're in effect going along with 
the way Mr. Begin has also described 
the goal of Israel. But my question is 
whether the United States also shares 
the specific goals as outlined by Mr. 
Begin recently, such as the removal o 
all the missiles from Lebanon, as well 
as the new ones placed on the Syrian 
side of the border and a commitment 
by Syria not to fire at Israeli planes 

A. I think nothing could be more 
counterproductive than for me to enga] 
in commenting on positions taken by on 
side or the other, and I'm not going to 
do it. It's too important. 



Department of State Bulleti 

The Secretary 

Q. Could you at least, then, give a 
broader scope of when you say the 
status quo ante? Is there something 
you might want to add to that answer? 

A. No, other than what I had said 
before. I think a week or two ago that 
was reported rather extensively at the 
time, that we're talking about a return 
to normalcy. You can't describe Lebanon 
since 1976 as normal, not by any set of 
circumstances. But you can quiet down 
current tensions by a return to that 
situation as we continue to work on the 
longer range problems which would in- 
volve, in my view, the ultimate creation 
of a central government which is capable 
of ruling all of Lebanon, an independent 
and sovereign Lebanon. 

Q. On the multinational force in 
the Sinai, could you please confirm 
that Canada, Australia, and New 
Zealand have been asked to help the 
United States in forming the force? 
And when do you expect the force to 
be in place? 

A. First, I would prefer not to deny 
it, and suggest there may have been 
others contacted as well. There have 
been what I consider to be rather pre- 
mature discussions of this subject over 
the last week, and we still have a great 
deal to be worked out between the par- 
ties, and I will just leave it there. 

Q. Did you discuss your policy on 
terrorism, and does the Chancellor 
share your definition of terrorism? 

A. No, we didn't discuss it, so I 
can't speak for the Chancellor. I'm not 
sure I'd presume to do so anyway; he's 
very capable of speaking for himself. 

Secretary Participates in 
St. Louis Town Hall Forum 

Press release 154.1 

Secretary Haig was the guest at the 
St. Louis Town Hall Forum, sponsored 
by the St. Louis Regional Commerce and 
Growth Association, on May 29, 1981. 1 

The essence of President Reagan's 
foreign policy is a policy which some 
describe as being less than clear at the 
moment. I will accept the charge that 
we have not set out some grand design, 
some conceptual framework which from 
day-to-day provides a scorecard for con- 
temporary critics. 

We have, however, established a 
fundamental bedrock of national objec- 
tives, and that is to recreate a world 
structure hospitable to the values and 
ideals of the American people — the 
freedom and dignity of the in- 
dividual — and to recognize that 
necessary and desirable historic change 
must occur through the accepted rules 
of international law and the mores of 
Western civilization rather than through 
bloodshed, terrorism, and resort to so- 
called wars of national liberation. 

These objectives are structured over 
what I call "four pillars," the first pillar 
of which is the attempt to establish a 
relationship with the Soviet Union built 
on restraint and reciprocity and a clear 
recognition that such a goal and such a 
pillar cannot be structured until the 
United States reverses the worsening 
trends in military balances between East 
and West. 

Secondly, we have recognized the 
imperative of refurbishing traditional 
alliances and bilateral relationships with 
those nations in the world which share 
our values. This can only be done with a 
new spirit of consultation, built on 
reliability in the American approach to 
our relationships with our friends 
abroad, built on a recognition of tradi- 
tional friendships, and a need for con- 
sistency in manifesting our recognition 
of those friendships. 

Thirdly, to recognize that we have to 
construct in this changing world a just 
and responsible relationship with the 
developing world and to do so with full 
cognizance that there are changing at- 
titudes in this developing world today. 
Increasingly, developing leaders in black 
Africa, this hemisphere, and in Asia are 
recognizing that a close alignment with 
Marxist-Leninism in the Soviet model 
brings with it bayonets and bullets, per- 
vasive presence, and frequently a client- 
state relationship. Whereas relationships 

with the Western industrialized world 
bring economic growth, development, 
technology, medicine, human develop- 
ment, and participation in a world 
market community where performance 
and work dictate rewards. 

And, finally, this new foreign policy 
structured by President Reagan 
recognizes first and foremost that 
America cannot once again lead abroad 
until it cleans up its own economic situa- 
tion here at home. 

I've witnessed the American dollar 
decline in value over an extended period 
in Europe and with it American prestige 
and influence. And the impact of ill- 
disciplined, runaway double-digit infla- 
tion here at home on foreign perceptions 
of America's ability to carry out its in- 
ternational tasks is sometimes stagger- 

So all of these things together repre- 
sent what I call a four-tiered structure 
to achieve these objectives I touched 

Where do we stand in the task? The 
jury, of course, is still out. But I think 
it's a remarkable period in American 
history, one unique in my 20 years of 
public service at a relatively high level, 
where I see a remarkable consensus of 
the American people, the American Con- 
gress, and the American executive 
branch to roll up our sleeves and to put 
America back in action again. 

It's a source of great comfort and 
pride to me. It's also a source of certain 
caution that those of us in Washington 
who today carry out your tasks have a 
great responsibility not to abuse this 
wonderful consensus that has been so 
hard fought and so long in coming. I'm 
optimistic that will not happen. 

Q. You mentioned a new and a 
somewhat different policy to the 
Soviet Union. I think it is widespread 
knowledge that Secretary [of 
Agriculture John R.] Block had talked 
earlier on in the campaign of perhaps 
using the food weapon, I think was 
the word he used — that's been toned 
down some. I know you and he are 
talking soon with Soviets and Chinese 
alike. You in China, probably in a 
couple of weeks. Is there any hope 
that we may use that one thing that 
we produce so well — food— to help us 
achieve the foreign policy goals that 
you're searching for? 

A. That's a very perceptive ques- 
tion, and I suspect thei-e's more to it 

July 1981 


The Secretary 

than just the words of it, since we have 
just lifted the grain embargo on the 
Soviet Union. And I must be very 
careful not to say something to con- 
tradict that reality. 

I have always maintained, and I 
know President Reagan has always 
maintained, that food alone — agricul- 
tural restraints or sanctions, if you 
will — are not adequate to exercise the 
kind of sanction power that you might 
need from time to time in international 
affairs. The President himself has ex- 
pressed repeatedly before his election 
and before his inauguration that he in- 
tended to lift the grain embargo. I spoke 
about it all around the country because I 
had had some firsthand experiences in 
the early 1970s with the application of a 
grain embargo, and we frankly shot 
ourselves in the foot. 

From the President's point of view, I 
think that he felt — and correctly — that 
the value of his word, his commitment, 
was a very precious commodity that he, 
himself, would not squander. He did 
restrain himself for some 4 months and 
I would think primarily as a result of my 
counsel to him to go slowly, to be sure 
that the Soviet Union would not misread 
the lifting of the grain embargo. 

A grain embargo alone is too nar- 
rowly based, and in diplomatic terms it 
could have caused us increasing prob- 
lems as other partners — those which 
share our values in Europe and in 
Asia — were less than strict in their ap- 
pliance of that sanction. Increasingly, 
the American farmer would have been 
the isolated bearer of the burdens of this 
grain embargo. 

I would hope that in the future, 
should it ever be necessary — for Poland 
or some other situation — to apply sanc- 
tions to the Soviet Union or any other 
state, that it would be approached in a 
far more broadly based way— trade 
across the board and other sanctions 
across the board, rather than to ask one 
segment of the American society to bear 
alone the burden of disciplining an inter- 
national problem. 

Q. Can we use that food to 
bargain with the Soviets in perhaps 
attaining certain kinds of goals, cer- 
tain attempts to have them see things 
more clearly in the kind of world that 
you stated the Reagan Administration 
would like to live in? 

A. I don't discount the importance 
of America's greatest single and most 
successful accomplishment and that's 

from the agricultural sector, because, in- 
deed, that is one of the greatest ac- 
complishments of our American system. 
But I would not delude myself, and I 
don't think others should, that a 
disciplined Soviet or Marxist leader is 
necessarily going to modify fundamental 
policy decisions which are based on their 
own vital national interests even by such 
an important factor as food — especially 
if it's a unilateral American attitude. 
There are other sources available and 
there are transfer capabilities from 
other customers of the United States, as 
we saw in this last grain embargo, 
where we would restrain wheat, sell it 
to other countries, it would be refined 
into flour, and shipped into the Soviet 
Union. I think you have to be extremely 
careful in your hopes, and there is also a 
very important human aspect to that 
question which I won't go into. 

Q. We point to your China trip in 
a couple of weeks. There's been some 
question as to whether or not the 
Reagan Administration has a China 
policy. We have the friends in China; 
we have the friends in Taiwan. Are 
the two compatible under the Reagan 

A. Let me assure you that Presi- 
dent Reagan does have a China policy, 
and I've been exposed to it first-hand 
from day one so I'm very familiar with 
it, and it is as follows. 

We recognize the strategic im- 
perative of strengthening and improving 
and normalizing our relationships with 
the People's Republic of China; there 
can be no question about that. 

Secondly, we see no incompatibility 
with that and both our legal and moral 
obligations to abide by the provisions of 
the Taiwan Relations Act which require 
a degree of relationship with the people 
of Taiwan. This is an unofficial relation- 
ship in government-to-government 
terms, and we see these as completely 
compatible and two tracks which we can 
pursue successfully. And I hope to con- 
firm that once again with the People's 
Republic government this coming 

Q. Since Africa is probably one of 
the largest storehouses of raw 
materials and the future of the indus- 
trial world, my question concerns 
Africa. Since the United States is 
already committed to free elections in 
Namibia, which will ultimately lead to 
independence, has the United States 
any plans for aid or assistance in the 
development of an area such as 
Namibia, thereby precluding another 
Angola situation? 

A. First, let me recall the informal 
remarks I made at the outset and that 
was that we clearly must seek a just and 
responsible relationship with the 
developing world — and that includes 
southern Africa and maybe especially 
southern Africa. 

Secondly, let me remind you that 
this Administration was the highest 
donor to the recent contributions of the 
donor nations to Zimbabwe in southern 
Africa. This Administration was the 
highest donor to the recent Geneva con- 
ference on African refugees — black 
African refugees — most of whom, 
unfortunately, were the victims of 
Marxist-Leninist activity in Africa. 

We have set about in the context of 
the U.N. Resolution 435 to lend all of 
our weight to the objective of achieving 
an internationally recognized independ- 
ent Namibia, and to do so within the 
framework of 435, but to do so in such a 
way that we elaborate that framework 
from the current text of the U.N. resolu- 
tion to include certain constitutional 

Those guarantees would provide for 
the rights of minorities. They would pro- 
vide for a recurrent vote by the popula- 
tions — not one man, one vote, one 
time — and they would provide for 
nonalignment, true nonalignment, and 
nonforeign presence in Namibia. 

We have stated, and I would restate 
today, that there's an empirical relation- 
ship between the ultimate independence 
of Namibia and the continuing Soviet 
and Cuban presence in Angola. 
Although we intend to proceed 
unilaterally along the line toward 
Namibian independence, we cannot ig- 
nore this empirical relationship. 

Finally, let me tell you that we just 
had a visit from the South African 
Foreign Minister in Washington, Mr. 
Pik Botha; and, while we are not totally 
satisified that we have a convergence of 
view, I think we have enough confidence 
as a result of those discussions to sug- 
gest that this process can continue 
within 435 and in the context of the so- 
called contact group in Europe — Britain, 
France, West Germany, and 
Canada — which has been working on 
this problem with us. 

I remain optimistic, although it's a 
very complex and difficult task. And 
ultimately, if we succeed, there will, of 
course, be incentives to insure that that 
success is carried forward by necessary 
assistance to a new government. [Ap- 


Department of State Bulletin 

The Secretary 

Q. The question concerns 
Afghanistan. Could you give us an up- 
date on what the military situation is 
there now? And also what the Ad- 
ministration's policy is with respect to 
assistance, direct or indirect, to the 
Afghan freedom fighters? 

A. You used all the right language, 
and I liked especially your reference to 
freedom fighters. [Applause] The situa- 
tion has clearly been something far less 
than I would anticipate the Soviet 
leadership expected when they con- 
ducted their second intervention in 
Afghanistan. You know they conducted 

The first was to install a puppet 
leader a year before the actual invasion. 
It was unfortunate that at that time I 
read in the editorial of an unnamed 
Eastern newspaper, "Stay Cool in 
Kabul." And that was Eastern press 
jargon to suggest that we should not be 
concerned about that initial Soviet in- 
tervention in the installation of a puppet 
leader in Kabul. 

The step from that, unchallenged, to 
the massive intervention of Soviet forces 
a year later is a very small step to take. 
And I would say that we in the West 
have some obligation and some culpabili- 
ty for that second step having occurred 
in the first place. 

The Soviets are not succeeding. I 
wouldn't want to suggest the freedom 
effort is overwhelming and is achieving 
major military successes, but the control 
that the Soviets would like to exercise 
over the countryside in Afghanistan is 
very, very limited. It involves a cir- 
cumventerental road which they control 
periodically and some of the cities which 
they control, but the countryside is a 
very risky place for Soviet forces. 

The last part of your question I'm 
going to fall back on an old habit, and 
that is, never pop off in public about 
things that you are doing or may want 
to do or you will create all the pressures 
that are necessary to prevent you from 
doing anything at all. [Laughter and ap- 

Q. Along with the plans to in- 
crease the U.S. military defenses, are 
there any associated plans to improve 
our civil defense posture, particularly 
as it relates to chemical and biological 

A. First, let me suggest that I 
would prefer to let my friend, Cap 
Weinberger, field that question. I can 
tell you that in general the Defense 
Department and our own political- 
military policy planners are very, very 

conscious of the low state today of our 
readiness in civil defense. 

We are extremely conscious of the 
great assets applied by the Soviet Union 
to that sector of their defense capability. 
Unfortunately, we're dealing with a 
number of conflicting priorities. I would 
suspect that as important as this subject 
is, it is not quite as high on the priority 
list as some of our other defense needs. 
But it will get increased resources and 
increased attention under Cap 
Weinberger and President Reagan, I can 
assure you. 

With respect to those two more 
sophisticated areas, we have been 
engaged, as you know, and just won a 
very important vote in the Congress — a 
vote that allocated some $20 million to 
create a binary offensive capability in 
the chemical weapons area. We felt this 
was necessary, because since 1969 the 
United States has absolutely left untend- 
ed its chemical weapons inventory while 
the Soviet Union has built steadily. 

It's been our view that you cannot 
sit down and negotiate unless you have 
something in your larder with which to 
talk. That's why we've been totally un- 
successful in that span of 11 years to get 
the Soviet Union to sit down with us 
and arrive at some coherent restraints 
which we would all, of course, seek. 

There is no activity in the 
radiological area because it is banned by 
international agreement, subscribed to 
by both the Soviet Union and ourselves. 

Q. How can President Reagan, 
and I presume with the concurrence of 
the State Department, justify the sup- 
plying of the AWACS [airborne warn- 
ing and control system aircraft] and 
other sophisticated — highly sophisti- 
cated — weapons to Saudi Arabia as a 
defense against Russia when the 
Saudis themselves say that— practical- 
ly have said it themselves that they 
want them as an offensive weapon 
against the very existence of the State 
of Israel? And even with our being 
there to watch these weapons and so 
forth, isn't it quite a danger that they 
could become used for the purpose of 
which I have just stated? 

A. I think that's a very important 
and certainly very urgent contemporary 
question in Washington today. First, let 
me challenge one of the premises of 
your question and that is that I am not 
aware, and I seriously doubt, that 
there's been any exposition on the part 
of the Saudi Arabian leadership that 

would attribute the employment of 
AWACS to the motives you subscribed 
it to in your question. 

Secondly, I think it's vitally impor- 
tant for Americans to understand that 
the situation in the Persian Gulf area 
and in Southwest Asia at large has 
changed profoundly over the last few 
years. We've had the collapse of the 
Shah of Iran, who was the traditional 
policeman of that area, who frequently 
combated Soviet-inspired and Marxist- 
inspired insurgencies in a number of the 
sheikdoms, and whose very presence 
and armed forces and overall demeanor 
were a stabilizing force. With his col- 
lapse, the outbreak of the conflict be- 
tween Iran and Iraq, uncertainties have 

We have had, of course, the Soviet 
invasion of Afghanistan and no prospect 
at the present time for their orderly 

Thirdly, we have had the situation 
develop in the Horn of Africa which 
poses a dagger-like threat to the viabili- 
ty of the oil fields in Saudi Arabia which 
are fundamentally important, not only to 
U.S. interests but to Western in- 
dustrialized interests at large. 

Fourth, we have seen the takeover 
of South Yemen by Soviet-inspired in- 
surgencies and recent efforts about 18 
months ago, or 24 months ago, to over- 
take and to overwhelm the North 
Yemen border with Saudi Arabia. 

I think it's vitally important for 
Americans to understand that Saudi 
Arabia's security, its general pro- 
Western orientation — And, if one may 
ask the question, I ask one to think back 
as recently as a week ago at Geneva 
where the Saudi Arabian Government 
was the leading advocate of no increases 
in OPEC [Organization of Petroleum 
Exporting Countries] oil prices and 
where the Saudi Arabian Government 
has been involved in high levels of pro- 
duction to actually create a glut de- 
signed to drive oil prices down which are 
in the interest of Western, industrialized 
societies and developing societies as 

I think I would suggest that our 
questioner reflect on the past 3 weeks, 
the anguishing work of Phil Habib [the 
President's emissary to the Middle 
East], who I just left in Washington, 
who has asked and received great 
assistance from the Government of 
Saudi Arabia as we seek to reestablish a 
status quo normalcy in an extremely 


The Secretary 

dangerous situation which continues to 
be dangerous today. 

I think we must be very, very 
careful in our value judgments about the 
importance of this provision of arms to 
Saudi Arabia which are designed to de- 
fend against the threats I just spoke to. 
I would also emphasize that the AWACS 
itself is a defensive weapon whose 
technical capabilities are somewhat more 
limited than some of the misinformed 
suggestions that we are reading in the 
press today. 

I don't mean to suggest by that that 
our friends in Israel do not have reason 
to be concerned. We have been in the 
process of discussing this issue with 
them. I've discussed it with them. 

We are in the process now of for- 
mulating the modalities for the sale of 
this system to Saudi Arabia, and I would 
suggest that prudent people who may be 
concerned hold their fire until they see 
and are able personally to assess what 
these modalities will be. I think you'll 
find they're far less frightening than the 
questioner might have suggested. 

Q. Following that meeting with 
you. President Reagan, and Mr. Habib 
this morning, did you send him 
away — back to this shuttle diplo- 
macy — with any special tools or any 
special instructions that we might 
want to know about? 

A. One of the greatest tools we can 
give him is not to pop off in public and 
complicate his tasks at the cutting edge 
of diplomacy. [Laughter] 

I just left President Reagan and 
Phil, and we had a very long discussion 
where the President was asked to be 
brought abreast of the diplomatic efforts 
undertaken by Phil. These are efforts all 
in the direction of the objective of peace 
and stability in the area. 

I notice some of the press suggest 
the mission is a failure. Nothing could be 
farther from the truth. Four weeks ago 
when this mission was launched, we 
were on the verge of conflict, the expan- 
sion of which could not be predicted. 
We've had 4 weeks of, let's say, 
reasonable peace. We hope and we have 
perceived that none of the parties ap- 
pear to want a broader conflict. That's a 
very good premise from which to con- 
tinue this effort. 

This effort will continue. Mr. Habib 
only returned home because there was a 
natural break in the dialogue among the 
parties, and it gave him an opportunity 
to bring the President abreast of the 

situation. He will be returning shortly. 
We haven't fixed the date yet. The proc- 
ess will continue. We continue to have 
hope, although it's an extremely complex 
and anguishing problem, and it still re- 
mains in my view somewhat of a long- 
shot. But with each passing day, we've 
accomplished greater chances for the 
maintenance of peace which we seek. 

Q. The Strategic Arms Limitation 
Treaty has been stalled for over a year 
and a half. What is the policy of this 
Administration toward those negotia- 
tions, and how soon will we see some 

A. First, I think if you watch 
carefully, you'll see there has been some 
action. We have already committed 
ourselves to a time schedule to initiate 
discussions — formal negotiations — with 
the Soviet Union on theater nuclear 
arms control. These are the systems 
deployed in Western Europe and 
deployed in the Soviet Union which 
threaten Western Europe. These discus- 
sions will be conducted within the 
framework of SALT. I will discuss the 
actual modalities and timing with 
Foreign Minister Gromyko this 
September at the United Nations, and I 
would anticipate shortly thereafter the 
formal negotiations would begin. 

With respect to what we referred to 
as SALT II, a lot of Americans seem to 
think SALT II was stalled out on the 
rocks of Afghanistan. Let me tell you 
nothing could be further from the truth. 
SALT II was dead in the American Con- 
gress before Afghanistan, and it fell on 
its own substantive shortcomings. 

Now we are in the process of 
reassessing. It is President Reagan's 
policy to support arms control negotia- 
tions which are verifiable, which are 
balanced and just and equitable, and 
which bring about reductions — actual 
reductions — in levels of nuclear arma- 
ment and don't provide functional 
highways for the continuing growth, 
which is one of the problems with SALT 

So I anticipate these studies will 
continue on the U.S. side, that there will 
be discussions at the appropriate time, 
and that that timing itself is also going 
to be a reflection of that term "linkage," 
other aspects of Soviet international 
behavior, as it should be. 

Q. Considering Richard Nixon's 
background in China, wouldn't he be 
the best man for Ambassador to the 
People's Republic of China? 

A. Well — [Laughter and applause] 

Certainly not an unserious or unimpor- 
tant question — a very important one and 
very much justified, I think, by the 
former President's qualifications and 
background. But I don't anticipate it will 
be happening. 

Q. Earlier this month an event oc- 
curred in which the repercussions 
have not totally been felt. This event 
in Europe is the election of France of 
a Socialist government in which the 
Communists will obviously have a 
part. This may represent once again 
the fall of France. 

During the years of which the 
U.S. Government foreign policy has 
been based on appeasement to the 
Soviet Union, France has stood up 
against the Communists — in Africa 
and in the Arab Horn of Africa and in 
other Arab nations. 

What now, since the Government 
of France has fallen, can the United 
States do to pick up the slack to stop 
the Soviet Union from continually ex- 

A. You've got a lot of very tough 
questions wrapped into one there. 

First, let me tell you I would not 
necessarily accept the premise of your 
question that there will inevitably be 
Marxist participation in the Government 
of France under the Mitterrand electoral 
mandate. I think a very important 
aspect of that question will be arrived at 
in the parliamentary elections which will 
be coming late in the month of June. 
But frankly this is an internal question. 
The important thing to remember is tha" 
France is a trusted, a true, and in- 
valuable ally and that the formulation of 
their internal government is France's 

Needless to say, we will watch that 
with great care, and the outcome of the 
ultimate government will have an in- 
fluence on ultimate relationships in- 
evitably, as it always does. But I think 
at this juncture, it's far too soon to draw* 
the kinds of conclusions that your ques- 
tion suggested. 

Q. Can you tell if the United 
States would be willing to join the 
Soviet Union in a total withdrawal of 
forces from Europe? 

A. Let me suggest to you there 
might be some anomalies, very 
dangerous ones, in that the United 
States is what? — how many thousand 
miles away? — and it takes months to 
build up forces. The Soviet Union is 


Department of State Bullet i 

The Secretary 

right on the border, and I could not 
imagine anything more self-defeating 
than a concept that would visualize total 
withdrawal of both sides. 

If you're talking about total disarma- 
ment by both sides, why, that's another 
question which I'm afraid has certain 
ephemeral overtones that are mind- 
aoggling for me to perceive. 

If you're talking about the recent 
proposal in the CSCE [Conference on 
Security and Cooperation in Europe] 
made by the Government of France and 
oelatedly supported by the U.S. Govern- 
ment after President Reagan came into 
office to support a confidence-building 
set of proposals in a zone from the 
Atlantic— that is, the European shores 
}f the Atlantic— to the Ural Mountains 
vvhere there would be notification of 
'orce movements that could be wor- 
■isome to either side, then we are in the 
orocess of supporting and fleshing out 
such a proposal today. Then I think it 
nas certain values, and that's why I 
ecommended to President Reagan that 
we join the French and the British and 
our other Western partners in support- 
ng it, 

Q. What is the current status in 
he Iran-Iraq situation? Is this a lull 
>efore the storm and perhaps Mr. 
labib's next assignment, or do you 
;ee that it could go into a permanent 
'unk here? 

A. There are people being killed. 
There are people dying every day in this 
•onflict. But the level and the intensity 
)f conflict has been very, very low for 
in extended period. 

American policy has been to be ab- 
solutely and strictly impartial in this 
onflict, and we intend to remain that 
ivay for the foreseeable future. 

There are a number of efforts 
inderway. I just met with our Swedish 
:olleague, Olaf Palme, this past week in 
ny office, and he has been undertaking, 
mder the auspices of the United Na- 
tions, a peacekeeping effort. There have 
Deen also peacekeeping efforts by the 
Arab regimes in the area. Thus far there 
nave been no signs of progress, and I 
would not predict any progress in the 
foreseeable future, but I think Mr. 
Habib will leave the Lebanon situation, 
delighted at the prospect of returning to 
that happy retirement that he just left, 
as a great patriot that he is. 

Q. Poland now owes Western 
banks $29 billion. The total loans to 
the Third World and Communist na- 
tions are over $500 billion. A default 
by any of these nations could cause 

severe economic problems for our 
economy. What is being done so that 
we're not at the mercy of a blackmail 
situation, considering that many of 
our banks are holding these loans? 

A. A great deal has been done. 
We've already contributed well over 
$500 million to the Polish Government in 
commodity credits. We have just joined 
the other 14 donor nations, which hold 
these debts you are speaking of, to defer 
for a year the outstanding interest or 
the carrying responsibilities of the Polish 
debt, which is in the order of magnitude 
precisely as you described it. 

In addition to that, during the recent 
visit of the Deputy Premier to Washing- 
ton about 3 weeks ago, we gave another 
$72 million of special rate food com- 
modities. That's a substantial sum 
already provided to deal with the prob- 
lem you raise, not only in terms of the 
internal problem but the debt-servicing 
problem as well. 

We are now, I think, at the end of 
that road for this year with this recent 
deferral action. We do anticipate that 
the Soviet Union has a very heavy 
obligation, and not to look exclusively to 
Western industrialized nations to con- 
tribute to relieving these internal prob- 
lems in Poland today. 

Q. A lot of us have been watching 
Africa for the last 10-12 years, and 
we've been really concerned about 
Qadhafi over in Libya and all the 
things that he's done. 

We've been reading now in the 
paper, and is it a possibility that there 
is a growing lack of support of 
Qadhafi by the people? And, if there 
is, would there be any possibility of 
the people succeeding against 

A. That's a difficult question. You 
are correct: How could it be otherwise, 
when the resources — and they are 
substantial— received by Qadhafi from 
his natural resources — oil — are almost 
exclusively diverted to the purchase of 
armaments, the training of international 
terrorists, and the conduct of direct in- 
terventionism in the neighboring states 
in northern Africa, the most recent of 
which being the invasion of Chad. 

It's clear that the very modest 
population of Libya who witnesses these 
extravagant expenditures for objectives 
that do not meet their vital interests 
must be increasingly asking themselves 
whether or not they have a visionary as 
the head of state. 

I don't have to tell you that we in 
the West are increasingly concerned 

about Mr. Qadhafi's lawless activity in a 
direct military sense and in his support 
for bloodshed and terrorism worldwide. 
As recently as 2 weeks ago, he again 
espoused the right of the Libyan people 
to destroy their opponents. 

We don't mind the rhetoric, but 
when he applies assets, training, and in- 
dulges in work— even in this hemisphere 
and in these United States— which are 
reflective of that leadership, then we 
have a problem and one which we in the 
Western world are going to have to give 
increasing attention to and coordinate to 
deal with. 

Q. Can we expect help from our 
Western allies in the whole fight 
against terrorism? Have they pledged 
their support to that? 

A. I think there's a growing con- 
sciousness of the problem of interna- 
tional terrorism which is something dif- 
ferent than the so-called wars of libera- 
tion. It's probably phase one of a war of 

We have continued to be plagued. 
We've had four major hijackings to deal 
with since this Administration has been 
in office. I find a growing sense of con- 
cern. There was reference to it in recent 
communiques among our allies, and I 
think it's a question of leadership 
emanating from the United States. I am 
very comfortable that our Western 
European partners will work with us. 

Q. My question has to do with the 
vote earlier this month in the World 
Health Organization when the United 
States cast the only opposing vote 
about the code of marketing breast 
milk substitutes. Considering your 
statements of how dependent we are 
upon the developing nations for 
resources, how do you perceive this 
kind of thing affecting diplomatic 

A. I think it's difficult to say, and I 
would make the broad observation that 
this is a difficult and was an anguishing 
question for the President and for the 
Administration — especially for our AID 
Administrator, Mr. McPherson. 

We did feel that the forum is not ap- 
propriate to engage in that kind of a 
restrictive activity; and there are very, 
very serious and well-meaning people on 
both sides of that issue, as is always the 
case on tough decisions. I think it re- 
mains to be seen what the consequences 


The Secretary 

will be of that decision for American 

Q. I understand that the Reagan 
Administration looks favorably on the 
new Administration in Jamaica, Ed- 
ward Seaga, and I was wondering if 
you could outline basically your 
policies toward Jamaica as a country 
and maybe tell us anything about any 
other planned assistance without pop- 
ping off in public. And any other 
thoughts you might have on the Carib- 
bean in general. 

A. I think a reflection of President 
Reagan's interest in and support for the 
Seaga government in Jamaica was 
underlined by the reality that he was our 
first, official foreign visitor in 

Of course, we are extremely in- 
terested in the future development of 
the Seaga regime, because it represents 
the first regime that has cast off in the 
Caribbean basin the extreme Marxist- 
Socialist approach to government. 

Mr. Seaga inherited an economic 
shambles left to him by his predecessor. 
So we have been engaged in a broad- 
front program involving not only federal 
support for Mr. Seaga but, more impor- 
tantly, activity in the private sector. At 
the time of Mr. Seaga's visit, I asked 
David Rockefeller, in behalf of the Presi- 
dent, to chair a group of the private sec- 
tor here in America. The Canadians 
have done the same, and they've been 
coordinating together to get private in- 
vestment going into Jamaica, and with 
some promising success. 

Just yesterday we got an agreement 
to provide the convention for Jamaica 
which the Prime Minister addressed in 
the Parliament yesterday. So I want you 
to know that we consider this to be a 
vitally important issue for the whole 
security of the Caribbean basin, that 
Jamaica succeeds as the model state 
that has cast off the shackles of extreme 
leftist activity. 

Secretary Participates in 
Foreign Policy Conference 

■Press release 17(i. 

Secretary Haig participated in a Na- 
tional Foreign Policy Conference for 
U.S. Editors and Broadcasters at the 
Department of State on June 2, 1981. l 

First, I want to thank you for that 
warm reception, the kind I so richly 
deserve and so seldom receive. [Laugh- 
ter] You know, I have been basking in 
the adulation of official Washington 
recently. Some of it has to do with my 

The other day, when I was speaking 
to a group of editors here in Washington 
at their annual meeting, I was intro- 
duced by Mike O'Neill, of The New York- 
Daily News, and he said, "Secretary 
Haig is the most articulate spokesman 
we have had in Washington since 
Dwight Eisenhower." [Laughter] And I 
said, "Thank you very much, Mike. That 
probably explains why I've never re- 
ceived a Pulitzer Prize. It may explain 
why I'll never have to give one back." 
[Laughter and applause] 

But I want you to know things are 
getting better. There was a story in The 
Washington Star the other night that 
said, "Haig has now taken to reading the 
text, and he does it quite well. It's only 
when he gets to ad libbing in the 
question-and-answer period that 
everything becomes a shambles again." 

So I want you to know, this after- 
noon I haven't brought a text; and I said 
there was a lesson to be drawn from 
that, as I fired my speech writer the 
other day. 

I think one of the problems is com- 
munication and jargon. You know, I 
think back to my experiences in NATO 
and I was raised in the military 
discipline, so sometimes my military 
jargon is a little different. On this occa- 
sion, we had a specialist from The New 
York Times who was doing a study on 
"the military mind," and he spent 2 days 
in our headquarters interviewing 
military figures. 

Finally, one night I took him on my 
helicopter to Bonn, from our head- 
quarters in Mons, Belgium. As he got in 
the plane with his tablet, he leaned up 
and tapped the pilot on the shoulder and 
said, "Say, young fellow, when was the 
last time you've been out with a member 
of the opposite sex?" 

The fellow looked at him and said, "I 
think it was about 1950." 

He said, "You poor devil." 

Then the fellow looked at his watch 
and said, "Well, it's only 2030 now." 

So you see, sometimes it's just a 
question of the jargon. 

There has been some comment 
recently that perhaps we have some con- 
fusion about our conceptual framework 
for President Reagan's foreign policy; 
and let me assure you, nothing could be 
further from the truth. We have, cer- 
tainly, a fundamental objective that we 
seek — and that, first and foremost, is to 
help to structure an international en- 
vironment that is hospitable, at least, to 
the values that we Americans cherish — 
freedom of the individual and the dignity 
of the individual in society. 

We feel also that this can only be 
achieved in an international environmenl 
in which necessary and desirable historic 
changes occur within the accepted rules 
of international law and the mores of 
modern civilization, and not by resort to 
force, bloodshed, terrorism, and so- 
called wars of national liberation. 

Now we have structured this on fou 
fundamental pillars: the first of which is 
to recognize that the fundamental objec- 
tives will be unachievable until we 
establish a relationship with the Soviet 
Union that is based upon restraint and 
reciprocity in our dealings with them. 
We have concluded long since that such 
restraint and reciprocity must be ac- 
companied by an improvement in the 
worsening military balances between 
East and West, and especially the 
United States and the Soviet Union. 

The second pillar that we are struc- 
turing our foreign policy on is the 
recognition that the United States must 
refurbish traditional alliances — NATO, 
ANZUS [Australia, New Zealand, U.S. 
security treaty], and others — that we 
must establish a relationship with those 
who share common values with us 
around the world and do so with a 
greater level of consultation so that our 
own policies are perceived to reflect an 
understanding and sensitivity to the 
needs of our friends and allies 

That means that we have to 
eliminate systematically a number of 
contemporary aggravations, ranging in 
number of functional areas from human 


Department of State Bulleti 

The Secretary 

rights, nonprofileration, and fundamen- 
tal economic policies as well. 

Thirdly, we believe that in the 
period ahead — and it is increasingly im- 
portant in this period ahead — we focus 
on establishing a just and responsible 
relationship with the developing world. 

In that process, we are acutely con- 
scious of a growing trend in which Third 
World leaders and Third World people 
are increasingly leery of close associa- 
tion with the Russian Marxist-Leninist 
model which has brought with it merely 
bullets and armaments, a pervasive 
presence, and, in special cases where a 
strategic geographic objective is served, 
a client-state relationship. We are not 
about to proceed in our efforts to 
establish a just and responsible relation- 
ship with the developing world in such a 
way that we will have the practical con- 
sequences of reversing this growing 
favorable trend. 

That underlines why the United 
States was one of the major contributors 
to Zimbabwe's aid requirements this 
past year. It underlines why this Ad- 
ministration was the highest donor to 
the black African refugee conference in 
Geneva 2 months ago. And it underlines 
why we are dedicated, within the 
general framework of U.N. Resolution 
435, to seek an independent, interna- 
tionally recognized Namibia — but to do 
so in a way in which it is clear that we 
also recognize the sensitivities and con- 
cerns of the Government of South Africa 
in this process. 

Lastly, and the fourth pillar upon 
which we structure our foreign policy to- 
day is one in which we clearly recognize 
that the United States cannot proceed to 
reestablish its modified, though tradi- 
tional, leadership role internationally if 
we preside over an economic shambles 
here at home and that a key aspect of 
successful foreign policy is an orderly, 
productive, domestic economy. That is a 
fundamental aspect of Reagan foreign, 
as well as domestic, policy. 

As we look at the prospects for the 
achievement of the objectives I have 
outlined under the four pillars we have 
cited, of course the jury is still out — as 
it will be for some time. But I think we 
go about our task with the clear recogni- 
tion that there is an historic change here 
in America. There is a new consensus 
among the American people, the 
American legislature, and the executive 
branch to roll up our sleeves and get 
back in an active international role and 
to provide the assets in the military sec- 
tor that are necessary to insure our ef- 
fectiveness in that role. 

Now I want to tell you that this Ad- 
ministration, those of us here at the 
Department of State, and I know the 
President, are acutely aware that we 
have a responsibility not to abuse this 
new-found consensus which is so promis- 
ing for America. Therefore, we go about 
our tasks with a great degree of 
diligence and perhaps not so much con- 
ceptual "hoop-la" as some would like. 

But while the jury remains out, I am 
certainly optimistic that we are making 
progress along all the lines I have just 

Q. The warnings that the Ad- 
ministration gave to you in regards to 
the weapons to El Salvador have 
resulted in less weapons coming into 
El Salvador. However, we still know 
that some weapons are going. We 
have the situation in Grenada where a 
submarine and a big airport — military 
airport — is being built. What else can 
the United States do to stop Cuba as a 
center of subversion for the Central 
and the Caribbean areas? 

A. I think it's always prudent not to 
lay out explicitly in a public forum con- 
tingency planning and future planning, 
because it usually reduces your flexibili- 
ty to execute it in the first instance — 
and that is certainly not untrue of this 
particular situation. 

It is true that our policies with 
respect to El Salvador have had the 
practical consequence of reducing the 
flow of illicit arms into El Salvador to- 
day. But they have not terminated, and, 
indeed, there are high levels of wor- 
risome armaments flowing, especially in- 
to Nicaragua but also into such ter- 
ritories as Guatemala, Honduras, and 

History never tells what would have 
happened if you had pursued another 
course; but several of the local and inter- 
national figures that I have spoken to 
recently have suggested that had we 
done something less than we did in El 
Salvador, we might be facing another 
totalitarian regime there today. 

I think it is awfully important, with 
the controversy associated with this 
issue, that we recognize that the level of 
assistance to El Salvador has thus far 
been very, very modest in dollar terms, 
especially in the security-related area. 
We are talking on an order of 
magnitude of military trainers of about 
50 to 55 — some of whom have already 
been withdrawn. But this level of 
assistance is roughly one-third of what 

we have been providing in the economic 
support area to that government. 

It is clear that Castro's Cuba con- 
tinues to engage in subversive activity 
throughout the hemisphere. It is clear 
that we have laid out clearly the unac- 
ceptability of this activity in a long-term 
sense to the United States and, I think, 
to many of our allies in the hemisphere. 
It remains to be seen whether or not the 
Cuban leadership — which is itself 
plagued with economic dilemmas of a 
tremendous character at home — is going 
to continue to indulge in this activity 
which is not limited to this hemisphere 
but which involves the exportation of 
troops to the Continent of Africa — 
literally thousands of miles away — 
where they are also engaged in similar 

I would say that it is important for 
all to recognize that this does not meet 
the vital interests of those who share 
our conception of a world that permits 
peaceful, historic change and welcomes 

In the period ahead we will be en- 
gaged in additional measures designed 
to deal with this — and we are going to 
deal with it, not in an exclusively 
security-oriented fashion but rather with 
a clear awareness that we must also 
deal with the situations, the cause, ef- 
fects, that make insurgency and external 
interventionism possible and acceptable 
in the target areas. That means 
economic and social development. These 
will be the twin approaches that we will 
pursue, but I am going to avoid 
referencing any specific measures. 

Q. I am from Miami. I was with 
the assembly of the ASNE [American 
Society of Newspaper Editors], and I 
asked you about the intervention of 
Castro in Central America. And now I 
have to ask you something about the 
news that appeared this morning in 
The Washington Post about the Soviet 
tanks that have been sent to 
Nicaragua and to Central America. 
That means that the Nicaraguan 
Government is receiving very heavy ar- 
maments from the Soviet Union. Am I 

A. First, I think you are referring 
to a newspaper report. 

Q. Yes. [Laughter] 

A. I am not being critical, but I am 
going to be very careful about making 
reference to newspaper reports which I 

July 1981 


The Secretary 

haven't had an opportunity to study and 
don't know the source of that report. 

I can say this categorically: We have 
been watching with increasing concern 
the levels of sophisticated armaments 
being provided to the Government of 
Nicaragua, transshipped from Soviet, 
Eastern European, Libyan, and 
ultimately through Cuban assembly 
areas into El Salvador. 

And we are also concerned about the 
high level of manpower being assigned 
by the Sandinista government in 
Nicaragua to purely military 
duties— both in the active sense and at 
an extremely high level in the reserve 
sense. We do not see any threats in the 
local area that would justify that level of 
manpower, nor do we visualize a re- 
quirement for the sophistication in the 
level of armaments that we see have 
already arrived and which we under- 
stand are programmed to arrive. Let me 
just leave it there. 

Q. On the board outside this 
room, under your name, are 44 policy- 
level posts in the State Department. 
There are only 16 names opposite 
them. Is that enough people to run the 
store? Are you satisfied with that? 
And what is holding up the implemen- 
tation of your staff? 

A. Not at all. But don't let that list 
deceive you. These are fellows that are 
through the system, formally confirmed, 
and are at their desks in a confirmed 

Almost every vacancy, from the 
Assistant Secretary level up, has been 
filled. I think we only have one that re- 
mains to be filled. But the process of 
running them through the Hill confirma- 
tion process — with other legislative 
agenda items facing the committee— 

And I would not be exaggerating a 
bit to suggest that some of our conflict- 
of-interest rules that have emerged in 
recent months or years are mind- 
boggling in the administrative burden 
that they impose. But we are well- 
staffed, well-manned, and are function- 
ing every day. Some of our fellows sort 
of back into the pay table because they 
haven't had their rank formally assign- 
ed. [Laughter] 

Q. Are we sending arms to 
Afghanistan and, if we're not, why 
aren't we? 

A. There again, there's an old 
bureaucratic game that when you're 
asked about sensitive questions and 
when you're talking about contingency 

planning, the very act of discussing 
them publicly makes it impossible to pur- 
sue them. I would have no comment on 
that subject. 

Q. You don't think that the 
American people are entitled to the 
answer to that question? 

A. I think that's a hard way of put- 
ting the question which would be tanta- 
mount to: "When did you stop beating 
your wife?" So I'm not going to answer 
in the context of your question. But I do 
think that the President has commented 
on this subject, and I think I commented 
on it in a recent interview in U.S. News 
& World Report where I said the Presi- 
dent said if the freedom fighters were to 
ask for assistance that we would be very 
serious about considering meeting that 

I say the issue involved here is a 
double standard. It is clear the Soviet 
Union insists, and has historically and 
categorically insisted, on its rights to 
support such freedom movements or 
liberation movements in target areas of 
their selection. It hardly seems consist- 
ent that they could oppose such activity 
on the part of the West under similar 

Q. One of the first issues you 
faced as Secretary of State was the 
Russian grain embargo. At first you 
were not in favor of pulling that. 
Since this is over, what's your reac- 
tion to its effect? 

A. When the President heard my 
views on it, when he made his decision, I 
supported that decision fully and com- 
pletely. I have the luxury as the 
Secretary of State to confine my advice 
to the President to exclusively foreign 
policy-related considerations. Needless 
to say, early on I was opposed to lifting 
the embargo on those grounds. 

But the President is President of the 
United States, and he must make his 
decisions on a full range of considera- 
tions and interests. First and foremost 
of those interests was the fact that the 
President had consistently and 
categorically opposed the grain embargo 
prior to his election and committed 
himself to lifting it if he were to be 

He does not squander his words 
lightly, and frankly I don't think he 
should. I can also suggest consistency in 
my own view. I was opposed to the 
grain embargo when it was imposed. I 
was opposed to it because I had lived 
with the experiment with the grain em- 
bargo in the early 1970s, and we shot 

ourselves in the foot. It's too narrowly 
based a sanction. It asks only one seg- 
ment of the American society to bear 
the burden of the sanction. 

More importantly, it even had long- 
term foreign policy implications, because 
had we continued with the grain embar- 
go as some of our Western European 
partners and other partners worldwide 
were less enthusiastic — some didn't join 
in the first place, some dropped off — 
there would have been an increasing 
disunity evolve in foreign policy terms, 
as only a few "hung tough," if you will. 
Even from that point of view it was a 
tightly balanced judgment. I think the 
President made the right decision. I sup- 
port him fully. 

Q. The EEC [European Economic' 
Community] is going to become in- 
volved in Northern Ireland because 
many of its members see it as a poten- 
tially grave threat to both itself and 
NATO. The British Government is 
now spending $2 'A billion a year in 
both subsidies and security in Nor- 
thern Ireland at a time when we hear 
that it may reduce its naval NATO 
force as well to about 15 ships. And 
we have an Irish-American constituen- 
cy in this country of between 16-20 
million people, including. I believe, 

Given all these considerations and 
many more, why does our govern- 
ment—why does the Reagan Admini- 
stration — insist on treating this as an 
internal British matter? 

A. I think precisely because it is 
that. That does not suggest that there 
aren't external forces involved from timt 
to time in one or another aspect of this 
anguishing problem. But I think it's 
clear that this is a problem that must be 
worked out internally by the parties. It's 
an historic agony for those parties and 
has been. One might make the case if 
there were not a Great Britain playing 
the role that it's playing there today, we 
might have to create one to prevent a 
blood bath. 

I think what we are all interested in 
is patiently and sympathetically to do all 
we can in an empathetic way to seek a 
resolution to these historic problems but 
to recognize that they are internal and 
that for a public official in my position 
to make offhand public comments about 
it only aggravates a problem which 
needs no aggravation; so I won't do it. 

Q. When President Reagan said 
that: "We will transcend communism 
rather than to contain it," was he sug- 
gesting a new foreign policy slogan, 


Hpnartmpnt of .^tatp Rnllptin 

The Secretary 

possibly like detente or containment? 
And, if so, what does "transcending 
communism" really mean? 

A. I wouldn't presume to speak for 
the President; he does very well at it 
himself. But I think he was suggesting 
that those charges from time to time 
that we were guilty of fixation with 
communism are less than enlightened 
critiques of our concerns. 

I think we do believe that recent 
Soviet activity internationally is prob- 
ably the greatest threat to world peace 
that exists today, either directly or in 
exploiting historic tensions that exist to- 
day in this period of transition. 

I think he has also made the 
point— and I have made it— that this is 
not a Soviet Union that is relieved of the 
burdens that any nation has; and, in the 
case of the Soviet Union, they are prob- 
ably historically unprecedented 
today— in agriculture, economics, in the 
areas of systematic effectiveness of the 
Marxist-Leninist system in the Soviet 

They are heavily engaged in a no- 
end conflict in Afghanistan, which cer- 
tainly did not turn out the way those 
who proposed that that aggression take 
place visualized. They are today engaged 
in the support of 200,000 North Viet- 
namese troops in Kampuchea in a no- 
win conflict which is costing the Soviet 
Union about $200 million a day. They 
are faced with the mind-boggling com- 
plexities of the situation in Poland. 

I think all of this suggests that as 
we pursue our relationship with the 
Soviet Union, we must do so with a 
clear recognition that they, too, are 
plagued with many fundamental chal- 
lenges and problems. It isn't a simplistic 
question of building up enough arm- 
aments to force them to do our will, as 
some would suggest our policies repre- 
sent. That is not the case at all. 

The thrust of your question, I think, 
suggests that perhaps there are other 
issues with which we will have to deal, 
and I cited three of them in three of the 

Q. Would you care to comment on 
Prime Minister Begin's statement that 
there is a limit to how long Israel can 
wait for success in the diplomatic ef- 
forts being exercised to solve the 
Syrian missile crisis? 

A. I don't make it a habit at a time 
like this, when the United States is 
engaged in an intensive effort to 
preserve the peace such as it is and 
shaky as it has been in that difficult area 

of the world, to indulge in comments 
about public statements from one or the 
other parties to the conflict. 

I think what we have suggested in 
our efforts to maintain peace and stabili- 
ty, to at least achieve in the near term a 
return to the status quo ante — and I'm 
talking about a return to the situation 
that has existed de facto and formally as 
well since 1976 — is to work on those 
problems and, hopefully, to relieve them. 

I do think there is a time limit. 
There is a time limit because there has 
been a change in the status quo. From 
that point of view one might say that 
there is some urgency — although I don't 
call it an immediate sense of urgen- 
cy — but there is a time limit to achiev- 
ing some progress, and I'm hopeful we 

Q. Your second pillar was refur- 
bishing traditional alliances. Given 
your experience as a military com- 
mander at NATO and our recent re- 
quest of Japan that they do a little bit 
of helping, are you pleased with the 
European attitude toward its own 
defense, and isn't it about time Uncle 
Sam stops being leaned on as heavily 
by the Common Market, as it were, 
militarily? Or am I wrong in that 

A. First let me answer your ques- 
tion by suggesting that I believe the 
worsening trends between East and 
West require that all of us do a bit more 
in the defense sector. That is not to sug- 
gest that we're totally helpless and 
behind today but rather that these 
trends are increasingly worse, and they 
need tending. 

One thing that bothers me frequent- 
ly is the charge that Americans make 
that our European partners are not car- 
rying their share of the burden. I heard 
it for 5 years in my position in NATO- 
Europe when congressional groups and 
others would come over, pound the 
table, and say: "We're going to get equal 
sharing of the burden." 

I would always say, "Let me remind 
you, my friend, that over the last 10 
years, NATO partners in Europe have 
increased their expenditures for security 
needs by some 22%." The United States, 
on the other hand, until this past year 
where our defense spending increased, 
had declined and decreased in its con- 
tributions to the NATO alliance by 13%. 

The point of departure was 
drastically different, because at the 
onset of NATO, the United States did 
bear most of the burden, our Western 

European partners having been the vic- 
tims of a conflict that had just been con- 
cluded. But as they built up their ability 
to do so, they have taken increasing 

I think it's important for Americans 
to remind themselves about this alliance 
—NATO. When I was in NATO, if I had 
gone to war, I would have gotten 90% 
of my ground forces from European 
powers, 80% of my air forces, and 75% 
of my naval forces from European 
powers. It was a very cost-effective 
operation and remains one for the 
United States. 

I think it was my old friend Jim 
Schlesinger who had a study made when 
he was Secretary of Defense to analyze 
what it would cost the American tax- 
payer to get an equivalent level of 
security if we did not belong to NATO 
and we did it on our own. He estimated 
that we would have to double our outlay 
of gross national product to defense 
needs without the benefits of the NATO 
alliance we have today, so it's a very 
cost-effective endeavor. 

Q. I hate to bring you back to a 
report in the newspaper again. There 
are, however, some of us who still 
have a little faith in those journals. 

A. So do I, incidentally. 

Q. But I'm talking about the 
report the other day about the changes 
in the wind, apparently a leak out of 
the State Department, in the U.S. 
relationship with the Government of 
South Africa. Would you care to com- 
ment about the leak? Would you care 
to comment about what changes might 
be forthcoming? 

A. First, let me suggest that the 
leaks were atrocious and appalling to 
me. It has sometimes been to me in- 
conceivable that public officials on the 
public payroll feel they have a right to 
protect their constituted leadership from 
itself because leaks don't just happen; 
they are in many instances executed in 
order to set up backwashes and to pre- 
vent policy decisions. 

With respect to those papers, let me 
also advise you that these were both out- 
dated and, in some instances, very low- 
level staff effort papers — in one instance 
not— and they are not necessarily a 
reflection of American policy in southern 
Africa today, nor were they ever. 

Having said that, let me establish 
for you those policies. Those policies to- 
day are, under U.N. Resolution 435, to 

I,, I, 1QQ-I 


The Secretary 

achieve an internationally recognized in- 
dependent Namibia at the earliest possi- 
ble date. 

We, however, believe that 435 
alone — as it was previously conceived 
and as we sought to implement it 
earlier — is not adequate for the purpose. 
There is no sense in trying to sail again 
in a leaky ship. We believe that 435 
needs to be fleshed out and expanded 
and that that expansion would involve 
the provision of constitutional, or at 
least ironclad, guarantees which will 
cover the rights of minorities in indepen- 
dent Namibia; that would provide for a 
franchise regularly exercised and not 
one man, one vote, one time; and that it 
would provide for a totally, truly 
nonaligned Namibia which will not be 
burdened by foreign presence or foreign 
troops. We don't think that that's an ex- 
ceptionally excessive requirement for us 
to lend our weight — along with the con- 
tact group, along with the front-line 
states, and, hopefully, with the Govern- 
ment of South Africa — to achieve this 
long-sought goal. 

We also seek to do it, incidentally, 
through these guarantees in such a way 
that the Government of South Africa 
can sense that it is in its interests to 
participate in this process. After all, 
that's a key aspect of the whole ap- 
proach. I hope I've answered your ques- 

Q. First, let me say, I wish that in 
1956 you were Secretary of State. 
That's for the Hungarian freedom 
fighters. Then I would like to ask you, 
first of all, is the United States going 
into negotiations on a SALT II or a 
different agreement? And secondly, 
when are we going to attempt to catch 
up with the Russians militarily? 

A. I think you want to be careful, 
and I will answer the last part first. 
Sometimes there is a great tendency to 
paint the Soviet military capabilities in 
10-foot tall proportions. It has been my 
experience — and it's a prudent ex- 
perience — that those involved in those 
estimates always tend to view the oppo- 
nent in somewhat more healthy terms, 
and that's a prudent approach. I 
wouldn't change it. And in many areas 
of strength it's true; the Soviet Union 
has surpassed the United States. In 
many others, they have not at all. And I 
would put in the central strategic 
nuclear area the fact that we are still in 
an area of rough equivalents. But I 
would emphasize that were current 
trends to continue, and were current 

trends even under SALT II to continue, 
we would be faced in 1985 or 1986 with 
rather substantial deficiencies in the 
American capabilities. 

What is necessary is to reverse the 
trend. How long it will take will depend 
on a number of imponderables, not the 
least of which is the level of spending 
the Soviets are willing to engage in dur- 
ing the period that we have increased 

With respect to SALT II, many say 
that SALT II fell on the rocks of 
Afghanistan. Nothing could be farther 
from the truth. SALT II fell on the 
substantive inadequacies of the 
agreements themselves. I can tell you 
because I've testified, and I can assure 
you that there was not the adequate 
consensus in the American Senate and 
House to ratify. 

I can also suggest to you without 
any question that SALT II is not an ade- 
quate basis for future arms control 
negotiations with the Soviet Union. We 
felt that while it limited certain levels of 
strategic building, it permitted func- 
tional freeways for unusual growth as 

It is President Reagan's view that he 
will negotiate SALT agreements with 
the Soviet Union and wishes to do so. 
He wants those agreements to be fair, 
equitable, and to result in actual reduc- 
tions, not in continuing growth. 

We are in the process of studying 
this issue with great intensity in the 
bureaucracy today. It involves a number 
of potential options which could include 
dramatic changes in the SALT II 
framework, an entirely different 
framework in which maybe functional 
progress in particular areas were 
sought, or it might involve a whole new 

We have not gotten far enough 
along for me to suggest which way we'll 
come out on that. I would also suggest 
that the timing of when we sit down and 
discuss strategic arms control limitations 
is going to also take into consideration 
worldwide, global Soviet conduct and 
the term "linkage." 

As you know, we agreed in the 
Rome ministerial to begin talks — and 
they have begun with the Soviet Union 
on long-range theater nuclear arms con- 
trol for Europe. We anticipate discuss- 
ing the precise move into formal 
negotiations in the September meeting 
between myself and Foreign Minister 

Gromyko in New York. Shortly follow- 
ing that, I would anticipate we will be 
into formal negotiations on this issue 
within the framework of SALT. 

Q. I think you are the first 
Secretary of State ever to appear 
before press briefing like this with 
Secret Service protection. 

A. Yes. Watch 'em. [Laughter] 

Q. In that connection, knowing 
that you have already had one attempt 
on your life that we know about, what 
is the role of terrorism in foreign 
policy today? Is it coordinated? Is the 
Soviet Union the primary source of it? 
And could you give us any other com- 
ments on it? 

A. Incidentally, my wife might have 
a few other experiences to describe 
where my life was in jeopardy. 

I made some comments early on in 
my incumbency about international ter- 
rorism. I made some comments at the 
time I was almost blown out of my 
Mercedes in Belgium about 2 years ago, 
about international terrorism. Those 
comments are clearly on the record. I 
haven't changed my view one bit. And 
while the Soviet Union clearly doesn't 
bear the responsibility for all acts of ter- 
rorism internationally, it's a hemorrhag- 
ing phenomenum. 

I did say that they bear a major 
responsibility, however, because they 
have been engaged in the funding, train- 
ing, and philosophic underpinnings 
which suggest historic change by rule of 
force is an acceptable code for interna- 
tional behavior. 

I know there have been a number of 
charges about "Secretary Haig doesn't 
know the difference between terrorism 
which is just stealing an airplane and 
perhaps wars of liberation, which is a 
higher level of insurgency." What I 
would suggest is that they are all inter- 
related and that terrorism in- 
volves — especially if it is state-supportec 
terrorism of the kind that the Govern- 
ment of Libya is heavily engaged in to- 
day with the benefit of high levels of 
Soviet armament, Soviet advisers 
technically in their country — that one 
cannot turn one's face to the respon- 
sibilities that this kind of activity brings 
with it, especially as we have seen. 

We have presided in this Depart- 
ment just since we came in in four majo 
international aircraft hijackings. I 


Department of State Bulletit 


Khmer Relief Efforts 

Since autumn of 1979, when widespread 
famine inside Kampuchea sent 
thousands of starving Khmer to the Thai 
border in search of food, the massive 
response from the international com- 
munity has been essential to the survival 
of the Khmer people. Through the end 
of 1980, Western donor nations had con- 
tributed to the Kampuchea relief effort 
over $450 million, while private Western 
donations through voluntary agencies 
amounted to well over $100 million. The 
Soviet Union and other Eastern bloc 
countries made substantial bilateral 
donations as well. 

Although the situation is much im- 
proved, Kampuchea will be dependent 
on international relief food at least 
through 1981. In addition, special 
emergency needs include health care and 
elementary agricultural rehabilitation. 
Failure to continue relief assistance 
could result in new calamities and a 
return to the terrible days of 1979. 
Moreover, some 200,000 displaced 
Khmer remain in Thailand — in UNHCR 
[U.N. High Commissioner for Refugees] 
holding centers and in makeshift camps 
along the Thai-Khmer border — and 
these unfortunate people are totally 
dependent upon international assistance 
until some more lasting solution is found 
for them. The United States plans to 
continue to make significant contribu- 
tions toward the basic humanitarian 
needs of the Khmer people in 1981 and 
into 1982 and is encouraging other 
donors to do so as well. 


The U.S. Government contributed 
$128,861,700 to the relief effort in FY 
1980, all but a small fraction of which 
went to international organizations. In 
the first 7 months of FY 1981, we have 
contributed another $38,691,400. In the 
breakdown that follows, figures are 
rounded to the nearest $100, with FY 
1981 grants listed individually. Contribu- 
tions for FY 1980 have been combined 
into a single total. 

Amount Reason/Date 


$20,307,600 Total contribution (FY 1980) 
4,000.000 UNICEF "Common Fund" 

5,800,000 Reimbursement for food pur- 
chased by UNICEF/ICRC 



International Committee of the Red Cross 

$8,560,500 Total contribution (FY 1980) 
Support for ICRC in FY 1981 
included in $5.8 million 
granted to UNICEF 

World Food Program 

$64,987,100 Total contribution (FY 1980) 
495,400 Food management in Thailand 

494,600 Monitoring, transportation, 

and warehousing in Thailand 


wouldn't attribute those in every in- 
stance to the Soviet Union. I might sug- 
gest that in one instance they had a 
very heavy hand. I think all of these 
things require very careful analytical 
thougth. And it makes no sense for peo- 
ple not to face reality. We'll have more 
to say on this in the period ahead, and I 
hope with greater specificity and explici- 


Q. Just what are the basic 
qualities that you and President 
Reagan find in Mr. Lefever [Ernest 
W. Lefever, Assistant Secretary- 
designate for Human Rights and 
Humanitarian Affairs] to nominate 
him for the human rights divisions 
responsibility in your department? 

A. I am not going to tick off the 
man's academic credentials, which are 

substantial and are open in public record 
for anyone to see. He is a man who 
dedicated a good portion of his life to 
the very activities he is being asked to 
assume responsibility for. 

One may disagree with his views on 
that subject, but I don't think anyone 
can disagree with his qualifications to 
hold those views and to bring his talents 
for the work of the American people. 

Mr. Lefever is going to be working 
in this Department, That means that he 
is going to be loyal to the views of the 
President of the United States who was 
elected by the American people. And I 
think the President has every right to 
choose whom he selects to serve him, as 
he seeks to carry out the popular man- 

10,000,000 Food for Peace commodities 

including shipping costs (4/81) 


U.N. High Commissioner for Refugees 

$21,435,500 Total contribution (FY 1980) 
1 ,11(10,000 Returnee program (10/80) 
9,000,000 Holding centers in Thailand 


Food and Agriculture Organization (FAO) 

$5,000,000 Total contribution (FY 1980) 

2,000,000 1981 Seed rice purchases 



National Council for International Health 

$87,200 Medical assistance clear- 
inghouse (FY 1980) 
15,000 Continuation of clearinghouse 

Cambodia Crisis Center 

$80,900 Startup costs (FY 1980) 

American Friends Service Committee 

$589,300 Total contribution (2 grants) 
(FY 1980) 


$ 155,800 Total contribution (2 grants) 
(FY 1980) 
1,576,400 Rice seed for Kampuchea 



Church World Service 

$2,400,000 Total contribution (2 grants) 
(FY 1980) 

International Rescue Committee 

$199,000 Pediatrics ward at Khao I 
Dang (2/81) 

Pathfinder Fund 

$69,000 Community-based mater- 
nal/child health care in Khao I 
Dang (11/80) 

World Relief Corporation 

$1,000,000 Total contribution (1 grant) 
(FY 1980) 

'Press release 180 of June 3, 1981. 

July 1981 



World Vision Relief Organization 

$3 103 300 Total contribution (1 grant) 
(FY 1980) 
4,012,000 Rice seed and other 

agricultural inputs for Kam- 
puchea (4/81) 


Office of the U.N. Secretary General's 
Special Representative for Kampuchean 
Humanitarian Relief 

$150,000 Startup costs for office (FY 

U.S. Embassy Bangkok 

$69 000 Emergency funds for Khmer 
relief (FY 1980) 
30,000 Contingency funds for Kam- 
puchean Emergency Group in 
Thailand (10/80) 

International Economic Policy 


Thai Red Cross 

$125,000 Total contribution (two grants) 
(FY 1980) 

Task Force 80 (Thai Supreme Command) 

$13,000 Office supplies for Coordinator 
(FY 1980) 


$382,500 Special airlift of medical and 
other relief supplies in 
response to the President's 
11/13 decision (11/79) 

Administrative Costs 

$550,000 Travel and administrative ex- 
penses of staffing Khmer relief 
program in Thailand (10/79, 

$167,553,100 Total contributions to date 

$ 19,308,600 Pledged to U.N. Joint Mission 

for Khmer relief for 1981, but 

not yet allocated 

$186,861,700 Total contributions plus 

Press release 145 of May 13, 1981. 

by Robert D. Hormats 

Address before the International In- 
surance Advisory Commission in New 
York City on May 19, 1981. Mr. Hor- 
mats is Assistant Secretary for 
Economic and Biisiness Affairs. 

International economic issues are in- 
creasingly important to the U.S. 
economy as well as to American foreign 
policy. Access to reasonably priced 
energy supplies for ourselves and our 
allies, for example, is an essential com- 
ponent of our economic well-being and 
our security. The financial stability of 
our friends and allies has a direct bear- 
ing on our prosperity and our foreign 
policy interests. Trade issues are central 
to our relations with many countries, 
and trade expansion is increasingly im- 
portant to our economic growth. In-^ 
evitably, the Reagan Administration's 
domestic economic policies will affect - 
and will be affected by -international 

I would like to describe for you to- 
day some of the foreign economic policy 
priorities of the Administration. I will 
group them under five main headings. 

• Strengthening the U.S. economy 
and improving economic cooperation 
with the other industrialized democra- 
cies; these together are the cornerstones 
of our international economic policy; 

• Reducing the vulnerability of the 
United States and our friends and allies 
to disruptions in the international oil 

• Promoting open trade on the basis 
of fair and effective rules and helping 
U.S. exporters to take advantage of in- 
ternational trading opportunities; 

• Insuring a smoothly functioning 
international financial system -with an 
effective International Monetary Fund 
(IMF) -capable of facilitating recycling 
and adjustment and underpinning ex- 
panding trade and investment; and 

• Building durable and mutually 
beneficial economic ties with developing 
nations based on a greater private sec- 
tor role and supported by an effective 
and adequate foreign assistance pro- 

Strong U.S. Economy and 
International Cooperation 

A strong American economy and close 
cooperation with other industrialized 
democracies are the cornerstones of 
TJ S international economic policy and 
our foreign policy as well. The success of 
the President's program to reduce infla- 
tion through increased investment and 
productivity growth will give this 
nation's competitiveness a powerful 
boost. It will also facilitate adjustment 
to high energy prices, which will lead to 
more efficient use of oil, and enable us 
better to adjust to changing market con- 
ditions, which will reduce protectionist 
pressures. It will lead to sustained, low- 
inflation growth at home, thereby im- 
proving economic prospects and lower- 
ing interest rate pressures abroad. And 
it will permit us to generate strong 
domestic support and adequate re- 
sources for our security and foreign 
assistance programs. 

We and our industrialized country 
partners recognize that our economic 
and foreign policy prospects are inex- 
tricably linked. And while differences ot 
approach or emphasis often receive the 
preponderance of public attention, the 
fundamental interdependence of our 
economies and the similarity of our in- 
ternational and domestic objectives 
make cooperation among us imperative 
and attempts to work at cross-purposes 
patently futile and unproductive. 

The prosperity of our major trading 
and financial partners will directly in- 
fluence our own. In addition, it will im- 
prove their ability to muster resources 
and public support for contributions to 
the Western security and economic as- 
sistance effort. The energy performance 
of these nations, like our own, will have 
a direct impact on the world oil market, 
on which we and they continue to be 
heavily dependent. Our mutual efforts to 
reduce oil imports will in turn benefit us 
all A common policy toward economic 
relations with the Soviets can balance 
our commercial and our security con- 
cerns and enable us to respond de- 
cisively to such provocations as the inva- 
sion of Afghanistan. Our nations can 
benefit from a common, constructive ap- 
proach to the developing nations, insur- 
ing that as we attempt to meet their 
interests, they respect ours. And we to- 
gether must find new types of coopera- 
tion in research and development to 


Department of State Bulletin 


bring to our societies and the world the 
benefits of the prodigious talents of our 
peoples and the potential of our tech- 

Energy Policy 

The international energy situation repre- 
sents the single greatest threat to the 
well-being of this nation, and most 
others, in this decade. It makes our 
economies vulnerable to disruptions and 
our foreign policy and alliances vulner- 
able to threats. 

Strong national and international 
efforts are required to reduce the 
unhealthy dependence of the United 
States and our economic partners on im- 
ported oil. We have already seen how 
rapid oil price rises and occasional sup- 
ply interruptions play havoc with eco- 
nomic growth and inflation and sow 
discord among friends. 

Due in large measure to efforts to 
reduce oil use in the face of sharply in- 
creasing prices and supply insecurity, 
U.S. imports of oil have declined dra- 
matically to 6.3 million barrels per day 
(b/d) from their highs of 8.6 million b/d 
in 1977. But we cannot allow this prog- 
ress, or the present softness in the oil 
market, to lull us into complacency. 
Much more remains to be done to reduce 
our vulnerability. 

The President's decision to decontrol 
the price of domestic oil, coupled with 
the legislatively mandated phased dereg- 
ulation of natural gas prices, are essen- 
tial steps in eliciting increased produc- 
tion and discouraging inefficient use of 
energy. The Administration is also in- 
creasing its efforts to resolve regulatory 
and institutional problems inhibiting the 
use of nuclear power and will reform 
regulatory policies to promote greater 
production and use of other energy 
resources, particularly coal. And we will 
explore— in the International Energy 
Agency (IE A) and at the Ottawa eco- 
nomic summit— ways to reduce impedi- 
ments to the export and use of such 

Yet increased production and more 
efficient energy use in the United States 
addresses only part of the energy prob- 
lem. Supplies can be disrupted, as we 
have seen, by war and social upheaval 
and by national shortfalls caused by sud- 
den demand surges. The obvious ex- 
amples of these dangers stem from the 
Middle East; less visible is Western 
European dependence on the Soviet 
Union for substantial amounts of natural 
gas, which has the potential for 
unhealthy influence in a crisis. 

We and our allies are preparing to 
counter threats to our energy security 
through intensified national action and 
international cooperation. Nationally, an 
effective strategic petroleum reserve 
(SPR) is crucial. I am pleased to report 
that we have begun to fill the SPR at an 
annual rate of over 200,000 b/d and 
hope to reach a level of 750 million bar- 
rels before the end of this decade. This 
could offset the loss of 3 million b/d of 
U.S. imports for a full year. 

Internationally, the International 
Energy Agency is the prime forum for 
cooperation with other industrialized 
democracies. The IE A has an emergency 
oil allocation system, designed to 
counter significant shortfalls. This is the 
keystone of Western energy security 
policy. In addition, we have learned 
from the recent past that smaller, or 
even threatened, shortfalls can lead to 
harmful price rises. We and our col- 
leagues in the IEA must insure that in 
the event of supply disruptions, such as 
those which followed the Iranian revolu- 
tion, there is no repetition of sharp price 
increases, which could thwart our anti- 
inflation program. Nor can we permit oil 
to be used as an instrument of political 
pressure on our allies or friends. IEA 
consultations are underway to try to 
find appropriate contingency measures 
for these situations. 

We must also develop new sources 
of conventional and nonconventional 
energy. Good relations with reliable sup- 
pliers must be maintained, and a few 
might be encouraged to develop addi- 
tional excess capacity for use during 
supply interruptions. Investment 
climates need to be improved; 
discriminatory policies, such as those 
favoring domestic investment, can 
reduce optimal energy investment to 
everyone's detriment. 

And we will continue to help 
developing nations to reduce their 
dependence on imported oil. Their in- 
ability to do so can only lead to greater 
instability in the developing world, and 
disruptions in the international financial 
and trading systems. 


We now face challenges arising out of 
the success— in both foreign policy and 
economic terms -of the basic policies we 
adopted after World War II. Our goal 
then in establishing the General Agree- 
ment on Tariffs and Trade (GATT) and 
urging a more open and market-oriented 
trading system was to increase both 

world prosperity and international in- 
terdependence through the expansion of 
trade. World trade expanded fivefold 
between 1970 and 1980. By 1979 the 
average tariff levels in the developed 
countries had fallen to 10.6%. Cuts 
agreed to in that year, in the Tokyo 
Round of multilateral trade negotiations, 
will reduce them to 4.5%. 

At the same time, a number of new 
problems in the trade area have become 
increasingly important. In order to con- 
tinue into the future the expansion of 
trade, which has contributed so much to 
our prosperity and added stability to the 
international environment, we will have 
to deal with these. Our trade policy is 
based on several key elements: 

• Effective implementation of rules 
already negotiated; 

• Negotiating, or improving rules 
and understandings in new problem 
areas of trade policy; 

• Removal of domestically imposed 
disincentives to U.S. exports, and im- 
proved U.S. export promotion efforts; 

• A prosperous U.S. economy which 
promotes adjustment. 

First, we intend to insure effec- 
tive implementation of the "rules of 
the game" already agreed to. One of 

the major accomplishments of the Tokyo 
Round was to make a start at dealing 
with what I consider the key trade prob- 
lem of this decade— nontariff barriers. In 
an era of relatively low duties, these act 
as the major impediments to interna- 
tional trade. The "codes" agreed to dur- 
ing these negotiations are being put into 
effect. We will insist that our trading 
partners live up to the spirit and the let- 
ter of these agreements; we know that 
they will expect the same of us. We will 
use these same agreements, now em- 
bodied in U.S. law, to insure that our 
firms and workers are protected against 
unfair trade practices by other coun- 

Second, we will endeavor to 
negotiate or improve rules to deal 
with new trade problems. A number of 
areas important to U.S. trade interests 
hitherto have not been the subject of 
much international discipline. One good 
example relates to trade in services. 

Trade in services is an increasingly 
important component of U.S. exports. 
U.S. service exports have grown nearly 
400% since 1971 and are continuing to 
grow at a rapid rate. Here at home, our 
services industries provide employment 
for about 70% of the U.S. workforce. 
Given these statistics, there is no 

July 1981 



wonder that U.S. trade representative 
Brock recently stated that "service trade 
is the frontier for expansion of U.S. ex- 

At present, no coherent interna- 
tional framework exists for resolving 
trade problems in services. The 
Organization for Economic Cooperation 
and Development (OECD) in Paris has 
several ongoing projects to identify bar- 
riers to such trade. The United States 
strongly supports this work. 

We will seek a political endorsement 
in June from OECD ministers to con- 
tinue and to emphasize the ongoing 
work on services. In the longer term, we 
hope to pursue liberalized trade in ser- 
vices in multilateral negotiations. If we 
are successful, the insurance industry 
will reap substantial benefits. In the in- 
terim, we will continue to utilize existing 
bilateral channels for resolving specific 

Another challenge we must meet 
stems from the increasingly important 
role of the developing countries in world 
trade. Our trade with the developing 
countries has expanded rapidly over the 
past decade: imports by 25% per year, 
exports by 18% per year, compared with 
a 15% increase in trade with the 
developed countries. The developing 
countries as a group are now a larger 
market for U.S. exports than the Euro- 
pean Communities and Japan taken 

Within this group, a small number of 
countries often referred to as the "newly 
industrializing countries" account for 
three-fourths of developing-country 
trade with the United States. We seek 
to integrate these more fully into the in- 
ternational trading system. This involves 
insuring that they undertake obligations 
commensurate with their stage of 
development. This will help insure that 
the poorer developing nations are 
treated in ways appropriate to their less 
advantaged positions. 

In addition, we will want to insure 
that the international community 
vigorously addresses investment incen- 
tives and performance requirements, 
such as those which mandate local con- 
tent or exports as a percentage of pro- 
duction, and thereby distort trade. Both 
developed and developing nations will 
also need to avoid the temptation to 
negotiate bilateral deals to "lock up" sup- 
plies of raw materials or energy in 
return for commitments of investment 
or market access in processed goods. 
These practices serve to undermine the 

multilateral trading system and con- 
tribute to intense international friction. 

Finally, we will press hard for 
agreement to significantly reduce, and 
hopefully eliminate, the subsidy element 
in government export credits. The large 
subsidy element in the export financing 
of many countries is a waste of scarce 
resources. It is practically absurd when 
one considers the fact that a large por- 
tion of the benefits of this folly go to in- 
dustries in Eastern Europe, which com- 
pete with us, and the subsidy is paid by 
the Western taxpayer. 

Third, removal of export disincen- 
tives and improved U.S. export promo- 
tion efforts are necessary components 
of U.S. trade policy. For too long we 
have failed to recognize the cumulative 
adverse impact on U.S. exports of in- 
hibiting U.S. regulations and laws. The 
trend will be reversed. In this connec- 
tion, the Administration supports the ex- 
port trading company bill now before 
the Congress, as well as legislative ac- 
tion to modify the Foreign Corrupt 
Practices Act and to reduce the income 
tax burden on Americans working 
abroad. We need also to use the 
resources of State, Commerce, and 
Agriculture Departments more effective- 
ly to promote exports. I can assure you 
that the Department of State and U.S. 
ambassadors abroad stand ready to 
vigorously support U.S. exporters. 

Underlying a successful U.S. trade 
effort must be a successful domestic 
economic policy. Our efforts to continue 
the progress made so far in developing a 
more orderly trading system and our 
efforts to respond to new competitive 
challenges will ultimately fail unless they 
are backed by a vigorous U.S. economy. 
We often are critical of Japan's vigorous 
export efforts. And it is true that Japan 
is frequently insensitive to the impact of 
their exports on others and that it has 
not fulfilled adequately its responsibility 
to open its economy to others. 

But we should never lose sight of 
the fact that Japan's rates of savings 
and investment, its productivity in- 
creases and its technical innovations, 
are, more than any other factors, the 
reasons for its success. Unless the 
United States can reverse its weakening 
productivity, savings, investment, and 
research and development picture, even 
the most aggressive export promotion 
effort will be fruitless. And the self- 
defeating notion will take hold that the 
United States cannot compete and 
should, instead, shelter itself from 
foreign competition. Improved growth, 

investment, and productivity perfor- 
mance will, on the other hand, facilitate 
our ability to adjust to and compete in 
dynamic international markets. 

International Finance and Investment 

In an increasingly interdependent world, 
the smooth operation of the financial 
system is as essential to world prosperi- 
ty as is trade. The two proceed hand-in- 
hand. Two aspects of international 
finance have an especially important 
bearing on our broader economic and 
foreign policy interests. 

Role of the IMF. The first is the 
central role of the IMF in the "recycling" 
process. The 1979-80 oil price increase 
has allowed the Organization of 
Petroleum Exporting Countries (OPEC) 
to build current account surpluses, 
which reached about $120 billion last 
year. The counterpart to this enormous 
surplus was a $50 billion deficit among 
the industrialized countries and a $70 
billion deficit among the non-oil develop- 
ing countries. 

It is expected that the OPEC 
surplus and the industrialized countries 
deficit will moderate this year. The com- 
bined current account deficit of the non- 
oil developing countries, however, may 
reach $100 billion this year, and this 
prospect raises questions about the 
future financial stability of these coun- 
tries. Many of these countries have not 
adequately adjusted their domestic 
economic policies to the last round of oil 
price increases. Essentially, they have 
tried to finance growth, as many did 
successfully during the mid-1970s, 
through domestic credit expansion and 
external borrowing. 

What distinguishes the current situa- 
tion from that of the mid-1970s is that 
interest rates are now three times what 
they were and debt service costs now 
absorb 20% of the developing countries' 
export earnings, up from 13% in the 
mid-1970s. Private financial markets 
have thus far been able to channel ade- 
quate funds to deficit countries and un- 
doubtedly will continue to play the 
predominant role in the recycling pro- 
cess. And the International Monetary 
Fund, through access to its own 
resources and its influence on the 
judgments of the private market, has 
effectively supplemented this for coun- 
tries attempting to adjust in order to 
reduce serious payments imbalances. To 
strengthen its efforts, the IMF is in- 
creasing its resources— in part through 


Department of State Bulletin 


borrowing from OPEC and tailoring its 
conditionality guidelines to current re- 

The United States is encouraging 
this expansion of the IMF's role and 
resources. We believe it is especially 
well placed to encourage countries to ad- 
just their economic policies to current in- 
ternational realities. And this effort will 
also involve OPEC countries with a very 
constructive form of recycling. 

U.S. Investment Policy. The second 
aspect is U.S. investment policy. This 
Administration believes that market 
forces rather than government fiat 
result in the most efficient distribution 
of investments. This Administration will 
not seek to influence the decision of an 
investor as between investment at home 
and investment abroad. But when a firm 
has decided to invest abroad, the U.S. 
Government will provide maximum sup- 
port: such as making available informa- 
tion on market prospects, facilitating 
contacts with appropriate officials, and 
supporting company efforts to resist un- 
fair treatment. Our policy calls for in- 
sistence on national treatment for U.S. 
enterprises abroad -i.e., that such enter- 
prises be treated no less favorably than 
local investors; and for prompt, ade- 
quate, and effective compensation in the 
event of expropriation. 

In those countries where they exist, 
we will encourage removal of unjustified 
impediments and disincentives to foreign 
investment -for example, in the tax and 
regulatory area. Our objective is not to 
force countries to accept U.S. invest- 
ment but to insure that where in- 
vestments are made, they are given 
equitable treatment. One of our major 
economic goals will be to win sup- 
port—by working bilaterally through 
bilateral investment treaties and 
multilaterally in the OECD and United 
Nations— for the goal of an open and 
fair investment system. 

Support for Economic Development 

The last area of the Administration's 
foreign economic policy I would like to 
discuss with you today is our approach 
to economic development. The most visi- 
ble part of our policy in this area is 
foreign aid. You are all familiar with the 
grim poverty which is a fact of life in 
many parts of the developing world and 
with the traditional humanitarian con- 
cerns which have been a strong 
motivating element in our aid policy 
from the start. Our aid programs also 

serve other interests which have been 
less prominent in our public discussions 
of foreign assistance policy. They bolster- 
countries of strategic importance to the 
United States -notably in the Middle 
East. They are part of our relations with 
countries which supply critical raw 
materials. The economic expansion they 
support reduces the likelihood of long- 
term social instability in certain coun- 
tries and increases market opportunities 
for U.S. goods. 

The Administration intends to insure 
that our policies in this area accord 
closely with our tangible economic and 
security interests in developing coun- 
tries. Our aid allocations will reflect 
these interests as well as our 
humanitarian concerns. Historically, our 
aid has been extended both as direct 
bilateral assistance and through multi- 
lateral institutions. We are examining 
the balance between these channels, in 
an attempt to insure that our choice of 
aid tools reflects the different interests 
our aid programs should serve. 

The overall magnitude of our aid 
contributions will be affected by the Ad- 
ministration's economic policies, and, in 
particular, by the drive to reduce 
Federal budget expenditures. Conse- 
quently, this is a good time to recall that 
our policies toward economic develop- 
ment include other elements besides aid. 
In fact, while aid is the most important 
contribution we can make to many of 
the poorer countries, other elements of 
policy play a greater role in promoting 
the prosperity of many other developing 
nations. I would single out: 

• Open markets and smooth adjust- 
ment to the exports of developing coun- 

• Domestic economic policies that 
facilitate overall growth; and 

• Access to capital markets. 

We have dramatically increased our 
imports of developing-country manufac- 
tured goods over the last decade. U.S. 
imports from developing countries in 
1978 were nearly nine times our official 
aid flows. The same type of relationship 
holds for all the Western aid-giving na- 
tions as a group. U.S. direct investment 
in the developing countries runs at or 
above the level of aid, and private 
capital markets provide bank loans and 
bond issues in an amount which far ex- 
ceeds that of development assistance. 

These factors suggest that we 
should pay greater attention to the role 
of the private sector in the development 
process. They also suggest that a 

favorable climate for investment, for at- 
tracting capital flows, and for encourag- 
ing exports without trade-distorting 
subsidies -will be increasingly important 
in this decade. The Administration, in 
consultation with the business communi- 
ty, is reviewing what we might do to 
facilitate private sector involvement in 
the development process while fully 
respecting its private character. 


Let me conclude by trying to pick out a 
few guiding themes for U.S. foreign 
economic policy. 

First, we need to recognize the 
domestic impact of international 
economic policy, the international impact 
of domestic economic policy, and the 
essential relationship of both to our 
foreign policy and security interests. 

Second, the Administration believes 
in the efficiency of the marketplace and 
has considerable skepticism about the 
effectiveness of government efforts to 
supplant it. This belief will affect our 
views on the policy tools appropriate for 
pursuing our economic objectives. 

Third, close ties between the 
government and the private sector are 
essential in helping us develop and im- 
plement our international economic 
policy. Likewise, close cooperation with 
the Congress is essential. As interna- 
tional economic policy becomes increas- 
ingly important to our domestic 
economy and to our international 
political and security interests, so effec- 
tive cooperation among the executive 
branch, Congress, and the private sector 
become imperative in the making of that 

Fourth, we are persuaded that the 
more effective integration of the various 
considerations which affect economic 
policy is essential to our well-being, both 
economically and politically. Energy 
security, vigorous exports and open and 
fair trade, a world investment climate 
which encourages the development of 
productive enterprises, smoothly func- 
tioning financial markets, and the sound 
economic expansion of the developing 
countries— these are the key re- 
quirements for an improved U.S. and 
world economy. They also are essential 
contributions to world peace and fruitful 
political relations among countries. ■ 

July 1981 



U.S. Subscription to the World Bank 

by Ernest B. Johnston 

Statement before the Senate Foreign 
Relations Committee on April 21, 1981. 
Mr. Johnston is Deputy Assistant 
Secretary for Economic and Business 
Affairs. 1 

I appreciate the opportunity to appear 
again before the committee to discuss an 
important part of President Reagan's 
foreign assistance program: the U.S. 
subscription to the $40 billion general 
capital increase of the World Bank [In- 
ternational Bank for Reconstruction and 
Development (IBRD)]. 

For over 35 years, World Bank 
loans to countries of importance to the 
United States have raised productivity, 
stimulated economic growth, and con- 
tributed to political stability. For exam- 
ple, in its early years, the Bank was in- 
strumental in raising capital to rebuild 
the war-torn economies of Western 
Europe and Japan. Today, these coun- 
tries are again strong and prosperous 
and are key members of the Western 
alliance. They are also major con- 
tributors to the ongoing work of the 
World Bank. 

Promoting Economic Progress 

More recently, the World Bank has con- 
centrated on the difficult task of foster- 
ing economic growth in the developing 
nations. Here, too, its lending has made 
a difference. Partially as a result of its 
work, the economies of such key coun- 
tries as Finland, Greece, Iceland, 
Ireland, Singapore, and Spain have pro- 
gressed to the point where they no 
longer need Bank assistance. We expect 
other major borrowers will also 
graduate from Bank lending during the 

One reason for the Bank's success in 
promoting economic progress is that it is 
fundamentally a market-oriented institu- 
tion engaged in lending for development. 
It is not a welfare agency. Its projects 
must generate a stream of goods and 
services which exceed in value the cost 
of the resources utilized. They should 
also stimulate further growth by 
creating the conditions for additional in- 
vestment, both private and public. The 
Bank is by far the largest multilateral 
development institution. Although it lent 
about $7.6 billion in 1980, it provides 
barely 1% of total investment in the 
developing countries. Therefore, if it is 

to be effective, it must act as a catalyst 
for development. A few examples of 
projects financed by the Bank in 1980 il- 
lustrate the point. 

• The Bank lent $63 million to 
Brazil for a rural development project 
with a total cost of $184.6 million. The 
funds will be lent to about 30,000 small 
farmers and 1,100 nonfarm enterprises. 
In addition, the project will provide im- 
proved agricultural extension services. It 
is expected that the value of the produc- 
tion of the small farmers will increase by 
about $30 million annually in constant 

• In Indonesia, a $116 million bank 
loan will help to increase the production 
of basic food crops by about 234,000 
tons a year. In addition, 800,000 farm 
families will benefit from improved ir- 
rigation, drainage, and flood protection 
systems. The total project cost is $186.7 

• A $60 million loan to Korea will 
be relent to small- and medium-sized 
private companies to meet the foreign 
exchange costs of their investment proj- 
ects. The loan supports the 
government's policy of promoting a 
greater regional dispersal of employ- 
ment opportunities. Twenty-five million 
dollars is earmarked for small, labor- 
intensive ventures. 

• In Swaziland, a $10 million loan, 
combined with $5 million in local fund- 
ing, will improve the access of rural and 
underprivileged children to education by 
financing the construction of 31 primary 
and 6 secondary schools, as well as pro- 
viding textbooks and teacher training. 
The loan will create 11,000 new places 
at the primary level and 2,600 places at 
the secondary level. 

• A $15.5 million loan to Fiji will 
reduce the country's dependence on im- 
ported energy by doubling the size of a 
dam and financing the costs of addi- 
tional generating equipment. The total 
project cost is $50 million, with bilateral 
donors providing a good part of the rest 
of the funds. 

• A Bank loan of $42.5 million to 
Tunisia will provide one-third of the 
funds necessary to expand two ports so 
that they can efficiently accommodate 
traffic up to the year 2000. The funds 
will be used to dredge access channels; 
construct new quays, jetties, and 
warehouses; and purchase cargo- 
handling and workshop equipment. 

Promoting Rational Use of Local 

The World Bank does more than lend 
development capital. For most of its bor- 
rowers, it is also an influential adviser 
on economic policy. With its substantial 
financial leverage, particularly through 
the use of program loans, the Bank en- 
courages developing countries to follow 
policies based on the workings of the 
market and the rational use of local 
resources. This serves our long-term in- 
terests because it promotes economic ef- 
ficiency and, thus, growth and stability. 
It also leads to a more open interna- 
tional economy from which developing 
and developed nations — including the 
United States — can benefit. 

The general capital increase will 
double the resources available to the 
Bank from $40 billion to about $80 
billion and permit it to continue its im- 
portant work through the mid-1980s. 
Although our share will amount to about 
$8.7 billion, or 22% of the total, the ac- 
tual cost to the United States is relative- 
ly small. This is because the other donor 
countries, many of which used to borrow 
from the Bank, will provide several 
times more than we do. The budgetary 
cost is sharply reduced because only 
7.5%, or $658 million, of our total 
subscription will be paid in cash. The 
rest will be in the form of callable 
capital guarantees. These would be used 
by the Bank only if it could not other- 
wise repay its debts. 

In over 35 years, the Bank has 
never made a call, and the chances of it 
doing so in the future are extremely 
remote. The reason is that the Bank's 
loans are based on sound economic per- 
formance criteria and on adequate rates 
of financial and economic return. As a 
result of this leveraging, each dollar the 
United States pays in to the capital in- 
crease will support up to $65 in loans tc 
promote economic growth and stability 
in the developing world. 

Maintaining U.S. Leadership 

I want to stress the importance that the 
U.S. subscription to the increase must 
not be cut. We have already made the 
only cut that could responsibly have 
been made. We plan to stretch our 
subscription over 6 years instead of re- 
questing appropriations and program 
limitations for the full amount in FY 
1982. This will reduce the impact on the 
FY 1982 budget by $548 million. But ar 
propriation of the full $658 million over 


Department of State Bulletii 


S.708: A Viable Foreign Corrupt 
Practices Act 

by Ernest B. Johnston 

Statement before a joint hearing of 
the Subcommittees on International 
Finance and on Securities of the Senate 
Committee on Banking, Housing, and 
Urban Affairs on May 20, 1981. Mr. 
Johnston is Deputy Assistant Secretary 
for Economic and Business Affairs. 1 

Thank you for allowing me to comment 
to the subcommittee on S.708 and to ex- 
press the State Department's support 
for that bill. We believe S.708 will lessen 
some of the undesirable consequences of 
the current Foreign Corrupt Practices 
Act, which create problems in our 
foreign relations and unnecessarily cut 
down U.S. exports. 

Bribery by American citizens and 
firms works against the foreign interests 
of the United States. It harms the good 
name of this country, and it is contrary 
to the principles which our people hold 
dear. Though corruption may be more 
prevalent in some countries than it is in 
our own, Americans do not wish to have 
our citizens associated with it. 

Corruption of foreign officials is not 
in the long-run interest of our com- 
panies. Bribery does not add to the 
number of goods being produced. It does 
not increase the goods being consumed. 
It is a cost which either must be shaved 
off profits, passed on to the consuming 
public, or shared — for the enrichment of 
particular individuals at the cost of 

society. Such payments can also corrode 
political stability and good relations. 

Side-Effects of the 1977 Act 

The 1977 act has had three undesirable 
and, in some cases, unintended side- 

First, many U.S. firms do not clear- 
ly understand which acts are proscribed 
under the Foreign Corrupt Practices Act 
in its present form. This has caused 
some companies to retrench their export 

Second, it has placed U.S. firms at 
a disadvantage in relation to their 
foreign competition. 

Finally, investigation and prosecu- 
tion tend to raise extraterritorial issues 
which are difficult to reconcile with 
widely varying local laws and customs. 

Reports from our Foreign Service 
posts indicate the act has had a restrain- 
ing effect on U.S. exports, although the 
amount is impossible to quantify. Con- 
gress envisaged that some exports 
would be lost as a consequence of the 
act. However, ambiguities associated 
with the act also have caused law- 
abiding firms to forgo legitimate and 
profitable transactions. Business ex- 
ecutives frequently err on the side of 
caution, often on the advice of counsel, 
in order to avoid any possibility of a 
violation of the act. For example, last 
year our Embassy in Muscat reported 

the next 6 years is necessary if we are 
to honor our commitments to our allies 
and to the developing countries. To do 
less would risk a permanent loss of our 
veto over amendments to the World 
Bank charter and a relinquishment of 
the U.S. leadership role in the Bank. 
This must not occur. 

I want to mention completion of the 
authorization for U.S. participation— as 
negotiated— in the fifth replenishment 
of the Inter-American Development 
Bank and the second replenishment of 
the Asian Development Fund. Apart 
from the value of the work of these 
regional institutions, full participation is 
very important because if we expect 
others to keep their promises to us, we 
must surely meet our agreements with 

As I stressed in my March 25 state- 
ment, the Administration is committed 

to an all-out effort to pass the legislation 
in support of the multilateral develop- 
ment banks. This bill is particularly im- 
portant because: 

• It will improve the prospects for 
economic growth and political stability in 
developing countries and thereby help 
our security and well-being; 

• It will contribute to expanded in- 
ternational trade and investment; 

• It is cost-effective; and 

• It reaffirms the willingness of the 
United States, even in a time of severe 
budgetary strictures, to continue in a 
strong international leadership role. 

'The complete transcript of the hearings 
will be published by the committee and will 
be available from the Superintendent of 
Documents, U.S. Government Printing Of- 
fice, Washington, D.C. 20402. ■ 

that a U.S. firm apparently lost a 
$20-$30 million deal largely because of 
delays caused by a lengthy internal 
review to determine the application of 
the act to the proposed transaction. 
Clarifications contained in S.708 regard- 
ing proscribed acts will greatly facilitate 
the ability of Americans to make timely 
decisions and to compete more effective- 


The second side-effect derives from 
the fact that while U.S. firms are con- 
strained by U.S. laws, foreign firms may 
operate without such restraints. There is 
no other exporting country with a law 
which has the extraterritorial reach of 
the current act. The current act, because 
of its broad sweep and lack of clarity, 
also gives the impression that American 
business is basically corrupt and a great 
corrupter of others. S.708 should lessen 
somewhat the unjustified competitive 
edge which foreign firms have enjoyed. 

Finally, the 1977 law attempted to 
lay down strict rules for our firms but 
failed to take sufficient account of vary- 
ing national standards. Charges against 
a U.S. firm may bring into question the 
honor and integrity of local officials 
without regard to local laws and 
customs. Simply put, the problem is one 
of balancing two competing interests: 
restricting potentially harmful business 
practices overseas by U.S. firms while 
refraining from imposition of our own 
standards on others. The approach in 
S.708 achieves such balance by ex- 
cluding actions which are legal in a 
specific country and by permitting 
customary, lawful payments to facilitate 
or expedite transactions. It will go far to 
meet the genuine concerns of our 
business people, while reducing our own 
censorious judgments on standards 
other countries choose to set for 

Sections 2 (B)(5) and 10: Illicit 
Payments Agreement 

The State Department agrees complete- 
ly that we must continue to seek a solu- 
tion at the international level. The 
United States has vigorously pressed the 
negotiation of an international agree- 
ment on illicit payments since 1976. 
Although a U.N. Economic and Social 
Council (ECOSOC) committee completed 
lengthy preparatory work on a largely 
agreed-upon draft agreement on illicit 
payments in 1979, the ECOSOC and the 
U.N. General Assembly have each failed 

July 1981 



for 2 consecutive years to take any ac- 
tion to conclude an agreement. This was 
largely due to the insistence of the 
developing countries on linking an illicit 
payments treaty with the code of con- 
duct for transnational corporations. The 
United States and its major Western 
allies consistently opposed such linkage. 

At the Venice economic summit in 
June 1980, the U.S. Government made a 
commitment to work in the United Na- 
tions toward an illicit payments agree- 
ment but, if that effort faltered, to seek 
to conclude an agreement among the 
summit countries, open to all, with the 
same objective. 

After the fall of 1980, the General 
Assembly failed to reach agreement on 
the treaty. The U.S. representative 
stated that the United States intended 
to consult with other interested states 
regarding alternative means of achieving 
a treaty outside the United Nations. The 
Administration has been considering the 
best way to proceed to secure such an 
international agreement, and we intend 
to confer with other interested nations 
in the coming months. 

While we cannot now predict the 
final form of any international agree- 
ment, we will strive for positive en- 
forceable, objective criteria that can be 
clearly applied by governments and 
adhered to by business. Legislation 
along the lines of S.708 will significantly 
enhance our efforts to achieve this objec- 

The sense of the Congress will be an 
important force in our efforts. The 
Department of State has noted the 
language in the bill regarding reports to 
the Congress, and I can assure you that 
we intend to consult fully with you. 

I am pleased to associate the 
Department of State with the Ad- 
ministration's support of this bill. We 
look forward to continuing dialogue with 
Congress as this legislation moves for- 
ward. S.708 provides a more realistic 
standard for U.S. corporate activities 
overseas, will alleviate an impediment to 
U.S. exports, and will enhance our 
efforts to reach an acceptable interna- 
tional arrangement on illicit payments. 

International Investment Issues 

■The complete transcript of the hearings 
will be published by the committee and will 
be available from trie Superintendent of 
Documents, U.S. Government Printing Office, 
Washington, D.C. 20402. ■ 

by John T. McCarthy 

Statement before the Subcommittee 
on Mines and Mining of the House In- 
terior and Insular Affairs Committee on 
May 7. 1981. Mr. McCarthy is Acting 
Deputy Assistant Secretary for 
Economic and Business Affairs. 1 

I am pleased to be here today to present 
the State Department's views on inter- 
national investment issues as they relate 
to H.R. 2826 which is now before the 
committee. The United States has long 
favored an open international invest- 
ment climate which we believe has 
served us well by facilitating capital 
flows and promoting the efficient alloca- 
tion of resources throughout the world. 
When capital is free to move without 
hindrance, all nations can benefit 
through expanding world output. The 
State Department is concerned with the 
implications of the proposed legislation 
for U.S. policy in three areas: invest- 
ment, energy, and strategic materials. 
Because H.R. 2826 legislation would 
have a direct impact on investment in 
certain sectors of the U.S. economy and 
a potential impact on U.S. investment 
abroad as well, I would like to begin 
with brief remarks on the overall U.S. 
posture toward foreign investment. 

U.S. Investment Policy 

U.S. policy for many years has been the 
same for both inward and outward in- 
vestment — the United States neither 
promotes nor discourages international 
investment flows or activities. This does 
not imply lack of interest toward inter- 
national investment; we believe that in- 
creasing levels of global investment are 
essential for all economies to grow and 
prosper. It means, however, that we 
seek to minimize government interven- 
tion in the decisionmaking process 
related to individual investments. 

This policy rests on our belief in an 
open international environment for 
global economic relations in which 
market forces rather than government 
fiat result in the most efficient distribu- 
tion of investments. Such a policy calls 
for U.S. application of the general prin- 
ciple of national treatment for foreign 
enterprises — i.e., foreign enterprises are 

treated no less favorably than U.S. in- 
vestors in like situations. This is a cen- 
tral element of both our bilateral rela- 
tionships — in particular under treaties of 
friendship, commerce, and navigation 
and our multilateral relationships — 
especially in the Organization for 
Economic Cooperation and Development 
(OECD) — and we attempt to promote 
the broadest possible acceptance of the 
principle of national treatment by other 

Government Protection 

Among the benefits of increased direct 
investment flows are more jobs, more 
capital, transfers of new, improved 
technology and management skills, in- 
creased production, and greater com- 

The government has means of 
overseeing investment in order to pro- 
tect national security and other vital in- 
terests. U.S. law provides a number of 
safeguards which are designed to pro- 
tect our essential security and other in- 
terests. The vast bulk of this legislation 
is nondiscriminatory, applying equally to 
all investment in the United States 
regardless of the nationality or owner- 
ship. Some of these laws do constitute 
exceptions to national treatment but are 
widely recognized as legitimate restric- 
tions justified on essential security or 
other grounds. 

Foreign investment is restricted, for 
example, in sectors of the U.S. economy 
relating to national defense, nuclear 
energy, transportation, and exploitation 
of federally owned land. A number of 
states also have their own limited 
restrictions on foreign investment in 
such areas as banking, insurance, and 
land ownership. And, of course, the Con- 
gress has provided the President with 
extensive authority and policy guidance 
on the control of both imports and ex- 

In addition, the U.S. Government 
monitors trends in foreign investment 
through the Committee on Foreign In- 
vestment in the United States. The pur- 
pose of this group, chaired by the 
Treasury Department, is to monitor the 
impact of inward investment, including 
the review of foreign investments which 
might have major implications for U.S. 
national interests and to coordinate U.S. 
policy implementation. The committee 


Department of State Bulletin 

Countries of the World Classified Economically 

This atlas divides the world's nations in- 
to the following three economic groups: 

Developed market economies— 

technologically advanced countries 
where the private sector is dominant; 

Centrally planned economies— 
U.S.S.R., Eastern European countries 
(except Yugoslavia), and other countries 
with state-run economies tied to the 
Soviet bloc; and 

Developing market economies— 
relatively underdeveloped countries 
trading primarily with developed market 

China is in a separate category 
because of economic reforms currently 
under way and the special character of 
its foreign economic relations. 

The threefold classification is widely 
used, partly because it reflects the ac- 
tual economic blocs that have formed 
since the end of World War II. 
However, there is no settled usage as to 
names and which countries belong in 
each category. Each international 
economic organization has its own ter- 
minology and modified classification 


Developed market economies 

Developing market economies 

Centrally planned economies 

China: evolving toward market 


u3' ( 

The Bahamas 

Dominican Republic 
St Lucia 
St Vincent and 
the Grenadines 
/// ^Barbados 


n . ' Guyana 

r Grenada 
Trinidad and 
— Tobago 














Ireland United NeUV y ' D , 
CHKiftgdom j, G'DR™ 3 ' 
< Lux F R G-prech 

France Switz Aus H 


Tunisia, M . 
■Morocco Mana 

Sahara »,„ ria 

Algeria Libya 


'"*<* Cyprus Syria 

lran Afghanistan 
lay /—Kuwait 




lsraet Jordan^ C 

Bahrain Pakistan 


Arabia Ojrian 
Mal ' Niaer -Yemen Y ei, - 

.7 /-The Gambia « Chad Sudan ,Sanaa) (Aden) 

Guinea ^Z Benin D„bou.i 

'7„ .Togo'f" 3 CAR E,h '°P ia 

Coast .. - * Cameroon 

Uganda Somalia 

Gabon Rwanda Ken V3/ 
-Congo - Burundi 

Tanzania Seychelles 

Angola Malawi a 


■J /--Madagascar 
».«..».. " Zimbabwe 

' Mauritius 

Botswana -,Mozambid,ue 

Sou,h Lesotho 

Nefi al Bhutan 


Burma.K"J J -J^ ■' "C"°" 9 "°'"" u 

Laos' ,*. '-M.cBulPorl l 

i -Tti$lland'; , S; etnam 

Sri Lanka 

4 f 




Ghana- 1 

Sao Tome and 

■Sierra Leone 

, V~N^ Papua 
Indonesia NewGuine 

"■." i>* 







Zealand y 


Boundary representation is not necessarily authoritative 



o o 

o o o o o 




cm a> 

CM CO -3- O r-- 


O) O 


n in m n n 




in cm 

*- O O O O) 




























co c 


i3 E "to 




< -r 

■Q Is c "g w 





"O CD 

c 5 

p « CD O -o 
m E "O »- CD 

3 a> S» c 





^O Z) w 




1-1 '5 '* 

^ -I 

cO -o 


o 2:= 
en *^ .b 
& <» c 

CO - CD 

— ' Oh -* 

• ZC 

5o 2 

co 3 



Q s 

- - CD 

9 fso 

£3 ct> — 

lil = 

CO CO 0) ^ 
n --Jig. 

-° r^ M 

i -£h IS • 
Sio h cu © 

in °"i 
11 j° 5 

a S * 

5 o cB 

CO .— c 
Oh C 8« 

■^ -y cu 

6 5 > 

* — - a at 



O. „. M 

<S & =- 
c -a 

o Oh c 

co CO O 
CO -J O 
O o.'XS 


^ en 

c y 

o ? 
-rs ! - 



3 *~ 3 

gg § O 
O to O 

Oh -O 

fi ° 

O bo 


c o 

1-, CD 

cO 3 
<D "3 

j= CJ 
S bo 


o,'-S o 

O cf g 


o en 

H T3fc 
§ £Z 


a > 

2 j<j 


CO so- 

Ih o 



O. <U 

en x: 

CD -»-> 
o . 

2 ft; 


en i— < 




























y. ■ 

C o 
CO -S 

C73 T3 
O 0) 

U U 

o cp 
"- 1 a. 

g^ cp 

S to 














cS cO 

fa T3 

o cp 

CM to 

£ . 

,2 J. 

-fa 3 





3 >>-m 


00 o 


a> o 

^ § 


ft fc, 
ft CO 
3 cp 
co >, 










fa O -O 

S — «* 

to cO 3 

C c5 

co -tJ 

C T3 co 

O g 0) 
& * > 

cp i2 -^ 




£ ft a; 
fa cp s- 

_co ^ 




^ cy -p 
'co C C 
»} oi eg 
O^ c 
fc o +3 



3 co 

to c3 

S M 

o , 

u "c0 

■!-> u 

C 3 

co eg 
cp C 

ft^ 3 


a! 5 

■S c 
-2 -5 

M o 

o u 

C to 

62tj" cs _ cp "5 

12 co o ^^ fa a> «* 
_c0 t, OJ to o "O jj",-i -o 



CP CO tO^^j; U ^ jg 

b »i ib c^u u as- 

cpt,t0o,c0 4 - Jt -fa H 
>tOObftS"t0 3 

5 m cp a> "co 

05 -^' 


c o .£.22 

CP -i-i -i_> Sh . 

V V» ^ 

a _ 

.- c rt 

co *- 

CD O) 

*" co 

2 § 

— 1 
























a; .22 

±5 0) 

a - c 

a o 

o c 

co .ti c 

CD ^3 -3 
-O CO £ 

-£ .S <D 
Co O- — 

£ -u "* 

c -S i 
.- o J* 

c 5 






*-> O ' 
co *~r 
O <■£ 


a; cd 


.o _co 

'co CO ' 




w< E 

O 0) 

a c 


cd 53 

S » « 

u s 

CO -~ CO 

15 C M 

+j . * f- 

CD £ CO 

E B.E 


o „, 

S =: M 

0) o c 
^Xl in 
H co •- 

w a> "2 

0) _c o 

5 °3 
■C CD 

.S CO 

co .a 

s- E 
cu o 

" e 




CO £ 





r • 










++ • 





• • < 



• • 

• • 





*c» • * 


S L 












- • 




■ ' 

' . • 





• • 


• • 

»• — 


• •• 

• • 





'. 1 


• • 


CO # 


" t 




• • 

• • 







• • 







• ••»• 








































E "3 
^ £ 

CO -C 




3 CO 
CO *- 

A g 
xj ■■= 
c E 

CO __ 

- cu 

>- 3 
Oj <+h 

a. c 
o. o 
o c 

CJ , , 


« 3 



c ™ 
CO s- 

c 'S 

O A. 

u -" 


u e 
3 C 
-O 3 


a, E 

-° ^ 

CO - 

~_ Q> 
^ & 

- s 

J3 - 

- CD 

c/} CD 

CD J3 

Cu o 
§ IS 


>> 3 

c c 

C 3 

>-, o 

O s- 

T3 *° 
CD U2 

cd -r 

a . 


cu O _; 2J 

s., cu .y z3 

CO "D *~ C 
C cu c o 

£ o CO 

<" !P § 
!- CD -a s 

o y c£ 

^ c 

_S CO 

> co CO 



g E5 S 

S H co 


U Ul !fl 

« §'§ 3 E 

•g E a.3 g 

i; ;J- cu *j .E 

o cu .— J2 3 

W O 03,^ 

c ° t «° 

'7 S £ fe ca 
co *i 5 o o 

m CO cu .O £ 

to -° c a J* 

CD _c J O ^= 

1) ° ^ .- rj r 
™+j cu CD o 3 

(O C (0 


t rt •*- CJ> 

3 ° O T- 

CO -■= - _- 

n ° c C 



^ Q> — O 
£ ^ « Q. 

rac S o 

«5 II 

So oo 

CO -i* "- — 
CO S > CD 






"D co 








O cn 




>- c= 
° o 

J- 3 





o -o 









^ Q. 






3 ' 



CD , 
_c0 ( 










t a> 
he »h 
C 2 







ho CD 

c o .£ -c 

73 tuO g 

cO ■ 


CD en 

■ ■ CO 

CM _C 

CD -S 

-, a) 
t- "co ^ 3 

I « CO co 

I - CD 73 
i CO ft 3 

1 g-ftg 
?i-s co Sb 

-^- CD 
73 -C 

CD « 

co £ 

CD o 

co ,- 

CD — - 

S, C O 

CO Si r- 
CD p 


CO -^ 

§ bo 



3 >>"E 

ft?t2 -e 
co c c 

■- ■" CCJ 



CD <C 

« cci t3 .O 

cc t: CO 

=«£ 8 

O ctl 
. CD > 
>s i , c 

o * =3 

co O "^ 

. co -^ 
hp C _c 

§ fc <* 

c "S 

o c 

^ CD 

bo ft 
■§ * 

-^ 3 

^ CO 


? C 

o o 

,CM U 

CD . 

-tJ u 

CD "g « 

'SblS '5 
-Si & J= 


ft c 
3 co 
co "^ 

co " 


-a ■ 


-^ CO 
73 CD 
Si co 

j y o 
' .3 °< 

■ CD 3 
,-K ft 

i S »- 
j -O CD 




c C .2 
2 o -a 
E *3 c 

. co _co >— ! 

^"S S.B5 r 
,S 5 ftCO 

2^ °^ 

T3 +J "^ t— T 
T3-- Cp 
C "° 2 <D 

=« >>« " 

Si c — 

cd ,„- 5 

g<_co .-y 2 

-C cs 
o Si 


■S <D 

■C > 

3 u 

cr o 

— CD 

e sj >- cd 

2 Si.S "co 

«-> .22 c5 "O 

>aT3 03 +J 

73 i2 H D 

ho o § CD 

iSo 8h 

CO & 

• - .2 

5 ^ »- 


*4— i ^ 

CO j CO 

2 3.S 

15 -U 
CD - ? 73 

-C O- ^ 

_> o .S 

2 *- 73 

.S ° c 

CO ? _Q 

g ft 





c aj 

CO 73 

73 C 

^ C72 

co -a 

CO . — 

3 C 







2 S 

ft CD 
CO ft 

o - 


CO >> 

2 £ 


P o 


v £ 

o o 
ft o 

E he 

— ' c 
s- o 

0) c 

-^ s 

•4-3 TO 



£>e 1 

3 3 5 



« CD 

^t-t ^ ' 
O 03 


p a 

V > 


: . 

C3 f_. 




ft s- 

o < 




CO ^o 





c -3- 






N J I O < 

■ 2 





■ CO 











■ ■ 











s * 

O W 




a. **. 

CO ^. 

(J) CVJ 









;hina 17.0% 
izil 15.0% 

FAO, Production Yearbook, 1978 
UN Statistical Yearbook, 1979 




on figures in 
I on figures in 




• Based 

en ctj a i 
ni 0) V- " 


.2 o 

3 § 




o 2 fe 

c ^ S 

c o & 

c« a) 

u ft 


9 a; oj 


5 o o 

jj- ft+J 





- CD 

r/ j u ft^ a! 

- 1 P E o 

J-i CO 

H * 

O +J 

— 0) 

c .-y 

'3 .» 



™ 5 3 d 

_^^ 5 S 










— ' 



















3 -C 









o s^ o 

£ 3 * 

*" <D CO 





^^ — I c_j j_ 

" c a> 



CO ^» 





- C T3 


rt a> aj 

5"° c 

«1 „c 


m <^ "+-i 



Q co CO 


3 O 

-a j3 
o > 
u > 

ft w 




+J.S ft 

S c 
ft>— i 


3 O 

p .a 

C -C 
co ^ 

S2 3 

ft l- _Q 
co o 

c -a 2 

cfl CD £ 

I- J 1) 



2 I CD 

ET co S 
3. 2 ^ 

co i„ •— 

+j -a cd 
c S -c 

* °2 




3 • 

t*H O tD 
O _Q C 
fc, * ° 

* in C 
t « «! 






^-a 3 

« i s 

CD ? .2 


e« O 

-C ft 







-C J3 



^tf r 


cfl _cfl 

.2 15 

T3 ft 

* a* ° 

cp J^ 

O ft-w -y 

CD tD 

is o 

3 2 

co 3 
CD c 



(33 "C 

CD +j 

> P 

^ ft 


JS tD 

S s 

p s 



„ tD 

boj= -c 

' " P » Ifl 

_ (0 TJ CM ■ 



I 8 - 

C o 

EL m" 

- ° 
S e 

"^ o 

2 *~ 











2 S « £ # « g 

f % ■> o n P 

5 M * * -« w 

1? ? » J«n tcq 

■ ■ 5 u! s l*|s 





S m 
2? <= 
a; g 


CM Q. 

£ S 

en it 



CM => 







o £2 

CO a> 











io m i- cm I n -n 1 

I w ? I I 



P H o* 
o 3 -c 

> 3 to 

s * 5= 

c « CO 
O O CM 00 i- CO CM O m j 2 

»5 ° 

CO 3* 
-i ra o 





CD ™ — — aj 

Uji. DO 

;5 °>.!2 

6 £ => 3 I 3 m iS S. § 

a> Q.-J" 
co x ^ 
as a> -; 

CQ-L ^ 

cu b 

3 CD 


' J3 CD 

) <-* CO -r -*-3 

)£ 0) o„ 

' £ 3-D 13 

i CD g-2<« 


-c +3 

O co 

CD o 

CO -C 
03 £ 

J3 — 
" 'o 


£-.2 13 

«:S S • 

*— • T3 -r3 CD 

_a cu p -£ 
rt u h cB 

*2 c ™ i« 

-Q CD _- _ 
03 3 03 *3 

■^ *3 3 


„ 3 

CD § .52 
I S.S2 

CO ^ -^ 

C 3H 



b ~° 

TO r- 




3 u 

CO 33 

CD £ 

x- o3 


— CD 

c -° 
o ° 
'"" ho 

2 -r J= >- 

03 _ 
„ h h 

S 5 £ 

"CD O ~3 CD 
CO co cj _C 

-.2 3 <* 

CD -^ CO -m 

1 -2 -Q -s- _c 
;S-c >,« 

^.aS S 












.2 St: 

□)■- o 
<d ra z 

^ ra ra 
M 3 ni" 
•D O S- 


nj to c 

E Jj££ 
cnTi en i; 

OTJ -_, 


« § 
D cm 

r O 



01 ^ 

G en 


iS n! C 

CO - CJ 

i> S- 0> 

a* cd" 

CD g 

+J o 

.s fe 

en <u 

0> i- 

•J3 ?U 

2 :> c 
■2-a c 

t3 J3 a! 

O 03 

2d £ 

03 '43 
c- en 

•£3 CD 

„ N 

ai ■ — 

Ih C 

O o3 


.a oj 

be tp 

CD 01 -g 
01 _Q tj 


c" ° 

'J 3 "p 

o3 OJ 


S-S £ 2 2 >> 3 

XI c» 
03 •- 

A o 

03 — 

T3 >- 
C >- 
03 Jl 

5b i 

03 to 




c .5 

O) -*-» 


9" to 


fc. 'S 

Oi 3 

Cu o c 
-Q ft.O 
ch O.*! 
° ° g 
l* X3 — 
to S n3 




























*- ^ 11/ 

6.5 E 

0; JS 

*- "5 
S a. 

03 •-a 
4-j 3 c 
>, a * 

& 2 m 

. o. c 

03 0> > 

-C J3 O 

+J +J +-> C 03 

_ C .H 

* .2 -fa 

y +3 In 

« C3 3 

01 0) _ 

1> *- u 

zj cd <^ 






























































> . 

cS 0> 



• "\ 






o X^ 

S « 

cS (33 


03 CJ 

1* CD 

, , S-< 

5 to 


-u 3 

'£ ° 

^^ £ «- 

a o ° <u 

C *-, i, ,c 

.5 £1 fl> ^ 

O 3 c 3 
M 0) o 41 

o <d tic c 

is es < -a 
-3 -C -ai 

o c .5 $ 
a es c o 

Q) -*-> 

C co 
C3 "-' 

■^ +j 

0) CS 

> -a 

cS O 

2 c ' 

c es 
.2 3 

cS o 



e .S E O- 

s-s § >> 

3 3 -S 
O +-> a co 


-o ""a! "" 
a; to > 
a'"" 1 a> 
o c -a 









c > 
CD o 

5td u 
5 to 

CD ■£ 






— 1 










s-, C 

? s 

d> cS 
9 -^ 


C7i O 


o +j 

+3 C 
e« 3 
"3 ° 

° ^ c 

a _2 cs 


o, <u aji 

» o2 

o -* 
a fc,, 

° I 


Ci o 

^H O 


T3 13 J3 


g a 

a o 

3 o 

W c 

eu i ^2 

o »-. 

to _c 

*»OlL WT 













I , * 


! w 



tr c 

CO a; 

- ra 
3 ixi 






8 2 



1 s 

fcT 04 ^ 


















C — 

CO ~ 

E ro 
< ° 

2 >. 



a> cf 


2 2? 








5 » 









"O w 




































3 .0 


" F 

D □ 



£ *> 

cd ^3 

-c ca 

£ E 

- CO 

5 OJ 

— V, * 

^ "o O 

14 C O 

ca ca 

2 <•> 



r- £ - 

3 c c 

u t. c i« cs 
£ .SPcm J J 



-73 u 

CD <*H 

."S o 

D .0 
oj "S 


Ji> OJ .-, 

is §■§ 


8 * m 

<"-<-> CD 

ft -a „ 


r c o) 
ft^> 5J 
cd cd -O 

+-» -t-j .2 

co o 


i-< ca -y <; 

c °s c ~ 
_ o — o c 

2'5 5 co cs 

co oj ja 

■G o .5 £ ca 

J5 E 

C co 
— <u 

-a M 


"Be . s.fc 

OJ <u rt '£ qj 


0) - 
3 C 

cr o 
oj ■ J3 

E * 

8. 1 

o E 

C c« 

O E 

c o 

O -n 

'• ca 



C J3 

2 oj e' 

ft_C o 

c3"a '-5 

E G ™ 


■ 2-c 

3 a 
o oj 



! 8 
! 3 

1 c 

: o 

Si" p. ^ 


t- CO 

nl CD 

CD V. 



O r- 

C P 


o CD 

ca o 



oj -3 
cj ca 

„ 3 r- 

O T3 CD 2 
U) Cj S- +J 



S OJ o. 

^ o -^ 
12 "3 W 

CO > 

«M OJ 

O T3 



*. £ 

C 3 

CD •— ' E 
C !— ' 

ca l.23 

CD •=* . 

_ Q--o c 
"^ =" T ° 
S ° o 
So s-. > 

•= OJ 1-* 

E -° ^ _ 

E CO rl> 

c o — : 

3 Q.° 

E "— 1 

, CD -,_ 

OJ *^ _ 

bo c ca 

o a 




o _ 

=W 5 CO 

O ' — ' -^ 

cd oj c ca 


£~ fcl, I 


cS . 


3 o 

ft 3 


.2 c 

— Sh 
^3 CD 



ca o 
OJ ,H 

O C 





- ,3 

CJ ^4— < 

c <u 


•»■ A 


*£* / 

1 o V^'>~ s 

\ *y j / 

V7 * / 

s s ->^t 

ki y 'i^w 

c nj -V rvC 



a c 

o o 

* \ 

m = 

ropean O 
er 7.5 Mil 



3 > 

m o 

\*> \^ 

I- o 

M <° 

3 03 

» 8 

*-: -t-» 



3. 3 

c o 

he g 
s .£ 

S-, O 



-i -3 x 

■s ° £ 

w to 3 
5 fc< 4> 

-° £ 

_£ £ « 
C £0h 

2 01 a! 

■2 a> >- 
l"0 1z <+* 
J£ 3 ° 

r= o c 

.* " O 

3 «5 

3 C «5 
3 .3 N 

O 3 g 

"Of 3 

CD o t* 

M E. A 

£ w 

O *- 

a, a) 

■- o 


O a» a* 
CD as as 

^) C a> 

M u " 

C Hi 5 

3 -m as 






co >> 


= cd 

"3 o 
C to 

C -3 

'■£ S 


- cd 

he to 

3 CD 


£ 3 

o -^ 



3 .£ 

*S -"-> 
O c 

> a> 

•£ ctf) co 
h C b 































rt > 

O c^ 

O, w 

E >^ 

a> u a> ^ 

3-a ' 
to a> 

s- 3. 

1) o 


I s 

> -a 




* S 
o -Q 


V 3 

-a ^ 

CD 3 
— as 

a> ■ 


-« a> £ 
0) t* o 

as fc, 
JS as S 

3 -iS 















o <2 £2 ™ = 




ZJ=SCDcDa>C™Qj >- ?? CD CO m 



; "g 03 



^ CD ^ co 

c E co N ™ ™, 
co CD n > s £ - 


a> = 

<1J CD CD 

£ co 

• u. 

a co 

E 2>. 

^ N CD 

s mooo 

co a. co o -o c c^ 
P cd ai o) c co OT 
oc £ £ « £ 

£ O O "- I 

T 5 a_ cr r> > 

g E 8. 

* c ■ 

» ■ • 


O O B 

o o < 

? s « I 

S £ O g 

5 Pcfl 

O < < LU 

o) 5; 

s 1 1 

CD ° CD 




C v) 

o c J 

£ ° 

0) irt 

c °o 


12 "> "£ 


c ° a> 

™T3 . 

1> C C 

2 CTJ 

k. <o *- 

CD ■ 2 
C T3 CJ 

» ~ c 

O Q (0 

CD C 3 

ui nj cd 



2 »r 

£— c 

l/>£ J 

Ol O — 

_ M CO 

CD — C 

c — - 

> CD 10 



-* Ol — 
4) > 

£ 73 
™ 3 C 
CD CI 3 

1- 2 J 



1- -O J3 

CD >,X3 

n jd co 

5 £> 


CO z 

o 3 

° p 

(0 CD O O 



S" 9 .9>.9 ) E 

z z z: z: o ol 

ro J= « 3 



Q. £L Q.O. 

>- CO 

£ ■ T3 a? co 

1 m-l O 

co -* 

s Ooio; "SE d: "rorjc 

Q. O n rr co to cococococococococococococOHhi- 

CO CO -Q -Q 

i -1 >, 


» — CO 

: c co 

; CD C 

"O CO co 
1 < CO > 


CO _Q 


• - — IU 

3 3 h- 

CTC ra CL^0jCD^cDCDZ3COcO5= 



CD co 
(0 T3 

C CO CO -^ p 

r q, o oj ^ - F1J 
^°>c ?-cora £ co o 


■ CO co C 

o ^ d j co (0 i: r oooo 3 >-0 o o oiJ or£ .=* <n ^z 

CO ca 

-o 2 
E o 

" E 


cn2 co d O F E 
c inn cl-O t t 

o — 

■5 _ > H 



1 £ -r 

1 tr co co 


>- Z> 3 D 3 CO O "O "O CO 


ji ° o 

o Z CO 

i Q. tO co CO S 

i CO CD O O 3 

> ^ ¥ * ^ M 



■so oversees the efforts of several 
bvernment agencies such as the 
departments of Treasury, Commerce, 
Ind Agriculture to collect and analyze 
lata on foreign investment. 

)eclaration and Related Decision on 
[Jational Treatment 

pi 1976 the United States joined other 
|>ECD member governments in par- 
Icipating in the consensus adopting a 
declaration and related decision on na- 
tional treatment. The declaration and 
lecision were reviewed and reaffirmed 
ki 1979 by a consensus of OECD coun- 
tries in which the United States also 
tarticipated. The declaration states in 
lart "that Member countries should, 
onsistent with their needs to maintain 
riublic order, to protect their essential 
ecurity interests, and to fulfill com- 
mitments relating to international peace 
md security, accord to enterprises 
Operating in their territories and owned 
br controlled directly or indirectly by na- 
ionals of another member 
country. . . treatment under their laws, 
•egulations, and administrative practices 
•onsistent with international law and no 
ess favorable than that accorded in like 
situations to domestic 
■nterprises. ..." 

Since the declaration and related 
lecision on national treatment were 
idopted in 1976, progress has been 
nade toward refining the concept in- 
cluding a listing of those exceptions 
which now exist and their rationales. 
Continuing work is in progress with a 
stated goal of extending the application 
jf national treatment over time. The 
Department believes that the very ex- 
stence of the declaration and related 
decision has dissuaded member countries 
from implementing new derogations 
from the principle. 

1920 Mineral Lands Leasing Act 

The Mineral Lands Leasing Act of 1920 
provides for a reciprocity test (30 USC 
181) in permitting foreign interests to 
bid for Federal leases of lands for ex- 
ploration and development of oil, gas, 
coal, phosphates, and certain other 
minerals. The Department of Interior 
administers the act, including the 
maintenance of a list of countries that 
have been deemed "reciprocating" — i.e., 
countries that grant to U.S. interests 
like or similar privileges for develop- 
ment of their mineral resources. 

For its determination of reciprocity, 
the Department of Interior works with 

the Department of State to gather infor- 
mation concerning restrictions on 
mineral leases of foreign countries. For 
example, the Department of State has 
assisted in gathering the appropriate 
foreign statutes through our embassies 
overseas. Updated information on coun- 
tries once designated as reciprocating is 
provided periodically. Information for 
countries not on a current list of 
reciprocating countries is sought on an 
ad hoc basis as needed for new deter- 

H.R. 2826 

H.R. 2826 contains a provision which 
would place a moratorium on foreign in- 
vestment in excess of 25% of the voting 
securities in a mineral resource corpora- 
tion which meets certain criteria. The 
Department opposes this provision of 
the bill on investment, energy, and 
strategic materials policy grounds. 

Investment. From the investment 
policy standpoint, such a moratorium 
would represent a probable exception to 
the principle of national treatment to 
which we have obligated ourselves inter- 
nationally and toward which industri- 
alized countries have been working for 
mutual benefit. More generally, the 
moratorium would be inconsistent with 
longstanding U.S. policy in support of 
free capital movements and might en- 
courage the spread of economic nation- 
alism to the detriment of all countries. 

In addition, in an era when the 
United States must increasingly look 
overseas for important mineral re- 
sources, a moratorium on investment in 
our mineral sector could set an unfor- 
tunate example for other nations while 
at the same time discouraging foreign 
investment from helping to develop U.S. 
domestic resources. 

Energy. We are also concerned 
about the implications of this provision 
for U.S. energy policy. A basic tenet of 
our international energy policy is the 
need to promote rapid development of 
alternative energy resources by oil- 
importing countries. U.S. coal reserves 
loom large in this picture because of the 
extensive supplies available. Many 
resource-poor countries have manifested 
interest in purchasing coal from the 
United States and have offered to pro- 
vide capital in the form of equity invest- 
ment to finance the expansion of U.S. 
coal production capacity. 

We need this capital for several 
reasons. First, foreign investment in 

coal resources companies will stimulate 
U.S. output and employment. Secondly, 
it will reinforce foreign confidence in the 
United States as a reliable supplier of 
coal and assist foreign countries in ex- 
panding their use of coal in substitution 
for oil, thus assuring us of increased ex- 
ports and also reducing pressure on the 
world oil market. 

Strategic Materials. The proposed 
moratorium could also have unforeseen 
and possibly negative ramifications on 
investments by U.S. nationals overseas, 
particularly in strategic materials sec- 
tors. The United States is the largest in- 
vestor in foreign countries and has been 
a major force in world mining develop- 
ment. The book value of U.S. direct 
foreign investment in mining stood at $7 
billion as of 1979. 

As we look to a future where the 
United States is likely to be increasingly 
reliant on imports for a number of 
crucial raw materials, it is apparent that 
we continue to have a major interest in 
maintaining maximum freedom of in- 
vestment and capital flows in world min- 
ing. Not only will continued U.S. par- 
ticipation in foreign mining enhance the 
security of our future supplies, but 
without such investment from the 
United States and other industrialized 
countries, it is doubtful that mineral- 
producing developing countries will be 
able to meet the sharply increased 
capital costs of new mining investments. 

U.S. Decision 

Given these circumstances the Depart- 
ment believes that it would not be in the 
U.S. interest to enact a moratorium on 
certain types of foreign investment in 
U.S. mining companies as required by 
H.R. 2826. This action could be wrongly 
interpreted by other countries as a 
signal that the United States was mov- 
ing toward an inward-looking policy on 
access to its domestic resources which, 
in turn, could make it more difficult for 
other governments to resist nationalistic 
pressures related to natural resources 
and lead to further foreign restrictions 
on energy and minerals investment. This 
would be the wrong direction for the 
world to move in an era of increasing in- 
terdependence and reliance on natural 
resources as a foundation for modern in- 
dustrialized societies, and it could 

July 1981 



adversely affect long-term mineral 
prices and the availability of strategic 
materials to the United States. 

To summarize our views on section 
three of H.R. 2826, the State Depart- 
ment opposes the proposed moratorium 
as contrary to U.S. international obliga- 
tions on national treatment of invest- 
ment, inconsistent with longstanding 
U.S. policy favoring an open investment 
climate and on the grounds that it 
creates a potential precedent and 
justification for retaliation by foreigners 
against U.S. investment abroad, par- 
ticularly in the strategic minerals sectors 
which are vital to our national interest. 
If the proposed legislation is motivated 
by a concern over maintaining U.S. con- 
trol of our mineral resources, the 
Department of State believes that ade- 
quate authorities are already available 
under existing legislation, especially the 
Export Administration Act and regula- 
tions established thereunder, which are 
administered by the Department of 
Commerce in consultation with the 
Department of State and other agencies. 
Foreign-controlled firms operating in 
the United States are fully subject to, 
and accountable under, U.S. laws and 

Another provision of H.R. 2826 pro- 
vides that the Secretary of the Interior, 
in consultation with other appropriate 
Departments, should undertake a com- 
prehensive study of indirect foreign in- 
vestment in mineral resources on lands 
owned by the United States and to 
report to Congress. The Department op- 
poses this provision as unnecessary. 
Legislation need not be enacted for the 
Administration to proceed. 

We urge the Congress in its con- 
sideration of this bill to be mindful of 
the large stake the United States has in 
the efficient functioning of the interna- 
tional investment system. The Depart- 
ment opposes the legislative requirement 
for a comprehensive study of foreign in- 
vestment in mineral resources on United 
States lands, and we oppose the propos- 
ed moratorium on foreign investment in 
mineral resource corporations. We 
believe that the United States has more 
to lose by suspending free investment in 
our minerals sector than we can hope to 
gain through a moratorium. 

Strategic Petroleum Reserve 

•The complete transcript of the hearings 
will be published by the committee and will 
be available from the Superintendent of 
Documents, U.S. Government Printing Of- 
fice, Washington, D.C. 20402. ■ 

by Robert D. Hormats 

Statement before the Subcommittee 
on Energy and Mineral Resources of the 
Senate Energy and Natural Resources 
Committee on May 8, 1981. Mr. Hormats 
is Assistant Secretary for Economic and 
Business Affairs. l 

This testimony is particularly mean- 
ingful for me both because it is my first 
as Assistant Secretary for Economic and 
Business Affairs and because it ad- 
dresses a subject which I consider of 
profound importance to the interest of 
the United States. In my judgment, the 
international energy situation presents 
the most serious threat to the well-being 
of this country, and the industrialized 
democracies as a whole, in this decade. 
It raises the potential for sharp price in- 
creases and supply interruptions, which 
would seriously disrupt our societies and 
our economies. And it causes vulnera- 
bilities which could weaken the very 
foundations of our alliances and our 
political cooperation. 

As this country moves toward the 
imperative of dramatically reducing its 
dependence on imported oil over the 
longer run, we must take bold and pur- 
poseful actions to enhance our energy 
security for the immediate future. Fill- 
ing the strategic petroleum reserve at 
the highest feasible rate, especially dur- 
ing this period of market softness, is 
essential to that security. Failure to do 
so would be a mistake of historic 

I know that many members of this 
committee need no convincing on this 
subject. In fact, many of you, quite ap- 
propriately, have been critical of the ex- 
ecutive branch, in the past, for not fill- 
ing the strategic petroleum reserve. 
That is why this is a particularly con- 
structive forum in which to explain, in 
some detail, the importance of adequate 
financing for the strategic petroleum 
reserve in order to reinforce the momen- 
tum, recently established, toward achiev- 
ing overall fill objectives. 

Structure of the International 
Oil Market 

The structure of the international oil 
market has changed significantly over 
the last decade. In 1973-74, less than 
10% of OPEC's [Organization of 
Petroleum Exporting Countries] oil 

flowed outside the majors' channels. The 
companies were then able to act as buf- 
fers between producers and consumers. 
They had the flexibility to allocate oil, 
based on changes in demand and supply, 
among their markets. 

Since that time, the situation has 
changed substantially. OPEC countries 
have, to state the obvious, steadily 
assumed greater control over production 
and price policy. Less obviously, these 
same countries have assumed increasing 
control over sales and distribution chan- 
nels. Today over 45% of crude oil traded 
by OPEC is handled directly by pro- 
ducers. Trading by the major oil com- 
panies has increasingly been reduced by 
OPEC direct sales to foreign govern- 
ments. In addition, destination restric- 
tions, by which some OPEC countries 
prohibit the resale of their oil outside 
certain designated areas, have become 
more common. Thus, the ability of the 
majors to manage a curtailment of pro- 
duction has been significantly reduced. 

At the same time, events during the 
last 2 years have shown us that the 
potential for disruption is real and ever 
present. In 1979, when stocks were well 
below normal, the Iranian revolution 
caused that country's production to drop 
sharply — from an earlier peak of 6 
million barrels per day (b/d) to less than 
1 million b/d for a short period. Com- 
panies and governments engaged in 
defensive stock building. Spot-market 
prices shot upward. 

The war between Iran and Iraq 
again disrupted world supplies. About 
3.8 million b/d were lost almost as soon 
as the war broke out. Had stocks not 
been unusually high and consumption on 
a downward path, or if Saudi Arabia 
and other countries had not raised their 
production, prices might have risen fur- 

The Present Situation 

Given this recent history, we should 
draw little comfort from current oil 
surpluses. Our oil lifeline is fragile; it 
will remain so for years. 

This nation, along with other oil im- 
porters, is vulnerable to disruptions 
caused by wars — such as that between 
Iran and Iraq and the 1973 Arab-Israeli 
war. We are vulnerable to disruptions 
from internal turmoil — such as the 
strikes and chaos during the Iranian 
revolution. We are vulnerable to 
deliberate cutoffs of oil designed to app- 


DeDartment of State Bulletin 



ly political pressure by particular expor- 
ting countries. And we are vulnerable to 
disruptions caused by accidents — such as 
a ruptured pipeline, the sinking of a ship 
in a strategic strait, or a fire in a major 
refinery complex. 

Importance of the 
Strategic Petroleum Reserve 

Our reliance on insecure sources of sup- 
ply has led this Administration to place 
a high priority on energy security. A 
great deal of time and effort already 
have been spent on reexamining energy 
security alternatives. 

One alternative for reducing our 
vulnerability has already been put into 
action. The President's prompt action on 
oil price decontrol will further reduce 
U.S. oil imports. U.S. imports of crude 
oil and products peaked at 8.6 million 
b/d in 1977. Through 1980, they had 
fallen an incredible 27%. This year will 
also show another substantial drop. Un- 
fortunately, the reduction in oil imports 
alone is not enough. We are still vulner- 
able to supply interruptions. 

To cope with this situation the Ad- 
ministration has begun comprehensive 
reviews of energy security issues. We 
are examining the emergency sharing 
program of the International Energy 
Agency (IEA) to see what changes, if 
any, may be needed; we are studying 
our own domestic contingency planning; 
and we are again reviewing the role the 
international oil companies can play in 
conjunction with IEA in alleviating the 
effects of supply interruption. 

Though not yet complete, our 
energy security review has come to one 
clear conclusion: that a sizable strategic 
petroleum reserve is vital to our energy 
security effort in order to counter the 
potential effects of an oil-supply inter- 

The Administration is committed to 
carrying out the existing plan to build a 
strategic petroleum reserve of 750 
million barrels. We believe that protec- 
tion against unforeseen shortages must 
begin with an effective reserve. The 
benefits are significant. A strategic 
petroleum reserve could: 

• Substantially shelter the United 
States from the effects of a severe sup- 
ply interruption. A 750-million-barrel 
reserve and existing private safety 
stocks could offset the loss of 3 million 
b/d in U.S. imports for a full year; 

• Act as a deterrent to threats of an 
oil cut-off for purposes of political black- 
mail; and 

• Provide a measure of flexibility in 


anal Energy 









New Zealand 













Unitea Kingdom 


United States 

dealing with a supply crisis or in con- 
ducting the diplomacy needed to 
eliminate the cause of the disruption. If 
we can draw on a strategic reserve for a 
period of months in the event of inter- 
rupted imports, our response to the 
situation can be a more measured one; 
our diplomacy can proceed in a less 
pressured atmosphere, and we may, as a 
result, have more options available to 

What We Need To Do 

Regrettably, despite the clear need, one 
could not characterize the history of the 
reserve as smooth and steady progress. 
As many in this room know only too 
well, filling the reserve has been an on- 
again-off-again proposition. While Con- 
gress authorized a 500-million-barrel 
reserve in 1975, as of mid-1980 we had 
only 92 million barrels in storage. 

We are still far from what I would 
consider an adequate reserve at this mo- 
ment. However, the fill rate has 
dramatically increased. Under this Ad- 
ministration, a very successful effort has 
been mounted to buy oil on the open 
market. We have already bought enough 
oil so that the average for the fiscal year 
will exceed 200,000 b/d, and more pur- 
chases are underway. The strategic 
petroleum reserve now totals above 132 
million barrels; excellent momentum has 
been established. 

Now is an ideal time for rapidly 
building our reserve. The world oil 
market is slack; oil is widely available at 
relatively modest prices. I do not need 
to recall for this committee the sorts of 
pressures that exist internationally 
against filling the reserve when the oil 
market is tight. Many important pro- 
ducers, not to mention our fellow oil 
consumers, are concerned about the 
potential price consequences of our fill- 
ing in a tight market. While I believe we 

have learned from past mistakes and 
can manage these pressures more effec- 
tively, it remains true that it is far 
easier to maintain a sustained fill rate in 
a slack market. Once established, a 
higher fill rate can be more easily ac- 
cepted as an ongoing feature of the 

These steps are required to continue 
this excellent momentum. 

First, approval by the Congress of 
DOE's [U.S. Department of Energy] 
supplementary request for $1.3 billion 
for purchases of oil this fiscal year to be 
delivered next fiscal year. These funds 
would make up for money which is not 
being received because the entitlements 
program was cancelled upon decontrol. 
The reserve had been partly funded by 
payments received from U.S. refiners 
through the entitlements system, which 
was scheduled to continue through 
September. Entitlements payments 
evened out the impact on U.S. refiners 
and the reserve of differing levels of 
reliance on price-controlled domestic 
crude and uncontrolled or imported 

Second, assured, continuous financ- 
ing for the reserve for the FY 1982 and 

I realize these programs are expen- 
sive, and in a time of budgetary re- 
straint, expenditures for the strategic 
petroleum reserve loom large. Questions 
as to whether the reserve should be on- 
budget or off-budget and whether it 
should be publicly financed or privately 
financed have been appropriately raised. 

My colleagues from Treasury, DOE, 
and OMB [Office of Management and 
Budget] have already addressed the 
financing question. The overriding con- 
cern from my Department's perspective 
is that there be an assured source of 
funding to purchase oil for the reserve. 

We may never have a better oppor- 
tunity to act to enhance our energy 
security. Market conditions are right. 
Storage is available. The international 
political climate is favorable. 

The strategic petroleum reserve is 
an important part of our energy security 
program. It is admittedly expensive. But 
consider the enormous economic prob- 
lems and security consequences of facing 
a major disruption of supplies and not 
having adequate reserves to protect our 
strategic interests. It is a risk that the 
United States cannot afford to take. 

'The complete transcript of the hearings 
will be published by the committee and will 
be available from the Superintendent of 
Documents, U.S. Government Printing Of- 
fice, Washington, D.C. 20402.B 

July 1981 



U.S. Competition in International 
Coal Trade 

by John P. Ferriter 

Statement before the Subcommittee 
on International Economic Policy of the 
Senate Foreign Relations Committee on 
April 28, 1981. Mr. Ferriter is Director 
of the Office of Energy Consumer- 
Country Affairs. 1 

Expansion of coal exports serves a 
multitude of U.S. policy interests, both 
domestic and foreign. Coal exports help 
us economically by strengthening our 
balance of payments and increasing 
employment in key regions of the coun- 
try. They bolster our national security 
by alleviating the dependence of our 
allies on unreliable sources of energy. 
Finally, they contribute to our energy 
policy goal of reducing pressure on 
world petroleum production and, thus, 
the potential for harm arising from oil- 
supply interruptions. Meanwhile, 
obstacles to expanded coal exports by 
and large are technical ones which we 
can and will overcome. 

Developing International Energy and 
Coal Export Policies 

Of primary concern is the continued 
heavy dependence of a large part of the 
world, including the United States and 
most of its allies, on imports of oil. In 
the first quarter of 1981, the 21 in- 
dustrial country members of the Inter- 
national Energy Agency (IEA) con- 
sumed 35.4 million barrels per day of oil; 
55% of this oil was imported. As events 
of the past several years have demon- 
strated, interruptions of even a small 
part of those imports can have very 
serious consequences for the economies 
of all oil-consuming countries. 

As a result, governments around the 
globe have committed themselves to 
reducing their national dependence on 
oil imports as a matter of highest priori- 
ty. In pursuing this objective, we in the 
United States recognized at an early 
stage that international cooperation was 
essential and this was a driving force in 
the creation, in 1974, of the IEA as a 
forum for such cooperation among the 
Western industrial countries. The IEA 
has two principal functions. 

First is its crisis management func- 
tion. Recognizing that reduction of oil- 
import dependence will be accomplished 
only over the longer term and, hence, 
that we will remain vulnerable to harm 

from oil-supply disruptions for some 
time to come, the IEA has developed a 
standby emergency system for respond- 
ing to such disruptions. A primary aim 
of the system is to prevent self-defeating 
competition for oil among major oil- 
importing countries in the face of a 
disruption. The system provides for 
coordinated and equitable implementa- 
tion of demand restraint measures, 
drawdown of oil stocks, and, as 
necessary, sharing of oil supplies among 
member countries. 

Second, the IEA coordinates mem- 
ber country efforts to reduce long-term 
dependence on imported oil. This is a 
very broad effort. Attention is being 
given both to conservation and to 
development of alternative sources of 
energy— coal, nuclear, gas, hydroelec- 
tricity, geothermal, solar, biomass, and 
synthetic fuels. The United States at- 
taches great importance to this effort. 
Sharing of experiences, information, and 
analyses and pooling of resources have 
permitted us and other member coun- 
tries to improve significantly our in- 
dividual national energy programs. 

Coal: A Practical Substitute? 

We are concerned fundamentally with 
the extent to which coal, especially U.S. 
coal, constitutes a practical substitute 
for imported oil for ourselves and other 
countries. Coal enjoys a price advantage 
over oil. Even mined underground, 
transported long distances over land and 
sea, and burned in plants fully equipped 
for environmental protection, coal is, 
and is generally expected to remain, 
substantially cheaper than oil on a 
dollar-per-BTU-generated basis. It is 
also plentiful. Coal reserves are much 
larger than oil reserves not only in the 
United States but throughout the world. 
Economically recoverable world reserves 
of coal are estimated at upwards of 600 
billion tons. Estimated total coal re- 
sources are some 15 times that amount. 
This compares very favorably with cur- 
rent annual world consumption of about 
3.5 billion tons. 

Despite these advantages, use of 
coal has risen rather slowly since 1974. 
There are three major reasons. 

First, coal is difficult to transport, 
handle, and burn relative to other fuels. 

Second, coal has traditionally been 
burned near to where it was mined. 
Trade, at least in steam coal, has been 

very small. Hence, there remain many 
countries in the world, even some in- 
dustrial ones, which have never burned 
much coal, have little experience with it, 
and, therefore, are somewhat wary of 
converting to it. 

Third, recent events have called into 
doubt whether the sources of supply of 
coal are substantially more reliable than 
the sources of oil. Political and labor 
unrest in Poland have caused a 50% 
decline in its coal exports in the last 6 
months. South African coal exports 
may, at some point, be affected by such 
difficulties too. Australia's exports were 
seriously disrupted by a coal miners' 
strike last summer. U.S. exports are 
currently suffering from the United 
Mine Workers strike. 

In order for coal to fulfill its poten- 
tial as a substitute for oil, trade in steam 
coal must increase geometrically. We 
and our trading partners are giving high 
priority to achievement of this objective. 
At the 1979 Tokyo economic summit, 
participants agreed to a reciprocal 
pledge not to interrupt coal trade under 
long-term contracts unless required to 
do so by a national emergency. That 
same year, IEA ministers adopted a list 
of principles for action on coal, aiming 
at expanding coal demand, supply, and 
trade. A coal industry advisory board 
was established in 1980 to counsel the 
IEA and its individual members in their 
implementation of the coal principles 
and is now actively involved in analyzing 
problems associated with increasing coal 
use. Finally, the IEA is devoting special 
attention to coal in its program of re- 
views of member country energy 
developments and policies. 

We are also seeking to promote use 
of coal in developing countries through 
both multilateral and bilateral develop- 
ment assistance programs. Over the past 
several years, we have significantly ex- 
panded coal-related technical assistance 
in the U.S. bilateral assistance program. 
Australia and perhaps other donor coun- 
tries have similar programs. 

Supply and Demand 

The United States has enormous coal 
reserves, about one-quarter of the world 
total. Current production— 840 million 
tons last year— is the largest in the 
world and accounts for almost one- 
quarter of the world total. Even at that 
level of production, the U.S. coal sector 
had an estimated 100 million tons of 
surplus capacity left unused for lack of 
demand. U.S. bituminous coal exports— 


Department of State Bulletin 


9.9 million tons in 1980 — were nearly 
ouble those of our nearest competitor, 
ustralia. Only about 30% of 
lese — 26.8 million tons — was steam 
oal. Analysts project that steam coal 
xports alone will surpass 100 million 
letric tons annually some time in the 

As I noted at the outset, coal ex- 
orts offer important benefits to the 
Jnited States. We, therefore, strongly 
upport examination of means for pro- 
moting expansion of U.S. coal exports, 
specially in response to the substantial 
icreases in world demand for steam 
oal projected to occur in coming years. 
Ve can identify a number of areas for 

Efforts must be made to accelerate 
he expansion of foreign demand for 
J.S. coal. The coal-supply chain is 
lemand-initiated, and infrastructure 
apacity will not expand rapidly in the 
ibsence of assurances of long-term de- 
nand for use of that capacity. 

However, we must also recognize 
hat there is a chicken-and-egg problem 
lere. While domestic producers await 
oreign assurances of long-term demand 
o justify new investments, prospective 
'oreign buyers are reluctant to under- 
ake long-term commitments where bot- 
lenecks in the supply system remain 
;erious. The United States must, 
;herefore, resolve problems on the sup- 
Dry side, too. Of priority concern must 
3e our lack of infrastructure to export 
arger quantities of coal. In particular, 
existing coal port terminals must be 
modernized and new ones built. 

Beyond expanding our physical 
capacity for exporting coal, there may 
oe other steps which the United States 
:an take to enhance the competitiveness 
and, thus, the volume of its coal exports. 
First, of course, U.S. coal exporters can 
seek to improve productivity and, 
thereby, lower the price of their prod- 
uct. Given the substantial cost advan- 
tages of other suppliers in furnishing 
coal to most markets, the extent to 
which such price reduction will lead to 
expanded quantities of exports is 
unclear. On the other hand, there are a 
few markets where U.S. coal is price 
competitive. For example, we currently 
can deliver coal to Europe at about the 
same price as the Australians. Hence, 
efforts by U.S. coal exporters to reduce 
prices could well stimulate increases at 
the margin in demand for U.S. coal, 
especially in an expanding market. 

Reinforcing this conclusion is the 
fact that current price is not the sole 
basis for competition in the coal market, 
especially where long-term contracts are 

1980 World Coal Exports and Imports 

Exports Imports 








L. America 


United n 

States America 



Total 270 

(Million Short Tons) 



W. Europe 

East Europe 

Total 270 

(Million Short Tons) 

concerned. Expectations as to price 
escalation play an important role. So, in- 
creasingly, does reliability of supply. 
Foreign coal purchasers may be willing 
to pay a premium in order to obtain ac- 
cess to our coal exports because they are 
more reliable than those of other coun- 

Private Companies and the 
U.S. Government 

With the foregoing considerations in 
mind, we see a broad scope for action to 
expand U.S. coal exports. In this con- 
text, I note that one of the most salient 
features of the U.S. coal market is its 
general independence from supports and 
controls by the U.S. Government. The 
Administration admires the independent 
spirit of U.S. coal companies and intends 
to leave them the broadest possible 
latitude for actions to facilitate coal ex- 

Private companies are already acting 
in all of the areas we might identify as 
helpful by: 

• Expanding port and inland 
transportation infrastructure; 

• Expanding coal production; 

• Financing both of the above; 

• Seeking to lower costs; 

• Seeking to enhance reliability in 
fulfillment of contract provisions — tim- 
ing of delivery, prices, quality specifica- 
tions, avoidance of disruptions in the 
flow of coal supplies; and 

• Increasing responsiveness to pur- 
chase requirements of foreign markets 
and buyers. 

In our view, actions in all of the 
above areas should be governed by nor- 
mal considerations of profitability and 
should, therefore, be left in the private 
domain. The U.S. Government should 
not subsidize coal exports nor should it 
interpose itself in any other way directly 
in coal trade. 

This judgment is full borne out by 
current developments in the coal export 
sector. For example, ambitious port 
modernization and expansion projects 
are underway and capacity will begin to 
expand rapidly next year. Domestic pro- 
ducers are engaged in a widening dia- 
logue with prospective foreign buyers, 
improving their understanding of the 
buyers' needs and seeking to satisfy 
those needs. U.S. coal exports grew by 
almost 40% last year. We have no doubt 
that they will continue to expand rapidly 
without direct government involvement 
in the future. At the same time, certain 
functions do fall to the Federal Govern- 
ment by logic and by tradition. 

First, we have a responsibility to 
minimize, consistent with other national 
interests, regulatory burdens on the coal 
market. We are aware of proposals to 
reduce such burdens in the area of coal 
exports and will examine these pro- 
posals carefully in the context of the 

July 1981 



Projected World Steam Coal Imports 

(Million Tons) 


1 2 






W. Germany 






From U.S. Total 

2| ~|8 

3| |13 



















11 15 

"11 |8 








overall Administration review of Federal 
regulation. Moreover, we will uphold the 
commitment of the U.S. Government not 
to interrupt coal trade under contractual 
commitments unless forced to do so by a 
national emergency. 

Secondly, the Federal Government 
can help to promote foreign demand for 
U.S. coal. The U.S. Department of Com- 
merce has programs to promote exports. 
We would urge that coal be given high 
priority in those programs. 

Third, the Federal Government 
should also take an active role in 
discussing coal policy and U.S. coal ex- 
port issues with foreign governments, 
seeking to stimulate their interest in 
coal and seeking to improve access for 
U.S. coal in their markets. 

There are significant benefits to be 
gained from exchanges with other gov- 
ernments of information and analyses 
concerning coal and coal policy. In addi- 
tion, we can take advantage of the fact 

that many foreign governments play a 
much greater role in determining energ : 
utilization among utilities, industry, and 
households in their economies than does 
the U.S. Government in ours. Stimulat- 
ing the interest of these governments in 
U.S. coal exports and allaying fears 
about the reliability of those exports car 
have a direct impact in expanding de- 
mand. Necessarily, efforts in this area 


Department of State Bulletir 


North Atlantic Council 
Meets in Rome 

Secretary Haig departed Washing- 
on, D.C., on May 1, 1981, and arrived 
n Rome May 2 to attend the regular 
;emiannual session of the North Atlantic 
'ouncil ministerial meeting (May 4-5). 
ie stopped in Brussels on May 5 and 
•eturned to the United States on May 6. 

Following are the texts of the Secre- 
ary's news conference in Rome and the 
Vorth Atlantic Council final communi- 
que, the minutes extract, and the declara- 
tion on terrorism. 

MAY 5, 1981 1 

First, let me emphasize what a great 
pleasure it is to be back in a community 
with which I am somewhat familiar; I 
am especially pleased to be back in 
Rome. Visits to Italy during my in- 
cumbency in NATO, whether for rest or 
[recreation or business, were always op- 
portunities to be seized with enthusiasm. 

I think, in substantive terms, I 
would want to emphasize that the North 
Atlantic Council meeting just concluded, 
in the words of the Secretary General, 
was perhaps one of the most important 
that the alliance has held in the recent 
past. The most fundamental conclusion 
to be drawn from the deliberations that 
we have just concluded over the last day 
and a half was the reaffirmation, in the 
most conclusive terms, of the continuing 
unity and solidarity existing within the 
members of the alliance and, most im- 
portantly, in a trans-Atlantic context. 

I think this meeting afforded me an 
opportunity to present to the other 
members of the council President 
Reagan's fundamental approaches to 
foreign policy and national security 

affairs. I am very pleased to emphasize 
that these policies were strongly- 
approved and endorsed by all of the 
members of the North Atlantic Council. 
In that regard, I would refer you 
especially to the first paragraph of to- 
day's communique describing our 

With respect to specific accom- 
plishments achieved over the past year 
and a half, I think President Reagan's 
- decision with respect to the second track 
of the 1979 decision on theater nuclear 
modernization enabled us to insure one 
another, without equivocation and 
without reservation, that the full im- 
plementation of the 1979 decision will be 
realized by the alliance. The achievement 
will be accomplished despite the heavy 
level of propaganda flowing from the 
East with respect to the modernization 
decision itself. Therefore, in that impor- 
tant context this past day and a half has 
reaffirmed the indivisibility of our 
NATO alliance. 

I think there was a strong consensus 
developed during these meetings of the 
essentiality of working together to elicit 
greater restraint on the part of the 
Soviet Union; not just in the sense of 
threats directly to the alliance but in the 
context of increasing Soviet involvement 
in the Third World. There was clearly a 
consensus to make all resources avail- 
able that are necessary to strengthen 
the deterrence and the defense of the 
alliance. I refer you to the language of 
the communique in that regard. 

There was strong language agreed 
to in the communique itself with respect 
to the unacceptable intervention of the 
Soviet Union in Afghanistan and a reaf- 
firmation of the warnings previously put 

will require coordinated involvement by 
the Departments of State, Energy, and 

We in the government are providing 
support to U.S. coal producers by em- 
phasizing to our foreign interlocators 
both bilaterally and in the IE A the need 
for them to provide assurances — e.g., 
through agreement to long-term coal 
purchase contracts or investment in U.S. 
coal production and transportation proj- 
ects—of their long-term demand for 
U.S. coal in order to encourage expan- 
sion of export infrastructure. 

In sum, we see a bright future for 

U.S. coal exports. We will continue to 
work with foreign buyers and govern- 
ments to foster demand for U.S. coal 
and enhance the reputation of the 
United States as a supplier of coal. At 
the same time, we have a strong tradi- 
tion in the United States of reliance on 
the private sector for the conduct of coal 
trade, and we intend to adhere to that 

•The complete transcript of the hearings 
will be published by the committee and will 
be available from the Superintendent of 
Documents, U.S. Government Printing Of- 
fice, Washington, D.C. 20402.B 

forward with respect to the grave conse- 
quences of Soviet intervention in Poland. 
In that regard it was clearly noted that 
there would be fundamental changes in 
the international environment should 
that happen. 

Finally, I think there was a strong 
consensus that only the Western 
world — members of the alliance and 
those which share our values — can 
bring to developing states the nation- 
building assets which are so essential for 
their aspirations. That is in somewhat 
sharp contrast to Soviet activity in the 
Third World, which is primarily based 
on the provision of arms, pervasive in- 
fluence, and, in many instances, a client- 
state relationship. 

In sum I think this was an unusually 
successful North Atlantic Council 
meeting, and I have participated in 
many over the last 6 years. I am ex- 
tremely pleased that the fundamental 
solidarity and unity of our alliance has 
not only been maintained but 
strengthened as a consequence of our 

Q. We are told that you will be 
meeting [Soviet Foreign Minister] Mr. 
Gromyko in September. How will U.S. 
contacts with the Soviet Union over 
reduction of theater nuclear forces 
and perhaps eventually over central 
strategic systems proceed thereafter? 

A. This, of course, is a two-sided 
situation, and I cannot speak for the 
Soviet leaders with respect to what they 
will seek in the way of modalities. But I 
would anticipate some preliminary talks 
at the ambassadorial level designed to 
put together a framework which would 
permit the meeting of the Foreign 
Ministers in the fall to proceed promptly 
to the agreement for negotiations — for- 
mal negotiations — with the Soviet Union 
by the end of the year. That, of course, 
will ultimately derive its character from 
the viewpoints of the Soviet Union as 
well as the United States. 

Q. Could you tell us whether 
President Reagan's letter to Mr. 
Brezhnev comprises the proposals that 
you made at this council about the 
resumption of tactical arms control 
talks with the Soviet Union, and tell 
us anything else about what Mr. 
Reagan had to say to Mr. Brezhnev? 

A. I noted that the fact of such a 
letter managed to seep out of the 
heretofore impregnable walls of our con- 
fidential discussions, and, therefore, it 
would be foolish for me to suggest there 
was not such a letter. But I will abide by 

July 1981 



the very strong principle that we always 
abide by and that is not to discuss the 
contents and characters of such ex- 
changes in the public forum. I'm sorry. 

Q. You have set forth a timetable 
and plan on the TNF [theater nuclear 
forces] negotiations with the Soviet 
Union. Does the Administration have a 
plan or timetable on the strategic 
weapons systems discussions with the 
Soviet Union? 

A. No, we do not. Clearly, Presi- 
dent Reagan has reiterated his will- 
ingness and desire to engage in a full 
range of negotiations that are necessary 
to provide equitable, balanced reductions 
in nuclear weaponry — and I emphasize 
reductions. This is a problem associated 
with a host of technical issues associated 
with the arms control of central stra- 
tegic systems themselves, but it is also 
clearly related to Soviet international 
behavior and overall relationships be- 
tween East and West. And I do not 
foresee in the immediate future a 
resumption of those talks. 

Now you will note in the language of 
the communique that we refer to the 
conduct of the theater nuclear discus- 
sions as being within the framework of 
SALT. That suggests two things: First, 
it suggests that all nuclear systems 
represent somewhat of a continuum 
whether they be theater-based — and to 
our European partners it makes very lit- 
tle difference whether it's a theater 
system or a central strategic system; 
theater systems from the Soviet side 
represent a strategic importance to our 
Western European partners. So, it sug- 
gests a continuum and, if you will, con- 
firms that there are no separate 
theaters of nuclear concern. We talk 
about shared risks, shared burdens, and 
total unity in a trans-Atlantic sense in 
nuclear terms. 

Secondly, clearly the interrelation- 
ship between theater systems — long- 
range TNF, if you will— and central 
strategic systems is blurred and a grey 
area in many respects. So coherent arms 
control negotiations in the theater area 
should always be conducted in the light 
of strategic balances and long-term ob- 
jectives in arms control in that regard. 
It does not mean that the resumption of 
the initiation of our talks with the Soviet 
Union and formal negotiations with 
it — discussions of central strategic 
systems in the American sense, does 
not; they can proceed separately but in 
full cognizance of the interrelationship 
one with the other. 

Q. If we are to read into the final 
communique a lesson from the number 

of references to the notion of detente, 
what should that signify to those peo- 
ple who are going to discuss the com- 

A. As I recall there is no specific- 
reference to detente in the communique, 
and it is further clarified by the term 
"genuine" detente. I think, clearly, the 
whole character of the communique 
bespeaks very clearly the increasing 
awareness of all in the alliance of the 
need to concert together to insist on 
Soviet restraint internationally, both in 
areas of vital concern within the con- 
fines of the alliance itself and beyond. 

Q. Still on detente, will you ac- 
cept this definition of detente as an 
overall and nonmilitary wav to defeat 
the West? 

A. I get the chemical character of 
your question. Somebody said that Mr. 
Weinberger [Secretary of Defense 
Caspar W. Weinberger] and Mr. Haig 
are not getting along very well; I want 
to discount that. Nothing could be fur- 
ther from the truth. Just the other day 
Mr. Weinberger gave me a personally 
autographed copy of the American Con- 

Q. But the quotation actually is 
not from Mr. Weinberger but from 
Mr. Allen [Richard V. Allen, Assistant 
to the President for National Security 

A. Then the problem is even less of 
concern. I think clearly on both sides of 
the Atlantic there has been growing con- 
cern about the implications of and the 
proclivity by the Soviet leadership to in- 
dulge in risk-taking. One need only tick 
off the various situations that have 
developed starting with Angola in 1976; 
running to Ethiopia, Southern Yemen, 
Northern Yemen; Afghanistan on two 
occasions, culminating in a blatant in- 
terventionism; the overrunning of Kam- 
puchea by proxy forces of the Soviet 
Union. As an American — and I know 
here in Europe — there is great concern 
about increased proxy activity in the 
Western Hemisphere once again — 
Nicaragua, El Salvador, Guatemala, 
Honduras, and other nations of the Cen- 
tral American republics. All of this, 
clearly, has raised our level of concern. I 
think today's communique and the 
discussions over it in the past day and a 
half strongly affirm that growing level 
of concern. 

Q. In view of that checklist, is it 
your expectation that the Soviet Union 
will be required to act with much 
greater restraint if the dialogue we 

are about to enter into with Mr. 
Gromyko is to have any chance of suc- 

A. It goes without saying that we 
all recognize the implications of the term 
"linkage." But we are not entering into 
theater nuclear arms control discussions 
as a favor or a gift to the Soviet Union. 
We are engaged in these negotiations 
once they commence, as certainly an im- 
plementation of the agreed moderniza- 
tion decision of 1979 and with full 
recognition that it is in Western in- 
terests as well. If we are successfully to 
halt and to roll back the growth of 
nuclear weapons here on the European 
Continent, that does not suggest for a 
moment that we would in any way aban- 
don our concern about linkage for exam- 
ple when we speak in the context of in- 
tervention in Poland, of profound 
changes, we would include a very im- 
portant consequence for arms control 
discussions as well along with other in- 
terfaces with the East — economic and 
political — as well as arms control. 

Q. The positive result of this 
meeting with the negotiations now 
scheduled for next autumn are seen as 
a victory for the European side of the 
alliance. What is vour comment to 

A. I wouldn't describe it as a vic- 
tory. I would describe it more impor- 
tantly as a strong, unequivocal affirma- 
tion of continuing Western solidarity 
with the members of the alliance and 
especially in a trans-Atlantic context. 
Clearly in recent months— and this is 
not unusual in cycles of 4 years in deal- 
ing with your American partners — 
unsettlements develop until the full 
scope of the new American Administra- 
tion's policies are known and under- 
stood. I think my ability to bring here to 
our Western European partners a clear 
articulation of President Reagan's 
foreign policy objectives and goals, and 
above all his reaffirmation that the 
NATO alliance is the bedrock and the 
anchor of American foreign policy as it 
has been in the past, was reassuring to 
all. The reaffirmation of our intention of 
following through with the obligations 
on theater nuclear modernization— the 
two tracks— was clearly a reassuring 

All of these things together con- 
verged to make this a very robust, if you 
will, a very happy and a very construc- 
tive North Atlantic Council meeting. I 
think the consequences are in the direc- 
tion of solidarity and unity and the in- 
ability of the East, despite rather 


Department of State Bulletin 


ubstantial efforts to effect differences 
etween our European partners and the 
Jnited States, is not going to succeed in 
hese efforts. 

Q. My question concerns the forth- 
■oming agreement on the U.S. bases 
n Greece. Have you accepted, during 
Kour meeting with the Greek Foreign 
Minister, the Greek demands on the 
seven to ten ration in the military aid 
|to Greece and Turkey and the Greek 
demand for a commitment by the U.S. 
Government to oppose any threat to 
the Aegean? 

A. Let me assure you that the 
discussions I had with the Greek 
Foreign Minister on Sunday were most 
cordial, most constructive, and most im- 
portant as a further step toward the 
completion of the necessary future 
agreement between the United States 
and Greece. I think in every area — and 
there were some four specific areas 
raised by the Foreign Minister of Greece 
which are associated with our ongoing 
discussions — we were able to move the 
problem somewhat constructively for- 
ward. I think it was a very successful 
discussion that we had. I will avoid 
answering the specifics of your question 
because they were neither appropriate 
to those discussions that we conducted 
nor do they serve any useful purpose. 

Q. If there is a military putsch in 
Spain, will the United States give sup- 
port to the Spanish regime? 

A. I think that is a horse that has 
been beaten almost out of insensibility. I 
discussed this issue at length in my re- 
cent visit to Madrid, and I think it is 
clearly understood that it is the policy of 
the U.S. Government to neither favor 
nor condone the outcome your questions 

Q. You mentioned the intention of 
following through with American 
obligations to TNF. Why should there 
have been any doubt about those in- 
tentions and if there were — which we 
here in Europe gather there 
were — what did you do to quell those 

A. I think there has been some con- 
cern here in Europe about the character 
of various American proclamations and 
statements from a number of different 
sources. I think it is not unusual that 
that would raise well-meaning and 
understandable concerns with respect to 
American intentions. After all, it was 
the U.S. Government that agreed in 
1979 to the provisions of the moderniza- 
tion concensus that involved two tracks, 

and I think the mere fact that I, based 
on President Reagan's decision this past 
week, was able to reaffirm not only our 
commitment to proceed on these two 
tracks but to do so in fairly timely 
fashion, clearly was a source of relief 
and a welcome reassurance on the part 
of our European partners. 

Q. Do you have any doubts about 
your ability to continue to proceed on 
that track? 

A. None whatsoever. I know 
everyone understands that it takes two 
to tango, and the Soviet Union is in- 
volved in the negotiations on theater 
nuclear arms control. So one cannot 
answer that. But with respect to the 
U.S. decision to abide by the two obliga- 
tions incurred by all the parties which 
are directly involved, that means the 
modernization track itself and the arms 
control negotiating track will proceed 
without delay. 

Q. Turning to Southwest Asia. 
How would the United States view 
German arms sales to Saudi Arabia 
with a view to helping stabilize the 

A. I carry enough scar tissue to 
know how imprudent it is for a Foreign 
Minister or even an official of one 
government to comment on the internal 
affairs of another, and it is not my prac- 
tice to do so. 

Q. You are going to Brussels this 
afternoon, and you are going to meet 
Mr. Eyskens, the Belgian Prime 
Minister. What do you plan to discuss 
with him, and will you touch upon the 
reserves some partners in the Belgian 
Government have against the installa- 
tion of the new missiles on Belgian 

A. No. I don't seek to use the op- 
portunity to meet my friend and former 
acquaintance from my days in Brussels 
on the issue you raised, because I think 
this matter is in the proper NATO chan- 
nels now, and we are all aware of the 
complications facing Belgium on this 
issue. While remaining basically op- 
timistic about the ultimate outcome, I 
will use this as an opportunity to bring 
the Prime Minister abreast of these 
talks here and a number of other 
bilateral relationships between the 
United States and Belgium which I think 
are so important. 


MAY 5, 1981 2 

The North Atlantic Council met in Ministerial 
session in Rome on 4th and 5th May 1981, 
deeply concerned at the continuing threats to 
security and international stability. Determin- 
ed to counter these threats by effective 
restraints including firmness in defense and 
persistence in the search for peaceful solu- 
tions, Ministers in that spirit agreed to the 

1. The strength and cohesion of the 
Alliance remain indispensable to guarantee 
the security of its members and thereby to 
foster stable international relations. This 
stability requires that all nations act with 
restraint and responsibility. Claims by the 
Soviet Union that it too subscribes to such 
policies are not borne out by Soviet deeds. 
The more constructive East- West relationship 
which the Allies seek requires tangible signs 
that the Soviet Union is prepared to abandon 
the disturbing build-up of its military 
strength, to desist from resorting to force 
and intimidation and to cease creating or ex- 
ploiting situations of crisis and instability in 
the Third World. 

2. The Soviet invasion and occupation of 
Afghanistan is a particularly flagrant exam- 
ple of violation of the principles of restraint 
and responsibility in international affairs. 
This occupation is now in its second year, 
with a mounting toll of human suffering and 
loss of life. It remains and will remain totally 
unacceptable to the Allies and to world opin- 
ion. The Soviet Union has ignored interna- 
tional condemnation of its actions and appeals 
by the United Nations, the Islamic Con- 
ference and the non-aligned movement. 
Soviet forces must be withdrawn and a 
political settlement must be found enabling 
the Afghan people to exercise fully their 
rights of independence and self-determination 
and permitting the two million refugees to 
return to their homes. 

3. In Europe, efforts to restore East- 
West co-operation and exchanges on the basis 
of the Helsinki Final Act cannot but be 
severely undermined by the use of threat of 
force for intervention in the affairs of other 
countries. Poland must be left free to resolve 
its own problems. Any outside intervention 
would have the gravest consequences for in- 
ternational relations as a whole and would 
fundamentally change the entire international 
situation. The Allies, for their part, will con- 
tinue to adhere strictly to their policy of non- 
intervention and they call on all other states 
to do the same. 

4. In this situation, the Allies will 
strengthen their capability to deter aggres- 
sion and act, individually or collectively, to 
encourage Soviet restraint and responsibility 
in international affairs with the goal of laying 
a stable basis for East- West relations. In pur- 
suance of the established policies of the 
Alliance they will seek these objectives in 
particular in the following areas. 

July 1981 



5. They will ensure their solidarity, con- 
sulting closely in the North Atlantic Council 
on all matters affecting security and East- 
West relations. In the same spirit, they will 
strive, in particular by providing assistance 
for the economically less advanced member 
countries, to strengthen the economic and 
social stability of the Alliance as a whole in 
accordance with Article 2 of the North Atlan- 
tic Treaty. 

6. In the area of military capability, the 
increase in Warsaw Pact military power has 
created a disturbingly adverse trend in the 
military balance between East and West, par- 
ticularly in Europe. The Allies agree that 
assuring an overall military balance between 
NATO and the Warsaw Pact is fundamental 
to the security of the Alliance, the enforce- 
ment of restraint and the maintenance of 
peace. They are resolved to make available all 
the resources needed to provide the requisite 
strengthening of their deterrent and defense 

7. Genuine non-alignment is an important 
factor for stability in the world. The Allies 
will continue to consult among themselves 
and to work together with others to en- 
courage stability and reduce the risks of 
crisis in the Third World, especially where 
the independence of sovereign nations is 
threatened. The maintenance of this in- 
dependence, peace and international 
equilibrium is a vital interest of the West. 
Political settlements must be found to crisis 
or conflict situations, especially when they af- 
fect sensitive areas such as the Middle East, 
South-East and South- West Asia or Southern 
Africa; the Allies desire to work to this end 
in co-operation with other countries. 

The stability and genuine non-alignment 
of Third World countries also depend on the 
freedom to develop economically and socially 
without outside interference. All states must 
refrain from exploiting social problems or 
fomenting instability for political advantage. 
Equally, all must contribute actively to 
strengthening the economies of developing 
countries and to the fight against hunger, 
poverty and under-development. For their 
part, the Western nations also offer these 
countries the trade technology and respect 
for political sovereignty that are vital for 
their independence and economic well-being. 

A number of allied countries possess, or 
are determined to acquire, the capability to 
deter aggression and to respond to requests 
by nations for help in resisting threats to 
their security or independence. 

8. They will maintain a dialogue with the 
Soviet Union and will work together for gen- 
uine detente and the development of East- 
West relations, whenever Soviet behavior 
makes this possible. The principles and provi- 
sions of the Helsinki Final Act provide a code 
of conduct that must be observed by all the 
signatories. At the CSCE [Conference on 
Security and Cooperation in Europe] meeting 
in Madrid, the Allies seek substantive and 
balanced results which will lead to better im- 

23d Report 
on Cyprus 

JAN. 19, 1981 1 

In accordance with the provision (if Public 
Law 95-384, I am submitting the following 
report on progress made during the past 60 
days toward reaching a negotiated settlement 
of the Cyprus problem. 

As I noted in my last report, the inter- 
communal talks between representatives of 
the Greek and Turkish Cypriot communities, 
which resumed in August 1980, have con- 
tinued their substantive examination of the 
issues which divide the island. Under the 
chairmanship of the UN Secretary General's 
Special Representative on Cyprus, Am- 
bassador Hugo Gobbi, both sides have pur- 
sued analysis and discussion of the four basic 
areas agreed upon for examination. Meetings 
were held on November 19 and 26 and 
December 3 and 8 before breaking for a 
mutually-agreed end-of-year recess. The talks 
resumed routinely with a meeting on January 
7 and can be expected to continue in weekly 

We have been encouraged by the serious, 
nonpolemic approach taken by the 
negotiators in their effort to devise mutually 
acceptable positions. Throughout the discus- 
sions, the negotiating atmosphere has re- 
mained businesslike and positive. 

The United Nations has continued 
to pay close attention to Cyprus develop- 
ments. In his December 1 report on Cyprus, 
Secretary General Waldheim reviewed 
developments to date, noting that "Some 
common ground has been indicated on certain 
practical questions." He suggested that while 
"progress so far has been slow, the discus- 
sions have been on the whole construc- 
tive . . ." and cautioned that a problem lying 
ahead is "the difficult issue of how and where 
to start the actual give-and-take which is the 
essence of an effective negotiating process." 
The Secretary General also expressed the 
judgment that while a complex negotiating 
process such as the Cyprus intereommunal 
talks must proceed with caution, "... it 

must also, if it is to maintain its credibility, 
produce concrete results." 

I have noted with pleasure that the 
Secretary General intends to remain directly 
engaged in the negotiating process. He met 
in New York in mid-December with Cyprus 
Foreign Minister Rolandis and with Kenan 
Atakol, foreign affairs spokesman for the 
Turkish Cypriot community. 

The United States continues fully to sup- 
port the Secretary General's efforts and 
those of his Special Representative on Cyprus 
to reach mutually agreeable solutions to the 
Cyprus problem. This support has been con- 
veyed on several occasions to Secretary 
General Waldheim and was expressed also by 
Secretary Muskie to Turkish Foreign 
Minister Turkmen and to Greek Foreign 
Minister Mitsotakis in separate meetings at 
the NATO Ministerial meeting in Brussels 
December 10-11, 1980. 

I am also pleased to note that on 
December 11, 1980, the Security Council 
passed without dissent a resolution extending 
the mandate of the UN Peacekeeping Force 
in Cyprus (UNFICYP) to June 15, 1981. 
Other Security Council members continue to 
share our view that UNFICYP plays a vital 
role in maintaining the atmosphere of calm 
conducive to fruitful negotiation within the 
intereommunal talks. 

The Cyprus problem remains on the in- 
ternational agenda. Its historical complexities 
suggest that only perseverance, patience and 
political courage of the highest order will 
bring about a just and lasting settlement. I 
remain hopeful that the good start 
represented by the intereommunal negotia- 
tions will evolve in the near future into a 
comprehensive solution that will benefit all 
the people of Cyprus. 


Jimmy Carter 

1 Identical letters addressed to Thomas P. 
O'Neill, Jr., Speaker of the House of 
Represtentatives, and Charles H. Percy, 
Chairman of the Senate Foreign Relations 
Committee (text from the Weekly Compila- 
tion of Presidential Documents of January 
20, 1981). ■ 

plementation of these principles and provi- 
sions, including respect for human rights, im- 
proved human contacts, a freer flow of infor- 
mation and enhanced security and co- 
operation. This would clearly demonstrate the 
continuing value of the CSCE process. 

The Allies reaffirm their support for the 
French proposal for a conference of disarma- 
ment in Europe aimed at achieving in an in- 
itial phase an agreement on a coherent set of 
militarily significant, binding and verifiable 
confidence-building measures, applicable 
throughout the European Continent from the 
Atlantic to the Urals. Underlining the impor- 

tance they attach to such a conference taking 
place as an integral part of the CSCE pro- 
cess, they consider that it would be for a 
future CSCE followup meeting to examine 
ways of continuing their efforts for security 
and disarmament, in the light of the progress 
achieved by the end of the initial phase of the 
conference and taking into account other cur- 
rent negotiations. While welcoming the prog- 
ress made so far, they express the hope that, 
as part of a balanced outcome, agreement can 
be reached at Madrid on a precise and unam- 
biguous mandate incorporating the above 


Department of State Bulletin 


9. Arms control and disarmament, 
jether with deterrence and defense, are in- 
gral parts of Alliance security policy. The 
lies support negotiations to achieve mean- 
jful restraints on Soviet military power and 
improve security. The object of this policy 
a stable military balance, if possible at 
duced levels of forces. The Allies stress the 
lue of stabilizing, equitable and verifiable 
ms control through limitations of Soviet 

id U.S. strategic arms. They recognize that 
ms control negotiations can only lead to 
uitful results in an international climate of 

10. The Allies taking part in the Vienna 
jgotiations on Mutual and Balanced Force 

'ductions continue in their determination to 
hieve genuine manpower parity in the form 
a common collective ceiling based on 

*reed data. They regret that no substantial 
ogress has been made in the negotiations, 
rgely because the Eastern participating 

ates are still unprepared to make the re- 

jired contribution to the clarification of the 

ita problem. 

11. The Allies continue to attach par- 
cular importance to the maintenance of the 
,1m situation in and around Berlin. The 
rict observance and full implementation of 
le Quadripartite Agreement of 3 September 
971 remain vitally important for security in 
,urope, East-West relations and the interna- 

jonal situation as a whole. The Alliance con- 
i nues to support the efforts being made by 
le Federal Republic of Germany to secure 
j le cancellation of the increase in the 
linimum exchange requirements imposed by 
ne GDR [German Democratic Republic], 
/hich is having a particularly adverse effect 
■n the number of tourists and visitors travel- 
ing to the GDR and East Berlin. 

12. The Allies who participated in the 
lecember 1979 NATO decision on LRTNF 
ong-range theater nuclear force] moderniza- 
ion and arms control reaffirmed their com- 
litment to that decision. They emphasized 
hat in light of increasing Soviet LRTNF 
.eployments which in the case of the SS-20 
Jready exceed the total LRTNF deployment 
ilanned by NATO, the modernizing of 
-JATO's LRTNF is more essential than ever, 
ind offers the only realistic basis for parallel 
rNF arms control. Since the December 1979 
lecision, Soviet threats and efforts to divide 
;he Allies have only strengthened their 
"esolve to take the steps necessary to main- 
:ain deterrence, redress the imbalance of 
LRTNF, and ensure their security. The latest 
Soviet proposal for a moratorium of LRTNF 
deployments is wholly unacceptable to these 
Allies. It would freeze them into inferiority 
by blocking the NATO modernization pro- 
gramme altogether. Moreover, the proposal 
would permit the Soviets to increase the 
threat to NATO by failing to limit systems 
capable of striking Allied territory from east 
of the Urals. 

These Allies welcome the intention of the 
United States to begin negotiations with the 
Soviet Union on TNF arms control within the 
SALT framework by the end of the year. The 
American Secretary of State intends to 
discuss the timing and procedures for these 
negotiations with Foreign Minister Gromyko 
in September at the United Nations. These 
negotiations will rely on an updated Alliance 
threat assessment and a study of functional 
requirements for NATO TNF to be under- 
taken within the framework of the Special 
Consultative Group and the High Level 
Group as matters of immediate priority. 

MAY 4, 1981 

The Foreign Ministers and representatives of 
Belgium, Canada, Denmark, France, the 
Federal Republic of Germany, Greece, 
Iceland, Italy, Luxembourg, the Netherlands, 
Norway, Portugal, Turkey, the United 
Kingdom and the United States recalled 
previous declarations regarding the condem- 
nation, prevention and suppression of all acts 
of terrorism including those involving attacks 
on the personnel of diplomatic and consular 
missions and their premises. They noted with 
deep concern the suffering inflicted on human 
lives as well as the negative impact of the 
continuation and spread of such acts on the 
social and political institutions of individual 
countries and on international relations. They 
deplored the recent resurgence of armed at- 
tacks, hi-jacking and kidnapping aimed at ob- 
taining political concessions. They vigorously 
condemned all acts of terrorism regardless of 
their origins, causes or purposes as a flagrant 
violation of human dignity and rights. They 
agreed on the necessity, in accordance with 
the legislation of each country, for effective 
bilateral and multilateral co-operation to pre- 
vent and combat all acts of terrorism. Par- 
ticularly reprehensible are those sponsored, 
supported or endorsed by governments. They 
expressed their determination to take all 
necessary measures to ensure effectively the 
security of all official representatives and 
persons who participate on their territories in 
activities within the scope of diplomatic, con- 
sular and other official relations. 

MAY 5, 1981 

Extracts for Publication 

From the Minutes 

of the Ministerial Meeting 

of the Council 

In addition to the communique, the Foreign 
Ministers decided to publish the following ex- 
tracts from the minutes of their meeting of 
the 4th and 5th May 1981: 

Economic Co-operation 

and Assistance Within the Alliance 

In the light of continued economic difficulties 
which in particular affect the less advanced 
members, Ministers noted that further 
assistance was necessary to help Turkey to 
overcome her severe economic problems, and 
that this question would be discussed shortly 
in the OECD [Organization for Economic 
Cooperation and Development]. They ex- 
pressed satisfaction at the general improve- 
ment in the economic situation in Portugal 
over the last year, noting however the need 
for further assistance. They welcomed the ac- 
cession of Greece to the European Communi- 
ty, expecting this to strengthen her ties with 
member countries and over the longer term 
to lead to a steady improvement of the Greek 
economy. Ministers underlined that continued 
support was essential for solving the longer 
term economic problems of these countries 
which would contribute to the consolidation 
of Alliance strength and solidarity. 

In this connection they re-emphasized the 
need to bear in mind the interests of these 
countries in co-operative arrangements, both 
in the sphere of defence equipment and in the 
general scientific field, so that they can play 
a fuller part in making more effective use of 
the resources of the Alliance as a whole. 

The Situation in the Mediterranean 

Ministers noted the report on the situation in 
the Mediterranean prepared on their instruc- 
tions and underlined again the necessity of 
maintaining the balance of forces in the 
whole area. They requested the Council in 
permanent session to continue to consult on 
the question and submit a further report at 
their next meeting. 


Ministers considered a report on substantive 
elements of the current NATO infrastructure 

Civil Emergency Planning— 
State of Civil Preparedness 

Ministers examined a report on the state of 
civil preparedness in the Alliance. They noted 
that improvements had been achieved over 
the last two years, but endorsed the view 
that enhanced planning and devotion of 
budgetary allocations were needed to enable 
the remaining weaknesses and deficiencies to 
be overcome. This would help civil emergency 
planning to play a better part in strengthen- 
ing the security of the Alliance. To that end, 
Ministers issued guidance for civil emergency 
planning over the next four years. 

.Inlw 1QR1 



NATO Defense Planning Committee 
Meets in Brussels 

The Defense Ministers of the NATO 
members met in Brussels May 12-13, 1981. 
The following final communique was issued 
on May 13. 

The Defence Planning Committee of NATO 
met in ministerial session in Brussels on 
12th/13th May, 1981. 

Defence Ministers reaffirmed what the 
member nations of the North Atlantic 
Alliance expressed at the meeting of the 
NATO Council in Rome on 4th and 5th May, 
1981. They shared the deep concern at the 
continuing threats to security and interna- 
tional stability. A strong and cohesive North 
Atlantic Alliance remains indispensable to 
guarantee the security of its members and 
foster stable international relations. Such 
stability requires all nations to act with 
restraint and responsibility, in the interests 
of promoting genuine detente and of develop- 
ing East-West relations, whenever Soviet 
behavior makes this possible. Claims by the 
Soviet Union that it too subscribes to such 
policies are not borne out by Soviet deeds 
such as its invasion and occupation of 
Afghanistan. Efforts to achieve a more con- 
structive East- West relationship are severely 
undermined by the use or threat of force for 
intervention in the affairs of other countries. 
Poland must be left free to solve its own 
problems. The more constructive East-West 
relationship which the Allies seek requires 
tangible signs that the Soviet Union is 
prepared to abandon the disturbing build-up 
of its military strength, to desist from resort- 

ing to force and intimidation and to cease 
creating or exploiting situations of crisis and 
instability in the Third World. The nations of 
the Alliance expressed their determination to 
counter the continuing threat to security and 
international stability by effective restraints 
including firmness in defense and persistence 
in the search for peaceful solutions. 

For their part, Defence Ministers agreed 
that the past decade has seen an unrelenting 
build-up of Soviet military strength across 
the complete spectrum of capabilities encom- 
passing the strategic, theatre nuclear and 
conventional fields. This is in contrast to 
numerous Soviet statements advocating 
peace and disarmament. This disturbing 
growth in military strength allows the Soviet 
Union to exert pressure in many parts of the 
world, particularly through the increasing 
global mobility of its forces and the develop- 
ment of a major maritime capability. All this 
has been in parallel with continuing im- 
provements in the forces confronting the 
Alliance in Europe and the Atlantic. These 
steady increases in Soviet military power 
over the past decade, despite unreciprocated 
Alliance restraint, have created for NATO a 
situation demanding intensified action to en- 
sure an adequate future deterrence. The 
prospects for continued peace and stable 
political relations between East and West de- 
pend on the requisite strengthening of 
NATO's deterrent and defence forces and on 
the maintenance of an overall military 

Science and Technology 

Ministers recognized that scientific resources 
and the aptitude for technological innovation 
constitute a major contribution to increases 
of productivity and hence to economic expan- 
sion and international competitiveness. They 
expressed their concern over the problems 
faced by research and experimentation as a 
consequence of the current economic situa- 
tion in many Alliance countries. Ministers 
urged the strengthening of innovative capaci- 

ty in the productive sector and basic research 
in universities; they invited the members of 
the Alliance to support appropriate measures 
to foster the mobility of scientists and 
engineers and to encourage the adoption of 
technical change in a truly international 

'Press release 140 of May 6, 1981. 
2 Press release 137 of May 8, 1981. 

balance, if possible at a lower level, between 
NATO and the Warsaw Pact. 

In response to this continuing build-up in 
Soviet military strength, nations have achiev- 
ed considerable improvements in the forces 
which they contribute to the Alliance. But the 
rate at which these have been achieved has 
not been commensurate with the sustained 
growth in the Soviet and other Warsaw Pact 
forces. Assessment of the military balance is 
a complex equation and cannot be determined 
simply by counting men, ships and aircraft. 
However, it is clear that there is a disturb- 
ingly adverse trend in the military balance 
between East and West, particularly in 

Although the policies which nations adopt 
outside the NATO area are a matter for na- 
tional decision, the Allies have recognized 
that situations outside NATO's boundaries 
may, whenever peace, international 
equilibrium and the independence of 
sovereign nations are affected, threaten the 
vital interests of the West and therefore have 
implications for the security of members of 
the Alliance. Ministers recognized that when 
considering policies intended to protect such 
vital interests, nations should be prepared to 
participate fully in consultations within the 
Alliance to enable NATO Governments to 
share, and as far as possible coordinate, their 
assessments of the threat and its implications 
and to identify common objectives. It is 
especially important that such consultations 
should be undertaken when 
nations in a position to do so are considering 
out-of-area deployment of forces, in order to 
deter aggression and to respond to requests 
from other nations for help in resisting 
threats to their security or independence. The 
effect of such deployment on Alliance securi- 
ty and defense capabilities should be examin- 
ed collectively in the appropriate NATO 
bodies. Ministers also recognized that com- 
mon objectives identified in such consulta- 
tions may require members of the Alliance to 
facilitate out-of-area deployments in support 
of the vital interests of all. 

The United States and other nations have 
already responded to challenges 
arising from situations outside the NATO 
area. Future deployment of the United States 
rapid deployment force to deter aggressn >n 
and respond to requests by nations for help 
could involve possible changes in the 
availability of combat and support forces cur- 
rently committed to NATO in a reinforce- 
ment role. At the same time as the United 
States carries out its efforts to strengthen 
defence capabilities elsewhere, Allied 
capabilities to deter aggression and to defend 
NATO Europe should also be maintained and 
strengthened. This situation only heightens 
the need for all Allies to maintain levels and 
standards of forces necessary for defence and 
deterrence in the NATO area. 


Department of State Bulletin 



-irst and Second 
Reports on Cyprus 

MAR. 20, 1981 1 

In accordance with provisions of Public Law 
■5-384, I am submitting the following report 
In progress made during the past sixty days 
toward reaching a negotiated settlement of 
[he Cyprus problem. 

A just, fair and lasting resolution to the 
liroblems of Cyprus will remain a priority for 
Iny Administration. 

The talks between representatives of the 
preek Cypriot and Turkish Cypriot com- 
Inunities are continuing. Under the chairman- 
ship of United Nations Secretary General's 
[special Representative on Cyprus, Am- 
bassador Hugo Gobbi, the two sides are 
undertaking detailed analytic review of basic 
Issues. The parties have been addressing the 
(following topics in rotation on the basis of 
pne topic each meeting: 

(A) Reaching agreement on the resettle- 
ment of Varosha under United Nations 

(B) Initial practical measures to promote 
good will. 

(C) Constitutional aspects. 

(D) Territorial aspects. 

Meetings were held on January 16, 21, 
and 28 and February 4, 11, and 18. After a 
mutually agreed upon recess, the meetings 
resumed on March 11. We expect the 
negotiations to continue on a regular basis. 
Throughout this period both sides have 
engaged in serious discussion of the issues in- 
volved. Each side has advanced proposals and 
the negotiators have been seeking to identify 
areas of agreement and reduce differences. 
Throughout these discussions the parties 
have maintained a congenial negotiating at- 
mosphere, seriously addressing points for 

I am convinced that through these 
negotiations a foundation for a stable, endur- 
ing settlement on Cyprus is being laid. Both 
sides are seriously discussing steps to 
mitigate long-standing conflicts and, as was 
anticipated, progress is slow. However, the 
opportunity for a just and lasting settlement 
will not remain indefinitely. Therefore, the 
need for patience and persistent negotiating 
must be complemented by innovative and 
flexible approaches to the outstanding prob- 
lems. After six years of effort, it is time to 
see a fair settlement that will benefit and 
serve all of the Cypriot people. 

In this, my first report to Congress on 

Cyprus, I unhesitantly reaffirm the support 
of the United States for the efforts of the 
Secretary General and his Special Represen- 
tative on Cyprus. They have been vigorously 
and persistently seeking a just and lasting 
solution of the Cyprus problem, The 
Secretary General and other United Nations' 
officials have been creative in their proposals 
and unflagging in their patience from the in- 
ception of the negotiations. I commend their 
professional conduct and offer the commit- 
ment of my Administration to assist in their 
endeavors to resolve the Cyprus issue. 

Ronald Reagan 

MAY 19, 1981 1 

In accordance with the provision of Public 
Law 95-384, I am submitting the following 
report on progress made during the past 
sixty days toward reaching a negotiated set- 
tlement of the Cyrpus problem. 

The intercommunal negotiations between 
Greek Cypriot and Turkish Cypriot 
representatives continue under the chairman- 
ship of the Secretary General's Special 
Representative on Cyprus, Ambassador Hugo 
Gobbi. The two sides are proceeding in their 
detailed review of the four basic, mutually 
agreed-upon issues and continuing to devote 
each session to one topic. 

Meetings were held on March 18, April 2, 
15, and 29, and May 6. The pace of weekly 
sessions has slowed somewhat as both Greek 
and Turkish Cypriots prepare for elections. A 
reduced schedule in May and June is an- 
ticipated with resumption of a regular 
schedule in July. Both sides have continued 
their talks in a congenial negotiating at- 

Although not directly connected to the in- 
tercommunal talks, the problem of missing 
persons in Cyprus has been a significant issue 
dividing the communities. Consequently, we 
are pleased to note a significant, positive 
development in this area. Ambassador Gobbi 
announced on April 22 that an intercommunal 
agreement had been reached on the terms of 
reference for a Committee on Missing Per- 
sons (text attached). The date for the first 
meeting of the Committee will be fixed soon 
following coordination with the International 
Committee of the Red Cross and appointment 
of members of the Commitee. 

The issue of setting up a Committee on 
Missing Persons could, in our view, only be 
resolved with cooperation of both Cypriot 
communities. Consequently, we are gratified 
by the United Nations' announcement and 

hope that subsequent discussion in the Com- 
mittee will be productive and lead to a resolu- 
tion of this important, humanitarian question. 

We also believe the formation of a Com- 
mittee will contribute to a positive 
negotiating atmosphere facilitating progress 
in the intercommunal talks. The agreement 
reached to form a Committee suggests that 
patient, persistent negotiating between both 
communities, under United Nations aegis, 
holds the potential for success even on the 
most difficult of issues. I am confident that 
the productive attitudes characterized by the 
formation of a Committee on Missing Persons 
can be employed in the pursuit of a just and 
lasting settlement of the Cyprus question. 


Ronald Reagan 

Statement of Agreement on Missing 
Persons Committee 

Following is the text of a statement made 
April 22 by SRSG Gobbi at the Ledra Palace 
in Nicosia, Cyprus: 

"On behalf of the Secretary-General, I am 
very pleased to announce that agreement has 
been reached by the two sides on the terms 
of reference for the establishment of a com- 
mittee on missing persons in Cyprus. 

"The Secretary-General has asked me to 
thank both sides for their important coopera- 
tion which has made this agreement possible. 
In particular, I wish to thank the representa- 
tives of the two sides who, over the past few 
months, were engaged in intensive efforts to 
bring about the setting up of this committee. 
The Secretary-General also wishes to thank 
the Internationa] Committee of the Red 
Cross for its cooperation in facilitating this 
significant achievement. On the basis of this 
agreement it is possible now to proceed to 
the establishment of the committee. This 
development represents a very important 
step forward in the solution of a long- 
standing issue of great concern to the two 

"Furthermore, we hope the efforts of the 
committee on missing persons will strengthen 
the spirit of cooperation and the joint 
endeavor undertaken in the framework of the 
intercommunal talks." 

'Identical letters addressed to Thomas P. 
O'Neill, Jr., Speaker of the House of 
Representatives, and Charles H. Percy, 
Chairman of the Senate Foreign Relations 
Committee (text of the second report from 
Weekly Compilation of Presidential 
Documents of May 25, 1981). ■ 

NATO will continue to seek to negotiate 
equitable, militarily significant, binding and 
fully verifiable arms control agreements in 
order to achieve a balance of forces at lower 
levels and provide better security. The Allies 
recognize the arms control negotiations can 
only lead to fruitful results in an interna- 
tional climate of confidence. 

It is against this broad political and 
strategic background that the new ministerial 
guidance, both for nations and the NATO 
military authorities, has been developed. This 
guidance which has today been approved by 
Ministers addresses what needs to be done in 

the current political and economic situation, 
to ensure the continued viability of NATO's 
deterrent strategy in light of the Warsaw 
Pact military capabilities. In particular, it 
gives direction for the preparation of NATO 
force proposals for 1983-1988 including 
guidelines for the correction of the most im- 
portant deficiences in the conventional forces. 

July 1981 



The planning period covered by the 
guidance will also see SACEUR's reinforce- 
ment plan take effect; this will facilitate the 
rapid and co-ordinated deployment to Europe 
of large numbers of United States, United 
Kingdom and Canadian reinforcements in 
times of tension or hostilities. 

Recognizing that nations not responding 
to situations outside NATO's boundaries may 
need to assume additional tasks within the 
NATO area, national defence planning should 
make provision towards compensating for 
changes in the availability of forces commit- 
ted to NATO because of diversion or tasking 
on a national basis to carry out operations 
outside NATO's boundaries in support of the 
vital interests of Allied countries. 

The critical strategic importance of the 
southern region and the Mediterranean is 
recognized as is the need for continued sup- 
port and assistance to Greece, Portugal and 
Turkey whose economic situation does not 
permit them to provide from their own 
resources all the defence capabilities 
necessary for the implementation of Alliance 

There is a continuing necessity for NATO 
to maintain strong, diverse and flexible 
nuclear forces as part of the NATO triad and 
thereby to ensure deterrence. NATO will 
move ahead with its planned schedule of long- 
range theatre nuclear force (LRTNF) mod- 
ernization whilst at the same time making 
efforts to reach balanced, equitable and 
verifiable arms control agreements limiting 
such forces as was decided on 12th 
December, 1979. In this respect, Ministers 
welcomed the intention of the United States 
to begin negotiations with the Soviet Union 
by the end of the year on theatre nuclear 
force arms control within the SALT 
framework as declared in Rome, and endors- 
ed plans for the high level group and the 
special consultative group to undertake 
urgently agreed studies. 

Ministers discussed the status of the long- 
term defence programme and approved 
recommendations designed to ensure continu- 
ing progress in a number of key areas. 

The Alliance is engaged in many longer 
term planning efforts. As reflected in the 
guidance, these include the development of 
concepts and of long-term planning guidelines 
in certain specific areas. The guidance 
underlines the need for further efforts in the 
area of armaments co-operation, including 
continued emphasis on NATO-wide planning 
procedures and the extension of the family of 
weapons concept. Special attention will be 
given to long-term armaments planning 
especially where there will be opportunities 
for taking advantage of advanced 
technologies and for energy conservation. At- 
tention is drawn to the need for control over 
the transfer of advanced technology to War- 
saw Pact countries, within the framework of 
existing international consultations. 

Other matters to which the Alliance is 
currently giving increased attention concern 
the provision of adequate infrastructure 
funds; Ministers approved financing for the 
programme for the current year. 

Confronted with all these tasks and not- 
withstanding economic and financial con- 
straints the standing Allied commitment to 
the 3 percent formula guidance has been con- 
firmed. In the light of the worsening military 
situation as well as the emerging need to 
cope with the implications of contingencies 
outside the NATO boundaries the Allies have 
also agreed to do their utmost to make 
available all the resources needed to provide 
the requisite strengthening of their deterrent 
and defence forces. This general guidance on 
resources is only one of a number of factors 
which are relevant to determining the 
defence efforts which nations should under- 
take. It therefore needs to be accompanied by 
more specific considerations for each nation 
taking account of the quality and quantity of 
its past and present defence efforts, the most 
critical deficiencies in its forces and the 
necessary improvements which should be 
achieved as soon as possible within the plann- 
ing period. Greater emphasis should be 
placed on performance, such as reflected in 
the achievement of force improvements. In 
this regard Ministers welcomed the signifi- 
cant efforts made by the United States to 
strengthen its defence capability in the in- 
terest of the Alliance as a whole. ■ 

West German 
Chancellor Visits 
United States 

Chancellor Helmut Schmidt of the 
Federal Republic of Germany made an 
official visit to Washington, D.C., May 
20-23, 1981, to meet with President 
Reagan and other government officials. 

Following is the text of the joint 
statement issued on May 22. 1 

During the official visit of Chancellor 
Helmut Schmidt of the Federal Republic 
of Germany to the United States from 
May 20-23, 1981, President Reagan and 
the Federal Chancellor held detailed 
talks on a wide range of political and 
economic questions. They noted with 
satisfaction that they share a common 
assessment of the international situation 
and its implications for the Western 
alliance. They agreed that their two 
countries have a common destiny found- 
ed on joint security interests and firmly 
rooted in their shared values of liberty, 
a democratic way of life, self- 
determination, and belief in the in- 
alienable rights of man. 

They regard the reliable and proven 
U.S. -German partnership as an essential 
factor in international stability and 
Western security based on the North 
Atlantic alliance. They agreed that 
substantive and effective consultations 
are a mainstay of the relations between 
Western Europe and the United States. 

The President and the Federal 
Chancellor welcomed and reaffirmed the 
results of the recent NATO ministerial 
meetings in Rome and Brussels as 
renewed proof of the political strength 
of the alliance and the continuity of 
alliance policy. They stressed the deter- 
mination of alliance members to take the 
necessary steps to work with their 
NATO partners to strengthen the 
Western defense posture and to address 
adverse trends due to the Soviet 
military buildup. Together with deter- 
rence and defense, arms control and 
disarmament are integral parts of 
alliance security policy. 

The President and the Federal 
Chancellor affirmed in this connection 
their resolve to implement both elements 
of the NATO decision of December 1979 
and to give equal weight to both 
elements. The Federal Chancellor 
welcomed the U.S. decision to begin 
negotiations with the Soviet Union on 
the limitation of theater nuclear 
weapons within the SALT framework by 
the end of this year. He also welcomed 
the fact that the U.S. Secretary of State 


Department of State Bullet 


ias initiated preparatory discussions on 
heater nuclear forces with the Soviet 
Jnion, looking toward an agreement to 
jegin formal negotiations. The President 
ind the Federal Chancellor agreed that 
JTNF [theater nuclear force] moderniza- 
;ion is essential for alliance security and 
is a basis for parallel negotiations 
eading to concrete results on limitations 
)f theater nuclear forces. They further 
igreed that the preparatory studies 
;alled for in the Rome communique 
should be undertaken as matters of im- 
mediate priority by the relevant NATO 

The President and the Federal 
Chancellor assessed very favorably the 
close cooperation between the Federal 
Republic of Germany and the three 
Ipowers in matters relating to Berlin and 
(Germany as a whole. The Federal 
[Chancellor thanked the President for his 
reaffirmation of the pledge that the 
lUnited States will continue to guarantee 
Ithe security and viability of Berlin. They 
agreed that the maintenance of the calm 
[situation in and around Berlin is of 
[crucial significance for European securi- 
|ty and stability. 

The European Community plays an 
important part in maintaining interna- 
tional political and economic stability. 
The United States will continue to sup- 
port the process of European unifica- 

Both sides noted that a serious inter- 
national situation has been created by 
Soviet expansionism and armaments ef- 
forts. To meet this challenge and to 
secure peace, they are determined to 
respond with firmness and to maintain a 
dialogue with the Soviet Union. 

The President and the Federal 
Chancellor agreed that it is important 
for the stabilization of East-West rela- 
tions that the current CSCE [Con- 
ference on Security and Cooperation in 
Europe] review conference in Madrid 
agree on a balanced substantive con- 
cluding document which includes en- 
hanced respect for human rights, in- 
creased human contacts, a freer flow of 
information, and cooperation among and 
security for all of the participants. In 
this regard, and as part of such a 
balanced result, the President and the 
Chancellor favor agreement on a precise 
mandate for a conference on disarma- 
ment in Europe, providing for the ap- 
plication of militarily significant, bind- 
ing, and verifiable confidence-building 
measures covering all of the continent of 
Europe from the Atlantic to the Urals. 

Poland must be allowed to solve its 
problems peacefully and without exter- 
nal interference. The President and the 
Federal Chancellor reaffirmed unequiv- 

July 1981 

ocally their view that any external in- 
tervention would have the gravest 
consquences for international relations 
and would fundamentally change the en- 
tire international situation. 

Genuine nonalignment of the states 
of the developing world is an important 
stabilizing factor in international rela- 
tions. The Chancellor and the President 
support the independence and the right 
of self-determination of the states of the 
developing world. They will, in concert 
with their allies and the countries af- 
fected, oppose any attempts, direct or 
indirect, by the Soviet Union to under- 
mine the independence and stability of 
these states. They confirmed their will- 
ingness to continue their cooperation 
with these states on the basis of equal 
partnership and to continue their sup- 
port of their economic development. 

The President and the Federal 
Chancellor reaffirmed their view that 
the Soviet occupation of Afghanistan is 
unacceptable. They demanded the 
withdrawal of Soviet troops from 
Afghanistan and respect for that coun- 
try's right to return to independence and 
nonalignment. The destabilizing effects 
which the Soviet intervention in 
Afghanistan has on the entire region 
must be counted. 

Both sides stressed the importance 
of broad-based cooperation with the 
states of the gulf region. 

The President and the Federal 
Chancellor agreed that the United 
States and the Federal Republic of Ger- 
many, the latter within the framework 
of European political cooperation, should 
continue the search for a comprehensive, 
just, and lasting peace in the Middle 
East. Their efforts should continue to be 
complementary and build upon what has 
been achieved so far. 

Both sides reaffirmed the determina- 
tion to strengthen further the open 
system of world trade and to oppose 
pressure for protectionist measures. 

They stressed the vital importance 
for political and economic stability of 
further energy conservation and diver- 
sification measures to reduce the high 
degree of dependence on oil. The press- 
ing energy problems can only be 
mastered on the basis of worldwide 
cooperative efforts that strengthen 
Western energy security and reduce the 
vulnerability of the West to potential 
supply cutoffs from any source. The sup- 
ply problems of the developing countries 
require particular attention. 

The President and the Federal 
Chancellor agreed on the need in fram- 
ing their economic policies to give high 
priority to the fight against inflation and 
to the creation of improved conditions 
for renewed economic growth and in- 

creased productivity. Both sides stressed 
the need for a close coordination of 
economic policies among the industrial 

Both sides stressed the need for 
close and comprehensive exchange of 
views on the U.N. Conference on the 
Law of the Sea while the U.S. Govern- 
ment reviews its position. 

The President and the Federal 
Chancellor noted that their talks once 
more demonstrated the friendly and 
trusting relationship that has linked 
their two countries for over 30 years. 
They welcomed all efforts which serve 
to broaden mutual contacts and 
underlined the responsibility of the 
coming generation for maintaining and 
developing German-American friendship. 

■Text from White House press release. 
Arrival remarks, dinner toast, and departure 
remarks were also issued as White House 
press releases. ■ 

U.S. Asks Libyans To 
Close People's Bureau; 
Travel Advisory Issued 

MAY 6, 1981 1 

From the first days of the Administra- 
tion, both the President and Secretary 
Haig have made known their very real 
concern about a wide range of Libyan 
provocations and misconduct, including 
support for international terrorism. 

We have also been concerned by a 
general pattern of unacceptable conduct 
by the People's Bureau in Washington, 
which is contrary to internationally ac- 
cepted standards of diplomatic behavior. 

We have, therefore, asked the 
Libyans to close their People's Bureau in 
Washington and have given them 5 
working days, starting today, to 
withdraw their personnel. This action 
reduces our relations with Libya to the 
lowest level consistent with the 
maintenance of diplomatic relations. 

A new travel advisory is being 
issued today: "Due to unsettled relations 
between the U.S. Government and the 
Government of Libya, the Department 
of State warns American citizens 
against any travel to or residence in 
Libya. Travelers should also be informed 
that the U.S. Embassy in Tripoli is 
closed, and the U.S. Government is not 
in a position to provide consular protec- 
tion and assistance to Americans 
presently in Libya." 

1 Made available to news correspondents 
by Department spokesman Dean Fischer. ■ 



Requirements of Our Defense Policy 

by Caspar W. Weinberger 

Address before the I r nited Press In- 
ternational (UPI) luncheon of the 

American Newspaper Publishers 
Assiiriul iiitt in Chicago on May 5, 1981. 
Mr. Weinberger is Secretary of Defense.' 1 

Today I want to talk to you about the 
defense policy of (he Reagan Adminis- 
tration as we have been shaping it over 
the recent months. I want to say 
something about our goals, about our 
strategies for meeting different threats 
and contingencies, and about the urgent 
task of rebuilding our capabilities. 

Necessarily, this will be an in- 
complete description of our defense 
policy. I do not want to tax your pa- 
tience with details; I only want to give 
you some highlights. Yet, in reality, our 
defense policy must be comprehensive 
and cover many aspects of our security. 
It must enable us to cope with all the 
significant threats, with all the plausible 
contingencies that might endanger our 
security. When it comes to the security 
of our country, we cannot prepare for 
only those threats that are easy to 
handle. In the final analysis our ultimate 
goal is to do everything necessary to 
preserve peace with freedom and to do 
it in time. 

The fundamental goal of our defense 
effort, as I have said, is to preserve 
peace with freedom. Peace alone is not 
enough. Poland is technically at peace. 
We must secure peace with freedom, not 
only for today but for the future; not 
only for ourselves and our descendants, 
but for those many other nations which 
have joined us in an alliance for the com- 
mon defense. 

From our alliance commitments 
stem some important constants for our 
strategy, tactics, and deployment, 
because these matters have been ar- 
ranged by common agreement. And if, 
because of a growing threat or new 
technology change is needed, we will 
again seek common agreement to bring 
it about. 

Thus, among the constants of our 
defense policy, is the agreed basic 
strategy for NATO, which requires 
strong conventional, theater nuclear, 
and strategic nuclear forces to provide 
the full spectrum of deterrence. We are 
also recommitted to strengthen U.S. 
conventional forces in Europe, to im- 
prove their readiness, and to move for- 
ward with the agreed modernization of 

theater nuclear weapons and our 
associated effort at arms control 

Changes in Policy 

What has changed in our determination 
to respond realistically to the growing 
threats wherever they confront our na- 
tional security? For well over a decade, 
the Soviet Union's spending on conven- 
tional armaments has been about double 
our own. And its investment in strategic 
nuclear armaments has been triple that 
of the United States. These facts aren't 

particularly in the vital regions of the 
Middle East. During this same period, 
we have let our strategic superiority be 1 
eroded. We have long tolerated this 
deterioration in our relative nuclear 
strength because we hoped that the 
nuclear balance could be stabilized 
through arms control agreements and 
that the Soviet leadership, in fact, 
shared our goal for such a stable nuclear 

It is an unfortunate, indeed, a 
tragic, fact that this hope of ours has 
been badly disappointed— the Soviet ex- 
penditures for armaments, in particular 
strategic arms, grew more rapidly and 
more steadily during the period called 
"detente" than during the so-called cold 
war. This is not to say detente caused 

We must secure peace with freedom, not only for today but for the 
future; not only for ourselves and our descendants, but for those many other 
nations which have joined us in an alliance for the common defense. 

new; you have heard them before. 

What is new is that Americans, last 
fall, reasserted their belief that our na- 
tion must restore its military strength as 
President Reagan promised. What is 
new is that we have decided that 
America can, and in fact must, remain a 
great power if we are to keep peace and 
freedom. What is new is the determina- 
tion of President Reagan, and those of 
us who serve him, to cut back Federal 
spending and reduce the role of govern- 
ment, thereby making room for a 
vigorous expansion in our defense effort, 
without causing more inflation. 

The Soviet buildup in armaments 
over the last 15 years is not the only 
changed threat we must address. During 
the same period, Soviet power has been 
growing in other important ways. The 
Soviet Union has greatly extended its 
geostrategic reach by establishing 
military outposts in the Middle East, in 
Africa, and elsewhere. Soviet footholds 
in Ethiopia, Yemen, and Afghanistan 
threaten the vital oilfields of the Middle 
East and, indeed, the peace of the 
world. These bases and facilities were 
formerly neutral or accessible to us. And 
Soviet forces have increasingly been 
designed and deployed to take advan- 
tage of this farflung access they have 

As Soviet ability to project its power 
abroad has grown, American and allied 
access to bases and airspace has de- 
clined in many areas of critical concern, 

the Soviet buildup, as some European 
journalists felt I have said. It is to say 
that detente slowed only our investment 
in strategic arms. 

As I am stressing the need to re- 
spond to the relentless growth in Soviet 
arsenals, I do not want to be misunder- 
stood to mean that Soviet military 
power is the only threat of concern to 
the Defense Department. We and our 
allies have come to be critically depend- 
ent on places in the world which are 
subject to great instability. Many of our 
vital resources come from such areas in 
the world. And in those areas, some na- 
tions are both strongly armed and 
hostile toward us. These local threats to 
our interest, and local instabilities, in 
general, often present a temptation to 
various forms of Soviet intervention. 
They constitute the troubled waters that 
are a favorite fishing ground of the 
Soviets. We need only to look at Syria, 
Iran, and Iraq, to say nothing of the 
Caribbean disturbances, to see this. 

We cannot meet alone all the 
farflung challenges that may arise. We 
have to count on increased and closer 
cooperation with our friends and allies. 
Indeed, the commitments and interests 
that we are bound to support in almost 
every quarter of the globe are not 
isolated points of concern. For example, 
what we do to assure uninterrupted ac- 
cess to oil from the Persian Gulf affects 
Japan and Israel and all our European 
allies. What Japan does to strengthen its 


Department of State Bulletin 

Military Affairs 

fense enhances our ability to fulfill our 
leaty obligations to Australia and New 
aland. What Australia and New 
aland contribute to safeguarding the 
istern approaches to the Indian Ocean 
creases our capabilities and NATO's to 
mnter any coercive threats on NATO's 
stant flanks— Turkey and Norway. 
ur interests and commitments, our 
liances and our treaties, are both 
ligations and assets at once. 

This interlock of interests and com- 
litments of the free world creates 
utual obligations to share in the 
urdens of our common defense. I 
lieve President Reagan set an example 
f courage and political leadership by 
imming back sharply many domestic 
overnment expenditures with large 
jnstituencies, while expanding our 
sources needed to meet the growing 
ilitary threat. I know our allies have 
een deeply impressed by this example, 
hope that many of them will find it 
ossible to follow it. As partners in the 
Dmmon defense, we must all assume an 
ppropriate effort at appropriate levels. 

In the past, we and our allies en- 
>yed a commanding lead in technology 
nd its defense applications. Today we 
annot take for granted that this lead 
xists and will be maintained in matters 
nportant for our defense. I am confi- 
ent that the United States has the 
uman resources to hold and keep that 
^ad — the skills, the imagination, the in- 
enuity. But we have not sufficiently 
iewed our technology as a valuable, and 
mited, national resource, and we 
leglected that part of this resource 
v'hich must be devoted to keeping our 
lation strong and free. We have to 
ealously guard technology that has 
nilitary applications. Let us realize that 
vhen we talk about "East- West 
echnology transfer," we are not talking 
ibout a transfer of national assets in 
me direction— from West to East. 

)efense Strategy 

t is a primary mission of the Depart- 
nent to be prepared to wage war, 
iecause we invite aggression if we are 
mprepared to meet it, and we invite 
lisaster if we are forced to meet aggres- 
ion unprepared. The grim paradox we 
ace, constantly, is that in trying to 
ireserve peace with freedom we must 
trengthen ourselves with weapons we 
till never use if we are successful. We 

know from nearly 20 years' experience 
with the Soviets that unilateral restraint 
is the most dangerous of all policies and 
the policy most likely to produce expan- 
sionism or subjugation. 

To fulfill our mission, we must 
restore our ability to mobilize our forces 
quickly and to support them in the com- 
bat we hope thus to deter. Accordingly, 
we have added major investments in 
readiness in our revisions of the FY 
1981-82 defense budgets. 

But all the investments in equipment 

Our interests and commitments, 
our alliances and our treaties, are 
both obligations and assets at once. 

and personnel would not suffice if we 
are unprepared to respond adequately to 
warnings. And we have learned from 
history that warning of attack is often 
ambiguous. We must develop and imple- 
ment improvements to strengthen our 
ability to respond to warning. We are 
acquiring better command and com- 
munications systems that are survivable 
and, thus, can properly function in a 

The new Soviet projection forces do 
not merely give an unprecedented reach 
to Soviet military ventures into regions 
of greatest importance to us, but they 
are also inherently capable of swift ex- 
ecution. Hence, we have to be able to 
move our forces quickly. The scale and 
the speed of the invasion of Afghanistan 
has demonstrated that a country's 
capital and all its airfields can fall under 
Soviet military control in a matter of 

We must, frankly, recognize the 
possibility of a similar military operation 
against other countries where the 
Western interest would be vital. In the 
middle of any night, I may be awakened 
to be told that the Soviet Union is ac- 
tually in the process of invading a coun- 
try that we must defend but where we 
have neither bases nor troops. To be 
sure, we have contingency plans, but are 
our forces truly ready to carry them 
out? To be sure, there are crisis- 
management arrangements, but are we 
also administratively and psychologically 
ready to follow up with all the detailed 
steps necessary for farreaching and 
swift military movements? This is why I 

put so much stress on improving our 
ability to mobilize our forces and to 
mobilize quickly. We may not again have 
the preparation time we had to get 
ready for World War II, which was 
barely enough then. 

Even more important, we have to 
build up a stronger military presence in 
vital areas to meet potential aggression 
before it can become an accomplished 
fact. This is the reason for the effort we 
now put into rapid deployment forces 
for the Middle East. This is also the 
reason for important elements in our 
security assistance bill, now pending 
before Congress, which is designed to 
help such countries as Turkey, Egypt, 
Sudan, and Israel. 

However, within the next few years, 
we and our allies cannot rebuild our 
strength sufficiently to meet all risks of 
military aggression. Soviet-backed 
aggression against some of our vital in- 
terests in distant regions of the world 
might overwhelm some of our forces. 
What counts in a war is not winning the 
first battle, but the last. More and more 
it is apparent that we cannot and, in- 
deed, should not rely exclusively on 
strategic forces and that we will need a 
strong conventional capacity to counter 
conventional strength that may be 
deployed against us. 

We have to be prepared to launch 
counteroffensives in other regions and 
to exploit the aggressor's weaknesses 
wherever we might find them. That is to 
say, we must be prepared for waging a 
conventional war that may extend to 
many parts of the globe, if persistent 
local aggression by superior forces can- 
not be turned around. It is in this con- 
text that our need for naval superiority 
acquires special dimension. 

Historically, we have always relied 
heavily on our industrial base. We recall 
how our productive genius was decisive 
in bringing us victory in both the great 
wars of this century. Today, we must, of 
course, rely on our ready nuclear forces 
to deter nuclear attack, as well as to 
help deter conventional attack against 
our principal alliance system. But our 
large and latent capacity to expand 
defense production has always provided 
an added and powerful deterrent against 
piecemeal aggression in other regions 
where we have vital interests. 

Yet, we cannot take this asset for 
granted. Over the years, we have 
neglected our capacity to mobilize in- 
dustry for defense. I have instituted 

luly 1981 



changes in our methods for purchasing 
arms— the so-called acquisition proc- 
ess—designed to reduce costs and 
delays in our arms purchases in 
peacetime. In addition, these reforms 
will also improve our capability to 
mobilize industry in time of war or dur- 
ing a major emergency. 

First, putting ourselves in position 
to expand our defense effort greatly, if 
we should have to, will be a very low- 
cost aspect of our defense program, yet 
one that brings great returns in defend- 
ing our security. 

Second, such steps have particular 
importance in countries like ours. 
Democracies find it difficult to conduct 
and persevere in an active, long-term 
defense and foreign policy. As De 
Tocqueville long ago pointed out: 
"Foreign policies demand scarcely any of 
those qualities which are peculiar to 
democracy; they require, on the con- 
trary, the perfect use of almost all those 
in which it is deficient." By the same 
token, democracies are naturally adverse 
to maintaining huge armaments and 
large bodies of men on a war footing in 
peacetime. We cannot hope, nor would 
we want to match our adversaries in 
ground forces during peace. Hence, the 
readiness with which we could mobilize 
our industrial potential serves as our 
countervailing reserve of military 

Now, as our defense policies are 
developed and put into effect, some will 
carry on the earnest hunt for some easy 
label, some simplified tag to describe it 
so it will fit into a headline. I don't 
doubt that we will learn about "X's 
strategy," or "Y's doctrine." But in our 
fluid and complex world, the policies and 
doctrines that must guide our defense 
can never be final and complete, or be 
locked into dogmatic terms. 

What we propose to do is clear. Why 
we do it should also be clear. There has 
been an enormous increase in Soviet 
strength. This is an ever-growing im- 
balance between their forces and ours. 

• We feel we must strengthen the 
deterrent capabilities of our nuclear 
forces and move to redress the present 
strategic imbalance. 

• We must maintain fully our con- 
ventional and nuclear deterrent commit- 
ment to NATO. 

• Our global interest and com- 
mitments dictate that our armed forces 
acquire greater range, mobility, and sur- 
vivability. That means naval power able 

U.S. Policy and the Law of the Sea 


by James L. Malone 

Statement before the Subcommittee 
on Oceanography of the House Merchant 
Marine and Fisheries Committee on 
April 28, 1981. Mr. Malone is Chairman 
of the U.S. delegation to the Law of the 
Sea Conference and Assistant Secretary- 
designate for Oceans and International 
Environmental and Scientific Affairs. 1 

It is a pleasure to be given the oppor- 
tunity to speak today about the recently 
concluded session of the Law of the Sea 
Conference and the Administration's 
policy review process. My statement will 
attempt to put into perspective this Ad- 
ministration's approach to the Third 
U.N. Conference on the Law of the Sea 
and the reasons why we adopted the 
decision to slow down the negotiating 
process just as it may have been about 
to finalize the draft convention text. 

Preparation for the Third U.N. Con- 
ference on the Law of the Sea began in 
1966. During the 15-year history of 
these negotiations, the United States 
has sought to protect U.S. oceans in- 
terests and has pressed for urgent solu- 
tions to what it perceived to be the prob- 
lems of the law of the sea. The develop- 
ing countries have approached the 
negotiators with a different perspective 
and sought economic concessions from 
the industrialized world, chiefly in the 
deep seabed part of the negotiations. In- 
creasingly, important compromises to 
developing country interests were ac- 
cepted by our negotiators in order to 
achieve the protection of U.S. interests 
as they defined them. 


Informal Draft Convention 

When this Administration took office, it 
was confronted with an informal draft 
convention on the Law of the Sea con- 
taining a number of provisions raising 
concerns. We were informed that the 
conference was on the verge of finalizing 
this text and that there was an expecta 
tion that the negotiations would con- 
clude in 1981. 

Many of the provisions of the draft 
convention prompted substantial criti- 
cism from industry, Congress, and the 
American public. There was also some 
question whether this draft convention 
was consistent with the stated goals of 
the Reagan Administration. Therefore, 
the Administration decided that it would 
be better to face criticism in the United 
Nations than to proceed prematurely to 
finalize a treaty that might fail to fur- 
ther our national interests. Many com- 
ments were made by foreign delegates 
and in the U.S. press about the manner 
in which we announced our decision to 
conduct a policy review and to appoint a 
new chief negotiator. 

The decision to conduct the review 
was made as rapidly as possible, consist- 
ent with the many burdens and com- 
peting priorities faced by any new 
Administration. A change in the leader- 
ship of the American delegation was 
essential in order to ensure that other 
countries clearly understood our 
seriousness of purpose with respect to 
the review. That action was also neces- 
sary in order to send the signal to other 
delegations that the United States could 
not be induced to return immediately 

to command the sealanes vital to us and 
our allies. It means developing, urgently, 
a better ability to respond to crises far 
from our shores and to stay there as 
long as necessary. 

• The Arabian Gulf is such a vital 
area for us and our allies. The West's 
dependence on its oil means we must 
make sure we can respond effectively to 
threats in this region. 

• This idea that all conventional 
wars will be short has been overtaken by 
events. Conventional wars could come in 
all sizes; if we value our freedom, we 
must be able to defend ourselves in wars 

of any size and shape and in any region 
where we have vital interests. 

We do not expect to do all these 
things overnight. Some of the tasks thai 
face us are obviously continuing tasks. I 
we persevere— and the American peopk 
are determined to persevere— we can 
bring about changes not only in the 
strategic balance. Improved defense will 
bring with it greater international 
stability and a continuing hope that we 
can pass on to our descendents the in- 
estimable privilege of peace with 

defense Department press release 
176-81. ■ 


DeDartment of State Bulletir 


id, thus, prematurely, to the bargain- 
ig table by offers of minor technical 
langes to the draft convention. I am 
ire you can also appreciate that it 
ould be less difficult for a new head of 
elegation to adhere to a negotiating 
osture that diverged from our past ap- 

The argument has been made by 
ime that the United States is failing to 
eep its commitments by reviewing its 
olicy and possibly changing its position 
n subjects of importance. This, in my 
ldgment, is an unconvincing argument, 
hortly before the Carter Administra- 
on took office, leading representatives 
f the developing countries at the con- 
?rence rejected treaty provisions they 
ad previously negotiated and demanded 
ubstantial changes to the draft text 
len on the table as the price of future 
greement. Those delegates entertained 
le hope that more favorable conces- 
ions could be extracted from a new ad- 
linistration which was thought to be 
lore sympathetic to developing country 
ositions in U.N. forums. 

It has always been well understood 
.t the Law of the Sea Conference that a 
uccessful treaty must be based on a 
lackage deal. The position that the Ad- 
ninistration will take toward the eon- 
ents of that package remains to be 
letermined in the course of the review 
process. No nation is committed to the 
I ext in the sense that it is bound by it. 
n this regard I would like to quote from 
I .he conference president's preparatory 
lote to the draft convention. 

This text like its predecessor will be 
nformal in character. It is a negotiating text 
md not a negotiated text, and does not prej- 
ldice the position of any delegation. 

Features of the Present Convention 

Some of the features of the present 
draft convention raise questions as to 
whether they are consistent with U.S. 
interests. I will not, today, seek to iden- 
tify other features of the text which 
have been considered to preserve or pro- 
mote other U.S. interests. This will be 
part of the review process. The areas of 
concern include the following: 

• The draft convention places under 
burdensome international regulation the 
development of all of the resources of 
the seabed and subsoil beyond the limits 
of national jurisdiction, representing 
approximately two-thirds of the Earth's 
submerged lands. These resources in- 
clude polymetallic nodules. They also in- 
clude mineral deposits beneath the sur- 
face of the seabed, about which nothing 

is known today but which may be of 
very substantial economic importance in 
the future. 

• The draft convention would estab- 
lish a supranational mining company 
called the Enterprise, which would 
benefit from significant discriminatory 
advantages relative to the companies of 
industrialized countries. Arguably, it 
could eventually monopolize production 
of seabed minerals. Moreover, the con- 
vention requires the United States and 
other nations to fund the initial 
capitalization of the Enterprise, in pro- 
portion to their contributions to the 
United Nations. 

• Through its transfer of technology 
provisions, the convention compels the 
sale of proprietary information and 
technology now largely in U.S. hands. 
Under the convention, with certain 
restrictions, the Enterprise, through 
mandatory transfer, is guaranteed ac- 
cess on request to the seabed mining 
technology owned by private companies 
and also technology used by them but 
owned by others. The text further 
guarantees similar access to privately 
owned technology by any developing 
country planning to go into seabed min- 
ing. We must also carefully consider 
how such provisions relate to security- 
related technology. 

• The draft convention limits the 
annual production of manganese nodules 
from the deep seabed, as well as the 
amount which any one company can 
mine for the first 20 years of produc- 
tion. The stated purpose of these con- 
trols is to avoid damaging the economy 
of any country which produces the same 
commodities on land. In short, it at- 
tempts to insulate land-based producers 
from competition with seabed mining. In 
doing so, the draft treaty could 
discourage potential investors, thereby 
creating artificial scarcities. In allocating 
seabed production, the International 
Seabed Resource Authority is granted 
substantial discretion to select among 
competing applications. Such discretion 
could be used to deny contracts to quali- 
fied American companies. 

• The convention creates a one- 
nation, one-vote international organiza- 
tion which is governed by an assembly 
and a 36-member executive council. In 
the council, the Soviet Union and its 
allies have three guaranteed seats, but 
the United States must compete with its 
allies for any representation. The 
assembly is characterized as the 
"supreme" organ, and the specific policy 

decisions of the council must conform to 
the general policies of the assembly. 

• The convention provides that, 
after 15 years of production, the provi- 
sions of the treaty will be reviewed to 
determine whether it has fulfilled over- 
riding policy considerations, such as pro- 
tection of land-based producers, promo- 
tion of Enterprise operations, and 
equitable distribution of mining rights. If 
two-thirds of the states' parties to the 
treaty wish to amend provisions con- 
cerning the system of exploitation, they 
may do so after 5 years of negotiation 
and after ratification by two-thirds of 
the states' parties. If the United States 
were to disagree with duly ratified 
changes, it would be bound by them, 
nevertheless, unless it exercised its op- 
tion to denounce the entire treaty. 

• The draft convention imposes 
revenue-sharing obligations on seabed 
mining corporations which would signif- 
icantly increase the costs of seabed min- 

• The convention imposes an inter- 
national revenue-sharing obligation on 
the production of hydrocarbons from the 
continental shelf beyond the 200-mile 
limit. Developing countries that are net 
importers of hydrocarbons are exempt 
from the obligation. 

• The convention contains provi- 
sions concerning liberation movements, 
like the PLO [Palestine Liberation 
Organization], and their eligibility to ob- 
tain a share of the revenues of the Sea- 
bed Authority. 

• The convention lacks any pro- 
visions for protecting investments made 
prior to entry into force of the conven- 

On the basis of the foregoing dif- 
ficulties and others, it is the best judg- 
ment of this Administration that this 
draft convention would not obtain the 
advice and consent of the Senate. Of 
course, since the treaty would require 
implementing legislation, the House 
would also have a major role that must 
be considered. We have reason to doubt 
that the House of Representatives would 
pass the necessary legislation to give ef- 
fect to a treaty containing provisions 
such as these. 

Administration's Review 

The provisions I have mentioned raised 
questions for this Administration. We 
must seriously consider whether those 
provisions should be included in a treaty 
to which the United States would be- 
come a party, unless there were a 

July 1981 



countervailing national policy interest. 
The review will evaluate all of our na- 
tional interests and objectives, including 
national security, to determine the ex- 
tent to which they are protected by the 
draft convention, to identify necessary 
modifications to the convention. The 
review will also examine, with great 
care, whether these same interests and 
objectives would fare better or worse in 
the absence of a treaty. 

During the course of the review, we 
will consult with the Congress, with 
other nations, including our principal 
allies, and with a broad spectrum of the 
private sector. We anticipate that this 
will be a fairly lengthy process. The Ad- 
ministration believes that any decision 
concerning a subject as comprehensive 
and complex as this one must be taken 
with deliberation and with keen under- 
standing of foreign and domestic reac- 
tions. Accordingly, we have determined 
that the policy review process cannot be 
fully completed before the resumed 10th 
session of the Law of the Sea Con- 
ference in Geneva this August. We must 
have time to insure adequate opportuni- 
ty to test our tentative views with the 
widest possible number of countries. 

At the recently concluded session of 
the conference, disappointment and ap- 
prehension were, indeed, registered at 
the decision of the United States to 
undertake such a sweeping review, 
although this reaction was not universal. 
The Administration realizes the concern 
and disappointment that this decision 
has engendered. However, we feel 
strongly that the American people would 
wish to see this review occur rather 
than being plunged headlong into this 

We think that the world community, 
too, will be better served if we return to 
the conference with a realistic assess- 
ment of what will satisfy our people and 
our Congress. The Administration does 
not wish to be in a position of mis- 
leading other countries into concluding a 
treaty they will expect us to ratify a 
treaty which, in many respects, is be- 
lieved by them to satisfy our national in- 
terests and then find us unable to par- 
ticipate in the final result. 

Summary of New York Session 

As could have been expected in the light 
of the U.S. position, the session in New 
York this spring was, relative to 
previous sessions, inactive. We were not 
in a position to negotiate on substance 
and, because our participation is vital to 

the formation of consensus, participants 
in the conference were unwilling to pro- 
ceed without us. There was some activi- 
ty, however, which I will now briefly 

The first week of the conference was 
devoted to electing a President to suc- 
ceed the late Ambassador Hamilton 
Shirley Amerasinghe of Sri Lanka. Am- 
bassador Tommy Koh of Singapore, an 
able and experienced diplomat, was 
elected to replace him. 

In Committee I— that is the commit- 
tee dealing with seabed mining — 
Chairman Paul Engo of the United 
Republic of Cameroon focused attention 
on the draft resolution setting up the 
preparatory commission of the Interna- 
tional Seabed Resource Authority. The 
developing states attacked, and the 
developed states defended, the require- 
ment set out in the text that the rules, 
regulations, and procedures adopted by 
the commission be applied by the Seabed 
Resource Authority until others are 
recommended to the assembly by a con- 
sensus of council members and are 
adopted by the assembly. Some devel- 
oped countries, with the United States 
reserving its position at this session, 
have regarded this approach as essential 
to assuring those ratifying the treaty 
that the Seabed Resource Authority 
would operate in a foreseeable manner. 

Participation in the commission — the 
so-called ticket-of-admission problem- 
was also debated. Those industrialized 
countries expressing a view preferred 
that signatories of the final act of the 
conference be full participants in the 
work of the commission and in its deci- 
sionmaking procedures in order to pro- 
vide the broadest possible participation. 
The developing countries wanted 
membership reserved to those states 
which had expressed the intent to 
become parties to the treaty by signing 
it. The developing states, at that point, 
offered a compromise that would have 
allowed those states that had signed the 
final act of the conference but not the 
treaty itself, to participate as observers 
in the commission's work. Other Com- 
mittee I issues were treated only super- 

The U.S. delegation confined its par- 
ticipation in the seabed discussions to 
several brief interventions reserving our 
position pending completion of the 

Committee II, which deals with 
navigation and coastal state jurisdiction, 
held four informal meetings without 
agenda to permit delegations to raise 
any questions deemed important to 
them. Some states favored requiring 
prior authorization or notification of 
warship passage in the territorial sea. Of 
the approximately 70 states which ex- 
pressed views on the subject, roughly 
one-half favored the amendment and 
one-half opposed it. Among those favor- 
ing the amendment, a small number 
thought that notification, alone, might 
be acceptable. 

Brazil argued that the text should be 
revised to exclude military exercises in 
the exclusive economic zone unless 
authorized by the coastal state. This pro- 
posal received support and opposition 
along the same lines as did that relating 
to warship passage. 

Argentina pressed its suggestions 
for a change in the text to provide for 
cooperation among affected states for 
the conservation of so-called straddling 
stocks — that is, fish stocks found both 
within and without the exclusive 
economic zone. 

Disagreement continued to be ex- 
pressed as to the relative weight to be 
placed upon "equitable principles" and 
the "median or equidistance line" in the 
formula for the delimitation of maritime 
boundaries of the exclusive economic 
zone between opposite and adjacent 
states. Finally, there was some discus- 
sion concerning artificial islands. 

At the conclusion of the Committee 
II meetings, Chairman Aguilar of 
Venezuela noted that while there were 
widely divergent views expressed, a 
practical consensus existed along the 
basic lines of the Committee II package 
and that there remained only a very few 
questions of interest to a substantial 
number of delegations. As in the case of 
Committee I, no changes in the text 
emerged as a result of work regarding 
Committee II subjects. 

Committee III, dealing with marine 
scientific research and pollution, met 
only once during the session. Chairman 
Yankov of Bulgaria stated that, in his 
view, negotiations had been completed 
at the ninth session and that any at- 
tempt to reopen substantive negotiations 
would seriously endanger the com- 
promises already achieved. Several 
delegations expressed agreement with 


Department of State Bulletir 


iese views. The United States reserved 
s position on the status of the work of 
le committee, pending the outcome of 
lr review. Further, the United States 
lade clear that there also remained 
veral minor, essentially technical, 
ranges that needed to be discussed at 
jme point. 

The drafting committee did exten- 
ve work directed toward conforming 
nd harmonizing the texts. However, a 
reat deal of additional work confronts 
lat committee. 

Finally, the conference scheduled a 
week session beginning August 3 in 
eneva with the option to extend the 
)nference for an additional week. The 5 
■eeks prior to the August resumed ses- 
on will be dedicated to drafting efforts. 

I would like to emphasize that it is 
ur intention to keep members of this 
ibcommittee and other interested 
lembers fully informed throughout the 
olicy review. We will welcome your 
iews, and you, in turn, may expect 
om us candid and continuous reports 
n our progress. 

'The complete transcript of the hearings 
ill be published by the committee and will 
i available from the Superintendent of 
ocuments, U.S. Government Printing Of- 
ce, Washington, D.C. 20402. ■ 

Arms Transfer and the National 

by James L. Buckley 

Address before the Aerospace In- 
dustries Association in Williamsburg, 
Virginia, on May 21, 1981. Mr. Buckley 
is Under Secretary for Security 
Assistance, Science and Technology. 

I am delighted to be with you today in 
this superb setting. Some of the great 
debates defining the goals of what was 
to be the American Revolution took 
place here in Williamsburg. The seeds 
sown here and elsewhere along the 
Atlantic seaboard took root and pro- 
duced the greatest experiment in 
human freedom the world has ever 

This new republic, which the patriots 
who walked the streets of Williamsburg 
two centuries ago helped design, has 
evolved into a great and powerful na- 
tion. We are no longer merely the 
world's foremost example of the bless- 
ings that freedom brings; but of 
historical necessity, we are now the 
primary guardians of the very concepts 
of individual freedom and the inherent 
dignity of man on which this country 
was founded and from which it con- 
tinues to draw its strength. 

We Americans have never sought 
the responsibilities of world leadership, 
but we cannot avoid them or the 
burdens they impose on us. Irving 
Kristol described our obligations as a 
great power in an essay written in 1967 
when some in the United States were 
beginning to call for a withdrawal from 
Vietnam, a reduction in our foreign com- 
mitments, and a return to "Fortress 
America." With a provocative reference 
to the United States as an "Imperial 
Power," Kristol wrote: 

There are a great many people who ap- 
pear to think that a great power is only the 
magnification of a small power, and that the 
principles governing the actions of the latter 
are simply transferable -perhaps with some 
modification— to the former. In fact, there is 
a qualitative difference between the two con- 
ditions, and the difference can be summed up 
as follows: A great power is "imperial" 
because what it does not do is just as signifi- 
cant, and just as consequential, as what it 
does. Which is to say, a great power does not 
have the range of freedom of action— derived 
from the freedom of inaction -that a small 
power possesses. It is entangled in a web of 
responsibilities from which there is no hope 

of escape; and its policy-makers are doomed 
to a strenuous and unquiet life. 

We are now experiencing the bitter 
consequences of the attempt by 
American policymakers in recent years 
to escape from this reality. 

Experience of the Last Decade 

Over the past decade, first the Congress 
and then the Carter Administration 
presided over an American withdrawal 
from world responsibilities that con- 
tributed to a dramatic shift in global 
power relationships. 

Ten years ago, we enjoyed unques- 
tioned nuclear superiority. Our Navy 
still dominated the world's oceans; and 
even though the bulk of our military 
forces were committed to Vietnam, the 
Soviets could not safely challenge us 
elsewhere on the globe. As recently as 
the fall of 1973, during the Middle East 
war, an American President could still 
head off the introduction of a Soviet 
division into Egypt by signaling a 
worldwide alert of U.S. forces. The oil 
fields in the Middle East were circled by 
nations friendly to the West. 

Today, we have lost our strategic 
superiority, and the Soviets are forging 
ahead in long-range nuclear weaponry. 
Our naval combatant forces have been 
reduced by half, and we can no longer 
guarantee the safe passage of American 
merchantmen over more than one ocean 
at a time. The major oil producing states 
of the Persian Gulf are flanked by an 
unstable regime in Iran, Soviet satellites 
in the Horn of Africa and South Yemen, 
and by the Soviet Union itself in 
Afghanistan. And when an American 
President, just 1 year ago, declared that 
we would protect our interests in the 
Persian Gulf by military force if 
necessary, people openly wondered 
whether we could— or would. 

But that is only part of the story. At 
the same time that we allowed our 
military strength to deteriorate while 
the Soviets established strategic 
beachheads in Africa and the Middle 
East, the Carter Administration adopted 
policies toward the transfer of arms to 
friends and allies that substituted 
theology for a healthy sense of self- 

It was the Carter view that such 
transfers were inherently evil or morally 

July 1981 


Security Assistance 

reprehensible, or both. Therefore, the 
United States world henceforth, in prin- 
ciple, refrain from selling arms except 
under the most restricted circumstances. 
Representatives of U.S. arms manufac- 
turers abroad were to be treated as 
pariahs by American diplomatic 
representatives even when engaged in 
transactions duly licensed by the govern- 
ment itself. Never mind the fact that 
our unilateral restraint proved less than 
contagious and had the net effect of 
lessening U.S. influence over the arms 
policies of other nations by encouraging 
them to seek the weapons they needed 
from other suppliers. And never mind 
that, in practice, the countries which 
were important strategically continued 
to receive support, while the burden of a 
restrictive policy fell on those nations 
less able to fight back either with U.S. 
policymakers or American public opin- 
ion. Pragmatism and realism are at least 
philosophically defensible on their own 
terms as a basis for policy; but when 
used in practice, but masked by a 
moralistic smoke screen, they are not. 

To compound these self-inflicted in- 
juries, the Congress adopted a series of 
restrictions on sales to nations whose 
behavior -in the case of human 
rights -or intentions -in the case of 
nuclear proliferation -we disapprove of. 
While these well-intentioned efforts have 
had little detectable impact on such 
behavior or intentions, they did lead at 
times to the awkward result of under- 
cutting the capabilities of strategically 
located nations in whose ability to de- 
fend themselves we have the most im- 
mediate and urgent self-interest. 
Pakistan is a spectacular case in point. 

The net effect of all of this is that 
we find ourselves, in 1981, not only with 
deteriorated military and strategic posi- 
tions but with far fewer nations in a 
position to work with us in defending 
common interests and deterring threats 
by the Soviet Union and its surrogates. 
Thus we are faced not only with the 
need to rebuild and modernize our own 
military forces but to help other nations 
in the free world rebuild theirs. 

It is for all of these reasons that the 
Reagan Administration has concluded 
that the strengthening of other nations 
with which we share common security 
interests is an essential component of 
our total effort to restore effective 
deterrence to aggression. 

Nothing worthwhile in the world 
community is possible -neither economic 
growth nor political or social reform in 
an atmosphere of increasing instability. 

And there is little reason to assume that 
the decade of the 1980s will witness a 
basic change in this situation, unless the 
United States is prepared to meet the 
security needs of its friends and allies as 
well as its own. Military power alone 
cannot solve the large array of problems 
which currently beset the community of 
nations; nor can it provide the founda- 
tions for an international society in 
which equity and security prevail. What 
it can do, given the growing disorder 
that we confront today, is help to 
reestablish some sense of equilibrium. 

All of this will require the best of 
American leadership abroad and at 
home. We must not only demonstrate 
that we have the will to lead but the 
capacity to back that will with the 
necessary military and economic power. 
This will require the revitalization of our 
defenses and the building of stronger 
alliances and cooperative relationships 
as well as the rebuilding of our own 
economic strength. This is why the adop- 
tion of the President's economic pro- 
gram is as essential to our ultimate na- 
tional security as the increased requests 
for defense and security assistance ap- 

My own responsibilities are focused 
on the last, so I would like to take the 
time to describe some of the attitudes 
and policies that I expect will be applied 
to the sale of weapons and related goods 
and services. These and other related 
objectives are being spelled out in a 
policy statement that we expect will be 
released in the near future. 

U.S. Attitudes and Policies 

For starters, this Administration 
believes that arms transfers, judiciously 
applied, can complement and supplement 
our own defense efforts and serve as a 
vital and constructive instrument of 
American foreign policy. In revising our 
practices in this area, we seek to achieve 
the following: 

• Enhancement of the state of 
preparedness of our friends and allies; 

• Revitalization of our alliances; 

• The fashioning of more coherent 
policies and strategies that bear on 
East-West relations; and 

• The buttressing of our own 
defense production capabilities. 

Arms transfers can thus serve as an 
important adjunct to our own security 
by helping deter acts of aggression, by 

enhancing the self-defense capabilities o 
nations with which we share close 
security ties, and by facilitating access 
by American forces to military facilities 

The Administration's new approach 
to arms transfers will emphasize the 
need for flexibility and rapid response to 
meet changing circumstances affecting 
American security interests. We will 
evaluate requests for support in terms 
of their contribution to deterrence and 
defense. We will accord high priority to 
requests from members of our major 
alliances and from those nations with 
which we have developed cooperative 

Assessing Requests 

In assessing arms transfer requests, th< 
United States will continue to give due 
consideration to such factors as the 
degree to which the equipment re- 
quested corresponds to the military 
threat facing the recipient, the manner 
in which such equipment will serve to 
maintain stability within regions where 
friends of the United States are on less 
than the best terms one with the other; 
and whether the proposed transfer can 
be absorbed by the recipient without 
overburdening its military support 
system or financial resources. 

We believe that particular care mus 
be taken to avoid an adverse impact on 
allied and friendly nations by encourag- 
ing them to assume burdens for which 
their economies are ill-prepared. For 
this reason, we are prepared to en- 
courage the efforts of American 
manufacturers to produce equipment 
which, in terms of cost, complexity, an« 
sophistication, is more appropriate to 
the needs of nonindustrialized nations. 
At the same time, the United States wi 
continue to strive with its NATO allies 
to achieve a high degree of equipment 
standardization in order to achieve our 
mutual goal of interoperability of equip 

Recognizing, as we do, that in 
today's economic climate a number of 
nations cannot afford to purchase equip 
ment on commercial terms, we are re- 
questing congressional authority to help 
finance some such purchases at conces- 
sional rates. At the same time we are 
seeking other statutory provisions that 
will simplify procedures and achieve 
significant economies in the production 
and sale of items in high demand. 

Requests for transfer of tech- 
nologically sensitive materials will be 


Department of State Bulleti 

Security Assistance 

insidered on a case-by-case basis. Such 
•ansfer will not be approved if a signifi- 
int possibility of compromise of sen- 
tive information or equipment exists, 
r if justification on the basis of over- 
ding U.S. interest cannot be made. We 
ill also give serious consideration to 
iture requests for coproduction, or 
^assembly, of military equipment pro- 
uced by American manufacturers, while 
nderstanding the extreme complexity 
f this particular subject as well as the 
otential for conflict between foreign 
nd domestic economic policy objectives, 
'or this reason, I would particularly 
'elcome your views as the Administra- 
on works to develop specific guidelines 
1 the area of coproduction and 

Finally, as one of my first actions in 
lis position, we rescinded the Carter 
idministration's so-called leprosy letter, 
rhich instructed U.S. officials overseas 
ot to assist U.S. businessmen seeking 
d meet the military needs of friendly 
tates. Henceforth, U.S. Government 
epresentatives overseas will be ex- 
acted to provide the same courtesies 
nd support to firms that have obtained 
censes to market items on the U.S. 
lunitions list as they would to those 
larketing other American products. In 
lue course we will be reviewing our 
censing procedures to see how they can 
e simplified. 

lultilateral Restraint 

know there will be those who will con- 
lude that these new policy changes will 
•.erald a period of unrestrained military 
ales. They will not. We remain 
ledicated to the goal of mutual restraint 
n arms transfers. What we advocate is 

similar dedication to the goal of serv- 
ng U.S. interests; and in those cases 
vhere arms transfers are the best 
neans of doing so, we will make them. 
The difference between this Administra- 
ion and its predecessor is in the 
oerception of where those interests lie, 
now and by whom they are challenged, 
Mid how best to advance them. 

Though I believe it was well-inten- 
ioned, Presidential Determination 13 
Was, after all, issued by a President 
who, some 2V2 years later, after Soviet 
croops had invaded Afghanistan, admit- 
ted he had learned more about the Rus- 
sians in the immediately preceding 10 
days than in his entire prior time in 
office. This Administration starts with 

no illusions as to Soviet purposes. Soviet 
support for so-called wars of national 
liberation has never been qualified, even 
during the halcyon days of detente. It is, 
therefore, not surprising that there has 
been little or no interest in arms 
transfer limitations manifested by the 
Soviet Union— or, for that matter, by 
the majority of other arms producing 

We will, nonetheless, continue to ex- 
amine ways to secure a regime of 
multilateral restraint. But in the mean- 
time this Administration will face up to 
the realities of Soviet aggrandizement, 
and it will pursue a sober, balanced, and 
responsible arms transfer policy, one 
which is essential for the protection of 
our national security interests. 

Security and Cooperation 

Which brings me to the last point I 
would like to make. Despite our inherent 
strength, there are limits to what we 
can accomplish alone. We are as depen- 
dent on the cooperation of other 
sovereign nations for the defense of our 
larger security interests as we are 
dependent on foreign sources for oil and 
such other strategic minerals as cobalt, 
manganese, titanium, chrome, and a 
host of others to support the high 
technology on which our economy is 

The alliances and cooperative ar- 
rangements we need to forge with other 
nations cannot be coerced. They require 
of us a new maturity in our relationships 
with other nations, one that recognizes 
the sovereignty and dignity of other 
societies as well as the enormous diversi- 
ty of cultures that exists among them. If 
we build our security relationships on 
the bedrock of mutual interests, then 
they will prove durable -provided 
always that we can once again restore 
confidence in the reliability of American 

We are the essential partner in any 
credible network of free world relation- 
ships because we are the only power 
that has the capacity to hold in check 
the aggressive opportunism of the 
Soviet enterprise. Our attempt in recent 
years to downgrade our world respon- 
sibilities has proven catastrophic for 
precisely the reason that only we are in 
a position to make the difference. As 
Irving Kristol pointed out in the essay I 
cited earlier: "It is the world situa- 
tion -and the history which created this 
situation -that appoints imperial powers, 
not anyone's decision or even anyone's 
ambition. And power begets respon- 
sibility -and above all the responsibility 
to use this power responsibly." 

That is our challenge: not to strip 
ourselves of power but to focus that 
power for the achievement for the com- 
mon good. And that common good these 
days is to restore a world order in which 
each nation can work out its own 
destiny, free of fears of external threat. 
What we have to offer other nations as 
we seek to forge new and effective part- 
nerships is the prospect of global stabili- 
ty in which the United States can be 
relied upon to use its influence and 
strength to protect the peace and re- 
quire that rogue nations observe a code 
of behavior that eschews resorts to force 
or subversion in international affairs. 

This is the stated objective of the 
Reagan Administration, and it is one 
that is based on the long overdue reaf- 
firmation of our confidence in ourselves 
and in the rightness of our cause. We 
are the last best hope on Earth; and we 
have no responsible choice but to act ac- 

I know that conservatives are often 
accused of being simplistic; and as a self- 
confessed, card-carrying member of that 
fraternity, I might as well confess that I 
harbor the simplistic notion that on the 
world's stage today it is possible to 
divide the principal actors between the 
good guys and the bad guys; and we 
might as well understand that the bad 
guys are serious and playing for keeps. 

A few years ago that great 
American philosopher, Leo Durocher, 
made the observation that good guys 
finish last. It is the intention of this Ad- 
ministration to prove him wrong. ■ 

July 1981 



Infant Formula Code 

The following statements were made 
by Elliot Abrams, Assistant Secretary 
for International Organization Affairs, 
on May 15, 1981, M. Peter McPherson, 
Administrator of the Agency for Interna- 
tional Development (AID), on May 18, 
and Assistant Secretary Abrams before 
the Subcommittee on International 
Operations of the House Foreign Affa i rs 
Committee on May 20. 

MAY 15, 1981 

After very careful consideration of this 
issue at all levels of the Administration 
and by several agencies, we have deter- 
mined that the U.S. delegation to the 
assembly of the World Health Organiza- 
tion (WHO) must cast a negative vote on 
the draft code of marketing of 
breastmilk substitutes. A formal an- 
nouncement of the vote will come, as 
you would expect, when the matter 
comes up on the agenda in Geneva, 
which will be, roughly, a week from 

This has been a very difficult deci- 
sion. It's a very highly emotional issue, 
and in arriving at our decision, we have 
tried to take into account both the 
positive and negative aspects of the 
draft code, in the context of our own 
social, legal, and constitutional system. 

The code causes us serious prob- 
lems, both on constitutional and legal 
grounds and on economic and commer- 
cial grounds. It seeks to proscribe cer- 
tain commercial practices, such as 
advertising and association between con- 
sumers and manufacturers, which con- 
tradict our constitutional guarantee of 
free speech and freedom of association 
and our antitrust laws. It does not pro- 
vide the flexibility governments, com- 
panies, and health workers need in ac- 
cordance with varying legal, social, 
economic, or cultural conditions of the 
member states of WHO. 

There is ambiguity regarding the 
scope of the code. That is, it could easily 
be read to apply to foods other than in- 
fant formula. 

Some of the provisions seek to cur- 
tail the free flow of admittedly truthful 
information to the public regarding 
products available to the public, and, 

more generally, it would curtail commer- 
cial practices without adequate evidence 
linking those practices to a decline in 

Fundamentally, we think it would be 
hypocritical for the United States to 
vote for a code which we could not and 
would not wish to adopt or implement in 
this country. We cannot recommend its 
implementation here, and, therefore, we 
cannot recommend its implementation to 
others. We remain committed to the 
promotion of breastfeeding as the 
preferred form of infant feeding and to 
measures to improve infant and mater- 
nal health worldwide. We very much 
support WHO's efforts in this area and 
will continue to provide bilateral 
assistance to other countries, with the 
object of improving nutrition for infants 
and mothers. 

press statement by 
mr. Mcpherson, 

MAY 18, 1981 

The World Health Assembly, currently 
meeting in Geneva, is considering a pro- 
posed code of marketing practices for 
breastmilk substitutes. After very 
careful consideration, the Administra- 
tion has decided to oppose this code. 
AID fully supports that decision. 

AID has consistently endorsed the 
promotion of breastfeeding as the 
preferred form of infant nutrition. AID 
has many programs around the world 
where encouragement of breastfeeding 
is part of the health education effort. It 
also continues to support the WHO in 
fostering improved health for all the 
peoples of the world. However, the Ad- 
ministration feels that it is inappropriate 
for an agency of the United Nations to 
move in the direction of regulating 
economic activity. 

This is not the only example of a 
U.N. agency proposing a bad interna- 
tional code.' UNESCO [U.N. Educational 
Scientific and Cultural Organization] is 
currently attempting to restrict press 
freedom by establishing a so-called new 
world information order. This code 
would undermine respect for press in- 
tegrity and legitimize attempts by the 
Soviet bloc and its allies to control the 
flow of information. Clearly, it is not the 
role of WHO or UNESCO to legislate 
these types of restrictions. However well 

intended, these codes set dangerous 
precedents which the United States will 
continue to oppose. 



MAY 20, 1981 1 

Thank you for the opportunity to discuss 
the U.S. position on the WHO draft in- 
ternational code of marketing of 
breastmilk substitutes. As you know, we 
expect the World Health Assembly to 
discuss and vote on the code today or 

Major Events Leading to Code 

The concern with infant nutrition and 
the decline of breastfeeding in the 
developing countries began a number of 
years ago. In October 1979, WHO and 
UNICEF [U.N. Children's Fund] jointly 
sponsored a meeting including govern- 
ment and development assistance 
officials, companies, health professionals 
and public interest groups to discuss the 
problems of infant nutrition and the pro | 
motion of breastfeeding in particular. 
The participants agreed that breast- 
feeding, clearly, is the preferred form ov 
infant nutrition, a position long taken b; 
the U.S. Government and propounded 
most clearly in statements of the 
Surgeon General. One of the major 
issues at that October meeting was the 
role of the manufacturers of infant for- 
mula in the worldwide effort to promote 
breastfeeding. Agreed language was 
achieved at that meeting, including a 
recommendation that advertising or pre 
motion of infant formula should not be 
to the detriment of breastfeeding. 

Following the October meeting, the 
World Health Assembly at its 33rd an- 
nual meeting in May 1980, unanimously 
agreed to authorize WHO to draft an in 
ternational code for the marketing of 
breastmilk substitutes. This was to be 
done in close consultation with health 
professionals, governments, manufac- 
turers, and public interest groups. The 
original U.S. position at that assembly 
was that a code should be drafted, that 
it should be done by means of inter- 
governmental negotiations rather than 
by an international secretariat. An in- 
tergovernmental negotiation would havt 
led more easily to a code that reflected 
the differing needs of the countries 
represented. To our regret, the U.S. 
position was rejected. 


Department of State Bulletir 

United Nations 

During the intervening year, WHO 
as presented four drafts for considera- 
lon by interested parties. The fourth 
raft is the one being presented to the 
orld Health Assembly this week. The 
Inited States has been actively involved 
i the development of this draft code 
nd has had some influence on the actual 
erms of the code. Unfortunately, such 
ignificant problems as a recommended 
omplete ban on advertising to the 
■eneral public and highly detailed re- 
uirements concerning labeling and con- 
act by marketing professionals with 
nothers and expecting women have not 
ieen changed, notwithstanding our 
^presentations during the past year. 
During this entire time, we expressed 
eservations about the propriety of 
VHO becoming involved in a commer- 
ial code in addition to our comments on 
he specifics of this particular draft 

During all of the discussions on the 
/arious drafts, the U.S. position was 
presented clearly on a number of issues, 
ilthough when it became apparent that 
t would be impossible to change the ap- 
Droach taken to such issues, we did not 
necessarily press on that issue to the ex- 
clusion of all others; in effect, we made 
pur views known on virtually all issues 
n the code. Unfortunately, we did not 
Ivvin on the most important questions. 
Our goal throughout this effort was not 
to derail a code but rather to develop a 
useful statement of principles upon 
which each member of WHO could draw 
in light of its own special circumstances. 

U.S. Position 

I would like to emphasize that this issue 
has received very careful consideration 
at all levels of the Administration and by 
several agencies. It was pursuant to 
those deliberations that we determined 
that the U.S. delegation to the World 
Health Assembly must cast a negative 
vote on the draft code of marketing of 
breastmilk substitutes. 

This has been a difficult question and 
one that has received widespread and, I 
might add, emotional attention. In arriv- 
ing at our decision we have tried to take 
into account both the positive and 

negative aspects of the draft code, in the 
context of our own social, legal, and con- 
stitutional system. 

The code contains provisions that 
raise significant legal and constitutional 
questions for the United States. For ex- 
ample, one provision seeks to ban all 
advertising, which raises serious ques- 
tions concerning our constitutional doc- 
trines of freedom of expression. In addi- 
tion, some of the provisions raise con- 
cerns regarding our laws on competition 
among business entities, i.e., antitrust 

Another problem is that although 
the code appears to provide flexibility 
for governments, its overall effect is to 
prescribe a rigid set of rules applicable 
to companies, health workers, and 
health care systems in all parts of the 
world. It does not provide the flexibility 
that these parties need to take account 
of varying legal, social, economic, and 
cultural conditions. There is also am- 
biguity regarding the scope of the 
code — specifically, whether it would be 
applicable to products other than breast- 
milk substitutes. 

The decision on the code was especi- 
ally difficult here because of the absence 
of adequate evidence demonstrating that 
the practices at issue have an adverse 
impact on breastfeeding or infant health. 
Some of the provisions seek to curtail 
the free flow of truthful information to 
the public regarding products available 
to the public, and some provisions would 
also curtail commercial practices without 
adequate evidence linking those prac- 
tices to a decline in breastfeeding. 

We recognize the right of a govern- 
ment to ban or restrict the marketing of 
harmful products and substances. We 
also recognize, in our laws, the respon- 
sibility of manufacturers to adhere to 
honest and ethical standards in the 
preparation and marketing of their prod- 
ucts. But the United States cannot sup- 
port the proposed code because it would 
be, if applied in the United States, an 
unwarranted invasion of the freedom of 
men and women to make informed 
choices, on the basis of all the truthful 
information available about a product 
which appears to them to best meet 
their needs. 

Finally, and perhaps most impor- 
tantly, as we could not and would not 
recommend the implementation of this 

code at home, we cannot, in good con- 
science, recommend the code for im- 
plementation by other countries. 

I would emphasize that this Ad- 
ministration is deeply concerned about 
maternal and infant health, and we sup- 
port an extensive program in this field 
in our own country and throughout the 
world. We strongly support efforts to 
promote and protect breastfeeding as 
the ideal form of infant nutrition, and 
we strongly support the work of WHO 
in fostering improved health for all the 
people of the world. The United States 
remains committed to improving infant 
and child health, and we believe that our 
own bilateral assistance programs en- 
compassing education, training, and the 
dissemination of information on the pro- 
motion of breastfeeding and the im- 
provement of infant and maternal nutri- 
tion attest to this commitment. 

•The complete transcript of the hearings 
will be published by the committee and will 
be available from the Superintendent of 
Documents, U.S. Government Printing Office, 
Washington, D.C. 20402. ■ 

July 1981 



U.S. Assistance to 
El Salvador 

Foreign Relations Outline 1 


The Government of El Salvador is work- 
ing to improve the quality of life for the 
people through social and economic 
reforms. Extremists of both left and 
right have used violence to try to block 
the reforms. Salvadoran guerrillas have 
received large quantities of arms and 
other assistance from Cuba and other 
Communist governments. On January 
10, 1981, they launched a general offen- 
sive intended to bring down the govern- 
ment. Although it failed, the offensive 
taxed the poorly trained and ill-equipped 
Salvadoran Armed Forces. 

U.S. Policy 

We believe that Central American coun- 
tries should be free to solve their inter- 
nal problems without intimidation or 
violence supported by Cuba and other 
Communist governments. Our policy is 
to support President Napoleon Duarte's 
interim government as it implements 
reforms, moves toward free and open 
elections, and works to end all forms of 
terrorism. In addition to diplomatic sup- 
port, the United States provides 
economic and military assistance, with 
economic aid more than 3V2 times the 
amount of military aid. 

Economic Aid 

Because of the violence and the many 
difficulties of implementing basic 
reforms, El Salvador's production has 
declined by more than 15% in the past 2 
years. Violence and terrorism will con- 
tribute to a further decline in 1981. The 
foreign exchange shortfall is estimated 
to be at least $143 million. Continuing 
unemployment of about 20% is expected. 
Venezuela and Mexico provide signifi- 
cant assistance by allowing El Salvador 
to apply part of its oil costs to develop- 
ment programs. Financial assistance 
also is provided by international lending 

U.S. economic assistance emphasizes 
support for certain land reform ac- 
tivities, creation of jobs, provision of 
food, and increased credit to the private 
sector. In FY 1980 we provided $58.8 
million in aid; $63 million was originally 
scheduled for FY 1981. Because of the 
continuing economic decline, additional 
assistance is required urgently to help 
the government meet basic needs, 
especially to finance essential imports of 
food, agricultural chemicals, and in- 
dustrial materials for the private sector. 
Therefore, the United States is pro- 
ceeding with an additional $63.5 million 
in aid, bringing our total economic 
package in FY 1981 to $126.5 million. 

Security Assistance 

Until the guerrillas' January offensive, 
the United States had earmarked $5 
million for loan guarantees to help 
finance Salvadoran purchases of 
nonlethal military equipment, such as 
trucks, and $440,000 for military educa- 
tion and training. As an immediate 
response to the offensive, the United 
States leased six U.S. Army helicopters 
to El Salvador and made available a 
small number of U.S. military personnel 
to help with their delivery and assembly 
and to train Salvadorans in their use. On 
January 16, 1981, President Carter 
agreed to provide defense articles and 
services valued at $5 million to meet the 
emergency resupply needs of the 
Salvadoran forces. Under this authoriza- 
tion, the United States supplied arms 
and ammunition to the Salvadoran 
Government for the first time since 

In March 1981 President Reagan 
authorized another $25 million in securi- 
ty assistance to provide for additional 
equipment and the assignment of addi- 
tional training personnel. This increased 
the level of FY 1981 security assistance 
from $10.4 million to $35.4 million. The 
new U.S. assistance will provide four ad- 
ditional transport helicopters (bringing 
the total number to 10), jeeps, trucks, 
tents, tools, and first-aid supplies, as 
well as small arms, grenade-launchers, 
mortars, and ammunition. 

Military Training Personnel 

In the fall of 1980, there were 33 U.S. 
military personnel assigned to El 
Salvador: 20 U.S. Embassy Marine 
security guards, 4 security assistance ad- 
ministrators in the Embassy military 
group, 4 officers and enlisted personnel | 
in the defense attache's office, and 5 
officers and enlisted personnel assigned 
as an operational planning assistance 
team to the Salvadoran high command. 
The additional training personnel will 
consist of: 

• A 5-man addition to the opera- 
tional planning assistance team working 
with the Salvadoran high command and 
regional commands on communications, 
intelligence, and planning; 

• Three 5-man army teams working 
outside the capital, providing small unit 
training, particularly in counterinfiltra- 
tion techniques, to the Salvadoran 
Army's newly created quick-reaction 
forces (training will be conducted ex- 
clusively inside Salvadoran military gar- 

• A 6-man naval team to instruct 
Salvadoran personnel in interdiction at 
sea and maintenance of patrol craft and 
to survey the need for upgrading the 
boats and for further training; and 

• A 14-man helicopter maintenance 
and pilot training team. 

In the spring of 1981, the 6-man 
naval training team completed its mis- 
sion and withdrew, the administrative 
staff of the U.S. military group in- 
creased by 8, and 1 Marine security 
guard was added. These changes left 76 
U.S. military personnel positions in El 
Salvador; 51 security assistance posi- 
tions, 21 Marine security guards, and 4 
positions in the defense attache's office. 

War Powers Resolution 

The war powers resolution requires the 
executive branch to consult with Con- 
gress before U.S. Armed Forces are in- 
troduced into hostilities or into a situa- 
tion where the circumstances clearly in- 
dicate that hostilities are imminent. It 
also requires a report within 48 hours 
after such an introduction as well as a 
report, but not prior consultation, 
whenever U.S. Armed Forces equipped 
for combat are sent into foreign ter- 
ritory. The Administration has conclud- 
ed that present circumstances do not in- 
dicate an imminent involvement of U.S. 
personnel in hostilities. 

Since January the level of hostilities 
has declined. Our personnel will be sta- 
tioned in San Salvador or in carefully 


Department of State Bulletin 


current Actions 



Invention on the Inter-American Institute 
I Cooperation on Agriculture. Done at 
Ishington Mar. 6, 1979. Entered into force 
C. 8, 1980. TIAS 9919. 
Itification deposited : Argentina, May 6, 


lomic Energy 

Ireement amending and extending the 
t-eement of Sept. 15, 1976 (TIAS 8655), on 
liearch participation and technical exchange 
Ithe U.S. Nuclear Regulatory Commission 
Is of fluid test (LOFT) research program. 
I.ted Jan. 28, 1981. Entered into force Mar. 
I, 1981; effective Oct. 20, 1980. 


jnvention on the international recognition 

frights in aircraft. Done at Geneva June 19, 

148. Entered into force Sept. 17, 1953. 


I lherences deposited : Guinea, Aug. 13, 

BO; Togo, July 2, 1980. 

otocol relating to certain amendments to 
\s convention on International Civil Aviation 
[IAS 1591). Done at Montreal June 14, 
I 54. Entered into force Dec. 12, 1956. TIAS 

itifications deposited: El Salvador, Feb. 13, 
80; Sao Tome and Principe, Sept. 18, 1980. 

■otocol relating to amendment of Article 
i(a) of the Convention on International Civil 
/iation (TIAS 1591) to increase membership 
the Council from 21 to 27. Adopted at 
ontreal June 21, 1961. Entered into force 
ily 17, 1962. TIAS 5170. 
atification deposited : Sao Tome and Prin- 
pe, Sept. 18, 1980. 

rotocol relating to an amendment to the 
onvention on International Civil Aviation 
'IAS 1591) (to increase number of parties 
hich may request holding an extraordinary 
leeting of assembly). Done at Rome Sept. 
5, 1962. Entered into force Sept. 11, 1975. 
IAS 8162. 

.atifications deposited: El Salvador, Feb. 13, 
980; Guatemala, Apr. 29, 1980; Sao Tome 
nd Principe, Sept. 18, 1980. 

'rotocol relating to an amendment [Article 
0(a)] to the Convention on International 

Civil Aviation (TIAS 1591). Done at New 
York Mar. 12, 1971. Entered into force Jan. 
16, 1973. TIAS 7616. 

Ratification deposited : Sao Tome and Prin- 
cipe, Sept. 18, 1980. 

Protocol relating to an amendment [Article 

56] to the Convention on International Civil 

Aviation (TIAS 1591). Done at Vienna July 7, 

1971. Entered into force Dec. 19, 1974. TIAS 


Ratifications deposited: El Salvador, Feb. 13, 

1980; Sao Tome and Principe, Sept. 18, 1980. 

Protocol relating to an amendment [Article 
50(a)] to the Convention on International 
Civil Aviation (TIAS 1591). Done at Montreal 
Oct. 16, 1974. Entered into force Feb. 15, 
1980. TIAS 9702. 

Ratifications deposited: Cape Verde, Apr. 18, 
1980; Senegal, Aug. 4, 1980; Panama, Aug. 
28, 1980; Sao Tome and Principe, Sept. 18, 

Protocol relating to an amendment to the 
Convention on International Civil Aviation 
(TIAS 1591) (to add Russian as an authentic 
language of the convention). Done at Mon- 
treal Sept. 30, 1977. 1 
Ratifications deposited: Greece, Oct. 23, 
1980; Guatemala, May 12, 1980; Lebanon, 
Sept. 15, 1980; Switzerland, Mar. 4, 1980; 
Yemen, People's Dem. Rep. of, Jan. 9, 1980. 

Commodities — Common Fund 

Agreement establishing the Common Fund 
for Commodities, with schedules. Done at 
Geneva June 27, 1980. 1 
Signatures : Bangladesh, Dec. 23, 1980; Italy, 
Dec. 17, 1980; Luxembourg, Dec. 29, 1980; 
Malawi, Mar. 17, 1981; Malaysia, Dec. 30, 
1980; Mexico, Dec. 19, 1980; Sudan, May 13, 
1981; Switzerland, Mar. 30, 1981; U.K., Dec. 
16, 1980 2 ; Zaire, Mar. 17, 1981. 
Ratifications deposited: Denmark, Philip- 
pines, May 13, 1981. 


Convention on the conservation of Antarctic 
marine living resources, with annex for an ar- 
bitral tribunal. Done at Canberra May 20, 
1980. 1 

Ratification deposited : Australia, May 6, 


Articles of agreement of International Cotton 
Institute. Done at Washington Jan. 17, 1966. 
Entered into force Feb. 23, 1966. TIAS 5964. 
Accession deposited : Argentina, May 6, 1981. 

elected regional military garrisons, and 
pecial precautions will be taken to pro- 
ide security for them. They will not go 
m patrol or combat missions with 
salvadoran forces nor will they other- 
vise be placed in situations where com- 
lat is likely. Although U.S. personnel 
ire authorized to carry sidearms, they 
nay use them only in self-defense or to 
irotect other Americans. They will not 

serve as combat advisers. Instead they 
will train Salvadoran personnel who 
come to the training centers. 

'Taken from the Department of State 
publication in the GIST series, released May 
1981. This outline is designed to be a quick 
reference aid on U.S. foreign relations. It is 
not intended as a comprehensive U.S. foreign 
policy statement. ■ 

Human Rights 

International covenant on civil and political 
rights. Adopted at New York Dec. 16, 1966. 
Entered into force Mar. 23, 1976. 3 
Accession deposited : Central African Re- 
public, May 8, 1981. 

International covenant on economic, social, 
and cultural rights. Adopted at New York 
Dec. 16, 1966. Entered into force Jan. 3, 
1976. 3 

Accession deposited : Central African Re- 
public, May 8, 1981. 

Judicial Procedure 

Convention on the taking of evidence abroad 

in civil or commercial matters. Done at The 

Hague Mar. 18, 1970. Entered into force 

Oct. 7, 1972. TIAS 7444. 

Ratification deposited : Netherlands, Apr. 28, 

1981. 4 

Maritime Matters 

Amendments to the convention of Mar. 6, 
1948, as amended, on the Intergovernmental 
Maritime Consultative Organization (TIAS 
4044, 6285, 6490, 8606). Adopted at London 
Oct. 17, 1974. Entered into force Apr. 1, 
1978. TIAS 8606. 

Acceptance deposited : El Salvador, Feb. 12, 

Amendments to the convention of Mar. 6, 
1948, as amended, on the Intergovernmental 
Maritime Consultative Organization (TIAS 
4044, 6285, 6490, 8606). Adopted at London 
Nov. 14, 1975. 1 

Acceptance deposited : St. Vincent and the 
Grenadines, Apr. 29, 1981. 

Amendments to the convention of Mar. 6, 
1948, as amended on the Intergovernmental 
Maritime Consultative Organization (TIAS 
4044, 6285, 6490, 8606). Adopted at London 
Nov. 17, 1977.' 

Acceptance deposited : St. Vincent and the 
Grenadines, Apr. 29, 1981. 

Amendments to the convention of Mar. 6, 
1948, as amended on the Intergovernmental 
Maritime Consultative Organization (TIAS 
4044, 6285, 6490, 8606). Adopted at London 
Nov. 15, 1979. ' 

Acceptances deposited: Denmark, May 12, 
1981; St. Vincent and the Grenadines, 
Apr. 29, 1981; Yugoslavia, May 15, 1981. 

Patents — Microorganisms 

Amendments to the regulations under the 
Budapest treaty on the international recogni- 
tion of the deposit of microorganisms for the 
purposes of patent procedure. Adopted at 
Geneva on Jan. 20, 1981. 
Entered into force : Jan. 31, 1981. 


International convention relating to inter- 
vention on the high seas in cases of oil- 
pollution casualties, with annex. Done at 

luly 1981 



Brussels Nov. 29, 1969. Entered into force 

May 6, 1975. TIAS 8068. 

Ratification deposited : Ireland, Aug. 21, 


Accession deposited : Kuwait, Apr. 2, 1981. 

International convention on civil liability for 

oil-pollution damage. Done at Brussels 

Nov. 29, 1969. Entered into force June 19, 

1975. 3 

Accessions deposited: Kuwait, Apr. 2, 1981; 

Maldives, Mar. 16, 1981. 

International convention on the establishment 

of an international fund for compensation for 

oil-pollution damage. Done at Brussels 

Dec. 18, 1971. Entered into force Oct. 16, 

1978. 3 

Accession deposited : Kuwait, Apr. 2, 1981. 


Constitution of the Universal Postal Union 
with Final Protocol of July 10, 1964. Entered 
into force Jan. 1, 1966. TIAS 5881. 
Accessions : St. Vincent and Grenadines, 
Feb. 3, 1981; Tuvalu, Feb. 3, 1981. 

Additional protocol to the Constitution of the 
Universal Postal Union with Final Protocol of 
July 10, 1964. Done at Tokyo Nov. 14, 1969. 
Entered into force Jan. 1, 1971. TIAS 7150. 
Ratification deposited : Ivory Coast, Jan. 27, 

Accessions : St. Vincent and Grenadines, 
Feb. 3, 1981; Tuvalu, Feb. 3, 1981. 

Second additional protocol to the Constitution 
of the Universal Postal Union of July 10, 
1964. Done at Lausanne July 5, 1974. En- 
tered into force Jan. 1, 1976. TIAS 8231. 
Ratifications deposited: Ivory Coast, Jan. 27, 
1981; Portugal, Feb. 12, 1981. 
Accessions : St. Vincent and Grenadines, 
Feb. 3, 1981 4 ; Tuvalu, Feb. 3, 1981. 4 

General regulations of the Universal Postal 
Union, with final protocol and annex, and the 
universal postal convention with final proto- 
col and detailed regulations. Done at Rio de 
Janeiro Oct. 26, 1979. Enters into force July 
1, 1981. 4 

Ratifications deposited: Switzerland, Mar. 4, 
1981; U.S., May 5, 1981. 
Accessions : Maldives, Mar. 12, 1981; St. 
Vincent and Grenadines, Feb. 3, 1981. 4 

Money orders and postal travellers' checks 
agreement with detailed regulations with 
final protocol. Done at Rio de Janeiro Oct. 26, 
1979. Enters into force July 1, 1981. 
Ratifications deposited: Switzerland, Mar. 4, 
1981; U.S., May 5, 1981. 4 

Postal Americas and Spain 

Constitution of the Postal Union of the 
Americas and Spain. Done at Santiago 
Nov. 26, 1971. Entered into force July 1, 
1972. TIAS 7480. 
Ratification deposited : Bolivia, Dec. 24, 1980. 

Additional protocol to the constitution of the 
Postal Union of the Americas and Spain, 
general regulations, regulations governing 

the International Office and the Transfer 

Office, and convention with final protocol and 

detailed regulations. Done at Lima Mar. 18, 

1976. Entered into force Oct. 1, 1976. TIAS 


Ratification deposite d: Bolivia, Dec. 24, 1980. 

Parcel post agreement, final protocol, and 
detailed regulations of the Postal Union of 
the Americas and Spain. Done at Lima Mar. 
18, 1976. Entered into force Oct. 1, 1976. 
TIAS 9206. 
Ratification deposited : Bolivia, Dec. 24, 1980. 

Property— Industrial-Classification 

Nice agreement concerning the international 
classification of goods and services for the 
purposes of the registration of marks of June 
15, 1957, as revised. Done at Geneva May 13, 
1977. Entered into force Feb. 6, 1979. 3 
Ratification deposited : Norway, Apr. 6, 1981. 

Red Cross 

Geneva convention for the amelioration of the 
condition of the wounded and sick in armed 
forces in the field. Done at Geneva Aug. 12, 
1949. Entered into force Oct. 21, 1950; for 
the U.S. Feb. 2, 1956. TIAS 3362. 

Geneva convention for the amelioration of the 
condition of the wounded, sick, and ship- 
wrecked members of armed forces at sea. 
Done at Geneva Aug. 12, 1949. Entered into 
force Oct. 21, 1950; for the U.S., Feb. 2, 
1956. TIAS 3363. 

Geneva convention relative to the treatment 
of prisoners of war. Done at Geneva Aug. 12, 
1949. Entered into force Oct. 21, 1950; for 
the U.S. Feb. 2, 1956. TIAS 3364. 

Geneva convention relative to the protection 
of civilian persons in time of war. Done at 
Geneva Aug. 12, 1949. Entered into force 
Oct. 21, 1950; for the U.S. Feb. 2, 1956. 
TIAS 3365. 
Notifications of succession : Tuvalu, Feb. 19, 

1981 6 ; Grenada. Apr. 13, 1981. 6 
Notification of accession: St. Vincent and the 

Grenadines, Apr. 1, 1981. 


Protocol relating to the status of refugees. 
Done at New York Jan. 31, 1967. Entered 
into force Oct. 4, 1967; for the U.S. Nov. 1, 
1968. TIAS 6577. 
Accession deposited : Lesotho, May 14, 1981. 

Safety at Sea 

Protocol of 1978 relating to the international 
convention for the safety of life at sea, 1974 
(TIAS 9700). Done at London Feb. 17, 1978. 
Entered into force May 1, 1981. 
Proclaimed by the President: May 15, 1981. 


1980 Protocol amending the interim conven- 
tion of Feb. 9, 1957, as amended and ex- 
tended, on the conservation of North Pacific 
fur seals (TIAS 3948, 5558, 6774, 8368). 

Done at Washington Oct. 14, 1980. 1 
Ratification deposited : Japan, May 28, 1981. 


Agreement on the international carriage of 
perishable foodstuffs and on the special equi] 
ment to be used for such carriage (ATP), 
with annexes. Done at Geneva Sept. 1, 1970. 
Entered into force Nov. 21, 1976. 3 
Accession deposited: Morocco, Mar. 5, 1981. 

U.N. Industrial Development Organization 

Constitution of the U.N. Industrial Develop- 
ment Organization, with annexes. Adopted a 
Vienna Apr. 8, 1979. ' 

Signatures: Ukrainian S.S.R., Dec. 12, 1980; 
Dominican Republic, May 8, 1981; 
Guatemala, May 13, 1981; Comoros, May 18, 

Ratifications deposited : Brazil, Dec. 10, 1980 
Argentina, Mar. 6, 1981; Austria, May 14, 
1981; Zambia, May 15, 1981. 


1981 protocol for the sixth extension of the 
wheat trade convention, 1971 (TIAS 7144, 
9878). Done at Washington Mar. 24, 1981. 
Enters into force July 1, 1981, if by June 30, 
1981, certain provisions have been met. 
Signatures : Algeria, Guatemala, Peru, South 
Africa, Spain, Trinidad and Tobago, U.S.S.R. 
May 15, 1981; Argentina, Belgium, Denmark 
EEC, France, F.R.G., Greece, Italy, Luxem- 
bourg, Netherlands, U.K. 7 , May 14, 1981; 
Australia, Finland, Japan, Vatican City State 
May 12, 1981; Austria, Korea, Rep. of, 
Mauritius, May 7, 1981; Cuba, U.S., May 8, 
1981; Iraq, May 11, 1981; Kenya, Apr. 16, 
1981; Portugal, May 13, 1981; Saudi Arabia, 
Apr. 30, 1981; Switzerland, May 6, 1981; 
Venezuela, May 5, 1981. 
Declarations of provisional application 
deposited: Belgium, EEC, F.R.G., Greece, 
Ireland, Italy, Luxembourg, Netherlands 8 , 
U.N., May 14, 1981; Cuba, May 8, 1981; 
Finland, May 12, 1981; Spain, May 15, 1981; 
Tunisia, Apr. 29, 1981. 
Ratification deposited : Switzerland, May 6, 

1981 protocol for the first extension of the 
food aid convention, 1980. Done at 
Washington Mar. 24, 1981. Enters into force 
July 1, 1981, if by June 30, 1981, certain pro 
visions have been met. 
Signatures : Argentina, Belgium, Denmark, 
EEC, France, F.R.G., Greece, Ireland, Italy, 
Luxembourg, Netherlands, U.K. 7 , May 14, 
1981; Australia, Finland, Japan, May 12, 
1981; Austria, May 7, 1981; Spain, May 15, 
1981; Switzerland", May 6, 1981; U.S., May 
8, 1981. 
Declarations of provisional application 

deposited: Belgium, EEC, F.R.G., Greece, 
Ireland, Italy, Luxembourg, Netherlands 8 , 
U.K., May 14, 1981; Finland, May 12, 1981; 
Spain 4 , May 15, 1981. 
Ratification deposited : Switzerland 4 , 
May 6, 1981. 


Department of State Bulletin 



wention on the elimination of all forms of 
crimination against women. Adopted at 
w York Dec. 18, 1979. 1 
;nature: Uruguay, Mar. 30, 1981. 



;aty on Pacific coast albacore tuna vessels 
1 port privileges, with annexes. Signed at 
ishington May 26, 1981. Enters into force 
an the exchange of instruments of ratifica- 

ministrative arrangement for the im- 
mentation of the agreement on social 
'urity concluded on Mar. 11, 1981. Signed 
Washington May 22, 1981. Enters into 
•ce on the date of entry into force of the 
reement on social security. 

•morandum of understanding on coopera- 
>n in geological sciences. Signed at Reston 
)r. 2, 1981. Entered into force Apr. 2, 

■eaty to submit to binding dispute settle- 
nt the delimitation of the maritime bound- 
y in the Gulf of Maine area with annexed 
Teements. Signed at Washington Mar. 29, 

nate advice and consent to ratification: 
3r. 29, 1981 with amendments. 

emorandum of understanding on coopera- 

Iin in remote sensing. Signed at Reston 
3r. 2, 1981. Entered into force Apr. 2, 

ink Islands 

greement relating to the establishment of a 
lace Corps program in the Cook Islands, 
ffected by exchange of notes at Wellington 
id Rarotonga Apr. 28, 1981. Entered into 
rce Apr. 28, 1981. 


greement amending the agreement for sales 
'agricultural commodities of Dec. 14, 1980. 
ffected by exchange of notes at Cairo Apr. 
I, 1981. Entered into force Apr. 21, 1981. 


greement for sales of agricultural com- 
odities, relating to the agreement of Apr. 
1, 1980 (TIAS 9738), with agreed minutes, 
gned at Accra Mar. 31, 1981. Entered into 
rce Mar. 31, 1981. 


greement amending the agreement of 
ec. 30, 1977, as amended (TIAS 9036, 9232, 
i78, 9663, 9764, 9913), relating to trade in 
itton, wool, and manmade fiber textiles and 
xtile products. Effected by exchange of let- 
rs at Washington Apr. 22 and 23, 1981. 
ntered into force Apr. 23, 1981. 


greement establishing the Korean-American 
iltural Exchange Committee. Effected by 

exchange of notes at Seoul Apr. 17, 1981. 
Entered into force Apr. 17, 1981. 


Investment incentive agreement. Effected by 
exchange of notes at Beirut Sept. 17, 1980 
and Feb. 10, 1981. 
Entered into force : Apr. 30, 1981. 


Agreement relating to additional cooperative 
arrangement to curb the illegal traffic in nar- 
cotics. Effected by exchange of letters at 
Mexico Apr. 8, 1981. Entered into force Apr. 
8, 1981. 

Agreement amending the agreement of July 
25, 1980 (TIAS 9822) relating to additional 
cooperative arrangements to curb the illegal 
traffic in narcotics. Effected by exchange of 
letters at Mexico Mar. 31, 1981. Entered into 
force Mar. 31, 1981. 

Memorandum of understanding covering 
scientific cooperation in earth resources. 
Signed at Washington Jan. 19, 1981. Entered 
into force Apr. 8, 1981. 

Papua New Guinea 

Search and rescue memorandum of 
understanding. Signed at Honolulu and Port 
Moresby Nov. 8, 1980 and Feb. 26, 1981. 
Entered into force Feb. 26, 1981. 


Agreement amending the agreement for sales 
of agricultural commodities of June 24, 1980. 
Effected by exchange of notes at Lisbon Mar. 
27 and Apr. 8, 1981. Entered into force Apr. 
8, 1981. 


Program of cooperation and exchanges in 
educational, cultural, scientific, technological, 
and other fields for the years 1981 and 1982, 
with annex. Signed at Bucharest May 21, 
1981. Entered into force May 21, 1981; effec- 
tive Jan. 1, 1981. 

Sierra Leone 

Agreement for sales of agricultural com- 
modities, relating to the agreement of Aug. 
31, 1978 (TIAS 9210), with memorandum of 
negotiations. Signed at Freetown Mar. 25, 
1981. Entered into force Mar. 25, 1981. 

Sri Lanka 

Agreement amending the agreement of July 
7, 1980 (TIAS 9869), relating to trade in cot- 
ton, wool, and manmade fiber textiles and 
textile products. Effected by exchange of 
notes at Colombo Mar. 16, 1981. Entered in- 
to force Mar. 16, 1981. 


Supplementary convention on extradition. 
Signed at Washington May 27, 1981. Enters 
into force upon the exchange of ratifications. 


Agreement for sales of agricultural com- 
modities, relating to the agreement of June 
15, 1976 (TIAS 8310), with minutes of 
negotiating meeting. Signed at Dar es 
Salaam May 5, 1981. Entered into force May 
5, 1981. 


Agreement continuing in effect safeguards 
and guarantee provisions of the agreement of 
Oct. 8, 1958, as amended (TIAS 4416, 6945), 
for cooperation concerning civil uses of 
atomic energy. Effected by exchange of notes 
at Caracas Feb. 18, 1981. Entered into force 
Feb. 18, 1981. 

Memorandum of understanding on coopera- 
tion in earth resources and geological 
phenomena. Signed at Washington and 
Caracas Feb. 5 and 7, 1980. Enters into force 
upon signature by both parties or upon entry 
into force of Jan. 11, 1980 agreement for 
scientific and technological cooperation, 
whichever date is later. 


Agreement amending and extending the 
memorandum of understanding relating to 
the air transport agreement of Dec. 15, 1977 
(TIAS 9364). Effected by exchange of notes 
at Belgrade Mar. 13 and 26, 1981. Entered 
into force Mar. 26, 1981; effective Apr. 1 


Implementation agreement regarding the 
consolidation and rescheduling of repayments 
due under Agency for International Develop- 
ment loans. Signed at Kinshasa Apr. 8, 1981. 
Entered into force Apr. 8, 1981. 

'Not in force. 

2 With statement. 

3 Not in force for the U.S. 

4 With reservation(s). 

5 Effective from date of independence, 
Oct. 1, 1978. 

6 Effective from date of independence, 
Feb. 7, 1974. 

'With territorial application to: The 
Bailiwick of Guernsey, the Isle of Man, 
Belize, Bermuda, Bn'tish Virgin Islands, 
Gibraltar, Hong Kong, Montserrat, St. 
Helena and dependencies. 

"With respect to the Kingdom in 
Europe. ■ 

uly 1981 



May 1981 


May 1 

Secretary Haig visits Rome May 1-6 to 
attend North Atlantic Council ministerial 
meeting. He also stops in Brussels on May 5. 

May 2 

President Reagan announces the appoint- 
ment of George H. Aldrich to serve on the 
Iran-U.S. Claims Tribunal, pursuant to the 
Jan. 19, 1981, claims settlement agreement. 

May 4 

Japanese Prime Minister Zenko Suzuki 
makes official visit to the U.S. May 4-9, and 
to Washington, D.C., May 7-8. 

North Atlantic Council ministerial 
meeting is held in Rome May 4-5. A joint 
communique is issued May 5 expressing deep 
concern "at the continuing threats to security 
and international stability" and welcoming 
"the intention of the United States to begin 
negotiations with the Soviet Union on theater 
nuclear forces arms control within the SALT 
framework by the end of the year." The coun- 
cil also issues a declaration on terrorism, May 
4, and extracts from minutes of the meeting, 
May 5. 

May 5 

President Reagan appoints Philip C. 
Habib as special emissary to the Middle East. 
Ambassador Habib will meet with leaders of 
Lebanon, Syria, and Israel to explore ways to 
diffuse tension resulting from recent 
developments surrounding the situation in 

May 6 

U.S. orders Libya to close its People's 
Bureau in Washington, D.C. and expels its 
diplomats, because of that nation's support 
for international terrorism and disregard for 
the norms of international behavior. A new 
travel advisory is also issued warning 
"American citizens against any travel to or 
residence in Libya." 

May 10 

Francois Mitterrand, the Socialist Party 
leader, defeats President Valery discard 
d'Estaing in France's presidential elections. 

May 12 

NATO Defense Planning Committee 
meets in Brussels May 12-13. The committee 
issues a final communique reaffirming the 
NATO Council's "concern at the continuing 
threats to security and international stability" 
and which also expresses the determination 
to counter the threat "by effective restraints 
including firmness on defence and persistence 
in the search for peaceful solutions." 

May 13 

South African Foreign Minister F. Roelof 
Botha visits Washington, D.C. May 13-16 
and meets with President Reagan, Secretary 
Haig, and other White House officials to 
discuss progress on negotiations for establish- 
ment of an independent nation of Namibia. 

Pope John Paul II is seriously wounded in 
an attempted assassination. The alleged 
assassin, Mahmet Ali Agca, a Turkish citizen, 
is arrested. 

May 16 

Japanese Foreign Minister Masayoshi Ito 
resigns. Sunao Sonoda is appointed his suc- 

May 20 

West German Chancellor Helmut Schmidt 
makes official visit to Washington, D.C. May 

May 21 

World Health Organization (WHO) for- 
mally approves 118 to 1 (U.S.) an interna- 
tional code of marketing of breastmilk 
substitutes. The code seeks to promote 
breastfeeding by recommending limitations 
on methods of marketing infant formulas. 
Japan, South Korea, and Argentina abstain. 

May 25 

The 60th OPEC conference meeting is 
held in Geneva May 25-26. A communique is 
issued announcing that 12 OPEC member na- 
tions (except Saudi Arabia) will freeze oil 
prices at current levels and cut production by 
at least 10%. 

May 28 

Stephen Cardinal Wyszynski, Roman 
Catholic Primate of Poland, dies. 

May 30 

Bangladesh President Ziaur Rahman is 
assassinated during an attempted coup. ■ 

Department of State 

Press releases may be obtained from the 
Office of Press Relations, Department of 
State, Washington, D.C. 20520. 

No. Date Subject 

*131 5/1 Program for the official 

visit of Japanese Prime 
Minister Suzuki, May 4-9. 

"132 5/1 Haig: statement before the 

Senate Subcommittee on 

*133 5/5 Shipping Coordinating Com- 

mittee (SCC), Subcommit- 
tee on Safety of Life at 
Sea (SOLAS), working 
group on lifesaving ap- 
pliances, May 21. 

"134 5/5 Advisory Committee on 

Oceans and International 
Environmental and Scien- 
tific Affairs, May 20. 

*135 5/5 SCC, SOLAS, working group 

on the carriage of 
dangerous goods, June 4. 

*136 5/6 Haig: remarks following 

meetings with Italian 
Prime Minister Forlani and 
Foreign Minister Colombo, 
May 2. 
137 5/8 Final communique— North 

Atlantic Council, May 5. 

"138 5/7 U.S., Panama Joint Com- 
mission on the Environ- 
ment, Washington, D.C, 
May 4-6. 

139 5/8 Digest of U.S. Practice in 

International Law, 1978. 

140 5/6 Haig: news conference, 

Rome, May 5. 
*141 5/8 Haig: statement to members 

of Japanese press corp. 
142 5/11 Haig: address at Syracuse 
University, N.Y. 
*143 5/11 Secretary's Advisory Com- 
mittee on Private Interna- 
tional Law. 
*144 5/12 William P. Clark sworn in as 
Deputy Secretary of State 
(biographic data), Mar. 25. 
145 5/13 U.S. contributions to interna- 
tional Khmer relief. 
*146 5/14 U.S. Organization for the In- 
ternational Telegraph and 
Telephone Consultative Com- 
mittee (CCITT). working 
party on Integrated Services 
Digital Network (ISDN), 
June 3. 
*147 5/14 Advisory Committee on Law 
of the Sea, June 8-9 (par- 
tially closed). 
148 5/18 Haig: address at Hillsdale 

College, Michigan, May 16. 
*149 5/18 Overseas Schools Advisory 

Council, June 18. 
*150 5/19 Program for the official 

visit of German Chancellor 
Helmut Schmidt, May 


Department of State Bulletin 

Press Releases 





John Gavin sworn in as 
Ambassasor to Mexico 
(biographic data), May 13. 
Foreign Policy Conference 
for U.S. editors and broad- 
casters, Washington, D.C., 
June 1-2. 
Oceans and International En- 
vironmental and Scientific 
Affairs Advisory Com- 
mitee, June 15 (partially 
Haig: news conference. 
Haig: commencement ad- 
dress at Fairfield Univer- 
sity, Connecticut, May 24. 
SCC, SOLAS, working group 
on international multimodal 
transport and containers, 
June 10. 
SCC, SOLAS, working group 
on the carriage of danger- 
ous goods, June 23. 
John A. Burroughs, Jr., 
sworn in as Ambassador to 
Malawi (biographic data). 
U.S., Canada agreement on 

albacore tuna vessels. 
Advisory Committee on In- 
ternational Investment, 
Technology, and Develop- 
ment, working group on in- 
ternational data flow, June 
Advisory Committee on In- 
ternational Investment, 
Technology, and Develop- 
ment, June 30. 
U.S., Sweden sign supple- 
mentary extradition con- 
John H. Holdridge sworn in 
as Assistant Secretary for 
East Asian and Pacific 
Affairs (biographic data). 
Haig: remarks at the award 
ceremony, Airline Hijack- 
ing Task Force par- 
ticipants, May 27. 
Arthur H. Woodruff sworn in 
as Ambassador to the Cen- 
tral African Republic 
(biographic data). 
Jeane J. Kirkpatrick sworn 
in as U.S. Permanent 
Representative to the U.N. 
(biographic data), Feb. 4. 
Richard T. Kennedy sworn in 
as Under Secretary for 
Management (biographic 
data), Feb. 28. 
U.S., Thailand amend 
bilateral textile agreement, 
Mar. 30 and Apr. 27. 
U.S., Colombia amend 
bilateral textile agreement, 
Feb. 18 and Mar. 12. 

170 5/29 Deane R. Hinton sworn in as 
Ambassador to El Salvador 
(biographic data), May 21. 

■171 5/29 John J. Louis, Jr., sworn in 
as Ambassador to the 
United Kingdom, May 8 
(biographic data). 

•172 5/29 Robert Dean Nesen sworn in 
as Ambassador to 
Australia and Nauru 
(biographic data). 

•Not printed in the BULLETIN. ■ 


Press releases may be obtained from the 
Public Affairs Office, U.S. Mission to the 
United Nations, 799 United Nations Plaza, 
New York, N.Y. 10017. 



Date Subject 

1/5 McHenry to lead U.S. dele- 
gation to Geneva con- 
ference on Namibia. 
*2 1/15 Schwebel elected U.S. 

judge to the International 
Court of Justice (bio. data). 
*3 1/15 Vanden Heuvel to present 
Freedom Medal to Roger 
N. Baldwin, founder of the 
American Civil Liberties 
♦4 1/20 McHenry completes his 

tenure as U.S. Permanent 
Representative to the U.N. 
*5 2/10 Kirkpatrick: founding meet- 
ing of the committee for 
the Free World. 
*6 3/2 Kirkpatrick: credentials of 

the South African 
*7 3/6 Lowman: relief to Kam- 

puchea, relief donors' 
*8 3/6 Kirkpatrick: Namibia, 

*9 3/11 U.S. delegation to the 10th 
session of the Third U.N. 
Law of the Sea Con- 
ference, New York, Mar. 
9-Apr. 24. 
3/17 Malone: LOS conference. 
3/26 Rosenstock: non-use of 

force, Special Committee. 



•12 4/1 White House statement on 
travel plans to Africa of 
Assistant Secretary of 
State-designate for African 
Affairs Chester A. Croker. 

•13 4/2 White House statement that 
Ambassador Kirkpatrick 
will represent the U.S. at 
the International Con- 
ference on Assistance to 
Refugees in Africa 
(Geneva) instead of Vice 
President Bush. 

•14 4/3 Stromayer: preparatory 
work for the U.N. Con- 
ference on New and 
Renewable Sources of 
•15 4/7 Strasser: Guam, Special 

Committee on Decoloniza- 
16 4/10 U.S. perspective on the 35th 

U.N. General Assembly. 
•17 4/9 Kirkpatrick: FY 1982 budget 

request, U.S. Senate Com- 
mittee on Appropriations. 

18 4/9 Kirkpatrick: refugees in 

Africa, International Con- 
ference on Assistance to 
Refugees in Africa 

19 4/14 Western five statement on 


*20 4/16 Cerny: social development, 
Commission for Social 

•21 4/16 Clark: narcotics, Committee 

•22 4/21 Sorzano: Decade for Action 
to Combat Racism and 
Racial Discrimination, 

•23 4/21 Reynolds: women, ECOSOC. 

•24 4/21 Kirkpatrick: Namibia, Se- 
curity Council. 

•25 4/23 Kirkpatrick: Namibia, Se- 
curity Council. 

*26 4/27 Clark: disaster relief assist- 
ance, ECOSOC. 

•27 4/28 Cardwell: credentials for a 
minority rights group, 
28 4/30 Kirkpatrick: Namibia, Se- 
curity Council. 

•29 5/1 Novak: human rights, 


•30 5/1 Kirkpatrick: birthday of 

Andrei Sakharov, New 
School for Social Research, 
New York, May 2. 

•Not printed in the Bulletin ■ 


i ill/ 1QH1 


International Law 
Digest, 1978 

The Digest of United States Practice in 
International Law, 1978, published by 
the Office of the Legal Adviser of the 
Department of State, was released on 
May 8, 1981. 

The size of the 1,802-page volume, 
sixth in the series of annual Digests, 
reflects, first, the special circumstance 
that several U.S. foreign policy ini- 
tiatives in train for a number of years 
came to fruition in 1978, and second, the 
substantial increase during the period 
1977-78 of litigation that challenged the 
conduct of foreign affairs. 

Two matters brought to conclusion 
came before both Congress and the 
courts: ratification of the Panama Canal 
Treaty and establishment of diplomatic 
relations with the People's Republic of 
China, combined with notice of termina- 
tion of the defense treaty with Taiwan. 
Other less politically controversial 
aspects of foreign policy were litigated 
as well (e.g., extradition, prisoner 
transfer, implementation of fisheries 
conventions, the making of aviation 
agreements, and U.S. actions to seize 
narcotics cargoes and to participate in 
other nations' efforts to eradicate nar- 
cotics production). 

The 1978 volume discusses a number 
of domestic legislative provisions with 
major impact upon U.S. practice in in- 
ternational and transnational law and 
U.S. treaty activity, both multilateral 
and bilateral. More published source 
material has been reproduced than in 
former years. Nonjudicial and 
nonlegislative material includes a variety 
of official correspondence and 
statements. The volume also indicates 
the role of mediation in U.S. diplomacy. 

Publication of annual Digests concen- 
trating completely upon U.S. practice in 
international law began with the volume 
for the year 1973. Over the previous 
century, beginning with Cadwalader's 
one-volume Digest (1877), the Depart- 
ment of State issued at intervals com- 
prehensive, encyclopedic-type surveys of 
the entire field of international law that, 
nevertheless, emphasized U.S. practice. 
The distinguished Digests by Marjorie 
M. Whiteman (15 v., 1963-73), Green 
Haywood Hackworth (8 v., 1940-44), 
John Bassett Moore (8 v., 1906), and 
Francis Wharton (3 v., 1887) are con- 
sidered authoritative for their respective 
periods of coverage and are heavily 

relied upon by practitioners, scholars, 
government officials, and jurists 
throughout the world. 

The Office of the Legal Adviser has 
existed in its current form since July 1 , 
1931. Prior thereto the Department's 
legal officer had been designated as its 
Solicitor under an act of March 3, 1891, 
and as its Examiner of Claims under an 
act of July 25, 1866. The Department 
has had a legal officer as a distinct, 
statutorily established entity since 1848. 

The Legal Adviser of the Depart- 
ment of State during the year 1978 was 
Herbert J. Hansell. The Acting Legal 
Adviser at the present time is Mark B. 
Feldman. The Editor of the Digest of 
United States Practice in International 
Law, 1978, is Marian Lloyd Nash (Mrs. 
Harold Herbert Leich) of the Office of 
the Legal Adviser. 

Orders for the 1978 Digest and/or 
earlier annual Digests should be sent 
to the Superintendent of Documents, 
U.S. Government Printing Office, 
Washington, D.C. 20402, and should be 
accompanied by check or money order, 
made payable to the Superintendent of 
Documents. Remittances from foreign 
countries may be made by international 
postal money order, by draft on an 
American or Canadian bank, or by 
UNESCO coupons; an additional 25% 
handling charge is required for orders to 
foreign countries. 

Ordering data is as follows: 

• 1978: Digest 
International Law, 

• 1977: Digest 
International Law 

• 1976: Digest 
International Law, 

• 1975: Digest 
International Law, 

• 1974: Digest 
International Law, 
(796 pp.). 

• 1973: Digest 
International Law, 

of U.S. Practice in 

$19.00 (Stock No. 
(1,802 pp.). 
of U.S. Practice in 
, $12.75 (Stock No. 
(1,158 pp.). 
of U.S. Practice in 

$9.50 (Stock No. 
(850 pp.). 
of U.S. Practice in 

$11.00 (Stock No. 
(947 pp.). 
of U.S. Practice in 

$11.00 (Stock No. 
(2d printing) 

of U.S. Practice in 
$7.50 (Stock No. 
(618 pp.). 

Press release 139 of May 8, 1981.1 

Department of State 

Free, single copies of the following Depart- 
ment of State publications are available frot 
the Public Information Service, Bureau of 
Public Affairs, Department of State, 
Washington, D.C. 20520. 

Secretary Haig 

Peaceful Progress in Developing Nations, aci 
dress at Fairfield University, Fairfield, 
Conn., on May 24, 1981 (Current Policy 

Foreign Policy and the American Spirit, 
address at Hillsdale College, Hillsdale, 
Mich., on May 16, 1981 (Current Policy 

NATO and Restoring U.S. Leadership, 
address at Syracuse University, Syracuse, 
N.Y., on May 9, 1981 (Current Policy 

East Asia 

Background Notes on Indonesia (May 1981). 


International Economic Policy Priorities, 
Assistant Secretary Hormats before the Ii 
ternational Insurance Advisory Council, 
New York on May 19, 1981 (Current Polic 

Economic Growth of OECD Countries, 
1970-80, INR report of Mar. 9, 1981 
(Special Report #82). U.S. Trade Policy 
(GIST, May 1981). 


Indochinese Refugees (GIST, May 1981). 

Security Assistance 

Arms Transfers and the National Interest, 
Under Secretary Buckley before the 
Aerospace Industries Association in 
Williamsburg, Va., on May 21, 1981 (Cur- 
rent Policy #279). 

South Asia 

Background Notes on Maldives (Apr. 1981). 

Western Hemisphere 

U.S. Assistance to El Salvador (GIST, May 

Background Notes on Mexico (Apr. 1981). I 


Department of State Bulletir 


luly 1981 

lo\. 81, No. 2052 

ifghanistan. Secretary Participates in 
St. Louis Town Hall Forum 13 

frica. Secretary Participates in St. Louis 
Town Hall Forum 13 

merican Principles. Peaceful Progress in 
Developing Nations (Haig) 8 

rms Control 

forth Atlantic Council Meets in Rome (Haig, 
final communique, minutes extract, 
declaration on terrorism 37 

ecretary Haig's News Conference of 
May 22 9 

ecretary Participates in Foreign Policy 
Conference 18 

ecretary Participates in St. Louis Town Hall 
Forum 13 

hina. Secretary Participates in St. Louis 
Town Hall Forum 13 


'irst and Second Reports on Cyprus (message 
to the Congress) 43 

ifant Formula Code (Abrams, McPherson) 54 

-iternational Investment Issues (McCarthy) 30 

.708: A Viable Foreign Corrupt Practices Act 
(Johnston) 29 

trategic Petroleum Reserve (Hormats) . . .32 

3d Report on Cyprus (message to the Con- 

ress) ' 40 

I.S. Competition in International Coal Trade 
(Ferriter) 34 

he United States and Mexico (Briggs) 4 

i.S. Policv and the Law of the Sea (Malone) 48 

I.S. Subscription to the World Bank (John- 
ston) 28 


irst and Second Reports on Cyprus (message 
to the Congress) 43 

3d Report on Cyprus (message to the Con- 
gress) 40 

lepartment of State. Secretary Participates 
in Foreign Policy Conference 18 

leveloping Countries 

'eaceful Progress in Developing Nations 
(Haig) 8 

■Vest German Chancellor Visits United States 
(joint statement) 44 


vtlas of United States Foreign Relations: 
Economics— Part 1 A 

nternational Economic Policy Priorities 
(Hormats) 24 

nternational Investment Issues (McCarthy) 30 

i.708: A Viable Foreign Corrupt Practices Act 
(Johnston) 29 

Strategic Petroleum Reserve (Hormats) . . .32 

J.S. Subscription to the World Bank (John- 
ston) 28 

i\ Salvador 

Secretary Haig's News Conference of 
May 22 9 

Secretary Participates in Foreign Policy Con- 
ference 18 

J.S. Assistance to El Salvador (foreign rela- 
tions outline) 56 


nternational Economic Policy Priorities 
(Hormats) 24 

Strategic Petroleum Reserve (Hormats) . . .32 

U.S. Competition in International Coal Trade 
(Ferriter) 34 

The United States and Mexico (Rriggs) 4 

West German Chancellor Visits United States 
(joint statement) 44 


Secretary Haig's News Conference ot 
May 22 ......9 

Secretary Participates in Foreign Policy Con- 
ference 18 

West German Chancellor Visits United States 
(joint statement) 44 

Food. Secretary Participates in St. Louis 
Town Hall Forum 13 

Foreign Aid. U.S. Assistance to El Salvador 
(foreign relations outline) 56 

France. Secretary Participates in St. Louis 
Town Hall Forum 13 


Secretary Haig's News Conference of 
May 22 9 

West German Chancellor Visits United States 
(joint statement) 44 

Greece. North Atlantic Council Meets in Rome 
(Haig. final communique, minutes extract, 
declaration on terrorism) 37 

Health. Infant Formula Code (Abrams, 
McPherson) 54 

Jamaica. Secretary Participates in St. Louis 
Town Hall Forum 13 

Japan. Secretary Haig's News Conference of 
May 22 . . . .' 9 

Immigration. The United States and Mexico 
(Briggs) 4 

Kampuchea. Khmer Relief Efforts 23 

Latin America and the Caribbean. Secretary 
Haig's News Conference of May 22 9 

Law of the Sea. U.S. Policy and the Law of 
the Sea (Malone) 48 

Lebanon. Secretary Haig's News Conference 
of May 22 ....'. 9 

Libya. Secretary Participates in St. Louis 
Town Hall Forum 13 

U.S. Asks Libyans to Close People's Bureau; 
Travel Advisory Issued (Department state- 
ment) ' 45 


Mexico— A Profile 5 

The United States and Mexico (Briggs) 4 

Visit of Mexican President Lopez Portillo 
(Lopez Portillo, Reagan) 1 

Middle East 

Secretary Participates in Foreign Policy Con- 
ference 18 

Secretary Participates in St. Louis Town Hall 
Forum 13 

Military Affairs 

Arms Transfer and the National Interest 
(Buckley) 51 

NATO Defense Planning Committee Meets in 
Brussels (final communique) 38 

Requirements of Our Defense Policy (Wein- 
berger) 46 

Monetary Affairs. U.S. Subscription to the 
World Bank (Johnston) 28 

Namibia. Secretary Participates in Foreign 
Policy Conference 18 

Narcotics. The United States and Mexico 
(Briggs) 4 

North Atlantic Treaty Organization 

NATO Defense Planning Committee Meets in 
Brussels (final communique) 38 

North Atlantic Council Meets in Rome (Haig, 
final communique, minutes extract, 
declaration on terrorism) 37 

Requirements of Our Defense Policy (Wein- 
berger) 46 

Secretary Participates in Foreign Policy Con- 
ference 18 

West German Chancellor Visits United States 
(joint statement) 44 

Oceans. U.S. Policy and the Law of the Sea 
(Malone) 48 

Petroleum. Strategic Petroleum Reserve 
(Hormats) 32 

Poland. Secretary Participates in St. Louis 

Town Hall Forum 13 

Presidential Documents 

First and Second Reports on Cyprus (message 
to the Congress) 43 

23d Report on Cyprus (message to the Con- 
gress) 40 

Visit of Mexican President Lopez Portillo 
(Lopez Portillo, Reagan) 1 


Department of State 62 

International Law Digest, 1978 62 

Refugees. Khmer Relief Efforts 23 

Security Assistance 

Arms Transfer and the National Interest 
(Buckley) 51 

Requirements of Our Defense Policy (Wein- 
berger) 46 

U.S. Assistance to El Salvador (foreign rela- 
tions outline) 56 

Spain. North Atlantic Council Meets in Rome 
(Haig, final communique, minutes extract, 
declaration on terrorism) 37 


North Atlantic Council Meets in Rome (Haig, 
final communique, minutes extract, 
declaration on terrorism) 37 

Secretary Participates in Foreign Policy Con- 
ference 18 


International Economic Policy Priorities (Hor- 
mats) 24 

The United States and Mexico (Briggs) 4 

Treaties. Current Actions 57 


Arms Transfer and the National Interest 
(Buckley) 51 

North Atlantic Council Meets in Rome (Haig, 
final communique, minutes extract, 
declaration on terrorism) .37 

Peaceful Progress in Developing Nations 
(Haig) 8 

Requirements of Our Defense Policy (Wein- 
berger) 46 

Secretary Participates in Foreign Policy Con- 
ference 18 

Secretary Participates in St. Louis Town Hall 
Forum 13 

West German Chancellor Visits United States 
(.joint statement) 44 

United Kingdom. Secretary Participates in 
Foreign Policy Conference 18 

United Nations 

Infant Formula Code (Abrams, McPherson) 54 

U.S. Policy and the Law of the Sea (Malone) 48 

Name Index 

Abrams, Elliot 54 

Briggs. Everett E 4 

Buckley, James L 51 

Carter, President 40 

Ferriter, John P 34 

Haig, Secretary 8, 9, 13, 18, 37 

Hormats, Robert D 24, 32 

Johnston, Ernest B 28, 29 

Lopez Portillo y Pacheco, Jose 1 

Malone, James L 48 

McCarthy. John T 30 

McPherson. M. Peter 54 

Reagan, President 1,43 

Weinberger, Caspar W 46 

Superintendent of Documents 
U.S. Government Printing Office 
Washington, D.C. 20402 


Postage and Fees Paid 

Department of State 


Second Class 


Subscription Renewals: To insure uninterrupted service, please renew your subscription promptly when you 
receive the expiration notice from the Superintendent of Documents. Due to the time required to process 
renewals, notices are sent out three months in advance of the expiration date. Any problems involving your 
subscription will receive immediate attention if you write to: Superintendent of Documents, U.S. Government 
Printing Office, Washington, D.C. 20402. See inside front cover for subscription rates and mailing address. 

Hvpttvtmvss t 



If of State If If J • 


\'e Official Monthly Record of United States Foreign Policy / Volume 81 / Number 2053 

August 1981 

Department of State 


Volume 81 / Number 2053 / August 1981 

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 provide 
the public, the Congress, and 
government agencies with information 
on developments in U.S. foreign 
relations and the work of the 
Department of State and the Foreign 

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; 
special features and articles on 
international affairs; 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. 


Secretary of State 


Assistant Secretary for Public Affairs 



Office of Public Communication 


Chief, Editorial Division 




Assistant Editor 

The Secretary of State has determined that 
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 Management and 
Budget through January 31, 1986. 

NOTE: Contents of this publication are not 
copyrighted and items contained herein 
may be reprinted. Citation of the 
Department of State Bulletin as the 
source will be appreciated. The Bulletin is 
indexed in the Readers' Guide to Periodical 

For sale by the Superintendent of 

Documents, U.S. Government Printing 

Office, Washington, D.C. 20402 

Price: 12 issues plus annual index — 

$19.00 (domestic) $23.75 (foreignl 

Single copy— $3.25 (domesticl $4.10 (foreign) 

Index, single copy— $2.25 (domestic) $2.85 (for. 



1 President Reagan Attends Economic Summit in Canada (Press Briefings, 

Statements by Participants, Declaration, Statements Released to the Press) 

' e President 

Z News Conference of June 16 

ie Vice President 

Visit to Paris and London (Toast, 

News Conferences) 
Visit to the Philippines (Arrival 

Statement, Toast, Statement to 

the Press) 

ie Secretary 

Arms Control for the 1980s: An 
American Policy 

Visit to China: Attends ASEAN 
and ANZUS Meetings 
(Secretary Haig, Joint News 
Conferences, ANZUS Communi- 

New Initiatives on Afghanistan 
and Kampuchea 

Interview on "Face the Nation" 


U.S. Policy on Namibia 
(Chester A. Crocker) 
< U.S. Response to OAU Criticism 
(Department Statement) 
Strengthening U.S. -African Rela- 
tions (Chester A. Crocker) 
i Western Sahara (Department 

"ms Control 

I America's Blueprint for Control- 
ling Nuclear Weapons 
(Eugene V. Rostow) 





U.S. Policy Toward Western 
Europe and Canada 
(Lawrence S. Eagleburger) 

France (Department Statement) 

U.S. Policy Toward the U.S.S.R., 
Eastern Europe, and Yugoslavia 
(Lawrence S. Eagleburger) 

East Berlin Volkskammer Elec- 
tions (Allied Public Statement) 

Human Rights 

78 U.S. Contributions to the ICRC 

Middle East 

79 Israel's Raid on Iraq's Nuclear 

Facility (Secretary's Letter to 
Congress, Department State- 
ment, Walter J. Stoessel, Jr.) 

80 Situation in the Middle East 

(President Reagan, Statement by 
White House Deputy Press 

81 U.S. Defers Shipment of F-16s to 

Israel (Secretary Haig) 

82 Multinational Force in the Sinai 

(Department Statement) 

South Asia 

83 U.S. Assistance to Pakistan (Joint 


United Nations 



Security Council Meets to Con- 
sider Israeli Raid (Jeane J. 
Kirkpatrick, Text of Resolution) 

International Conference on Kam- 
puchea (Secretary Haig, 
Declaration, Resolution) 


90 June 1981 

Press Releases 

92 Department of State 


92 Department of State 

93 GPO Sales 



88 Current Actions 

President Reagan 
Attends Economic Summit 
in Canada 


President Reagan attended the seventh economic summit of the industrialized na- 
tions July 19-21, 1981, at the Chateau Montebello (62 miles east of Ottawa) and in Ot- 
tawa The other participants were Canadian Prime Minister Pierre-Elliott Trudeau, 
chairman of the summit; French President Francois Mitterrand; West German 
Chancellor Helmut Schmidt; Italian Prime Minister Giovanni Spadohni; Japanese 
Prime Minister Zenko Suzuki; British Prime Minister Margaret Thatcher; and 
European Communities Commission President Gaston Thorn. 

Following are the texts of press briefings held by Secretary Haig and Treasury 
Secretary Donald T. Regan; the declaration issued at the conclusion of the summit; 
the concluding statements of the eight participants; and statements released to the 
press on a summary of political issues and terrorism. 

Secretary Haig's 
Press Briefing 

July 19, 1981 1 

As you know, this is the seventh of our 
major industrial power economic sum- 
mits. This one at Montebello, Canada; 
it's outside of Ottawa proper. 

The first one of these was held at 
Rambouillet [France] in 1975, and it was 
really conceived to deal with the conse- 
quences of the 1973 war and the oil 
crisis and its impact on the Western in- 
dustrialized nations. Ottawa thus com- 
pletes the first cycle of the meetings 
hosted by each of the principles. It is, 
like its predecessors, essentially an 
economic summit. But there will be op- 
portunities, as there always are on such 
occasions, for political discussions. And 
on this occasion, I'm sure it will be no 

The purposes of the summit are to 
enable the heads of government to get 
to know each other personally, to ex- 
change views on major problems and 
prospects in a relaxed, informal at- 
mosphere and setting, and to seek 
agreement on what we refer to as 
"cooperative approaches;" the major 
focus, of course, will be economics. 
There are broad topics under that 
heading: macroeconomic policy involving 
all Western industrialized nations in 
which there are common prob- 
lems—economic growth, levels of 
employment, and the common struggle 
against inflation. There will also be 
discussions on the North-South dialogue, 
if you will, on relations between 
developed and developing nations. There 
will be discussions on energy, trade, and 
East-West economic relations. 

These summit meetings express a 

basic and inescapable reality— that the 
participating nations, with the most ad- 
vanced economics in the world, are in- 
creasingly interrelated. We used that 
term some years ago. It's a manifesta- 
tion of the emerging interdependence 
among developed states and the coor- 
dination of policies which recognize that 
imperatives have become increasingly 

Developments in policies in one area 
affect policies and developments in 
another. This requires close and con- 
tinuous consultation not only to consider 
their own interests, that is, the world 
system at large. It has never been more 
true in the history of mankind that we 
either hang together or hang separately. 
Our enormous power has to be matched 
by equivalent responsibility. 

These summits are primarily ad- 
dressed to economic subjects of common 
interest, and this is the way it should be. 
But economics and politics are closely in- 
tertwined. Our economic policies in- 
evitably have important political implica- 
tions, both domestically and abroad. And 
that will clearly surface during this sum- 

Each of the participating nations 
faces, in various degrees, difficult 
economic problems today. It's a common 
situation that we're all faced with, 
characterized by rising inflation, high 
levels of unemployment, slow economic 
growth, excessive dependence on im- 
ports of oil, and other increasingly 
scarce raw materials as well. 

The President came into office com- 
mitted to trying to put the U.S. 
economy on the path of sustained, 
noninflationary growth. He proposed a 
major recovery program to the 
American people, and it's been very well 
received. That reflects the disappoint- 
ment and frustration with past policies 
that failed to address fundamental and 

economic problems. I believe that 
Americans are committed to the solution 
of the fundamental problems and are 
willing to accept short-term costs that 
are entailed with improvement. 

Achieving once again a dynamic 
American economy is the best way we 
can go right now for the world economy. 
In other words, it clearly has overlap- 
ping impact on the economies of the 
developed states in Western Europe and 
in Japan, and U.S. difficulties translate 
very rapidly into those economies. 

Our policies, in regard to our own 
recovery program, were not adopted out 
of this regard for the impact on other 
countries. On the contrary; we have 
been, and remain and will be in the 
future, sensitive and aware of the effect 
that our economic policies here in the 
United States have on those economic 
situations within our partner countries. 
Strong economies in all summit coun- 
tries are essential to address common in- 
ternational tasks with confidence and 
support here at home. This is true if we 
are to achieve our goals in trade, 
energy, and, perhaps most importantly, 
in our relationships with the developing 
countries of the world. 

Relationships between the developed 
and developing countries are, and have 
been from January on, a key aspect of 
President Reagan's foreign policy. It's 
one on which our perspective has not yet 
been fully spelled out but will be in the 
period ahead. The summit is a very good 
opportunity for us to do that with our 
Western industrialized partners. The 
Cancun summit in October will be 
another. And I think you know it's 
somewhat unusual for an American 
President to join such a meeting as that 
which will take place in Mexico in Oc- 
tober. Our approach will be both con- 
structive and positive. And I only 
highlight for you, as specific examples, 
this Administration's approach to the 
developing world — a pilot case of the 
development of Jamaica, which has been 
underway since the visit of Prime 
Minister Seaga; the efforts which we 
concluded last week in Nassau to join in 
a social economic development program 
for the Caribbean basin — the islands of 
the Caribbean and of Central America; 
the fact that the United States is one of 
the leading contributors to the economic 
development of Zimbabwe; the fact that 
the United States was the highest donor 
at the black African refugee conference 
in Geneva. 

We think there will be at the summit 
a wide measure of agreement among the 
leaders on several points, and they are 
particularly in the macroeconomic area. 
We will seek commonly to reduce infla- 
tion and unemployment, to strengthen 
savings and investment, to assist growth 
and productivity, to facilitate adjustment 
to new worldwide economic circum- 
stances — the least of those associated 
with rising costs of energy. There may 
be differences on the choice of policy in- 
struments between one nation or the 
other; I think they are commonly united 
on these major macroeconomic objec- 

On trade they agree on the need to 
resist protectionism, to maintain an 
open trading system, and in the period 
ahead to address trade restrictions not 
yet subject to international discipline. 
And it's the policy of this Administration 
to be a leading proponent of free trade 
worldwide and to adopt the necessary 
measures to insure that that objective is 
broadened and expanded in the period 
ahead — not only among our Western in- 
dustrialized trading partners but 
perhaps even more importantly among 
developing nations in the North-South 

On energy they recognize the need 
to continue to conserve the use of 
energy and increase supplies — especially 
coal and nuclear— through price 
mechanism, to reduce dependence on im- 
ports, and decrease our vulnerability to 
oil supply and disruption. 

They are committed to a major ef- 
fort to help promote economic and social 
progress in the developing countries and 
to integrate these countries more fully 
into the international economic system. 

On East- West economic relations— a 
new agenda topic proposed by the 
United States for this conference— we 
look to a probing discussion on which we 
can build after Ottawa to bring our own 
economic relations with the Soviets, col- 
lectively, in alignment with our political 
and our security objectives. 

More purely political discussion will 
take place in an unstructured way at the 
conference, such as at luncheons and 
dinners, where heads of government will 
participate together. There will also be a 
series of bilateral meetings between 
heads of state and government and 
President Reagan and his counterparts. 
There is no formal political agenda for 

this summit. The leaders will raise 
whatever subjects are of particular cc| 
cern to them. I would expect, howeve 
that events between now and the sun 
mit itself will tend to shape the ageno 
in the political area, but certainly the 1 
topics which include Poland, perhaps 
relations with the Soviets in general, 
arms control, the Middle East, south] 
Africa, and possibly Central America 
The political talks, while not the 
centerpeice of the economic summit, 
nevertheless, of very great value. A 
word about the participants. The othi 
heads of government at the summit a 
Prime Minister Thatcher of the Uniti 
Kingdom; Chancellor Schmidt of the 
German Federal Republic; President 
Mitterrand of France; Prime Ministe 
Spadolini of Italy; Prime Minister Su 
of Japan; and the host, Prime Minist 
Trudeau of Canada, who was here la 
week as you know. The President of 
European Commission, Mr. Gaston 
Thorn, will also be a participant. He 
was here last week. Only three of tb 
eight principals have attended any oi 
previous six summits. Chancellor 
Schmidt, of course, is the veteran of 
of them. And Prime Ministers Trudei 
and Thatcher have also participated 
the past. The heads of government \ 
be accompanied at their meeting by 
their foreign and finance ministers. 

The session will begin this Sunda 
evening with a get-acquainted dinner' 
and a discussion. It will be limited tc 
heads of state and government 
themselves, and there will be a cor- 
responding dinner, that I'm aware o1 
for the foreign ministers— a parallel 
ner. It will end some time in the afte 
noon— this overall conference— Tues 
with a joint press conference by the 
heads of government, all participate 
It's important that the press and 
public should not expect a summit of 
this kind— and that's been true in thj 
past as well— to reach momentous cc 
elusions. The value of this meeting, < 
with previous summits, has been a si 1 
ing of perceptions, and it will seek tx 
so on this occasion, increasing 
understanding and insuring that the 
proaches to problems are not workin 
crossed purposes but are mutually re 
forcing. This is not the stuff of dram 
but it is important. And as you know 
and you may care to explore, there a 
some differing viewpoints among the 
participants on a number of— primal 

Department of State Bull. 


Economic Summit 
Ottawa, 1981 

omic but not exclusively so— related 

Let me conclude my brief presenta- 
by summarizing what I believe to be 
oasic objectives at this summit— to 
;o know the other leaders personal- 
evelop rapport with them, under- 
d their concerns, and make clear our 
itivity to these concerns; to explain 

economic and foreign policy goals; 
amonstrate to the other leaders our 
rmination to create a strong U.S. 
omy with stable prices, accepting 
ssary short-term costs in this effort; 
xengthen our defenses and to keep 
commitment to international con- 
ition and cooperation and to keep it 

and enduring; to discuss the East- 
t relations, as well as other major 
i?s areas. 

The summit nations and the in- 
| rialized democracies as a whole are 
id together by more than trade 
s. Our ties transcend purely 
jiomic relations. What Chancellor 
rnidt has written recently about the 
I ntic alliance is absolutely correct 
I applies as well to our friends in the 
I fie. What unites us and makes us 
ue is the purpose for which we ap- 
pur wealth and our power — namely, 
Iromote respect for the freedom of 
pns and the dignity of individuals. 
Lt we decide on specific issues we 
| leave this summit essentially and 
ifully more sensitive to each other's 
/s and concerns, more united, and 
>ugh shared challenges we can 
eve the international growth and 
jlopment that all of our member 
es seek. 

Q. Do you envision an agreement 
he nations on some future get- 
ether where you would discuss 
iging economic policies, in relation 
he Soviet Union, in line with 
itical and the security objectives? 

A. Not in the specific sense that 
r question suggests. I think there are 
amber of ongoing fora that permit 
t to happen, both in the Economic 
nmunity and the OECD [Organiza- 
i for Economic Cooperation and 
'elopment] where they have always 

a specific focus on East- West trade 
. the data associated with that trade. 
;re will, hopefully, be some further 
:ussions within the COCOM [Coor- 
ating Committee for East- West 

Trade Policy] apparently designed to put 
a more coherent East- West trade policy 
in the security-related area together, as 
an example. 

Q. Could you be a little more 
specific as to what the United States 
will propose to its allies on East- 

A. I think it doesn't serve a healthy 
purpose at this point to get ahead of the 
discussions. And, incidently, with 
respect to whether there would be 
something as a result of the discussions 
at the summit that the heads of state, of 
government, would put together, I could 
not predict, because they're free agents 
and their agenda is open and somebody 
could propose such a thing. But it's not 
visualized at this time. 

With respect to East- West in 
general, I think a broad set of discus- 
sions involving the interrelationship of 
the political, economic, and security 
aspects of East- West relations, in a very 
general sense, would be the kind of a 
backdrop I would anticipate in Ottawa. 

Q. How important will it be in Ot- 
tawa to come to some kind of a new 
game plan or understanding on TNF 
[theater nuclear forces] with the allies 
and how to proceed on TNF? 

A. I don't anticipate that this will 
come up unless it comes up in the 
margins or in bilaterals. Essentially, our 
situation with respect to TNF and the 
two-track decision made in December of 
1979, reaffirmed last May in Rome, is in 
good shape. Our European partners 
know precisely what we are doing. 
We've been in the process, since the 
Rome summit, of coordinating together 
with our allies in putting together a 
common threat assessment, common re- 
quirement assessments, and that's been 
underway. I believe that the speech that 
I gave earlier this week in New York 
again underlined our commitment to 
follow through with the two-track com- 
mitment and to have discussions with 
Foreign Minister Gromyko in September 
with respect to fleshing out the precise 
time when the formal negotiations will 
begin sometime between mid-November, 
mid-December, I would anticipate. 

Q. You said events between now 
and the summit in the political field 
may shape the agenda of what they'll 
bring up. One of those events is ex- 

pected to be the release of the F-16s 
to Israel. Are you going to be able to 
tell our partners that we have some 
assurance from Israel that in the 
future this equipment will not be used 
in possible violation of U.S. law? 

A. First, with respect to the deci- 
sion itself, I don't want to prejudge that 
because as of this session the President 
has not formally made such a decision. I 
would anticipate he will in the very near 

With respect to that topic as an 
agenda item, I would not expect it 
would be the focus of much discussion. 
But we are prepared to deal in timely 
fashion with the exchanges that we've 
had with the Government of Israel on 
this subject, and I will certainly be 
prepared, and the President will be 
prepared to do that. 

Q. Regarding your personal effect 
on the summit, especially from the 
standpoint of dedication to achieving 
peace, one of your Foreign Service of- 
ficers, James Kleskin, has written in a 
national magazine that the corps of 
cadets at West Point are, in his 
words, "sworn warmakers." Since he 
works for you, you went to West 
Point— you're a graduate of West 
Point— do you think it's fair or ac- 
curate to call West Pointers "sworn 

A. It really depends on what you 
meant when you said that. If you meant 
they are sworn-in to defend this country, 
why, the answer to that is, of course, 
they are. If it means that they are 
something beyond that, I would like to 
have the benefit of reading the article, 
and you certainly titillated my appetite 
to do so. 

Q. On the subject of East- West 
trade, does the United States have a 
position or a paper that it will pre- 
sent, at the very least, for discussion 
purposes at the summit, and if not, 
how does the United States expect 
discussions to get started when it's 
this country that initiated the idea of 
putting it on the agenda in the first 

A. First, there are some very broad 
aspects of this topic that I think we feel 
the participants will benefit from an ex- 
change on, such as linkage, such as the 
interrelationship between economic, 

m ict -t no -I 

political, and security-related policies, 
especially Soviet military capabilities. 

As you know, we've been in the 
process in the Administration of review- 
ing very thoroughly East- West trade. 
That process is drawing to a conclusion. 
That does not necessarily mean that the 
completion of that very extensive review 
lends itself to public disclosure or even, 
necessarily, exchanges with our Euro- 
pean partners in the context that the 
review has been conducted. Where they 
have an interest and are involved, of 
course, we will consult. So the answer to 
your question is we don't view that kind 
of a litany as being presented. We do 
view a broad interrelationship discus- 

Q. Do you expect that nuclear pro- 
liferation and the problems of pro- 
liferation will be an important topic? 

A. It's clear that all of our member 
governments are seized with this prob- 
lem. As you know, there again we have 
just brought it to a conclusion and will 
soon have something to say, if it hasn't 
already been said. It did go today as 
scheduled. Yes, I would anticipate that. 
But it is not a major agenda item. The 
agenda item of energy will inevitably 
lead to future American policies and at- 
titudes on peaceful uses of nuclear 
energy and the associated improvements 
we hope to see achieved in international 

Q. Do you anticipate any unified 
approach to the problems in the Mid- 
dle East and particularly does the 
President feel determined to go for- 
ward with the sale of the AW ACS 
[airborne warning and control system 
aircraft] to Saudi Arabia? 

A. Let me answer your last ques- 
tion first, and the answer to that is a 
very positive yes. The President will 
proceed with that project. 

With respect to the discussions on 
the Middle East, I think you all know 
there's been a lot of background at- 
mospherics with respect to the so-called 
European initiative on the Middle East 
and a certain degree of frustration with 
the slow pace, if not the stalemate, in 
the Camp David process, which was 
probably a consequence of electoral 
deadlines here in the United States and 
certainly in Israel. 

I would expect there would be a 
free-flow exchange of views between the 
leaders on the importance of the 

peacekeeping effort in the Middle East. 
I have already been engaged in a 
number of discussions with our Euro- 
pean partners, especially the President 
of the Economic Community, Peter Car- 
rington— British Foreign Minister. Thus 
far we have been assured and we are 
still confident that what our European 
partners would visualize undertaking in 
this effort in the near term would be 
mutally reinforcing and cooperative ef- 
forts with whatever U.S. led activities 
might be undertaken in the near term. 

Q. Since all the nations need 
energy, I presume you all are really 
going to take up some unified ap- 
proach to how we get some other 
energy than OPEC [Organization of 
Petroleum Exporting Countries] and 
maybe use some of these great alter- 
native energy sources like Canada has 
so much of. 

A. I would anticipate this will be one 
of the really major topics at the summit, 
both in the working group specialist 
areas and in the heads of state and 
government sessions and along the 
margins and during bilaterals as well. 
Clearly, we are looking for major ef- 
forts, commonly applied throughout the 
membership of this summit, to seek to 
reduce dependency on Middle Eastern 
oil resources, and perhaps beyond that, 
Eastern oil resources, either of which 
are subject to cutoff in crises. 

We are anxious to look very careful- 
ly at what the United States can con- 
tribute in this area— the area of peaceful 
uses of nuclear energy— and the vast 
coal deposits which exist here in North 
America. We're interested in also ex- 
ploring what contributions can be made 
in other non-OPEC, non-Eastern- 
producing areas, such as the northern 
part of Europe and Canada. All of these 
things, I am confident, will be carefully 

Q. When you talk about the 
developing world, do you include in 
that China and do you expect the new 
U.S. relationship with China to come 

A. I think it would be unusual if, 
either in my discussions with the foreign 
ministers or in the President's discus- 
sions with the heads of state and 
government, we did not get into the re- 
cent trip I made to China and the 

results of that trip and the outlook fo 
the future as we see it. 

Q. You seemed to underline the 
East- West trade question and then 
later questions you've been, to my 
mind anyway, vague about exactly 
what is going to be said. Are we go 
ing to initiate long discussions tryii 
to get some notion of where these 
other leaders are, what their thinki 
is, with the idea that down the roa< 
we will have some sort of a new 
agreement or is the President goinj I 
make some sort of proposal for disc 

A. I wouldn't go looking for any 
dramatic U.S. -sponsored proposal, an 
am sorry if you got the impression I 
tried to jazz that topic up in my prest 
tation. I must have been gasping for . 
at the moment. But it's just another 
agenda item. It's an important agend; 
item. The point I was trying to make 
that I think there will be an effort on 
the part of the United States— it's om 
of the main reasons we're anxious to 
have it on the agenda— to demonstra 
the importance we feel this particulai 
topic enjoys and its interrelationship 
with the political and economic and 
security-related concerns that we hav 
today in East- West terms. 

Q. What hope do you have of co 
vincing the allies to shoulder any m 
of the burden either financially or i 
terms of equipment in Europe and 
would you couple that, as you talk i 
them, with any hint that we might 
reduce what we are doing there oth 

A. Do you mean are we going to 
engage in verbal blackmail threats? 

Q. Whatever the right words ar< 

A. No, I would not anticipate the 
topic coming up in the context of you 
question. I do think that the 
macroeconomic issues that we will be 
discussing and the example being set 
the United States in which we are 
engaged in substantial reductions in a 
number of our Federal expenditures, 
while simultaneously adding at the le\ 
of about 7% increase a year for the m 
5 to our defense needs, is an example 
that we feel is both necessary because 
the slippage in our own military 
capabilities but also an example that \ 
hope our European friends and our 

Department o^tat^uHe 


Economic Summit 
Ottawa, 1981 

nese friends will be impressed by as 
make their own calculations in a 
tough economic environment. 

J. Your tone would be as soft as 
' That is the tone that you're go- 
o take on it? You won't be cam- 
rung any harder for them to make 
»ater effort? 

\. No, I don't anticipate a confron- 
n. As you know, there are a number 
;ues that are of concern to both 
. There is the issue of Japanese- 
ipean trade relationships. There are 
s of vehicles that impede the kind 
3e trade that we are seeking. There 
icern in Europe about high 
rican interest rates and the impact 
5 having on European economies. 
These are going to be areas of very 
• discussion. I hope they are not go- 

be areas of tension or disagree- 

t but, rather, exchanging views and 
;htening one another with respect to 
:oncerns of all. 

b. A number of observers, sea- 
lid or otherwise, who have return- 
Irom Europe in recent weeks bring 
je the judgment that the Euro- 
is, for the most part, do not like 
economic policies and to the ex- 
they are familiar with our foreign 
:y they don't like that either. Do 
think that 2 days with the Presi- 
. is going to change much of that? 

A. First, I won't share your broad 
:ralization. I do not find that our 
apean partners are discomforted by 
foreign policy. There is a specific 
of that foreign policy that they 
; been less than happy with. In fact, 
e are two. The one is the pace at 
:h we have been willing to enter into 
s control negotiations with the 
let Union, and that's intimately in- 
ed in their own domestic climate 
i respect to nuclear weapons. 
mdly, I think there's been some con- 
i expressed by some about the tone 
ur approaches to the East. I think 
;ntly President Mitterrand has made 
e equally vigorous statements on 
; subject. So I don't accept what you 

1 do accept that our economic 
cies, especially our interest rates, 

e been the subject of concern and in- 
ising concern in recent weeks. But I 
nt 5 years in Europe, and during that 
lod they were also disturbed with 
erican economic programs. At that 

time their concern was what they 
perceived to be a lack of discipline here 
in the U.S. economy, a situation where 
we are letting inflation run rampant, a 
situation when we were letting the 
dollar suffer what they referred to as 
"benign neglect," and a situation in 
which they felt that lack of discipline in 
our own domestic energy program was 
being translated onto their shoulders 
through declining dollar values. 

We've turned that around. This Ad- 
ministration has put together a 
coherent, comprehensive program 
designed to get inflation under control, 
to get economic growth proceeding more 
rapidly in a positive direction. It has, of 
course, been perceived in Europe to 
some degree with resulting high levels 
of interest rate to be a cause of their 

We understand their concern. We've 
been sensitive to it from the beginning, 
and we are going to be increasingly sen- 
sitive to it as we proceed down the road. 
I think another problem that bothers our 
European friends, and I'm speaking very 
frankly, is that they have different 
systems than we do here. They don't 
welcome American officials suggesting 
how they should correct their economic 
deficiencies, and they have many. I think 
it's important that there be a free ex- 
change of views on these relative con- 
cerns, and I anticipate there will be, but 
I think it's going to be a very cordial and 
constructive dialogue that will take 

Q. The Canadian Government has 
released logistical and security details 
on the Ottawa summit trip. They are 
permitting hostile demonstrations in 
the near vicinity of the summit. Are 
you satisfied with the Canadian 
Government's security arrangements? 

A. I would leave that to the ex- 
perts. I haven't dug into those matters 
that you're speaking of. I think we do 
welcome the fact that Canada is a 
democratic society and an open society 
and we like that. 

Q. Do we have a contingency 
agreement with our allies to radically 
cut trade with the Soviet Union in the 
event of an invasion of Poland? 

A. I think we have discussed this 
issue repeatedly over the last 6 months 
and it was discussed at length before 
this Administration came in. There's no 

question that there's been extensive 
planning and coordinating discussions 
between the members of NATO and 
those Western industrialized states out- 
side of NATO, and which are focusing, 
primarily, on political, economic, and 
diplomatic reactions that might be 
undertaken in the event of a situation in 
Poland of the kind you describe. Beyond 
that I won't say. And that doesn't mean 
there are any a priori triggering 
mechanisms for a complete set but a 

Q. Given the different approaches, 
given the fact that you said that the 
allies will try to reach a mutual 
understanding on a different subject, 
on the subject of Central America, 
does that mean that the United States 
would be willing to change its posi- 
tion on Central America? 

A. I think our Assistant Secretary 
for Latin American Affairs is giving a 
speech today on this subject, and I 
would refer you to that. It's a clear ex- 
position of what our current policy is 
and will remain. On the other hand, I 
would like to take the opportunity of 
your question to suggest that what we 
are talking about in there is our view of 
a political solution and reaffirming that 
a political solution is our objective. 

We are faced with two problems. 
One is a security-related problem. And 
the other is a problem of dealing with 
the condition of, whether you refer to 
them as economic deprivation or 
socioeconomic or social justice objec- 
tives, to which an entirely different set 
of programs have to be designed and 
tailored. That's precisely what we've 
been doing in the case of our Caribbean 
basin development plan and the discus- 
sions we have had with Mexico, 
Venezuela, and Canada. 

We would visualize, if this plan takes 
shape with the agreement and participa- 
tion of all, that we would expand the 
donor countries. I think that deals more 
precisely with the question of the 
socioeconomic environment in Central 
America and the opportunities it affords 
for external mischiefmaking. 

Q. Do you expect the annual 
economic summits to continue after 
this one? 

A. Yes, I would anticipate it, but it 
depends on the heads of state and 
government. It will be one of the topics 
they will discuss, I am sure. 

Secretary Haig's 
Press Briefing 

July 19, 1981 2 

What I'm really trying to do for you 
tonight is to give you a very quick and 
cryptic description of the bilaterals that 
were held between the President and 
Chancellor Schmidt of West Germany 
and French President Mitterrand. 

As you know, the President will con- 
duct bilaterals not only with these two 
but with Japan and Great Britian. He 
has talked to Canada. He's talked to the 
Economic Community; of course, finally 
with Italy. After each we'll give you a 
flavor of what occurred. 3 That is all we 
are going to talk about. 

First, the meeting with Chancellor 
Schmidt was an extension of a relation- 
ship which has already begun, as you 
know, both as a result of the 
Chancellor's earlier visits to Washington. 
There was a very lengthy discussion and 
exchange on the economies. The 
Chancellor, of course, raised his con- 
cerns about the impact of the perception 
of high U.S. interest rates on European 
economies in general. The President 
went into considerable length to explain 
to the Chancellor that high interest 
rates do not represent American policy, 
that these were inherited economic con- 
ditions, and that it is the policy of the 
United States to pursue a broadly based 
program involving fiscal, tax, and 
monetary reform and fiscal 
restraint — all designed to bring our in- 
flation levels under control — and that 
the consequence of that would be a 
responsive drop in the interest rate. At 
the same time, the President made it 
very clear that he understood the con- 
cerns of our European partners and 
Helmut Schmidt's particular concerns 
about the current high level of interest 

Beyond these economic questions 
Chancellor Schmidt was, of course, very 
interested in our current state of 
knowledge of the critical situation in the 
Middle East. And there was an ex- 
change on the activity we have under- 
way with Ambassador Habib's [Philip C. 
Habib, the President's special emissary 
to the Middle East] mission, the discus- 
sions that the Ambassador had with 
Prime Minister Begin — two discussions 
today. We've just gotten the report on 

the second, and the situation remains 
tense and worrisome. 

There were discussions in general on 
East- West matters between the 
Chancellor and the President. The Presi- 
dent registered his concerns about ex- 
cess dependency on Soviet natural gas 
and the pipeline issue and offered to 
present to the Chancellor a host of alter- 
native programs that the United States 
is prepared to cooperate and support on 

UPl photo 

which might eliminate dependency or 
reduce dependency in that area. 

The President also raised the issue 
of other aspects of East- West trade and 
the desirability of having a high-level 
meeting this fall to look at the possibility 
of tightening up in certain areas and 
perhaps loosening up in other areas. But 
the main objective would be to tighten 
up in military-related issues involving 
end items and technology. With respect 
to technology, the focus would be on 
military-related trade as distinct from 
specific military trade. Military-related 
trade, items that could have an impact 
more indirectly — that would be reserved 
to technology. 

All in all, the meeting was fast- 
moving, cordial, and reflected the fact 
that the two leaders have spoken 
together in the past and have already 
established a level of frankness and rap- 
port that enabled us to do a lot of 

The President used this meeting also 
to once again reaffirm the American in- 
tention to proceed with the two tracks 
of the TNF modernization, deployment, 
and negotiation. The President noted 
that I would meet with [Soviet Foreign 

Minister] Gromyko in the fall at the 
U.N. General Assembly with a view 
toward having specific negotiations 
begin between mid-November and mi 
December of this year. 

The meeting with Mr. Mitterranc 
was [inaudible]. In other words, this 
the first occasion that the two leader 
had an opportunity to meet one anot 
I, as an observer, was very impresse 
with the cordial relationship which w 
established at this first meeting. The 
was an initial exchange of personal 
observations by the two men which, 
think, helped to establish that. There 
were discussions again on the econor 
situation in Europe and in the Unitei 
States. Mr. Mitterrand made it clear 
that he was not going to attempt to 1 
ture the United States on our econor 
policy but at the same time pointed c 
that at some point this interest rate 
problem could have a profound impai 
not only in Western Europe but perl 
in a broader global context. 

The President thanked Mr. Mitte | 
rand for the recent statements of tht 
President himself— President Mitter- 
rand — and his Foreign Minister and 
other government officials on suppor 
for the two-track decision of the thej 
nuclear modernization and negotiatic 
and the French President's repeated 
reference to the need to maintain ou: 
defense levels. 

There were discussions, which wi 
brief and yet important, on East- We; 
relations, exchanges between the twc 
men. President Reagan used this as ; 
opportunity — recognizing the French 
terest in North-South relations — to 
outline with some specificity his grea 
interest and the high priority he give 
U.S. and Western policies vis-a-vis 
developing nations. 

This is an interest which the Pres 
dent came into office with which has 
been sharpened as a result of discuss: 
early on in his Administration with tl 
President of Mexico, Lopez Portillo, i 
with Prime Minister Trudeau. They'vi 
been reflected in this hemisphere by t 
pilot model program the President ha 
launched for the economic developme 
of Jamaica and the subsequent efforts 
we've made to launch a program desij 
ed to assist with the social-economic 
needs of the Caribbean basin area anc 
the Central American countries, whic. 
was the focus, as you know, of the 
meeting we had with Mexico, Canada 
Venezuela, and ourselves in Nassau a 


Economic Summit 
Ottawa, 1981 

;nd ago. 

resident Mitterrand expressed a 

i to continue and expand the 

ral talks started today and to pro- 

lese discussions into a longer 

futuristic timeframe— 3-4 years 
he future, and because he felt it 
mportant that we not exclusively 
re ourselves in immediate problems 
jut look toward longer range 
s. I think the President warmly 
med that. The President used this 
ion to invite President Mitterrand 
le with him and to meet with him 
illiamsburg at the time of the 
town celebration this fall where, as 
erstand, an invitation had already 
to President Mitterrand from the 
oring organization. President Mit- 
nd expressed a warm reception to 
oroposal, and I anticipate that will 
l.ppening at Williamsburg. We bet- 
let the date on that because I don't 
it in my left pocket. 
.II in all, I think the discussions 
i both leaders were an auspicious 
I as preliminaries to the multilateral 
issions which will proceed tomorrow 
i ing; and as a prelude to tonight's 
Ir which will be participated in or 
ded by the principals only, and dur- 
'hich I anticipate all of the leaders 
express themselves in greater detail 
vith a greater exchange of views in 
irger venue. 

^. You said in the discussion with 
icellor Schmidt, the President— 
>e these were your words, the sit- 
in in the Middle East remains 
i and worrisome. What did you 
is by that? 

A. I think that anyone who has 
witnessing the escalating cycle of 
nee in the Middle East cannot but 
mcerned as casualties mount and in- 
nt noncombatants become the vic- 
of these exchanges. I don't want to 
ery much beyond that because that's 
:ubject of another set of events yet 
:cur, as I say. 

J. You mentioned that the Presi- 
offered Chancellor Schmidt 
ral options on a natural gas supply 
r est Germany. 

A. No, he didn't mention several op- 
;. He suggested that it would be 
rul if we could offer to our Euro- 
partners, especially those engaged 
e pipeline project, some alternative 

approaches to their energy need prob- 
lem. And this was done as an offer to 
see whether or not there might be better 
alternatives for both West Germany and 
France in this instance and whether or 
not in the long term these would better 
meet their interests and our mutual in- 

Q. So he offered nothing specific 
and — 

A. In general, we are talking about 
coal, a peaceful nuclear power, plus 
alternative gas and fuel oil solutions, 
where we are somewhat more limited, 
as are they. 

Q. Did President Reagan bring up 
in his bilateral talk with President 
Mitterrand the four Communists that 
have joined his government in France? 

A. No, that subject was not discuss- 
ed. It is clearly a subject that has been 
discussed in the past and is behind us. 

Q. Did the President discuss with 
Mitterrand the Middle East situation 
and what was Mitterrand's response? 

A. No, that did not come up, and I 
think it did not come up simply because 
the two leaders ran out of time. We had 
to use an interpreter for that meeting so 
the substantive exchange was somewhat 

Q. I'm just wondering about 
Chancellor Schmidt, whether or not 
you could be more specific? Did he 
give any particular view on what he 
felt the U.S. posture should be vis-a- 
vis Israel, or what the Western com- 
munities' posture should be vis-a-vis 

A. No, I think that he expressed 
very specifically his deep concern about 
the escalating cycle of violence and was 
anxious to both register that concern 
and to hear President Reagan's own 
outlook with respect to recent events. 
We provided that, but it's a little 
premature yet and I think inappropriate 
to go farther than that. 

Q. Did the President tell him his 
decision on the F-16s, and when will 
the press be notified about that? 

A. No, he did not and there's been 
no decision on that subject. I would an- 
ticipate one in the very near future, but 
we leave this up to the President, of 
course. It's his responsibility, and he just 
h?d not made it yet. 

Q. Can you say whether either 
Chancellor Schmidt or President Mit- 
terrand raised concerns and expressed 
them to the President about U.S. 
policy in Central America, particularly 
El Salvador? 

A. No, this subject did not arise in 
either of the bilaterals. As I mentioned 
earlier, however, President Reagan went 
into considerable detail about his think- 
ing with respect to the developing 
world, and especially the socioeconomic 
objectives associated with the Caribbean 
basin plan. 

Q. Did the question of the Com- 
munist participation in the Cabinet in 
France come up? 

A. No, as I say, I believe that sub- 
ject is behind us. 

Q. Did either of the European 
leaders give an estimate to the Presi- 
dent as to how long their economies 
could tolerate high interest rates in 
this country — 6 months, a year? And 
what would happen if the high rates 
did not come down by a specified 

A. Clearly there was some discus- 
sion about durability in the context of 
the current levels of high interest rates. 
And incidentally, many of our other 
European partners have equally high in- 
terest rates of their own. I think the 
President noted that we were number 
four among some of the major in- 
dustrialized countries in that regard. But 
I think, in the case of the discussion 
with President Mitterrand, there was 
some exchange that would have sug- 
gested that the toleration level has limits 
in terms of duration, perhaps the end of 
the year. 

There was some hope expressed on 
the U.S. side that as we are watching 
current or previous levels of inflation 
start to come down that there's a basis 
for some optimism that, in the not too 
distant future, there will be a 
corresponding lowering of American in- 
terest rates. But I think it's also impor- 
tant that all of us bear in mind, and the 
President emphasized himself, that we 
do not control interest rates. They are 
set by an independent agency, the 
Federal Reserve Board, and it is impor- 
tant, I think, that we recognize that, 
too, in the context of assessing the abili- 
ty of the United States to manipulate 
monetary policy in that way. 




July 21, 1981 4 

1. We have met at a time of rapid change and 
great challenge to world economic progress 
and peace. Our meeting has served to rein- 
force the strength of our common bonds. We 
are conscious that economic issues reflect and 
affect the broader political purposes we 
share. In a world of interdependence, we 
reaffirm our common objectives and our 
recognition of the need to take into account 
the effects on others of policies we pursue. 
We are confident in our joint determination 
and ability to tackle our problems in a spirit 
of shared responsibility, both among 
ourselves and with our partners throughout 
the world. 

The Econony 

2. The primary challenge we addressed at 
this meeting was the need to revitalize the 
economies of the industrial democracies, to 
meet the needs of our own people and 
strengthen world prosperity. 

3. Since the Venice Summit the average 
rate of inflation in our countries has fallen, 
although in four of them inflation remains in 
double figures. In many countries unemploy- 
ment has risen sharply and is still rising. 
There is a prospect of moderate economic 
growth in the coming year but at present it 
promises little early relief from unemploy- 
ment. The large payments deficits originating 
in the 1979-80 oil price increase have so far 
been financed without imposing intolerable 
adjustment burdens but are likely to persist 

for some time. Interest rates have reached 
record levels in many countries and, if long 
sustained at these levels, would threaten pro- 
ductive investment. 

4. The fight to bring down inflation and 
reduce unemployment must be our highest 
priority and these linked problems must be 
tackled at the same time. We must continue 
to reduce inflation if we are to secure the 
higher investment and sustainable growth on 
which the durable recovery of employment 
depends. The balanced use of a range of 
policy instruments is required. We must in- 
volve our peoples in a greater appreciation of 
the need for change: change in expectations 
about growth and earnings, change in 
management and labor relations and prac- 
tices, change in the pattern of industry, 
change in the direction and scale of in- 
vestments and change in energy use and sup- 

5. We need in most countries urgently to 
reduce public borrowing; where our cir- 
cumstances permit or we are able to make 
changes within the limits of our budgets, we 
will increase support for productive invest- 
ment and innovation. We must also accept 
the role of the market in our economies. We 
must not let transitional measures that may 
be needed to ease change become permanent 
forms of protection or subsidy. 

6. We see low and stable monetary 
growth as essential to reducing inflation. In- 
terest rates have to play their part in achiev- 
ing this and are likely to remain high where 
fears of inflation remain strong. But we are 
fully aware that levels and movements of in- 
terest rates in one country can make 
stabilization policies more difficult in other 
countries by influencing their exchange rates 
and their economies. For these reasons, most 
of us need also to rely on containment of 
budgetary deficits, by means of restraint in 
government expenditures as necessary. It is 
also highly desirable to minimize volatility of 
interest rates and exchange rates; greater 

stability in foreign exchange and financial 
markets is important for the sound develop 
ment of the world economy. 

7. In a world of strong capital flows ant 
large deficits it is in the interests of all tha' 
the financial soundness of the international 
banking system and the international finan- 
cial institutions be fully maintained. We 
welcome the recently expanded role of the 
IMF [International Monetary Fund] in final 
ing payments deficits on terms which en- 
courage needed adjustment. 

8. In shaping our long term economic 
policies, care should be taken to preserve tl 
environment and the resource base of our 

Relations With Developing Countries 

9. We support the stability, independence a 
genuine non-alignment of developing coun- 
tries and reaffirm our commitment to 
cooperate with them in a spirit of mutual in 
terest, respect and benefit, recognizing the 
reality of our interdependence. 

10. It is in our interest as well as in 
theirs that the developing countries should 
grow and flourish and play a full part in the 
international economic system commensural 
with their capabilities and responsibilities ai 
become more closely integrated in it. 

11. We look forward to constructive anc 
substantive discussions with them, and 
believe the Cancun Summit offers an early 
opportunity to address our common problerr 

12. We reaffirm our willingness to ex- 
plore all avenues of consultation and coopen 
tion with developing countries in whatever 
forums may be appropriate. We are ready tx 
participate in preparations for a mutually ac 
ceptable process of global negotiations in cir 
cumstances offering the prospect of mean- 
ingful progress. 

13. While growth has been strong in mo: 
middle income developing countries, we are 

Department of State Bulletii 


Economic Summit 
Ottawa, 1981 

conscious of the serious economic 
ms in many developing countries, and 
im poverty faced especially by the 

among them. We remain ready to sup- 
he developing countries in the efforts 
nake to promote their economic and 
development within the framework of 
own social values and traditions. These 
s are vital to their success. 
1. We are committed to maintaining 
intial and, in many cases, growing 
of Official Development Assistance and 
»ek to increase public understanding of 
portance. We will direct the major por- 
f our aid to poorer countries, and we 
articipate actively in the United Nations 
rence on the Least Developed Coun- 

We point out that the strengthening 
own economies, increasing access to 
larkets and removing impediments to 
d flows contribute larger amounts of 
;d resources and technology and thereby 
lement official aid. The flow of private 
|d will be further encouraged insofar as 
Uveloping countries themselves provide 
l ances for the protection and security of 

3. The Soviet Union and its partners, 
i ; contributions are meagre, should make 
i development assistance available, and 
( i greater share of exports of developing 
ries, while respecting their in- 
ldence and non-alignment. 

7. We will maintain a strong commit- 
to the international financial institu- 
and work to ensure that they have, and 
ffectively, the financial resources for 
important responsibilities. 

8. We attach high priority to the resolu- 
jf the problems created for the non-oil 
loping countries by the damaging effects 
lem of high cost of energy imports 
,ving the two oil price shocks. We call on 
urplus oil-exporting countries to broaden 

valuable efforts to finance development 
>n-oil developing countries, especially in 
ield of energy. We stand ready to 
erate with them for this purpose and to 
ore with them, in a spirit of partnership, 
ible mechanisms, such as those being ex- 
ied in the World Bank, which would take 
account of the importance of their finan- 

19. We recognize the importance of ae- 
rated food production in the developing 

Id and of greater world food security, and 
need for developing countries to pursue 
id agricultural and food policies; we will 
■nine ways to make increased resources 
lable for these purposes. We note that 
Italian Government has in mind to 
uss within the European Community pro- 
ils to be put forward in close cooperation 
l the specialized U.N. institutions located 
tome for special action in this field 
narily directed to the poorest countries. 

20. We are deeply concerned about the 

implications of world popuation growth. 
Many developing countries are taking action 
to deal with that problem, in ways sensitive 
to human values and dignity; and to develop 
human resources, including technical and 
managerial capabilities. We recognize the im- 
portance of these issues and will place 
greater emphasis on international efforts in 
these areas. 


21. We reaffirm our strong commitment to 
maintaining liberal trade policies and to the 
effective operation of an open multilateral 
trading system as embodied in the GATT 
[General Agreement on Tarriffs and Trade], 

22. We will work together to strengthen 
this system in the interest of all trading coun- 
tries, recognizing that this will involve struc- 
tural adaptation to changes in the world 

23. We will implement the agreements 
reached in the Multilateral Trade Negotia- 
tions and invite other countries, particularly 
developing countries, to join in these mutual- 
ly beneficial trading arrangements. 

24. We will continue to resist protec- 
tionist pressures, since we recognize that any 
protectionist measure, whether in the form of 
overt or hidden trade restrictions or in the 
form of subsidies to prop up declining in- 
dustries, not only undermines the dynamism 
of our economies but also, over time, ag- 
gravates inflation and unemployment. 

25. We welcome the new initiative 
represented by the proposal of the Con- 
sultative Group of Eighteen that the GATT 
Contracting Parties convene a meeting at 
Ministerial level during 1982, as well as that 
of the OECD countries in their programme of 
study to examine trade issues. 

26. We will keep under close review the 
role played by our countries in the smooth 
functioning of the multilateral trading system 
with a view to ensuring maximum openness 
of our markets in a spirit of reciprocity, while 
allowing for the safeguard measures provided 
for in the GATT. 

27. We endorse efforts to reach agree- 
ment by the end of this year on reducing sub- 
sidy elements in official export credit 


28. We are confident that, with 
perserverance, the energy goals we set at 
Venice for the decade can be achieved, ena- 
bling us to break the link between economic 
growth and oil consumption through struc- 
tural change in our energy economies. 

29. Recognizing that our countries are 
still vulnerable and energy supply remains a 
potential constraint to a revival of economic 
growth, we will accelerate the development 
and use of all our energy sources, both con- 

ventional and new, and continue to promote 
energy savings and the replacement of oil by 
other fuels. 

30. To these ends we will continue to rely 
heavily on market mechanisms, supplemented 
as necessary by government action. 

31. Our capacity to deal with short-term 
oil market problems should be improved, par- 
ticularly through the holding of adequate 
levels of stocks. 

32. In most of our countries progress in 
constructing new nuclear facilities is slow. 
We intend in each of our countries to en- 
courage greater public acceptance of nuclear 
energy, and respond to public concern about 
safety, health, nuclear waste management 
and non-proliferation. We will further our ef- 
forts in the development of advanced 
technologies, particularly in spent fuel 

33. We will take steps to realize the 
potential for the economic production, trade 
and use of coal and will do everything in our 
power to ensure that its increased use does 
not damage the environment. 

34. We also intend to see to it that we 
develop to the fullest possible extent sources 
of renewable energy such as solar, geother- 
mal and biomass energy. We will work for 
practical achievements at the forthcoming 
United Nations Conference on New and 
Renewable Sources of Energy. 

35. We look forward to improved 
understanding and cooperation with the oil 
exporting countries in the interests of the 
world economy. 

East-West Economic Relations 

36. We also reviewed the significance of 
East- West economic relations for our political 
and security interests. We recognized that 
there is a complex balance of political and 
economic interests and risks in these rela- 
tions. We concluded that consultations and, 
where appropriate, coordination are 
necessary to ensure that, in the field of East- 
West relations, our economic policies con- 
tinue to be compatible with our political and 
security objectives. 

37. We will undertake to consult to im- 
prove the present system of controls on trade 
in strategic goods and related technology 
with the USSR. 


38. We are convinced that our democratic, 
free societies are equal to the challenges we 
face. We will move forward together and 
with all countries ready to work with us in a 
spirit of cooperation and harmony. We have 
agreed to meet again next year and have ac- 
cepted the invitation of the President of the 
French Republic to hold this meeting in 
France. We intend to maintain close and con- 
tinuing consultation and cooperation with 
each other. 

gust 1981 


July 21, 1981 5 

Prime Minister Trudeau 

I should wish first on behalf of my col- 
leagues at the table here to express our 
welcome to the press here and in accord- 
ance with the practices, established 
practices, and as chairman of the sum- 
mit meeting this year, I must make a 
statement summarizing the main points 
we have dealt with in the course of the 
last few days, and each of my colleagues 
will in turn speak to you. 

The Ottawa summit was met at a 
time of rapid change and great challenge 
to world economic progress and peace. 
East- West relations have been affected 
by the increase in the armed forces of 
the U.S.S.R. and its ever increasing 
presence in the world. The political and 
economic situation of many countries 
has made it difficult for them to adapt 
to the new changes. The members of the 
summit meeting have also been victims 
of these changes, and whatever we have 
attempted to do in the course of the last 
years was not necessarily carried out. 
We have had to reexamine the situation 
and restructure our activities so that, of 
course, there has been some pessimism 
about this summit. 

Of course, it seemed to have been a 
difficult one but in my dual capacity as a 
participant and chairman I am able to 
say, "No, the pessimists were not 
justified." We have met for many hours, 
and these contacts have promoted 
mutual trust and confidence in facing 
the crises we may have to — which 
challenge us. We've had very com- 
prehensive discussions and frank discus- 
sions during our meetings. We have not 
tried to hide our divergences. We realize 
that we are dealing with economies 
which have different structures and 
have different reactions to the evolving 
situation. We have agreed that we could 

not revitalize our economies by isolating 
ourselves from one another. We have 
agreed on the fundamentals and realize 
we must take into account in our politics 
the impact it may have on our partners. 

The whole burden of that fight can- 
not be made on monetary policy alone. 
And third, levels and movements of in- 
terest rates in one country can make life 
more difficult for other countries by in- 
fluencing the exchange rates. This is 
something to which we must all remain 
sensitive and which we must try to 
minimize. We must also pursue responsi- 
ble trade policies. 

Over the years, as summit partners, 
we have warned against succumbing to 
the temptation of protection. These 
warnings have served us well. If we had 
drifted into protectionism, we might 
have conjured up an economic crisis 
similar to that of the 1930s. We have 
reiterated our strong commitment to an 
open, liberal, and multilateral trading 
system. We have agreed to deal with 
trade distortions. But we are determined 
not to lay the burdens of adjustment at 
the doorstep of our neighbors. We are 
looking forward to working with others 
on a trade agenda for the 1980s. I 
regard this consensus about trade policy 
as one of the most important to have 
emerged from our meeting, not least for 
a major trading nation like Canada. 

One of the uncertainties hovering 
over this summit was how it would deal 
with the North-South relationship. It's 
no secret to anyone that I attach very 
great importance to that relationship as 
an element of fundamental equity, of 
mutual interests and benefits, and of 
global security. 

The Ottawa summit was the first of 
a series of important meetings this year 
where the North-South relationship will 
be at the center of the agenda. It seem- 
ed important to me, therefore, that the 
signal emanating from Ottawa should be 
clear and that it should be positive. For 
the signal to be persuasive, it had to 
come from all of us jointly. That was the 
purpose of much of the travel, that as 
chairman of this year's meetings, I 
undertook in the weeks immediately 
preceding the summit. 

The world looked to the Ottawa 
summit for some sign of movement, 
some basis for hope that progress is 
possible, that the logjam can be broken. 
I'm very pleased with what we've been 
able to achieve. Our discussions showed 

a common appreciation of the 
magnitude of the problem and a com- 
mon readiness to respond to it. There ; 
now a disposition on the part of all sur 
mit countries to pursue any opportunit 
for meaningful progress, including whs 
are known as "global negotiations." Th, 
openness to the process of global 
negotiations represents a consensus 
which did not exist before our summit 
and seemed very remote not too many 
months ago. 

The message we send from this 
meeting to the developing countries is 
the following: First, we respect your ii 
dependence and support genuine non- 
alignment as a contribution to interna- 
tional peace and stability and as a basi 
for cooperation. Second, we look to yoi 
to play a full part in the international 1 
economic system and to become closelj 
integrated to it. Third, we are ready t( 
participate with you in preparations fo 
a process of global negotiations. Fourt 
we appreciate the problems of energy i 
supply which you are encountering anc | 
are prepared to join with the surplus o j 
exporting countries in examining how j 
best we might jointly help you in 
developing your indigenous energy 
reserves. Five, we recognize the impor 
ance of more food production in your 
countries and of greater world securitj 
and will try to make increased resourc 
available for these purposes. Six, we v4 
maintain our strong multilateral comm 
ment to the international financial in- 
stitutions and to the role they have 
played in alleviating the problems of 
development. And lastly, we will direct 
the major portion of our aid to the 
poorer countries. 

On the occasion of this year's sum- 
mit meeting, it seemed to us we could 
not ignore the fact that the strength- 
ening of the armed forces in the Soviet 
Union has had an impact on the 
resources of our country and on the 
orientations which we have had to 
follow. We are convinced of the need f( 
a strong defense capability, but we're 
also open to the possibility of dialogue 
and negotiation with the Soviet Union, 
particularly as regards nuclear ar- 
maments and security with less ar- 
maments and diminished cost. 

I should wish, in conclusion, as 
Prime Minister of Canada, to say that 
we were very happy to be the host na- 
tion of this summit meeting. I am par- 
ticularly grateful to all of those who 


Department of State Bulleti 


Economic Summit 
Ottawa, 1981 

accepted the challenge for this 
endeavor and have provided the 
num in assuring success. May I be 
tted also to express deep gratitude 
colleagues at this table for having 
my task so easy and to wish them 
)eed as they return to their own 

(dent Reagan 

sure I speak for all of us in thank - 
ou for the welcome we've had and 
ospitality that we've enjoyed during 
days together in Montebello. 

ou've been a most gracious host 
ny fellow countrymen and I shall 
be grateful. Not long ago the con- 
onal wisdom was that our seven na- 
were more sharply divided than 
rime in years. Only three of us had 
ided an economic summit before 
ihe rest of us are still in the first 
B — the first year class. 
'o the outside world this looked like 
>uld be a difficult summit. Inflation 
. are running at incredible levels, 
nployment disrupts the lives of 
ons of people and new fears of pro- 
onism are sweeping across our con- 
its. The agenda of Montebello 
esented an enormous challenge for 
? us. The true measure of these past 
/s— days filled with candid but 
ys friendly talks— is that we leave 
a true sense of common under- 
ding and common purpose. We've 
issed at great length how each one 
; is addressing economic problems at 
e while working in concert to assure 
we are sensitive to the impact of 
actions upon our partners. 
I'm grateful to the other leaders 
for their degree of understanding 
support for the economic policies 
e embarked upon in the United 
es. We have also resolved that we 
l resist protectionism and support an 
I expanding system for multilateral 
e. And, as you have been told by the 
ne Minister, we shall work together 

in helping the developing nations move 
toward full partnership in that system. 

As Chancellor Schmidt has told us, 
our unity in economic matters is the best 
insurance we have against a return to 
the disastrous "beggar-thy-neighbor" 
policies of another era. 

Economic unity and political unity 
are two great goals we must continue to 
pursue. All our nations share democratic 
institutions based on a belief in human 
dignity, freedom, and the preeminence 
of the individual. I believe that we 
depart with fresh confidence and op- 
timism about the future of democratic 
values and our societies. 

Many uncertainties still lie ahead; 
much remains to be done. But, as an 
American, I would like to recall for you 
an inspiring story of my native land. It's 
the story of young Franklin Roosevelt, 
who was struck down by polio in the 
prime of life and then, struggling to 
cover and to scale new heights. I men- 
tion it because much of that struggle 
took place on a little island not too far 
from here in New Brunswick, Canada, 
and the story is remembered by a very 
appropriate title, "Sunrise at 

Today, as we leave Montebello, I 
just can't resist the suggestion that over 
the past few years our nations have suf- 
fered from an affliction too, an economic 
affliction. I hope sometime in the future 
people will look back and say that here, 
in these talks, we began to put our na- 
tions back on the road to economic 
recovery and that a new sun rose at 
Montebello. That is a hope I know all of 
us share. 

President Mitterrand 

I too would like to express my thanks to 
Mr. Pierre-Elliott Trudeau, Prime 
Minister, and I would like to thank the 
Canadian Government for its excellent 
welcome and for the very favorable con- 
ditions under which the Ottawa, or 
Montebello, summit was carried out. 
These conditions were so favorable 

that we were able to progress, to 
achieve work, and even to achieve some 
conclusions. You know that France has 
an original policy — a new policy, if you 
like— within this framework as com- 
pared to the theme generally put for- 
ward. I call this an original policy. It is 
our own peculiar policy. We have our 
own objectives, and it was important for 
us to see whether it was possible — and I 
had no doubt this was possible — for us 
to fulfill this policy in harmony with the 
others. By the others, I mean our main 
partners— those represented here and a 
few others as well. 

This has been possible partly 
because everybody participated, partly 
because everybody has realized what 
elements in our own policies can harm 
other countries' policies and what must, 
therefore, be set aside. 

We have all realized what can be 
favorable to our common success and 
should, thus, be supported. But this has 
succeeded also because France is in 
favor of solidarity. We support, first of 
all, our friends. We think of history, par- 
ticularly the history of the past half cen- 
tury in which we have seen disruptions, 
crises, and war, and we, thus, are united 
behind a certain number of fundamental 
changes particularly freedom — freedom 
concerning the international level and 
freedom concerning democracy and 
democratic values within each of our 

We stand solidly behind our friends, 
and we also fully support those who, 
without being represented here, have 
been kept in mind many of our discus- 
sions and in many, in fact, of our deci- 
sions. I'm thinking more particularly of 
the countries of the Third World, more 
particularly the poorer among the coun- 
tries of the Third World. 

Right from the beginning, I wanted 
to emphasize the fact that we have to 
cooperate, to restrict as much as pos- 
sible erratic exchange rates in our cur- 
rencies, and to avoid as much as pos- 
sible, as well, high interest rates. This is 
not a French problem. It is a European 
problem. In fact, I can say that this is a 
worldwide problem. I can say this taking 
into account possible consequences of 
present trends. 

If you have a look at the text of our 
communique, you will see that there are 


a certain number of points being put for- 
ward concerning these issues. Similarly, 
right from the start, our position was in 
favor of everything that is able to bring 
down protectionism provided, of course, 
that right from the start we are all 
familiar with the whole set of existing 
mechanisms— mechanisms which mean 
that here and there protectionism is 
much too present. 

Concerning trade with East bloc 
countries, as the communique says, a 
new examination of the situation will be 
carried out shortly. I have expressed the 
hope that, concerning this issue as con- 
cerning all the others, we take stock 
very precisely of the state of trade with 
those countries and that we take stock 
of the strategic consequences that might 
arise. This is also a point included in the 

In addition to this, priority had to be 
given during our talks to a policy toward 
countries of the Third World, what we 
call North-South relations. This is 
necessary not simply because it is our 
duty but also because it is in our own in- 
terest. We must be distrustful of any at- 
titude that I would term paternalistic. It 
is when we will be able to expand trade 
on stable bases, when we will be able to 
stabilize raw material prices; once this is 
done it will be possible for those coun- 
tries to set up lasting development 
plans, and once they have done this, we, 
the industrialized countries, will be able 
to fulfill our tasks. 

I think that along the lines of what 
we call the energy affiliate and along the 
lines of global negotiations, which will be 
referred to again at Cancun, and also 
concerning international relations, I 
would say that on all these points prog- 
ress has been achieved. We have been 
able to outline our objectives clearly. 

And then, particularly during our in- 
formal meetings, we discussed problems 
concerning international relations, con- 
cerning the balance of forces. The posi- 
tion of France has always been as 
follows: equilibrium above anything else. 
Of course, equilibrium has to dominate 
not simply the matter of forces but it 
should determine the nature, the type of 
negotiation to be opened up. The aim be- 
ing to insure disarmament and peace. 

In conclusion, I would like to say 
that in Paris, or perhaps I should say in 
France, the next summit will be held. As 
you know, we have reached the end of a 
first cycle here in Canada. This was the 
seventh summit. So a new cycle of such 
summit meetings will begin, and I am 
very happy that the first element, the 
first step in this cycle, will take place in 
France. I will be happy to welcome 
them, my friends and partners, gathered 
here today, and since it is my task, I will 
continue to put forward and defend the 
interests of my country, but I will make 
sure that the summit of the industrial- 
ized countries will make it possible for 
us to continue along the path of under- 
standing of our common interests and of 
our common tasks. 

Chancellor Schmidt 

First of all, I too would like to thank 
you very warmly for the welcome, the 
hospitality of your country, and for the 
way you have acted as chairman. You 
have been a very fair, a very just, chair- 

I think that we have found many 
areas in which we have been able to 
agree, and there were also many other 
areas or sectors in which close coopera- 
tion is possible and in which I think we 
can achieve or have already achieved a 
compromise. We have all expressed our 
desire to fight inflation and unemploy- 
ment and to achieve competent and 
strong world trade and world economy. 
I would like to stress these points 
because this time, even more so than in 
the past, the countries were represented 
by heads of state who use different 
economic policies or recipes, if I can call 
them this, in their own countries, in the 
range between monetarism and Keyne- 
sian theory. 

I would like to bring up four points. 
First, the main role played by trade 
policy: We agreed here that we do not 
wish to adopt any policies that take ac- 
count only of national goals and do not 
take account of the repercussions they 

may have on the world economy. We di 
not wish to pursue such national 

I'd like to refer you to points 21 
through 24 of the communique more 
particularly. We all face considerable 
pressure toward protectionism in our 
own governments, and we have all here 
expressed the desire to avoid such pro- 
tectionism with a view toward maintair 
ing the strength and freedom of world 

Second, another important subject 
was that concerning the problems 
caused by high interest rates. We had i 
very detailed and interesting discussion 
without any accusations from one of thl 
other parties, and several participants 
mentioned what negative repercussions* 
a long-lasting, high interest rate would 
have on their national economies. This 
true in any case for the German 
economy — particularly if you keep in 
mind the fact that the European 
economies have already been more 
strongly affected by the second oil prio 
rise than was expected a couple of yeai 

We also welcome the fact that the 
United States of America has expresse I 
the intention to do its very best to brin 
down these high interest rates. Presi- 
dent Reagan, too, has told us that the 
American economy is also suffering 
from high interest rates. 

It has not yet been able to see 
whether the fight against inflation in tl 
United States might take certain dif- 
ferent paths, which is why I have had 1 
point out that my government, when I 
go back to Bonn, will begin to take cer- 
tain decisions concerning the fact that, 
unfortunately for the time being, we wi| 
still have to deal with high interest rate 
and that we will thus have to take cer- 
tain measures. 

The third point, North-South rela- 
tions, I would like to emphasize what 
Prime Minister Trudeau said a moment 
ago, and I would like to say, quite clear 
ly, that we have full respect toward tru 
ly nonaligned countries, toward genuinf 
nonalignment, which we consider to be 
an essential element of stability 
throughout the world. 

I would also like to announce that 
the federal government in Bonn will su] 
port the organization of global negotia- 
tions in the near future. I am happy thj 


Department of State Bulletir 


Economic Summit 
Ottawa, 1981 

lave already been able to hold 
assions on the upcoming summit in 

Fourth, I would like to emphasize 
importance of the exchange of views 
lving the basic agreement concern- 
East- West relations where we are 
ing about equilibrum in military 
es, dialogue, and preparedness to 
>eration. An exchange of views 
it present-day problems, about arms 
tation and arms control, were par- 
arly important to me. And I was 
very much interested in the ex- 
lge of views about the present-day 
ation in the Middle East. We have 
■essed the common desire to see 
:e be established in that part of the 
Id in the near future. We all want 
vicious circle of the use of violence 
lat part of the world to be ended. 
In conclusion, I would like to thank 
warmly President Reagan, Presi- 
Mitterrand, my colleagues Prime 

iister Thatcher, Mr. Spadolini, Mr. 
oki, and, more particularly, to our 
:, Prime Minister Trudeau. I would 
| to thank you all for the openness, 
I frankness with which you all spoke. 
par as I am concerned, I have been 
\i much enriched by this summit 
i ting, and I have to say that I'm hap- 
,o note that we have become better 
iiainted and that we are all deter- 
ed not to accept that we should act 
i lout taking account of each other's 
iDlems. But quite on the contrary, we 
le said strongly that we will take into 
hunt everybody else's interests and 
IDlems. These are two essential points 

me Minister Thatcher 

1 1 join my colleagues in paying a 
y warm tribute to your skilled chair- 
nship and thorough preparations. I 
ik our success at this summit owes a 
at deal to those two things. I'd like 
d to say thank you to our Canadian 
;ts for the excellent arrangements 

they made, both in Montebello and in Ot- 

This is my third economic summit. 
And over that period, we've increasingly 
given time in our discussions to the ma- 
jor political issues of the day, such as 
Afghanistan and the Middle East as well 
as to the economic problems that we 
face. I think this development reflects 
reality because political issues and 
economic matters can't be isolated from 
one another and treated separately. 
They interact at every level— national 
and international. And I think this reali- 
ty was recognized more at this summit 
than at any other. The result, I think, 
was a workmanlike, balanced discussion 
which comprehended all of the major 
problems, whether economic or political, 
that face the Western world. 

On these substantive issues, I'd like 
to confine my comments to four points: 
First, the world economy. At the last 
two summits in Tokyo and Venice, our 
work was dominated by the impact of 
the second oil price shock on the world 
economy. We then considered the im- 
pact it would have and how we should 
react to it. This time, of course, we met 
in the trough of the recession which that 
shock produced. But we've had to look 
at the whole range of economic ques- 
tions, at the twin evils of inflation and 
unemployment, the need to adapt our 
economies and attitudes in order to beat 
unemployment, and of monetary 
disorders producing high interest rates 
and volatile exchange rates. 

We all agreed on the need to fight 
inflation as the precondition for 
defeating unemployment as you have 
emphasized, Mr. Chairman, and on the 
need for low monetary growth, on the 
need for containing public borrowing, 
and for tight control of government ex- 
penditure. We are all giving effect to 
these principles in our own policies ac- 
cording to our own different cir- 

The second substantive issue on 
which I'd like to comment is developing 
countries. I think I take away three 
salient thoughts from our discussions on 
relations with developing countries. The 
first is that we share many of the prob- 
lems of the world economy with 
them— the need to develop energy 
resources, to encourage investment, to 
fight inflation and unemployment, and 
to expand trade. All of these things we 
share with them. The second thing that 

we share is that we welcome discussion 
with them in whatever ways or groups 
are useful. And the third is, we must 
pay particular regard to the needs of the 
poorer countries. We agreed to direct a 
major portion of our aid to the poorer 
countries, and I would like to stress that 
the United Kingdom has a particularly 
good record on that. 

Third, a few comments about the 
Middle East. We have been meeting in 
the shadow of a further outbreak of 
fierce fighting in the Middle East. Once 
again, the unfortunate people of 
Lebanon are bearing the brunt of a con- 
flict that is not of their seeking. And 
whatever any of us may think about the 
causes, we all agree on the need for an 
urgent cease-fire in Lebanon, for an end 
to the loss of innocent civilian life there, 
and, above all, for a solution to the con- 
flict between Arabs and Israelis from 
which this violence flows. In the United 
Kingdom, we shall continue to use all 
our influence for this purpose. 

The last issue on which I'd like to 
comment is East- West relations. We 
discussed this scene and the concern 
that we all feel about the extent of the 
Soviet military threat to our interests. 
Speaking for Britain, I've been heart- 
ened by the strength of common purpose 
that I sensed in our discussions. We all 
agreed, and we agreed with real deter- 
mination, on the need to maintain a 
strong defense capability and to insist on 
the need for military balance. Of course, 
that goes hand-in-hand with our 
readiness to negotiate arms control 
agreements to insure genuine security at 
a lower level of weaponry and resources. 

Our discussions have linked the two 
aspects of the preservation of the free 
world and the free market economy 
which sustains it, namely, defense and 
the maintenance of peace and the health 
and soundness of the world economy. 
Altogether, a very successful summit on 
which you, Mr. Chairman, and Canada 
deserve our thanks and congratulations. 



Prime Minister Suzuki 

For this most successful conclusion of 
this Ottawa summit, we are indebted to 
the outstanding chairmanship of Prime 
Minister Trudeau and the most generous 
cooperation by the Government of 
Canada. I am grateful, Mr. Prime 
Minister, beyond expression. 

The fundamental task of sum- 
mitry—particularly this summit— is for 
us to deal with political and economic 
difficulties that threaten the peace and 
the prosperity of the world. It is in this 
sense that as the sole representative 
having crossed the Pacific Ocean to join 
this summitry to say that the nations of 
Asia and the Pacific also have much ex- 
pectation of and interest in this summit. 

As regards the fruits of this summit, 
there have been many fruits— on East- 
West relations, North-South issues, and 
various problems that face all of us in 
the West within us. We have committed 
ourselves and expressed this commit- 
ment that we should tackle these prob- 
lems with a common perception and 
sense of common objectives in a way 
that befits our respective nations and its 
strength and circumstances. 

Another fruit is that we have felt 
strongly that we should demonstrate 
that the Western political, economic, and 
social institutions are superior to those 
in the East and also to step up our 
cooperation with the Third World, and 
pledging ourselves to the steadfast 
maintenance of free trade institutions is 
a most important fruit out of this sum- 
mit. I believe this is, indeed, the 
message from Ottawa to the world. Our 
participants have expressed our solidari- 
ty and cooperation, and this strong ex- 
pression, I believe, is a most valuable 
and irreplaceable achievement of this 

Above all, I am satisfied that we 
have been able to build friendship and 
mutual confidence among the leaders of 
these summit nations. 

The North-South question was an 
important item on our agenda. We have 
been united in recognition that our in- 
terdependence in the international com- 
munity is becoming more important than 
ever, and we are committed to further 
expand official development assistance. 

In conclusion, I would like to say 
that for this most successful summit 
conference, I am again grateful to Prime 
Minister Trudeau personally and to the 
people of Canada for their most 
generous support and cooperation and, 
with that note of thanks, I would like to 
conclude my comments. 

Prime Minister Spadolini 

The Government of the Italian Republic 
is very grateful to the Canadian Govern- 

ment and in particular to Prime Minist 
Trudeau, who was the animator and 
coordinator of our discussion, for the 
perfect organization of this summit 
meeting of the main industrial countrie 
of the Western world — a summit 
meeting which has coincided with one < 
the most difficult moments of the 
periods of the Western industrial coun- 
tries and after many events which hav< 
affected our countries, which has had a 
impact on all our countries, and which 
has made it necessary to search for ne' 
points of view and coordinated views. 

In this case, also, as in the past, thi 
work of the summit meeting developed! 
in a spirit of civil and constructive con- 
frontation and a framework of tolerant 
and a mutual understanding within the 
framework of a common understanding, 
of our pluralistic, complex society, whk 
is shaken by serious events. In a short 
period of time, the societies we have 
constructed on the basis of a reliance o 
and a firm belief in our values have goi 
over to uncertainty and doubt. And it I 
our responsibility to interpret and to 
understand the reasons for these 
upheavals, which are affecting the very 



July 21, 1981* 

1. Our discussion of international affairs con- 
firmed our unity of view on the main issues 
that confront us all. We are determined to 
face them together in a spirit of solidarity, 
cooperation and responsibility. 

2. We all view with concern the continu- 
ing threats to international security and 
stability. Lasting peace can only be built on 
respect for the freedom and dignity of na- 
tions and individuals. We appeal to all 
governments to exercise restraint and 
responsibility in international affairs and to 
refrain from exploiting crises and tensions. 

3. In the Middle East, we remain con- 
vinced that a solution must be found to the 
Arab-Israeli dispute. We all deplore the 
escalation of tension and continuing acts of 
violence now occurring in the region. We are 
deeply distressed by the scale of destruction, 
particularly in Lebanon, and the heavy 
civilian loss of life on both sides. We call on 

all states and parties to exercise restraint, : 
particular to avoid retaliation which only 
results in escalation; and to forego acts whi < 
could lead, in the current tense situation in 
the area, to further bloodshed and war. 

4. We are particularly concerned, in thi: 
respect, by the tragic fate of the Lebanese 
people. We support the efforts now in prog- 
ress to permit Lebanon to achieve a genuini 
national reconciliation, internal security and 
peace with its neighbours. 

5. In East- West relations, we are seriou 
ly concerned about the continuing build-up ( 
Soviet military power. Our concern is 
heightened by Soviet actions which are in- 
compatible with the exercise of restraint an< 
responsibility in international affairs. We 
ourselves, therefore, need a strong defence 
capability. We will be firm in insisting on a 
balance of military capabilities and on 
political restraint. We are prepared for 
dialogue and cooperation to the extent that 
the Soviet Union makes this possible. We ar 
convinced of the importance of working 
towards balanced and verifiable arms contrc 
and disarmament agreements in pursuit of 
undiminished security at lower levels of ar- 
mament and expenditure. 

6. We welcome the fact that, at the 
Madrid Conference on Security and Coopera 
tion in Europe, Western countries have just 


Department of State Bulletii 


Economic Summit 
Ottawa, 1981 

dation of our societies, in order to 
alize our societies and to broaden 
snsus and trust in our political 
)cratic institutions based on stability 
ir economy and the social progress. 
The Italian Government has ex- 
ed its own policy in the field of 
omics and social policies as well, 
h are aimed at controlling inflation 
igh a range of initiatives and ac- 
es aimed at reducing the 
—government costs — and con- 
ing the interests of unions and 
igement, just as all of the nations 
cipating in these matters. We are 
inced that we must defeat this 
jter of inflation and unemployment 
they absorb ever-increasing 
irces and leave very little room for 
uctive investments. 
Ve consider it very significant that 
pint communique refers explicitly to 
ommon desire of the seven govern- 
j,s that the fluctuations of interest 
|. cause difficulties for other coun- 
l in pursuing their affairs. 
! ^he problem of foreign exchange 
I stability of markets is considered 
I important for the proper and con- 

sistent development of our economies. 
We have also dealt with the problems of 
energy and the North-South dialogue. 
We have emphasized our interest in 
developing alternative sources of energy 
starting with nuclear energy. 

As regards the problems affecting 
our societies, many derived from the 
need to find a common measure between 
industrialized countries and developing 
countries, mindful of the mutual in- 
terdependence the summit has made 
toward progress in this. We are well 
aware that developing countries — that is 
to say, the Third World— their public 
debt has reached proportions which can 
no longer be sustained, and, therefore, 
there is an urgent need to provide aid to 
those countries so that they will not be 
burdened with further debts. We have 
given appropriate priority to the har- 
monious development of relations be- 
tween the North and South. If we 
forego this aid, we would be abdicating 
our responsibility as regards peoples 
who are faced with those problems of 
underdevelopment and hunger. That is 
why we have proposed that Italy should 
assume, as soon as possible, in concert 

] another major initiative aimed at defin- 
le area to be covered by the measures 
( roposed European Disarmament Con- 
jce would negotiate. Equally important, 
i; nave proposed a number of human 
I ; provisions that would give new hope 
Idividuals deprived of their freedom. We 
re that Soviet acceptance of these mi- 
les would enable a balanced conclusion of 
lladrid meeting and a substantial reduc- 
if tension in Europe. 
. As regards Afghanistan, about which 
jblicly stated our firm and unanimous 
on at last year's Venice Summit, we 
that the situation remains unchanged, 
jfore, with the overwhelming majority of 
ns, we continue to condemn the Soviet 
iry occupation of Afghanistan. We sup- 
international efforts to achieve the corn- 
withdrawal of Soviet troops and to 
re to the Afghan people, who are 
.ng a war of liberation, their right to 
mine their own future. We note with ap- 
il the constructive proposal of the Euro- 
Council for an international conference 
ing about this result and call upon the 
;t Union to accept it. We are grateful for 
S eport given us by Foreign Secretary 
I ington on his recent visit to Moscow, and 
liscussions there, on behalf of the Ten, on 
International conference proposal. 

8. Believing as we do that the Kam- 
puchean people are entitled to self- 
determination, we welcome and support the 
Declaration of the International Conference 
on Kampuchea. 

9. Together with other states and 
regional organizations, we are resolved to do 
what is necessary to enhance regional securi- 
ty and to ensure a peace built on the in- 
dependence and dignity of sovereign nations. 
All peoples should be free to chart their own 
course without fear of outside intervention. 
To that end, we shall continue to promote 
peaceful resolution of disputes and to address 
underlying social and economic problems. We 
reaffirm our conviction that respect for inde- 
pendence and genuine non-alignment are im- 
portant for international peace and security. 

10. Recalling the statement on refugees 
adopted at the Venice Summit, we are 
seriously concerned over the growing plight 
of refugees throughout the World. We reaf- 
firm our support for international relief ef- 
forts and our appeal to all governments to 
refrain from actions which can lead to 
massive flows of refugees. 

with the European economy the develop- 
ment of specific proposals for action in 
the field of food and agriculture, in coor- 
dination with the international agencies 
in Rome and that priority interest 
should be devoted to those countries. 
One of the results of our summit 
meeting has been to unite our bonds 
even stronger on the basis of effective, 
common activities and pursuits beyond 
all rhetoric and ritual. And this is a bat- 
tle which, as Chancellor Schmidt in- 
dicated, is of essential importance. 

Italy reaffirms, just as France— as 
President Mitterrand — its solidarity 
with the Western powers in the 
knowledge that there is a close link be- 
tween Europe and the United States, 
and this has been again confirmed by 
President Reagan. We may say that it is 
a great satisfaction for us to observe 
that we have — there are many common 
points on which we have agreed — social 
justice, international peace, and other 
items are all indivisible problems for us. 

'Issued to the press in Ottawa by Prime 
Minister Trudeau, chairman of the summit, 
on behalf of all the participants. 

President Thorn 

I'm sure it's no exaggeration to be the 
seventh to thank you. And I would like 
to say that the heads of state and of 
governments represented here have 
decided to start up a new cycle, a second 
cycle, of summits. They have done so 
because the results quite justify such a 
second cycle. This is because the con- 
ference was very well prepared, of 
course, and also because the welcome 
extended by Canada and the beautiful 
site at which the conference took place 
favored such success. Moreover, Prime 
Minister Trudeau had taken up the 
pilgrim staff and has made sure that 
debates be restricted as much as pos- 
sible so that as many results be achieved 
as possible. 

Speaking on behalf of the Communi- 
ty, on behalf of the Commission of the 
European Communities, I'm not speak- 
ing at the same level and not speaking 
on behalf — for example, I'm not wishing 
to take the place of Mrs. Thatcher, 



who's President of the Council at the 
time being. 

But I would like to say that the 
Community, particularly countries not 
represented at the summit, wish to be 
heard— wish to speak. And we have 
been heard. It is being sufficiently often 
said that times are very hard. They are 
particularly hard for the European Com- 
munity. Why is this so? Because in 
terms of trade, we are more vulnerable 
than anybody else. We depend much 
more on foreign trade and also because, 
in monetary terms, our interdependence 
is greater and, thus, perhaps we suffer 
more greatly from the repercussions of 
policies carried out in other industrial- 
ized countries. Moreover, perhaps our 
commitment is greater toward the Third 
World since we are committed to the 
Lome convention, for example which 
binds us to a large number of Third 
World countries. 

It has been said that it was impor- 
tant for us to get to know each other. It 
was particularly important through per- 
sonal contact to become aware of the 
limits of everybody, to understand why 
perhaps each of us has adopted 
somewhat different attitudes. I think 
that once this understanding exists, 
there should no longer be any unclarity 
among ourselves. We understand the 
essential points. We agree, although we 
do, all of us, understand that sometimes 
we have to act differently. We agree 
that trade at the world level must re- 
main open, that protectionism is 
something we all should avoid, that free 
trade is a common rule that has to be 
respected by everybody, and this is why 
another conference at the ministerial 
level will perhaps be organized. 

We also understand why the United 
States follows a certain policy while 
other countries adopt another policy, 
and we have to see, as the Chancellor of 
Germany has just said, we will have to 
see how each of us will have to react to 
the results of this conference between 
us. You will have to react as well, of 

Finally, I would like to say that I'm 
very happy that during this summit of 
the industrialized nations we did not 
concern ourselves only with industrial- 
ized nations. We dealt also with other 
countries, with the developing countries, 
not for reasons of charity but because 
we know that the future of those coun- 
tries will play an important part in our 


own future. I am happy, on behalf of the 
European Community, to be able to see 
that on this point people have moved 
closer together, and that dialogue, 
perhaps even global negotiations, and 
perhaps even the energy affiliate, on all 

these points I think that we have achiev 
ed greater agreement. We are happy to 
see that concerning substantive matters; 
we all agree and once again I would like 
to thank Canada warmly for its ex- 
cellent organization of this summit. 


0£.\i*- ' ■ r 


Statement on Terrorism 

July 21, 1981* 

1. The Heads of State and Government, 
seriously concerned about the active support 
given to international terrorism through the 
supply of money and arms to terrorist 
groups, and about the sanctuary and training 
offered terrorists, as well as the continuation 
of acts of violence and terrorism such as air- 
craft hijacking, hostage-taking and attacks 
against diplomatic and consular personnel 
and premises, reaffirm their determination 
vigorously to combat such flagrant violations 
of international law. Emphasizing that all 
countries are threatened by acts of terrorism 
in disregard of fundamental human rights, 
they resolve to strengthen and broaden ac- 
tion within the international community to 
prevent and punish such acts. 

2. The Heads of State and Government 
view with particular concern the recent hi- 
jacking incidents which threatened the safety 
of international civil aviation. They recall and 
reaffirm the principles set forth in the 1978 
Bonn Declaration and note that there are 
several hijackings which have not been 
resolved by certain states in conformity with 
their obligations under international law. 
They call upon the governments concerned to 
discharge their obligations promptly and 
thereby contribute to the safety of interna- 
tional civil aviation. 

3. The Heads of State and Government 
are convinced that, in the case of the hijack- 
ing of a Pakistan International Airlines air- 
craft in March, the conduct of the Babrak 

Karmal government of Afghanistan, both 
during the incident and subsequently in giv- 
ing refuge to the hijackers, was and is in 
flagrant breach of its international obliga- 
tions under The Hague Convention to which 
Afghanistan is a party, and constitutes a 
serious threat to air safety. Consequently th 
Heads of State and Government propose to 
suspend all flights to and from Afghanistan 
in implementation of the Bonn Declaration 
unless Afghanistan immediately takes steps 
to comply with its obligations. Furthermore, 
they call upon all states which share their 
concern for air safety to take appropriate ac 
tion to persuade Afghanistan to honor its 

4. Recalling the Venice Statement on th< 
Taking of Diplomatic Hostages, the Heads ol 
State and Government approve continued 
cooperation in the event of attacks on 
diplomatic and consular establishments or 
personnel of any of their governments. They 
undertake that in the event of such incidents 
their governments will immediately consult 
on an appropriate response. Moreover, they 
resolve that any state which directly aids ant 
abets the commission of terrorist acts con- 
demned in the Venice Statement, should fact 
a prompt international response. It was 
agreed to exchange information on terrorist 
threats and activities, and to explore 
cooperative measures for dealing with and 
countering acts of terrorism, for promoting 
more effective implementation of existing 
anti-terrorist conventions, and for securing 
wider adherence to them. 

•Issued to the press in Ottawa by Prime 
Minister Trudeau, chairman of the summit, 
on behalf of all the participants. 

Department of State Bulle 

, tir , 


Economic Summit 
Ottawa, 1981 

ess Briefing 
ug and Regan 


y 21, 1981 s 

Ve were told that the United 
,es wanted some kind of language 
tie communique pointing out the 
ger, vulnerability, and over- 
jndence on Soviet trade. Such 
;uage is not in there. So why isn't 
nd how much of a disappointment 
that it's not there? 

i Secretary Haig. I think, in the first 
e, what we came here to do was not 
pok for language in communiques 
rather, to have a very detailed ex- 
lge on the interrelationships between 
e with the East and, most par- 
.arly, the Soviet Union, and the 
lical and security implications of 
ii trade. We are very pleased. If you 
i refer to, I think it's paragraph 12 of 
fcommunique, I think we have some 
I • specific language there and in the 
mage preceding it. It's not 12. I 
Lk it's in the back page of the com- 
irique, the penultimate paragraph. 
And the paragraph preceding that is 
• :isely what we were seeking. That's 
ugraphs 36 and 37. I think what's im- 
j ant to recognize here is what we are 
i ing about is reviewing and con- together to tighten up the 
■bushed procedures for controlling 
[flow of military-related end items 
, technology and technology-related 
security- related trade with the Soviet 
on. So I can't accept the premise of 
r question, although I certainly 
erstand the reasons for it. 

Q. Then you would say that it 
lly makes no difference that there 

such reference in there? 

Secretary Haig. No, I specifically 
r you to the two paragraphs that I 
mentioned, and I think you will find 
•e is a very clear reference to it. 

1 think you've heard a lot of 
ruage and probably you've never 

n as briefed as you've been on this 
unit. Clearly, we are all very, very 
sfied with the summit because of the 
y of view that emerged from it. I 
lk from the political point of 

view— and as you know, this is the key 
aspect of this summit, economics — and 
those discussions that were held in the 
margins and during meals and which 
were primarily political in character, I 
think we are extremely pleased, and the 
manifestation of that pleasure was con- 
tained in the briefing of the chairman of 
the summit yesterday afternoon, Prime 
Minister Trudeau. In that declaration 
there was a strong reference to the need 
for international restraint. In the con- 
duct of international affairs there was a 
reference to the collective concern of the 
member governments about the growth 
in Soviet military power and in the 
growing proclivity of the Soviet Union 
to use that power. There was specific 
reference to the Middle East situation 
and the current tensions there. There 
was a clear manifestation of what I call 
the balanced exposition of what is 
American policy and, clearly, the unified 
policy of the member governments, and 
that is that we are seeking to maintain a 
military balance with the Soviet Union 
while being prepared for a dialogue to 
include the initiation of arms control 
talks leading toward balance and a 
verifiable arms control outcome. 

As you know, we made reference in 
that statement to the CSCE conference 
[Conference on Security and Coopera- 
tion in Europe] in Madrid and a new 
initiative made yesterday by the 
Western powers, and specifically, Mr. 
Kampelman [head of the U.S. delegation 
to the CSCE], in which we attempt to 
clarify the recent French initiative 
designed to achieve the confidence- 
building measures from the Atlantic to 
the Urals, and we're hopeful that the 
Soviets will respond. There was 
reference to the unsatisfactory situation 
in Afghanistan, endorsement of the re- 
cent U.N. conference on Kampuchea, in 
which two-thirds of the member states 
of the United Nations joined in a plea 
for the withdrawal of North Vietnamese 
forces from Kampuchea and an ap- 
propriate political settlement which 
would reflect the will of the Khmer peo- 

There were references to refugees, 
and I think there was an extremely im- 
portant separate document released by 
Prime Minister Trudeau on the subject 
of terrorism. As you know, this has been 
an issue that we in the United States 
have had a very keen interest in for an 
extended period of time in this Ad- 

ministration, and so we are very, very 
pleased with the consensus arrived at on 
that subject. And it was timely, because 
here we have another aircraft hijacking 

I think, all in all, from the political 
point of view, we are extremely pleased 
from the U.S. side with the outcome of 
this and, most importantly, pleased at 
the consensus that exists between all the 
member governments. 

Secretary Regan. From an 
economic point of view, I think the Ot- 
tawa summit was very useful and very 
successful. It gave President Reagan an 
opportunity to explain his economic 
recovery program. He was able to 
reflect on his vision of leadership and, at 
the same time, to express concern over 
economic conditions both at home and 

I would say that the President re- 
mained firm in the defense of his pro- 
gram and in the methods that he is us- 
ing—his four-point program— in order 
to combat inflation and to see that his 
program is successful. 

I think the two problems that 
everyone expressed concern about— the 
two economic problems that face the 
world that are of the greatest impor- 
tance at this moment— are inflation and 
unemployment. We pledged to reduce in- 
flation, and the general consensus was 
that the proper ways to do it were 
through limited monetary growth and 
through controlling budget deficits. 
Everyone there deplored high interest 
rates, including the United States. We 
all agreed that stable foreign exchange 
policy was desirable. We all agree again 
on a liberal trade policy, saying that that 
was necessary for trade, not only among 
us but trade with the less developed na- 
tions. And we considered how we could 
be helpful in the area of economic help 
for these less developed countries. 

We maintained our faith in the inter- 
national financial institutions and 
reiterated that we should work through 
them. Then we talked about energy and 
we came back to reliance, primarily on 
market forces, in energy. 

All in all, I would say that the 
results of the summit and what is in that 
communique hit on all fours with the 
President's program. 

Q. It was 1 year ago at the Venice 
economic summit that the Europeans 
got together and published their own 


initiative on the Middle East, which 
would have a larger role or a role for 
the Palestinians. A year has passed 
and nothing appears to have happened 
on that initiative, and it did not ap- 
pear to have come up during this sum- 
mit. Is there some understanding be- 
tween you and the Europeans that 
they will hold back until the United 
States has had a full run at the Camp 
David process? 

Secretary Haig. Not in the context 
of your question. I think it's important 
to remember that there have been a 
number of events over the past year 
which have had a somewhat slowing ef- 
fect on the Camp David peace process, 
which is the process underway — elec- 
tions here in the United States, elections 
in Israel, and, I think, a de facto consen- 
sus by all who are concerned that until 
these political events were behind us it 
would difficult to achieve progress, 
although some progress has been 
achieved— specifically the Sinai 
peacekeeping force arrangements that 
were initialed a week ago which would 
lead to the withdrawal of Israeli forces 
from the Sinai by May of next year. I 
would anticipate, following the meetings 
of the Prime Ministers to Washington, 
some further movement in the autonomy 

In the meantime, our European 
partners have been engaged in an essen- 
tially fact-finding process which ran well 
into last spring. That is what the Euro- 
pean initiative thus far has amounted to 
and I think even the so-called European 
initiative is a misnomer. Our European 
partners are fully cognizant of the pace 
and direction of U.S. efforts and 
especially those recent efforts that have 
been taking place over the last month or 
so associated with the crisis in Lebanon. 
There were free, full, and very, very ex- 
tensive exchanges between both the 
foreign ministers and the heads of state 
and government on the current situa- 
tion. I had an opportunity to talk in 
detail to the foreign ministers about 
longer term aspects of the peace 

Q. Did you bring up the Sinai 
multinational force with any of these 
European allies, and did any of them 
suggest that they will be able or 
would be willing to contribute troops 
to it? 

Secretary Haig. Clearly that's a 
very sensitive question because we do 
not want to get a checklist of who's been 
asked and whom we've discussed until 
we have put the force together. But I 
can answer it to the extent that I would 
suggest to you, yes, there were some 
such discussions along those lines. 

Q. If you have now had official 
word about the qualified acceptance 
by Prime Minister Begin, reported 
earlier of the attempt at a cease-fire 
by Ambassador Habib, how do you 
evaluate it and how far does it go 
toward meeting what the United 
States was hoping would happen, and, 
finally, what contribution would that 
make toward a decision to resume the 
delivery of F-16 planes to Israel? 

Secretary Haig. As you know, Am- 
bassador Habib has had several 
meetings with Prime Minister Begin and 
awaited the third meeting that he had 
on this round until the completion of a 
very lengthy cabinet meeting by the 
Government of Israel. Following that 
meeting, the Government of Israel 
authorized, or at least concurred in, Am- 
bassador Habib's travel tomorrow morn- 
ing to Lebanon where he will attempt to 
negotiate a calming of the situation and 
a return to normalcy. 

I think that is a positive response 

. . . our West European 
partners welcome what 
they, to me, have referred 
to as an American awak- 
ening . . . 

from the Israeli Government and, 
therefore, we continue to have hope that 
Ambassador Habib is going to be able to 
put together a quieting framework or a 
situation that will enable us to achieve 
at least a temporary peace or a cease- 
fire, if you care to use that term. And 
that process will continue. 

What it will mean with respect to 
the second part of your question remains 
to be seen. Clearly we have seen some 
improvement in the military situation 
over the last 24 hours. There's been a 
very, very perceptible drop in the shell- 
ings across both sides of the border and 

some very limited air attack activities, 
as I understand it, over the last 24 

Q. In their final statements, 
several of the leaders— President Mil 
terrand, Chancellor Schmidt, among 
others— were still complaining, it 
seemed to me, about high interest 
rates. I wonder if you have any com- 
ment on that and also whether or not 
you would have anything to say about 
Chancellor Schmidt's suggestion thati 
when he goes back home to Bonn, ho 
was going to have to take new 
measures to respond to the fact that, 
unhappily or unfortunately, he said, 
interest rates are going to stay high 
for some additional time. 

Secretary Regan. I don't think tha 
anyone is happy about high rates of in-j 
terest. I would suggest that not only ai 
the heads of state unhappy about it bud 
the finance ministers are, including tha 
head of state of the United States and 
the finance minister of the United 
States. No one likes high interest rates 
We are trying, however, to get inflatio 
down. I know of no economist in the 
world who can suggest a way to have 
high inflation and low rates of interest! 
Accordingly, after we got through ex- 
plaining this to them and asking for sui 
gestions if there were any from our 
friends who were here at the summit, 
they all agreed we should stick to what 
we're doing. 

But I think that one of the better 
remarks was made by the head of the 
EEC [European Economic Community 
as he was leaving and said goodbye to 
me. He said: "Hurry it up, will you? W< 
can't wait too long." And I think that's 
the attitude that everyone has. If we 
would just get inflation down as quickh 
as possible and, therefore, interest rate 
down, they would be very happy. 

As far as Chancellor Schmidt is con 
cerned and what he is going to have to 
tell his people upon his return, each 
leader has to solve his own economic 
problems in his own way. We can offer 
sympathy but certainly no advice on ho 
to handle his situation. None of us, I 
repeat myself, want this condition. We 
inherited it, and we're doing our best tc 
overcome it. 

Q. Did Chancellor Schmidt in- 
dicate in his session with you just 
what sort of measures he has in mind 

Secretary Regan. I got the impres 


Department of State Bulleti 


Economic Summit 
Ottawa, 1981 

but with no definitiveness, that it 
d be along the budgetary lines. 

J. You mean tighter budget 

Secretary Regan. Yes. 

J. There were many questions 
about President Reagan's ability 
cplain his foreign policy to the 
d leaders and how much support 
I'ould get for that here. How suc- 
ful was he? Is there more support 
y for America's foreign policy 
than there was before he came 

Secretary Haig. First let me sug- 
I and let me assure you, now, the 
lident has seen, of course, Mrs. 
cher and Chancellor Schmidt. He 
I lot met President Mitterrand or 
I e Minister Spadolini. He had met 
I e Minister Suzuki and, of course, 
i e Minister Trudeau, whom he had 
I Dn two occasions, 
n answering your question, I don't 
| to accept its premise. I can assure 
i ;hat our partners who are here at 
! conference have never had any 
! tion about America's foreign policy 
e President's ability to articulate it. 
lisely the opposite. In my meetings 
kia at ASEAN [Association of South 
! Asian Nations], where I met with 
! apanese Foreign Minister and in 
i iscussions with the Japanese 
: ign Minister on Monday, again, this 
i :. There was clear and unusual ac- 
■1 for President Reagan's foreign 
y, his articulation of it, and their 
I rstanding of it. It came up this 
i ling at breakfast, as a matter of 
I with the Prime Minister. That is 
true, clearly, with Mrs. Thatcher 
| Chancellor Schmidt and in the case 
e new Italian Prime Minister and 
iiew French President. This was 
first opportunity, and I must tell 
anyone observing President 
jan's performance, personal perfor- 
ce, at this summit, could not but 
i with a deep sense of respect and 
iration for his grasp of the substan- 
issues discussed. I'm not an 
iomist but I know that my colleague 
I will say that there are few men, 
I leaders in the Western world today, 
have a clearer picture of where he 
ts to go and how he wants to get 
e in our economic affairs, both 
estic and international. 

But secondly, he also reflected a 
very clear grasp from start to finish of 
the interrelationship, if you will, and the 
complexity of the political, economic, 
and security nexus which [inaudible] of 
all of our nations which share common 

Thirdly, I think as an observer and 
on a personal observation basis, the 
man's ability to deal in moments of 
stress and tension where there are clear- 

The United States has 
probably been the least 
effective in increased 
levels of spending of all 
the NATO countries . . . 

ly potential disagreements around the 
table, to bring himself above those petty 
bureaucratic squabbles, and to set a tone 
which leads all participants to focus on 
the importance of solidarity and unity 
and commonness of purpose was an 
outstanding demonstration of our Presi- 
dent's qualities. I don't think any of the 
leaders who sat down with him over 
these last 2 days left that experience 
without a profound sense of respect for 
the President's performance here. 

Q. Before the summit began it was 
considered that some of the European 
allies thought the President's policies 
toward the Soviet Union were too 
tough. Do you regard what happened 
here, and primarily and specifically 
the tying of trade to security and 
political issues, as an endorsement of 
the American policy toward the Soviet 

Secretary Haig. Again, I want to be 
sure and emphasize my own assessment 
of what sometimes appears to be dif- 
ferences in atmospherics in the trans- 
atlantic sense, and I've had some ex- 
perience in that over the last 7 years. 
Surely, some of the American initial 
rhetoric, which was such a sharp depar- 
ture in a dialectic sense from previous 
policies of the American government, 
came as a different style and a different 
approach. In some instances, it raised 
concerns, especially associated with the 
tensions in Poland and the aftermath of 
Afghanistan and the great European 

concern about the need to get on with 
the task of arms control negotiations. 

But let me also assure you that our 
West European partners welcome what 
they, to me, have referred to as an 
American awakening— an awakening 
which recognizes that America has a 
leadership role to play in this decade of 
the 1980s and that we had not been 
playing it very well in the decade of the 
1970s. They are all enjoying somewhat 
of a sigh of relief that the American peo- 
ple are willing once again to pick up the 
burdens of international leadership in a 
modified way which gives greater 
weight to the views of our partners and 
which is structured on largely enhanced 
consultation of the kind we have just 
finished here. 

I think the answer to your question 
is if you read the political summary — the 
chairman's summary — put out yester- 
day, I think you will find that it is 
replete with the affirmation of the kind 
of statements this Administration has 
been making and which President 
Reagan has been making since he ar- 
rived in Washington. I don't call that the 
consequence of a selling job because 
that's not what it was but, rather, a con- 
vergence of views among the member 
states, which are all threatened by the 
dangerous international situation we 
face today. 

Q. On the Middle East situation; 
from your comments that the situation 
seemed to be at least temporarily a bit 
better, is there some U.S. understand- 
ing in any form with the Palestinians 
and the Israelis that they would at 
least slow down their conflict at this 
point and, secondly, how could Am- 
bassador Habib hope to proceed all the 
way to a solution if he's dealing with 
the Lebanese officials who may not 
have that much influence with the 

Secretary Haig. I think, first, there 
is clearly some kind of an understanding 
with the Government of Israel. Am- 
bassador Habib will go to Lebanon and 
talk with the internal parties there, and 
especially President Sarkis. I don't think 
anyone has to play any games that there 
are a number of channels of communica- 
tion to the Palestinian guerrillas who 
have been operating along the border of 
northern Israel. There have already 
been some assurances, as I understand, 
none that were generated by the United 


States, because we are not in the 
business of negotiating directly with the 
Palestinians and have not been until cer- 
tain conditions, established 6 years ago, 
are met, and that is that they would ac- 
cept the provisions of 242 and 338. 

None of this means that we are fac- 
ing an impossible task; not at all; 
precisely the opposite. There are ways 
and ways of doing things in the Middle 
East, and we've been living through that 
maze for too long, I'm afraid. But 
nonetheless, we've been living through 
that maze and it is an achievable objec- 

The most important thing for us all 
to remember is that we've had an 
escalating cycle of violence with in- 
creased levels of casualties, especially to 
noncombatants. This is a tragic situa- 
tion, and it's going to require the best 
efforts of all. It is not going to require a 
departure from longstanding American 
policy with respect to whom we 
negotiate with. 

Q. Can you describe those under- 
standings at all? 

Secretary Haig. You mean with 
Mr. Begin? 

Q. With Mr. Begin and, presum- 
ably, with the Palestinians? 

Secretary Haig. No. I have no 
understandings with the Palestinians. 
The U.S. Government has no under- 
standings. I thought I made that clear. 
There are no understandings. There 
have been discussions, I know, through 
U.N. channels, which we have been 
made privy to, but they do not represent 
the consequence of any American 
negotiations or contacts with the PLO 
[Palestine Liberation Organization]. 

In the case of Mr. Begin I think we 
told you that we have at least had the 
authorization of the Israeli Government 
for Ambassador Habib to go on to 
Lebanon, to see President Sarkis and 
others involved, and to see what can be 
done to quiet down the situation which 
is the most important and urgent task 
before us. 

Q. What decided in terms of 
Western aid for Third World energy 
development? Will it be in the context 
of a World Bank affiliate, and what 
role should the OPEC nations play in 
Third World energy development? 

Secretary Regan. There was accent 
in the paragraphs in the communique 
that refer to energy — let me refer to 
them myself — that had to do mostly 
with the free market and utilization of 
existing organizations rather than trying 
for new organizations. There was a 
statement about nuclear energy. And 
the actual statement there says: "... in 
most of our countries, progress in con- 
structing new nuclear facilities is slow. 

No one likes high interest 
rates . . . I know of no 
economist in the world 
who can suggest a way to 
have high inflation and 
low rates of interest. 

We intend in each of our countries to 
encourage greater public acceptance of 
nuclear energy, and respond to public 
concern about safety, health, and 
nuclear waste management and non-pro- 
liferation . . . We will take steps to 
realize the potential for the economic 
production trade and use of coal and will 
do everything in our power to ensure 
that its increased use does not damage 
the environment." 

What we're talking about there is 
there can be greater alliance on the 
private market system in conjunction 
with the World Bank rather than to set 
up a new affiliate. There's nothing in the 
communique, although the matter was 
discussed, to indicate the desire on the 
part of those attending the summit to 
start out anew with a separate energy 

Q. In terms of the nuclear energy, 
does that also include helping under- 
developed nations develop their 
nuclear energy capacity? 

Secretary Regan. Where that is 
feasible, although in most cases that is 
not needed where other methods of im- 
proving their energy condition can be 
used rather than nuclear. 

Q. Yesterday Prime Minister 
Trudeau said that if he had to draw a 
conclusion from the summit, it would 
be that the Americans have been sen- 

sitized to the effect of their policies 
on their partners. Would you comme 
on that? Do you agree with that? 

Secretary Regan. That's a good 
word, "sensitized." I thought we were 
sensitive to their feelings about high ir 
terest rates long before the summit. 
They did reemphasize it at the summit 
We did get a greater understanding — . 
more personal understanding — of wha 
their problems are. And, as we make 
decisions in the future affecting our 
economic policies — naturally now that 
we know them better and that we've 
talked to them and have understood 
their problems better — we will take 
those into consideration as we make o\ 
own policies. 

Q. Do you feel you've been given 
deadline to do something on interest 

Secretary Regan. No, we don't. 
They just kept saying do it as quickly i 
possible. President Mitterrand told us 
that he had problems concerning 
unemployment in France that would 
soon reach a critical stage and he hope | 
that long before that, we would be abl I 
to get our interest rates down because I 
he thought then the rest of the world 
could have lower interest rates and th; 
in turn, would help small business in 
France, which in turn would help his 
unemployment problem. The connectio 
is there. 

Q. Before you sent the message 
yesterday from the President to Prii 
Minister Begin suspending the 
shipments of the F-16s, how many 
other messages had gone from you t 
Prime Minister Begin? 

Secretary Haig. I don't make it &ti 
habit of outlining the numbers of 
messages other than I can tell you the 
was another message that day. 

Q. The reason I ask is that befor 
the Israeli official announcement 
which you have, it referred to Begin 
reporting to the cabinet his conversa 
tion with Habib and also the persons 
messages— plural— from Secretary o 1 

State Haig. 

Secretary Haig. That's what I thi 
I just answered. There was a message 
the morning. There was a message in 
the night, both of which were approve! 
by the President in full conformance 
with his wishes. 


Department of State Bull€ 


Economic Summit 
Ottawa, 1981 

J. Can you tell us what was in the 



Secretary Haig. I hope you will 
some sympathy for my reluctance 
> so. We would have no diplomacy if 
/ere to engage in that kind of actH 


J. The earlier message that you 
send to Prime Minister Begin, did 
espond to that one? To the one 
re the suspension of the F-16s? 

Secretary Haig. Yes, in effect, of 
se. We're in constant touch with our 
iassy in Israel. We know precisely 
i a message has been delivered and 

the reaction to the message was 
the response. Sometimes we get a 
formal response. Sometimes we 
in a fast-moving situation, 
;thing less than that. 

don't know where you're driving, 
t's a very foggy speculation. 

b. In the direction that you 
howledged. I was driving toward 
Uarlier message which you would 
share and asked for sympathy, 
:h I offered, and [laughter] that's 
!re I was driving. 

Secretary Haig. That's what I call a 
»ry at the end of a 2V2 day summit. 

I ghter] 

4. Before the start of this con- 
tnce, serious questions were being 
;d about the future strength of the 
nee. What specifically do you 
in when you say that the con- 
mce has been successful? Can you 
us some assessment of the future 
do you feel the alliance is going to 
ther the current economic and 
tical storms? 

Secretary Haig. I will take a piece 
then I will ask my colleague to take 
ther piece, which involves the ec- 
mic leg of the question. 
With respect to the alliance, this was 
an alliance gathering, but rather the 
ailed seven plus one. As you know, 
alliance would involve 15 of our 
TO member states. But, in essence, I 
k, clearly — and this would force me 
eflect back to the Rome ministerial 
JATO and the political summary 
jed upon here — that the consistency 
the unity of purpose and the 
larity of outlook and concern are 
f reassuring factors in the Atlantic 

community today. I must add that this 
summit was unique and that we had our 
main Pacific partner also participating 
and also sharing a commonality of view 
and outlook and concern. 

All of that suggests some reason for 
optimism. The security aspects of the 
alliance have been a focus of mine for 
almost 7 years, as you know. And I 
think, steadily, over those 7 years, there 
has been an awakening, if you will, of 
the dangers facing us commonly in the 
military terms and a somewhat 
strengthened dedication to deal with 
those dangers in a more integrated and 
effective way. I left NATO 2 years ago 
absolutely convinced that the integration 
of the alliance had achieved levels never 
before achieved. 

The United States has probably been 
the least effective in increased levels of 
spending of all the NATO countries for 
a rather prolonged period — someone 
said a 20% drop in real term spending 
by the American Government over the 
last decade. 

Our West European partners, on the 
other hand — while they're not doing as 
much as we'd all like to see — have been 
generally more responsive and have 
moved up in their levels of expenditure. 
One who lives in West Germany today 
might say: "Well, we've been carrying a 
heavy burden for an extended period," 
and, indeed, they have, but that's not 
unique. All of these things would sug- 
gest that there is a keen awareness on 
the part of the alliance as a whole that 
we are facing dangerous times. One of 
the great complications and aggrava- 
tions in dealing with the political- and 
the security-related aspects of our prob- 
lem is the economic, and I'd like Don to 
comment on that. 

. . . the knitting together 
of the nations, to me, was 
the most important 
aspect from an economic 
point of view. 

Secretary Regan. From the point of 
view of the economic side, I would say 
that we came away from here more in 
agreement than I would have imagined 
as the summit started. 

The finance ministers got along ex- 
ceedingly well. We had several very 
frank, very open, you might almost 
phrase it as no-holds-barred, type of 
discussion. It was very free-wheeling, in 
which the questions arose about each 
other's economies and each other's 
political and economic — mainly 
economic — philosophies were discussed 
and the methods of arriving at conclu- 
sions as to how to handle the various 
economic problems that confront the 
world today. 

From that, we drew the conclu- 
sion — and incidentally, you know that 
80% of the gross national product of the 
free world was represented at this sum- 
mit among the seven finance ministers 
who sat down together — that we 
understood what each other was doing 
and our mutual independence. 

Let's take just the subject of trade 
as an example. There we realized that 
some of the export subsidies and some 
of the internal, hidden subsidies that are 
going on in promoting trade among each 
other were damaging all of us and that 
this was something we should try to 
work to eradicate. 

When you can reach that type of 
conclusion with the finance ministers, 
this will be reflected in what our — as we 
call them — our masters and one 
mistress would have to say. From the 
point of view that the free world has to 
get together in order to solve these 
problems mutually, there's no way that 
one country can do it on its own. 

Chancellor Schmidt reminded us of 
something; if this were taking place in 
the 1930s, first of all, there probably 
wouldn't even be such a conference 
among such a group of nations. Second- 
ly, certainly we wouldn't be on a first 
name basis. And thirdly, we would not 
under any conditions have agreed to try 
to help each other out from an economic 
point of view. In those days it was 
beggar-thy-neighbor rather than what 
we have today — mutual understanding 
and mutual cooperation. 

From the point of view of this sum- 
mit, the knitting together of the nations, 
to me, was the most important aspect 
from an economic point of view. 

Q. Judging by the communique 
and the content of our briefings, 
there's been limited discussion of 
Poland at this summit. I wonder if 
that reflects a belief on the part of the 

leaders that the danger of a Soviet in- 
vasion has passed, and beyond that 
was there any discussion among the 
economic ministers and the foreign 
ministers of how to solve Poland's 
economic crisis? 

Secretary Haig. The answer to that 
is yes in both instances. There were 
rather extensive discussions among the 
foreign ministers on the subject of 
Poland, and these assessments were 
shared in the margins by the heads of 
state and government as well and I 
know by the finance ministers. 

With respect to the situation in 
Poland, I think there is a definite sense 
of relief that the recent party congress 
was permitted to proceed peacefully on 
the terms decided by the Polish people. 
There was an unprecedented secret 
ballot which selected the new member- 
ship — political leadership — in Poland, 
and that represents well over a 90% 
turnover. The character of that turnover 
is yet to be manifested and the days 
ahead will be a reflection of that, but it 
looks like a continuation of the 
moderating' trends. 

All of these things, I want to 
underline, are the business of the people 
of Poland, and from that point of view I 
think we are all encouraged that this 
process has taken place. There was 
great concern expressed, both in 
economic and, more importantly I sup- 
pose in the near term because of the in- 
terrelationship with the political, of the 
dire economic situation in Poland today. 
There were many exchanges of view 
among the leaders in the bilaterals and 
the multilaterals and among the foreign 
ministers with respect to developing a 
consensus that we in the Western world 
are going to have to help Poland. 

There are many ways under which 
that will take place, from food transfer 
to economic support. Don, would you 
care to comment? 

Secretary Regan. From our point of 
view, we discussed how our represen- 
tatives were getting along, discussed the 
Polish debt, the rollover of the Polish 
debt, both principal and interest. We dis- 
cussed the role of the private banks and 
how they were progressing in their talks 
with Poland regarding their loans. We 
also discussed the effects on our nations 
of this Polish loan question and further 
aid — whether we could afford it, how it 
could be done, things of that nature. 

Let me at this point make a very 
definite statement. No conclusions were 

reached. This is a process that is in 
development, and it's a process that 
must continue, not only now but in the 
future as well. 

Q. What was the Japanese 
response to calls for freer trade, and 
can you detail changes in export sub- 
sidies and internal hidden subsidies? 

Secretary Regan. The Japanese 
said they were for free trade. As a mat- 
ter of fact, Prime Minister Suzuki made 
quite a statement on this subject. He 
was listened to very carefully. There 
were some questions put to the Japanese 
regarding some of their trading prac- 
tices. They answered them that they 
welcomed foreign investment in Japan, 
that they recognized that some manufac- 
turing companies and some service com- 
panies had difficulty in selling in the 
Japan market. They thought this was 
because they didn't understand the 
Japanese consumer. They thought that 
there was very little impediment from 
the governor's point of view standing in 
the way of free trade. 

Q. Do you agree with that? Are 
you in accord with that? 

Secretary Regan. We had our own 

points of view which we stressed to 
them on the necessity for things that we 
thought could be done to make it a more 
open trade. We recognize that Japan has 
a favorable balance of trade, not only 
with the European nations but with us 
as well. We thought that there is more 
they could be doing to alleviate that con- 

Q. And can we expect any changes 
because of the summit — with Japan, 
trading with Japan? 

Secretary Regan. I wouldn't want 
to put my finger specifically on it and 
point to any changes in the near future, 
but I think it's something that Japan will 
definitely start considering as far as its 
long-range economic policies are con- 

Q. You might have heard the 
Soviet press commentaries on the U.S. 
approach to the summit, saying that 
you are trying to line up your partners 
to pursue a cold war policy against the 
Soviet Union. Do you have any com- 
ment on that? 

Secretary Haig. Why, of course. 
[Laughter] I suppose for many years 

we've been exposed to that kind of pr< 
aganda. If one would reflect back ovei 
the last 5 years, the problems that ha\ 
developed between East and West, an 
the United States and the Soviet Unio 
in particular, have been with few exce 
tions — and there have been a few — th' 
consequence of Soviet international ac 
tivity, in Africa, Angola, Ethiopia, 
southern Yemen, northern Yemen, an 
Afghanistan in the first instance wher 
puppet ruler was installed and in the 
second instance when an unprecedenti 
invasion occurred in that country; Kai 
puchea where the Soviet Union sup- 
ported the invasion of a neighboring 
country by some 200,000 North Viet- 
namese troops who occupy Kampuche 
today; the stepping up of insurgency 
supported by Eastern bloc weapons; a 
subversion and training in this 
hemisphere. It would hardly be an obj 
five witness who would not suggest tl 
it is time that the United States and 
those of us in the Western world who 
share our values suggest to the Sovie' 
Union leadership that this kind of inte 
national activity is a risk to internatic 
peace and that if they hope to enjoy t 
benefits of normal intercourse with tr 
West — and I clearly believe they 
do — and trade, political, nuclear arms 
control, and a whole host of other ink 
faces, that it's time that we had some 
understanding on this activity. 

We made it very clear and we ha 1 
from the outset, we are prepared to s 
down and negotiate these differences. 
All we need is an indication that the 
other side is willing to do so. We 
discussed at this conference the recen 
visit of the British Foreign Minister, 
Peter Carrington, to Moscow, where 1 
resurfaced and highlighted the Europ 
Community initiative on Afghanistan, 
which would seek a withdrawal of Sc 
forces and self-determination for all o 
the people. It's disappointing that the 
Soviet leadership did not respond 

'Held in the Old Executive Office 
Building (press release 245 of July 21, 198 

2 Held at the Montebello press center 
(press release 241 of July 20). 

Administration officials gave press br 
ings after the President's bilateral meeting 
the texts of which were issued as White 
House press releases. 

4 Text from White House press release 

5 Held at the National Arts Center (tex 
from White House press release). 

6 Held at the Skyline Hotel (press relea 
247 of July 22). ■ 


nani^mant r\t Ctato PiiIIj: 


ews Conference of June 16 

ast month you told graduates at 
re Dame that Western civilization 

transcend communism and that 
munism is, in your words, "A sad, 
irre chapter in human history 
>se last pages are even now being 

In that context, do the events of 
last 10 months in Poland con- 
ute the beginning of the end of 
iet domination of Eastern Europe? 

A. What I meant then in my 
larks at Notre Dame and what I 
eve now about what we're seeing tie 
sther. I just think that it is im- 
sible— and history reveals this— for 

form of government to completely 
y freedom to people and have that go 
nterminably. There eventually comes 

nd to it. And I think the things 
■e seeing, not only in Poland but the 
orts that are beginning to come out 
tussia itself about the younger 
eration and its resistance to long- 
e government controls, is an indica- 
1 that communism is an aberration, 
not a normal way of living for 
nan beings, and I think we are seeing 
first, beginning cracks, the begin- 
g of the end. 

Q. Have you learned anything in 
past 10 days that would support 
ael's contention that its attack on 
Iraqi nuclear plant was defensive? 
it was defensive, was it proper? If 
vasn't defensive, what action 
>uld the United States take beyond 

A. I did make a statement in which 
Dndemned that and thought that 
re were other options that might 
re been considered — that we would 
re welcomed an opportunity, for ex- 
ple, to try and intervene with the 
;nch who were furnishing the nuclear 
1 and so forth. 

I can't answer the last part of your 
istion there about future action, 
ause this is still under review. Under 

law I had to submit to the Congress 

fact that this did appear to be a 
lation of the law regarding American 
ipons that were sold for defensive 
poses. But I've not heard back yet 
m the Congress, and that review is 

yet complete. 

On the other hand, I do think that 
i has to recognize that Israel had 

reason for concern in view of the past 
history of Iraq, which has never signed a 
cease-fire or recognized Israel as a na- 
tion, has never joined in any peace ef- 
fort for that— so, in other words, it does 
not even recognize the existence of 
Israel as a country. 

But I think the biggest thing that 
comes out of what happened is the fact 
that this is further evidence that a real 
peace — a settlement for all of the 
Mideast problems— is long overdue, that 
the area is torn by tension and hostility. 
We have seen Afghanistan invaded with 
the Soviets, Iran invaded by Iraq, and 
that was in violation of a treaty. 
Lebanon's sovereignty has been violated 
routinely. Now this latest act. And I 
think that what it should be is a compel- 
ling move — and this I have stated to the 
representatives of several Arab coun- 
tries — a compelling reason why we 
should once and for all settle this matter 
and have a stable peace. 

Q. But in this case, can you say 
was it — do you think now that it was 
a defensive move? Are there any — any- 
thing which indicates that yet? 

A. No, I can't answer that, because, 
as I say, this review has not been com- 
pleted. But what I would have to say is I 
think, in looking at the circumstances 
that I outlined earlier, that we can 
recognize that very possibly in conduct- 
ing that mission, Israel might have 
sincerely believed it was a defensive 

Q. A couple of times in recent 
weeks your staff has told us that you 
were not quite ready to make a major 
foreign policy address and declined 
the opportunity to do so. In light of 
recent events in the Middle East and 
in Eastern Europe, have you given 
some serious thought to a foreign 
policy program across the board, and, 
if so, could you give us today some of 
the outlines of your foreign policy 
beyond your often-expressed deter- 
mination to stand up to the Soviets? 

A. There seems to be a feeling as if 
an address on foreign policy is somehow 
evidence that you have a foreign policy, 
and until you make an address, you 
don't have one. And I challenge that. I'm 
satisfied that we do have a foreign 

I have met with eight heads of state 
already, representatives of nine other 

nations. The Secretary of State is mak- 
ing his second trip and is now in China 
and is going to meet with the ASEAN 
[Association of South East Asian Na- 
tions] in the Philippines and then go on 
for a meeting in New Zealand. The 
Deputy Secretary of State has been in 
Africa and is now returning by way of 
Europe. I have been in personal com- 
munication by mail with President 

I don't necessarily believe that you 
must, to have a foreign policy, stand up 
and make a wide declaration that this is 
your foreign policy. I've spoken about a 
number of areas. We are going forward 
with a program— a tripartite pro- 
gram—dealing with Central America 
and the Caribbean. We have tried to 
deal with various areas of the 
world— both Asia, Africa, and in 
Europe. And so as to an address, I 
definitely did not do one at com- 
mencements, because I happen to 
believe, as I said at Notre Dame, that it 
has been traditional for people in my 
position to go and use a graduation 
ceremony as a forum for making an ad- 
dress that was of no interest particularly 
or no connection to the occasion but just 
for wide dissemination. And I thought 
that the young people who were 
graduating deserved a speech, whether 
good or bad, that was aimed at them. 

Q. Several of the Mideast leaders, 
most particularly Syria, say that 
because of the Israeli raid and the 
U.S. response to it that envoy Habib's 
[Philip C. Habib, the President's 
special emissary to the Middle East] 
peace mission is virtually eliminated, 
that it's permanently damaged. Do you 
agree with that, and if so, why not? 

A. I hope it isn't. I know that he's 
still there, and he has left Saudi Arabia 
now for Damascus. And I think that he's 
done a miraculous job so far when you 
stop to think that when we sent him 
there, they literally had the weapons 
cocked and ready for war. And it's been 
several weeks now, and no war has hap- 
pened. It would be just further tragic 
evidence if this latest happening should 
turn this off. But until he comes home 
and says, "I give up," why, I'm going to 
believe that we can do it. 

Q. How appropriate do you believe 
is Israel's decision not to sign the 
Nuclear Nonproliferation Treaty and 
not to submit to inspections by the In- 
ternational Atomic Energy Agency? 

gust 1981 


The President 


A. I haven't given very much 
thought to that particular question 
there, the subject about them not sign- 
ing that treaty or, on the other hand, 
how many countries do we know that 
have signed it that very possibly are go- 
ing ahead with nuclear weapons. It's, 
again, something that doesn't lend itself 
to verification. 

It is difficult for me to envision 
Israel as being a threat to its neighbors. 
It is a nation that, from the very begin- 
ning, has lived under the threat from 
neighbors that they did not recognize its 
right to exist as a nation. 

I'll have to think about that question 
you asked. 

Q. What do you think the proper 
role of the United States is in prevent- 
ing the spread of nuclear weapons and 
nuclear weapons technology? 

A. Our position is— and it is un- 
qualified—that we're opposed to the pro- 
liferation of nuclear weapons and do 
everything in our power to prevent it. I 
don't believe, however, that that should 
carry over into the development of 
nuclear power for peaceful purposes. 
And so, it increases the difficulty, if 
you're going to encourage the one, 
because you have at least opened a 
crack in the door where someone can 
proceed to the development of weapons. 

But I'm not only opposed to the pro- 
liferation of nuclear weapons, but, as 
I've said many times, I would like to 
enter into negotiations leading toward a 
definite, verifiable reduction of strategic 
nuclear weapons worldwide. 

Q. Every President since Dwight 
Eisenhower seems to believe that if 
the Soviet Union and the United 
States actually get into a shooting 
war, say, in Europe, it can't be con- 
tained and it would spread to a ther- 
monuclear war. Do you agree? 

A. It's a frightening possibility, and 
history bears it out. If we want to look 
for one little bit of optimism anyplace, 
the only time that I can recall in history 
that a weapon possessed by both sides 
was never used was in World War 
II — the use of poison gas. And possibly 
it was because the weapon was available 
to both sides. But the weapons are 
there, and they do extend to the bat- 
tlefield use as well — the tactical 
weapons as well as the strategic. 

And I have to believe that our 
greatest goal must be peace, and I also 
happen to believe that that will come 
through our maintaining enough 
strength that we can keep the peace. 

Q. I ask the question, because I 
suppose that your defense stategy 
depends on whether you think if the 
Soviets invade Western Europe, a tac- 
tical nuclear war could be fought 
there and contained, or whether you 
think that it would spread inevitably 
to a thermonuclear exchange. What do 
you think? 

A. I thought I answered it. I try to 
be optimistic and think that the threat 
of both sides would keep it from happen- 
ing, and yet, at the same time, as I say, 
history seems to be against that, that 
there comes a moment in desperation 
when one side tries to get an advantage 
over the other. 

Q. As you know, the Israeli 
Government has made the threat that 
it might take military action to wipe 
out the Syrian missiles in Lebanon. If 
that were to be done against our 
wishes, would you consider that a 
violation of the terms of the laws 
under which the Israelis have obtained 
those weapons? 

A. This one's going to be one, I'm 
afraid, that I can't answer now as to 
how— I would hate to see this happen. 
They're defensive weapons. There's no 
question about the direction in which 
they're aimed. I'm speaking now of the 
Syrian weapons. This would end our 
prospects for trying to bring peace to 
Lebanon, I know. 

We're going to use every effort we 
can to see that they, on either 
side — that there isn't a firing of those 

Q. Secretary Haig, as you know, 
announced in China today that the 
United States is lifting its ban against 
lethal weapons sales to the People's 
Republic of China. I want to know if 
you would explain to the American 
people why you've decided to help the 
People's Republic of China rearm 
militarily and how you think the 
Soviet Union will react to your action? 

A. I don't know how the Soviet 
Union will react, but all we have done 
is — with the People's Republic of China 
we've wanted — and I've said for a long 
time — to improve relations with them, 
move them to the same status of many 
other countries and not necessarily 
military allies of ours, in making certain 
technology and defensive weapons 
available to them. And I think this is a 
normal part of the process of improving 
our relations there. 

Q. You said earlier that you 
strongly oppose the proliferation of 
nuclear weapons. Yet at the same 
time, you are asking Congress to 
waive an American law so that 
Pakistan, which has refused to sign 
the Nuclear Nonproliferation Treaty 
can receive $3 billion in American ai 
Do we have any assurances from 
Pakistan that they will not seek to 
build an atomic bomb? 

A. Let me just say with regard to 
Pakistan — and I won't answer the last 
part of the question — we have had a 
long-time treaty with Pakistan in a 
mutual aid pact. But Pakistan is also i 
a very strategic position now in view c 
what has happened to Afghanistan. Ai 
I believe it is in our best interest to be 
supportive of Pakistan. 

Q. How do you assess the curreml 
situation in Poland? And the second I 
part of that is whether the warming j 
up of relations, especially in the 
strategic military area with China, h I 
any connection in your mind with 
events in Poland? 

A. No, I don't see any connection 
between China and what's going on in j 
Poland. I think the Poland situation is 
going to be very tense for quite some 
time now. The Soviet Union is faced 
with a problem of this crack in their 
once Iron Curtain and what happens i 
they let it go. But on the other hand, 
what is going to be the impact if they 
take a forceful action? The impact on 
the rest of the world, I think, would b 
tremendous in the reaction that would 
come from all the— 

Q. The point of my question wa> 
that there was a list being made up 
the Pentagon of weapons which mig 
be supplied to China in the event tlu 
the Soviets invaded Poland. There h: 
been a connection drawn by General 
Haig and others that one way to det 
the Soviets in Poland is to make it 
clear that they might have to pay by 
increased American aid to China. Do 
that exist in— 

A. These might have been con- 
tingencies that were discussed. Certair 
they are not policy in our Administra- 

Q. Returning once to that questic 
of lifting of the lethal arms sales 
shipments to China, does that affect 
any way our relationship with Taiwa 
and if so, how? Does that move us in 
any direction either to or away from 
the government of Taiwan? 


Department of State Bullet 


ice President Visits Paris and London 

Vice President Bush departed 
hington June 23, 1981, to confer with 
ich and British Government of- 
is. He was in Paris June 2^-25, in 
ion June 25-26, and arrived back in 
■hington June 26. On June 27 he 
\ to California to meet with Presi- 

Following are statements the Vice 
sident made in Paris after his lunch- 
with President Mitterrand at Elysee 
ice, his new conference in London, 
his news conference in California 
after his meeting with President 



JE 24, 1981 

mid like to very briefly characterize 
| discussion with President Mitterrand 
irank, friendly, and constructive in 
l Wishing a better understanding of 
government's policies and his 
lerstanding of the broad economic 
I foreign policy objectives of Presi- 
l Reagan. 

We talked a lot about the economic 
iation. President Reagan is looking 
irard to meeting President Mitter- 
i i. They will, of course, meet at the 
Uwa summit and at Cancun, but we 
: very hopeful of another visit as well. 
Of particular interest was our 
i ussions regarding the upcoming Ot- 
| a summit— my explanation of our 
I ninistration's economic intentions 
I goals with particular emphasis on 
problem that is plaguing us and con- 
ling our French friends, of interest 
js. This is an area of particular con- 
a, very articulately explained to me 
President Mitterrand. 
The subject of security problems in 
Middle East was also discussed, and 

A. No, and I have not changed my 
ling about Taiwan. We have an act, a 
] called the Taiwan Relations Act, 
,t provides for defensive equipment 
ng sold to Taiwan as well as other 
ngs in the relationship. And I intend 
live up to the Taiwan Relations Act. 

it is not an overstatement to say that we 
found many, many areas of agreement. 
Our European allies are sovereign 
nations. The decisions on how they are 
governed rest with their citizens and 
with their elected representatives. 
However, the position of the United 
States on the subject of Communist par- 
ticipation in the governments of our 
allies is well known. This participation is 
bound to cause concern, but having said 
that, I do want to emphasize at the con- 
clusion of these remarks that the talks 
were warm, productive, and I expect 
them to continue in that fashion 
throughout the day. I would be remiss if 
I didn't express my deep personal ap- 
preciation to the President of France for 
his extraordinary courtesy shown to me 
as Vice President of the United States. 



JUNE 26, 1981 

Let me just say that we've had a very 
good visit, and I want to take this op- 
portunity to thank the Prime Minister 
for an extraordinarily hospitable dinner 
last night, [British Foreign Secretary] 
Lord Carrington for his generous 
amount of time allocated to what I think 
was a very useful exchange of views. I 
leave here at the conclusion of a very 
quick trip— 1 day in Paris, 1 day in Lon- 
don—with a renewed sense of con- 
fidence about the alliance. Our visit here 
has been most reassuring, and I hope 
that is reciprocal in every way. We 
covered, with Lord Carrington, 
almost— not every, but almost— every 
issue one can think of. I had an oppor- 
tunity for a rather private visit with the 
Prime Minister and that also was most 
useful, most relaxed. I would be remiss 
if, before taking your questions, I didn't 
express my gratitude and my thanks to 
everyone involved in this visit. 

Q. I assume you discussed the 
Middle East with Lord Carrington, 
who'll be the head of the Common 
Market initiative in the Middle East, 
and I was wondering what impression 
you got as to how active a role 
Western Europe plans to take in the 
Middle East this year and whether it 
conflicts with what the United States 
is trying to do. 

tt from Weekly Compilation of Presiden- 
, Documents of June 22, 1981. ■ 

A. Let me answer the second part 
first. I see no conflict at all. It is hard to 
quantify on something as difficult as the 
Middle East— a degree of initiative— but 
we see no incompatibility between the 
European Community initiative and the 
Camp David process. 

Q. We've heard that there is an in- 
creasing amount of alarm being ex- 
pressed in Washington about what 
sometimes is called the growing 
pacifist movement in Europe at the 
moment, particularly in West Germany 
and the Benelux countries, and, as you 
know, the Labor Party here is commit- 
ted to unilateral disarmament. Could 
you give us your thoughts on that? 
Are you worried about that? 

A. I don't think we're so worried 
about it because we do feel that the 
governments involved will keep NATO 
commitments. I think you're right that a 
concern has been expressed in the past 
on this subject, but I've seen nothing on 
this trip to alarm me and to make me go 
back with any heightened degree of con- 
cern on that. 

Q. On the subject of real com- 
mitments, as you probably know, the 
British Government is moving toward 
a reduction in surface ships in its 
Navy in the Eastern Atlantic. Is there 
any concern that this will leave a gap 
in Britain's NATO commitment? 

A. We're more inclined, I think, to 
look at the positive aspects of it, which 
show that in the face of financial dif- 
ficulties here— just as we have them at 
home— the commitments are being kept. 
I expect that the question you most 
understandably ask will be discussed not 
by me in a public forum but by our 
Secretary of Defense and the Minister of 
Defense, and I expect these will be 
through negotiations accommodation. 
The thing to emphasize is not the 
negative aspects of this story but the 
positive aspects and that is that the 
United Kingdom is keeping its commit- 

Q. [Inaudible but the subject was 
the rapid deployment force in the Per- 
sian Gulf area.] 

A. I think everyone who is here is 
familiar with the U.S. policy on this. I've 
been in multilateral diplomacy from time 
to time, and I've seen resolutions 
passed, come and go; nobody is going to 



The Vice President 

inflict upon governments external force. 
That is not our goal with the rapid 
deployment force, but we have many 
friends in that area and we have obliga- 
tions in that area and I, again without 
being Pollyannish about it, am not in- 
clined to look for difficulty over a resolu- 
tion. We will do what the President of 
the United States and our Secretary of 
Defense has indicated, and if there is 
cooperation here so much the better. 
But I wouldn't read too much into 
multilateral pronouncements. We take 
them very seriously, but we also have 
strong bilateral relationships in the area, 
and we have commitments that involve 
international waters, for example, where 
we act within international law and that 
could well encompass certain parts of 
this rapid deployment force concept. 

Q. Is there any link between the 
agreement now to put American 
troops into the Sinai area being en- 
forced and plans for, say, a rapid 
deployment force? 

A. No, I wouldn't say there is 
linkage. I'd look at this Sinai force as a 
step toward peace, a fulfillment of the 
Camp David accords which we feel very 
strongly about. 

Q. If I may look back at your visit 
to France, I see that Mr. Cheysson has 
spoken of an error of evaluation on 
the part of the U.S. Administration 
about the presence of Communists in 
the government. Could you comment? 

A. In the first place, the story I 
read today was quite inaccurate, talking 
about a statement made after I left 
Paris — Mr. Cheysson's interview — 
unless there was another one. It took 
place on a radio station — one of these 
drive-time radio stations — before I left, 
and, very frankly, as is his style — and 
very courteously I might add — the 
Foreign Minister discussed this state- 
ment with him, and I've indicated over 
there the U.S. position. I just have a 
feeling that when all sides understand 
each other that there won't be in the 
French situation the complications that 
s^me might think. You had a more 
specific part to your question, and if 
you'd ask it again I'll try to be a little 
more specific. 

Q. Could you comment on Mr. 
Cheysson's reported remarks in a 
radio interview that there was an 
error of evaluation "by the United 
States Administration about the com- 
position of the French Government"? 

A. I think that there was a very 
helpful effort by President Mitterrand 
and by the Foreign Minister to explain 
exactly what it is they were doing in this 
regard, and I would not plead guilty to 
any error of evaluation. I do think that 
given the time they gave me to explain 
this the best thing would be not to fully 
air it here but to go back and discuss 
with our President and our Secretary of 
State the position explained to me in 
great detail by President Mitterand and 
by the Foreign Minister. I don't think 
that there is an error of evaluation on 
our part. I do think that they were very 
forthcoming and that the most confiden- 
tial discussion we had, when their posi- 
tions are explained and evaluated, that 
it will be very helpful to our govern- 
ment. I would not plead guilty to any 
error of evaluation. 

Q. Why is it taking your govern- 
ment so long to get into arms limita- 
tion talks with the Russians? 

A. I am not sure it's taking so long. 
This is a good opportunity to explain our 
view. In the first place, you have noted 
in theater nuclear forces a willingness to 
negotiate. On strategic arms limitation, 
the President's views — you've got to go 
back to the campaign, because there is 
an odd thing about this President; he in- 
tends to do what he said he would do 
and keep his word to the American peo- 
ple. What he said he'd do is to be 
prepared to negotiate and to negotiate 
for a reduction in nuclear weapons and 
one that is totally verifiable. We have 
not been enthusiastic about SALT II; 
that's very well known. That's something 
that in our country was just a matter of 
continuous discussion. That does not 
mean, however, as some of our friends 
think here and at home, that we are not 
prepared to negotiate. The President 
also, when he talks about negotiation, 
does feel that there should be a wide ar- 
ray of subjects to be negotiated. There is 
another point and that is that we are 
determined to correct the trends that 
have set in — the adverse trends — in 
terms of military strength. I can't give 
you a definitive date or time, but I can 
tell you that there is nothing changed in 
the President's willingness to talk along 
the broad lines that I have outlined here 

Q. The European Community has 
put forward a proposal for negotia- 
tions with the Soviet Union on 
Afghanistan. Do you think there 
should be any linkage between those 
talks that come about and theater 
nuclear forces discussions? 

A. I would refer you, I think, to th 
Community on that initiative and to se«J 
their views. But as it was explained to [ 
me, there was no linkage foreseen; thai I 
is an EC initiative. The answer to your I 
question I think should best come from | 

Q. There have been reports that 
the United Kingdom is seeking 
logistical facilities with the rapid 
deployment force from Pakistan as 
part of the new military aid package 
to that country. Would you like to 

A. No, I would not like to commen: 
on that. 

Q. On the question of Namibia 
which you discussed with Lord Car- 
rington, how do you reconcile your 
Administration's seeking some kind < 
preelection constitutional agreement I 
with the Security Council plan which 
the five Western partners still sup- 

A. Our view was that our plan 
would advance Security Council Resolu 
tion 435. Our plan is that what we wan> 
is a settlement in Namibia, and we wai 
some progress. We have already passei | 
a resolution— 435— but we felt in takir | 
the initiative that we did, admittedly 
with not too much success, that we we 
advancing the cause of settlement, not 
obstructing it. It does seem to us, and | 
believe that the United Kingdom woulc 
agree with this and I know others agn 
with it, that there has to be some 
guarantee of constitutional rights. Tha 
was what we were trying to do at the 
United Nations. I was Ambassador at 
the United Nations and, without being 
too critical, we passed many resolution 
there where everyone knew nothing w; 
going to happen. This contributed to th' 
irrelevance of the United Nations in 
some ways. I made a speech on this in 
New York before the U.N. Association 
or 3 weeks ago. Now I am more of a 
critic of the United Nations than I was 
there but I'm more of a supporter. Our 
support, which is not personally what I 
think, but the U.S. Government suppor 
can be much greater if we feel that the 
United Nations can take meaningful 
multilateral initiatives, do something 
that's going to effect something. That, 
fact, is what we were trying to do 
rather than simply reiterate an old posi 
tion. I really think we're trying to brin£ 
things forward in what we were doing 
there at the United Nations. 

Q. Did the subject of Northern 
Ireland come up in your talks? 


Department of State Bulletii 

The Vice President 

A. Yes. During the course of yester- 
, I had a good explanation of the 
ernment's position on that. I think 
■yone here is familiar with the U.S. 

Q. Since last September talks have 
n going on in Madrid on European 
irity. Do you think this exercise 
been productive from the Western 
it of view and how much longer is 
United States prepared to allow it 

A. I'll be honest with you. I don't 
w the answer to your question. I 
't know how — I can't quantify the 
ree of the productivity of that 
;ting. I'm sorry, I just can't help you 
t, and it's a lack of reading up on it. 

Q. We've heard various versions, 
nely from Israel, about the United 
tes knowing that Iraq is working 
an atomic bomb or knowing that it 
t. What did the United States 
iw, and when did it know it? 

A. Again, I feel that we said at the 
ted Nations, in this instance really, 
that constructively needs to be said 
ut that event. I don't think it would 
aseful to go into a charge and 
ntercharge, to be more responsive to 
ary penetrating question on who 
w what and what papers — alleged 
iers — that are classified said or didn't 

I don't think I can be helpful to you 
that. The United States, as you 
>w, took the position in condemning 
act that it did not approve of. I'll 
ve it there, and that probably says 
te a bit about all the facts to the case. 



NE 27,1981 

ist had a good visit at the ranch with 
i President — reported to him on our 
p to France and to England, filled him 
on a visit that I had with Phil Habib 
lilip C. Habib, the President's special 
lissary to the Middle East], who flew 
:k with us from England with a very 
ef stop in Ireland. Then we discussed 
ittle bit of our forthcoming visit to the 
ilippines which, in a sense, is 
■emonial, but also I will be having 
iteral meetings with the Prime 
raster of Thailand, I believe with Lee 
.an Yew of Singapore, and probably 
; Foreign Minister of Japan, Mr. 

Vice President Bush and French President Mitterrand. (White House photo) 

Sonoda. We talked about those forth- 
coming meetings, and that was the pur- 
pose for my visit here. I'll be glad to re- 
spond to a few questions. 

Q. What did you tell him about the 
Communist participation in the French 
Government and how we should relate 
to it and what should be our policy? 

A. We have a policy and that is not 
to intervene in the internal affairs of 
France. We expressed concern. I had a 
long, very frank, very cordial discussion 
with the President of France. The U.S. 
Government has stated its position, and 
there's no point in restating its position. 

France is a strong ally of the United 
States, and we're going to work closely 
with France. That's what I'm sure the 
President wants, and that's the way it's 
going to be. 

Q. There's an open wound with the 
U.S. -French relations now. The 
Minister of France for External Af- 
fairs has said, in so many words, 
"please mind your own business." 

A. I think France probably would 
prefer that we not express concern 
about what they view as an internal 
matter. Our concerns relate to external 
matters, and I don't happen to believe 
there's any open wound. And I'll bet you 
President Mitterrand doesn't believe 
there's an open wound. Everybody's 
positioned now on this question. I can 
tell you I've had a very long visit not 
just with him but with the Prime 
Minister and with the Foreign Minister, 

Cheysson, and I just don't happen to 
agree that there's any open wound. 
There may be a little difference here and 
there, but some of it's their business and 
some of — if it has international aspects 
and affects U.S. policy then it's ours. 

Q. [Inaudible] the U.S. position is 

A. Don't believe that without see- 
ing it in the total context. I talked to 
him at length, and if he's changed his 
position within the last 48 hours, all I 
can do is tell you what it was like when 
I was there. And I just can't believe that 
he feels that our overall relations with 
them are unacceptable or what position 
he doesn't accept— I just don't believe it. 

Q. What can you tell us about the 
progress, or the lack thereof, of the 
Habib mission? 

A. I really would prefer for Phil to 
mention it, but you know, in the first 
place the President feels, and I concur 
totally, that Phil Habib has done a very, 
very good job. He went there with that 
whole situation very, very tense, and I'm 
not suggesting that the matter is re- 
solved, but I think he deserves a great 
deal of credit for the diplomacy that he 
performed in lessening tension. I don't 
think there's no end in sight on this 
thing, but I do believe that he is owed a 
vote of thanks so far for keeping the 
matter defused. 

There's a lot of discussions with him 
that I'm sure the Secretary of State will 

jgust 1981 


The Vice President 


have as to when he goes back and what 
happens from here on, but that's about 
all I can say about it. 

Q. The President is not on record 
yet with his views of the French 
Government. What did he tell you to- 

A. I can't tell you what I discussed, 
what the President said in various 
words. The position of the United States 
is stated on the French situation. Are 
you referring to the make-up of their 

Q. Yes. 

A. We have expressed ourselves on 
that, and the views expressed by the 
State Department reflect the President's 
views, so that's all I can say. But he's 
not hyping that. There are so many 
other areas of common grounds with 
France, and we're not talking about this 
one thing. What we should also focus on 
is the fact that President Mitterrand has 
made some statements in the area of 
foreign policy that we very much sup- 
port and taken positions that the United 
States very much supports. I think we 
have a tendency to take a point of possi- 
ble difference and highlight it, and that 
overshadows the common ground. 

The relations with France are ex- 
tremely important to us and they're fun- 
damental and they are deep and they're 
strong, and those are the points I want 
to make here— not just to emphasize the 
points of difference. 

Q. Are you convinced that Britain 
is going to live up to their commit- 
ment to NATO with the 3% increase 
[in military spending] in real terms 
each year? 

A. So far we're quite encouraged 
about that, and the British have certain- 
ly stated very recently their intentions 
to do that. France itself, without details 
of percentages, I think, has a very 
realistic view of the problems that the 
free world faces — the Soviet Union. And 
I'm heartened. If you look at what Presi- 
dent Mitterrand said in his campaign, I 
think he's quite realistic about Soviet in- 

Q. Did you discuss with President 
Mitterrand the access of secret NATO 
information — Communist members of 
his government? You didn't ask for 

A. No, I did not discuss that. 

Q. There were reports in 
Washington that the U.S. Government 

was reassured that those defense 
secrets would be — 

A. I'm not going to go into those 
kinds of details. I can't see any 
usefulness to expand on what we've said 
and I'm just not going to go into it fur- 

Clearly, the United States is not pro- 
Communist, and I believe that President 
Mitterrand in France is not pro- 
Communist. But what you get into 
beyond that — I mean, if you see a com- 
munist government in NATO, which we 
don't have in France, that would cause 
us tremendous concern. Our expression 
of concern relates to eventualities 
beyond where France stands right now. 

Q. Did you receive any reassur- 
ances from President Mitterrand that 
he would not tell any NATO secrets to 
these Communists? 

A. I feel very strongly that Presi- 
dent Mitterrand is quite realistic about 
the Communist Party, which he's been 
running against for a long, long time. 

Q. Mr. Cheysson has just recently 
indicated that France is going to 
rebuild the Iraqi reactor. Was that a 
subject of your talks with him? 

A. No. That didn't come up, and I'm 
not familiar with that position. 

Q. Would that be a matter of con- 

A. No. 

Q. From time to time we hear of 
repressions in the Philippine Govern- 
ment, in a sort of pictorial manner at 
times about President Marcos. Are 
you going to discuss this with him in 
any way? 

A. I don't know whether we'll even 
have bilateral discussions with the Presi- 
dent. This is a very ceremonial occasion, 
but we want better relations with the 

We noticed, quite hearteningly, that 
they have removed martial law, they've 
had elections, and when we have human 
rights differences with countries, we'll, I 
think, feel free to at least express the 
position of the United States. But I 
think you're going to see that done much 
more quietly than it's been done in the 
past. We believe that that's the way to 
affect change, maybe not beating our 
breast about it out there in public, but 
the President feels strongly that the way 
to affect change is to make forceful 
representations — to sometimes do it 
quietly. But I would think this would not 
be the case for that. 

Q. Can we take your trip to mean \ 
that the Reagan Administration fully 
approves the way Marcos' governmen 
is handling things now? 

A. Let me tell you what to take th 
trip to mean — that we want to improvi 
relations with the Philippines, that we 
have historically good and strong rela- 
tions with the Philippines. It's gone 
through some ups and downs, and it's 
our intention to demonstrate from this 
that we do want better relations with 
them — that we view them as a very iro 
portant friend in the Pacific, and we 
need more friends in the Pacific. That's 
the way I view it. 

Q. When you were in London, di< 
you discuss with Mrs. Thatcher the 
Thatcher government announcement 
about major restructuring of the 
British Navy— that is, diverting mon 
from conventional ships to Trident 
submarines? And what's your view oi- 
that that you brought back? 

A. Not with her, but I did discuss 
that. I had an additional meeting with 
Mrs. Thatcher, meetings with [Foreign 
Secretary] Peter Carrington, and then 
saw Mr. Nott, Defense Minister and 
others in the British Government at a 
luncheon. But, generally, we're pleasec | 
that they're keeping their commitment 
But this is a matter how— what forces i 
are — they aren't able to do as much 
with. That's a matter that has been 
discussed with the Defense Departmer 
between their Defense Minister Nott a-/ 
[U.S. Defense Secretary] Cap 
Weinberger. I really think he'd be bett 
qualified. We didn't go into that much 
detail on it. 

Q. Is it the American intention ti 
take up the slack which will be 
created by the diversion of funds for 
British Trident? 

A. No, we didn't go into that kind 
of detail at all in the subject of defense 
It was more very broad brush on that. 
We didn't go into that. 

Q. There's still some comments 
about lack of foreign policy in the 
Reagan Administration while you 
were gone. Did you find comments 
abroad in terms of wanting some 
definition of some announcement, 
some findings of where the Reagan 
Administration stands? 

A. No, not on a question of whethi 
there's any foreign policy. But there 
were plenty of questions about differed 
areas of the world — what the 


Department of State Bulleti 

The Vice President 

esident's view was on them, which I 
nk you'd expect in any foreign visit. 
1 1 didn't find the suggestion that 
;re was no foreign policy. 

Q. Were they unclear where the 
Iministration's values were? 

A. Perhaps they're more clear now. 

Q. Why? 

A. Because I answered a lot of 
estions. Just like I wish everybody 
re might be, but I don't know. 

Q. What do you think the 
cretary of State meant when he said 
e other day that our relations with 
e People's Republic of China has 

len steadily on the decline for the 

1st 3 years? 

I A. I've not talked to him. And I 
link what he was talking about is 
lat — I know from my own experience 
| China — they have been concerned in 
je past, and I'm not here to condemn 
(r predecessors or anything like that, 
| what they have felt has been an 
urealistic assessment of Soviet inten- 
1ms. And so perhaps it was that area 
lat the Secretary was addressing 
Imself. I've not talked to Al on that 
ice I've come back here. 

Q. Did the President talk about 
I e Haig trip at all? There's been some 
nestion about their meeting the other 

A. We talked about the trip, yes. 

Q. Did the President feel that it 
as a triumph when he talked about 

A. We didn't talk about winning and 
sing, but I think he feels it was a suc- 
:ssful visit, yes. 

Q. Could you elaborate on what 
au said about the meeting in the 
hilippines — those specific questions 
lat you want to take up? 

A. No, but those people will be 
lere and what we're doing is setting up 
bilateral with them. I mean, the 
ecretary covered a lot of ground in the 
lSEAN [Association of South East 
Lsian Nations] meeting. But I am one 
mo firmly believes that the United 
'tates has a very useful role to play in 
tie Pacific. I also believe the more high- 
;vel contact we have with these coun- 
ries, particularly those that I named, 
he more useful it can be. I think they'll 
e interested in exchanging views on 

what's happening in Europe and other 
places. There's no set agenda if that's 
your question. I think it will be a wide 
discussion of interests of common con- 

Q. Do you think that we should 
arm China against Russia? 

A. My view is you don't play the 
China card. I think there's a demeaning 
concept in that in terms of our relations 
with the People's Republic of China, our 

relations with the Soviet Union, and 
anybody else. We're not playing a 
card — do something to make somebody 
else do something different. That's not 
the foreign policy of President Reagan 
as I understand it, and I don't believe 
that is what is involved. I think the 
Secretary of State's discussion on that 
matter — that this was a natural evolu- 
tion as relations develop — is a very clear 
explanation of what it is we're trying to 


Visit to the Philippines 

Vice President Bush departed the 
United States June 27, 1981, to head the 
U.S. delegation to the inauguration of 
President Ferdinand Marcos of the 
Philippines. He was in Manila 
June 29 -July 1 and returned to 
Washington June 3. 

Following are the Vice President's 
arrival statement, his luncheon toast, 
and his statement to the press after the 
luncheon with President Marcos. 



JUNE 29, 1981 

I want to express my pleasure and that 
of our entire delegation at being here in 
the Philippines, your wonderful country, 
to represent the United States at the in- 
auguration of President Marcos. 

For me and other members of the 
delegation, I can say that it is a real 
honor and it is a pleasure to be here, 
and we are made doubly welcome by 
having Mrs. Marcos, the first lady, and 
my good and dear personal friend, 
Foreign Minister Carlos Romulo, here to 
greet us. You honor us; you both honor 

Our two peoples have much in com- 
mon. We share deep and longstanding 
ties and affection for each other, and 
our mutual esteem and friendship have 
remained firm over the years. We both 
aspire to peace and prosperity for 
mankind— aspirations that President 
Eisenhower reflected when he sum- 
marized the basic message of Jose Rizal, 
the Philippine national hero whose 
monument I plan to visit today. He ex- 
pressed that message in these words: 
"Filipinos, Americans, forever 
strengthen your brotherhood. Forever 
grow together in knowledge; in wisdom; 
in your faith as a people of God . . . 
for all peoples' good and His glory." 

For more than three decades we 
have worked together fruitfully and har- 
moniously to enhance the security of 
both our countries, and I know we can 
count on each other to continue to do so. 
You may also be assured that we 
respect the important work that the 
Philippines is doing with its fellow 
members in the Association of South 
East Asian Nations (ASEAN) in enhanc- 
ing peaceful cooperation in the region 
and in speeding its economic develop- 

For any American a visit to the 
Philippines has a special significance. 
We are always aware of the great 
courage, dedication, and sacrifices of the 
Philippine people who have done more 
than their share in facing aggression 
whenever it threatened freedom. You 
have stood shoulder to shoulder with us 
in peace and war, and we can never, 
never forget that. It is a particular 
honor for me to be here as a represen- 
tative of my country to participate in the 
inauguration of your President. I look 
forward to my stay here and to the op- 
portunity to meet with President Mar- 
cos, members of the government, and 
the Philippine people. 



JUNE 30, 1981 

I am delighted to be here representing 
our President. We feel the same kind of 
proximity that you very generously 
talked about in your toast. And you, 
rhetorically, asked why do we stand and 
have stood traditionally close to the 
United States, and you very generously 
recounted some of the principles that 
our country feels so strongly about. 



The Vice President 

It's that, but I also hope when those 
children who were there to greet us at 
the airport yesterday asked the question 
why do we stand close to the United 
States, that, indeed, they will under- 
stand our values, but that they'll also 
know that part of the answer is because 
we stand with the Philippines. We stand 
with you. 

And our President, our country has 
a deep commitment in the Pacific; a 
great respect not only for the Philip- 
pines but for the other ASEAN coun- 
tries. We love your adherence to 
democratic principle and to the 
democratic processes. And we will not 
leave you in isolation to the degree we 
have any vibrant strength — it would be 
turning our backs on history if we did. 

I couldn't help but notice as I went 
to my bedroom last night, the medals 
that were modestly displayed — but 
displayed nevertheless — in a corner of 
the room, and I saw the Silver Star, 
Distinquished Service Cross, and the 
Purple Heart, and many, many 
others — President Marcos' service to 
freedom and to our country. 

Standing there with Foreign 
Minister Romulo, I think also of the 
same history and dedication and 
sacrifice. One million of 16 million 
Filipinos giving their lives for freedom. 

And so we are pleased and privi- 
leged to be here today. You have 
honored this delegation by singling us 
out — of all your distinguished foreign 
visitors — and it means a great deal to 
us, and it will to my President when we 
get back there and tell him about it. But 
with no further ado, I would like to 
again say thank you. I would like to try 
to tell you what the relationship between 
these two countries means to us, and, 
more than that, it's got to mean to those 
countries that treasure freedom. 

And so I would propose that we 
drink a toast, celebrating the inaugura- 
tion of Ferdinand Marcos as President, 
drink a toast to the President, to the 
first lady, and to the great and lasting 
friendship between the American people 
and people of the Philippines. 

Vice President Bush and Philippine President Marcos. (White House photo) 



JUNE 30, 1981 

I just want to make a very brief report 
on our activities so far. We have just 
concluded a very lovely luncheon given 
by President and Mrs. Marcos for the 
U.S. delegation. I had there an oppor- 
tunity to express to them our gratitude, 
not just for that but for so many 
courtesies shown us here. 

I also had an opportunity to tell 
President Marcos that it is the intention 
of the Reagan-Bush Administration, and 
of President Reagan, to improve and 
strengthen relations with the Philip- 
pines, to take into consideration at all 

times the importance of the ASEAN 
countries, to recognize that we have not 
diminished our interest in fulfilling our 
responsibilities in the Pacific area, and, 
indeed, to make sure he understood tha 
we want to help where can with the 
reforms and the development that he 
talked about in his inaugural address. 
We were privileged to be here; I 
mean that from the bottom of my heart 
and, indeed, we really have been ac- 
corded great hospitality. We look for- 
ward to this evening and then we are 
pushing off tomorrow and heading back 
to the States after seeing some of our 
military activities in this area. But it ha: 
been a most enjoyable visit so far.H 


Department of State Bulleti 


rms Control for the 1980s: 
American Policy 

Secretary Haig's address before the 
eign Policy Association in New York 
My U, 1981. 1 

want to say I'm very, very pleased to 
> an opportunity to talk again before 
Foreign Policy Association. I've al- 
s believed that an effective policy 
ad must be the product of support for 
policy here at home. And this asso- 
on and its activities have clearly 
e a major contribution to that re- 
ement here in America. It has always 
■pened the issues for the American 
)le and enabled them to decide for 
nselves on these fundamental issues, 
it is just such an issue that I would 
to discuss today, and that is the vi- 
important issue of the future of arms 
rol in this decade of the 1980s facing 
ericans. There is hardly a subject 
ch enjoys or is a focus of greater in- 
lational attention, especially recently, 
ng our allies in Western Europe, and 
good cause. 

This is true because we are living in 
cge when man has conceived the 
ins of his own destruction. The su- 
-ne interest of the United States has 
n to avoid the extremes of either nu- 
r catastrophe or nuclear blackmail, 
inning with the Baruch plan, every 
sident has sought international 
jement to control nuclear weapons 
to prevent their proliferation. But 
i Chief Executive has also recogniz- 
hat our national security and the 
irity of our allies depend on 
erican nuclear forces as well. 
President Reagan stands in this trad- 
i. He understands the dangers of un- 
ked nuclear arms. He shares the uni- 
isal aspiration for a more secure and 
seful world. But he also shares the 
/ersal disappointment that the arms 
trol process has delivered less than it 

One of the President's first acts was 
rder an intense review of arms con- 
policy, the better to learn the lessons 
he past in the hope of achieving more 
ing progress for the future. Two fun- 
lental conclusions have emerged from 
: review. 

First, the search for sound arms con- 
agreements should be an essential 

nent of our program for achieving and 

ntaining peace. 

Second, such agreements can be 
reached if negotiations among adver- 
saries about their national security inter- 
ests are not dominated by pious hopes 
and simplistic solutions. 

The task of arms control is enor- 
mously complex. It must be related to the 
nation's security needs and perspectives. 
Above all, arms control policy must be 
seen in the light of international realities. 
As Churchill put it: "You must look at 
the facts because they look at you." An 
American arms control policy for this 
decade must take into account the facts 
about our security and the lessons that 
we have learned about what works — and 
what does not work — in arms control. 

Despite the extraordinary efforts at 
arms control during the 1970s, the world 
is a less secure place than it was 10 years 
ago. We began the process with the ex- 
pectation that it would help to secure the 
deterrent forces of both the United 
States and the Soviet Union. But 
Moscow's strategic buildup has put at 
risk both our crucial land-based missiles 
and our bombers. Simultaneously, the 
Soviets have continued a massive buildup 
of conventional forces and have used 
them with increasing boldness. Their ar- 
mies and those of their surrogates have 
seized positions that threaten resources 
and routes critical to Western security. 

We cannot blame our approach to 
arms control alone for our failure to 
restrain the growth and use of Soviet 
power. The Soviet Union did not feel 
compelled to agree to major limitations 
and adequate verification in part because 
the United States did not take steps 
needed to maintain its own strategic and 
conventional capabilities. Nor did we re- 
spond vigorously to the use of Soviet 
force. The turmoil of the 1960s, Vietnam, 
and Watergate all contributed to this 
passivity. As a result, the basis for arms 
control was undermined. We overesti- 
mated the extent to which the Strategic 
Arms Limitation Talks would help to ease 
other tensions. We also underestimated 
the impact that such tensions would have 
on the arms control process itself. 

This experience teaches us that arms 
control can only be one element in a com- 
prehensive structure of defense and for- 
eign policy designed to reduce the risks of 
war. It cannot be the political centerpiece 
or the crucial barometer of U.S. -Soviet 
relationships, burdening arms control 

with a crushing political weight. It can 
hardly address such issues as the Soviet 
invasion of Afghanistan, the Iran-Iraq 
war, the Vietnamese invasion of Kam- 
puchea - which is the subject of our U.N. 
conference here this week — the Libyan 
invasion of Chad, or Cuban intervention 
in Africa and Latin America. Instead, 
arms control should be an element — a 
single element — in a full range of politi- 
cal, economic, and military efforts to 
promote peace and security. 


The lessons of history and the facts of in- 
ternational life provide the basis for a 
realistic set of principles to guide a more 
effective approach to arms control. All of 
our principles are derived from a recogni- 
tion that the paramount aim of arms con- 
trol must be to reduce the risks of war. 
We owe it to ourselves and to our pos- 
terity to follow principles wedded exclu- 
sively to that aim. 

Our first principle is that our arms 
control efforts will be an instrument of, 
not a replacement for, a coherent allied 
security policy. Arms control proposals 
should be designed in the context of the 
security situation we face, our military 
needs, and our defense strategy. Arms 
control should complement military pro- 
grams in meeting these needs. Close con- 
sultation with our allies is an essential 
part of this process, both to protect their 
interests and to strengthen the Western 
position in negotiations with the Soviet 

If, conversely, we make our defense 
programs dependent on progress in arms 
control, then we will give the Soviets a 
veto over our defenses and remove their 
incentive to negotiate fair arrangements. 
Should we expect Moscow to respect par- 
ity if we demonstrate that we are not 
prepared to sacrifice to sustain it? Can 
we expect the Soviets to agree to limita- 
tions if they realize that, in the absence of 
agreement, we shall not match their ef- 
forts? In the crucial relationship between 
arms and arms control, we must not put 
the cart before the horse. There is little 
prospect of agreements with the Soviet 
Union that will help solve such a basic se- 
curity problem as the vulnerability of our 
land-based missiles until we demonstrate 
that we have the will and the capacity to 
solve them without arms control, should 
that be necessary. 

oust 1981 


The Secretary 

Our second principle is that we will 
seek arms control agreements that 
truly enhance security. We will work for 
agreements that make world peace more 
secure by reinforcing deterrence. On oc- 
casion it has been urged that we accept 
defective agreements in order "to keep 
the arms control process alive." But we 
are seeking much more than agreements 
for their own sake. We will design our 
proposals not simply in the interest of a 
speedy negotiation but so that they will 
result in agreements which genuinely en- 
hance the security of both sides. 

That is the greatest measure of the 
worth of arms control, not the money 
saved nor the arms eliminated. Indeed, 
valuable agreements can be envisioned 
that do not save money and that do not 
eliminate arms. The vital task is to limit 
and to reduce arms in a way that renders 
the use of the remaining arms less likely. 

Just as arms control could not aim 
simply at reducing numbers, so it should 
not try simply to restrict the advance of 
technology. Some technological advances 
make everyone safer. Reconnaissance 
satellites, for instance, discourage sur- 
prise attacks by increasing warning and 
make verification of agreements possible. 
Submarines and other means of giving 
mobility to strategic systems enhance 
their survivability, reduce the advantage 
of preemptive strikes, and thus help to 
preserve the peace. Our proposals will 
take account of both the positive and the 
negative effects of advancing technology. 

Whether a particular weapons sys- 
tem, and therefore a particular agree- 
ment, undermines or supports deterrence 
may change with the development of 
other weapons systems. At one time, 
fixed intercontinental ballistic missiles 
(ICBMs) were a highly stable form of 
strategic weapons deployments, but 
technological change has altered that. We 
need to design arms control treaties so 
that they can adapt flexibly to long-term 
changes. A treaty that, for example, had 
the effect of locking us into fixed ICBM 
deployments would actually detract from 
the objectives of arms control. 

Our third principle is that we will 
seek arms control bearing in mind the 
whole context of Soviet conduct 
worldwide. Escalation of a crisis pro- 
duced by Soviet aggression could lead to 
a nuclear war, particularly if we allowed 
an imbalance of forces to provide an in- 
centive for a Soviet first strike. Ameri- 
can foreign policy and defense policy, of 

which arms control is one element, must 
deter aggression, contain crisis, reduce 
sources of conflict, and achieve a more 
stable military balance — all for the pur- 
pose of securing the peace. These tasks 
cannot be undertaken successfully in iso- 
lation one from the other. 

Soviet international conduct directly 
affects the prospects for success in arms 
control. Recognition of this reality is es- 
sential for a healthy arms control process 
in the long run. Such "linkage" is not the 
creation of U.S. policy: It is a fact of life. 
A policy of pretending that there is no 
linkage promotes reverse linkage. It ends 
up by saying that in order to preserve 
arms control, we have to tolerate Soviet 
aggression. This Administration will 
never accept such an appalling conclu- 

Our fourth principle is that we will 
seek balanced arms control agree- 
ments. Balanced agreements are neces- 
sary for a relationship based on reciproc- 
ity and essential to maintaining the secu- 
rity of both sides. The Soviet Union must 
be more willing in the future to accept 
genuine parity for arms control to move 
ahead. Each agreement must be balanced 
in itself and contribute to an overall bal- 

Quantitative parity is important, but 
balance is more than a matter of num- 
bers. One cannot always count different 
weapons systems as if they were equiva- 
lent. What matters is the capacity of 
either side to make decisive gains 
through military operations or threat of 
military operations. Agreements that do 
not effectively reduce the incentives to 
use force, especially in crisis situations, 
do nothing at all to enhance security. 

Our fifth principle is that we will 
seek arms controls that include effec- 
tive means of verification and mecha- 
nisms for securing compliance. Unveri- 
fiable agreements only increase uncer- 
tainties, tensions, and risks. The critical 
obstacle in virtually every area of arms 
control in the 1970s was Soviet unwilling- 
ness to accept the verification measures 
needed for more ambitious limitations. As 
much as any other single factor, whether 
the Soviets are forthcoming on this ques- 
tion will determine the degree of progress 
in arms control in the 1980s. 

Failure of the entire arms control 
process in the long run can be avoided 
only if compliance issues are clearly re- 
solved. For example, there have been ex- 

tremely disturbing reports of the use 
chemical weapons by the Soviets or tl 
proxies in Afghanistan and in SoutheE 
Asia. With full Western support the 
United Nations is now investigating t 
issue of chemical weapons. Similarly, i 
the spring of 1979, there was an extra 
dinary outbreak of anthrax in the Sov 
city of Sverdlovsk. Despite continued 
probing, we still await a serious Sovie 
explanation as to whether it was linke 
activities prohibited under the biologi 
weapons convention. 

Our sixth principle is that our 
strategy must consider the totality < 
the various arms control processes i 
various weapons systems, not only 
those that are being specifically neg 
ated. Each U.S. weapons system mus 
understood not merely in connection \ 
a corresponding Soviet system, but ir 
lation to our whole strategy for deter 
the Soviets from exploiting military f< 
in general. In developing our theater 
clear arms control proposals, for exan 
we should consider the relationship ol 
theater nuclear forces to NATO's over 
strategy for deterring war in Europe 
cannot overlook the fact that our Eur 
pean strategy has always compensate 
for shortfalls in conventional capabilit 
through a greater reliance on theater 
strategic nuclear forces. If we are to )i 
less on the nuclear elements in the fu 
ture, the conventional elements will r 
to be strengthened. 


What then are the prospects for arms 
control in the 1980s? We could achieve 
quick agreements and an appearance 
progress if we pursued negotiation fo: 
own sake or for the political symbolis 
continuing the process. But we are co 
mitted to serious arms control that tr 
strengthens international security. Tl 
is why our approach must be prudent 
paced, and measured. 

With a clear sense of direction an 
dedication to the serious objectives ol 
arms control, this Administration will 
strive to make arms control succeed, 
will put our principles into action. We 
conduct negotiations based on close c< 
sulfation with our allies, guided by th 
understanding that our objective is e* 
hanced security for all of our allies, m 
just for the United States. We will w< 
with the Congress to insure that our : 


Department of State Built 

The Secretary 

■ol proposals reflect the desires of our 
le, and that, once agreements are 
tiated, they will be ratified and their 
'mentation fully supported. We will 
ily with agreements we make, and 
ill demand that others do likewise. 
By the end of the year, the United 
;s will be embarked upon a new arms 
ol endeavor of fundamental im- 
ince, one designed to reduce the 
it nuclear threat to our European al- 
The impetus for these negotiations 

back to the mid-1970s when the 
ets began producing and deploying a 
e new generation of nuclear systems 
rned not to threaten the United 
;s — for their range was too short — 
o threaten our European allies, 
e new weapons, and in particular the 
ly 3,000-mile-range SS-20 missile, 

not just modernized replacements 
lder systems. Because of their much 
ter range, their mobility, and above 
leir multiplication of warheads on 
missile, these new systems pre- 
sd the alliance with a threat of a new 
r of magnitude. 

The pace of the Soviet buildup is in- 
dng. Since the beginning of last year, 
Soviets have more than doubled their 
!0 force. Already 750 warheads have 

deployed on SS-20 launchers. The 
et Union has continued to deploy the 

ange Backfire bomber and a whole 
y of new medium- and short-range 
ar missiles and nuclear-capable air- 
. This comprehensive Soviet arms 
lup is in no sense a reaction to 
'O's defense program. Indeed, NATO 
/ery little as this alarming buildup 

In December 1979 the alliance finally 
onded in two ways. First, it agreed 
jploy 464 new U.S. ground-launched 
ie missiles in Europe and to replace 
medium-range Pershing ballistic mis- 
already located there with modern- 
versions of greater range. Second, 
alliance agreed that the United States 
ild pursue negotiated limits on U.S. 
Soviet systems in this category. 
This two-track decision represents 
icit recognition that arms control 
lot succeed unless it is matched by a 
r determination to take the defense 
.sures necessary to restore a secure 
ince. On taking office, as one of its 
; foreign policy initiatives, this Ad- 
istration announced its commitment 
oth tracks of the alliance decision — 
loyments and arms control. Last May, 
tome, we secured unanimous alliance 
orsement of our decision to move 
ad on both tracks and of our plan for 

Since then I have begun discussions 
in Washington with the Soviet Ambas- 
sador on this issue. When I meet with 
Soviet Foreign Minister Gromyko at the 
United Nations this September, I will 
seek agreement to start the U.S. -Soviet 
negotiations on these weapons systems 
by the end of this year. We would like to 
see the U.S. and Soviet negotiators meet 
to begin formal talks between mid- 
November and mid-December of this 
year. We intend to appoint a senior U.S. 
official with the rank of Ambassador as 
our representative at these talks. 

Extensive preliminary preparations 
for this entirely new area of arms control 
are already underway in Washington and 
in consultation with our NATO allies in 
Brussels. Senior U.S. and European offi- 
cials will continue to consult after the be- 
ginning of U.S. -Soviet exchanges. We 
and our allies recognize that progress can 
only come through complex, extensive, 
and intensive negotiations. 

We approach these negotiations with 
a clear sense of purpose. We want equal, 
verifiable limits on the lowest possible 
level on U.S. and Soviet theater nuclear 
forces. Such limits would reduce the 
threat to our allies and bring to Europe 
the security undermined today by the 
Soviet buildup. We regard the threat to 
our allies as a threat to ourselves, and we 
will, therefore, spare no effort to succeed. 

We are proceeding with these negoti- 
ations to limit the theater threat within 
the framework of SALT — the Strategic 
Arms Limitation Talks designed to limit 
the nuclear threat to the United States 
and to the Soviet Union. In this area, too, 
we have initiated intense preparations. 
These preparations must take into ac- 
count the decisions we will take shortly 
on modernizing our intercontinental bal- 
listic missiles and our strategic bombers. 

In the course of 10 years of SALT 
negotiations, conceptual questions have 
arisen which must be addressed. For in- 
stance, how have improvements in moni- 
toring capabilities, on the one hand, and 
new possibilities for deception and con- 
cealment, on the other, affected our abil- 
ity to verify agreements and to improve 
verification? Which systems are to be in- 
cluded in a SALT negotiation, and which 
should be discussed in other forums? How 
can we compare and limit the diverse 
U.S. and Soviet military arsenals in the 
light of new systems and new technolo- 
gies emerging on both sides? 

In each of these areas there are seri- 
ous and pressing questions which must be 
answered to insure the progress of SALT 

in the 1980s and beyond. Only in this way 
can SALT become again a dynamic pro- 
cess that will promote greater security in 
the U.S. -Soviet relationship. We are de- 
termined to solve these problems and to 
do everything necessary to arrive at bal- 
anced reductions in strategic arsenals on 
both sides. 

We should be prepared to pursue in- 
novative arms control ideas. For exam- 
ple, negotiated confidence-building meas- 
ures in Europe could provide a valuable 
means to reduce uncertainty about the 
character and purpose of the other side's 
military activities. While measures of this 
sort will not lessen the imperative of 
maintaining a military balance in Europe, 
they can reduce the dangers of miscalcu- 
lation and surprise. 

We are eager to pursue such steps in 
the framework of a European disarma- 
ment conference based on an important 
French proposal now being considered at 
the Madrid meeting of the Conference on 
Security and Cooperation in Europe. We 
call upon the Soviets to accept this propo- 
sal, which could cover Soviet territory to 
the Urals. As we proceed in Madrid, we 
will do so on the basis of a firm alliance 
solidarity, which is the key to bringing 
the Soviets to accept serious and effec- 
tive arms control measures. 

Our efforts to control existing nu- 
clear arsenals will be accompanied by 
new attempts to prevent the spread of 
nuclear weapons. The Reagan Adminis- 
tration is developing more vigorous 
policies for inhibiting nuclear prolifera- 
tion. We expect the help of others in this 
undertaking, and we intend to be a more 
forthcoming partner to those who share 
responsibility for nonproliferation prac- 
tices. Proliferation complicates the task 
of arms control: It increases the risk of 
preemptive and accidental war, it de- 
tracts from the maintenance of a stable 
balance of conventional forces, and it 
brings weapons of unparalleled destruc- 
tiveness to volatile and developing re- 
gions. No short-term gain in export rev- 
enue or regional prestige can be worth 
such risks. 

It may be argued that the "genie is 
out of the bottle," that technology is al- 
ready out of control. But technology can 
also be tapped for the answers. Our 
policies can diminish the insecurities that 
motivate proliferation. Responsible ex- 
port practices can reduce dangers. And 
international norms can increase the cost 
of nuclear violations. With effort we can 
help to assure that nuclear plowshares 
are not transformed into nuclear swords. 


The Secretary 

In sum, the United States has a 
broad agenda of specific arms control ef- 
forts and negotiations already underway 
or soon to be launched. The charge that 
we are not interested in arms control or 
that we have cut off communications with 
the Soviets on these issues is simply not 

The approach I have discussed today- 
stands in a long and distinguished Ameri- 
can tradition. We are confident that it is a 
serious and realistic approach to the 
enduring problems of arms control. The 
United States wants a more secure and a 
more peaceful world. And we know that 
balanced, verifiable arms control can con- 
tribute to that objective. 

We are also confident that the Soviet 
leaders will realize the seriousness of our 
intent. They should soon tire of the pro- 
posals that seek to freeze NATO's mod- 
ernization of theater nuclear weapons be- 
fore it has even begun, while reserving 
for themselves the advantages of hun- 
dreds of SS-20s already deployed. They 
should see that the propaganda campaign 
intended to intimidate our allies and frus- 
trate NATO's modernization program 
cannot and must not succeed. Arms con- 
trol requires confidence, but it also re- 
quires patience. 

Americans dream of a peaceful 
world, and we are willing to work long 
and hard to create it. This Administration 
is confident that its stance of patient op- 
timism on arms control expresses the 
deepest hopes and the clearest thoughts 
of the American people. 

It is one of the paradoxes of our time 
that the prospects for arms control de- 
pend upon the achievement of a balance 
of arms. We seek to negotiate a balance 
at less dangerous levels but meanwhile 
we must maintain our strength. Let us 
take to heart John F. Kennedy's reminder 
that negotiations "are not a substitute for 
strength — they are an instrument for the 
translation of strength into survival and 

Secretary Haig Visits China: 

Attends ASEAN 

and ANZUS Meetings 

■Press release 233.1 

Secretary Haig departed the United 
States June 10, 1981, to visit Hong Kong 
(June 12-14), Beijing (June U-17), 
Manila (June 17-20) to participate in the 
foreign ministers' meeting of the Associa- 
tion of South East Asian Nations 
(ASEAN), and Wellington (June 21-23) 
for the 30th meeting of the ANZUS 
(Australia, New Zealand, United States 
pact) Council. He returned to the United 
States (Hawaii) on June 23 and on June 
25 was in Los Angeles to report on his 
trip to the President. 

Following are the Secretary's 
remarks and news conferences made on 
carious occasions during the trip, as 
well as the text of the communique issued 
at the conclusion of the ANZUS meeting. 

JUNE 14, 1981 1 

Nearly 10 years ago, it was my pleasure 
to visit your country, and I am proud to 
have participated in the historic renewal 
of contacts between the United States 
and the People's Republic of China. Our 
rapproachement was based on strongly 
held national interests, and the interven- 
ing years confirmed that judgment. Con- 
tacts between our two nations have 
grown, friendship has flowered, and 
mutual advantage has been served. Our 
relations are now firmly based on the 
joint communique that normalized our 
diplomatic ties. 

Four American Presidents- 
including President Reagan — have at- 
tached the highest importance to the 
development and expansion of friendly 
relations with your government. Our 
cooperation serves our mutual in- 
terests — it is essential to peace and 
stability, not only in the Asia-Pacific 
region but also to the world. I have 
come to China in recognition of this fact. 

Chinese-American cooperation is all 
the more important today, when we con- 
front serious threats to peace and tran- 
quility, your statesmen have been warn- 
ing of the dangers of aggression for 
some time. You have long argued for 
concerted action to prevent such 

President Reagan has pledged t9 
the United States, working with its 
allies and friends, will act with couraj 
and consistency to resist aggression, 
this effort, the United States conside 
China to be a close and valued friend 
Our national interests are parallel in 
many respects; our policies can often 
complement each other. We regard 
China's strength, security, and well- 
being as fundamental to the global 
balance that is the basis for our own 

The President is committed to th 
steady strengthening of our relations 
was my honor today to explore with 
ways to achieve this objective. I look 
ward to further discussions, both wit 
you and other Chinese leaders in the 
days to come. 

In this spirit, I propose a toast tc 
the health of China's leaders; to your 
health, Mr. Vice Premier; and to gro 
ing friendship and cooperation betwe 
the peoples and governments of our 

JUNE 16, 1981 2 

I arrived here in the spirit of friends 
born of common interests. American 
policy and Chinese policy are both 
rooted in an objective appraisal of 
strategic realities. My discussions wi" 
you, with Vice Chairman Deng, Pren 
Zhao, Vice Premier Geng, Vice Prerr 
Bo, and others have confirmed that c 
appraisals of the international situati 
are, indeed, very similar and, therefc 
that the prospects for our bilateral rt 
tions are bright. 

We have achieved this converger 
of views despite the fact that our 
peoples seek collective well-being anc 
dividual fulfillment on different path; 
But neither of us seeks to extend oui 
economic or social systems by force, 
our relations are based on mutual 
respect. Thus I am convinced that wi 
patience and far-sighted statesmansh 
the differences history has bequeathe 
us can be peacefully resolved. As we 
proceed to build closer ties based on 
common interests, we stand together 


Department of State Built 

The Secretary 

desire to work toward a world order 
id on equality and mutual respect 
ng nations. 

In the 1980s, the prospects for such 
)rld order are under challenge. From 
end of Asia to the other — in Kam- 
lea, Afghanistan, and the Middle 
t, in Europe, in Africa, in Central 
;rica and the Caribbean — the hard- 
independence of smaller nations is 
opardy. Our talks have shown that 
jricans and Chinese can work 
ither to oppose efforts by other na- 

to achieve global or regional 
;mony. It is imperative that we con- 
e to consult closely with each other 
re\\ as with our respective friends 
allies. The United States is corn- 
ed to do so. 

During my visit, I assured China's 
ers that we intend to develop our 
tions in accordance with the joint 
munique on the establishment of 
pmatic relations between us. This 

was of unusual significance. It 
pled us to dispel misapprehensions 
to convey the resolve of the United 
jes, under President Reagan's leader- 
, to further expand cooperation be- 
im our two nations. During the past 
|ys, a solid basis has been laid for 
[ficant progress in every field — in 
lomic and technological cooperation, 
efense, and in the development of 
mon approaches to international 
js of mutual concern. 
On many of the key international 
es of the day our policies and posi- 
3 complement each other and are 
■ closely aligned. We share the con- 
on that the future of Poland, 
Jianistan, and Kampuchea must be 
rmined by the peoples of those coun- 
i. Where aggression has occurred, 
stand together with the peoples of 
occupied nations in demanding an 
ediate, complete, and unconditional 
idrawal of all foreign forces. 
My discussions with you and other 
lese leaders over these last few days 
3 been among the most productive of 
experience. I am confident that 
na— and the United States— will do 
.t is necessary to insure that indepen- 
t nations— great and small— can pur- 
their aspirations for a better life in 
ze. These talks have advanced our 
ity to coordinate our efforts in every 
ere to this end. 

I will bring this important message 
he next stop on my journey — the 
;ting of the foreign ministers of the 
ociation of the South East Asian Na- 
is. The ASEAN governments lead 

the international efforts to turn back 
foreign- supported aggression in 
Southeast Asia. They seek a region free 
of great power rivalry, a goal supported 
by both the United States and China. 

In my meeting shortly thereafter 
with our allies in the South Pacific, I 
shall tell them that China and the 
United States share with them a com- 
mon determination to preserve the 
peace of the Asian-Pacific region. 

Finally, I will report to the Presi- 
dent and to our allies and friends that 
U.S. -China relations are strong and im- 

It is now my honor to propose a 
toast: to the health of all the Chinese 
leaders with whom I have held such 
fruitful talks during my visit; to the 
health of all here tonight; to the friend- 
ship and close cooperation of the United 
States and China; and to world peace. 



JUNE 16, 1981 3 

I came to China to clear the air, dispel 
some misapprehensions, and convey the 
President's desire to inject new momen- 
tum into our bilateral relationship with 
China. Specifically, I came to discuss 
with leaders of China major develop- 
ments in the global strategic environ- 
ment, regional issues of mutual concern, 
and some bilateral questions. 

My discussions over the past 3 days 
have been unusually productive. They 
confirmed the importance we attach to 
high-level contact with the leaders of the 
People's Republic. They also bore out my 
expectation that we face important op- 
portunities for moving our cooperative 
ties with China on to a new plateau. 

With regard to international issues, 
it is apparent that the strategic realities 
which prompted reconciliation between 
the United States and China more than 
a decade ago are more pressing than 
ever. U.S. and Chinese perceptions of 
the international situation have never 
been closer. Our common resolve to 
coordinate our independent policies in 
order to limit the Soviet Union's oppor- 
tunities for exploiting its military power 
has, likewise, grown stronger. It is 
clearer that China appreciates the steps 
taken by President Reagan to restore 
our military power, reinvigorate our 
alliances and ties to friendly nations, 
develop equitable relations with Third 
World countries, and place our economy 
on a sound footing. 

With respect to regional issues, we 
found that we shared objectives on vir- 
tually all issues, even though our tactical 
approaches may differ on some. Natural- 
ly, much of our discussion focused upon 
the challenges posed by the Soviet 
Union and its proxies in Afghanistan 
and in Indochina. We shared a common 
determination to prevent the pressure of 
other events from deflecting attention 
away from this twin strategic challenge. 
Our objectives in both areas coin- 
cide — above all, in our resolve to press 
for the complete withdrawal of foreign 
military forces from Afghanistan and 

On other issues, where our ap- 
proaches differ to some extent as in the 
Middle East and southern Africa, the 
discussions were useful in narrowing the 
range of disagreement. 

On bilateral issues we made genuine 
progress. Regarding Taiwan, I explained 
that the unofficial relationship which has 
characterized the contacts between the 
people of the United States and the peo- 
ple of Taiwan since normalization of 
relations with the People's Republic of 
China will be continued, and this was 

I underscored our intent to promote 
the evolution of our bilateral relations 
with China on the basis of principles em- 
bodied in the joint communique on nor- 
malization. We discussed a number of 
specific ways in which cooperation can 
be expanded to our mutual benefit. 

• I conveyed the President's intent 
to treat the People's Republic as a 
friendly nation with which the United 
States is not allied but with which it 
shares many interests. 

• I informed them of the Adminis- 
tration's intent to introduce legislation 
amending U.S. laws which lump the 
P.R.C. with the Soviet bloc. 

• I outlined some changes in export 
control procedures which we hope will 
facilitate expanded trade with China. 

There were a number of other more 
specific results of these discussions. 

• I extended, on behalf of President 
Reagan, an invitation to Premier Zhao 
Ziyang to visit the United States. 
Premier Zhao accepted the invitation 
and will visit our country sometime next 
year. Premier Zhao also reconfirmed his 
invitation to President Reagan to visit 
the People's Republic. 

• As you may know, some of our oil 
companies have been concerned about 
possible problems of double taxation 
because of the way the Chinese tax code 

■met 1QR1 


The Secretary 

is written. I raised these concerns, and 
Bo Yibo welcomed my suggestion that 
U.S. tax experts visit China to discuss 
the matter, which is of potentially great 
significance to future foreign investment 
in oil exploration. 

• With respect to economic coopera- 
tion, the Chinese and we agreed to hold 
the second joint economic committee 
meeting, headed by Treasury Secretary 
Regan and Vice Premier Bo Yibo, in 
China this autumn. 

• Bo Yibo also responded positively 
to the suggestion that a separate joint 
U.S.-P.R.C. commission on commerce 
and trade be established and agreed to 
consider a specific proposal at an early 

• I said in Hong Kong that I was 
not coming to China on an arms selling 
mission. But we did agree that ex- 
changes between our respective defense 
establishments would continue to ex- 
pand. And Vice Chief of the PLA [Peo- 
ple's Liberation Army], Liu Huanqing, 
will bring a delegation to the United 
States in August. 

• With regard to consular matters, 
we reached agreement on an exchange 
of notes that will enable the P.R.C. to 
open an additional consulate in New 
York and the United States to open one 
in Shenyang. 

Because of our heavy schedule of of- 
ficial discussions, my colleagues and I 
had no opportunity to explore the world- 
famed classical attractions of Beijing. 
That extremely pleasant experience fell 
to my wife, who visited the Palace 
Museum, Great Wall, Ming Tombs, Sum- 
mer Palace, and an experimental 
elementary school. She was also par- 
ticularly pleased to have had an oppor- 
tunity to meet with Madame Kang 
Keqing, Vice Chairman of the National 
People's Congress and Vice Chairman of 
the All-China Women's Federation. 

I would also like to pay tribute to 
the many Chinese friends and American 
colleagues who worked so hard and so 
effectively to assure the success of this 
visit. I believed it was unusually signifi- 
cant and successful. It foreshadows the 
prospect that President Reagan's Ad- 
ministration will be marked by a major 
expansion of Sino-American friendship 
and cooperation. 

Q. You said the Chinese under- 
stood your policy on Taiwan. Did they 
accept it? 

A. I think the issue is best ex- 
plained by the words that I used. They 
understand it. 

Q. Were you able to assure the 
Chinese that the United States will 
not sell advanced fighter planes to 
Taiwan, or what position did you take 
on that question? 

A. It is clear that the subject of arm 
sales to Taiwan is a very sensitive issue 
with the People's Republic of China, and 
these issues were discussed. But this is 
neither the time nor the place to go fur- 
ther into that matter beyond the state- 
ment I have just made. 

Q. Did you discuss with them 
what to buy, or is that something that 
will occur when the Deputy Chief of 
Staff— is that who you said is coming 
to Washington? 

A. The PLA's joint staff. Clearly 
there were discussions revolving around 
this subject, but, as I emphasized in 
Hong Kong and continued to emphasize 
during the visit, we were not here to 
discuss the details associated with the 
provision of armament sales or arms- 
related technology. I would anticipate 
that this will be explored in some depth 
by the Chinese delegation that will visit 
Washington. As I have emphasized re- 
peatedly in the past, each issue will be 
dealt with on a case-by-case basis follow- 
ing the necessary coordination with af- 
fected allies and with the American Con- 

Q. Did you have any answer for 
them on these computers that are be- 
ing held up at the Pentagon? 

A. No, I don't know which com- 
puters you're talking about. You're talk- 
ing about the census-related computers; 
that issue has already been resolved. It 
was before we came. 

Q. What was the resolution? 

A. They will be provided. We're 
talking about the census computer. 

Q. You said there's going to be the 
effect of relaxation of trade restric- 
tions. Could you give us an idea of 
what items the Chinese will be able to 
buy that they wouldn't have been able 
to buy before, and what items they 
may, in fact, be interested in purchas- 

A. That's very difficult to be specific 
on. I would say, in general, there would 
be substantial loosening up of dual-use 
technology. That's the common phrase 
used to describe some high technology 
items. It will remain to be seen what the 
Chinese side might be interested in, and 
then again we would deal with each re- 

quest on a case-by-case basis. No, in 
context of armaments unless it's arm 
related but on a case-by-case basis 
within the established procedures in i 
bureaucracy. But the instructions to 
American bureaucracy have already 
gone out, and they will have the eff& 
of loosening up former restrictions 
maybe in the order or magnitude as 
twice as loose. 

Q. I don't understand the term 
dual-use technology. 

A. There are a number of compi 
related and electric-related items whi 
have an application in both the comir 
cial and potentially the military field 
that's the area where usually there's 
most sensitivity in COCOM [Coor- 
dinating Committee for East- West 
Trade Policy] and other restriction 

Q. Before you came, China saic 
would make a strong response if tr 
United States continued to sell 
weapons to Taiwan. After your dis j 
sions here, what is your understam 
ing? Will they make a strong respo 
to continued weapons sales? 

A. I've said that this is a very se 
sitive issue here, and we conducted s 
discussions on it. I think both sides 
understand one another, and that's f:i 

Q. Has a decision been made ii 
connection with the visit of the De 
ty Chief of the Joint Staff to 
Washington that the United States 
ready to provide or sell lethal arms 
nonlethal or some kind of military 
equipment other than technological 
equipment to China besides specifii 
items? Has a policy been made that 
this man would come to Washingto 
to discuss what he might be interes 
in buying? 

A. Basically munitions-list restri 
tions will be removed in general and 
specific Chinese requests will be con- 
sidered in conjunction with appropria 
consultation with affected allies. Tha 
means, in general, that there is a loo: 
ing up over what has been previous 
policy which was affected by munitioi 
list restrictions. 

Q. Are you able to outline in 
general terms what type of equipmt 
you are talking about? 

A. I would view that this questio 
serves no useful purpose to get out 
ahead of reality. We may find that th 
Chinese side is not particularly in- 


Department of State Bulk 

The Secretary 

Ited in arms purchases. We may 
Ithat it is interested in some arms 
J would be imprudent to provide at 
juncture. On the other hand we 
lize the evolution of this relation- 
that will be slow and measured and 
ent and that would represent close 
dination by both parties. That 
n't answer your question because 
juestion can't be answered, but it 
give you some general guidelines 

Q. Are you thinking in terms of 
ng China in a category such as 

regards Yugoslavia which ob- 
sly still regards itself as a Com- 
ist country but is eligible for cer- 

end items? 

A. With, of course, the special in- 
luality of the People's Republic of 
1a being the overall criteria as well. 

Q. Did you get any specific indica- 
from the Chinese that they too 
that these meetings were un- 
dly productive? I ask that because 
jclose reading of Foreign Minister 
jng Hua's response to your toast 
jcates a slightly lower level of en- 

I A. No, I don't presume to 
| acterize the Chinese on this, but my 
lassions today made it very clear to 
:hat they are pleased with the out- 
e of this visit as are we, that 
iuse of some of the atmospherics 
preceded the visit that it was an ex- 
ionally important and significant 
and I think from both of those 
Its of view that it was a successful 
and I merely refer to you — you 
a> everyone reads what they want to 
1 in a statement, and you can read 
Vice Premier's statement a number 
'ays, but I think he described it as 
j successful. He described it as hav- 
deepened our understanding and 
iing positive results. Now I don't 
w to tell you that it is not schooled 
he People's Republic language that 
;'s a significant term, positive results, 
iddition he said I congratulate you 
■mly for your successful visit — that's 
ler explicit. Again I wouldn't 
sume to put further words into their 
aths but this was what has been said. 

Q. The reason I asked you was for 
previous phrase which is this point 
never be overstressed which is 
t we must prove with our own ac- 
ns that our relationship can stand 

A. Absolutely, and I don't know 
that anything about the outcome of this 
visit runs counter to that statement. 

Q. You mentioned fulfilling the 
joint communique on establishment of 
diplomatic relations. You made no 
mention of the Taiwan Relations Act? 
What was said in your discussions 
about the Taiwan Relations Act? 

A. I think I have already addressed 
Taiwan to the degree that it is appro- 
priate to do it, and if you look at my 
original statement on it that will have to 

Q. What was achieved in terms of 
security cooperation of some of the 
things you talked about Kampuchea? 

A. I think it goes without saying 
that both the United States and the Peo- 
ple's Republic of China have been ex- 
tremely concerned about the situation in 
Afghanistan, its implications for future 
peace and stability in this region. 

Clearly one of the discussions in- 
volved the importance of the security of 
Pakistan in this situation and the con- 
vergence of views with respect to the 
need to be sure that Pakistan has the 
ability to defend itself and to maintain 
its truly nonaligned posture. As you 
know Under Secretary [for Security 
Assistance, Science, and Technology 
James L.] Buckley has just returned 
from a trip to Pakistan where he con- 
tinued with the discussions that I had 
launched with the Pakistan Foreign 
Minister in Washington several weeks 
ago and from all reports — and I haven't 
talked to Jim yet, but I will as soon as I 
get back to Washington — that was a 
very successful meeting which carried 
forward the discussions that I had with 
the Foreign Minister. 

There is one area, rather specific, of 
mutual concern. It was discussed where 
a consensus of views was arrived at; 
now we are also equally concerned about 
the proxy forces of the Soviet Union 
emanating from Hanoi, 200,000 of whom 
are now occupying the neighboring state 
of Kampuchea. We feel that it is fun- 
damentally important that these two 
issues not be submerged in the give-and- 
take of other international preoccupa- 
tions — for example, Poland — and that 
major diplomatic and political efforts be 
applied to the regimes concerned to 
effect the prompt and total withdrawal 
of forces from both of those countries 
and to permit the people of those coun- 
tries to determine their own future, free 
of external coercion. 

Q. Can you outline in a little more 
detail what you mean by the major 
diplomatic and political efforts? 

A. As you know there are — this will 
be a topic for example at the ASEAN 
meeting; the situation in Afghanistan 
but more importantly even in Kampu- 
chea. As you know the U.S. Secretary 
General is sponsoring a meeting on this 
subject in the fall. A number of states 
have already agreed to participate in it. 
As you know Hanoi has recently at- 
tempted to deflect this international 
movement by attempting to convene a 
regional conference which both the Peo- 
ple's Republic of China and ourselves 
consider to be no more than a ploy. 

Q. Was there any agreement on 
helping to establish a united front, or 
united anti-Vietnamese front, in Kam- 
puchea by the United States and 

A. I think we have some differences 
of nuance on that issue, but we are 
essentially of one mind as a united front 
or a front that would be representative 
of the wishes and the aspirations of the 
Khmer people be formed and that free 
elections determine the ultimate out- 
come of the final regime there, and in no 
way could the current puppet regime 
established by Hanoi be representative 
of a popular government. 

Q. Was there any discussion of the 
financing of Chinese military pur- 
chases in the United States or loans or 
soft finances? 

A. No, but you'll recall when Vice 
President Mondale — I believe 1979 there 
was reference made to a $2 billion inter- 
national loan which is still under active 
consideration and which I hope will be 
ultimately approved. There are some re- 
maining technical difficulties with 
respect to the U.S. contribution to the 
international — what we call the Bretton 
Woods instrument. 

Q. You mentioned political and 
diplomatic pressure being put on 
Hanoi and Kampuchea. Are you and 
the Chinese ready to do anything more 
than simply political and diplomatic 
pressure that has proved to be ab- 
solutely useless in the case? 

A. I think there are a number of ad- 
ditional steps that can be considered and 
that have been undertaken; for example, 
the United States has been actively 
engaged in a very high level of economic 
support for the refugees. There are 
other activities which one can con- 
template in the future. I don't mean to 

nnct 1Q«1 


The Secretary 

suggest there were not any active 
discussions of that here. There was not 
nor are we contemplating what I think 
your question is driving toward and if it 
were, I wouldn't say it. 

Q. Is it correct to say from what 
you said about removing the munitions 
list controls that the United States 
has agreed in principle to sell arms to 
China but that the details of what it 
will sell will be determined on a case- 
by-case basis? Is that the upshot of it? 

A. Yes, but you know that's not 
that dramatic a change in the context of 
the past, and in the past we did make 
available certain dual-capable 
systems — aircraft and what have you, 
trucks and other things. Now we have 
agreed to consider a much broader 
range of requests on a case-by-case 
basis, and, as I say, we would anticipate 
that that would evolve in a steady 
measured way. 

Q. This would include not just 
equipment but actual arms? 

A. It might. It might indeed, and 
such requests would be considered. 

Q. At who's initiative is this being 
done — considering arms on a case-by- 
case basis? Did you come here propos- 
ing this to the Chinese or did they say 
they would like the United States to — 

A. No, no. I think you will recall we 
discussed this in Washington. This is a 
decision that has been approved by the 
President, recognizing, of course, that 
case-by-case issues will have to be coor- 
dinated with the appropriate Members 
of Congress. 

Q. In addition to talking about 
possible defense sales exchange, train- 
ing of members of the Chinese defense 
establishment in the United States or 
by U.S. military personnel or any 
other planned exchange? 

A. No, but that doesn't foreclose the 
possibility of this topic coming up in the 
future. Should the Chinese indicate that 
they would be interested, we would be 
willing to consider it. 



JUNE 17, 1981 4 

I want to express the great pleasure of 
Mrs. Haig and myself to be here in 
Manila for this ASEAN dialogue. My 
presence here, I think, confirms un- 
equivocally the great level of support 

that the United States has for this 
regional grouping and the importance 
the United States attaches to the 
bilateral relationships it maintains with 
each of the member nations of ASEAN. 

ASEAN has become an international 
symbol of the great accomplishments of 
peaceful cooperation here in Southeast 
Asia, and this dialogue here in Manila 
once again underlines its fundamental 
importance. During the next few days, I 
would hope to use my time here to in- 
dulge in consulations with the ASEAN 
member foreign ministers, with the 
other dialogue participants and 
observers, and to conduct these con- 
sultations in a range of focus that will 
include global issues, important regional 
security issues, and, of course, the equal- 
ly important bilateral relationships be- 
tween the United States and each of the 

In particular, I think, this con- 
ference will focus on the dangerous ac- 
tivities of Vietnam with the encourage- 
ment and with the support of the Soviet 
Union, and specifically the U.N. interna- 
tional conference scheduled for July 
which I hope to participate in myself. I 
will seek to enrich myself with the views 
of the foreign ministers of the ASEAN 
organization in preparation for that 

Finally, it is a wonderful pleasure 
for my wife Pat and I to return to 
Manila — to the Philippines, a nation 
with which the United States has en- 
joyed historic relationships, character- 
ized by mutual trust and friendship. I 
look forward, of course, to the honor 
and opportunity of visiting once again 
with President Marcos and also for the 
opportunity to hold discussions with this 
year's chairman of the dialogue, a distin- 
guished international leader who has 
become a legend in his own time. Gen. 
Romulo [Philippine Foreign Minister]. 

JUNE 19, 1981 5 

It is my privilege, on behalf of the 
distinguished representatives here, to 
respond, and I want you to know that 
our distinguished Foreign Minister of 
the Philippines is a very naughty man. I 
also want you to know that I'm going to 
keep my remarks very brief because I 
don't want to cut into his slumber time. 
As a matter of fact, "His Madame Kho- 
meini" told me that ASEAN had three 
golden rules for responses — that is a 
snappy beginning; rule two, get a 

snappy ending; and rule three, the m 
important of all, is keep the two as cl 
together as possible. 

But I'm going to tell you a story 
about generals, especially the worst 
kind — retired generals. You know, w 
I retired from NATO and went lookii 
for work in the American industrial 
scene, I was fingering through the w, 
ads and I found an ad that said: Brai 
transplants. And I read the number e 
I called this New York number and s 
enough a foreign-speaking medical e> 
pert got on and he said: "Yes, you ca 
the right number, I do brain trans- 
plants." And he said: "I'm glad you 
called today. I have a special this we< 
And I said: "What do you mean?" He 
said: "Well, I have an exbureaucrat's 
brain for $10,000." He said: "I have a 
retired foreign minister's brain — 
$15,000!" He said: "I have a retired 
defense minister's brain — $20,000." 
He said: "But I have a real special. I 
have a retired general's brain — $30,0 
I said: "My God, why is the general's 
brain so expensive?" He said: "It's sir 
pie, it's like brand new — it's never be 
used before." 

I can assure you that Gen. Romu 
brain is like brand new, and he has 
proved it time after time during this 
conference. Indeed, I think I'm the tl 
consecutive Secretary of State from I 
United States to participate in the 
dialogue. And I know my predecesso 
and myself leave the experience with 
great sense of admiration and awe fc i 
the dynamic character of this ASEAi 
association spawned clearly from the 
initiative of nations in the region 
itself — spawned out of a sense of pui 
pose and dedication, which has enabli 
it, in its short life, to overcome the d 
ferences of background, customs, anc 
perspective; to develop a unity of pur 
pose and action which is unique, peril 
in all the world. 

Our discussions over this period 
have focused first and foremost, of 
course, on the development and well- 
being of the peoples of the region— c 
mercial, trade, and, to some degree ii 
directly, security. And, indeed, the fit 
ble character of this association has 
enabled it to shift that focus when 
necessary to immediate threats to the 
well-being and security of the region, 
it has done with respect to the interv 
tions in Kampuchea and the concertei 
effort to deal effectively with that in- 

But I think one thing which im- 
pressed me more than anything else i 
my participation in the dialogue — anc 
there are many things to be impresse 



ripnartmpnt nf Staff 

The Secretary 

t — the skill and great dedication of 
dreign ministers of the member five 
rnments — but perhaps more impor- 
ly, there was a common thread, and 
common thread was interest in the 
are of the common man in the 
on. Perhaps the words of that great 
world leader— Winston Churchill— 
iciated some four decades ago, best 
ure the essence of the challenge fac- 
all free men today. And it was the 
ds that suggested that this is the age 
le common man, that unfortunately, 
rchill stated: "It is this age that has 
lessed more common men destroy 
e common men with greater efficien- 
han at any other five centuries in the 
ory of mankind." 

And so it is the purpose of ASEAN, 
le who participate in the dialogue of 
association, to dedicate ourselves to 
good and the welfare of the common 
of all of our nations and to dedicate 
rselves to the proposition that our 
rs, our concerted efforts, our com- 
lality of purpose in thought and ac- 
would be to insure that we do not 
e a more frightened legacy in this 
lear age to our children and their 
dren. And that is the purpose of our 
, and it is in that spirit that I would 
to ask all here assembled to join me 
toast, first to the Philippine nation 
the Philippine people who have 
le our stay here this week so en- 
ible and so productive in substantive 
ns; to our host, the distinguished 
eign Minister of the Philippines and 
wife, Gen. Romulo and Mrs. Romulo; 
his dynamic and admirable ASEAN 
Delation and all members of the 
ogue; and, above all, to the good of 
imon free men everywhere — to the 
imon man. 

NE 20, 1981 

EAN is a unique organization — 
nging together five great nations, 
:h having achieved a different state of 
^elopment. This rich diversity is but 
3 example of why categories such as 
i "Third World" are misleading as a 
ide to policy. The U.S. approach 
vard the developing world seeks to be 
xible, recognizing both regional and 
tional differences. And yet, as with 
y policy, we are guided by principles 
i beliefs which provide the overall 
ection for our policy. 

I would like to discuss two broad 
aspects of our policy and how these two 
principles help shape our relations with 

First, the United States remains 
deeply committed to and concerned with 
the development process. We under- 
stand that historical change may be 
desirable as it is inevitable, and we in 
the industrialized free market economies 
believe that we have something to offer 
to this process of historical change. We 
see a shift occurring — away from the 
Soviet Union, which offers only arms, a 
pervasive presence, and, in areas of 
strategic interest, a client-state relation- 
ship. We find that the Soviets are most 
welcome where there is conflict, and we 
know, as do you, that development and 
national growth are the first victims of 
conflict. On the other hand, the free 
market model offers trade, credits, 
technology, medicine, and the political 
buildingblocks of modern society. And 
its adoption brings participation in an in- 
ternational marketplace where perfor- 
mance determines rewards. 

However, this growing momentum 
toward the free market system and 
away from the Soviet Union can only 
flourish in an environment of peace and 

security. And this is the second aspect 
of our policy — that security and develop- 
ment are intimately related and that we 
are equally committed to both. The 
economic and political growth that ac- 
company the development process can- 
not occur in an environment character- 
ized by violence, bloodshed, and so-called 
wars of national liberation. Because we 
are concerned with development and 
because we have seen so much progress, 
we cannot sit idly by and permit the 
Soviet Union and its proxies actively to 
undermine and threaten the prospects 
for development. The United States, 
under President Reagan, is determined 
to challenge blatant illegal Soviet in- 
terventionism wherever it occurs. 
Because these actions by the Soviets or 
their proxies remain the greatest threat 
to international peace, they are 
simultaneously the greatest obstacle to 
the development of free societies. And in 
this very region, the threat to the prog- 
ress of free societies grows increasingly 

For the people of Vietnam, Laos, 
and Kampuchea, the past 6 years have 
meant no progress but stark tragedy 
and misery. The Communist rulers of a 
supposedly unified Vietnam have failed 

New Initiatives on 
Afghanistan and Kumpuchea 

JUNE 30, 1981 1 

I wish to underline the profound impor- 
tance and promise of two new 
diplomatic initiatives. Today the Euro- 
pean Community announced a fresh at- 
tempt to open the way to a political solu- 
tion of the problem of Afghanistan- 
proposing a major international con- 
ference for this fall. On July 13th, a 
U.N. conference opens in New York to 
try to resolve the problem of Kam- 

These two issues are at the very 
heart of the increase in international 
tension in recent years. The combination 
of Vietnam's invasion of Kampuchea in 
1978 and the Soviet Union's invasion of 
Afghanistan in 1979 created a strong 
reaction on the part of the vast majority 
of members of the United Nations. The 
continuing occupation and conflict in 
these countries represent a major threat 
to security in key regions. The vast 

number of refugees reflects the terrible 
human costs. And both conflicts are a 
major barrier to the development of a 
more constructive East- West relation- 

Let there be no doubt about where 
we stand. The Afghan and Kampuchean 
people must control their own destiny. 
The purpose of negotiation is not to im- 
pose a solution from outside as the Viet- 
namese and Soviets have attempted to 
do by force of arms. Rather we seek to 
achieve the full withdrawal of Soviet and 
Vietnamese forces, to eliminate outside 
intervention, and to restore the 
nonaligned and neutral status of these 
two countries. 

This serves the genuine security in- 
terests of all parties, including the 
Soviet Union and Vietnam, and is the 
only way to assure the long-range 
stability of these troubled regions. 

'Read to news correspondents on the 
Secretary's behalf by Department spokesman 
Dean Fischer. ■ 

jgust 1981 


The Secretary 

totally to build a society which answers 
the needs of the Vietnamese people, be 
they north or south. Instead of peaceful 
reconstruction, the Hanoi government 
has chosen to focus its efforts on 
military adventure and the imposition of 
a thinly disguised vassalage upon Viet- 
nam's neighbor states. 

Equally unwelcome, there has been 
the intrusion into the region of a Soviet 
military presence in the form of opera- 
tion facilities at Cam Ranh Bay and 
elsewhere in Vietnam and increased 
military activity in the waters and air 
space of the Western Pacific and 
Southeast Asia. Fortunately, however, 
heightened regional concern and 
vigilance have prevented the Soviets 
from translating this temporary 
strategic gain into lasting political ad- 

U.S. recognition of the stark con- 
trasts in the region — the prospects for 
peaceful development and the threat to 
that development — is what shapes our 
policy toward ASEAN. 

U.S. policy rests on three com- 

• Our commitment to economic 
development and a commerce of mutual 

• Our commitment to promote fruit- 
ful bilateral relations with each of your 
countries; and 

• Our commitment to consult on 
regional and global issues — to a genuine 
dialogue between equals on matters of 
common political concern. 

Concerning economic development, 
one cannot but be impressed by the 
remarkable growth rates of the ASEAN 
economies over the last decade, averag- 
ing over 10% per year. Trade between 
the United States and ASEAN has in- 
creased rapidly, reaching a record of $21 
billion in 1980. ASEAN is now 
America's fifth largest trading partner, 
and all indications point to 1981 being 
another banner year for commerce be- 
tween our two regions. 

Our successful economic dialogue 
with ASEAN governments will continue 
with the next meeting of senior 
economic officials scheduled for October 
in Washington. 

In addition, the ASEAN-U.S. 
Business Council plays an active, con- 
structive part in our growing economic 
relationships. The council is sponsoring 
joint meetings between ASEAN and 
U.S. banking and automotive industry 
leaders to seek new ways for greater 
mutual support and cooperation. These 

activities fit perfectly into our intention 
to place greater emphasis upon the role 
of private enterprise in international 
development. We expect this part of our 
relationship to grow in breadth and 

With regard to our second commit- 
ment, I would underscore the excellent 
bilateral relations which the United 
States enjoys with each of your coun- 

With two members of 
ASEAN— Thailand and the Philip- 
pines — the United States has a mutual 
security relationship. With regard 
specifically to Thailand, the United 
States intends to honor its obligations 
under the Manila pact. Likewise we will 
carry out the letter and the spirit of our 
commitments to the Philippines under 
our Mutual Defense Treaty. 

In these countries and elsewhere in 
the region the United States provides 
substantial bilateral economic and securi- 
ty assistance programs. We intend to 
maintain these programs and to improve 
their effectiveness. Where our resources 
permit, we will expand them to meet the 
needs of our ASEAN friends. 

Let there be no doubt that the 
United States will maintain and 
strengthen its own military capability in 
the Pacific and Asia as a contribution to 
the security of the area in the face of 
the Soviet military buildup. 

The Indochinese refugee tragedy 
continues to evoke our common concern 
and to demand our concerted action. 
The world commends the courageous 
and constructive policies of first asylum. 
The thrust of our own refugee program 
is clear: to seek to reduce the burden of 
refugee camp populations through 
prompt resettlement of large numbers of 
refugees in the United States and in 
other resettlement countries. We also 
believe that the time has come for a 
more concerted effort to deal with this 
longstanding and anguishing human 
problem at its source. In this connection, 
the United States has appointed a 
special commission which will be visiting 
Southeast Asia in July to consult with 
you on all aspects of this problem. 

Finally U.S. bilateral relations with 
each one of the five ASEAN countries 
contain a mutual trust and reciprocal 
good will that exist independently from 
our relations with ASEAN itself yet in- 
evitably strengthen our posture toward 
your association. 

With regard to our third commit- 
ment, the American dialogue and con- 
sultations with ASEAN have developed 
in a way unforeseen in 1975. Vietnam's 

invasion and continuing occupation of 
Kampuchea have provided the catalyst 
for a new range of consultations which 
extend to the United States, other clos 
friends in Asia and Europe, and to the 
nonaligned world which focus on mean 
to oppose Soviet-supported Vietnames< 
aggression in Kampuchea. 

Today the greatest threats to the ii 
terests, prosperity, and well-being of tl 
peoples of Southeast Asia are the 
policies of Vietnam. We deeply regret 
that Hanoi has been unwilling to conve' 
its military machine into more produc- 
tive endeavors. While ASEAN and its 
friends would welcome a more construe 
tive path, Hanoi's intrasigence stands i 
the way, perverts the aspirations of its- 
people, and generates instability in the 

The United States remains firmly ( 
the side of those who oppose the Viet- 
namese occupation of Kampuchea. Our 
support is durable. We regard the U.NI 
General Assembly resolution on Kam- 
puchea, sponsored by ASEAN, to be 
both just and the best basis for a con- 
structive settlement of the Kampuchea 
issue. We are ready to work with all th 
parties to develop such a constructive 
alternative, which builds peace and 
stability on the basis of sovereignty ani 
respect for the independence of all the 
nations of the region — not on the tram 
pled sovereignty of other nations. The 
development of our policies will also be 
guided by the recognition that the situ: < 
tion in Kampuchea affects most directl 
the interests of Thailand as the front- 
line ASEAN state. 

The United States also strongly en 
dorses the convening of an internation; 
conference to deal with the Kampuche; 
issue. I intend to personally participate 
We urge all the parties, including Viet- 
nam, to join the dialogue which can 
bring general progress to Southeast 
Asia. Only Vietnam can end its isolatio 
and attendance at the international cor 
ference could signal Hanoi's interest to 
do so. 

There is one additional point which 
must emphasize: The United States wil 
not normalize relations with a Vietnam 
that occupies Kampuchea and remains 
source of trouble to the entire region. 
We will continue to question seriously 
any economic assistance to Viet- 
nam—whatever the source — so long as 
Vietnam continues to squander its 
scarce resources for aggressive pur- 

Our dialogue in hospitable Manila 
this week demonstrated once again tha 
equal and sovereign nations can work 
together to achieve an international cor 
sensus based on established and proved 


Department of State Bulleti 

The Secretary 

is of international behavior. We 
, through this dialogue, harmonized 
ring perspectives and backgrounds 
way which will contribute to con- 
id action. Time and time again corn- 
opposition to aggression has suc- 
ed in reversing its course. Be 
red that the United States will con- 
i to actively participate in your ef- 
to achieve this vital goal. We look 
to our discussions with ASEAN as 
nost promising framework for 
;ving a productive future for 
heast Asia. 


IE 20, 1981 6 

re there any reservations among 
of the delegations that a rearmed 
la might also pose an eventual 
at to the peace and security of 
theast Asia? 

I Secretary Haig. There is a great 
ipatibility among generals, always. I 
k the question is somewhat irrele- 
; in the context in which it was 
id, not the topic. Clearly some por- 

of our dialogue was focused on the 
•nt visit of the U.S. delegation to the 
pie's Republic of China, to include 
•ific reference to the fact that there 

been no decision on the sale of arms 
;hina but rather there had been a 
sion — an internal decision in the 
. bureaucracy — to change the 
:gory in which we had held the Peo- 
5 Republic of China both in the con- 
: of potential arms sales and in the 
text of dual use of technology 
isfer, in the commercial sector. 
The point was made that we intend 
>roceed on this issue based on re- 
sts we may or may not receive from 

People's Republic of China, on a 
e-by-case basis with consultations 
h our allies and those whom we feel 
aid have a particular interest in the 
lie, as well as with the American Con- 
ss. So if someone is going to ask the 
ft question, did you consult before 
l made an internal decision in the 
3. Government to change the category 
which you are carrying the People's 
public of China, the answer is no. 
d, indeed, that is what the answer 
mid be. If there is to be a decision in 
i future for such a sale, we will con- 
ct the necessary consultation, and our 
5EAN friends were so informed, as 
ire our dialogue partners. I hope I 
ve answered your question in a way 
it gets this nettlesome question in bet- 
• focus. 

Foreign Minister Romulo. I have 
been asked many times, as I entered this 
room, by several newspapermen about 
this arms sale. I must say that we have 
not taken up this question. Nobody took 
it up in the dialogue nor in the ASEAN 
foreign ministers' meeting. We did not 
discuss it at all. I am saying this because 
I do not want to be bothered when I go 

Q. I learned here in Manila that 
before you left for Beijing, the 
Australian and Japanese Governments 
were made aware as to what kind of 
subject you would discuss there. In 
the context of your global strategy 
policy, what grade do you give to your 
relations with the ASEAN? 

If I may address my question at 
the same time to Minister Rithaud- 
deen. What kind of hopes do we have 
now after your dialogue with 
Secretary Haig on the question of the 
sixth ITA [International Tin Agree- 
ment] which is going on in Geneva? 

Secretary Haig. First, I do not 
make it a habit of publicly revealing 
diplomatic dialogues with one country or 
another, but I don't believe there were 
any particular surprises with respect to 
those nations with which we have con- 
ducted the dialogue traditionally on our 
visit to Beijing. I think in the category 
of where we put ASEAN, I don't know 
whether you want a Kissinger-like 
grade, in which case it would be a plus. I 
do want to emphasize that, as I pointed 
out in my official statement this after- 
noon in our U.S. -ASEAN dialogue, we 
consider it to be an extremely important 
relationship which the United States has 
with ASEAN, and we think the 
dynamics of the region are such that it 
is becoming more— not less— important 
than it was at the time of its original 
conception, as important as it was then. 
And that is the way we view it in 

Foreign Minister Rithauddeen. I 

did bring up this matter in the dialogue 
with the U.S. delegation, with Secretary 
Haig, the importance, emphasizing the 
need for the conclusion of the tin agree- 
ment which is now underway in Geneva. 
And have impressed that the participa- 
tion of all the consumers, of all the pro- 
ducers, in the sixth tin agreement will 
be beneficial to all of us. The coopera- 
tion among the consumers and the pro- 
ducers as reflected in the fifth tin agree- 
ment should be continued in the sixth tin 
agreement. And I have asked Secretary 
of State Haig to bring this back to his 

colleagues so that by the 26th of this 
month we will be able to conclude the 
sixth tin agreement. I have urged upon 
him, I have exhorted upon him, I have 
told him that he should prevail upon his 
colleagues to do so when he goes back to 

Q. According to page 5, I am get- 
ting the impression that you seem to 
think that the military gains the 
Soviet Union has made are only tem- 
porary, because you speak of tem- 
porary gains. Would you please 
elaborate on what you mean by only 
temporary gains, thinking of the 
facilities they are building up in Viet- 
nam, Kampuchea, and Laos? 

You also say we cannot sit idly by 
and permit the Soviet Union and its 
proxies actively to undermine and 
threaten the prospect for development. 
What do you mean by undermining 
and threatening, and what actions 
would you take when you feel the 
Soviet Union is undermining and 
threatening, plus what will you do 
when the Reagan Administration is 
determined to challenge blatant, il- 
legal Soviet interventionism? What 
kind of determination is that? Is that 
military determination or how shall 
we understand that? 

Secretary Haig. I think any objec- 
tive assessment of the involvement of in- 
vasion forces, whether it would be in 
Kampuchea or in Afghanistan, today is 
that anticipated success which was prob- 
ably the product of the weight of the in- 
tervention forces— in the case of Kam- 
puchea some 200,000 North Vietnamese 
regulars and in the case of Afghanistan 
somewhere in the neighborhood of 
80,000 regular Soviet forces. That initial 
momentum has stalled, and the pros- 
pects for a sucessful future outcome re- 
main in serious doubt. 

Now with respect to the undermin- 
ing action of Soviet agressiveness, there 
may have been some skepticism in your 
question as to whether or not there is 
such aggressiveness, and I could only 
ask you to reflect back on global events 
since the Cuban proxy intervention in 
Angola in 1976, followed by the in- 
tervention in Ethiopia, the creation of a 
puppet state in Southern Yemen by in- 
tervention, the effort to overthrow the 
status quo in northern Yemen, the first 
phase of Afghanistan in which a puppet 
regime was established by the Soviet 
Union internally, and the second phase 
which involved unprecedented interven- 
tion by Soviet forces. The kind of ac- 
tivity we are witnessing today in the 
Western Hemisphere which is spawned 

igust 1981 


The Secretary 

by direct Cuban involvement through 
the provision of huge amounts of arm- 
aments, advice, and some command and 
control and direction of insurgent 
movements in El Salvador. All of these 
have set a pattern that would be hard 
for the objective observer to deny, pos- 
ing a threat to international peace and 

The point that I made and a point 
that has been made consistently by 
President Reagan and those who are in 
his Administration is that the time has 
come to make it clear to the Soviet 
Union and its proxies that this is unac- 
ceptable international behavior, and if 
they hope to participate as full-fledged 
members of a healthy, viable interna- 
tional community, it is important that 
restraint and reciprocity characterize the 
relationships between East and West. 
One could make the case that it has not 
done so in recent months and years. 

I don't make it a habit of suggesting 
how we would deal with that issue, but 
let me emphasize the fact that recourse 
to military action is not a normal or an- 
ticipated approach to this problem, 
which I feel can be handled effectively 
through other demographic aspects of 
Western capability. 

Q. My first question I don't think 
was answered because you referred to 
Cam Ranh Bay and facilities. That's 
what I mean, and if you consider that 
this is temporary, I would like to ask 
you what you are going to do about 
that it will be temporary. 

Secretary Haig. I apologize. I did 
not hear your question and clearly did 
not answer it but I used it as a good 
vehicle to answer what I wanted to say 
anyway. I think we all watch with con- 
siderable and growing concern the relin- 
quishment of Vietnamese territory to 
the interest of the Soviet Union by the 
current leadership in Hanoi today, 
despite the frequent assurances to all of 
us that this would not happen. The only 
answer I can have is the very answer of 
this conference, and that is if we are 
dedicated in ASEAN— and those in- 
volved in the dialogue — and I saw an 
unusual degree of unity with respect to 
this question — to make it clear to Hanoi 
by a host of actions — political, economic, 
and diplomatic — that they will be an 
isolated member of the international 
family of nations if they continue to per- 
sist in pursuing policies not only in Kam- 
puchea but elsewhere which unsettle the 
regional stability that is so important to 
economic progress and peace. 

Q. You were quoted as saying that 
there's a new America which will lead 
and show, if necessary, those en- 
dangered on the frontlines. What does 
this mean? Does it mean that America 
is again willing to go to war? In Asia? 
Or is it just empty talk? About 
China, the reclassification of the 
status of China, does it mean that the 
embargo on U.S. arms sales in China 
has been lifted or will be lifted? 

Secretary Haig. I think to suggest 
that the message that we are attempting 
to bring forward during my visit, and 
other public pronouncements that the 
United States is going to participate in 
this region of the world, is going to con- 
tinue and in many respects reinvigorate 
its posture in a role history has placed 
on our shoulders. That is one way to be 
sure that threatened states in this 
region, which share our values and our 
aspirations for a peaceful world or that 
economic development and progress is 
the objective, can feel that they have an 
active partner in Washington, and that I 
would reiterate that is so. I think the 
alternative of war or peace, as such a 
question suggested, really are irrelevant 
and counter to the concept that I have 
put forward. It is where uncertainty 
about Western resolve and willingness 
to pursue their vital interests develop in 
reality or perception that the miscalcula- 
tions that lead to conflict are favored 
and, indeed history shows, occur. I 
would hope that what we are espousing 
is a policy which seeks to improve the 
prospects for world peace and stability 
and economic development in the area. 

The second part of your question is 
we have not had an arms embargo, as 
such, on China. We have carried the 
People's Republic of China in a category 
which tended to lump it with the Soviet 
Union in our internal bureaucratic 
system. We've now modified that 
category to put them in a category 
similar perhaps to that of Yugoslavia — a 
friendly, nonaligned state. We have not 
in that process offered, suggested, 
urged, or promoted arms sales nor do 
we intend to. We are willing to listen if 
the Chinese Government comes and 
makes a request. We will then assess it 
on its own merits, very carefully. We 
will consult with our friends, and we will 
consult with the American Congress 
which has an important role to make in 
American arms sales. I would anticipate 
this will be a very slow, revolutionary, 
carefully orchestrated process, and we 
may, indeed, never be faced with the 
question in the first place because I did 
• not sense while in the People's Republic 

of China an appetite for U.S. arms. 
After all, the European markets have 
been open to China for a number of 
years, and they have not been visited 
with great regularity and certainly not 
with a large measure of armaments pui 

Q. Judging from what you said 
about your posture in this part of the 
world and other areas of the world 
against the Soviet Union, you give mt 
the impression that you are still talk- 
ing with the Soviet Union, or is 
detente really dead? 

Secretary Haig. Of course, we are 
conducting discussions with the Soviet 
Union. I have met with the Soviet Am- 
bassador in Washington on more than 
half a dozen occasions over the last 4 
months. Our deputy chief of mission in 
Moscow has been engaged in intensive 
dialogue with the host government in 
Moscow. I don't mean to suggest by th; 
that that dialogue contributes to the 
kind of dialogue that the Soviet Union 
would be pleased with. We are clearly 
seeking as a first priority to get heavilj 
engaged in arms control discussions — I 
will discuss this with Foreign Minister 
Gromyko in New York in September. 
Following that period formal negotia- 
tions will begin, and I anticipate, shortl 

With respect to the broader questic 
of SALT, we are not prepared at this 
point to conduct such discussions 
because we are reviewing the entire ap 
proach to strategic arms control talks, 
was clear that SALT II was inadequate 
failed to garner the necessary support 
from the American Congress and Senai 
to permit its ratification. We do not 
want to have a repeat of that situation. 
Beyond that we talked about linkage ar 
that is the clear interrelationship of 
functional areas of dialogue between 
ourselves and the Soviet Union — 
whether it be arms control, credit 
transfer, trade — will be carefully 
measured against overall international 
Soviet behavior, and that will be appliec 

Are we in favor of talks, negotia- 
tions — if you want to call it detente — 
of course we are. We believe that it is 
absolutely essential to maintain the 
dialogue with the leadership in Moscow. 
We intend to pursue it. We have been 
pursuing it. We also expect that it woul 
be conducted against the background of 
greater restraint in Soviet worldwide ac 
tivity and a degree of greater reciprocit 
than we have witnessed in the recent 


Department of State Bulletir 

The Secretary 

;. In view of the dangers that you 
said in all your public statements 

do you foresee in the near future 
this grouping — these five member 
tries of ASEAN — should go into 

sort of a military grouping, if 
mstances dictate it? 

Secretary Haig. Not at all. I don't 
it is for the United States to have 
iv on this subject. I think ASEAN 
pawned at the initiative of the 
nal nations. It has flourished and 
oped under their initiative and 
igh their concerted action. It is 
itially political, economic, with clear 
ity overtones. But the decisions of 
ive member nations of ASEAN with 
set to their defense capabilities is 
s alone to make, and we would not 
lme to intervene in that process. 

. There is danger that the 
etary has sounded and do you 
i this aggrupation [sic] will evolve 
a military grouping? 

Foreign Minister Romulo. We 

always said and we underscore 
to you right now, to the mass 
a. The ASEAN does not intend to 
military alliance. We do not intend 
ive any military commitments. We 
ve that in the case of Kampuchea, 
'ant to support the people of Kam- 
ea to have self-determination and to 
)le to express their views freely 
Dut 200,000 troops breathing on 

necks, without any military sup- 
from us. We want that to be very 
'. ASEAN is not and will not be a 
ary alliance. 

^. You now have the advantage of 
ng had talks with both ASEAN 
the People's Republic of China on 
subject of Kampuchea when you 
assed these two groups. Did you 
any differences in their approach? 
if so, what were they? And in 
vering your question, could you 
•ess yourself to the proposition 
n expressed that China is more 
:erned perhaps with bleeding Viet- 
i through Kampuchea than achiev- 
a quick peace in the region? 

Secretary Haig. First let me say 
the interrelationship between my 
; here for the ASEAN dialogue and 
earlier visit to Beijing is circumstan- 
rather than one designed to reflect 
nterrelationship between those two 
s. I don't make it a habit, of course, 
ublicly detailing discussions I've had 
rivate sessions, either here in 

ASEAN or in Beijing. I would expect 
there would be a number of differences 
between two so different and diversive 
sets of interests. I didn't find any excep- 
tions to that; there were some dif- 
ferences. I would also say that I found 
in Beijing a sharp degree of concern 
about the presence of North Vietnam's 
troops in Kampuchea, and they sug- 
gested a level of support for the interna- 
tional conference which is designed to 
effect the withdrawal of those troops. In 
a broad sense I think that suggests some 
compatibility with — or at least the U.S. 
view on what I've learned here today 
and yesterday— the ASEAN view. 

I think you would be better served 
perhaps to ask one of the ASEAN 
members the question you've asked me. 
It would neither be appropriate for me 
to tick off the score card on that ques- 
tion. The last part of your question is 
not something that I would be comfor- 
table with, if that were, indeed, a 

Q. In your opening remarks, you 
emphasized one point that United 
States will not normalize relations 
with a Vietnam that occupies Kam- 
puchea and remains a source of trou- 
ble to the entire region and will con- 
tinue to question security and 
economic assistance to Vietnam from 
whatever source. Considering the tone 
of the joint communique of the 
ASEAN ministers, do you think that 
this statement in the ASEAN venue 
and the ASEAN region helps the ef- 
fort of ASEAN to seek and reach a 
comprehensive political solution on 
the Kampuchean problem? What is 
your argument there? 

Secretary Haig. I don't know 
whether it did or it did not, and I don't 
see that my intervention here at 
ASEAN was designed to develop 
unanimity necessarily. I think one of the 
great values of ASEAN and the par- 
ticipation of dialogue states in the proc- 
ess is to bring the divergence of views 
forthrightly to the attention of the 
member governments. I did not discern 
the existence of serious divergence on 
this subject between the United States 
and ASEAN based on the dialogue con- 
ducted. So maybe you're head hunting. 
Now, that's very flippant, and I don't 
mean it to sound that flippant. Clearly 
the tone of the communique is very 
moderate with respect to Vietnam, and I 
think intentionally so. 

Q. The tone is conciliatory, and 
your statement is rather hard. 
Sometimes it turns Vietnam to be 

harder on you if you push it harder, 
and ASEAN tends to invite Vietnam 
to the table to negotiate. 

Secretary Haig. We joined that in- 
vitation. And as a matter of fact, in my 
comments this afternoon I urged Hanoi 
to sit down at the table as a first indica- 
tion of their willingness to find a 
politically negotiated solution which we 
strongly favor; that is not inconsistent 
with the position taken earlier in my 
remarks to the effect that while Viet- 
nam is involved in the squandering of its 
scarce resources — in supporting invasion 
forces in Kampuchea — the United States 
sees no practical value. In fact, we see 
just the opposite in permitting them to 
have their cake and eat it too. 

Q. How do you feel about the tone 
and tenor of Secretary Haig's 
statements and commitments today? 

Foriegn Minister Siddhi. I listened 
to Secretary Haig at the end of our 
meeting. I just showed my appreciation 
about his repeated pledge to keep com- 
mitments to Thailand on the Manila 
pact. What I feel about Secretary Haig's 
remarks is we are assuring Thailand's 
security as we are a front-line state. 

Foreign Minister Kusumaatmadja. 

Secretary Haig has made remarks on a 
number of subjects, so I don't know 
what you mean. But the general tenor of 
the remarks he made is reassuring. I'll 
take, for instance, the remarks or the 
answers he gave to the questions: Are 
you not engaged in an exchange of 
views or dialogue or whatever you call it 
with the Soviet Union? He clearly said 
that he has been; I mean over six times 
in the past 4 months or something. So 
this is a completely different thing from 
the image one gets from newspaper 

Q. Because we are from Thailand 
we are interested in that refugee 
question you referred to. When you 
mentioned about taking this problem 
right to the source, that means Viet- 
nam. How do you think you could do 

Secretary Haig. It is a very com- 
plex question. Clearly, we would seek 
through political and diplomatic ex- 
changes and economic levers to try to 
influence the nations which generate the 
source of these human tragedies, to 
ameliorate the conditions that brought 
them about; in one instance — in 
Afghanistan — we have open conflict. 
That means the best resolution to that is 

just 1981 


The Secretary 

to withdraw Soviet forces immediately 
and promptly from Afghanistan. More 
intensified pressure in that direction, I 
think, is in order, although all of the 
Western world, all of ASEAN, is united 
on the necessity to do that. 

In the case of Kampuchea, here 
again this is combat-related, conflict- 
related. So there again, the withdrawal 
and return to self-determination by the 
peoples of Kampuchea would clearly 
resolve that problem. 

So we get to the real heart of your 
question and that is Vietnam and the 
Vietnamese boat people who are really 
the consequences of the internal 
economic and living tragedies, which 
really have been aggravated somewhat 
and are related clearly to the diversion 
of resources and efforts in Kampuchea 
but also involve a number of other 
essential political reforms internally. We 
don't feel it is our role to tell a nation 
how to conduct itself internally but we 
do have a right, when their actions bring 
hardships to us, to bring it forcefully to 
their attention politically, diplomatically, 
and, if necessary, economically. 

Q. As the United States develops a 
more substantial relationship with the 
People's Republic of China, do you 
feel that it should seek from Beijing 
certain assurances — firm assur- 
ances—that China will not again 
create trouble for non-Communist 
countries in Southeast Asia; for exam- 
ple, by prevailing upon Beijing to cut 
its links— its party-to-party 
links — with Communist-led insurgent 
movements in Southeast Asia? 

Foreign Minister Kusumaatmadja. 

We have made known our view of the 
subject you mentioned to the Chinese 
but not through the United States. 
Through our friends — also directly 
because we prefer to deal directly — 
because there is some contact going on 
through the United Nations in New 
York, and they know our views and we 
have communicated to them, either 
through our friends or directly. But not 
through the United States. 

Foreign Minister Rithauddeen. 

First of all, I would like to say that we 
have made ourselves clear — Malaysia — 
with regard to party-to-party contact of 
our unhappiness to the Chinese on this, 
because it would hinder the further 
enhancement of our bilateral relations. 
But with regard to the question of 
relations between the United States and 
China, this is a matter for the United 
States and China to develop good rela- 
tions — we like to see good relations 

developed between one country and 
another country. I think this is what we 
like to see in the world today, that every 
country should have good relations with 
one another. I think we should en- 
courage it, particularly between the 
United States and China. But as far as 
relations between Malaysia and China, 
this is a matter that we must bring up 
bilaterally with China. We hope that 
China will see the need that good rela- 
tions exist between all countries in 
ASEAN, and we hope that good rela- 
tions will continue in the years to come. 

Q. Will the United States provide 
military assistance to the united Kam- 
puchean front? And if so, do you 
believe that the arms supplies to the 
united Kampuchean front, as well as 
the economic, political, and military 
pressures on Vietnam, will help in a 
certain way to solve the Kampuchean 

Secretary Haig. I know of no deci- 
sion nor do I know of any suggestion of 
a decision which would lead to the provi- 
sion of U.S. arms to the united front 
resistance movement in Kampuchea. So 
the answer to your question is no. It's 
been U.S. policy that we will provide 
and continue to provide humanitarian 
support to the tragic human conse- 
quences of this Vietnamese intervention, 
and we have continued to do that. We 
will lend our political support to the ef- 
forts of ASEAN with respect to that 
subject. As I have mentioned, I will par- 
ticipate in the U.N. conference on this 
topic with great enthusiasm and with 
the full level of the support that I can 
render to ASEAN in their efforts in the 
regional context to bring forcefully to 
Hanoi's attention the urgency of dealing 
with this question constructively. 

Q. Both Indonesia and Malaysia 
are notable pillars of nonaligrtment in 
this block. There are signs— very 
definite signs— that Vietnam and the 
Soviet Union and a number of other 
supporters will not participate in the 
meeting in New York. I wonder if you 
would comment on what you think the 
nonaligned movement then should be 
after the New York meetings, if the 
situation is not resolved there? 

Foreign Minister Rithauddeen. 

We are members — Malaysia, Indonesia, 
and Singapore — of the nonaligned move- 
ment. From what we can see the 
temperature of the resolution that we 
had last year — 35/6 — and I would say 
that a good preponderance of nonaligned 
members supports the resolution. I 

would reckon that from what I can 
see — from the last that we heard— 62 1 
countries have responded positively or I 
attending the international conference J 
on the 13th of July and this is not yet | 
the last figure. I would imagine more 
countries will participate, and these ai 
reflecting support on the issue of Kan 
puchea. There is a tremendous suppor 
from nonaligned countries. 

JUNE 21, 1981 7 

This is the first visit that I have had a 
opportunity to make to New Zealand, 
and I have been looking forward to it 
with great enthusiasm, both in the coi 
text of New Zealand-American bilater 
relationships, and in that context, I v« 
much look forward to seeing the inter 
Prime Minister as soon as I can. I am 
here, as you know, for the 30th ANZI 
meeting, and I think this durable 
trilateral relationship, which is design 
to integrate and coordinate foreign 
policies and security policies of the thi 
member states, has by its own durabil | 
confirmed its utility. I look forward 
while I'm here to discuss with the oth 
two governments global, regional, anc 
relative bilateral matters of mutual cc 
cern. Now we are here, the American 
delegation, first and foremost to listei | 
and to learn from the other two mem 
states of the region, whose sensitivity 
to, and feeling for, the realities of thi! 
vitally important region are much mo i 
finely tuned than our own, and so we 
look forward to learning while we are 

It's a great, great pleasure for tlw 
U.S. delegation and I know I speak oi 
behalf of all of them and my wife to b« 
here and we look forward to a very g 

JUNE 2, 1981 8 

It is a great honor to participate in su 
a distinguished gathering of friends, 
allies, and kinsmen. Although this is a« 
festive occasion, I must begin upon a 
note of sadness— New Zealand's very 
distinguished Brian Talboys has in- 
dicated his intention to retire. This is 
most regrettable, but I can tell him th 
when I retired I found my services mc 
in demand than I had expected. 


Department of State Bulle 

The Secretary 

n fact, you see before you one of 
rica's most popular speakers. The 
ia in the United States have been 
lendously impressed with my 
tery of the English language. For in- 
ce, there was an article just a short 
e ago in a Washington newspaper 
Haigspeak." The author pointed out 
my speeches, when read from the 
were excellent — articulate, well- 
nized, and thoughtful. But when I 
irted from the text — off-the- 
— my speech became inaudible to the 
an ear. Now there is a profound 
>n here, and I explained it to my 
ichwriter as I fired him. 
Last June Foreign Minister Talboys 
inded his fellow countrymen— and 
f us— that we live in a world 
inated by change and uncertainty. 
;," he said, "in the great battle of 
deal ideologies and principles that 
ie it, there is no doubt that New 
and's place is on the side of those 
share the belief in freedom and 
ocracy that New Zealanders 

Here are two themes that might be 
oted by us all: appreciation of the 
ities, the dangers, and the oppor- 
ties of this world and certainty that 
who believe in freedom and 
locracy must rally together to 
serve our principles. And I would 
Dose tonight that we add a third 
ne: the free association of like- 
ded peoples in the best guarantee of 
dom and democracy. Our participa- 
in ANZUS has taught us the value 
hese three themes and I would add a 
iment on each of them. 
Let there be no doubt that we con- 
it a dangerous international situa- 
.. The dangers, however, should not 
d us to the opportunities, especially 
opportunities that can be created 
)ugh our joint collaboration. Let us 
in with the brighter side for a 
nge. We can take some encourage- 
it from developments in the South 
■ific and Oceania. 
Democracy prevails in the South 
:ific. The assistance, advice, and par- 
pation of New Zealand and Australia 
'e been of vital importance to the new 
ntries in the region and their 
;anization— the South Pacific Forum. 
3 United States is also seeking to help 
continued peaceful development of 
islands. Finally, we are pleased to 
1 with Australia and New Zealand in 
isting the programs of the South 
cific Commission, a commission that 
; fostered economic development in 
island countries for over three 
:ades. And for more than four 

decades this area has been free of major 
conflict, a fact that has surely been 
perpetuated by the close consultations 
among us. 

Unlike the South Pacific, the situa- 
tion in Southeast Asia can only be 
described as dangerous. The cause of 
this danger is simple: Vietnam seeks 
control over the whole of Indochina and 
does so with the support of the Soviet 
Union. We have had important talks 
here and in Manila on this subject and 
the threat to the other countries of the 
region. But even in Southeast Asia, the 
free association of nations truly in- 
terested in peaceful progress is yielding 
important results. The five independent, 
non-Communist countries of ASEAN 
have cooperated successfully together 
for over a decade. They have developed 
a high degree of mutual tolerance, 
eliminating many of the traditional fric- 
tions that impeded even bilateral 
cooperation in the past. This tolerant 
reconciliation of differences — the spirit 
of ASEAN— has facilitated remarkable 
political, social, and economic progress. 

ASEAN does not function in a 
vacuum. Strong economic, educational, 
and technical assistance has been provid- 
ed to its five members by the ANZUS 
governments. Perhaps most importantly, 
ANZUS itself contributes to an interna- 
tional environment where promising ex- 
periments in cooperation can flourish. 
The United States, Australia, and New 
Zealand have consulted closely to insure 
the maximum effectiveness of their sup- 
port for ASEAN. These bilateral and 
collective relationships have undoubtedly 
bolstered the self-confidence and sta- 
bility of the members. 

These few remarks about the situa- 
tion in the Pacific and Southeast Asia 
can lead to only one conclusion: The 
dangers have not paralyzed us; we have 
worked together for our principles; and 
our free association has helped the prog- 
ress and stability of the region. 

Yet there is something more about 
ANZUS we may be inclined to overlook. 
An observer once described diplomacy 
as a talk, followed by a duel, followed by 
a pact. We have our pact; but we have 
never had a duel. This spirit of coopera- 
tion, this regard for the common benefit, 
makes ANZUS an uncommon associa- 
tion. Secure in our past accomplish- 
ments, let us rededicate ourselves to the 
security of our future accomplishments 

JUNE 23, 1981 

The 30th meeting of the ANZUS Council was 
held in Wellington on 22 and 23 June 1981. 
The Rt. Hon. B.E. Talboys, C.H. Minister of 
Foreign Affairs of New Zealand, the Rt. Hon. 
D.S. Thomson, Minister of Defence of New 
Zealand, the Hon. A.A. Street, Minister of 
Foreign Affairs of Australia, and the Hon. 
Alexander Haig, Secretary of State of the 
United States, represented their respective 

Opening the meeting, the Minister of 
Foreign Affairs of New Zealand noted that 
the previous meeting, scheduled to be held in 
New Zealand in mid-1980, had been held 
early in Washington following the Soviet in- 
vasion of Afghanistan. The heightening of in- 
ternational tension, he said, had enhanced the 
significance of the alliance and added to the 
importance of high-level consultations among 
the ANZUS partners and other allies on 
issues of international security. He stressed 
that this was a time for the ANZUS members 
to stand together. 

The Council members agreed that the 
Soviet invasion and continuing occupation of 
Afghanistan was a direct violation of the fun- 
damental principles governing international 
relations. The Soviet action remained totally 
unacceptable to the international community 
and constituted a serious threat to global and 
regional stability and to the independence of 
all states. The treaty partners agreed on the 
urgent need for the withdrawal of the Soviet 
forces and the achievement of an early 
political settlement in Afghanistan. The 
Council noted that the treaty partners had 
responded with firmness to the Soviet in- 
tervention. The Council also noted that the 
Soviet Union had been left in no doubt of the 
grave consequences for international peace 
and stability that would arise from any in- 
tervention in Poland. The Council members 
reaffirmed their belief that Poland should be 
left to settle its own affairs without outside 
intervention. The treaty partners agreed to 
continue to consult closely over their policy 
towards the Soviet Union. 

The Council members, acknowledging the 
obligation on each treaty partner to maintain 
and develop its individual and collective 
capacity to resist armed attack, reviewed 
military cooperation by the partners since the 
last Council meeting. They noted with 
satisfaction the close consultation that had 
occurred on defence policy initiatives to help 
meet the Soviet challenge. The Council noted 
the heavy requirements for safeguarding 
Western security interests in the Pacific and 
Indian Oceans and noted in this regard the 
increased naval deployments into the Indian 
Ocean region which had been made by the 
United States and Australia on an indepen- 
dent national basis following the Soviet inva- 
sion of Afghanistan. The United States Coun- 
cil member noted the benefit to United States 
and allied interests of B-52 surveillance of 
the Indian Ocean. Some B-52 aircraft con- 
ducting low-level navigation training missions 
over Australia were now staging through 

igust 1981 


The Secretary 

Darwin to carry out Indian Ocean 
surveillance missions. The Australian and 
New Zealand Council members reaffirmed 
their commitments to enhancing their 
defence cooperation activities in the South 
East Asian and South West Pacific regions. 
The Council expressed satisfaction with the 
continuing program of exchanges, exercises 
and visits between the treaty partners, in- 
cluding cooperation — such as the recent 
Beacon South maritime exercise — taking 
place bilaterally and multilaterally outside the 
treaty context. 

The Council members stressed their con- 
tinued firm commitment to the goal of arms 
limitation through negotiations which could 
lead to effective, balanced and verifiable 
agreements, but also noted that this could 
not be a substitute for the necessary efforts 
which the West had to undertake to redress 
the adverse trend in the military balance. 

The Council members emphasized the 
need to sustain efforts to prevent the further 
spread of nuclear weapons, and reaffirmed 
their commitment to strengthen the interna- 
tional non-proliferation regime. 

The treaty partners welcomed the con- 
tribution which the Association of South East 
Asian Nations (ASEAN) had made to the 
peace and stability of the region since its 
establishment and reaffirmed support for its 
efforts in this direction. They noted par- 
ticularly the impressive economic progress 
which had been made. They expressed their 
determination to continue to provide 
economic and technical assistance to the 
ASEAN member countries and agreed on the 
importance of maintaining close consultations 
with them on developments affecting the 
region. The treaty partners also welcomed 
the opportunities that had presented 
themselves for closer cooperation with the 
ASEAN member countries. 

The Council members reaffirmed their 
support for the United Nations General 
Assembly Resolution 35/6 on Kampuchea, 
and called for further efforts to be made 
towards its implementation. The members ex- 
pressed their appreciation for ASEAN's in- 
itiatives to attain a peaceful resolution of the 
situation in Kampuchea. They emphasised the 
need for an early political settlement reflect- 
ing the wishes of the Kampuchean people, 
which would result in a neutral, non-aligned 
Kampuchea which would not pose a threat to 
any of its neighbors. The Council members 
expressed their particular concern that any 
settlement should provide adequate 
guarantees of the security and territorial in- 
tegrity of Tliailand. To the end, they wel- 
comed the forthcoming international con- 
ference on Kampuchea and expressed the 
hope that all parties would attend. Members 
further agreed to continue essential 
humanitarian assistance to the Khmer people. 
The Council noted the contribution made by 
ASEAN member countries in providing first 
asylum and processing facilities for refugees 
fleeing Vietnam, Laos and Kampuchea. 

The Council noted with regret that in 
North Asia the Korean Peninsula remained 
an area of tension and armed confrontation. 
The Council welcomed the re-establishment of 

constitutional order to maintain its military 
commitments to the ROK [Republic of 
Korea]. The Council reaffirmed its support 
for the political integrity and international 
recognition of the Republic of Korea and 
called upon the Democratic People's Republic 
of Korea to take up the offer of direct 
dialogue with the Republic of Korea as the 
essential prerequisite to an easing of tension 
in the area. 

The Council welcomed statements by the 
Government of Japan that its development 
assistance to the Pacific region would be ex- 
panded. The treaty partners considered the 
Japanese could play an important part in the 
overall economic development and continued 
stability of the region. They noted that 
Japan's increased political role in the region 
contributed positively to the region's affairs 
and expressed understanding and support for 
the Japanese policy of improving its self- 
defence capability while not seeking a wider 
regional security role. 

The Council also welcomed the further 
improvement in China's relations with a 
number of countries in the region, and 
China's continued commitment to moderniza- 
tion and to a need for a peaceful environ- 

The Council members reviewed 
developments in the Middle East peace proc- 
ess and discussed the role of the proposed 
Sinai peacekeeping force. They expressed 
concern at the continuing high level of ten- 
sion and outbreaks of hostility in the region. 
They called for a determined effort on the 
part of all to move forward in a constructive 
search for a just and lasting peace. 

Reviewing developments in the South 
Pacific, Council members expressed satisfac- 
tion that the region remained overall an area 
of peace and stability. The Council members 
reiterated their commitment to continue to 
cooperate with the South Pacific countries in 
support of a common interest in a secure and 
peaceful environment in which those coun- 
tries could most effectively pursue their na- 
tional policies. They welcomed the accession 
to independence of Vanuatu and the continu- 
ing expansion of self-government in 

The Council members agreed that effec- 
tive regional institutions were important to 
the region's progress. Specifically, they 
acknowledged the importance of the South 
Pacific Forum as a focus for discussion 
amongst heads of government of major issues 
affecting the area, of the South Pacific 
Bureau for Economic Cooperation in foster- 
ing common approaches to economic issues 
and of the South Pacific Commission in help- 
ing promote social and economic development 
in the island countries. The Council welcomed 
the steps taken during the past year to afford 
additional island governments direct par- 
ticipation in the activities of both the Forum 
and the Commission. Recognising that 
despite the achievements of recent years, 
many of the Pacific island countries remained 
vulnerable because of fragile economies, the 
Council members agreed to encourage, where 
appropriate, public and private sector 
economic development through aid, trade and 

investment. In this regard, the Council 
members welcomed the coming into effect o 
the South Pacific Regional Trade and 
Economic Cooperation Agreement in Januai 
1981. The ANZUS partners reaffirmed their 
commitment to cooperate with the Govern- 
ments of the island states of the South 
Pacific in pursuing economic and social 

The Australian and New Zealand Counci 
members emphasised the importance of suc- 
cessfully completing the negotiations on the 
Law of the Sea treaty and expressed the 
hope that the United States would shortly b 
in a position to participate actively in the co 
eluding stages of the negotiating process. Tl" 
United States member noted the Australian 
and New Zealand views and undertook to 
consult closely with its friends and allies as 
determined its position. 

The treaty partners discussed the pros- 
pects for the world economy in general, inte 
national economic development issues and tl 
forthcoming Ottawa, Commonwealth and 
Mexico summit meetings. The Council agree 
that the energy situation remained serious 
and that many non-oil producing developing 
countries in particular continued to face 
severe economic problems. The foremost 
among these were the widening of their 
balance of payments deficits and accumula- 
tion of debt which threatened to curtail 
severely their essential social and economic 
development programs. The Council noted 
that it was in the interest of developed stati 
to address the economic development prob- 
lems of developing countries, and to seek tc 
ensure that they derived maximum benefit 
from participating in the international 
economic system. The maintenance of a 
cooperative and effective framework for th< 
conduct of international trade and monetar; 
affairs was also important. Council member 
acknowledged the need to ensure that the ii 
ternational financial institutions were able t 
make available adequate financial resources 
on appropriate terms to developing countrit 
They expressed their concern at the recent 
growth of protectionist pressures in many 
countries, and reaffirmed their commitment 
to the principles of free trade. 

The Council agreed to hold the next 
ANZUS Council meeting in Canberra in 19S 
at a date convenient to all members. 



JUNE 23, 1981 

Foreign Minister Talboys. It's been m 
privilege and my pleasure to have the 
Secretary of State, Mr. Haig, and the 
Minister of Foreign Affairs from 
Australia, Mr. Street, with us for this 
30th ANZUS Council meeting. 

Like other council meetings, this or 
has benefited immensely from the 
presence of the Secretary of State. It 
has not always been possible for the in- 


Department of State Bulletir 

The Secretary 

ual bearing the responsibilities of 
office to attend council meetings in 
part of the world. But I'm delighted 
Secretary of State Haig has been 
to come because his presence, of 
se, adds immensely to the value of 
liscussions. He can bring that wide 
view of the political and economic 
;, and I know that Mr. Street joins 
me in that appreciation. 
Squally, though, of course, do I 
ome Mr. Street on which is his sec- 
visit to New Zealand. Now that we 
completed the work of the council, 
1 just inform you that today we 
; discussing Pacific island develop- 
t, the Law of the Sea, prospects for 
Dttawa summit, and North-South 
;s. A communique has been issued, 
I hope that you have had time to 
a look at it, and you can direct 
questions to any one of the three of 

Q. Just how important is 
■tralia's participation in the Sinai 
Irekeeping force for American 
llility of that force? I ask you if you 
■confident that Australian reserva- 
js about participation can be over- 
le and are you confident that 
itralia will actually participate? 

Secretary Haig. With respect to the 
I part of your question, we are still 
i le process of formulating the com- 
Ition of the peacekeeping force in 
i lultation with a number of potential 
i.icipants. We have yet, as you know, 
i Dnclude the final agreement between 
pt and Israel on the force itself, 
ough we've made great progress, 

we are approaching the point where 

agreement can be concluded in the 
r near future. I say that with the 
•rvation that some unforeseen cond- 
ition doesn't arise. 
In that broad context we are, of 
~se, very anxious to have participa- 

in a very modest way from both 
tralia and New Zealand and to give 
laracter to the force itself that we 
ild hope would be achievable. But we 
e not felt that it was — we were at 
appropriate time to make a formal 
aest of the two nations to participate 
lough they have, as a result of our 
:ussions here, a clearer view of the 
pe of what we would be looking 
■ard them for, in the way of a con- 
ation, plus some additional observa- 
is of the importance of the 
cekeeping process itself and the over- 
timing desirability to continue with 
mentum in that process, which I 
lk is achievable in this area, and will 
achievable in the foreseeable future 

with respect to the autonomy talks 
themselves. So I think it would be 
premature to press for a — it's certainly 
inappropriate for me to make a forecast; 
there are two foreign ministers here 
who can do that better than can I, but it 
would be premature to do so in any 
event until we can get a little further 
clarification on the overall composition 
of the peacekeeping force. At this junc- 
ture, it goes without saying we would be 
very anxious to have participation from 
both Australia and New Zealand, 
recognizing the difficulties here. 

Q. There are reports in the New 
Zealand papers this morning that you 
disagree philosophically with the ap- 
proach taken by the United States 
toward Vietnam; that you feel 
isolating Vietnam and making it into 
an international pariah would only 
tend to push it further into Moscow's 
arms. Could you discuss this? 

Foreign Minister Talboys. The 

observation I would make is this: that 
what we are agreed upon is the need to 
find an early political solution to the 
problem. The continuation of the conflict 
has inherent in it the danger that the 
conflict could overflow into Thailand, 
and the continuation of the conflict 
necessarily means that Vietnam's 
dependence on the Soviet Union is likely 
to increase. What we are agreed upon is 
to support ASEAN in its search for a 
political solution; we will also be seeking 
to make our contribution to the interna- 
tional conference, which is to be called 
together on the 13th of July in New 
York, in the hope that through that con- 
ference we can speed the process of 
finding a political solution. 

Q. On this trip you have been 
sounding the anti-Soviet theme, and I 
wonder if you could take a retrospec- 
tive look on the three stops you have 
made so far and share with us your 
findings as to what extent you found a 
sympathetic ear on the anti-Soviet 
theme of the Reagan Administration 
here with the ANZUS council, 
ASEAN, and China. 

Secretary Haig. It's somewhat 
presumptuous of me to speak for the 
hosts in all three [inaudible] you've cited, 
but I think it goes without saying that 
there is a general consensus that the 
greatest threat to peace and stability in 
the area has been the growing aggres- 
siveness of, and encroachment of, the 
Soviet Union into the area, both directly 

and through proxy, and I did not find 
that as a matter of contention in any of 
the three sets of discussions that we 

On the other hand, I think it's vitally 
important that we do not view the ac- 
tivities, especially those in Manila and 
here in ANZUS, in the context of a brit- 
tle East-West preoccupation. We have 
viewed a broad range of objectives in 
these discussions both in ASEAN and in 
ANZUS and focused on the desirability 
of economic development, the desir- 
ability of creating a climate and con- 
tributing to the creation of a climate in 
which peace, stability, economic growth, 
and development in the interests of the 
free peoples of the area be enhanced. A 
very important aspect of that is the 
dangers to that process that are the 
result of Vietnamese activity in Kam- 
puchea, the extension of Soviet bases in 
Vietnam, and the increasing presence of 
Soviet naval and air forces in the region. 

Q. Can I ask Mr. Street and Mr. 
Talboys that following their discus- 
sions with the U.S. Secretary of State, 
what Australia's position is on the 
Sinai peacekeeping force now and 
what New Zealand's position is like? 

Foreign Minister Street. We were 
very interested to receive further 
clarification from the Secretary of State 
as to what he had in mind for the Sinai 
peacekeeping force, and I shall be 
reporting that back, of course, im- 
mediately for consideration in Australia. 
It's well known that we have been seek- 
ing further information that the 
Secretary of State mentioned as to the 
composition of the force — command 
structure and things of that kind. As he 
mentioned a minute ago, negotiations 
are still proceeding with the three coun- 
tries immediately concerned — the 
United States, Egypt, and Israel. On 
that latter point we are still awaiting the 
results of that. But certainly the further 
information that we have received here 
will be taken into consideration by 
Australia, and I'll be reporting on it im- 

Foreign Minister Talboys. I can 

add nothing to that. I mean, we are vir- 
tually in the same position, and we have 
benefited from the discussion we have 
had with the Secretary of State, and I 
shall certainly be reporting on those 
discussions to cabinet. 

Q. I wonder if you could comment 
on the New Zealand case for increased 
access for its exports to the United 
States as an essential prerequisite of 

gust 1981 


The Secretary 

being economically strong and, 
therefore, an effective ANZUS part- 
ner. What is the reaction of the 
United States to this proposition? 

Secretary Haig. We are, of course, 
acutely conscious of New Zealand's re- 
quirements for the American market. I 
do not foresee for the remainder of this 
year any change in the current levels, 
but this remains a matter of focus for 
the most intimate of consultations and 
discussions. We are going to continue 
that under that framework, recognizing 
that in the past there have been occa- 
sions where it's been less than produc- 
tive from the New Zealand point of 
view. But we have very, very broad 
discussions and detailed discussions on 
the multilateral aspects of trade in the 
agricultural— and particularly in the 
meat— area, and we are hopeful that we 
are going to be able to concert together 
to achieve further progress. 

Q. Referring to page 2 of your 
communique. You refer to the 
safeguards. [Inaudible] United States 
and Australia are already taking some 
unilateral action in that area. Would 
you see a place for increased New 
Zealand participation in that area, par- 
ticularly the Indian Ocean, bearing in 
mind we have troops in Singapore, of 

Secretary Haig. Frankly I think we 
do not anticipate that in the context of 
your question. We are very, very 
grateful for the contributions that New 
Zealand has made and continues to 
make in the southern Pacific— the 
maritime and the air and ground force 
contributions— and the presence of the 
battalion in Singapore. But no, the 
answer to your question would be that 
we did not address nor do we con- 
template addressing that aspect of the 

Q. The communique is rather 
sharp on Soviet intervention in 
Afghanistan and warns about Poland. 
But on Kampuchea it really doesn't 
even mention the Vietnam aggression 
there. Is that because you are trying 
to persuade them to come to the 
United Nations? 

Foreign Minister Talboys. No. 

There is agreement amongst us as far as 
our concern with the Vietnamese 
presence in Kampuchea, and as I said 
earlier what we seek to do is assist 
ASEAN in formulating a political solu- 
tion which will, we hope, lead to the 
withdrawal of the Vietnamese forces 
from Kampuchea. 

Q. Can you give us some indica- 
tion of your thinking on the structure 
of the Sinai force, specifically what 
role you would like Australia and New 
Zealand to play? 

Secretary Haig. I think I'd prefer 
to not go into further detail on this 
because we are in the process of discuss- 
ing potential contributions from a 
number of donors. Suffice to say that it 
is a very limited one, but a very impor- 
tant one that we had in mind for possi- 
ble contributions by New Zealand and 
Australia, and I say limited in terms of 
size and specialized in terms of role. But 
to go beyond that today I think it would 
be premature until we have gotten 
somewhat greater clarification on the 
overall structure we're going to be able 
to put together. 

Q. Was there any discussion on 
possible U.S. military hardware sales 
to Australia and New Zealand? 

Secretary Haig. Not in the formal 
context of our discussions, no, no. 

Foreign Minister Street. As it is 
well-known, Australia is considering at 
the moment the replacement of the 
Mirage by another tactical fighter. The 
choice is between two American aircraft. 
That wasn't discussed, but it is in the 
context of the current defense con- 
siderations. But it wasn't discussed in 
the conference. 

Q. [Inaudible] Sinai peacekeeping 
force. I wonder if you might be able 
to give us a date or a deadline by 
which time the United States on 
behalf of Egypt and Israel [inaudible]? 

Secretary Haig. I would say it's in 
the very near future and that we are 
hoping to have the overall agreement 
completed perhaps as early as the end of 
the month but certainly before the end 
of the month. 

Q. On your reservations about the 
Sinai, which of them were dispelled by 
what you have heard from the 

Foreign Minister Talboys. 

[Laughter] We've been given some 
useful information by the Secretary of 
State about attitudes toward the force 
that will certainly be taken into con- 
sideration as we discuss it in cabinet. 

Q. Whose attitudes? 

Foreign Minister Talboys. The at- 
titudes in the region. 

Foreign Minister Street. If I cou 

add our point of view on that, the sort 
of concerns that we have have been 
made public by us, quite deliberately, 
because we wish to stimulate a public 
debate on this. It would be very unusu 
for Australia to participate in a 
non-U. N. force, and, therefore, we 
wished a wide debate to take place anc 
the reservations that we have had are, 
therefore, well-known and public, and, 
we show the clarification that we 
sought. This process is still going on a: 
we have said that we would not, even 
though we haven't received a formal 1 
quest as the Secretary of State said, w 
wouldn't be in a position to make any 
decision until we had all the relevant h 
formation. We have had some further 
formation over the last couple of days 
which will add to that which we alread 
have and which we still have to get, 
depending on conclusions of the 
agreements for us to take into con- 

Q. Shall I interpret that to mean j 
that none of the reservations have 
been dispelled, or did you hear 
something like which did help 
alleviate your reservations? 

Foreign Minister Street. No, you( 
can't read that into your interpretatior 
at all. We have received further infor- 
mation which will be useful to us in co^ 
ing to a decision should a formal requt i 
be made to us. 

Q. Regarding Vietnam, Mr. 
Talboys has emphasized a couple of 
times your support in ASEAN in try 
ing to solve the problem, but could 
you tell me how you feel about the 
policy of political isolation and cutti 
back on any kind of economic inter- 
change with Vietnam. Meantime, if 
you would like to comment on the 
policy toward Vietnam, we'd like to 
hear that. 

Foreign Minister Talboys. At th« 

present time what those concerned are 
seeking to do is to apply pressure to 
Vietnam— political and economic and 
military pressures— and at the same 
time work out with ASEAN a political 
solution in the hope that the pressures 
and the nature of the solution will help 
to persuade Vietnam to move. 

Foreign Minister Street. We agrr 

completely with what Mr. Talboys has 
said. We have ceased bilateral aid to 
Vietnam because we believe that their 
invasion of a neighboring country was 
such as to warrant the cutting off of 
Australian aid and as an indication tha 
that sort of international behavior was 


Department of State Bulleti 

The Secretary 

cceptable to us, and until there is 
ie movement along the lines that Mr. 
wys has suggested — some indication 
movement toward a political set- 
lent— that would remain our at- 
de, but we would wish to be 
>ciated, as Mr. Talboys has indicated, 
i these efforts to reach a political 

Q. In the context of Mr. Talboys' 
answer, which of those concerned 
applying military pressure on Viet- 

Foreign Minister Talboys. There is 

tary pressure being applied by Kam- 
hea. And, of course, what ASEAN is 
cing to assist Kampucheans to bring 
united front to bring together those 
:es opposing the Vietnamese 
sence in Kampuchea. 

Q. This aid-to-Kampuchea clause 
s seem rather mild and is, in fact, 
t milder than things you said 
■tier on in this visit— earlier in your 
|r about Vietnam. Was that clause 
feted because of concerns expressed 
Australia and New Zealand? 

Secretary Haig. No, I think we are 
Idly consistent on the approach under 
j ASEAN initiative and the U.N. con- 
;nce, which will take place in July 
ch seeks a political settlement, as 

Talboys has reiterated. That does 

change the value judgment of the 
ilications and the character of the 
tnamese intervention in Kampuchea. 
iat we are talking about here is an 
iative, multilateral and, hopefully, 

which can be extensively and broad- 
upported which is designed to 
ieve a political settlement. And while 
:cept the thrust of your question, I 
lk it doesn't change the character of 

value judgment of the United States 
1 1 have made with respect to Viet- 
nese intervention. Both are serving a 
erent purpose in effect. One is a 
ae judgment, the other is a political 
irt to achieve a settlement. 

Q. Are there any reservations 
mt the U.S. decision to sell arms to 
ina— the decision in principal? 

Foreign Minister Talboys. I think 
t before I answer that question, I 
tik one should give Secretary Haig an 
jortunity to indicate what precisely 
position is so that then you can ask 
question in a different way. 

Secretary Haig. That question 
ne from an individual who's heard 
it position repeatedly, and it is that 

there has been no decision to sell arms 
to the People's Republic of China but 
rather a decision to change the category 
in which the People's Republic has been 
carried in the American bureaucracy, 
which will enable them to request, as 
any other nonaligned, friendly govern- 
ment, specific assistance if they decide 
to do so, in which case we will assess 
that, we will weigh it, we will consult 
with allies, we will consult with the 
American Congress, and a decision will 
be forthcoming. 

Foreign Minister Talboys. All I 

can add to that is that I've heard the 
Secretary of State make that statement, 
I'm not sure how many times, but still 
he gets the same question that you 
asked originally and the fact is, as he 
has pointed out that no decision has 
been made, there is no request at this 
time, so there is no decision that we can 
agree with or disagree with. 

Q. With respect to the position 
that you have just enunciated — the 
change in category, the clearing of the 
way to make arms sales possible if 
there is a request — what is your reac- 
tion to that? 

Foreign Minister Talboys. I'm 

happy with that. 

Foreign Minister Street. The new 

Administration has made it clear from 
the outset about its willingness to con- 
sult on issues of major concern to them, 
with its friends and like-minded coun- 
tries, and we welcome the reference to 
consultation which the Secretary of 
State had made, should a request ever 
come and before a decision is made. I 
think it's a good example, a good 
manifestation, if you like, of the will- 
ingness to consult which we welcome 
from the new Administration. 

Q. Would it be correct to state 
that the U.S. Government's position 
that you would like ANZUS and 
ASEAN to look more toward the In- 
dian Ocean and have you had any suc- 
cess in persuading the Australian and 
New Zealand Governments of the 
necessity for that? 

Secretary Haig. I think the context 
of your question is not exactly consistent 
with the discussions we have had here. 
We feel that the contributions made to- 
day by both Australia and New Zealand 
are indispensable. We welcome them, 
and we are grateful for them. We have 
also, in the case of Australia, been very 
pleased that unilaterally they have, from 
time to time, increased their presence in 
the Indian Ocean, and that's been a 

unilateral decision based on, I'm sure, 
unilateral concerns. We have also rather 
substantially increased our presence in 
that critical and dynamic area. We are 
clearly cognizant of each other's posture 
in that regard, and for the United 
States, I can say we are very, very com- 
fortable with what Australia has done. 

Q. My question concerns the com- 
mand structure of the proposed 
peacekeeping force in the Sinai. 
Would you want to see such a force 
under the command of Australia and 
New Zealand, having in mind that that 
would tend to allay any criticism that 
the United States had some sinister 
motive in establishing a force in a for- 
ward position in the Middle East? 

Secretary Haig. Let me answer 
your question to the degree that I would 
say the United States is not interested 
in commanding the peacekeeping force. 
As a matter of fact, the United States, 
in the initial negotiations with respect to 
that force, preferred not to participate 
at all. But in order to bring the two par- 
ties together— and this was really one of 
the crucial aspects of the tripartite 
discussions — it was necessary for the 
United States to agree to participate in 
very definite and somewhat restricted 
way. We do not visualize nor do we seek 
American command of the force— 
precisely the opposite for perhaps not 
only the reasons you mention but others 
of even broader character. 

Q. Did you agree with that [inaudi- 

Secretary Haig. I think that ques- 
tion is premature as to who should do it, 
and that would clearly be something that 
would be decided only after the final 
character and contributors — 

Q. That's just a couple of hurdles. 
Let's assume that Australia and New 
Zealand come in— 

Secretary Haig. That's a premature 
thing to do because, clearly, it's not a 
question that would give us any prob- 
lem. We are openminded on who should 
command the force, with the single ex- 
ception that we do not seek to on the 
U.S. side. 

Q. The Labor Party policy here is 
to ban nuclear ships of whatever coun- 
try from our ports. In your discussions 
with Mr. Rowling [William "Bill" 
Rowling, leader of the opposition 
party] yesterday, did you need to can- 
vass that point, from the American 
point of view if your warships or 



The Secretary 

nuclear ones are banned from our har- 
bors, what difficulty would that pre- 
sent to you and how would you see 
that affect the ANZUS alliance? 

Secretary Haig. I think our position 
on this subject is clearly known and 
understood, and I'm not going to use 
this press conference as a vehicle for in- 
terposing myself in the domestic political 
affairs of New Zealand. It would be in- 
appropriate, and I'm going to avoid it 
like the plague. 

Q. I noticed that in the second to 
last paragraph of this communique the 
three partners pledge themselves to 
reaffirm their commitment to prin- 
ciples of free trade. At the same time 
the Secretary of State has told us that 
he expects no change in the American 
barriers to New Zealand exports. How 
important to New Zealand's economy 
is greater access to American 
markets? And how satisfied are you 
with your discussions with the 
Secretary of State on that session? 

Foreign Minister Talboys. The im- 
portance of access — let me make it 
abundantly plain— it is not just a ques- 
tion of access to the U.S. market. If you 
look around the world you will find that 
the industrialized countries, and I look 
at the European Community, Japan, the 
United States— the industrialized coun- 
tries generally — have, to a greater or 
lesser degree, some form of quantitative 
control on imports of livestock products. 
What we seek to do is in whatever form 
we have the opportunity to make the 
point that for an economy like New 
Zealand, where livestock products are 
the engine, it is vitally important to ex- 
pand access to markets. Not that we 
have a capacity to meet the world de- 
mand or any nonsense like that, but 
simply we say to the international com- 
munity that when we talk about trade, 
let's recognize the fact that for 
economies like ours, economies like 
Australia, trade must include livestock 
products, otherwise it is virtually mean- 
ingless. We can talk about liberalized 
trade, free trade in industrial products, 
and we are seeking in this country to 
liberalize the trading opportunities, and 
what we have said in the communique is 
that there is a commitment to move 
toward free trade. It's going to take 
time for us because we have industries 
in New Zealand that have been pro- 
tected and some that will continue to be 
protected — many that will continue to 
be protected in various ways. But most 
of those industries are protected by 

tariffs. If all we had to contend with in 
the international market was tariffs, 
then we are up against a different prop- 
osition. What we object to is the quan- 
titative controls. And in my discussions 
with the Secretary of State, I know that 
he understands fully the position here. I 
recognize that there are some political 
difficulties to be overcome in the United 
States, and what we seek to do is to 
mobilize support in overcoming those 

Q. I said that there was apparently 
no progress being made here toward 
the goal that the foreign minister has 
outlined and you shook your head to 
indicate that I was wrong. 

Secretary Haig. No, it was the 
language that the premises of your ques- 
tion that I shook my head on. It always 
is a question of whether the bottle's half 
full or half empty. What I said was that 
the current levels for the remainder of 
this year between the United States and 
New Zealand would not be tampered 
with. There are some who would view 
that as good news. There are some who 
might view it as bad news. That has 
nothing to do with the detailed answer 
that Mr. Talboys gave and with which I 
am in full agreement, and that's the 
answer to your question. 

JUNE 25, 1981 9 

I just had an extensive discussion with 
the President reporting on my trip to 
Asia. We discussed the visit in Beijing 
and the communications that we had 
there with the People's Republic of 
China, various leaders— the Vice 
Premier and the Vice Chairman, the 
Premier and Foreign Minister, Defense 
Minister. We went on to discuss the 
meeting of ASEAN in Manila and the 
ANZUS meeting that was subsequently 
held in New Zealand. 

With respect to the China visit, I, of 
course, expressed satisfaction that it 
was a successful visit, one which had the 
clear consequence of clearing the air be- 
tween Washington and Beijing which 
will enable us to move now from a new 
plateau of improving relationships. It 
was clear also in the ASEAN meetings 
in Manila that there is a fundamental 
convergence of view, although some dif- 
ferences in nuance between allied and 
nonallied members of ASEAN. But 
these are merely tactical differences. 
There's a fundamental consensus of con- 

cern about the situation in Kampuchea, 
the need to improve commmercial and 
economic ties among those five nations, 
and their relationships with the United 
States and the rest of the Pacific area. 
The ANZUS meeting in Wellington, 
New Zealand, was marked by the kind 
of intimate relationship that has 
characterized that alliance for its 
30-year history, and I consider it to be 
both highly successful and highly 
beneficial for me because it was educa- 
tional in the sense of learning the sen- 
sitivities of those two long-standing 
allies and their views with respect to th 
Pacific Basin. 

Q. Did the subject of controversy 
involving you and Ambassador 
Kirkpatrick [Jeane J. Kirkpatrick, 
U.S. Ambassador to the U.N.] come 

A. It's your controversy; it's not 
mine. I have no controversy. I made 
that very clear yesterday, and it was 
discussed, of course, but in passing. 

Q. Was it discussed at length? 

A. It was discussed in passing, yes. 

Q. Did the President say he was 
angry about the reports? 

A. Not at all. 

Q. That he was angry about what 
your aides said? 

A. No. Look, we have a lot of 
serious business to do in the conduct of 
America's foreign policy. These kinds oi 
things happen as they have happened ir 
the past. If we allow them to divert us 
from the serious business that we are 
about, I think we are not serving the 
American people and their interest prop 
erly and I'm not going to do it. 

Q. Did you bring up the AWACS 
[airborne warning and control system 
aircraft] with the President? 

A. No, we didn't discuss that today, 
no. Only in a very glancing way. 

Q. Are you going to take any ac- 
tion against your two aides who were 
quoted in this story? 

A. I'm not taking any action againsl 
them other than to be very concerned 
that the situation came up, sorry and 
disappointed that it did, because it 
doesn't reflect reality and that's fre- 
quently the case in such personality, 
speculative stories. 


Department of State Bulletin 

The Secretary 

J. When you were out of the 
try there was a fair amount of 
rial criticism which you may or 
not have seen about your decision 
11 weapons to China, that you got 
ing in return, that we're giving 
!hinese something and we got 
ing in return. Would you care to 
»nd to that editorial comment? 

V. In the first place, I made it clear 
ighout my trip and I reiterate today 
there's been no decision to sell arms 
lina. There has been a decision to 
je that category in which we have 
;d China as a potential arms pur- 
;r from one that was restricted to 
capable systems to one which is no 
ir on the munitions list. 
Ihould China want some arms, they 
ie considered on a case-by-case 

following consultation with the 
ress and affected allies and friends 
Iwide who might have an interest 

affected by such a decision. I 
Id view a relationship in the arms 
with China as very evolutionary, 
! measured, and very paced in 

Jj. What did you get in return? 

A.. I'll leave that to you to speculate 
V^e have an improved relationship 
i the People's Republic of China. For 
I ast 3 years that relationship has 
on the decline, steadily. And I 
it is very important that we get 
; on the track in a constructive way, 
t won't go beyond that. 

^. How are you going to explain 
1 e Saudis that Congress is not go- 
! o approve AWACS this year? 

fb.. I hope that's not going to be the 


5. Isn't that the reading, though, 
Mr. Allen [Richard V. Allen, 

istant to the President for Na- 
il Security Affairs] got from the 
|as late as today? 

I A. No. I think the reading that Mr. 
1 has and that I have as well is that 
ave a lot of work to do and that 
? about that work and we hope that 
i who have expressed opposition 
d be patient and take the time to 
irsthand for themselves the condi- 
| under which that sale will be made. 

haven't had that opportunity yet, 
I'm optimistic that when they've had 
ley're going to change their view- 

,Q. Did you discuss the inclusion 
lommunists in the French cabinet 
1 the President? 

A. Yes. 

Q. And can you tell us just some 
reaction of what the feeling is? 

A. I think the State Department 
and the Vice President have made a 
statement on this subject. We put an of- 
ficial statement out yesterday in 
Washington, and I won't go a step 
beyond it. 

Q. As a former NATO commander 
how do you feel about it? 

A. Just precisely the way our view 
was expressed in the State Department 

Q. Have you said anything to your 
aides, though, about the policy in 
general of criticizing other Admini- 
stration officials? 

A. Oh, golly, I suppose a lot of us 
discuss that subject from time to time. 

'Made in response to a toast by Vice 
Premier and Foreign Minister Huang Hua, 
who hosted the banquet (press release 193 of 
June 16, 1981). 

2 Made at a banquet for Vice Premier and 
Foreign Minister Huang Hua (press release 
197 of June 22). 

3 Press release 196 of June 17. 

4 Press release 198 of June 22. 

6 Made in response to a toast by Foreign 
Minister Romulo, who hosted the dinner 
(press release 201 of June 23). 

6 Press release 199 of June 22. 

'Press release 202 of June 26. 

8 Made at the ANZUS dinner (press 
release 203 of June 26). 

9 Made outside the Century Plaza Hotel 
(press release 208 of June 29). ■ 

Secretary Haig Interviewed on 
"Face the Nation" 

Secretary Haig was interviewed on 
CBS's "Face the Nation" on June 28, 
1981, by George Herman, CBS News and 
moderator; Karen Elliott House, 
diplomatic correspondent for The Wall 
Street Journal; and Robert Pierpoint, 
CBS News diplomatic correspondent. 1 

Q. Pravda says that the American 
decision to sell weapons to Beijing is, 
in their words, reckless, highly 
dangerous for the cause of peace. So 
I'd like to ask you if you think, 
because of this Soviet reaction, if the 
world is in for a period of worsening 
relations between the United States 
and the Soviet Union, or is that just 

A. I think the process of worsening 
relationships has been underway for 
some time. The problem of China, 
however, must be dealt with in its own 
terms, and I do not believe, for one, that 
it would be advisable for the United 
States to conduct its relationships with a 
billion people under the specter of a 
Soviet veto. And I think that's very im- 
portant for the American people to 
understand as we seek to improve our 
relationships with both Moscow and 

Q. In answer to my first question, 
you said the relationships between the 
United States and the Soviet Union 
have been worsening for some time. I 
wonder if, for my benefit, you could 

give a beginning point and what you 
hope might be an end point for the 
decline in relations between these two 

A. I think the basic problem started 
perhaps as early as Angola, 1976. This 
trangressed through Ethiopia, southern 
Yemen, northern Yemen; the two 
phases of Afghanistan, which find 
80,000 Soviet forces occupying that 
country today; the invasion of Kam- 
puchea by a Soviet proxy, North Viet- 
nam; Vietnam; and all of these things I 
think were a rather shocking conse- 
quence of the great hopes and expecta- 
tions that were generated in the early 
1970s under detente, the SALT I agree- 
ment, and since that time our relation- 
ships have been deteriorating, and clear- 
ly as a consequence of Soviet, not 
American, action. 

Q. Could you explain to us what is 
our policy toward the Soviet Union? 
Are we trying to be tough in the hopes 
that at some point we can talk to 
them, or do we simply just want to 
shove them around the way we feel 
they've shoved the rest of the world 

A. No, I don't think that is a correct 
characterization at all. I think what the 
United States hopes, and I know what 
President Reagan hopes, is to establish a 
new relationship with the Soviet Union 
built on restraint and reciprocity in our 

lust 1981 


The Secretary 

mutual relationships - restraint in the 
sense that the Soviet Union will cease 
and desist from instigating, supporting, 
and carrying out efforts to effect 
historic change by rule of force, whether 
it be through proxy or the direct in- 
volvement of Soviet forces, as is true in 
Afghanistan. We believe this can be 
done only with the clear recognition 
in Moscow that the current activity of 
the Soviet Union is unacceptable in 
terms of improving East-West relation- 
ships and that we would seek to work 
with them to elicit the restraint that the 
basic policy has established as our goal. 

Q. Does this mean that 
policies— such as the SALT talks, the 
Strategic Arms Limitation Talks, and 
other detente efforts to ease relation- 
ships with the Soviet Union— those 
policies are dead until the Soviet 
Union changes its course? 

A. Not at all. I think clearly that 
would be an expectation that would 
neither be realistic nor achievable. On 
the other hand, we do feel that there is 
an urgent requirement for some fun- 
damental understandings on future 
directions for some reciprocity, if you 
will, and this does not mean that SALT 
II cannot begin until Soviet forces are in 
effect withdrawn from Afghanistan. It 
does mean that there are certain 
understandings with respect to the 
whole range of U.S. -Soviet relationships 
and East- West relationships in which 
there is a better consensus and a clear- 
ing of the air between us. 

Q. But it seems to me that what 
you're saying is that somewhere down 
the line the Soviet Union has got to 
change before we're willing to talk 
SALT. What are you waiting for? The 
Soviets themselves claim that we're 

A. First, the premise of your ques- 
tion suggests that these discussions have 
not been going on. We have, as you 
know, scheduled formal discussions 
before the end of the year to be hopeful- 
ly triggered and launched during a 
meeting between myself and Foreign 
Minister Gromyko in New York this 
September, and these will involve the 
theater nuclear arms control efforts, on 
which we have worked very carefully 
with our Western European partners 
and who have a vital stake in the out- 
come of these discussions. 

Beyond that, we're dealing with a 
whole host of internal reviews associated 
with strategic arms limitations, and 
these are complex in the extreme. It's 

the President's hope, I know, that the 
objective of such discussions will be the 
actual reduction of the growth of 
strategic armaments, and I would expect 
that these discussions will take place 
sometime next year without any firm 
deadlines being set one way or the 

Q. Let me just go back to the 
burden of my first question. You said, 
quite understandably, that the United 
States should not conduct its policy, 
its relations with China, on the basis 
of Soviet opinion. Nevertheless, it is a 
factor. If the Soviets— if any country 
thinks that what you're doing with 
another country is a threat to it, that 
has to be taken into consideration. It 
really is a kind of a triangle, is it not, 
and do our relations with China— 
Pravda says they're a threat— do you 
think that this is provocative to the 
Soviet Union or that they consider it 

A. In the first place, I would hope 
that they would not consider it pro- 
vocative because— 

Q. But Pravda says they do. 

A. —there is no basis for that. On 
the other hand, I think it is very impor- 
tant that Americans recognize that our 
relationships with China must stand on 
their own, and it doesn't mean that they 
do not affect our interrelationships with 
the Soviet Union; it would be specious to 
suggest so. But if we allow that so-called 
China card to become the dominant fac- 
tor in our relationships with a billion 
Chinese people, why, we will have, if ef- 
fect, given the Soviet Union a veto over 
those relationships. I think that would 
be very, very serious and a mistake. 

Q. You're aware, of course, of one 
of your predecessors, Cyrus Vance, 
who calls the announcement of the 
arms sales to China a needless pro- 
vocation of the Soviet Union? 

A. I think that's a debate that raged 
in the Carter Administration for the en- 
tire period that Mr. Vance was 
Secretary of State. It was well known 
and recognized. The simple facts are 
that in the first instance we have not 
made a decision to provide particular 
armaments to the People's Republic. We 
have merely internally changed the 
category under which they've been held, 
which lumped them together with the 
Soviet Union. 

Q. But all of us who've been in 
Washington any length of time know 
that changing a category in these lit- 

tle bureaucratic terms ends up in 
enormous changes of action. 

A. This depends on the future and 
the decisions made on a case-by-case 
basis. First, what requests we may get 
from the Soviets. We would then const 
with the Congress— 

Q. From the Chinese. 

A. I mean, from the Chinese. We 
would then consult, of course, with the 
Congress and with affected allies and 
friends, and so we view this as a very 
evolutionary thing. What we've done is 
put China, for all intents and purposes 
in the same category as Yugoslavia, as 
friendly, nonallied state. 

Q. There have been reports that 
the Chinese have been willing to 
cooperate with us by providing listei 
ing posts in China for us to spy on tl 
Soviet Union. Can you confirm those 

A. It's been our policy not to discii 
any such arrangements, and I'm not g 
ing to depart from that policy today. 

Q. Without you confirming or d< 
nying the intelligence reports, the 
reports of planned weapon sales are 
obviously true, if the Chinese decide 
to buy weapons. If it isn't— as 
Secretary Vance says — using our 
China card prematurely, what is the 
point of our selling arms to China? 

A. I think the point of our makinj 
the category different for China is a 
clear recognition that they are differe 
that they are a friendly regime in whi 
we have a number of converging in- 
terests, and we've been in a 10-year p 
cess in an effort to normalize our rela 
tionships with China. It goes without 
saying that— it was made very clear t< 
me in China, from the officials with 
whom I spoke, that they have not bee 
satisfied with the evolution of these re« 
tionships over perhaps the last 2 or 3 
years, and that is a consequence of— 

Q. Did the word Taiwan creep i 
to some of those discussions? 

A. Yes, it did, and as it would be 
expected to, as it did from the first 
period of normalization, where I was i 
timately involved, in 1972. And this is 
again, a question of, if you will, han- 
dling this very sensitive issue with 
prudence and great care. We happen 
believe we can do so; we can meet oui 
obligations to the peoples of Taiwan a 
continue with the normalization proce: 
with China. 


Department of State Bullel 

The Secretary 

\. Does that include new arms 
to Taiwan as well? Do they need 
i sophisticated planes? 

V. It includes the meeting of our 
litments to the people of Taiwan, 
the provision of defensive arm- 
ts as necessary to provide for their 
vital interests, and such future ac- 
will be taken precisely on that 
and this is understood in Beijing. 

j. Are you saying, in effect, that 
ither tacitly or explicitly told the 
le's Republic of China leaders, 
whom you met, that Taiwan 
d not get a new weapons system, 
ding FX planes, unless there was 
eat from Beijing? Is that really 
this is all about? 

\.. No, and I think that's far too 
ly drawn. I think it was made clear 
?m that we have obligations, 
ric and under law, to provide 
,sary defensive armaments to the 
e of Taiwan. This is known and 
nade known in Beijing. Now, clear- 
e basis for such decisions will be 
efensive needs of Taiwan. 

I. Is it your opinion that Pakistan 
Mrking toward a nuclear-weapon 

W. This is a subject which, of 
ke, we are keenly attuned to and 
sensitive about. As you know, 
r Secretary [for Security 
;tance, Science, and Technology 
s L.] Buckley just returned from a 
o Pakistan, where he held lengthy 
ssions with President Zia, and 
e he was assured by President Zia 
they would not seek the develop- 

of nuclear arms. I think he 
ied to this effect a week or so ago. 

really, this is one of the underlying 
ises of our new approach to 
stan, to remove the appetite, if you 
for nuclear weaponry which comes 

an intense sense of vulnerability to 
its from the Soviet Union and— 

^. From India? 

b.. Perhaps, although clearly today 
alanee between the two powers is 
idly skewed that it would hardly be 
ional acceptable balance in the 
i of a threat. 

IQ. How about some of Pakistan's 
Ihbors? You noticed that the Presi- 
of Iraq, Saddam Hussein, has 
d for all Arab nations, perhaps all 
|lim nations, which might bring in 
stan, to have nuclear-weapon 

capability in the view of Israel's 
capability to produce such a weapon. 

A. I, of course, saw that statement 
and we're looking into it now because 
it's an appalling statement. It's one 
which is not in consonance with fun- 
damental policies under the Reagan Ad- 
ministration, and that is, there should be 
no question about President Reagan's in- 
tent to pursue, as vigorously as we can, 
the nonproliferation policies of this Ad- 

Q. In that context, has the State 
Department asked Turkey to not pro- 
vide material that— 

A. I saw that newspaper report 


-would help Pakistan build a 

A. Yes, and I haven't had a chance 
to look into it to the depth that would be 
necessary, but let me assure you that 
any indication we have, official or unof- 
ficial, which would suggest any broaden- 
ing of the proliferation problem would 
be sufficient to trigger counteraction on 
our part to attempt to prevent it. 

And, secondly, let me tell you that 
the Government of Turkey is a signatory 
to the Nonproliferation Treaty, and they 
have rigidly reaffirmed, as we would ex- 
pect, their adherence to that treaty, and 
that means that they will not assist the 
expansion of nuclear weaponry. Now, it 
doesn't mean that we can take these 
things complacently, so if we have a 
report that suggests to the contrary, 
we're going to follow up on it, and that's 
just a responsible diplomacy. 

Q. Is it possible there could be a 
State Department cable asking Turkey 
not to provide materials to Pakistan 
that would help build a bomb, and you 
wouldn't know about such a cable? 

A. No, not at all. Oh, of course, it's 
possible in the sense that I've been out 
of the country, and this is a fairly 
routine procedure that whenever we 
would have a report of that kind, there 
would be a followup message sent. It's 
not the kind that would necessarily come 
to the Secretary's attention. It's very 
consistent with that policy. 

Q. In the view of Saddam 
Hussein's call for all Arab nations to 
produce atomic weapons, what do you 
suppose the Iraqi reactor was up to? 
Was it strictly for peacetime, or was 
there a weapons capability on the bot- 
tom of it? 

A. This is the subject of an intense 
investigation which is continuing. You'll 
note that President Reagan did approve 
a condemnation of the Israeli attack, 
while recognizing some of the concerns 
that may have caused that attack to 
take place. Our basic objection was the 
fact that we felt that all diplomatic 
recourse had not been pursued before 
resort to arms was undertaken. That 
does not mean that we don't remain con- 
cerned about the Iraqi nuclear develop- 

Q. In that review of the Israeli at- 
tack on Iraq, you said that there may 
have been a violation of the use of 
U.S. military weapons by the Israelis. 
I wonder if there has been, and if the 
American public is ever going to be 
told that there has been a violation by 
Israel, or are we going to carry out 
the usual policy of simply ignoring 
whether there has or not and going on 
and renewing our arms deliveries to 

A. I want to assure you that the 
considerations that were launched at the 
time of the attack and are still underway 
are continuing. Now, this will involve 
consultation with the appropriate com- 
mittees on the Hill, especially the Senate 
Foreign Relations Committee. We've 
already conducted some testimony there, 
in which we are continuing to examine 
the facts. Now I don't want to make any 
prediction at this juncture as to when a 
judgment would be made with respect to 
your question, or whether we are going 
to— when and under what circumstances 
we will resume the shipment of the four 
F-16s involved, but— 

Q. Is that a yes or a no? 

A. —it is not going to change our 
basic relationship with the Government 
of Israel and our obligation with respect 
to it. 

Q. But, given that, is that a yes or 
a no to my question as to whether the 
American public is ever going to know 
whether the Israelis violated the 

A. I don't know whether we alone 
are going to be able to give a juridical 
answer to that question. I think the best 
we can do, along with the Congress, is 
to study it with the intensity we have 
thus far and to try to arrive at a conclu- 
sion. Now, if that conclusion is juridical, 
as distinct from political, the conclusion 
we already made, then we will make it 

List 1981 


The Secretary 

Q. I was not along on the trip and 
I did not hear the statements, but I 
read them in the newspaper, and my 
question is, in the U.N. debate, with 
Ambassador Kirkpatrick [U.S. Perma- 
nent Representative to the United Na- 
tions] taking part, and the reactions 
that came from various parts of the 
country, did two of your spokesmen 
speak out with or without your ap- 
proval when they were critical of Am- 
bassador Kirkpatrick's action? 

A. I can assure you that they not 
only— to the degree that they were ac- 
curately portrayed in the article— they 
were not only proceeding without my 
authority, but they were proceeding 
along lines which were not represen- 
tative of the facts. And I've already 
made my position very, very clear on 
that; and I think it's not an uncommon 
event in this town, and I think it's im- 
portant we put it behind us, because it is 
not representative of reality. 

Q. While we were on that trip to 
China and the Far East, some impor- 
tant developments occurred in France. 
The new President of France, Mr. Mit- 
terrand, installed the four Communists 
in his Cabinet. There seems to be 
some difference of opinion within the 
Reagan Administration as to 
whether — as to how serious an event 
that was. The Vice President, when he 
was there, simply said it was of some 
concern to us and dismissed it. The 
State Department put out a statement 
saying that the tone and content 
would be affected, the tone and con- 
tent of relationship with France and 
the United States would be affected by 
this. How will the tone and content of 
our relations with France be affected? 

A. First, let me make it very, very 
clear that there is no difference of 
opinion in President Reagan's Ad- 
ministration on this subject. Every state- 
ment that has been made was cleared 

and discussed with the President per- 
sonally, and I can assure you that it 
doesn't mean that every spoksman poll- 
parrots every particular line, and it's 
clear that there's a total consistency. 
And we are concerned, as we have been 
historically, since the Second World War 
with this subject. On the other hand, it's 
important we also recognize that this is 
an internal French matter. It's up to the 
French people to decide the composition 
of their government. 

Having said that, we make no ex- 
cuses or no bones about our concern. 
Why? It's simply a fact of life that Com- 
munist regimes, whether thay are close- 
ly affiliated with Moscow or not, pursue 
policies which are not consistent with 
those of the Western family of nations. 

Q. Yes, but what's the point of 
publishing it? 

A. But the future will decide. 

Q. What is the point of publish- 
ing—as you say, it is a fact of life; 
they are installed; France is an 
ally— what good does it do to say, 
"We're disappointed in you. We don't 
like what you're doing"? 

A. It does a great deal of good. In 
the first place, it has been the consistent 
policy of the U.S. Government since the 
Second War, with every President mak- 
ing this clear. You will recall it in the 
Italian situation some 2 or 3 years ago, 
and it is very important for that reason 
that all of our Western European part- 
ners faced with the same decisions know 
that these decisions are not favorably 
viewed here in Washington. 

Q. Can I take you back to the Mid- 
dle East? Is there any thought in this 
Administration— do you intend to 
delay further the sale, your decision 
on the sale of AWACS [airborne warn- 
ing and control system] to Saudi 

A. Precise timing is a question 
which will ultimately be decided by the 
Senate leadership. I do want to assure 
you, however, there is no question about 
our intention to proceed with the sale. 
We feel this is vitally important, not 
only for U.S. regional objectives in the 
area but also for our future relationships 
with Saudi Arabia. 

Q. But you may delay it further? I 
mean, Senator Laxalt has suggested 
that you delay it further. Are you con- 
sidering delaying it past July? 

A. We're in the process now of 
developing the arrangements under 
which the sale will be made, and we 
think it's very important that these ar- 
rangements be known and understood 
by those who have reservations about 
that sale. We've asked them to be pa- 
tient. And I think that is a major con- . 
sideration on timing, as is the judgmei 
of our senatorial leadership, who are, 
after all, going to have to carry this b; 
tie forward. 

Q. So can I conclude from that 
answer that there may be further 

A. Of course, you can, but it will 
not be substantial, and it will not chair 
the intent of the President to proceed 
with this sale. 

Q. What would happen if the sail 
were rejected by the Congress? Wha 
would be the effect on our relations 
with Saudi Arabia and the oil we bu 
from them? 

A. I don't view it in the context ol 
oil. I don't think our Saudi friends or I 
dialogue that we've been conducting 
with them has been associated with th 
vital issue. What we are concerned 
about is the security of that oil, and t\ I 
contribution that AWACS would maki 
to insuring that security. And second! 
what we are interested in is our overaj 
regional security, which we've been 
working so intensely on, and the con- 
tribution AWACS will make to that. 

•Press release 211 of June 30, 1981. ■ 


Department of State Bullel 


I.S. Policy on Namibia 

"hester A. Crocker 

tatement before the Subcommittee 
frica of the House Foreign Affairs 
mittee on June 17, 1981. Mr. 
ker is Assistant Secretary for 
can Affairs. ' 

libia is an issue to which this Ad- 
stration has devoted enormous 
gy and one whose resolution we 
ider of considerable importance to 
ichievement of peace in southern 

This Administration took office only 
; after the Geneva conference 
hed a total impasse. At that time, 
South African Government indicated 
it was not willing to agree to a date 
,he implementation of U.N. Security 
ncil Resolution 435. Various theories 
! been put forward to explain the 
tion the South African Government 
. I think it is clear that Pretoria had 
me increasingly uncertain through- 
1980 about the desirability— from its 
dpoint — of implementing the U.N. 
for Namibia. That uncertainty was 
■d upon the South African Govern- 
t's analysis of a number of factors 
lging the southern African 
le — distrust of the United Nations' 
ty to play an impartial role, concern 
• the future political direction of an 
pendent Namibia, fears arising from 
election results at the time of Zim- 
i are's independence, and domestic 
tical considerations. Some have sug- 
;ed that the results of our own elec- 
here in the United States encour- 
i the South African Government to 
; the stand it did at Geneva. I believe 
facts and the realities show that to 
llusory. The negotiations had reached 
mpasse over unresolved issues. 

suits of Review 

en this Administration took office we 
agnized the importance of finding an 
^nationally acceptable solution to the 
blem of Namibia. In fact, since then 
as been perhaps the single African 
le to which I and others in the 
Dartment of State have devoted the 
3t time. We began with an exhaustive 
iew of the negotiations which the 
•ter Administration had undertaken, 
situation in which we found our- 
res, and policy directions which we 
jht undertake to achieve our desired 

objectives. Some key results of that 
review include the following: 

• We recognize that the people of 
Namibia have the right to self- 

• We recognize that the search for 
that self-determination has involved a 
complicated negotiation process sym- 
bolized in Resolution 435. We have no 
intention of usurping the United Na- 
tions' role or departing from the U.N. 
context; however, we cannot be con- 
strained by a rigid adherence to the let- 
ter of Resolution 435 if, by so doing, an 
internationally acceptable settlement in 
Namibia is impeded rather than aided. 

• We are fully aware that the con- 
tinuation of the conflict in Namibia com- 
plicates our relations with black Africa 
at a time when there appears to be more 
and more common ground between black 
Africa and the West. We attach major 
importance to U.S. interests in Africa as 
a whole, and we have no intention of 
permitting such issues or the behavior of 
third parties to impede our growing 
cultural, political, economic, and 
strategic links with the nations of 

• We are well aware that our Cana- 
dian, British, French, and German allies 

in the contact group have significant in- 
terests at stake in Africa based upon 
their involvement in the Namibia 
negotiations. The solidarity of the con- 
tact group allies remains a basic ingre- 
dient in the elaboration of a settlement. 

• Finally, we recognize the in- 
escapable fact that Pretoria holds the 
main key to a settlement and, therefore, 
must have a minimum of confidence in 
any settlement if it is to be im- 

Consultative Process 

Over the past 5 months, we have engag- 
ed in an exhaustive consultative process 
with the various relevant actors, in- 
cluding our contact group [France, 
Federal Republic of Germany, United 
Kingdom, United States, Canada] part- 
ners, the front-line states [Angola, 
Botswana, Mozambique, Tanzania, Zam- 
bia], and Nigeria, and with South Africa. 
That was the purpose of my trip to 
Europe and Africa in April. It was the 
primary purpose of Pik Botha's [South 
African Foreign Minister Roelof F.] visit 
to Washington in May, and it is the con- 
text within which Judge Clark's [Deputy 
Secretary William P.] trip to Cape 
Town, Windhoek, and Salisbury took 
place during June 10-13. 

The central purpose of the review 
and consultative process has been our 
attempt to determine whether enough 

Chester A. Crocker 
was born in New York 
City on October 29, 
1941. He received his 
B. A. from Ohio State 
University, graduating 
(1963) cum laude, with 
distinction in history. 
He received his M.A. 
(1965) and Ph.D. 
(1969) from Johns 
Hopkins University's 
School of Advanced International Studies. 

Dr. Crocker served as Director of African 
Studies at Georgetown University's Center 
for Strategic and International Studies from 
January 1976 until 1981. He directed 
research and policy analysis involving experts 
and leaders from the executive branch, the 
Congress, universities and foundations, the 
private sector, the media, and from African 
and other nations. He first joined 
Georgetown University in August 1972 as 
Director of the university's Master of Science 
in Foreign Service Program, serving concur- 
rently as Assistant (later Associate) Professor 
of African Politics and International Rela- 
tions. While at Georgetown he was also a 

consultant to the Department of State, the 
CIA, the Army War College, the Murphy 
Commission, the Rockefeller Foundation, and 
private firms. 

Dr. Crocker's other professional ex- 
perience includes work as news editor of 
Africa Report magazine (1968-69), lecturer in 
African government and politics at American 
University (1969-70), and staff officer at the 
National Security Council (1970-72), where 
he coordinated interagency policy studies and 
action papers involving Middle Eastern, 
African, and Indian Ocean issues. 

During the past 15 years, Dr. Crocker 
has lectured, written, and consulted on a 
broad range of international issues, especially 
those involving Africa. His research and 
writings have appeared in numerous books, 
newspapers, and journals, including the 
Washington Post, Orbis, The New Republic, 
Africa Today, Foreign Policy, Foreign Af- 
fairs, and the Washington Quarterly. He is 
the coeditor of South Africa into the 1980s, a 
book published in 1979. 

Dr. Crocker was sworn in as Assistant 
Secretary for African Affairs on June 9, 

nust 1QR1 



common ground exists on Namibia 
within the changing circumstances of 
southern Africa to warrant our involve- 
ment with a renewed effort to reach an 
internationally acceptable settlement. 
We have done so because of southern 
Africa's growing role in U.S. and 
Western interests. But this Administra- 
tion has a very full foreign policy 
agenda, the implication of which is that 
we will not engage ourselves in the 
Namibia equation if we feel the pros- 
pects for success are bleak. We have 
been frank with all of our interlocutors 
on these points. Our approach is 
realistic. The United States will not per- 
mit its energies, time, and credibility to 
be frittered away on a drawn out and 
fruitless diplomatic charade in southern 

With this in mind, we believe that 
the key focus of our analysis is whether 
South Africa's concern over a settlement 
can be made congruent with an interna- 
tionally acceptable settlement; one which 
uses Resolution 435 as its basis and is 
supported by the international commu- 
nity, in particular the countries of 
Africa. We believe that all those who 
share our goals will appreciate fully the 
care, the time, and the energy we have 
devoted to this issue to date. 

Judge Clark's trip to Cape Town and 
Windhoek was another key step in this 
process. In Cape Town we held in-depth 
and intensive discussions over a 2-day 
period with senior officials of the South 
African Government, including Prime 
Minister P. W. [Pieter Willem] Botha, 
Foreign Minister Botha, and Defense 
Minister [Magnus] Malan. As a result, 
we believe we now have a much clearer 
idea of the South African Government's 
views on Namibia and on the region. 

In Windhoek we met with all of the 
internal parties, including AKTUR, the 
DTA [Democratic Turnhalle Alliance], 
SWANU [South West African National 
Union], NIP [Namibia Independence 
Party], the Federal Party, CDP [Chris- 
tian Democrat Party], SWAPO [South 
West Africa People's Organization] 
Democrats, and the internal wing of 
SWAPO. In these sessions we were able 
to appreciate directly the concerns of 
these various groups about the future of 
Namibia. A meeting with leaders of the 
major religious groups provided us with 
a unique insight into the human dimen- 
sions of the Namibian problem. 

In Salisbury we had frank and 
friendly discussions with Prime Minister 
Robert Mugabe and other Zimbabwean 
officials in which we were able to define 
more carefully those areas of the 
Namibia situation about which the Zim- 

babwean Government has strong views 
and to explore future avenues in which 
we hope to move together on this and 
other issues. As a key southern African 
state whose successful development 
receives strong support from 
Washington, Zimbabwe is clearly one of 
our major interlocutors on the Namibia 

Internal Review 

We now begin a period of intensive in- 
ternal review of the information we have 
gathered. At the end of that period, 
perhaps by the end of June, we will 
make a judgment at the highest level on 
whether enough common ground exists 
upon which to build an internationally 
acceptable settlement. We recognize 
that Resolution 435 must be the basis 

for that settlement — a fact which we 
have underlined in all of our consulta 
tions. At the conclusion of the review 
we expect to be in touch promptly wi 
the relevant parties, both in the confc 
group and among the front-line state 
and South Africa. 

I cannot prejudge what our decis 
will be, nor can I predict a timeframe 
for Namibia's independence if we cho 
to go forward. I can assure you, how 
ever, of our good faith in this exercis 
and the seriousness of purpose with 
which we continue to approach it. 

'The complete transcript of the hearir 
will be published by the committee and wi | 
be available from the Superintendent of 
Documents, U.S. Government Printing Of | 
fice, Washington, D.C. 20402. ■ 

U.S. Response to 
OAU Criticism 

JUNE 30, 1981 1 

There have been a number of questions 
concerning our reactions to the recent 
Organization of African Unity (OAU) 
summit held at Nairobi, Kenya. I have a 

First, I would remind you of our 
statement at yesterday's briefing in 
which we applauded King Hassan's ini- 
tiative on the Western Sahara and 
hoped that his proposals would lead to 
an early resolution of the problem. Our 
reaction to other developments at the 
summit are less positive. 

We found the OAU resolutions on 
both South Africa and Namibia to con- 
tain serious distortions of the policy that 
we are actually pursuing in those areas 
and unhelpful contributions to our com- 
mon efforts. It should be absolutely 
clear from our actions in recent months 
that the United States is firmly com- 
mitted to pursuing an internationally 
recognized independence for Namibia. 
We continue to believe that U.N. Securi- 
ty Council Resolution 435 provides a 
solid basis for a settlement. Such a 
settlement can be reached only through 
negotiations with all involved parties, in- 
cluding South Africa. Our contacts with 
South Africa on that issue and on other 
matters of common interest in no way 
serve as the basis for suggestions, such 
as those in the OAU resolutions, that 

the United States is pursuing policies 
supportive of South Africa's racial 
policies or of its continued control of 
Namibia. Such suggestions are untru( 
unhelpful, and do not advance in any 
way our mutual efforts in pursuit of 
peace and stability in southern Africa 

We are disappointed that the OA 
summit did not condemn the clear vie i 
tions of OAU principles in the intern 
tion by Libya in the Chadian conflict 
the occupation of Chad by Libya. We 
look forward to early installation of t 
peacekeeping force called for in Chad 
the OAU so that the Libyans may be 
quickly withdrawn and so that peace 
economic development may once agai 
take root in that troubled land. 

The OAU meeting decided to hole 
its 1982 summit at Tripoli, Libya. We 
note that it is traditional for the OAL 
select the host head of state or gover 
ment as its next chairman. If that tra 
tion were followed in 1982, we would 
look upon it with deep regret, since w 
believe Libya to be a most inappropri, 
spokesman for the principles of peace 
and regional stability for which the 
stands and which we wholeheartedly 
support. Libya's support for interna- 
tional terrorism, its intervention in th 
affairs of neighboring states — includir 
its incursion into Chad— and its 
assassination campaign against Libya 
dissidents abroad hardly qualify it to 1 
the spokesman for Africa to the work 

'Read to news correspondents by Depi 
ment spokesman Dean Fischer. ■ 




rengthening U.S.-Africa^ 

Chester A. Crocker 

\Address before the African-American 

t'.tute Conference in Wichita, Kansas, 
une 20, 1981. Mr. Crocker is Assist- 
mSecretary for African Affairs. 

I subject of this conference, the atten- 
I it has drawn, and the degree of par- 
lation it has attracted are, I believe, 
Ictly related to the goals which we in 
■Reagan Administration want to 
leve in our policy toward Africa. In 
lign policy as in domestic policy, 
Isident Reagan has set some tough 
(is for this nation. To achieve them 
| require first that the American 
Inle understand them. And it will re- 
le a shared sense of what our 
Ion's interests and priorities are, at 
lie and abroad. To rebuild the image 
j, more important, the reality of a 
jng America also requires the 
deration of a broad spectrum of 
(;e institutions and groups which can 
(-v upon the vitality and genius of in- 
dual Americans. And just as certain 
■ifices will be necessary to achieve 
domestic economic reforms we need, 
nust we make choices in the alloca- 
of resources abroad. We live in an 
where such choices cannot be avoid- 
But the challenge the President has 
for us all is, I believe, both a 
essary challenge and one that we can 

This conference is making a signifi- 
t step in these directions. It has 
ught us together to enhance our 
lerstanding of a continent which is 
oming increasingly important to the 
ited States in the pursuit of our 
3al objectives. It has brought us in 
Reagan Adminstration together with 
African friends and the business 
imunity of the heartland of the na- 
1. We wish to work together to 
eive our and Africa's objectives. We 
i to be better prepared to meet the 
llenges to our shared interests in the 
ade of the 1980s. And we seek to 
ness with skill, creativity, and pur- 
e the human and material resources 
America and Africa. 
To do so will require a renewed 
se of purpose in our foreign policy so 
t we may project in Africa the same 
iciples that govern our policies 
;where. As Secretary Haig has stated 
m, those principles are: consistency 
he pursuit of U.S. interests, 

reliability as a force for peace and 
stability, and balance in our approach to 
individual issues and the orchestration of 
policy. As a nation we can no longer af- 
ford a foreign policy that confuses the 
American public because it lacks 
coherence, that confounds our allies 
because it lacks consistency, or that 
comforts our adversaries through its 
vascillation or ineptitude. 

While certain African problems and 
issues are unique to that continent, we 
ignore to our own— and Africa's— peril 
the geopolitical and economic realities 
that tie Africa to the international com- 
munity in which we all exist. Africa is 
an integral and increasingly important 
part of the global competitive system. 
We did not cause this to happen. It is a 
reflection of the reality of African in- 
dependence and a result of the abiding 
characteristics of world politics. Africa's 
leaders can have little confidence in an 
America that speaks with the condescen- 
sion or paternalism of a bygone era. A 
mature U.S. relationship with African 
states can be an important force for in- 
ternational as well as U.S. national 

U.S. Objectives 

We began this Administration by 
setting forth what U.S. objectives in 
Africa should be. 

• We seek to promote peace and 
regional security and deny opportunities 
to those who seek contrary objectives. 

• We will support proven friends 
and be known as a reliable partner, in 
Africa as elsewhere. 

• We want to maintain open market 
opportunities, access to key resources, 
and contribute to expanding African and 
American economies. 

• We support negotiated solutions 
to the problems of southern Africa. 

• We seek to expand that group of 
nations whose development policies pro- 
duce economic progress and which have 
flourishing democratic institutions. 

• We shall do our part in meeting 
Africa's humanitarian needs and in 
fostering basic human liberties in keep- 
ing with both our principles and our in- 

Meeting these objectives is, of 
course, no easy task. But we begin with 
several advantages. First, we have laid 
out objectives which we can al! under- 

stand. Second, these objectives are in 
keeping with basic American values. The 
policies we implement will not conceal 
them. To do so would indicate our own 
lack of confidence in those values and 
principles for which we as Americans 
have long been admired. They are an in- 
tegral part of the comparative advan- 
tage we as Americans and the Western 
world in general have in Africa. 

Africa and Africans are already 
largely oriented toward the West. Yet 
that orientation, that advantage, cannot 
be taken for granted. Events of the last 
decade have proven only too clearly that 
the objectives we seek in Africa are in- 
creasingly threatened by political in- 
stability, external intervention, and 
declining economic performance. Soviet- 
Cuban and Eastern bloc intervention in 
African affairs, the presence of 
thousands of Cuban troops in Angola 
and Ethiopia, the presence of Libyan 
troops in Chad, and the massive 
transfers of arms by Eastern bloc na- 
tions all serve to undermine U.S. and 
Western interests in Africa and to 
thwart our and Africa's objectives. The 
globe's leading sources of destabilization 
are active in Africa. This Administration 
has no hesitation in stating that frankly, 
categorically, and for the record. 

Nor do we hesitate in our belief that 
economic development, a central im- 
perative for a continent which contains 
two-thirds of the world's poorest na- 
tions, cannot take place in an environ- 
ment of instability or insecurity. In this 
respect, African nations are no different 
from other developing nations. Roads 
cannot be built, railroads cannot trans- 
port goods, wells cannot be dug, nor 
crops harvested when a nation is at war 
with itself or its neighbors. We will do 
our part in addressing Africa's security 
needs. We have already proposed to the 
Congress increased levels of security 
assistance to certain key African nations 
in support of our objectives in Africa 
and in the Persian Gulf. By defining 
carefully our interests and commitments 
and by backing them up in credible 
ways, we believe the United States, in 
concert with our major allies, can play a 
significant role in addressing Africa's 
security problems. We will stand 
together with our proven friends in 
Africa, offering them assistance and 
counsel rather than turning our backs on 
them in their time of need. To do other- 
wise would do injustice to our own 
values as a people, and it would prevent 
us from achieving our goals of peace, 
regional security, economic progress, 
and the expansion of human liberties. 

gust 1981 



But let me make it quite clear that 
we do not choose nor have we any man- 
date to be the policeman of Africa. No 
nation has such a mandate. Our pre- 
ferred choice is to foster and help 
implement, where we can, diplomatic 
solutions to Africa's conflicts. In 
southern Africa as in the Horn of 
Africa, we seek a reduction of regional 
tensions. Those who characterize this 
Administration's goals differently are, 
simph put. wrong. We are committed to 
playing our proper role in creating a 
context for successful negotiations 
leading to internationally recognized in- 
dependence for Namibia. We believe it is 
the task of the Western world to en- 
courage purposeful, evolutionary change 
in South Africa toward a nonracial socie- 
ty. And we believe that all those who 
share our opposition to foreign interven- 
tion on African soil will acknowledge the 
need to find means to remove any 
pretexts for the presence of foreign 
troops in Angola. 

Concerns With Southern Africa 

Our concerns with southern Africa, 
from Zaire to the Cape, are born out of 
our recognition of the strategic, political, 
ami economic importance of this region 
to the United States and the Western 
world. Southern African nations play an 
important role in meeting U.S., Euro- 
pean, and Japanese requirements for 
critical minerals such as chrome ore, 
cobalt, industrial diamonds, manganese, 
platinum, vanadium, copper, tin. and 
asbestos. The Western world must re- 
main engaged in this geopolitical ly im- 
portant region during periods of strife 
and uncertainty. Southern African states 
form the littoral to one of the vital 
lifelines of the industrial democracies. 
We must work actively and play our 
proper role— diplomatic, strategic, com- 
mercial, and economic— in this key arena 
to prevent destabilization and economic 
decline and to foster a secure and 
prosperous regional order. 

Failure to be an active participant in 
the affairs of southern Africa can only 
lead to heightened regional tension, 
polarization, and Soviet-backed adven- 
turism. That is why we have not shied 
away from the difficult negotiations on 
Namibia; why we have not abandoned 
South Africans of all races who are 
seeking constructive changes and who 
are committed to purposeful movement 
away from apartheid; and why we have 
not been dissuaded from pursuing an 
end to the internationalized strife in 

Angola. The stakes are too high, the 
threats to our mutual interests too 
great, and, above all, the costs to the 
peoples of southern Africa too heavy for 
us to turn away from the challenges of 
this region. 

Economic Concerns 

I mentioned at the beginning of my 
remarks the tough goals which Presi- 
dent Reagan has set for us in restoring 
our own economic well-being and in con- 
tributing to development efforts in 
Africa as elsewhere in the Third World. 
In an interdependent world, the trends 
which we see in Africa today should 
cause us alarm; declining per capita food 
production, falling per capita growth 
rates for most nations, staggering im- 
port bills for non-oil-exporting nations, 
desertification, high rates of inflation 
and deteriorating terms of trade, and 
population and urbanization growth 
rates which are the highest in the world. 
Already fragile economies are being 
undermined steadily by these 
developments. Even more fragile 
political systems, some of which are 
struggling to provide greater human 
liberities and broadened political par- 
ticipation, are being undermined by 
these economic trends. It is a vicious cir- 
cle, one which has a decidedly negative 
impact upon our efforts to expand the 

Western Sahara 

JUNE 29, 1981 1 

The United States welcomes the pro- 
posals made by King Hassan II of 
Morocco on June 26 in his speech to the 
Organization of African Unity (OAU) 
summit concerning the modalities for 
compliance with the objectives with the 
OAU's Wise Men's 2 recommendations. 
The United States believes that the 
King's proposals constitute an important 
step in seeking a peaceful resolution of 
the contentious issue of the Western 
Sahara and hopes that plans for the pro- 
posed referendum can be formulated 
and accepted by the parties concerned in 
the near future. 

'Read to news correspondents by Depart- 
ment spokesman Dean Fischer. 

2 An ad hoc committee of five chiefs of 
state appointed by the OAU in 1979 to at- 
tempt to facilitate negotiations for a settle- 
ment of the Western Sahara dispute. ■ 

linkages between our own and Africa! 
economies and upon our shared goals 
economic progress. 

To break this cycle will require a 
concerted effort on our part, on your 
part, and on the part of Africans 
themselves. It will require some 
sacrifices, closer attention to prioritie 
specific definition of objectives and be 
ter coordination of our assistance pro' 
grams with our foreign policy goals. V 
are not ashamed to back winners. We' 
want to expand that group of African 
nations whose development policies pi 
duce economic progress. We want to 
help those who help themselves and 
want to work with us on the basis of 
mutual respect and common in- 
terest—like Malawi and Kenya, Sudai 
and Cameroon. 

But our official assistance resourc 
and those of our allies are not infinite 
We want to engage the American 
private sector more fully in the econo 
development process— in the creation 
jobs, in overall growth, and in 
establishing a sustaining source of 
revenue. We recognize that the privai 
sectors of other industrial democracie 
are already competing effectively in 
Africa, yet we believe that U.S. firms 
have a comparative advantage in son: 
critical areas, such as agribusiness ac 
tivities. We plan to do our part to ass 
you, by reexamining present govern- 
ment policies which act as an un- 
necessary disincentive to business ac- 
tivities abroad, by exploring ways in 
which our own Agency for Internatio 
Development and other government 
agencies can support your activities, ; 
by coordinating our trade aid and inv 
ment instruments in supportive ways 

In a larger sense, we believe that 
our own policies at home and abroad 
create the environment in which U.S. 
business can operate more effectively 
This Administration seeks to rely mo. 
on market forces at home and to en- 
courage the growth of market econor 
abroad. We can set an example on bo 
fronts, one which, when weighed 
together with the dismal results of 
government-run enterprises in Africa 
elsewhere, will encourage the trends 
seek. At the same time, African gove 
merits themselves will need to make c 
tain changes — in management, in corr 
modity pricing policies, in resource 
allocation, and in economic planning, 
can no longer afford to provide scare* 
bilateral assistance, to encourage 
multilateral lending, or to promote 
private sector investment in countries 


Department of State Bulle 


Inerica's Blueprint 

lr Controlling Nuclear Weapons 

Eugene V. Rostow 

Statement before the Senate Foreign 
Uions Committee on June 22, 1981. 
Rostow is Director-designate of the 
is Control and Disarmament 

I always an honor to come before this 
imittee. I am proud to be here as 
sident Reagan's nominee for the 
ictorship of the Arms Control and 
irmament Agency (ACDA). The 
sident regards the functions en- 
;ted to the agency as among the 
t important in the arsenal of our 
omacy. So do I. 

President Reagan has said that "the 
t and foremost" objective of our 
;ign and defense policy is "the 
tblishment of lasting world peace." 
ice with freedom is and always will 
;he most fundamental of our national 
rests in world politics. But in the 
lear age, peace is more than an in- 

)se policies do not produce results, 
do otherwise would undermine our 
eign policy goals and lose us your 
port and the support of the 
•erican people. 

Yet there are reasons for optimism, 
ne African governments have already 
run an agonizing reappraisal of their 
nomic performance and policies. 
■re is a new determination to reverse 
eriorating economic conditions. U.S. 
/ate investment is more actively be- 
encouraged and the opportunities for 
1. firms are there— in food processing 
ustries; in telecommunications; in ir- 
ition, mining, construction, and 
lical equipment; in Earth satellite 
:ions; and in computer technology, 
i have this Administration's pledge 
t we will work toward creating a 
•e favorable environment in Africa 
private sector initiatives. We believe 
t Africans, if given the choice, will 
i strengthened relations with us and 
i you. We have shared goals. We 
e the wherewithal to produce results, 
values and institutions upon which 
greatness of this country was built 
r a solid basis for the continued 
■ngthening of African-American rela- 

terest; it is virtually a commandment. 
The President is convinced that a just 
and stable system of peace can be 
restored by peaceful means. In his view, 
the task can be accomplished through 
the diplomacy of regional coalitions 
backed by credible military deterrence. 
Such action is imperative now because 
our vital national interests in many 
parts of the world are threatened by the 
recent decline in world public order. 

Many look to arms control 
agreements as magical guarantees of 
peace. The history of the subject should 
persuade us to accept more modest ex- 
pectations. Fair, balanced, and verifiable 
arms control agreements can play a 
significant role both in achieving and 
maintaining peace. They cannot do so of 

The Versailles treaty and the naval 
agreements of the 1920s and 1930s were 
the most important arms control and 
disarmament agreements thus far dur- 
ing this century. These words have 
somber echoes. Much has been said 
about the moral justification of the Ver- 
sailles treaty. Viewed only as an arms 
control agreement, however, Versailles 
and the other arms control treaties of 
the period clearly failed. When they 
were tested, the United States was still 
in the grip of neutralism; the United 
Kingdom had lost faith in its com- 
mitments; and France could not act 
alone. The Second World War was the 

There is at least one successful arms 
control agreement in modern history — 
the Rush-Bagot agreement of 1817, 
which still limits the level of naval power 
we and Canada can deploy on the Great 
Lakes. The fact that everything about 
the Rush-Bagot agreement is rather dull 
is the most convincing evidence of its 
success. It was by no means self-evident 
in 1817 that the agreement would work. 
The passions of the Revolutionary War 
and the War of 1812 survived and 
rankled. There was great tension be- 
tween the United States and the United 
Kingdom over Canada on several occa- 
sions during the 19th century. In these 
periods, the Rush-Bagot agreement was 
a genuine influence for restraint. 

What is the moral of the experience 
I have just recalled? I should venture 
these conclusions. Where there is a 
general political understanding about the 
limits of rivalry, arms control 

agreements can help to prevent friction 
and conflict from degenerating into war. 
This was the case with the Rush-Bagot 
agreement but not with the Versailles 
treaty or the naval agreements of the 
period. The Western nations simply 
refused to recognize the aggressive 
nature of German and Japanese policy in 
the 1930s. Disarmed frontiers and arms 
control treaties cannot prevent war 
when democratic nations pursue blind, 
foolish, and inadequate policies, tempt- 
ing aggressors beyond endurance. 

In short, arms limitation agreements 
can help to reinforce the state of peace 
when it already exists, or when it is 
close to being the norm. They cannot do 
so where the will to peace is missing and 
the rules of peace are not fully accepted 
and enforced. Arms control agreements 
are neither good nor bad in themselves. 
Whether they turn out to be useful or 
harmful can be determined only in rela- 
tion to all the other factors playing on 
the formation and execution of our 
foreign and defense policy. 

It would be premature for me to at- 
tempt an outline of Administration 
policies in the areas committed by 
statute to the Arms Control and Disar- 
mament Agency. I have not yet fully 
taken up the duties of the office, nor 
consulted in detail about its programs. 
What I propose to do in this statement 
is to consider the background of the 
problem as I see it and then list a series 
of questions I intend to address before 
recommending changes in the substance 
of the agency's work. 

ACDA's Mandate 

ACDA is a pioneer agency. The United 
States was the first among the nations 
to create a separate government entity 
devoted entirely to arms control and 
disarmament. The statutes entrust a 
number of functions to ACDA as the 
organization charged with "primary 
responsibility" for this field: 

• To conduct research and recom- 
mend arms control initiatives "to the 
President, the Secretary of State, other 
officials of the executive branch, and the 

• To prepare and manage U.S. par- 
ticipation in international arms control 

• To determine whether arms con- 
trol agreements are adequately verified; 

• In the language of the statute, to 
"assess the effect of [arms control pro- 
grams] upon our foreign policies, our na- 
tional security policies, and our 
economy" and to evaluate our interna- 



Arms Control 

tional arms and technology transfer and 
export programs; and 

• To coordinate and disseminate 
public information concerning arms con- 
trol and disarmament. 

In addition to its inherent authority 
with respect to nonproliferation under 
the ACDA statute, the agency has also 
been assigned wide-ranging responsi- 
bilities by the Nuclear Non-Proliferation 
Act of 1978. In all these activities, save 
those entrusted by statute to the agency 
alone, the Director reports to the Presi- 
dent and acts under the direction of the 
President and Secretary of State. 

The centrality of ACDA's research 
responsibility is self-evident. I propose 
to give the ACDA research program a 
great deal of emphasis, because I believe 
it is of quite particular importance today 
that ACDA be an intellectually vigorous 
and autonomous agency, making its own 
contribution to the flow of ideas 
reaching the President. In carrying out 
its research function, it is my wish that 
ACDA draw on original minds 
throughout the government and the na- 
tion and in other nations as well. No one 
has a corner on the market for ideas. 

Originality in ACDA's research is 
especially needed because we have 
entered a new era in arms control. Our 
10 years of experience with Salt I and 
Salt II have been painful and unsatisfac- 
tory. Our first task, therefore, is to 
reassess the role of arms limitation 
agreements in our foreign and defense 

Role of Limitation Agreements 

It is hardly remarkable that our course 
in this novel realm has been one of trial 
and error, as we tested first one 
hypothesis and then another in our 
search for solutions to the puzzle of 

In the beginning of the nuclear age, 
many believe that our monopoly of 
nuclear weapons would be enough in 
itself to guarantee the peace. Strong ar- 
mies and navies would be unnecessary. 
The nuclear weapon would be Merlin's 

We soon learned how naive this view 
was. Bertrand Russell even proposed 
that we turn on our wartime ally, the 
Soviet Union, and insist under threat of 
nuclear attack that it become an open 
society. The idea was contrary to our 
nature and could not be considered 

Then we went through a period in 
which we espoused a policy of "massive 
retaliation," only to discover that it too 

could not become a day-by-day working 
rule for our diplomacy. 

But despite the disappointments and 
the setbacks, our foreign policy since 
President Truman's time has never 
stopped trying for effective international 
controls to minimize the risk of nuclear 
war and encourage the peaceful use of 
nuclear energy. Under President 
Reagan, this will emphatically remain 
the case. 

Since 1947, behind the shield of the 
Truman doctrine— the doctrine of con- 
tainment—the United States has relied 
upon five interdependent lines of policy 
to assure and enrich the peace: 

• A system of alliances for collective 
self-defense, backed by military forces 
deployed in key areas around the world 
to maintain the balance of power and 
the peace; 

• A progressive and integrated 
capitalist world economy, which serves 
the interests of the industrialized and 
the developing countries alike, and those 
of the Communist nations as well; 

• Special programs to assist the 
developing nations in their quest for 
modernization— next to peace itself the 
most pressing and fundamental problem 
of world politics; 

• Peaceful international cooperation, 
through the United Nations and other- 
wise, to encourage the recognition of 
human rights, the spread of education, 
and improvement in the quality of life; 

• The search for nuclear controls. 

These themes in our foreign policy 
are embodied in a series of programs 
going back to the four freedoms, Bret- 
ton Woods, the Marshall plan, point 
four, the Baruch plan, and NATO. Some 
of these programs have been extremely 
successful, others successful in part. 
Only one, the effort to eliminate the risk 
of nuclear war, has thus far been unsuc- 

Together, these related principles 
constitute a coherent foreign and 
defense policy. While there has been 
fluctuation and even some uncertainty in 
their application over the years, they re- 
main of necessity the heart of U.S. 
foreign and defense policy, because they 
reflect our character as a people and our 
permanent interests in world affairs. 
Changing circumstances require suitable 
changes in our programs. But these 
abiding principles will continue to shape 
our foreign and defense policy for the in- 
definite future. 

In the late 1940s, immediately after 
World War II, the United States offered 

the Soviet Union and the nations of 
Eastern Europe not only the Marshal 
plan but also the Baruch plan, which 
proposed to entrust our monopoly of 
nuclear science to an international 
agency for peaceful development. Eve 
American can be proud that our gove 
ment was willing to take so bold and 
imaginative a risk in the cause of pea 
In retrospect it is clear that the Sovie 
refusal to consider the proposal was a 
of the bitter turning points in the 
history of the cold war. 

Since the Soviet rejection of the 
Baruch plan, the United States has pa 
tiently pursued many other approach*' 
to the goal of limiting or eliminating 
nuclear arms — multilateral treaties lil 
those dealing with nuclear proliferate 
bilateral agreements with the Soviet 
Union with regard to antiballistic 
missiles and strategic arms, and so on 

Many of these have achieved imp« 
tant objectives. But so far the high 
hopes of peace which attended their 
signing have been disappointed. As 
Secretary of Defense Weinberger saic 
recently, "rarely in history have we on 
any other great nation pursued such I 
ble goals, risked so much, and yet 
gained so little." The state of world 
politics is not better now than it was 
1963, when the first of these agree- 
ments, the Limited Nuclear Test Ban 
Treaty, was signed and ratified. It is 
much, much worse. 

To understand the condition we 9 
today, and the significance of the gro.< 
ing Soviet nuclear arsenal, I turn brie* 
to the influence of the nuclear weapon 
on warfare and, therefore, on politics 

Influence of the Nuclear Weapon 

The nuclear weapon is a major chang' 
the nature of world politics— revolu- 
tionary in its implications, perhaps m< 
revolutionary than any previous evenl 
man's history. The nuclear balance af- 
fects every aspect of diplomacy— and 
fects it with increasing intensity. 

In the immediate postwar period, 
the United States had a monopoly of 
nuclear weapons and then, for a long* 
time, obvious nuclear superiority. The 
Soviet Union, rejecting the course of 
cooperation with the United States, 
began to expand its domain through t 
use of its own forces, proxy forces, an 
methods of subversion. These episode* 
took place first in Eastern Europe anc 
the Middle East and later in many otb 
parts of the world. Although the Unite 
States had warned the Soviet Union tl 
there could be no peace between our 
peoples until the Soviet Union honorec 



Arms Control 

edge of free elections in Eastern 
ipe, the Soviets soon discovered that 
'ere not then inclined to challenge 
!e facto Soviet sphere of influence in 
ern Europe. Furthermore, the 
;t Union concluded that we would 
:eriously consider using nuclear 
>ons to stop Soviet aggression out- 
of Europe in areas they thought we 
rded as of secondary importance, 
in Berlin and Cuba we contained 
it aggression with the threat to use 
entional weapons, not nuclear 
)ons, although in each case the 
ing shadow of the American nuclear 
>on played a decisive role. In the 
in missile crisis of 1962, for exam- 
the Soviets withdrew when they 
that we had more than 200,000 
js in Florida and the supporting 
1 and air forces necessary for the in- 
>n of Cuba. Both in Berlin and in 
i, American nuclear superiority was 
that it would have been wholly im- 
ent for the Soviet Union to have 
idered escalating the confrontation. 
\s our lead in nuclear power 
nished, our capacity to control the 
lation of crises diminished cor- 
ondingly. So did our capacity to use 
entional forces or credibly to 
aten their use. In Korea, at a point 
ounting American frustration, 
etary of State Acheson's secret 
ar hints, in response to what we 
ght might be Soviet signals of a 
e to end the war, produced the 
nning of negotiations, although it 
a second hint from President 
nhower to obtain the armistice. But 
lar secret American messages 
ird the end of the Vietnam war 
d to produce a similar reaction. By 
ate 1960s, the nuclear relationship 
/een the Soviet Union and the 
..ed States had become more nearly 

If the United States and its allies 
ild fail to carry through the pro- 
tis of rearmament on which they are 
embarked, the Soviet Union would 
l reinforce its widespread conven- 
al force superiority with a position of 
nous strategic strength. The Soviet 
on is now close to acquiring a 
ure from which it could gain an im- 
ant strategic advantage by striking 
I or threatening to strike first in a 
is. If we allow our strategic forces to 
iain vulnerable to that threat, the 
ilyzing specter of Soviet military 
eriority could prevent us from 
nding our national interests with 
:e if diplomacy and deterrence fail. In 
rt, we could be exposed to nuclear 

These profound changes in the 
political-military environment require us 
to review the policies we have been pur- 
suing in relation to control of strategic 
nuclear armaments. Policies which were 
plausible 10 or 15 years ago may well be 
obsolete today. 

Possible Negotiating Approaches 

There are several ways in which Presi- 
dent Reagan could approach the problem 
of negotiating agreements with the 
Soviet Union for limiting and reducing 
nuclear arms. 

The first would be to break off the 
SALT negotiating process altogether, or 
at least defer it until after we have fully 
corrected the military balance between 
the United States and its allies and the 
Warsaw Pact nations. President Reagan 
has rejected this course. He wishes to 
pursue every feasible opportunity for 
genuine negotiation with the Soviet 
Union on nuclear arms. 

A second possible policy would be to 
accept any SALT agreement we can get, 
on the ground that even a poor SALT 
agreement is better than no agreement 
at all and that all SALT agreements, 
however weak, contribute to peace, keep 
things from getting worse, or save 
money — perhaps all three. This ap- 
proach too has been firmly rejected by 
the President. 

In view of what has happened since 
the first SALT agreements were signed 
in 1972, it is impossible to defend the 
view that even a poor SALT agreement 
would contribute to peace. Since 1972 
we have endured the most dangerous 
period of the cold war and called it 
"detente." Adverse changes in the 
balance of power have been ignored 
because of the excessive hopes we in- 
vested in the SALT process and in 
nuclear arms limitation agreements. It is 
even more obvious that SALT agree- 
ments have not saved money. 

A third possible major premise for a 
SALT policy would be to seek an agree- 
ment that would make a nuclear attack 
on the United States— but not on its 
allies— unlikely. For the United States, 
this premise has always been rejected as 
a totally inadequate standard for nuclear 
negotiation. It would "decouple" us from 
our allies and leave us prisoners in "For- 
tress America." Facing the Soviet 
strategic arsenal which such a SALT 
policy would imply, we should be in no 
position to use conventional or nuclear 
force in defense of our interests in 
Europe, the Far East, the Middle East, 
or elsewhere. Since 1945, the United 
States has made many security com- 
mitments to other countries, through 

treaties, congressional resolutions, and 
otherwise. Those commitments are the 
cement of the world political system. A 
SALT policy based on the "Fortress 
America" premise would remove the 
nuclear umbrella over those com- 
mitments and leave them worthless. 

A fourth policy is to have a clear, 
credible, and unchallengeable second- 
strike nuclear capability— a "margin of 
safety," in President Reagan's 
words — as the essential basis of a 
countervailing strategy. Such a position 
on our part should make it possible to 
achieve one of the primary goals of our 
policy— to eliminate from world politics 
the threat that nuclear weapons could be 
used or brandished for aggressive pur- 
poses. Two fundamental national in- 
terests require the United States to pur- 
sue this aim: (1) to protect the United 
States, its allies, and its vital interests 
against nuclear attack or the threat of 
nuclear attack and (2) to permit us to 
use military force in defense of our in- 
terests with comparative freedom if it 
should become necessary to do so not 
only in Europe but in other strategically 
critical parts of the world. In my 
view — and here I speak for President 
Reagan— this must remain the minimal 
goal of our nuclear arsenal and our 
minimal goal in arms limitation negotia- 

Proliferation and World Order 

However, the record of our arms control 
experience and Soviet expansionism 
since 1972 requires us to seek more than 
this minimal goal. Of course we must at 
least maintain the nuclear stalemate. 
And of course nuclear balance must 
never again be allowed to dull our 
vigilance or reduce our capacity to pro- 
tect our interests by other means. But a 
nuclear balance should not be a license 
for aggression throughout the world 
backed by conventional forces, ter- 
rorism, subversion, and psychological 
warfare, in the pattern we have wit- 
nessed for many years and are witness- 
ing today on an expanding scale. The 
Soviet Union has been the principal fac- 
tor in this process of spreading anarchy, 
both through its own actions and those 
of nations and groups it has supported 
and protected. But it is by no means 
alone. Maintaining nuclear balance in 
order to allow the Soviet Union, its 
proxies, and its proteges to carry on the 
cold war as usual may be all we can 
achieve through negotiation and rearma- 
ment. But making the world safe for 
conventional and covert war is hardly an 
appetizing prospect for the United 

nuct 1Qf<1 


Arms Control 

States, for tht.' Soviet Union, or for the 
rest of the world, either. 

The Soviet drive for empire is ac- 
celerating in momentum and is becoming 
more and more difficult to contain and 
to confine. It is beginning to produce 
Western claustrophobia, and this is ex- 
tremely dangerous. World politics is not 
a chess game. War comes when human 
beings are swept away by emotional 
tides they cannot control— by rage, by 
frustration, and, above all, by fear. Con- 
fronting the fact, the course of wisdom 
is to move decisively toward stability— a 
condition of world politics where no 
state need fear its neighbor and where 
progress can be sought by peaceful 

The crumbling of world public order 
during the last decade has had another 
most unfortunate consequence. It has 
created an environment in which 
beleaguered nations have become more 
interested in acquiring nuclear weapons. 
However delusive the belief may be, 
some countries facing grave risks are 
convinced that a nuclear weapons 
capability could protect them against ag- 
gression or nuclear blackmail. We and 
other nations have frequently said that 
in a world where many states have 
nuclear weapons, politics will become 
nearly unpredictable and instability will 
reach the level of explosiveness. 

The magnitude of this danger was 
translated from the realm of forecast to 
that of reality by the Israeli attack on a 
nuclear reactor in Iraq on June 7. Israel 
perceived the potential development of 
nuclear capabilities in Iraq as a mortal 
threat, despite Iraq's adherence to the 
Nonproliferation Treaty and its agree- 
ment with the International Atomic 
Energy Agency (IAEA). While we have 
condemned that action, we should be 
aware that we are dealing here, as Dean 
Acheson said at the time of the Cuban 
missile crisis, with events which touch 
the nerve of sovereignty and survival. 
President Reagan made the same point 
in his news conference last week. 

The deadly volatility of politics in a 
world of nuclear proliferation cannot be 
cured by threats or reassuring words or 
pious votes in the United Nations. The 
phenomenon will continue until interna- 
tional public order is restored. Unless 
we, our allies, and other nations move 
decisively to restore world public order, 
and to deal with problems of regional in- 
stability, there is little or no chance to 
prevent nuclear proliferation on a large 
scale. And if nuclear proliferation on a 
large scale should take place there 
would be little or no chance for success 
in restoring world public order. 

I should stress as well in any pro- 
gram to prevent nuclear proliferation, 
the necessity for strengthening IAEA 
safeguards and for strengthened policies 
on the part of the main industrial na- 
tions that supply nuclear materials and 
technology. After the flash of lightening 
of the Israeli raid in Iraq, the world 
community should follow even more 
strictly an agreed and concerted policy 
based on the principles of the Non- 
proliferation Treaty and the bilateral 
and multilateral arrangements which 
have developed from it. 

Thus wherever one starts, analysis 
returns to the fundamental problem of 
stability and order. Secretary of State 
Haig addressed the issue in his impor- 
tant speech of April 24, 1981. The lesson 
he drew from the experience of the last 
10 years is that the United States, its 
allies, and all the other nations which 
cherish peace should return to the con- 
tainment policy pursued between 
Truman's time and the American 
withdrawal from Vietnam. 

The containment policy was one of 
collective self-defense against aggres- 
sion. In areas where their interests were 
affected, the United States and other 
nations worked together, especially to 
prevent Soviet expansion and coercion. 
The policy applied only where the Soviet 
Union sought to expand its empire by 
methods of aggression which violated 
the rules of the U.N. Charter regarding 
the international use of force. Those 
rules codify the necessary conditions of 
peaceful cooperation among the 
members of the state system. 

But the Charter of the United Na- 
tions is not a suicide pact. It cannot sur- 
vive as an influence in world politics 
unless the Soviet Union is finally per- 
suaded that the imperatives of the 
nuclear age require strict and reciprocal 
respect for its most fundamental 
rules — those dealing with the inter- 
national use of force. As Secretary of 
State Haig said on April 24: "We have a 
right, indeed a duty, to insist that the 
Soviets support a peaceful international 
order, that they abide by treaties, and 
that they respect reciprocity." 

Unless effective containment is 
restored, we cannot expect to pursue 
detente and arms control fruitfully. The 
restoration of containment should be the 
predicate for useful arms control 
agreements with the Soviet Union, 
which could then reinforce the policy 
and help to sustain it during periods of 
stress. Even competing nations have 
common interests in peace, if they can 
be brought to accept them. It should be 
possible, whatever difficulties, to 


translate those interests into 
agreements to limit and control ar 
maments. And such agreements, in tf 
could reduce the risk of war by in 
advertence, moderate arms eompetitS 
and promote political cooperation. 

What I suggest, therefore, is a fil 
possible approach to arms limitation J 
negotiations to be developed with oum 
allies in the period ahead— a policy 
which would link arms control to theH 
fective revival of the Truman doctrinl 
and the acceptance by the Soviet Una 
of the rules of the Charter of the Una 
Nations regarding the international us 
of force. Such an approach is well v/m 
the reach of Western policy. The 
Western nations have more than eno« 
power and potential power to accompli 
that goal. What has been lacking is at 
shared perception of the problem and! 
the political will to deal with it. 

I do not wish to be misunderstood 
When I emphasize the significance ofl 
the rules of the Charter of the United 
Nations governing the international us 
of force, I distinguish the Charter itsel- 
from the institutions of the United Na- 
tions and the abuse of those institution 
for purposes of political warfare. That 
tendency in recent years has been 
deplorable, and I hope that the United! 
States and its friends will succeed in 
restoring an atmosphere of civility and 
responsibility to the work of the Unit© 
Nations. The Charter, however, exists 
independently as an agreed code of lav 
to be enforced by the Security Council 
or, where the Security Council is unabi 1 
to act, by methods of individual and coi 
lective self-defense. The Charter is the 
only code for detente there is— the in-fl 
escapable starting point for all our ef* 
forts to improve delations with the 
Soviet Union and other nations which 
use war as an instrument of national 

The Future of Arms Control 

I come now to the final question: What 
to be done, and, more particularly, 
what's to be done about arms control? 

The first step has been taken. WitB 
its votes on the future of the military 
budget, the Congress has joined Presi- 
dent Reagan in launching a program to 
rebuild America's defenses. Without th; 
decision, nothing else could be ac- 
complished. We have ended our vain at- 
tempt to retreat to isolation and have 
started on the long march back to 

When I mention the figure of 9 
months as a timeframe, I am suggesting 
only an estimate, a target, a hope, not i 
promise or a deadline. The intellectual 


D e p a r t m e ntofStateBulletil 

Arms Control 

ems ahead are formidable, and 
lucracy has its own tempo, 
/hat are the implications of this im- 
e decision for arms control policy? 
believe it is now possible and 
able for us to resume the search for 
ced and verifiable arms control 
■merits. While we must not permit 
icissitudes of the negotiating pro- 
to interfere with the restoration of 
econd-strike nuclear capability and 
onventional force posture, we must 
imine the chief elements of our 
f with regard to strategic and long- 
? theater nuclear weapons— an ef- 
vhich, in the strategic area, should 
at least 9 months or so— and then 
;ed forthwith to the negotiating 
. Our policy will be to accept only 
;ments that contribute positively to 
•wn security and to the stability of 
tate system. The linkage we seek 
een Soviet behavior and arms con- 
ihould not be merely a transitory or 
;ed Soviet action— the sight of a 
upon the troubled waters— but the 
ration of world order sustained by 
rrence. The process of seeking arms 
ol agreements should play a 
ive part in that effort, 
should like now to list the ques- 
I believe we must address in reex- 
ing our policy for the control of 
i ar weapons. 

,ALT II Treaty. The first item on 
genda, obviously, is the SALT II 
ty still technically before the 
te. Should it be renegotiated or 
•d we proceed on what is loosely 
d the agenda for SALT III? Before 
:t, all aspects of this important sub- 
I should be studied with care by all 
■;rned in the executive branch and 
ienate and discussed with our allies. 
The Administration has reached no 
lusions on this subject, beyond the 
iction that the SALT II Treaty is 
|ily flawed and should not be ratified 
present form. We should make a 
start in seeking both arms control 
arms reduction; and we should 
se the course that will contribute 
; positively to the goals I have iden- 
d in the earlier parts of this 
ment— allied solidarity behind 
:>nal programs of containment in the 
ntic area, the Middle East, the Far 
;, or elsewhere as circumstances 
require. From now on, I suggest, 
hould have a new acronym— not 
;T but START, for strategic arms 
iction talks. 

Verification. I shall recommend a 
lamental review of the whole prob- 
of verification, monitoring, and 

Soviet compliance with arms control 
agreements and of our policies concern- 
ing them, perhaps including talks on the 
subject with the Soviet Union when our 
internal review has been completed. The 
possibility of reasonable SALT, or 
rather START, agreements and other 
arms limitation agreements depends on 
the ability of each party to verify com- 
pliance with full confidence. Given the 
closed nature of the Soviet system and 
the increasing complexity of nuclear and 
other highly technical weapons systems, 
we can never expect that weapons 
verification in the 1980s will be as sim- 
ple a problem as the verification of the 
Rush-Bagot agreement. But the discus- 
sion of the issue during the active 
debate on SALT II during the last 3 
years has left me, for one, deeply con- 
cerned about our capacity to verify 
Soviet compliance and to monitor 
developments in Soviet nuclear 
capabilities. Obviously, if nuclear arms 
limitation agreements do not reduce 
uncertainty about each side's arsenal, 
they can do little to improve security. 

Data. Similarly, I believe that we 
must examine once again the perennial 
problem of the data used in arms control 
negotiations with the Soviet Union. Un- 
til now, the data have been supplied 
almost entirely by the United States. 
While there was some improvement in 
this area during the SALT II negotia- 
tions, the Soviets must be more forth- 
coming in the provision of data in future 
negotiations, as the North Atlantic 
Council concluded in its Rome communi- 
que a few weeks ago. 

Nature of Agreement. We must 
consider the nature of the arms control 
agreement we want. Should we seek a 
comprehensive agreement or a relatively 
simple one? One for a period of years or 
one of indefinite duration, like the ABM 
Treaty? What should we be trying to 
limit or reduce? The number of deployed 
launchers? There is now serious concern 
that this approach is no longer adequate. 
Should we try to limit or reduce the 
number and types of missiles? The 
number and power of warheads on 
missiles? Their throw-weight? In this 
connection, we should recall former 
Secretary of State Rusk's incisive com- 
ment that there is no use building a dam 
halfway across a river. These questions 
have to be answered satisfactorily in 
order to produce an overall measure or 
measures of capacity and scope which 
could serve as the foundation for effec- 
tive arms limitation agreements. 

Theater Nuclear Forces. How 

should the difficult question of theater 
nuclear forces be approached? The 
history of that issue is complex, and 
positions have changed. It is a problem 
on which allied opinion is of quite special 
significance. Here, as on many other 
sensitive issues, we should move only 
after full consultations with our allies. 

Strategic Deterrent. President 
Reagan has made the strengthening of 
our strategic deterrent one of his major 
defense priorities. This step is indispens- 
able to the possibility of meaningful 
arms control. How can we best integrate 
our strategic force acquisition and arms 
control policies? How can we hope to 
achieve the President's goal of deep and 
reciprocal reductions in strategic nuclear 
weapons? I have little confidence in the 
"bargaining-chip" style of negotiations. 
On the other hand, we know from long 
experience that the Soviet pattern of 
negotiations rests on the principle of 
"nothing for nothing." We should never 
again defer actions essential to our 
security in the hope that the Soviet 
Union will follow suit. That approach 
has been followed, and it has failed. 
Equally, we should refuse to settle for 
cosmetic or ambiguous agreements and 
resolve to persevere in our armaments 
programs whether the news from the 
negotiating table is favorable or un- 

Will it be possible to negotiate and 
verify a dramatic and equitable cut in 
each side's arsenal— to achieve a real 
breakthrough in the mad spiral of arms 
accumulation? Such proposals have been 
made from time to time— notably by 
Paul H. Nitze in 1971 and by George 
Kennan a few weeks ago. Under present 
circumstances, such an approach might 
be feasible, perhaps by starting with the 
largest missiles. No American Adminis- 
tration could reject such a possibilty out 
of hand, despite the fact that President 
Carter's arms reduction proposals in 
1977 were abruptly dismissed by the 
Soviet Union. 

The world is becoming so unstable, 
war is so frequent, and the spread of 
nuclear weapons is gaining so much 
momentum that agreements which now 
seem hopelessly quixotic may well 
become practical politics. I, for one, 
devoutly hope so. All I can say on this 
subject is that we shall study and ex- 
plore all reasonable approaches to the 
goal of arms control and arms reduction 
and pursue the most promising with all 
the energy and imagination at our com- 


Arms Control 

Antisatellite Weaponry. Continued 
Soviet efforts to develop and test anti- 
satellite weaponry underline the impor- 
tance of possible technological break- 
throughs which could revolutionize the 
problem of security as much as the 
nuclear weapon did. We must examine 
the potential impact of a whole range of 
technological developments both on our 
defense programs and on our arms con- 
trol policies. Given the difficulties of 
monitoring what goes on in the Soviet 
Union, we must ask ourselves whether 
limitations on such systems as antisatel- 
lite weapons are feasible and in our 
security interests. 

ABM Treaty. The Antiballistic 
Missile (ABM) Treaty comes up for 
review in 1982. I take it as obvious that 
the review should not be pro forma but 

Nuclear Nonproliferation. What 
about the proliferation of the nuclear 
weapons and the future of the Non- 
proliferation Treaty? I commented 
earlier in this statement on the 
significance of proliferation both as a 
consequence and as a cause of the break- 
down of world public order. I have little 
to add here. If a strengthened non- 
proliferation policy is to be successful in 
containing the spread of nuclear 
weapons and explosives, it must be dealt 
with in the overall context of interna- 
tional security. 

It must be dealt with also in the con- 
text of the world energy problem and of 
President Reagan's commitment to the 
peaceful uses of nuclear energy. Our 
nonproliferation policy should fully ac- 
cept the energy security needs of our 
allies and other countries. The ex- 
perience of the last few years should 
teach us that policies that fail to 
recognize legitimate energy security 
needs cannot succeed. 

Finally, our nonproliferation policies 
need to reflect realism, commitment, 
and flexibility — in particular, a recogni- 
tion that dealing with proliferation is a 
shared reponsibility. We cannot try to 
impose our policies on others; we can, 
however, constructively commit the 
United States to a position of leadership 
in a truly international effort at reduc- 
ing the incentives and opportunities for 
proliferation while working to develop 
nuclear energy for peaceful purposes at 
home and abroad. 

1 intend to take a strong role in sup 
porting U.S. nonproliferation efforts and 
in meeting ACDA's statutory respon- 
sibilities in this important area. 

U.S. Alliances. Finally, what is the 
role of arms limitation negotiations and 
agreements in deepening the solidarity 
of our alliances throughout the world? I 
believe that role is fundamental. As the 
Western world has reluctantly come to 
recognize the expansionist nature of 
Soviet policy, people have become more 
fearful about the possiblity of war, and 
particularly of nuclear war. This 
heightening of anxiety is altogether 
natural and reasonable. People want to 
be certain that their governments are 
doing everthing possible to reach fair 
agreements with the Soviet Union and 
exploring every rational opening for 
peace, especially in the arcane and 
rather forbidding area of arms control. 

It follows, I believe, that we should 
enlarge the practice of consulting with 
our allies on the problems we face in our 
bilateral arms control negotiations with 
the Soviet Union and continue the suc- 
cessful practice of working together in 
multilateral negotiations. The more we 
and our allies understand each other, the 
stronger our alliances will be — provided, 
of course, that we pursue reasonable 

On that footing, I suggest, we 
should put a great deal of emphasis on 
effective and realistic programs of public 
information and education. The Soviet 
Union has scored several quite un- 
necessary propaganda victories in recent 
years by exploiting the horror of nuclear 
war. The purpose of those propaganda 
campaigns is clear: to separate the 
United States from its allies and to 
discourage Western rearmament. I shall 
press for information programs that ful- 
ly recognize the importance of the 
political, psychological, and ideological 
dimensions of security. Peace with 
freedom cannot be achieved without the 
discipline of power. But a balance of 
power does not of itself guarantee 


The heart of the dilemma of our foreign 
policy is that the Soviet Union is not 
seeking a few border changes but is 
challenging the system of peace we have 
known since 1945. The issue was recent- 
ly stated with compelling force by the 
Deputy Prime Minister of Singapore, 
Sinnathamby Rajaratnam: 

Unless the Soviet challenge is made the con.' 
of the U.S. foreign policy and met with the 
same resolve and sense of realism the Soviets 
bring to their cause, then a Fax Sovietica is a 
high probability in the 1980s. . . . That is not 
what we in Asia want, but if that is the only 
item on the shelf, that is what we will have 
to settle fur. 

I believe that President Reagan « 
succeed in his ambitious program of 
coalition diplomacy to renew and res 
the system of peace. I am an optimis 
although I do not believe that men ai 
likely to become angels very soon. Bi 
believe that the NATO allies, Japan, 
Australia, New Zealand, Israel, Egyj 
and a number of other countries, pur 
ing a rational policy of containment, 
should be able to convince the Soviet 
Union that the imperatives of survive 
the nuclear age demand strict and 
reciprocal respect by all nations for t 
rules of world public order governing 
the international use of force. Fair ai 
verifiable arms limitation agreements 
can help to fortify that conviction onj 
is established and to protect it agains 
temptation, as the Rush-Bagot agree 
ment has helped since 1817 to defeat 
pulses and pressures hostile to good 
relations among the United Kingdom 
Canada, and the United States. 

Despite the long history of disap- 
pointment with the results of arms cl 
trol negotiations, the peoples of the 
West continue to support such effort 
with tenacity and faith— sometimes \ 
excessive faith. The firmness of their 
faith bespeaks one of the finest and 
most powerful themes of Western 
civilization: our devotion to the ideal I 
law. The quest for disarmament trea I 
is meaningless except as part of a lai 
quest to bring international society 
under the control of an effective ami 
universal system of international law 
We are people of the book and peopl 
the law. In the Arms Control and Di 
mament Act, the Congress declared ) 
it is "an ultimate goal of the United . 
States" to subordinate the internatioi" 
use of force to the rule of law. This i t 
goal we can't help seeking. On this cJ 
tracting and interdependent planet, 
where modern science offers mankini 
both infinite promise and infinitely 
hideous dangers, the course of law is 
most promising foundation for the m 
tional security of the United States. ]| 
assure you that my efforts in the offi 
will be directed by the compass of th« 
law. The rule of law has been the 
guiding principle of my life. It is too . 
for me to change now. 

'ACDA press release 1. The complete 
transcript or the hearings will be publishe 
by the committee and will be available frc 
the Superintendent of Documents, U.S. 
Government Printing Office, Washington, 
D.C. 20402. ■ 


Department of State Bulle 


IS. Policy Toward Western Europe 
lid Canada 

Lawrence S. Eagleburger 

Etatement before the Subcommittee 
I'm rope and the Middle East of the 
me Foreign Affairs Committee on 
w 2, 1981. Ambassador Eagleburger 
Assistant Secretary for European 
li'rs. 1 

■come this opportunity to discuss 
I you U.S. relations with West 
Ipe and Canada. I look forward to 
ling; with you next week to review 
l-elations with the Soviet Union, 
pslavia, and the nations of Eastern 
|)pe. Your main interest is U.S. 

j» What are the priorities of the 
ran Administration? 
|» What major problems do we face? 
'• What have we achieved so far? 
j» What issues lie ahead? 

Kfou want, in short, the lay of the 
| and a look ahead. To that end, I 
(outline the following dimensions of 

k Our overall framework for action; 
k Our overriding concern for the 
|,ary security and economic well- 
g of the transatlantic community; 

• Our clear commitment to good bi- 
-al relations throughout the region. 


discussion of U.S. policy toward 
it Europe and Canada must be put 

broader perspective. The Reagan 
ninistration has made clear that the 
on is now launched on a new begin- 
{. We are proceeding, with a re- 
ed sense of purpose and direction, to 
ore American leadership and to 
ieve a world free from threat or use 

President Reagan and Secretary 
g have designed a foreign policy with 
r main points: 

First, our insistence on restraint 
reciprocity in East- West relations; 
Second, our determination to 
mgthen our alliances, particularly 

Third, our intention to play a con- 
ictive role in the developing nations 
he world; and 

Fourth, our fundamental resolve to 
strengthen our economy and our 

Each of these four points bears on 
U.S. relations with West Europe and 
Canada — directly or indirectly. And each 
concern relates to the others. Without 
progress on the President's economic 
reform program, we cannot marshal the 
resources for increased defense capabili- 
ty. Nor can we manifest the leadership 
needed to renew the North Atlantic 
alliance. Without a resolute demonstra- 
tion of collective will among the allies, 
we cannot build the basis for construc- 
tive East- West relations. And, without 
cooperation with the other nations of the 
transatlantic community, we cannot ad- 
dress the underlying problems of 
developing nations — problems which are 
significant on their own terms and which 
can provide openings for Soviet adven- 

But, with balanced, consistent, and 
reliable emphasis on the four pillars of 
the Reagan Administration's policy, we 

can achieve progress. That progress 
toward the common defense and com- 
mon welfare can serve not only our na- 
tional interests but also those of Canada 
and the nations of Western Europe. 


The Reagan Administration considers 
restoration of Western defense capabili- 
ty and allied cohesion an overriding 
priority. It is in concert with our NATO 
partners that U.S. foreign policy can 
achieve full effectiveness. The Atlantic 
alliance has stood the test of time. It has 
preserved the security of the United 
States, Canada, and Western Europe. 
And, based as it is on shared values and 
a common heritage, it will continue to 
play this essential role. 

The Administration, as one of its 
primary goals, has tried to lay the foun- 
dation for an improved relationship with 
its allies. The meetings of NATO foreign 
and defense ministers in May marked 
important steps in this direction. The 

Lawrence S. 
Eagleburger was born 
in Milwaukee on 
August 1, 1930. He 
received his B.S. 
degree from the 
University of Wiscon- 
sin (1952) and, after 
serving as a First 
Lieutentant in the 
U.S. Army (1952-54), 
earned an M.S. degree 
(1957), also from the University of Wisconsin. 

He entered the Foreign Service in 1957 
and was assigned to Honduras until 1959. He 
served as Political Analyst for Cuba in the 
Bureau of Intelligence and Research in the 
Department of State until 1961. Following 
Serbo-Croation language training, he was 
assigned to the economic section of the U.S. 
Embassy in Belgrade (1961-65). Mr. 
Eagleburger returned to the Department of 
State to join the Secretariat staff dealing 
with European affairs and then became 
special assistant (March-July 1966) to former 
Secretary of State Dean Acheson during the 
latter's special assignment as Adviser to the 
President on Franco-NATO matters. His next 
position was that of Acting Director of the 
Secretariat Staff. 

In October 1966, Mr. Eagleburger joined 
the National Security Staff and was responsi- 
ble for European affairs. He became Special 

Assistant to the Under Secretary of State in 
October 1967. 

From November 1968 until January 1969 
Mr. Eagleburger was assistant to Dr. Henry 
A. Kissinger in New York during the 
presidential transition; he then became Ex- 
ecutive Assistant to Dr. Kissinger at the 
White House. In September 1969 he was 
assigned to the U.S. Mission to NATO in 
Brussels as Political Adviser and Chief of the 
Political Section. From August 1971 to 
January 30, 1973, Mr. Eagleburger was 
Deputy Assistant Secretary of Defense for 
International Security Council Affairs, Policy 
Plans, and National Security Council Affairs; 
until May 25, 1973 he was Acting Assistant 
Secretary of Defense for International Securi- 
ty Affairs. He became Deputy Assistant to 
the President for National Security Opera- 
tions in June 1973 and served in that position 
until the following September when he was 
named Executive Assistant to Secretary of 
State Kissinger. In 1975 he became Deputy 
Under Secretary of State for Management. 

Mr. Eagleburger was sworn in as U.S. 
Ambassador to Yugoslavia on June 10, 1977, 
and became Assistant Secretary for Euro- 
pean Affairs on May 15, 1981. 

Ambassador Eagleburger has been 
awarded the Department of Defense's 
Distinguished Civilian Service Medal (1973) 
and the President's Award for Distinguished 
Federal Civilian Service (1976). 

just 1981 



solidarity, consensus, and mutual 
confidence achieved there provide a firm 
basis on which to build. 

Early in the new Administration, the 
United States resolved to strengthen its 
economy; to bolster its military power 
substantially; and to provide active, 
confident, and consistent leadership in 
foreign policy in the context of close and 
genuine consultation. Our allies have 
welcomed this approach as an important 
contribution to a healthy alliance. 

The central element in U.S. foreign 
policy, and one in which allied support is 
crucial, is the approach to East- West 
relations. The United States has been 
active in working to develop a shared 
allied perception of the problems and 
directions in East-West policy. At the 
NATO ministerial meetings, the alliance 
took significant steps toward forging a 
new consensus on a firmer, more 
realistic approach to the Soviet Union. 
This approach has several components, 
as outlined by Secretary Haig. 

First, an insistence that Soviet 
restraint and reciprocity in East-West 
relations must be a key element. The 
communique for the NATO ministerial 
put the Soviets on notice that a stable 
and constructive East- West relationship 
depends on Soviet restraint. In the same 
document, the Soviets were warned that 

grave consequences would follow from 
any intervention in Poland. The alliance 
reiterated the unacceptability of the 
Soviet invasion and occupation of 
Afghanistan and called again for a with- 
drawal of Soviet forces. 

Second, the alliance must be 
strengthened in order to restore the 
military balance. The NATO foreign 
ministers thus reaffirmed the decision 
made in December 1979 to proceed with 
theater nuclear forces (TNF) moderniza- 
tion. At the NATO Defense Planning 
Committee ministerial, the allies 
confirmed the standing allied commit- 
ment to the 3% formula for annual real 
defense spending increases and agreed 
to do their utmost to make available all 
of the resources needed to strengthen 
NATO's deterrent and defense forces. 
The United States and its allies will con- 
tinue to work to improve NATO defense 
planning, emphasizing defense output as 
a standard in addition to the 3% bench- 

Third, the United States and its 
allies intend to play an active and 
positive role in the developing nations of 
the world. The West has much to offer 
the developing countries in terms of 
humanitarian and economic assistance, 
aid in the peaceful resolution of interna- 
tional problems, and, when appropriate, 

assistance in deterring or defending 
against threats to their security. The 
United States and its allies recognize 
global nature of the Soviet threat, 
whether it is exerted directly or throi 
surrogates. The allies have expanded 
their horizons of concern beyond Eun 
because of appreciation for the fact tr 
events outside the NATO area can 
threaten vital Western interests. How 
ever, a formal extension of NATO's ai< 
of responsibility is not necessary and : 
under consideration. We will strive fo 
better consultation and cooperation 1 
among the allies on out-of-area concer 
and for greater efforts, in accordance 
with the capabilities of members of th 
alliance, to meet threats in Southwest 
Asia and elsewhere. 

Fourth, we will use East- West 
negotiations — while carefully assuring 
that the homework has been done so 
that U.S. and Western security inters 
will be served — as a means of achievir 
stability through restraint. The United 
States and our allies will maintain a 
dialogue with the Soviet Union. At the 
Madrid review meeting for the Con- 
ference on Security and Cooperation ii 
Europe (CSCE), we and our allies seel 
to achieve substantive and balanced 
results leading to better implementatif 
of CSCE provisions, including respect 

North Atlantic Treaty Organization: European Members 




The U.S. Government has not recognized the incorpora- 
tion ot Estonia. Lativa, and Lithuania into the Soviet 


NATO provides for the stationing of 
U.S. military units in Europe as part < 
a common NATO defense force in 
peacetime. Out of a total of 2 million i 
tive duty U.S. military personnel in 
1979, 485,000 were stationed overseas 
Of these the total number assigned in 
Europe was 300,000 of which 193,000 
were U.S. Army personnel stationed ii 
West Germany. 

NATO's European Members: Belgiurr 
Denmark, France,* the Federal Repub 
of Germany, Greece, Iceland, Italy, Lu 
embourg, the Netherlands, Norway, P< 
tugal, Turkey, the United Kingdom. 

North American Members: Canada 

United States. 


* France withdrew its forces from 
NATO's international commands in 1966 bin 
remains a member of the alliance. 


Department of State Bullet 1 


human rights and enhanced security 
cooperation. We support the French 
)Osal for a conference on disarma- 
it in Europe. The United States and 
alliance partners favor realistic, 
need, and verifiable arms control. In 
regard, the reaffirmation at this last 
ting of NATO foreign ministers of 
1 tracks of the 1979 decision on TNF 
imes particular importance. That 
sion had two elements: deployment 
arms control, which were to be pur- 
i together. Since the decision, NATO 
is have moved forward on TNF 

The arms control element of the 
r decision is also moving ahead. At 
Rome meeting of NATO foreign 
isters, the allies welcomed the an- 
ncement of the United States that 
would be meeting with the Soviets to 
in negotiations on TNF arms control 
lin the SALT [Strategic Arms 
litation Talks] framework by the end 
his year. Since then, Secretary Haig 
met with Ambassador Dobrynin to 
lin laying the groundwork for his 
kiting with Mr. Gromyko in Septem- 
! at the U.N. General Assembly. 
. These are the basic elements of 
1 ign policy on which we are working 
iiin the alliance. They have won 
jeral acceptance from our NATO 
|;ners. At the same time, it is realistic 
lay that we have only made a start, 
ierences exist in perceptions of the 
iiet threat between publics and 
liaments in Europe and the United 
les. The pressures upon our govern- 
i its often differ. So does our sense of 
! rities on some of the major issues of 
I day. But, we have achieved a signifi- 
; common sense of purpose and 
ction, and will continue, with our 
fs' help, translating these concepts in- 
pecific actions. To succeed, we each 
d the long-term support and under- 
lding of our publics and parliaments. 


:re can be no lasting military defense 
he West without economic strength, 
momic vigor is essential to provide 
resources for the security of the 
ince and to assure the political 
Dility of the region. Uncertainty in 
global economic situation can compli- 
; our collective efforts to improve the 
urity posture of the alliance. Low 
wth rates, excessive inflation, and 
h levels of unemployment are not 
.ducive to political stability. Energy 
:es and availability of supply are 

another critical area of mutual concern. 
Economic troubles generate protec- 
tionist pressures. There is a particular 
need to avoid restrictive measures which 
would impede necessary structural 
change and increase our partners' 
economic problems. 

The Reagan Administration recog- 
nizes the primacy of economic issues in 
U.S. relations with Canada and Western 
Europe. Progress toward sound nonin- 
flationary growth within the U.S. 
economy may well be the most signifi- 
cant contribution we can make for im- 
proving both the global economic situa- 
tion and the economic lot of our allies. It 
is for this reason that the President has 
put economic reform at the top of his 
roster of concerns. 

The Reagan Administration appre- 
ciates the fact that we cannot succeed in 
our economic objectives if we act alone. 
Nor can we succeed if we act at cross 
purposes with the economic interests of 
the other industrial democracies. It is 
for these reasons that the Administra- 
tion places special emphasis on close 
consultation and cooperation with the 
Canadians and West Europeans. Recog- 
nition of the need to work well together 
on shared challenges to our economic 
well-being is the reason for convening 
the economic summit to be held in Ot- 
tawa this July. And it underscores our 
particular commitment to two multilat- 
eral institutions: the Organization for 
Economic Cooperation and Development 
(OECD) and the European Community 

The next major meetings of the 
OECD and the International Energy 
Agency (IEA), an independent agency 
within the OECD framework, merit 
mention. The OECD ministerial, 
June 16-17, will address OECD member 
countries' relations with developing na- 
tions, cooperation on energy matters, 
trade among OECD countries and with 
nonmember countries, export credits, 
and the overall economic situation. 
Deputy Secretary of State Clark and 
Deputy Secretary of the Treasury 
McNamar will head the U.S. delegation. 
These issues will also be considered by 
the summit countries' heads of govern- 
ment when they meet, July 19-21, at Ot- 
tawa, where the agenda will also include 
a discussion of East- West economic rela- 
tions. The IEA Governing Board will 
meet at ministerial level, June 15, in 
Paris. Secretary of Energy Edwards 
and Deputy Secretary of State Clark 
will lead the U.S. delegation. Despite the 
present oversupply of crude oil on world 
markets and the recent OPEC [Organi- 

zation of Petroleum Exporting Coun- 
tries] ministerial decision to freeze 
prices for the rest of 1981, we need to 
continue our cooperative efforts to diver- 
sify sources of supply, develop alter- 
native energy sources, and improve 
emergency-sharing arrangements. 

The United States remains steadfast 
in its support for the process of Euro- 
pean integration, exemplified by the 
evolution of the European Community. 
The Reagan Administration considers 
progress toward European unity impor- 
tant for Europe, the West, and the 
world. We thus place special significance 
on our continuing consultations, cover- 
ing both economic and political issues, 
with the European Community and its 
10 member governments. 

The latest round of semiannual high- 
level U.S. -EC consultations was held, 
May 20-21, in Brussels. Under Secre- 
tary-designate for Economic Affairs 
Rashish led the U.S. delegation. We 
discussed a series of specific trade prob- 
lems, North-South issues, the future 
development of the Community's Com- 
mon Agricultural Policy, and energy 
security. We also exchanged views on 
current political issues of mutual in- 
terest. Given the volume and content of 
trade between the United States and the 
EC — according to Commerce Depart- 
ment statistics, our exports to the EC 
were valued at $53.7 billion in 1980 and 
our imports from the EC at $36.1 
billion, resulting in a $17.5 billion 
surplus in our favor — it is not surprising 
that problems arise from time to time. 
We work closely with the European 
Commission and the member govern- 
ments to manage and resolve these 
problems. We believe that they should 
not be permitted to fester to the point 
where they affect our political and 
security relationships. 

We follow the process of European 
integration with interest. We welcomed 
British, Danish, and Irish membership in 
the mid-1970s and are pleased that 
Greece became the 10th member of the 
EC on January 1, 1981. Spain and Port- 
ugal are actively negotiating the terms 
of their accession and are expected to 
join in the mid-1980s. But, while the 
Community is expanding its member- 
ship, the internal process of economic in- 
tegration has slowed, partly because of 
the wide disparity in rates of growth 
and inflation among its members. The 
Community has delayed movement of 
the European monetary system into its 
second stage. The Community is faced 
with difficult, interrelated problems- 
most notably, budget reform and modifi- 

gust 1981 



cation of the Common Agricultural 
Policy. Both problems are complicated 
by expansion of the Community. The 
European Commission and the member 
governments are grappling with severe 
structural problems in the steel, textile, 
and automobile industries. The directly 
elected European Parliament is seeking 
a more active role in the Community's 
budgetary and policymaking processes. 

Although internal economic integra- 
tion has temporarily slowed, there has 
been significant progress on political 
cooperation by the EC- 10 [the 10 mem- 
bers of the European Community]. This 
development has occurred even though 
political cooperation is an area outside 
the scope of the Treaty of Rome. There 
has been a conscious and increasingly 
successful effort to coordinate the 
foreign policies of the Community's 
member states. A "European political 
correspondents" network has been estab- 
lished which permits rapid direct com- 
munications among the EC- 10 Foreign 
Ministries. The country serving as Presi- 
dent of the Council — currently the 
Netherlands but the United Kingdom 
will take over on July 1 — provides 
secretariat services. Political directors 
meet regularly. A number of expert 
working groups, each with regional or 
institutional responsibilities, have been 
established to do the staff work. 

Such developments have increasing 
significance for the United States. Over 
the past year or so, there has been a 
common EC-10 response to events such 
as the Soviet invasion of Afghanistan, 
the Iran hostage situation, recent devel- 
opments in Poland, and the Middle East 
peace process. The result has been 
higher visibility for EC political action 
and the expectation that the Ten will be 
compelled to take a position on major 
political events and developments. A 
unified EC-10 position can be helpful to 
the United States, as was the case with 
the Community's statement on the in- 
tegrity of passage through the Strait of 
Hormuz when the Iran-Iraq war broke 
out. We are consulting closely with the 
EC-10 to insure that their Middle East 
initiative will be complementary to our 
own efforts to establish peace ifi the 

Our political dialogue with the 
EC-10 is an ongoing process covering a 
wide range of issues of mutual interest. 
As part of this dialogue, Secretary Haig 
stopped in Brussels on May 5, following 
the NATO ministerial in Rome. We have 
been assured, however, that the EC in- 
tends to use NATO as the forum for 
discussion of Western defense issues, in 
large part because Ireland is not a 
member of the alliance. 


Those four pillars of policy for the 
Reagan Administration, which provide 
the foundation for our economic and 
military security, are important in the 
pursuit of mutually satisfactory bilateral 
relations as well. Let me thus turn to 
those ties — addressing, in turn, the 
developments to date and issues before 
us, in our relations with: Switzerland, 
Austria, and the Federal Republic of 
Germany; nations of northern Europe; 
nations of central and southwestern 
Europe; nations in the eastern Mediter- 
ranean; and Canada. 

Federal Republic of Germany, Austria, 

Federal Republic of Germany. The 

Federal Republic of Germany (F.R.G.) is 
a key factor in all aspects of U.S. policy 
toward Europe. The just-concluded visit 
of Federal Chancellor Schmidt marked 
the culmination of a series of high-level 
contacts here and in Bonn which have 
established a sound foundation for 
cooperation between the Reagan Admin- 
istration and the Federal Republic in the 
difficult times ahead. This visit demon- 
strated a high degree of commonality in 
the basic objectives and policies of the 
two countries. In view of the crucial im- 
portance of the F.R.G. in our security 
posture in Europe, in relations with the 
U.S.S.R., and in problems beyond 
Europe, we were gratified to confirm 
that we have this broad area of agree- 
ment with the Federal Republic. 

The Federal Republic is inevitably 
on the front line in meeting the 
challenge posed by the Soviet Union. 
Through its performance over the last 
15 years, its leadership role in imple- 
menting the dual NATO decision on 
TNF, and its large and growing con- 
tribution to the common defense, the 
Federal Republic has demonstrated the 
ability and the will, together with the 
United States and its other allies, to 
meet this challenge. 

The Chancellor's visit also made 
clear that the U.S. -German relation- 
ship — including its political, military, 
and economic aspects — has reached a 
level of maturity at which we can 
achieve consensus despite differences 
due to history, geography, and differing 
roles in the world. We have developed 
means for dealing with the inevitable 
points of difference frankly and ex- 
peditiously, and in a manner which 
minimizes the impact of these minor 
frictions on the overall relationship. 

Berlin. U.S. policy in Berlin con- 
tinues to be to maintain allied rights ai 
responsibilities for the city as a whole 
and to insure four-power compliance f 
with the terms and the spirit of the 
Quadripartite Agreement of 1971. We 
can thus best defend Berlin against an; 
Soviet or German Democratic Republic 
(G.D.R.) threat to its security, whether 
that threat is directed against the city"! 
four-power status, rights of land and a 
access, or the city's developing ties to 1 
the F.R.G. Our policy of maintaining tl 
four-power commitments helps provide 1 
the calm atmosphere Berlin needs in 
which to develop and prosper. 

Our priorities are to encourage con 
tinued Soviet commitment to the four- 
power regime (done recently, for exam 
pie, by the conclusion of a four-power 
agreement on railway tariffs) and to en 
courage the development of Berlin's ec 
nomic, cultural, and political ties with 
the F.R.G. and the West. The major j 
potential problem is how to keep Berlii 
isolated from increasing East- West teirt 
sions created by the Soviet armaments 
buildup, the Soviet invasion of Afghani | 
stan, and the situation in Poland. 

Austria. As obliged under the 193 
State Treaty and as a matter of policy, 
we support the permanent neutrality o 
Austria. That policy has enabled Austr 
to pursue its basic Western orientation 
and has facilitated the broad con- 
vergence of Austria's international 
policies with U.S. interests. There are 
no serious bilateral problems, although 
we have differed with Chancellor 
Kreisky on Middle East policy. 

Good opportunities for expanded 
bilateral relations exist in the areas of 
energy and security. We are talking 
with the Austrians about sales of 
American coal and about technology e> 
change on the problem of nuclear spen 
fuel disposal and we are also encourag- 
ing Austria to choose an American air- 
craft in its search for an interceptor fo 
its air force. We admire and support 
Austria's role in refugee resettlement, 
and we are reviewing an Austrian re- 
quest to restore a cut in the visa 
numbers we allot for Eastern Europeai 
refugees from Austria. 

Switzerland. We support the 
neutrality of Switzerland and that na- 
tion's active international role. Swiss 
representation of U.S. interests in Cube 
and more recently in Iran, has been an 
outstanding contribution to improved bi| 
lateral relations. Switzerland's Western! 
orientation has produced sympathetic I 
understanding of our views on such 



Department of State Bulletir 


es as Afghanistan. The United 
;es supports Swiss efforts to main- 
an effective defense establishment 
ipped with modern weapons. We 
e had continuing discussions with the 
ss concerning our common nuclear 
proliferation objectives. We will con- 
e enhanced cooperation with the 
ss in ways fully consistent with their 
trality and where Switzerland's 
al leadership can contribute to the 
herance of our objectives, as in the 
}E and in multilateral aid efforts for 
key and for refugee relief. 

them Europe 

i United States seeks close relation- 
»s with the nations of northern 
•ope. Our links with the majority of 
se states are strengthened by com- 
i membership in NATO, and it is the 
irity relationship that is the principal 
ing force in our collective endeavors. 
:ourse, not all states in the region 
[e chosen NATO membership: 
i?den, Finland, and Ireland remain 

outside the alliance. Moreover, 
economic, psychological, and historic 
forces, even among allies, can strain, as 
well as strengthen, relationships. Grow- 
ing protectionist sentiment throughout 
northern Europe and the rise in anti- 
nuclear and pacifist sentiment in many 
countries challenge the strength of ties 
that have been nurtured since the Sec- 
ond World War. Our own relations with 
these nations are conducted both bi- 
laterally and multilateral^. The two 
strands intertwine and reinforce each 

United Kingdom. In the United 
Kingdom, the Conservatives, led by 
Prime Minister Thatcher, remain in 
office. The visit of Mrs. Thatcher to 
Washington in the second month of the 
new U.S. Administration symbolizes the 
close ties that bind the United States 
and the United Kingdom. The Thatcher 
government is fully committed to a 
strong NATO defense, despite the per- 
sistent problems of the U.K. economy. 
U.K. defense expenditures are expected 

to show a real increase of 8% in the 
3-year period that began in 1980-81. 
Her Majesty's Government also con- 
tinues to modernize both its nuclear and 
conventional deterrents, with the deci- 
sion to purchase Trident warheads il- 
lustrative of its continued nuclear com- 
mitment. At the same time, the 
Thatcher government remains fully com- 
mitted to NATO's two-track TNF deci- 
sion. Preparations for ground-launched 
cruise missile deployments in the United 
Kingdom are proceeding apace, and the 
British participate actively in the 
deliberations of the NATO Special Con- 
sultative Group addressing the arms 
control track of the alliance decision. 

The Thatcher government also ac- 
cepts the fact that alliance interests dic- 
tate a presence in the Persion Gulf. To 
this end, the United Kingdom has 
agreed to participate in an alliance rapid 
deployment force and has made tem- 
porary deployments of small-scale units 
to the area. The British have also 
cooperated with U.S. efforts to enhance 

lestern Europe* 

] Organization for Economic Cooperation and Development (OECD) 
1 European Communities (EC) 

~~1 European Free Trade Association (EFTA) 

e: Finland is an associate member of EFTA. 

i June 1981 Department of State Bulletin for description and membership 
s of OECD, EC, and EFTA. 

Area: 1.7 million sq. mi. 
Population: 382 million (1978) 
GNP: $2.5 trillion (1978) 
GNP Per Capita: $6,500 
Share of World GNP: 26% 
Share of World Trade: 48% (1979) 
Value of Merchandise Imports from 

U.S.: $68 billion (1980) 
Value of Exports to U.S.: $46 billion 


'Includes Austria, Belgium, Denmark, 
Finland, France, West Germany, Greece, 
Iceland, Ireland, Italy, Luxembourg, 
Netherlands, Norway, Portugal, Spain, 
Sweden, Switzerland, Turkey, United 

The U.S. Government has not recognized the incorpora- 
tion of Estonia. Lativa. and Lithuania into the Soviet 

Ugust 1981 



our ability to respond to contingencies in 
the region. 

U.S. policy with regard to northern 
Ireland, which has traditionally been one 
of impartiality, was outlined in the 
President's statement of March 17, 
1981. We will continue to urge the par- 
ties to come together for a just and 
peaceful solution, and we will continue 
to condemn all acts of terrorism and 
violence. The President also called on all 
Americans to question closely any ap- 
peal for financial or other aid from 
groups involved in the conflict to insure 
that contributions do not end up in the 
hands of those who perpetrate violence, 
either directly or indirectly. 

Republic of Ireland. With the 
Republic of Ireland, excellent relations 
reflect the enormous reservoir of recip- 
rocal good will with the United States. 
There is, however, no formal treaty rela- 
tionship between us. Northern Ireland 
remains the single most important issue 
that we face jointly. But, with Ireland's 
membership in the EC, our consultations 
now extend across a wide range of inter- 
national problems. During this current 
U.N. assembly, Ireland assumed a seat 
in the Security Council and held the 
Council presidency in April, gaining an 
important voice in the U.N. forum. We 
have made clear our support and ap- 
preciation for Ireland's considerable con- 
tribution to peace in the Middle East 
through participation in the U.N. 
peacekeeping forces in Lebanon. 

Belgium, Netherlands, and Luxem- 
bourg. Traditionally, our relations with 
Belgium, the Netherlands, and Luxem- 
bourg have been marked by an absence 
of bilateral problems. Representative of 
the strength and continuity of these ex- 
cellent relations is the fact that, in 1982, 
we will celebrate the 200th anniversary 
of the establishment of U.S. -Dutch diplo- 
matic relations, the longest unbroken 
friendly relationship in our history. 

The important issues which the 
United States and the Benelux nations 
face together are predominantly related 
to security concerns. They are actively 
involved in support of the alliance, for 
example, participating in host nation 
support for U.S. rapid reinforcement of 
NATO. Belgium and the Netherlands, as 
countries for TNF deployment, par- 
ticularly welcome the Administration's 
reaffirmation of TNF arms control as an 
integral part of NATO's 1979 decision to 
modernize its theater nuclear forces. 
The Belgian Government's decision on 
TNF deployment is consistent with the 
NATO decision. The Netherlands has in- 
formed its NATO partners that it will 

decide the issue of TNF deployment by 
the end of 1981. The decision will be 
taken by a Dutch Government to be 
formed in the aftermath of the May 26 
elections. The visit to Washington of the 
then Dutch Prime Minister in May em- 
phasized the Administration's desire for 
the closest possible consultations with all 
members of NATO and the EC. Both 
Belgium and the Netherlands maintain 
significant aid programs which con- 
tribute to stability in developing coun- 
tries, such as Zaire and Indonesia. 

Finland, Sweden, Norway, Den- 
mark, Iceland. The Nordic area — in- 
cluding Finland, Sweden, Norway, Den- 
mark, and Iceland — is one of increasing 
strategic importance. The buildup of 
Soviet forces in the Kola Peninsula con- 
tinues unabated and poses a growing 
threat to NATO, as well as to the non- 
aligned states of the region. As a step 
toward redressing the imbalance in the 
area, we concluded with Norway a 
memorandum of understanding in 
January which provides for the pre- 
positioning in central Norway of equip- 
ment for a U.S. Marine amphibious 
brigade of 10,000-12,000 men. As a 
result, in time of crisis, U.S. reinforce- 
ments will be able to link up quickly 
with their equipment and supplies. 

It is because of the presence of 
Soviet forces in the area that we view 
with concern recent discussions about a 
Nordic nuclear-weapons-free zone. While 
we endorse measures which lessen ten- 
sion in the region, the concept of the 
Nordic nuclear-weapons-free zone is un- 
balanced, ignoring the massive nuclear 
armaments in the Kola Peninsula and in 
the Baltic region. Realizing the asym- 
metry of the proposal, the governments 
of NATO allies in the region have op- 
posed the plan which excludes Soviet 
territory from the area of applicability. 

The Nordic states may not all share 
the same perspective on security affairs. 
But, they are a closely knit group with 
many common views on international 
issues such as human rights, assistance 
for developing states, arms control, and 
U.N. peacekeeping. We enjoy a close 
consultative relationship with these 
countries on a wide range of subjects 
and welcome the many high-level con- 
tacts we have had in recent months. The 
visits of the Icelandic foreign minister 
and the chairman of the Greenland 
Home Rule Authority are indicative of 
the importance which the United States 
attaches to these consultations. 

Countries of Central and 
Southwestern Europe 

As the Reagan Administration confrori 
the worldwide Soviet challenge, we an 
trying to improve the quality of securii 
cooperation with our friends and allies 
Europe. The focal point for the effort i 
NATO, but we also have important bi- 
lateral security relationships with 
several NATO members, as well as wit 
Spain. The Treaty of Friendship and 
Cooperation with Spain expires on 
September 21, 1981. We have begun n 
gotiating a successor to it. The first 
meetings have gone well. 

Spain and Portugal. Although no 
related to the bilateral negotiations, th 
question of Spain's entry into NATO is 
an important one. We believe member- 
ship in the alliance would benefit both 
Spain and NATO. The Government of 
Spain is actively considering the ques- 
tion. If it decides to seek an invitation 
join, we will give our strong support. J 

During the coming year, we will ahi 
begin the process of updating our secu.| 
ty relationship with Portugal. The bi- j 
lateral agreement that governs our usH 
of the Portuguese air base at Lajes in 
the Azores expires in early 1983. As \M 
renegotiate that agreement, we will al: 
be exploring areas where both sides 
might benefit from expanded coopera- 

We watched with admiration durir 
the past year as the young democracie 
in Iberia met the challenge posed in P> 
tugal by the tragic death of a popular 
prime minister and in Spain by an at- 
tempted coup. Both nations reconfirmi - 
their commitment to democracy. Both 
governments understand and apprecia 
that our support for democracy in Spa 
and Portugal is strong and unequivoca i 

Because rumors persist in Spain 
about other possible coup attempts, I 
would like to take this occasion to 
reiterate this Administration's strong 
support for democratic government in 
Spain. We are confident that the con- 
solidation of democratic government w 
continue so that Spain will be able to 
assume its rightful place in Europe am 
in the Western alliance. We would be 
strongly opposed to any attempt to tui 
back the clock since it would be a grea 
tragedy for Spain and a terrible blow t 
the Western democratic world. 

France. We are following with in- 
tense interest developments in France 
and the workings of French democracj 
which brought a new president to pow' 
in May and will elect a new legislature 
later this month. We look forward to 


Department of State Bulleti 


Wishing the same kind of close and 
lerative relationship with President 
errand and Prime Minister Mauroy 

we enjoyed with their predecessors, 
ough elements of the bilateral rela- 

hip between our governments may 
lge in some areas, we expect it to 
inue to be among the most impor- 

for the United States. 

Italy. Italy is of great strategic im- 
ance to NATO and the United 
es. Italian contributions to NATO's 
hern flank are vital in insuring that 
:ea remains open and free. Italy has 
1 directing greater attention to its 
role in the Mediterranean. Italian 
ical democracy, its status as a major 
trading partner, and traditional 
; with the United States make for a 
partnership. Italy has joined with 
nd with its northern neighbors in 
tough but necessary decisions like 
ter nuclear force modernization, 
tions between the United States and 
continue to be close and produc- 
The depth of that relationship was 
onstrated once again by the support 
h the U.S. Congress and private 
ricans gave to Italy following the 
ic earthquake in November 1980 — 
million in U.S. Government con- 
ations and many more millions in 
ate contributions are being dedicated 
econstruction efforts. 
The government of Prime Minister 
aldo Forlani resigned on May 26. 
owing political consultations, Presi- 
t Pertini asked Forlani to attempt 
nation of a new government. Forlani 
arated his commitment to Atlantic 
.nee initiatives undertaken by Italy 
to the struggle against inflation and 
orism. We consulted closely with the 
lani government and fully expect the 
e kind of cooperative relationship 
l its successor, whether led by 
lani or another person designated by 
Italian President. 

stern Mediterranean 

:ece. U.S. policy toward Greece 
ognizes that that nation is a key ally, 
ying a valuable role in the common 
ense — particularly in this period of 
ical developments in regions border- 
on the eastern Mediterranean. The 
ited States continues firmly to sup- 
■t the Greek people's commitment to 
nocratic ideas, strong democratic in- 
utions, and a vigorous democratic 
icess that will include parliamentary 
:tions later this year. This commit- 
nt to democracy was strengthened 
en Greece joined the EC on Jan- 

uary 1 and deepened its ties with 
Europe. Although there will be some ad- 
justments in U.S. trade with Greece as a 
result, we welcome Greek accession. 

Greece has moved in recent times to 
strengthen its defense relationship with 
the West — first, by returning its mili- 
tary forces to the alliance's integrated 
command structure on October 20, 1980, 
and, second, by entering into negotia- 
tions for a new defense and economic 
cooperation agreement with the United 
States. Greece's reintegration into 
NATO closed a 6-year gap in the 
southern flank and augurs well for 
alliance solidarity in the face of the War- 
saw Pact threat. It also provided an in- 
dication of improved relations between 
Greece and Turkey: Both nations now 
are making an effort to cooperate within 
the alliance and to continue bilateral 
talks at regular intervals to resolve their 
differences. The cooperation agreement 
negotiations are designed to modernize 
and update provisions under which U.S. 
military activities will be conducted. 
Talks are continuing intensively in 
Athens under the direction of our Am- 
bassador, and we expect that an effec- 
tive and mutually satisfactory agree- 
ment will result. 

Cyprus. As stated in the President's 
report to Congress on Cyprus 
(March 20), a just, fair, and lasting reso- 
lution to the problems of Cyprus is an 
Administration priority. After almost 7 
years of effort, it is time for a fair set- 
tlement which will benefit all the Cypriot 
people. The United States strongly sup- 
ports the intercommunal negotiations 
under the stewardship of the United Na- 
tions. We are convinced that, while the 
negotiating path may be protracted and 

difficult, it is only through direct negoti- 
ations between the communities that a 
stable, enduring settlement on Cyprus 
can be found. 

Since the U.N. -sponsored intercom- 
munal talks resumed in August 1980, 
developments have been regrettably 
slow. This pace reflects the complexities 
of the problems, the longstanding inter- 
communal differences, and a slowdown 
in the schedule of meetings associated 
with elections on Cyprus. However, we 
believe that the continuation of the talks 
and the good atmosphere surrounding 
them constitute a positive development 
in the search for a solution to the 
Cyprus problem. 

We are also encouraged by the deci- 
sion on April 22 for agreement on the 
terms of reference for a committee on 
missing persons. Because this issue has 
been one of the most emotionally 
charged and divisive aspects of the 
Cyprus problem, the agreement — 
achieved after 2 years of painstaking 
negotiation — suggests that patient, per- 
sistent negotiating between both com- 
munities, under U.N. aegis, holds the 
potential for success, even on apparently 
intractable issues. 

Cypriot Foreign Minister Nicos 
Rolandis, who visited Washington, 
May 18-19, had useful meetings with 
Secretary Haig and Vice President 
Bush. These discussions complement 
talks held with Turkish Foreign Minister 
liter Turkmen on April 1 in Washington 
and on May 4 at the NATO ministerial 
in Rome, and with Greek Foreign Minis- 
ter Constantinos Mitsotakis on May 3 at 
the NATO ministerial. The meetings 
were helpful, including useful exchanges 
of views on Cyprus. 


JUNE 24, 1981 1 

France is a valued ally and friend of the 
United States. As a sovereign 
democratic nation, France has chosen a 
new President and a new legislature. 
We welcome the opportunity to continue 
the excellent relationship between our 
two countries. 

The Vice President is currently in 
Paris for consultations with President 
Mitterrand on the full range of issues of 
joint concern to the United States and 
France. He is continuing the high-level 
exchanges of views which have included 

messages between President Reagan 
and President Mitterrand and a visit 
here by Minister Cheysson [Foreign 
Minister Claude Cheysson]. 

While we fully recognize and respect 
the right of the Government of France 
to determine its own composition, it is a 
fact that the tone and content of our 
relationship as allies will be affected by 
the inclusion of Communists in that 
government or in any government of our 
West European allies. Since the end of 
World War II, all U.S. Administrations 
have pursued policies reflecting this 
view. Our policies have not changed. 

'Made available to news correspondents 
by acting Department spokesman David 
Passage. ■ 

innot 1Q01 


We believe that there is some poten- 
tial for positive development this sum- 
mer but such can only come about 
through the U.N. negotiations. The 
United States, however, will continue to 
work closely with all parties to the 
discussion in order to encourage patient, 
flexible negotiating and creative ap- 
proaches to longstanding problems. 

Turkey. The lifting of the partial 
arms embargo in September 1978, the 
conclusion of the comprehensive defense 
and economic cooperation agreement in 
March 1980, and sustained and generous 
U.S. military and economic assistance 
have put our relations with Turkey, a 
major ally, on an excellent footing. The 
Turkish Government is strongly pro- 
NATO and pro-United States. The 
smooth implementation of the coopera- 
tion agreement has enabled us to 
operate our military logistical and in- 
telligence collection facilities effectively 
and efficiently. 

The central feature of our relation- 
ship is our shared commitment to the 
security of the Atlantic alliance. Con- 
tinued high levels of assistance are 
essential to support our policy goals— 
that is, that Turkey regain economic 
health and political stability; play an 
effective role in NATO; continue ongoing 
efforts to resolve bilateral differences 
with Greece; and promote a negotiated 
solution to the Cyprus problem. 

A healthy, growing Turkish economy 
will provide the basis for a stable society 
and a return to democractic institutions. 
The Turkish authorities have committed 
themselves to a courageous program for 
economic stabilization. The economy is 
showing signs of recovering from the 
deep financial crisis of the late 1970s, 
but significant levels of economic 
assistance from the United States and 
other OECD donors will be necessary 
for at least the next several years. On 
the military side, the Turkish Armed 
Forces have embarked upon a long over- 
due modernization program which will 
help Turkey fulfill its NATO role. 
Turkey's strategic importance to NATO 
and the West has been underlined 
dramatically by events to Turkey's south 
and east. 


Although U.S. relations with Canada do 
not fall under the responsibility of this 
subcommittee, some note concerning our 
close relations with our major trading 
partner and nearest ally may be in 
order. U.S. -Canadian relations cover a 
broad range of concerns— economic, 
political, commercial, cultural, and 
defense. We share the same general 
point of view and the same goals on a 
broad range of both bilateral and inter- 
national questions. 

President Reagan's visit to Ottawa 
in March was valuable in reassuring 
Canada of the important place it holds in 
U.S. foreign policy, and in reconfirming 
the positive tone of the U.S. -Canadian 
relationship. The most important 
bilateral issues concern trade, invest- 
ment, energy, fisheries, and boundary 
questions, and the environment. The two 
countries have worked cooperatively to 
resolve outstanding questions, although 
our interests and outlooks differ on 
many issues. 

We have been concerned that Can- 
ada's energy policies might adversely 
affect U.S. firms. I am pleased that 
Canada recently announced measures 
which meet some of our principal con- 
cerns. For Canada, the question of 
transboundary air pollution, or acid rain, 
is a volatile political issue. We are deter- 
mined to continue to move ahead on our 
joint scientific work related to the air 
pollution problem, and we will open for- 
mal negotiations on an air pollution 
agreement later this month. 

Canada takes an active role in 
NATO, and Canada expects this year to 
meet the 3% goal for annual increase in 
defense spending. Canada and the 
United States have worked together in 
seeking solutions to ongoing problems in 
southern Africa, Southwest Asia, and 
the Middle East. Finally, Canada's role 
in international peacekeeping has been 
second to none. 


The Reagan Administration has made a 
solid start in foreign affairs in general 
and in relations with West Europe and 
Canada in particular. 

• Together with those nations, we 
have sent a clear signal to the Soviet 

Union that it must exercise much 
greater restraint in the face of renewed I 
Western resolve. 

• We have begun to restore our ] 
allies' confidence that we appreciate 
their concerns and take them into ac- 
count, as we demonstrate the leadershi[ I 
they respect. 

• We are working with Canada and 
the nations of Western Europe to en- 
courage stability and reduce the risk o« 
war in developing nations. 

• And we are restoring the econom 
ic health of the United States which wl 
in turn, serve the broader interests of ( 
the West as a whole. 

In sum, we recognize the enormous 
challenges before us. But, we have set ] 
clear priorities for a consistent and 
balanced policy. We are prepared, in 
close consultations and cooperation with 
the nations of Western Europe and 
Canada, to move forward with confi- 
dence on issues of shared concern. 

'The complete transcript of the hearings 
will be published by the committee and will 
be available from the Superintendent of 
Documents, U.S. Government Printing Of- 
fice, Washington, D.C. 20402. ■ 


Department of State Ri.llet 


S. Policy Toward the U.S.S.R., 
stern Europe, and Yugoslavia 

awrence S. Eagleburger 

Statement before the Subcommittee 
'urope and the Middle East of the 
;e Foreign Ajfairs Committee on 
' 10, 1981. Ambassador Eagleburger 
isistant Secretary for European 

have asked me to meet with you 
I for a review of U.S. policy toward 
pe. I welcome the opportunity to 
_ he policy of this Administration 

!ie record. Last week I focused on 
-elations with Western Europe. I 
Ised our interest in the military 
Irity and economic well-being of the 
jsatlantic community and our clear 
Initment to good bilateral ties 
Lghout the region. 
[Today I will concentrate on our reta- 
il with the Soviet Union, Yugoslavia, 
[the nations of Eastern Europe. I 
Emphasize our concern with the 
I enge from adversaries and our corn- 
pent to building constructive ties 
I time that promote lasting peace, 
irhis week, as last, I speak against 
lackdrop of the Reagan Administra- 
s overall foreign policy. It is a policy 
four points that bear on our rela- 
; not only with Western Europe but 
with those nations I address today: 

• Our insistence on restraint and 
jrocity in East- West relations; 

• Our determination to strengthen 
alliances, particularly NATO; 

• Our intention to play a construc- 
role in the developing nations of the 
id; and 

• Our resolve to strengthen our 
lomy and our defenses. 

A fundamental point of departure 
this presentation is the distinction 
veen the Soviet Union and Eastern 
ope and, indeed, among the coun- 
5 of Eastern Europe themselves, 
hing could serve our interests in that 
; of the world worse than to lump 
n into one bloc. Each nation presents 
|ue problems and unique oppor- 
ties for the United States. 
The U.S. -Soviet relationship remains 
most important element of U.S. 
ign policy. As it has since the end of 
•Id War II, the Soviet Union 
■esents the primary threat to U.S. 
irity and interests. Our efforts to 

deal with that threat have the most pro- 
found implications for our national 
defense posture, our budget, and the 
rest of American diplomacy. Failure to 
deal adequately with the challenges 
presented us by the Soviet Union would 
have the most serious of consequences, 
for the United States and for the rest of 
the world. 

Yugoslavia and each of the nations 
of Eastern Europe have their own 
distinctive character and dynamics. In 
our relations with the Warsaw Pact 
countries of Eastern Europe, we seek to 
encourage evolutionary change toward 
greater diversity and national in- 
dependence. We do so because of the 
conviction that this approach will serve 
best our interest in stability and peace in 
Europe. Yugoslavia — a unique, non- 
aligned nation — is of special importance 
to the United States. Our relations with 
that nonaligned country are qualitatively 
different from those of the Warsaw Pact 
countries of Eastern Europe. We have 
not had relations with Albania since 
World War II. 

Bearing these distinctions in mind, 
let me turn to: 

• Relations with the Soviet Union: 
status of that relationship, the new ap- 
proach of the Reagan Administration, 
progress to date, and prospects for the 
future; and 

• Relations with Yugoslavia and the 
nations of Eastern Europe: our general 
interests and instruments of policy and 
ties with the individual countries. 


Status of the Relationship 

Relations between the United States and 
the Soviet Union have rarely been more 
troubled than at the present. The roots 
of current bilateral tensions are buried 
in fundamentally different systems and 
world views. But, in recent years, a 
number of factors have sharpened 
dramatically the differences between our 
two countries. The most significant of 
these factors has been a growing lack of 
restraint on the part of the Soviet 
Union. This tendency has manifested 
itself in a variety of ways. 

First, there has been an un- 
precedented Soviet military buildup. 

Soviet military expenditures have grown 
steadily over the past 20 years at an 
average of 4%-5% a year. As a result, a 
conservative estimate of our spending 
and theirs shows that the Soviets out- 
spent us by 30% in 1979 alone. The 
Soviet effort has allowed the U.S.S.R. to 
pull abreast of us in strategic and naval 
forces and in other areas of traditional 
U.S. predominance, while improving in 
both quantitative and qualitative terms 
its margin of superiority around its 
borders. It has also given the Soviet 
Union unprecedented capabilities for the 
projection of power. 

Second, the Soviets have shown a 
growing propensity to use force as an 
instrument of policy. Directly, as in 
Afghanistan, or acting through proxies, 
as in Angola and Ethiopia, the Soviets 
have shown a growing preference for 
military solutions to regional issues. At 
the same time, their support of so-called 
movements of national liberation and 
organizations engaging in international 
terrorism has continued unabated, 
despite its impact on relations with the 

Even in Europe — an area the 
Soviets have tried to make an "island of 
detente" in order to further Soviet 
economic and political goals and to in- 
sure access to Western credits and 
technology — the Soviet Union has 
resorted to the most blatant tactics of 
intimidation to influence events in 
Poland. While the military situation in 
and around that country is not as alarm- 
ing as earlier this year, heavy Soviet 
political pressure continues and Soviet 
military intervention could still come 
with little warning. 

The Soviet Union's increasingly 
assertive behavior stems only partly 
from its enhanced military capabilities. 
It can also be attributed to the lack of 
credible constraints on the part of the 
United States and other nations. For 
whatever reasons — and they are many 
and complex— the Soviet leadership in 
recent years has shown little regard for 
the ability and/or the will of the West to 
respond effectively to its challenges. 
And, when the West has responded, it 
has too often been without coherence or 
real credibility. 

A New Relationship 

The Reagan Administration has moved 
forcefully in its first 4 months in office 
to reverse these trends. We seek a rela- 
tionship with the Soviet Union which 
better serves U.S. interests — a relation- 
ship grounded in realities, not hopes. 
Such a relationship must be based on 
two principles: restraint and reciprocity. 

lust 1981 



Restraint. We cannot expect the 
Soviet Union to renounce the use of 
force and violence as instruments of 
foreign policy if such means continue to 
pay benefits. Bringing about greater 
Soviet restraint will involve 
demonstrating that there is no attractive 
alternative. This approach will require, 
first of all, that the United States im- 
prove its capabilities in areas where our 
interests and the Soviets come into con- 
flict. Our focus will be threefold. 

• First, we will improve the defense 
balance to insure our security, avoid the 
prospect of political blackmail, and 
reestablish allied confidence. 

• Second, we will repair our 
alliances. As I noted in my earlier 
presentation, this approach will require 
much closer and more effective consulta- 
tions than we have conducted in the 
past. Our perceptions and interests will 
never coincide perfectly with those of 
our allies, but it is important that we 
share a general sense of strategy and 
tactics in our approach to East-West 

• Finally, we will expand our 
capabilities for meeting Soviet 
challenges to our interests in the 
developing world. Doing so will require 
that we take better advantage than in 
the past of our political, economic, and 
other assets — and those of our allies. 
And, it will demand a greater invest- 
ment of scarce economic and other 
resources. It will also take a greater 
effort in the realm of security — both 
directly and by strengthening the 
capabilities of our friends in areas 
threatened by Soviet expansionism. Our 
efforts in each of these fields will require 
great sensitivity to local conditions to in- 
sure that we do not create more prob- 
lems for ourselves than we resolve. 

Reciprocity. Demonstrating to the 
Soviets, by expanding our own capabili- 
ties, that there is no alternative to 
restraint is a sine qua non to the success 
of our approach. But, we recognize as 
well the value and long-term necessity of 
giving the Soviets incentives to act with 
greater restraint. 

The Reagan Administration does not 
view cooperation with the Soviet Union 
as an end in itself. Nor does it believe 
that the prospect of cooperative ac- 
tivities will necessarily induce the Soviet 
Union to moderate its policies. Linkage 
will be an operative principle. The 
leaders of the Soviet Union cannot ex- 
pect to enjoy the benefits of joint ac- 
tivities in areas of interest to them, even 
as they seek to undercut our interests. 

But, in the context of adequate and 
credible U.S. defense and regional 
capabilities and on a basis of strict 
reciprocity of benefits, the United States 
is open to an expansion of mutually 
beneficial activities, if justified by Soviet 
behavior. The United States is prepared 
to respond positively to constructive in- 
itiatives by the Soviet Union. However, 
given the lessons of recent history, it is 
clear that we cannot be satisfied with 
words alone. Soviet actions in Afghan- 
istan and elsewhere have created the 
existing obstacles to expanded relations. 
Soviet actions will be required to remove 

The areas where our insistence on 
reciprocity will have its most direct ap- 
plications are arms control and economic 
policy. With respect to arms control, the 
Administration's review remains under- 
way. The issues are complex and related 
to basic decisions on U.S. military pro- 
grams which will be made only in the 
months ahead. We have nonetheless 
made clear our recognition of the poten- 
tial value of verifiable, balanced arms 
control agreements which enhance our 
national security. The President has ex- 
pressed his commitment to the SALT 
process. It is also our intention to begin 
negotiations with the U.S.S.R. on 
theater nuclear forces (TNF) arms con- 
trol by the end of the year. We are con- 
tinuing to participate, along with our 
NATO allies, in the mutual and balanced 
force reduction talks in Vienna. 

With regard to economic policy, the 
challenge for us is to develop an ap- 
proach which minimizes the West's 
vulnerability to Soviet pressure, denies 
the Soviets technology and goods which 
would enhance their military capabilities, 
maximizes our own leverage, and is fair 
to U.S. producers. We will be working 
with our allies and economic partners in 
the months ahead toward this end. In 
both these areas, Soviet international 
conduct will have a major impact on the 
possibilities for real progress. 

Progress on New Approach 

These are the broad outlines of the ap- 
proach the Reagan Administration will 
take in its dealings with the U.S.S.R. I 
would like to describe briefly the prog- 
ress we have made in implementing our 

With respect to improving our abili- 
ty to restrain Soviet actions, we have 
moved dramatically in a range of areas 
to restore U.S. credibility and the 
capabilities which underlie it. In the 
defense sphere, our budgetary decisions 
have made clear to the Soviets and 

others the impossibility of their attainit 
superiority over the United States in jj 
any critical measurement of capabilities 
At the same time, our decisions have J' 
given our allies and others an example 
to follow, and us, a sound position fron 
which to urge greater allied efforts. 

• With the ministerial of the North 
Atlantic Council, held in Rome in May, 
we have made a solid start at building i 
new NATO consensus on East- West 
relations based on a shared recognition* 
of the need to restrain Soviet power. I 

• The meeting of the Defense Plan* 
ning Group in May resulted in solid 
NATO reendorsement of a greater 
defense effort and in moving ahead on j 
schedule with TNF modernization in 

• Prime Minister Suzuki undertook 
in May to increase Japanese efforts in 
behalf of their own defense and to 
enhance support for U.S. forces in 
Japan in the interests of Far Eastern , 

Elsewhere, we are handling a varie 
ty of regional issues in ways designed t 1 
foster the climate of peaceful interna- 
tional change in which U.S. and Westef 
advantages can best be brought to beaw 
in our competition with the Soviet 

• We are working more effectively 
with the Government of Pakistan than i 
at any time in the recent past to 
strengthen that strategically important 
nation in the face of Soviet aggression I 
across its border into Afghanistan. 

• At the same time, we continue tc 
work closely with Pakistan and other n < 
tions to keep pressure on the Soviet 
Union to withdraw from Afghanistan 
and allow a political settlement there id 
keeping with the desires of the Afghan 

• We are working with a variety ol 
concerned governments in the region oi 
the Persian Gulf to bolster security 
there in the wake of the Soviet invasior 
of Afghanistan and the opportunities fo» 
further Soviet expansion presented by 
continuing instability in Iran and the 
Iran-Iraq conflict. 

• We are engaged actively in effort 
to resolve the current Israeli-Syrian im- 
passe in a manner which prevents fur- 
ther expansion of Soviet influence in 
that critical and unstable region. 

• In El Salvador, we have signaled 
our determination not to allow Soviet- 
backed subversion to topple a legal 
government seeking to implement badly 
needed internal reforms. We have made 
clear our determination to go to the 
source to prevent such subversion, if 


Department of State Bullet 


We are working with the Associa- 
f Southeast Asian Nations 
AN) states to build pressure on 
am to end its Soviet-backed oc- 
ion of Kampuchea. 

We are proceeding in a responsi- 
anner in building an expanded rela- 
lip with the People's Republic of 

We are working with all in- 

ed parties to resolve such African 

as a peaceful settlement of prob- 
m Namibia in ways which deny the 
t Union further opportunities to ex- 
its influence through violent 

jects for the Future 

activities have conveyed to the 
ts an unmistakable signal of our 
asness and have significantly ex- 
d our ability to influence their 
'ior. We must build on these efforts 

in the months ahead. At the same time, 
we have left open channels of com- 
munication with the Soviet Union. Our 
dialogue with the Soviet Union continues 
at all levels here and in Moscow. And 
we will build on that dialogue during the 
meeting in New York with Soviet 
Foreign Minister Gromyko this 

We have made clear to the Soviets 
our preparedness for an improved rela- 
tionship if Soviet behavior warrants it. 
The President's decision to lift the par- 
tial grains embargo in fulfillment of his 
campaign pledge could not have been 
taken had the Soviet Union intervened 
militarily in Poland. Our decision to 
enter into preliminary discussions with 
the Soviet Union on setting a date for 
resumption of TNF discussions should 
be seen in the same context. It should be 
clear that any Soviet move against 
Poland would have significant conse- 

quences for all aspects of East- West 

By the same token, further concrete 
evidence of Soviet willingness to accept 
peaceful change would allow a broader 
expansion of the relationship. Movement 
toward a settlement of the Afghanistan 
issue on terms which would insure the 
complete withdrawal of Soviet forces 
would be particularly important. 

In the absence of this or similar in- 
itiatives, the United States and its allies 
have no alternative but to insure that we 
are in a position to deal more firmly and 
credibly than in the past with Soviet 
lack of restraint. We will direct our 
efforts over the months ahead toward 
that end. 


Eastern Europe is not a monolith. Each 
country in the area has its unique 

S.S.R. and Eastern Europe' 





Area: 9 million sq. mi. (8.7 million sq. 

mi. is the Soviet Union) 
Population: 369 million (1978); (261 

million in the Soviet Union) 
GNP: $1.3 trillion (1978) 
GNP Per Capita: $3,500 
Share of World GNP: 16% 
Share of World Trade: 8% (1979) 
Value of Merchandise Imports from 

U.S.: $4 billion (1980) 
Value of Exports to U.S.: $1 billion 


— I... o j /■> -i i n . i r- « /^^..i-^^..., 'Includes Bulgaria, Czechoslovakia, East 

J Warsaw Pact and Council for Mutual Economic Assistance (COMECON) Germany, Hungary, Poland, Romania. 

//] Members of Group of 77 (G-77) 

~\ Member of nonaligned movement 

s: Albania has no international affiliation except with the United Nations. 

June 1981 Department of State Bulletin for description and 
nbership lists of COMECON, G-77, and nonaligned movement. 

The U.S. Government has not recognized the incorpora- 
tion of Estonia. Latvia, and Lithuania into the Soviet 

mst 1981 



history and culture, and the trends in 
the region are toward increasing 
economic, social, and even political 
diversity. U.S. policy toward the War- 
saw Pact member states of Eastern 
Europe — Poland, Hungary, Romania, 
Czechoslovakia, Bulgaria, and the Ger- 
man Democratic Republic — is tailored to 
our interests and to the situation 
prevailing in each country. We differen- 
tiate between these countries and the 
U.S.S.R. to the degree that they pursue 
independent foreign policies and/or more 
liberal domestic policies. 

U.S. Interests 

Our primary interests are: 

• A strong and legitimate security 
interest based on the proposition that a 
peaceful Eastern Europe, which is 
engaged in constructive interaction with 
the rest of Europe and the world, can be 
a force for stability in Europe. 

• A deep, humanitarian interest in 
the welfare of the peoples of Eastern 
Europe, both because of their interna- 
tionally recognized rights and because 
millions of Americans trace their 
heritage to the area. 

• A growing interest in trade and 
other forms of economic cooperation. 

Our bilateral relations with most of 
the Warsaw Pact member states of 
Eastern Europe have improved 
significantly in recent years. This Ad- 
ministration is prepared to work toward 
further improvements. In doing so, it 
will be guided by the following con- 

• The degree to which individual 
Eastern European governments 
demonstrate both the desire and ability 
to reciprocate our interests in improved 
relations, and demonstrate sensitivity to 
U.S. interests; 

• Indications that these govern- 
ments are willing to play a constructive 
role in Europe, both through the CSCE 
[Conference on Security and Coopera- 
tion in Europe] process and in their 
bilateral relations with other European 
countries; and 

• Indications that the Eastern Euro- 
pean governments are sensitive to the 
traditions and aspirations of their 
peoples and seek to fulfill their com- 
mitments under the provisions of basket 
3, as well as other sections of the 
Helsinki Final Act. 

Policy Instruments 

Our instruments to further U.S. in- 
terests and improve relations with the 

countries of Eastern Europe include 
high-level visits, cultural and scientific 
exchanges, and trade and other forms of 
economic cooperation. We will welcome 
high-level contacts with leaders of those 
Eastern European countries with which 
our relations are positive and are 
susceptible to significant improvement. 
We will encourage cultural and scientific 
exchanges with Eastern Europe in the 
belief that they enhance mutual 
understanding and enable Eastern Euro- 
peans to experience the diversity of the 
United States and the vitality of its 
democratic institutions. 

Bilateral trade has become an impor- 
tant component of our relations with 
Eastern Europe. Trade relations based 
on most favored nation (MFN) status 
now exist with Poland, Romania, and 
Hungary. In 1980, our total trade with 
Eastern Europe was $3.3 billion, and 
U.S. exports exceeded imports by well 
over $1 billion. In our trade and 
economic policy toward Eastern Europe, 
we seek to strike a prudent balance 
among our political, trade, and security 
interests. We seek, together with our 
allies, to offer Eastern Europe alter- 
natives to even heavier reliance on trade 
with other members of the Council for 
Mutual Economic Assistance. We also 
want the American farmer and worker 
to share in the benefits of expanded ex- 
port markets. At the same time, we do 
not intend to export technology which 
could adversely affect U.S. security in- 

The extension of MFN tariff treat- 
ment to Romania and Hungary has 
served our commercial interests and 
removed an obstacle to improved rela- 
tions in other areas. It has also permit- 
ted substantial progress on emigration 
and humanitarian issues. The President's 
recommendation concerning continuation 
of his waiver authority on MFN status 
for Hungary and Romania, under Sec- 
tion 402 of the Trade Act of 1974, is 
subject to congressional review this 
month. We strongly support the con- 
tinuation of the waiver for both coun- 
tries. This recommendation does not ig- 
nore the fact that problems in emigra- 
tion continue and that U.S. humani- 
tarian concerns have not been entirely 
eliminated. But, it does take account of 
the progress that has been made and the 
likelihood of more positive results if the 
waiver is renewed. 

Relations With Warsaw Pact 

In view of the diversity of Eastern 
Europe and our policy of differentiatir 
among the individual countries, it is ni 
surprising that our bilateral relations 
vary substantially from country to cou 

Poland. The dramatic developmeji 
in Poland over the past 1 1 months haii 
captured the attention of the world. W 
welcome changes which correspond to 
the aspirations and traditions of the I 
Polish people. But, we will continue to 
refrain from words or actions which 
would complicate the resolution of 
Poland's problems by the Poles 
themselves. We continue to believe thai 
the resolution of Poland's internal pro! 
lems can be achieved best in an at- 
mosphere of calm and moderation, fra 
from all outside interference. We rema 
committed to the NATO communique i 
December 12, 1980, which stated that 
any intervention in Poland would fun- 
damentally alter the entire internation* 
situation and that the allies would be 
compelled to react in a manner which 
the gravity of this development would 

We have noted with concern the 
economic hardships faced by the PolisI 
people and the detrimental effect of 
Poland's economic difficulties on effort \ 
to continue the process of peaceful 
renewal. Together with other Western 
countries, we have taken steps to ease 
Poland's economic difficulties. 

• Poland received the largest allod 
tion to any country of Commodity Crec 
Corporation agricultural guarantees in 
fiscal year 1981— $670 million. 

• In April, as Poland's food supplie 
continued to deteriorate, we authorizeo 
the sale of $71 million of surplus dairy 
products (30,000 tons of dried milk and 
30,000 tons of butter) and permitted 
payment in Polish currency. 

• We joined other Western coun- 
tries in easing Poland's financial positio 
by rescheduling repayments of official 
debt for the remainder of 1981. Appro* 
imately $400 million in principal and in- 
terest owed to the U.S. Government wi 
be affected. Together with other 
creditor governments, we will consider 
the possibility of rescheduling 
repayments for subsequent years. 

In taking these steps, we have em- 
phasized to the Polish authorities that 
we expect the Polish Government and 
people to make meaningful efforts to 
reinvigorate the Polish economy and to 

-- . 


D e p a r t m e n ^^tat^uMeti t 


e Poland's creditworthiness. We 
ilso stressed the need for com- 
e steps by Poland's Warsaw Pact 
particularly the Soviet Union. We 
mtinue to underscore these points 
are discussions on Poland's 
mic and financial problems. 

jmania. Romania continues to pur- 
i independent foreign policy, as ex- 
ied by its positions on Afghanistan 
le Middle East and its constructive 
i the CSCE context. Romania car- 
it more than 50% of its trade with 
ommunist countries. The United 
; has become Romania's third 
t trading partner, 
lis Administration has already 
a high-level political dialogue with 
nia. Last month President Reagan 
ecretary Haig met with Foreign 
;er Andrei in Washington, and 
lerce Secretary Baldrige traveled 
:harest for the* U.S. -Romanian 
Economic Commission and met 
with President Ceausescu. 
tary Haig underlined to Minister 
;i our recognition of Romania's uni- 
Dsition in Eastern Europe and sup- 
or the principle of self- 
nination. He also emphasized that 
nian responsiveness to U.S. con- 
relating to emigration and 
arian issues would contribute to 
irther development of our 

lungary. Hungary has embraced 
SCE process, using it as a 
|?work for relations with Western 
|pe and the United States. We are 
jiuing to build upon the momentum 
j-ated by the return of the Crown of 
Itephen and the signing of the 
{Hungarian Trade Agreement in 
I Hungary is particularly interested 
Iproving economic relations with the 
Pd States, and our trade relations 
i eveloping in a positive and 
lesslike fashion. Hungary's record 
Inigration continues to be positive, 
Its leaders permit a relatively broad 
l?e of expression on other than 
leal topics. 

iulgaria. We have made measured 
Iress in improving relations with 
|aria over the past several years, 

J ugh this progress has slowed 
what in the past year. We have a 
1st but active educational, scientific, 
■•ultural exchange program with 
laria, and the maritime agreement 
loneluded at the beginning of this 
linistration is working out satisfac- 
Ir. U.S. trade with Bulgaria, while 
Rxtensive, is balanced in our favor, 

and the Bulgarian Government is in- 
terested in expanding exports to the 
United States and developing economic 
relations in other ways. 

Czechoslovakia. Our relations with 
Czechoslovakia have been poor for some 
time due to the Czechoslovak Govern- 
ment's harsh repression of dissent and 
its close adherence to Soviet positions on 
foreign policy. Negotiations are pres- 
ently underway on a settlement of 
postwar nationalization claims of U.S. 
citizens against Czechoslovakia. Some 
progress has been made toward an 
agreement, but it is far from certain 
that an acceptable settlement will be 
reached. We are consulting closely with 
the Congress on the progress of the 

German Democratic Republic. 

Despite deep differences between the 
United States and the G.D.R., we have 
sought and achieved practical im- 
provements in our bilateral relations. 

Since the signing of the consular conven- 
tion in 1979, we have begun negotiations 
on a cultural agreement, and may soon 
begin negotiating on claims. We have 
encouraged the G.D.R. to exercise 
restraint in Poland and in the developing 
world, to settle the claims of our citizens 
as well as Jewish claims, and to improve 
its implementation of the Helsinki Final 
Act. For its part, the G.D.R. has ex- 
pedited the resolution of cases of divided 
families with the United States. The 
G.D.R. seeks MFN treatment with us, 
but we have made clear that it must 
first settle claims and give assurances 
required by the Jackson-Vanik amend- 


The position of nonaligned Yugoslavia is 
intrinsically different from that of the 

East Berlin Volkskammer Elections 

JUNE 14, 1981 1 

On June 14, 1981, the authorities of the 
G.D.R. [German Democratic Republic] 
held elections in the Eastern sector of 
Berlin in which deputies from that sec- 
tor were, for the first time, directly 
elected to the G.D.R. Volkskammer. The 
Governments of France, the United 
Kingdom, and the United States, 
through their Embassies in the Soviet 
Union, have [today] presented formal 
diplomatic protests to the Soviet 
Government concerning this action. 
These elections were held on the 
basis of an amendment of the G.D.R. 
election law approved by the Volkskam- 
mer on 28 June 1979. They constituted a 
change in the previous practice whereby 
the representatives of the Eastern sec- 
tor of Berlin were not directly elected 
but were nominated to the Stadt- 
verordnetenversammlung of Berlin 
(East). The practice was part of the ex- 
isting situation to which the Quadripar- 
tite Agreement of 3 September 1971 
refers. The new procedures which the 
G.D.R. has introduced in the Eastern 
sector of Berlin treat this sector as 
though it were part of the territory of 
the G.D.R. This is in contradiction with 
the wartime and postwar agreements 
defining the status of the special Berlin 
area and, accordingly, also in contradic- 

tion with the Quadripartite Agreement 
of 3 September 1971 which applies to 
the whole of Berlin. 

In the London declaration of May 9, 
1977, the Governments of the United 
States, France, and the United Kingdom 
reaffirmed that the status of the special 
area of Berlin could not be modified 
unilaterally. They also stated that they 
would continue to reject all attempts to 
put in question the rights and respon- 
sibilities which the United States, 
France, the United Kingdom, and the 
Soviet Union retain relating to Germany 
as a whole and to all four sections of 
Berlin. These points were reiterated in 
the 29 June 1979 statement in Tokyo by 
the foreign ministers of France, the 
United Kingdom, the United States, and 
the Federal Republic of Germany and in 
the protest delivered in Moscow by the 
Embassies of France, the United King- 
dom, and the United States on 9 July 

Accordingly the three allied govern- 
ments wish to reemphasize the position 
which they have publicly expressed on 
many previous occasions: No unilateral 
decision taken by the G.D.R. authorities 
can affect the legal situation of greater 
Berlin. The three governments will con- 
tinue to exercise their full rights and 
responsibilities in Berlin. 

'Press release 192 of June 15, 1981.1 



member states of the Warsaw Pact, and 
we deal with Yugoslavia on the basis of 
its unique status. Yugoslavia's collective 
leadership has made it clear that it will 
continue to pursue the course set by 
President Tito: nonalignment in foreign 
policy and self-management at home. 

An independent, economically viable 
Yugoslavia capable of resisting external 
pressure is a factor for stability and 
peace in the Balkans, the Mediterra- 
nean, and Europe as a whole. We firmly 
support Yugoslavia's independence, 
political unity, and territorial integrity. 
U.S. -Yugoslav relations are excellent. In 
recent years, we have created an exten- 
sive range of relations. 

• We have maintained a mature and 
frank political dialogue and this Ad- 
ministration has furthered the dialogue. 

• The United States has become 
Yugoslavia's fourth largest trading part- 
ner, and we are the leading foreign in- 
vestor in Yugoslavia. 

• Various agreements on culture, 
science, and technology provide the 
framework for a vigorous program of 
exchanges and joint projects. 

• We are engaged with the 
Yugoslav military authorities in a 
modest program of visits, arms 
transfers, and training. 

Despite this significant record of 
good relations, problems remain. 
Although we have made considerable 
progress in combating terrorist activity 
against Yugoslav officials and 
establishments in the United States, 
both we and the Yugoslavs are con- 
cerned over the continued existence of 
such activity in the United States. We 
are determined to deter such activity 
and to punish terrorists to the full ex- 
tent of the law. We are pleased that 5 
anti-Yugoslav terrorists were convicted 
recently by a court in New York City 
and that at present some 17 convicted 
terrorists are behind bars. 


We have not had diplomatic relations 
with Albania since World War II. Since 
the termination of its special relationship 
with the People's Republic of China in 
the summer of 1978, Albania has fol- 
lowed a course independent of major 
outside powers. Albania has moved to 
improve relations with Greece and 
Western Europe. The process of improv- 
ing Albanian-Yugoslav relations had ad- 
vanced significantly before the outbreak 
of violent demonstrations by ethnic Al- 
banians in Yugoslavia's autonomous 
Province of Kosovo in April and May. 

Albania's leaders have made it clear that 
they do not presently seek to improve 
relations with the United States. Should 
Albania display an interest in resuming 
relations with us, we would be prepared 
to respond. 


Some reference to U.S. policy toward 
the three Baltic States— Lithuania, Lat- 
via, and Estonia — is in order. Our policy 
of not recognizing their forcible incor- 
poration into the U.S.S.R. remains un- 
changed. We continue to recognize and 
deal with diplomatic representatives of 
the last three Baltic governments. 


This assessment of U.S. relations with 
Yugoslavia, Albania, and the Warsaw 

Pact nations of Eastern Europe bring; 
me full circle. I conclude, as I began, 
with reference to the overriding prin- 
ciples that govern foreign policy undei 
the Reagan Administration. 

• Ours is a policy that reflects ' 
respect for the territorial integrity of i 
tions and the dignity of individuals. 

• Ours is a policy that demonstra| 
determination to be firm in the face of 
aggression but forthcoming when then 
is constructive response to the shared 
challenges of the 1980s. 

1 The complete transcript of the hearin 
will be published by the committee and wil 
be available from the Superintendent of 
Documents, U.S. Government Printing Of- 
fice, Washington, D.C. 20402.B 

U.S. Contributions to the ICRC 

The Department of State announced on 
June 1, 1981, that, in response to urgent 
humanitarian needs in war-torn areas, 
the U.S. Government is making a con- 
tribution of $4.15 million to the Interna- 
tional Committee of the Red Cross 
(ICRC) for the following purposes: 

• $1.5 million as a contribution to 
the worldwide ICRC program for pro- 
tection and assistance to political de- 

• $500,000 as an additional con- 
tribution to the ICRC general program 
budget (in addition to a previous con- 
tribution of $1 million), bringing the 
total U.S. contribution for 1981 to $1.5 
million; and 

• $2.15 million against various 
special appeals, as follows: 

a) Lebanon — $1 million for 
emergency medical assistance and relief 
goods to victims of the conflict; 

b) El Salvador— $500,000 for relief 
to persons displaced by the armed con- 

c) Nicaragua— $250,000 to support 
relief activities; 

d) Indonesia (East Timor) — 
$200,000 for food and medical assistance 
and to trace missing persons and 
facilitate family reunification; and 

e) Iraq/Iran— $200,000 to finance 
visits to prisoners of war, to assist 
civilians in combat areas, and to trace 
persons displaced by military operations. 

This announcement is made on the 
occasion of a visit to Washington of Mr. 

Jean-Pierre Hocke, Director of Opera- 
tions of the ICRC. This current visit i 
one of a series of periodic visits that I 
Hocke makes to Washington to discus | 
matters of mutual concern. 

The ICRC is a nongovernmental, ! 
nonreligious Swiss organization, base; | 
on the principles of neutrality and 
humanitarianism, which is primarily c i 
cerned with giving protection and 
assistance to the victims of armed cor 
flict. The Geneva conventions, which I 
ICRC helped develop, assign the follo'l 
ing specific tasks to the ICRC: 

• Visiting and interviewing 
prisoners of war and civilian internees 

• Providing relief to the civilian 
population of occupied territories; 

• Searching for missing persons; 

• Offering its good offices to 
facilitate the establishment of hospital 
zones and safety zones. 

Among the general reponsibilities 
the ICRC are insuring the proper im- 
plementation of the Geneva conventior 
and acting as a neutral intermediary b 
tween the parties to a conflict. 

U.S. contributions to the ICRC are 
an essential part of a coordinated U.S. 
effort to assist refugees and displaced 
persons in urgent need throughout the 
world by means of cooperation with th 
U.N. system, the ICRC and other inter 
national organizations, and private 
voluntary agencies. 

Press release 173.1 


Department of State Bullet! 

si i. 


rael's Raid on 

aq's Nuclear Facility 

Mowing are two Department 
tents of June 8, 1981; the text of 
ary Haig's letter of June 10 to 
is P. O'Neill, Jr., Speaker of the 
of Representatives, and Senator 
?s H. Percy, Chairman of the 
i Foreign Relations Committee; 
statement by Under Secretary for 
-M Affairs Walter J. Stoessel, Jr.. 
the Senate Foreign Relations Com- 
: on June 18. 


: 8, 1981 1 

overnment of Israel has informed 
nited States that the Israeli Air 

attacked the Iraqi nuclear 
•ch facility at Tuwaitha on June 7. 
nd no prior knowledge of the raid, 
le have no further information. We 
|iw seeking more information con- 
ig the attack. This is clearly a very 
s development and a source of ut- 
•e have no first-hand details of the 

or of the overall damage, in- 
Lg casualities. Our initial estimate 
ential radiation effects is that they 
! probably be minimal and limited 
| immediate vicinity of the installa- 
|?his is based on preliminary infor- 
n about the amount and quality of 
I ial in the facility at the time of the 
I . The U.S. Government is ready to 
lid to any requests for help in 
bring the extent of any nuclear ef- 
Lnd in dealing with any other 
\i problems. 

lice we have additional informa- 
Ive will have more to say on the 


; 8, 1981 1 

.S. Government condemns the 
;ed Israeli air strike on the Iraq 
ir facility, the unprecedented 
:ter of which cannot but seriously 

the already tense situation in the 
Available evidence suggests 
>rovided equipment was employed 
sible violation of the applicable 
ment under which it was sold to 

and a report to this effect is be- 
■epared for submission to the U.S. 
•ess in accordance with the rele- 
J.S. statute. 

JUNE 10, 198P 

I am providing the following information pur- 
suant to section 3 (c) (2) of the Arms Export 
Control Act. 

The Department of State has learned that 
on June 7, 1981, the Government of Israel 
carried out an air attack against a nuclear 
reactor under construction in Iraq. Israeli Air 
Force units taking part in this attack were 
reportedly equipped with defense articles 
that have been furnished to Israel by the 
United States under the Foreign Military 
Sales program, including F-15 and F-16 air- 

Sales to Israel under the Foreign Military 
Sales program are governed by a Mutual 
Defense Assistance Agreement of July 23, 
1952 (TIAS 2675), which provides in perti- 
nent part: 

"The Government of Israel assures the 
United States Government that such 
equipment, materials, or services as may 
be acquired from the United States . . . 
are required for and will be used solely to 
maintain its internal security, its 
legitimate self-defense, or to permit it to 
participate in the defense of the area of 
which it is a part, or in United Nations 
collective security arrangements and 
measures, and that it will not undertake 
any act of aggression against any other 

In these circumstances, I must report on 
behalf of the President that a substantial 
violation of the 1952 Agreement may have 
occurred. We are conducting a review of the 
entire matter and will consider the contention 
of Israel, that this action was necessary for 
its defense because the reactor was intended 
to produce atomic bombs and would become 
operational very soon and that, once it 
become operational, an attack would have 
been impossible because it could not be car- 
ried out without exposing the inhabitants of 
Baghdad to massive radioactive lethal fallout. 

While our discussions with Israel con- 
tinue, and while your Committee is consider- 
ing this matter the President has directed the 
suspension for the time being of the im- 
mediate shipment of four F-16 aircraft which 
had been scheduled for this week. 

In responding to this incident we will 
make clear the seriousness with which we 
view the obligations of foreign countries to 
observe scrupulously the terms and condi- 
tions under which the United States furnishes 
defense articles and defense services. We 
will, of course, inform the Congress of the 
outcome of our discussions with the Govern- 
ment of Israel and our deliberations on the 
response warranted. 


Alexander M. Haig, Jr. 

JUNE 18, 198F 

Thank you for this opportunity to report 
to the committee on June 7, 1981, 
Israeli air attack against a nuclear reac- 
tor under construction in Iraq. 

You have received the Secretary's 
June 10, 1981, letter on this attack pur- 
suant to section 3 (c) (2) of the Arms 
Export Control Act. In his letter, the 
Secretary notified Congress that a 
Substantial violation of the Mutual 
Defense Assistance Agreement of 
July 23, 1952, with Israel may have oc- 
curred and indicated that we were 
conducting a review of this entire mat- 
ter, which is the subject of our session 

The Mutual Defense Assistance 
Agreement with Israel includes 
assurance by Israel that U.S. weapons 
provided under the terms of the agree- 
ment would be used solely to maintain 
internal security, meet legitimate self- 
defense needs, or permit it to participate 
in the defense of the area of which it is 
part or in U.N. collective security ar- 
rangements and measures. The agree- 
ment also provides that Israel will not 
undertake any aggression against any 
other state. 

Israeli Air Force units participating 
in Israel's attack were equipped with 
defense articles furnished to Israel by 
the United States under the foreign 
military sales program pursuant to the 
1952 agreement with Israel. 

Israel contends that the Iraqi reac- 
tor was intended to produce the re- 
quired weapons-grade material for use 
in atomic weapons. Israel notes that a 
state of war exists between the two 
countries and has further contended that 
Iraq had made clear its intention to pro- 
duce such a weapon for use against 
Israel. Israel indicated its belief that the 
reactor would become operational very 
quickly. Israel has pointed out that once 
the reactor became operational, an air 
attack would have been impossible since 
it would have exposed the inhabitants of 
Baghdad to massive lethal radioactive 
fallout. Israel also indicated that it had 
exhausted all diplomatic remedies prior 
to the attack. The Israelis, therefore, 
sincerely believe that their attack was 
an act of legitimate self-defense and not 
in violation of their 1952 agreement with 
the United States. 

Iraq denies that its nuclear program 
has any application other than the 
peaceful uses of nuclear energy. It 
points out that it has ratified the Non- 
proliferation Treaty (NPT) and notes 
that Israel has not and that Iraq's reac- 



Middle East 

tor and supply of enriched uranium were 
subject to International Atomic Energy 
Agency (IAEA) controls. Iraq further 
points out that no violations were found 
and that all enriched uranium supplied 
to Iraq was accounted for. Iraq, 
therefore, believes Israel's action was 
unprovoked aggression. 

The United States is deeply con- 
cerned about nuclear proliferation. We 
have long been concerned about the Ira- 
qi nuclear facility because it could give 
Iraq the capability to build atomic 
weapons if other elements were added. 
Furthermore Iraq has made no secret of 
its enmity toward Israel. We have 
shared these concerns in the past with 
appropriate governments and made 
clear our view that global adherence to, 
and respect for, the most stringent 
safeguards is essential. While the NPT 
and IAEA safeguards regime are still 
critical to any nonproliferation effort, 
we can all agree that we should work to 
strengthen today's safeguards to further 
allay the kind of suspicion and mistrust 
that contributed to Israel's action. 

It is also important to understand 
that although safeguards are vital, there 
are other critical elements required to 
deal with the proliferation problem. For 
example, material that is in a nearly 
weapons-usable form presents special 
dangers and should be minimized or 
avoided. This is why we believe that sup- 
pliers must exercise care in their nuclear 

activities, and particularly so in volatile 
areas of the world. The nonproliferation 
policy guidelines we will soon be discuss- 
ing with you take explicit account of 
these facts. 

The United States was not consulted 
in any way about any phase of the 
Israeli action, nor were we informed of 
it in advance. Although we had concerns 
about the potential of Iraq's nuclear pro- 
gram, we do believe that the Israelis had 
not exhausted all the diplomatic options 
available for alleviating their concerns. 
We further believe that the un- 
precedented character of the Israeli air 
attack could not but seriously add to the 
already tense situation in the area and 
seriously complicate our effort to resolve 
the various problems in the area through 
peaceful means. For these reasons we 
condemned Israel's attack. In addition, 
the President decided to suspend the 
scheduled delivery of four F-16s to 
Israel while the Congress considered the 
issue and while we consulted with Israel 
and others. 

Neither our condemnation nor the 
suspension of delivery of the four air- 
craft implied that we had reached any 
determination of the legal questions 
under the Arms Export Control Act that 
may have been raised by Israel's action. 
We have not made such a determination 
under the act. Nor should our condem- 
nation be construed as implying that we 
did not ourselves have serious misgiv- 

Situation in the 
Middle East 

JUNE 11, 1981' 

The President today is meeting with the 
Ambassadors to discuss his initiatives 
for peace in the Middle East. 2 He wants 
the Ambassadors of the various coun- 
tries to be aware of his commitment and 
the commitment of the United States to 
the furtherance of the peace process in 
that critical region of the world. He 
wishes the Ambassadors to convey this 
to their respective governments. The 
President will welcome their views on 
this matter. 

The mission of Ambassador Habib 
[Philip C. Habib, the President's special 
emissary to the Middle East] continues 
today with the important goals as out- 
lined by the President when he asked 
the Ambassador to undertake this im- 

portant venture. This is to seek a reduc- 
tion of the tensions and a lessening of 
the possibility of conflict arising out of 
developments in Lebanon which affect 
the entire region. The President regards 
this goal to be of utmost importance. He 
wishes that the Habib mission will con- 
tinue in cooperation with the concerned 
parties, whom we hope share our sense 
of the mission's continued importance. 

[The President said,] "The incident 3 
earlier this week is evidence the only 
answer in the Middle East is to achieve 
a true peace. As long as there is suspi- 
cion among the nations, the specter of 
further tragedies will hang over us." 

■Read at the daily press briefing at the 
White House by Larry M. Speaks (text from 
Weekly Compilation of Presidential 
Documents of June 15, 1981). 

z On the afternoon of June 1 1 , the Presi- 
dent held meetings with, first, the Am- 
bassadors of Bahrain, Saudi Arabia, Morocco, 
Jordan, and Sudan, and then with the Am- 
bassador of Israel. 

3 The Israeli bombing of the Osirak 
nuclear facility near Tuwaitha, Iraq.H 

ings regarding the ultimate character 
and direction of the Iraqi nuclear pre 

We are concerned by the damage 
that resorting to violence does to the 
cause of peace in the region. But we J 
must note that Iraq has not recognize 
the legitimacy of Israel, has refused t 
ascribe to U.N. Security Council Resc 
tions 242 and 338 and rejected the & 
David accords, and has not played a c 
structive role in the peace process. 

We continue to believe that force 
and hostility are not the answers to til 
problems of the Middle East. The peo 
of the Middle East yearn for peace so- 
that the vast human, natural, and 
technical resources of the region cani 
turned to the pursuits of peace and sc 
that this area can become a model for 
coexistence and cooperation among m 
tions. This yearning can only be realia 
through redoubled efforts by all partii 
to find negotiated solutions to the pro 
lems they face. The issues before us t 
day only accentuate this fact. 

Since the attack, we have been I 
engaged in consultations with Israel a 
other appropriate governments. Our 
consultations are continuing, and wel 
not prepared today to render any 
judgments on the merits of the issues 
reach any determinations. We believe 
that the issue in its essence is politica 
rather than legal, and for this reason 
our efforts are directed toward politic 
solutions. This is a grave matter that 
must not be treated in haste. Therefo 
our efforts and our review are contini 
ing. We will keep the committee in- 
formed as we continue our review of 

■Read to news correspondents by Depaj 
ment spokesman Dean Fischer. 

identical letters were sent to House 
Speaker O'Neill and Senator Percy (text ol- 
the letter to Senator Percy was issued as i\ 
White House press release). 

3 The complete transcript of the hearing 
will be published by the committee and wit 
be available from the Superintendent of 
Documents, U.S. Government Printing Of- 
fice, Washington, D.C. 20402. ■ 


Department of State Bullet 

Middle East 

5. Defers F-16 Shipment to Israel 


20, 1981 1 

resident has authorized me to 
the following statement. 

le President has decided to defer 
ipment of F-16s to Israel. This 
r remains under review. 

The obvious question is why are 

eferring a decision on the ship- 


.. Clearly, the President has con- 
1 that the escalating cycle of 
ce in the Middle East at this time 
make a decision to ship this equip- 

I Is this still part of the original 
iv of Israel's raid into Iraq, or 
i now shifted primarily to the 
lion in Lebanon? 

. The basic review, of course, is 
lated with the raid against the 
(•eactor. But, as I said Sunday 
|ng, it would be specious to suggest 
lie escalating cycle of violence in 
liddle East, the casualties among 
Smbatants on both sides of the 
I between Lebanon and Israel, was 
s contributing factor to the delay in 
! - esident's ultimate decision on this 
Ir, and he has decided to defer. 

I What has been the problem in 
I to get a cease-fire commitment? 
du try to get a cease-fire commit- 
ifrom [Prime Minister] Begin 
I; making your decision? 

I . No. This decision is not related 
J way to the discussions ongoing 
jen Ambassador Habib [Philip C. 
I, the President's special emissary 
i Middle East] and his efforts to 
lure a calming of the situation and, 
Lily, a cease-fire among the par- 
rhis is a decision that is made 
■dally in the context of the overall 
le in the Middle East in which the 
l)f violence has been increasing in 
I: days. 

1. Did the President consult with 
e summit members here, and did 
Jjffer their support and en- 
Ugement for this position? 

I. No, he did not consult on the 
lie decision. This is a decision that 
pen made by the President alone 
(consultation with his key advisers 

within the U.S. Government. Incidental- 
ly, the view of his advisers was unani- 
mous on this subject. 

Having said that, I want to also sug- 
gest to you that there have been a 
number of expressions of concern by all 
of the summit participants with respect 
to the worsening situation in the Middle 
East and the dangers that it poses for 
future peace in the area. 

Q. Can you tell us the latest on the 
Habib mission? Has Mr. Begin been 
asked to agree to a cease-fire, and has 
he refused to do so? 

A. No, I wouldn't describe the situa- 
tion in those terms at all. I think we 
have been, after attempting with all of 
the parties, directly and indirectly, to 
structure a cease-fire— an immediate 
cease-fire — to terminate the dangers to 
especially innocent noncombatants who 
have been involved, unfortunately, on 
both sides of the border. We have 
discussed this with Prime Minister 
Begin. He has not rejected the concept, 
but I think he feels, and correctly so, 
that he is a parliamentary government 
and he has to discuss this with his 
cabinet. That's scheduled to take place, 
as I understand, tomorrow. 

There are a number of very difficult 
questions facing Mr. Begin and his cabi- 
nent with respect to this subject. 
However, it is our strong conviction that 
the elimination of the violence is the 
best method by which to proceed and to 
establish a more lasting peace. 

Q. Does this apply to all 10 of the 
aircraft, and would you say that the 
suspension is indefinite? 

A. I wouldn't describe it as in- 
definite or temporary or prolonged. It 
does involve all F-16 shipments, the 
four originally involved in the Iraqi raid 
and that suspension decision, plus the 
six which were scheduled to leave on the 
21st— tomorrow morning. 

Q. Under what conditions would 
you decide to send the planes in the 

A. I don't want to establish precon- 
ditions. I think the situation has 
escalated to such a degree that the 
President felt it would have been highly 
inappropriate to send additional ar- 
maments into the area while this level of 
violence continues and until the situation 

Q. Has this been communicated to 
the Israeli Government, and is there 
no time limit? I mean, it's an in- 
definite delay as we see it now. 

A. The announcement I made here 
a few moments ago has been conveyed 
to the Israeli Government— prior to the 
announcement being made here. 

Q. And it is an indefinite delay? 
That is an appropriate way to state it? 

A. I would say the review continues 
and, clearly, the future level of violence 
in the area will have a very special im- 
pact on when that review will be com- 
pleted and the ultimate decision that's 
made. But I do want to make the point 
that this is not a decision that's linked to 
any specific action on the part of the 
Government of Israel but rather our 
concern that any action that the United 
States would take at a tense period such 
as this must be dominated by what we 
consider to be a contributor to modera- 
tion and to a return to status quo ante 
and normalcy in the area. 

Q. Was this decision colored by 
the expressions of concern that the 
President heard here? Would he have 
made a different decision had he not 
been here? 

A. No. I think, frankly, he would 
have made his decision regardless of 
whether or not he had been here in Ot- 
tawa for a summit. I think the decision 
was based on the objective realities of 
the situation in the Middle East today. 

Q. There are other F-16s and 
F-158 that are being built for Israel 
and are coming up for shipment next 
month. Are all of them suspended as 

A. I would certainly anticipate that 
the circumstances of the moment which 
have contributed to the deferral decision 
this evening will be behind us. But it's 
too early to say and it would be 
premature for me to do so. 

Q. What message is being sent to 
Mr. Begin by deferring the shipment? 

A. It isn't a question of messages to 
Mr. Begin. It's a question of appropriate 
actions that the United States would 
take in a situation of increasing danger 
and in stability in the Middle East area, 
and I think it's very important we focus 
on that as the logic which determined 
the President's course of action this 

Q. If you had sent the planes, 
would that not have been sending a 

st 1981 


Middle East 

A. I suppose you could say what- 
ever you did would have sent a message 
one way or the other. The simple facts 
are that that was not the deciding factor 
in the President's decision but rather the 
escalating level of violence and a deci- 
sion on the President's part which would 
be designed to contribute to greater 
moderation in the area. 

Q. Since the Israeli aggression in 
Lebanon undermines continuously the 
American influence and Israel knows 
very well that it can get away with 
this since Israel has tremendous in- 
fluence over the U.S. Congress, I 
wonder if your government would 
negotiate this mattter with the U.S. 
Jewish congress? 

A. Without joining some of the 
premises of your question, which I'm not 
sure that I could do, let me assure you 
that we have been in rather constant 
touch with the leadership on this matter. 
There were, I believe, hearings today 
that touched upon this subject, and 
while there will be differing viewpoints 
in the Congress, we feel that we have 
consulted appropriately in conjunction 
with this decision. 

Q. Do you think the Israeli aggres- 
sion in Lebanon is undermining 
American influence in the Middle 

A. I'm not sure I understood what 
you said. I think you said, "is this situa- 
tion undermining American influence in 
the Middle East." 

Q. Yes. 

A. I think the United States bears a 
very special responsibility for the situa- 
tion in the Middle East — it's been 
historically so. Anything that occurs in 
the Middle East, good or bad, the 
United States tends to enjoy or to suffer 
from the consequences. This is no excep- 

Q. A good deal of other military 
materiel has been in the 
pipeline— U.S. to Israel. Is that 
materiel continuing to be sent and 
that includes, I believe, air-to-air 
missiles and air-to-ground missiles? 

A. This deferral decision this eve- 
ning involves the F-16 aircraft, the four 
and the six that I mentioned earlier. It 
does not involve other equipment in the 
pipeline and en route to Israel. 

Q. Could you explain to us the 
logic of that if the U.S. Government 
believes that it's not advisable to send 
additional weaponry in because of the 
escalating violence, why is it going 
ahead and sending other weaponry in? 

A. I think the question at hand and 
the decision facing the President this 
evening and over the past 48 hours has 
been the F-16 issue, and that issue has 
been addressed and that decision has 
been made. The other aspects of the 
problem do not apply in the delibera- 
tions that have taken place, and I'll just 
leave it there. 

Q. Could you elaborate a little bit 
more on this decision— exactly when 
it was made tonight, who took part in 
that decision, and, specifically, when 
and how this decision was made by 
the President? 

A. I don't think it's appropriate to 
lay out a litany of the checklist of who 
was involved. But clearly, everyone who 
is responsible for national security af- 
fairs in the broad sense, together with 
the President's closest advisers and his 
personal staff, have been engaged in this 
matter for an extended period of time. I 
don't have to suggest otherwise because 
it wouldn't be true. We had meetings 
last week on this subject, before we 
came here to Ottawa, and we have had 
meetings here at Ottawa with respect to 
that subject. 

The decision was made this evening 
by the President, and we had the benefit 
of the advice of all appropriate officials 
of the executive branch. He had the 
benefit of consultative advice from cer- 
tain leaders of the Congress, and in the 
face of that advice and the President's 
own responsibilities to be the ultimate 
decisionmaker, he made his decision. 

Q. You have said that this decision 
is not linked to any specific action by 
Israel. But won't the decision be read 
in this country, and perhaps else- 
where, as indicating that this Admin- 
istration feels that Israel is more to 
blame than the Palestinians in the cur- 
rent wave of escalating violence? 

A. I would hope that that specific 
value judgment would not be made but 
rather that the facts of the situation, as 
I described them, would be the over- 
riding contributor to the President's 
decision; that is, and I repeat, the Presi- 
dent's personal conviction that the 
United States must conduct itself at this 
time in such a way that its actions will 
contribute to a peaceful solution to this 
anguishing and very tense situation in 
the Middle East today. 

Q. Against the background of 
Israel holding a cabinet meeting 
tomorrow, was the President's deci- 
sion designed to put pressure on the 
cabinet to accept a cease-fire; and 
secondly, if the cabinet should, in 

fact, accept a cease-fire, will the 
suspension be lifted? 

A. Not at all. I think those of yoi 
and I know you are among those whc 
follow this situation very, very closeh 
know precisely the sequence of event 
which has led to tonight's decision, ai 
in no way could that be attributed to 
effort to apply pressure one way or t 
other on an important national meeti; 
which will take place in Israel tomorr 

This is a decision which I reiterat 1 
again, and you gentlemen and ladies 
knew precisely, as deadlines approacl 
and shipment schedules faced us that 
there was no way that the President 
could have manipulated the cir- 
cumstances, or that we could have, 
which would have made tonight's dec 
sion any different. Something could h 
happened that would have made it mi 
easier, but, nonetheless, that would b 
very incorrect logic that you just out- 

■Press release 244.1 

Multinational Force 
in the Sinai 

JUNE 25, 1981 1 

We are very pleased by the announce 
ment today in Cairo that Egyptian, 
Israeli, and U.S. negotiators have 
reached preliminary agreement on th 
texts of documents relating to the 
establishment of a multinational force 
and observers to carry out the terms 
the Treaty of Peace Between Egypt i\ 

These documents are being submii 
ted to their respective governments f«i 
confirmation. It is expected that they 
will be initialed within a matter of da;. 
Formal signing by the three parties I 
would then take place later next mom 

This negotiation is a major step ft' 
ward in the implementation of the Tp 
ty of Peace Between Israel and Egyp 
and the strengthening of the relations 
between them. We congratulate the 
negotiators on their success. 

■Read to news correspondents l>> acS 
Department spokesman David Passage.H 


Department of State Bulle 


5. Assistance to Pakistan 


15, 1981 1 

L. Buckley, Under Secretary of 
for Security Assistance [Science, 
3chnology], and a team of U.S. of- 
from Washington, concluded their 
visit to Pakistan today and will fly 
o the United States from Karachi 
>n the morning of June 16. During 
it, Mr. Buckley met for 2 days of 
vith senior Pakistan leaders and 
Is including President [Moham- • 
ia-ul-Haq; Foreign Minister Aga 
Finance Minister Ghulam Ishaq 
the Secretaries General of the 
) and Defense Ministries, S. Shah 
and Maj. Gen. (retired) M. Rahim 
Foreign Secretary Riaz Piracha; 
n. Ejaz Azim; Ambassador- 
ate to Washington, Lt. Gen. K. M. 
^hief of Staff to the President; and 

Mr. Buckley also visited Murree 
fugee camps in the northwest 
ir province and Baluchistan. 
. Buckley's visit, at the invitation 
Government of Pakistan, was part 
continuing dialogue established 
en the Pakistan Government and 
S. Government during the last 4 
is and aimed at finding ways for 
lited States to assist Pakistan in 
lg the unprecedented threats it 
to its independence and sovereign- 
i consequence of the developments 
region. The previous round in 
talks had taken place in April 
Foreign Minister Agha Shahi 
d a team of senior Pakistani of- 
for talks with Secretaries Haig 
'einberger [Secretary of Defense 
r W. Weinberger] in Washington, 

r. Buckley's official talks in 
ibad, which took place on June 13 
i, centered on U.S. proposals to 
le economic assistance and to 
ate sales of military equipment to 
:an. Detailed discussion took place 
'ious levels of assistance and the 
>sition of assistance required by 
an. The talks also provided an op- 
lity for discussions of urgent 
;ani military requirements which 
nited States has agreed to look in- 
h a view toward determining 
ones the United States might be 
3 satisfy through its foreign 
ry sales program, 
iring the talks, the two sides 
sed the serious threat to the 

region posed by the presence of foreign 
troops in neighboring Afghanistan. Both 
sides agreed that a strong and independ- 
ent Pakistan is in the mutual interest of 
the United States and Pakistan, as well 
as of the entire world. Mr. Buckley af- 
firmed American determination to assist 
Pakistan and to support Pakistan's 
sovereignty and territorial integrity. 

The Pakistani side explained 
Pakistani policies, especially Pakistan's 
commitment to the principles and pur- 
poses of the nonaligned movement and 
the Organization of the Islamic Con- 
ference. Both sides agreed that U.S. 
assistance as proposed is consistent with 
these principles and with Pakistan's 
nonaligned status. Mr. Buckley 
specifically disclaimed any American in- 
terest in military bases or in establishing 
any new alliances. 

The United States and Pakistan 
discussed the dimensions of an overall 
framework for American efforts to 
assist Pakistan over the next 6 years. 
This includes a program of cash military 
sales during this year. It also includes a 
5-year program of economic support 
funds, development assistance, and loans 
for foreign military sales— the total 
value of which is expected to be approx- 
imately $3 billion, subject to annual ap- 
proval by the U.S. Congress. 

The multiyear approach is in 
response to the seriousness and im- 
mediacy of the threat to Pakistan's 
security. The United States has agreed 
to the sale of F-16 aircraft to Pakistan 
to assist Pakistan to improve its air 
defense capabilities; terms, timing, and 
numbers will be determined in a later 
meeting, likely to take place in 
Washington, between Pakistani and 
American military representatives. The 
United States agreed, also, to the early 
delivery of selected defense equipment 
urgently needed by Pakistan defense 
forces to meet the threats Pakistan 

Mr. Buckley invited the Government 
of Pakistan to send a team of military 
and defense officials to Washington to 
discuss military equipment needs and 
availabilities in detail. This visit is ex- 
pected to take place before the end of 

'Made available to news correspondents 
by acting Department spokesman David 
Passage. ■ 

st 1981 



Security Council Meets 
To Consider Israeli Raid 

The UN. Security Council met June 
12-19, 1981, to consider measures to be 
taken following the Israeli raid on Iraqi 
nuclear facilities. Following are two 
statements byJeaneJ. Kirkpatrick. U.S. 
Permanent Rrpresentatire t<> the United 
Nations, made on June 19 and the text of 
the resolution unanimously adopted that 


I wish to thank the Ambassador from 
Mexico, who has acquitted himself with 
such distinction in carrying out the 
difficult responsibilities, showing so keen 
a sense of the importance which the in- 
ternational community attaches to these 
deliberations. May I also congratulate 
the distinguished Ambassador from 
Japan, who last month earned the 
esteem of the entire Council by man- 
aging our affairs with singular deftness. 

The issue before the Security Coun- 
cil in the past week— Israel's attack upon 
the Iraqi nuclear reactor— raises pro- 
found and troubling questions that will 
be with us long after the conclusion of 
these meetings. The Middle East, as one 
prominent American observed last week, 
"provides combustible matter for inter- 
national conflagration akin to the 
Balkans prior to World War I," a cir- 
cumstance made all the more dangerous 
today by the possibility that nuclear 
weapons could be employed in a future 

The area that stretches from 
Southwest Asia across the Fertile Cres- 
cent and Persian Gulf to the Atlantic 
Ocean, is, as we all know, torn not only 
by tension and division but also by deep- 
ly rooted, tenacious hostilities that erupt 
repeatedly into violence. In the past 2 
years alone, one country in the area, 
Afghanistan, has been brutally invaded 
and occupied but not pacified. Afghan 
freedom fighters continue their deter- 
mined struggle for their country's in- 
dependence. Iraq and Iran are locked in 
a bitter war. And with shocking 
violence, Libya, whose principal exports 
to the world are oil and terror, invaded 
and now occupies Chad. Lebanon has its 
territory and its sovereignty violated 
almost routinely by neighboring nations. 
Other governments in the area have, 
during the same brief period, been the 


object of violent attacks and terrorism. 
Now comes Israel's destruction of the 
Iraqi nuclear facility. Each of these acts 
of violence undermines the stability and 
well-being of the area. Each gravely 
jeopardizes the peace and security of the 
entire area. The danger of war and 
anarchy in this vital strategic region 
threatens global peace and presents this 
Council with a grave challenge. 

My government's commitment to a 
just and enduring peace in the Middle 
East is well-known. We have given our 
full support to efforts by the Secretary 
General to resolve the war between Iran 
and Iraq. Our abhorrence of the Soviet 
Union's invasion and continued occupa- 
tion of Afghanistan— against the will of 
the entire Afghan people— requires no 
elaboration on this occasion. For weeks, 
our special representative Philip Habib 
has been in the area conducting talks 
which we still hope may help to end the 
hostilities in Lebanon and head off a con- 
flict between Israe 1 and Syria. Not least, 
we have been engaged in intensive 
efforts to assist in the implementation of 
the Egyptian-Israeli treaty, efforts that 
have already strengthened the forces for 
peace in the Middle East and will, we 
believe, lead ultimately to a comprehen- 
sive peace settlement of the Arab-Israeli 
conflict in accordance with Resolutions 
242 and 338 of the Security Council. 

As in the past, U.S. policies in the 
Middle East aim above all at making the 
independence and freedom of people in 
the area more secure and their daily 
lives less dangerous. We seek the securi- 
ty of all the nations and peoples of the 

• The security of all nations to 
know that a neighbor is not seeking 
technology for purposes of destruction. 

• The security of all people to know 
they can live their lives in the absence of 
fear of attack and do not daily see their 
existence threatened or questioned. 

• The security of all people dis- 
placed by war, violence, and terrorism. 

The instability that has become the 
hallmark and history of the Middle East 
may serve the interests of some on this 
Council; it does not serve our interests; 
it does not serve the interests of our 
friends, be they Israeli or Arab. 

We believe, to the contrary, that the 
peace and security of all the nations in 

the region are bound up with the pea< 
and security of the area. 

It is precisely because of my govi 
ment's deep involvement in efforts to 
promote peace in the Middle East th; 
we were shocked by the Israeli air sti 
on the Iraqi nuclear facility and prom 
ly condemned this action, which we 
believe both reflected and exacerbate! 
deeper antagonisms in the region whi 
if not ameliorated, will continue to le£ 
to outbreaks of violence. 

However, although my governme; 
has condemned Israel's act, we know 
is necessary to take into account the 
context of this action as well as its co 
sequences. The truth demands nothin 
less. As my President, Ronald Reagai 
asserted in his press conference: 

... I do think that one has to recogni 
that Israel had reason for concern in view 
the past history of Iraq, which has never 
signed a cease-fire or recognized Israel as 
nation, has never joined in any peace effoi 
for that .... [I]t does not even recognize 
existence of Israel as a country. 

With respect to Israel's attack on 
the Iraqi nuclear reactor, President 
Reagan said: "... Israel might hav< 
sincerely believed it was a defensive 

The strength of U.S. ties and con 
mitment to Israel is well known to th 
members of this Council. Israel is an 
portant and valued ally. The warmth 
the human relationship between our 
peoples is widely understood. Nothinj 
has happened that in any way alters 
strength of our commitment or the 
warmth of our feelings. We in the 
Reagan Administration are proud to 
Israel a friend and ally. 

Nonetheless we believe the meant 
Israel chose to quiet its fears about tl 
purposes of Iraq's nuclear program hi 
hurt and not helped the peace and 
security of the area. In my governme 
view, diplomatic means available to 
Israel had not been exhausted, and th 
Israeli action has damaged the region 
confidence that is essential for the pe; 
process to go forward. All of us with 
interest in peace, freedom, and natior 
independence have a high stake in the 
process. Israel's stake is highest of all 

My government is committed to 
working with the Security Council to 
remove the obstacles to peace. We rm 
clear from the outset that the United 
States will support reasonable actions 
this body which might be likely to con 
tribute to the pacification of the regio 
We also made clear that my governmi 
would approve no decision that harme 
Israel's basic interests, was unfairly 

United Nations 

nitive, or created new obstacles to a 
it and lasting peace. 
The United States has long been 
jply concerned about the dangers of 
:lear proliferation. We believe that all 
;ions should adhere to the Non- 
iliferation Treaty. It is well known 
it we support the International 
umic Energy Agency (IAEA) and will 
iperate in any reasonable effort to 
engthen it. 

We desire to emphasize, however, 
t security from nuclear attack and 
lihilation will depend ultimately less 
treaties signed than on the construc- 
i of stable regional order. Yes, Israel 
uld be condemned; yes, the IAEA 
uld be strengthened and respected by 
lations. And yes, too, Israel's 
jhbors should recognize its right to 
t and enter into negotiations with it 
esolve their differences. 
The challenge before this Council 
to exercise at least the same degree 
estraint and wisdom that we demand 
le parties directly involved in Middle 
I tensions. Inflammatory charges, 
i as the Soviet statement that the 
i ed States somehow encouraged the 
. or that we knew of the raid 
: rehand, are false and malicious. One 
.' speculate about whose interest is 
| ed by such innuendo. Certainly the 
t of truth, restraint, or peace is not 
id by such innuendo. Certainly the 
jss of peace is not forwarded. 
Throughout the negotiations of the 
i days, my government had sought 
I to move us closer to the day when 
i ine peace between Israel and its 
r neighbors will become a reality, 
i lave searched for a reasonable out- 
l of the negotiations in the Security 
i cil, one which would protect the 
I) interests of all parties, and damage 
e ital interests of none, which would 
I orate rather than exacerbate the 

I erous passions and division of the 
B In that search we were aided by 
B ^operative spirit, restrained posi- 
i and good faith of the Iraqi 

H gn Minister Sa'dun Hammadi. We 
K - ely believe the results will move 

II urbulent area a bit closer to the 
i .vhen all the states in the region 
Uthe opportunity to turn their 
Hies and resources from war to 

M, from armaments to development, 
<r anxiety and fear to confidence and 
1) eing. 


The Security Council, 

Having considered the agenda contained 
in document/agenda/2280, 

Having noted the contents of the 
telegramme dated 8 June 1981 from the 
Foreign Minister of Iraq, 

Having heard the statements made to the 
Council on the subject at its 2280th through 
2288th meetings; 

Taking note of the statement made by the 
Director General of IAEA to the Agency's 
Board of Governors on the subject on 9 June 
1981, and his statement to the Council at its 
2288th meeting on 19 June 1981, 

Further taking note of the resolution 
adopted by the Board of Governors of the 
IAEA on 12 June 1981 on the "military at- 
tack on the Iraq nuclear research centre and 
its implications for the agency", 

Fully aware of the fact that Iraq has 
been a party to the Non-proliferation Treaty 
since it came into force in 1970, that in 
accordance with that treaty Iraq has accepted 
IAEA safeguards on all its nuclear activities, 
and that the agency has testified that these 
safeguards have been satisfactorily applied to 

Noting furthermore that Israel has not 
adhered to the NPT, 

Deeply concerned about the danger to in- 
ternational peace and security created by the 
premeditated Israeli air attack on Iraqi 
nuclear installations on 7 June 1981, which 
could at any time explode the situation in the 
area with grave consequences for the vital in- 
terests of all states, 

Considering that, under the terms of Ar- 
ticle 2, Paragraph 4 of the United Nations 
Charter: "All members shall refrain in their 
international relations from the threat or use 
of force against the territorial integrity or 
political independence of any state, or in any 
other manner inconsistent with the purposes 
of the United Nations", 

1. Strongly condemns the military attack 
by Israel in clear violation of the United Na- 
tions Charter and the norms of international 

2. Calls upon Israel to refrain in the 
future from any such acts of threats thereof; 

3. Further considers that the said attack 
constitutes a serious threat to the entire 
IAEA safeguards regime which is the founda- 
tion of the NPT; 

4. Fully recognizes the inalienable 
sovereign right of Iraq, and all other states, 
especially the developing countries, to 
establish programmes of technological and 
nuclear development to develop their 
economy and industry for peaceful purposes 
in accordance with their present and future 
needs and consistent with the internationally 
accepted objectives of preventing nuclear 
weapons proliferation; 

5. Calls upon Israel urgently to place its 
nuclear facilities under IAEA safeguards; 

6. Considers that Iraq is entitled to ap- 
propriate redress for the destruction it has 
suffered, responsibility for which has been 
acknowledged by Israel; 

7. Requests the Secretary General to 
keep the Security Council regularly informed 
of the implementation of this resolution. 


Like other members of this Council, the 
United States does not regard this as a 
perfect resolution. With respect to the 
resolution, I must point out that my 
country voted against the resolution in 
the International Atomic Energy Agen- 
cy which is referred to in the present 
resolution. We continue to oppose it. In 
addition, our judgment that Israeli ac- 
tions violated the U.N. Charter is based 
solely on the conviction that Israel failed 
to exhaust peaceful means for the 
resolution of this dispute. Finally, we 
also believe that the question of ap- 
propriate redress must be understood in 
the full legal context of the relationships 
that exist in the region. 

Nothing in this resolution will affect 
my government's commitment to Israel's 
security and nothing in these reserva- 
tions affect my government's determina- 
tion to work with all governments of the 
region willing to use appropriate means 
to enhance the peace and security of the 

'USUN press release 39. 
Z USUN press release 41.1 

ist 1981 


United Nations 

International Conference on Kampuchea 

The U.N. International Conference 
on Kampuchea was held in New York on 
July 13-17, 1981. Following are a state- 
ment made at the conference by Secretary 
Haig, head of the U.S. delegation, on 
July IS and the texts of the declaration 
and resolution adopted by the conference 
on July 17. 

JULY 13, 1981 1 

Our purpose in meeting here today is 
one of compelling importance— to 
restore Kampuchea's sovereignty and in- 
dependence. The conquest of one nation 
by another represents the most fun- 
damental violation of the U.N. Charter. 
The international community cannot and 
will not acquiesce in the eradication of 
Kampuchea's sovereign identity through 
the aggression of its neighbor. 

The great majority of the members 
of that community have already ex- 
pressed their desire for a comprehensive 
solution to the Kampuchea problem 
through U.N. General Assembly Resolu- 
tion 35/6, which mandates this con- 
ference. Our gathering owes much to 
the initiative of ASEAN [Association of 
South East Asian Nations], which, 
besides the Kampuchean people 
themselves, represents those nations 
most affected by the situation. The 
United States will continue to work 
closely with ASEAN in seeking to 
resolve the Kampuchea issue while 
recognizing that the interests of 
Thailand are most directly threatened. 

A successful conference will be of 
great importance to the entire world 
community, but most particularly to the 
smaller nations which are increasingly in 
danger of foreign intervention. Most of 
all. our efforts are crucial to the Khmer