Remarks in an Interview With Nicholas Ashford and Charles Douglas-Home of the Times of London, Together With Written Responses to Questions

Q. And when Mrs. Thatcher was here, she mentioned in her toast that this year was the bicentenniary, not just of Anglo-American relations, but also the establishment of a venerable institution, which is my newspaper, the Times of London. And in honor of that event, I'd just like to make a small presentation. This is our office—over a hundred years ago—I'm afraid it doesn't look like that anymore. It's all glass and steel and high technology. But—times have progressed since then.

The President. Well, thank you very much. I'm very pleased to have that.

U.S.-Soviet Relations

Q. Thank you very much for this opportunity of meeting with you. Could I take this opportunity just to ask you about—I know you can't say anything about the date or time or agreement of a summit—but if a summit were to take place with Mr. Gorbachev, would you regard this as a turning point in American and Soviet relations?

The President. I don't know whether you could say that, because there have been summit meetings before. I would look on it as an opportunity to clear the air and express our desire to have a relationship that would eliminate this great threat that seems to hang over the world. If in any way it could help in the negotiations that are going on in Geneva—and very frankly, I'd like to speak to him to clear up some things, like the kind of tragedy with our officer there in Germany. ¹ Those things are so senseless; there's no need for them. But I don't know that you could see it as a turning point. After all, he has been for 4 years a member of the Politburo, 14 years a member of the party council. So, we know that the government really is a collective-the Politburo has the ultimate authority. So, I can't see that, as some speculated, there would be a great change of direction. It would only come about if that was the desire of that same Politburo.

¹ Maj. Arthur D. Nicholson, Jr., USA, who had recently been shot and killed in the German Democratic Republic.

Q. Given the nature of the Soviet system, how far can relations improve between the two nations?

The President. They could improve if we can show them that it would be to their material advantage as well as someone else's. I think about the Geneva talks that we're in right now. It's the first time in about 50 years and more than 20 arms talks with them between World War II and the present that they sit down faced with the possibility that either we join together in reducing arms or they engage us in an arms race, which they know they can't win.

April 10, 1985

The President's Responses to Questions Submitted by the Times of London

Nicaragua

Q. You have expressed your determination to make the Sandinista government of Nicaragua change its ways. How far are you prepared to go to achieve this objective?

The President. We believe that our interests and those of Central America would best be served by the conclusion of a workable, comprehensive, and fully verifiable regional agreement based solidly on the 21 objectives of the Contadora process. We continue to support that process strongly through our diplomacy.

I want to emphasize that, consistent with the 21 goals of the Contadora process, the United States continues to seek Nicaragua's implementation of its commitment to democracy made to the OAS. We also seek an end to Nicaragua's aggression against its neighbors. We think they should remove the thousands of Soviet bloc, Cuban, PLO, Libyan, and other military and security personnel and return the Nicaraguan military to a level of parity with their neighbors.

Realistically, we recognize that there must be incentives to get the Sandinistas to change their behavior. If incentives are taken away, they will have no reason to compromise, and there will be no hope of a negotiated settlement.

That is why I proposed last week, as a step toward peace in the Western Hemisphere, that the Sandinistas make peace with their own people by means of negotiations, which result in genuine democratic elections.

The democratic opposition has proposed a peace initiative to the Communists, which is completely fair. It includes mediation by the Catholic bishops of Nicaragua, who have accepted the proposal. It agrees to recognize the current regime pending a free election. It asks for guarantees of free speech and the political opportunity for the opposition to state its case there. A key feature of the peace plan is a cease-fire by both sides and a lifting of the state of emergency.

This proposal is fully consistent with the 21 objectives of the Contadora process. It has the approval of President Betancur of Colombia, President Duarte of El Salvador, and other neighbors of Nicaragua. Why won't the Sandinistas accept this proposal from their own people? We hope they will, for the sake of peace in their own country and in Central America as a whole.

Strategic Defense Initiative and Arms Talks

Q. How concerned are you by the Soviet Union's attempt to drive a wedge between the U.S. and its NATO allies by its bitter opposition to your Strategic Defense Initiative, the SDI?

The President. As much as our military strength or the vigor of our economies, the continuing vitality and solidarity of the Atlantic alliance lies at the heart of the West's ability to protect its freedoms while preserving the peace. The very nature of our democratic and open societies ensures that there will always be diversity of opinion within the alliance. Nonetheless, it is critically important that the United States and its European partners stand united on the basis of our common efforts to protect our mutual security.

Therefore, it is not at all surprising that the Soviets are now seeking, as they have in the past in regard to other issues, to incite and exploit differences within the West as a means of undercutting alliance efforts to strengthen our defense and deterrent forces. Their propaganda tools are familiar ones, involving misrepresentation, threats, and now a call for a moratorium that would freeze the imbalance in Europe.

Though their current propaganda campaign contains little that is new, I can't help but be struck by how disingenuous it is for the Soviet Union—which possesses the world's only operational ABM system, which has been energetically pursuing an extensive research program in the area of ballistic missile defense, and which has taken actions counter to the letter and spirit of the ARM treaty—now to express such public criticism of the idea that the United States might also engage in its own research into the feasibility of strategic defense.

Our allies know the truth. We have consulted closely with them on the nature and purposes of SDI. They know that it is a research program designed to provide the technical basis that would allow a future President to decide whether to develop advanced systems to defend against ballistic missiles. They also know that limits on research activity are neither feasible nor verifiable.

The goal of SDI research is to find nonnuclear technologies which, if deployed, would strengthen stability and enhance our mutual security. Our research will be conducted in conformity with all treaties to which the U.S. is a party, including the ARM treaty.

For all these reasons, NATO governments support SDI research and have stated their support on many occasions, most recently at the March meeting of NATO's Nuclear Planning Group.

Q. Mr. President, you have said it may take longer than your 4-year term to achieve a major nuclear arms reduction agreement with the Soviet Union. If this is so, what do you think can be achieved by 1988?

The President. We are prepared to negotiate constructively with the Soviet Union with the goal of radically reducing nuclear arms and, ultimately, eliminating nuclear weapons entirely. If the Soviets approach the negotiations in the same serious fashion, it should be possible to reach agreement in the relatively short term. At the same time, we recognize fully the differences between us and the Soviets. Historically, it has often taken considerable negotiation to work out arms control agreements.

The U.S. will not make unilateral concessions in an effort to come quickly to agreement nor will we be subject to artificial deadlines before which agreement must be reached. We want to negotiate good agreements which enhance the security of the United States and our allies. We are prepared to negotiate as long as necessary to achieve this.

Strength of the U.S. Dollar Abroad

Q. The strong dollar has been causing chaos in European currency markets, forcing governments to raise interest rates. A sharp fall in its value could also be very damaging. Given the interrelationship between the U.S. and other Western economies, why doesn't the U.S. actively intervene with other governments to achieve greater currency stability?

The President. The strength of the U.S. dollar against European currencies over the past 4 years has primarily reflected the strong U.S. economic performance and prospects, particularly relative to the economic performance and prospects elsewhere in the world. The dramatic improvement in U.S. growth, employment, productivity, and profitability, coupled with a lower inflation rate, has stimulated demand for dollars relative to demand for other key currencies. Additionally, foreign confidence in the U.S. economy as a "safe haven" has contributed to the demand for dollars.

Experience indicates that government intervention in exchange markets can have only a very limited and temporary impact in the absence of changes in the underlying fundamentals. We remain prepared to intervene, to counter disorderly markets in instances where we believe it would be helpful. But policies that promote a convergence of economic performance, including those designed to increase incentives for stronger noninflationary growth, are the key to achieving greater exchange rate stability.

Budget Deficit

Q. You have stated that a reduction of the Federal budget deficit is a top priority, but many economists and businessmen on both sides of the Atlantic are skeptical that you will be able to achieve significant cuts. What is your strategy, given the opposition your proposals are already facing in the Congress?

The President. Congress and the administration have a common goal: We want to reduce the budget deficit. The administration and the Senate Republican leadership have reached agreement on a budget proposal for FY 1986 which restrains both civilian and military expenditure—without endangering our military preparedness—while cutting some $50 billion from our budget deficit. Our budget proposal would utilize expenditure restraint and expanding revenues from economic growth to yield a declining trend of deficits, both in absolute terms and as a share of GNP, in the coming fiscal years.

In some quarters in Congress there is inclination to spare domestic spending from reductions we have proposed and instead just cut defense expenditures, or raise taxes, or both. The administration is certainly willing to consider proposals from Congress, but I will not agree to defense spending cuts that weaken our national security or to tax increases. Despite our differences with some Members of Congress, I believe that our strong, shared determination to reduce the deficit will prevail; that we will get the cuts in spending our economy requires; and that later in the year, we can secure passage of an historic reform and simplification of our tax code that will strengthen incentives for vigorous and sustained economic growth.

Trade Negotiations and the International Monetary System

Q. You have proposed a new round of GATT negotiations. In what areas will the U.S. be putting proposals, and would the U.S. agree to linking international currency and dollar issues to these talks?

The President. We have ideas as to what subjects might be covered, and we are confident that the other participants have their own ideas as to priority areas for the negotiations. We are anxious to proceed to the preparatory phase of the negotiations in the GATT and to draw up an agenda for the new round, which we believe should be launched formally by early next year. We do not believe it is right to link progress on these negotiations with international monetary questions; issues in each should be addressed on their merits when they arise. For example, the international monetary system was discussed at the Williamsburg summit in 1983. As a result, the Group of Ten undertook a study of ways to improve the operation of the world monetary system, and we look forward with interest to seeing the report, which is to be examined by Finance Ministers this June.

Middle East

Q. Do you think recent developments in the Middle East, notably the accord between King Hussein of Jordan and the Palestine Liberation Organization, can lead to an early revival of your September 1982 Middle East peace initiative?

The President. When I made my proposals in September 1982, my goal was to stimulate efforts to achieve a just and durable peace in the Middle East. That goal remains the same today. My initiative outlined the positions we will support when negotiations resume. I believe that direct negotiations between the parties is the best way to achieve settlement. But the challenge at the moment is to get those negotiations underway.

The Hussein-Arafat accord and the ideas put forward by Egyptian President Mubarak and others in the region are positive developments. I have decided to send Assistant Secretary of State Richard Murphy to the area to explore the possibilities raised by these proposals and to see how the peace process can be moved forward.

Q. In view of the protracted Iran-Iraq war, how prepared are you to provide Saudi Arabia and other Gulf States with the sophisticated weaponry they are seeking?

The President. Our policy has been to help these countries develop their capabilities to defend themselves against regional threats to their security. We will complete a review of our Middle East security policy in the very near future. Meanwhile, we are not initiating the sale of major new systems or augmentations to any country in the Middle East. We will respond to various requests for arms in light of the results of our review.

U.S.-United Kingdom Relations

Q. During your talks with Mrs. Thatcher in February you referred to the special quality of relations between the U.S. and Britain. What are these special qualities?

The President. In a few weeks, it will be the 200th anniversary of the date on which John Adams was received by King George III and diplomatic relations were established between the United Kingdom and the United States. With a few exceptions, the two centuries which followed have been marked by a growing closeness between our two countries. Our nations have been drawn together by common traditions and heritage and a common devotion to the concepts of liberty and human dignity. These bonds have been forged over the centuries as our countries have stood together to meet both the challenges of war and the opportunities of peace. Today relations between Great Britain and the United States are marked not only by cooperation and mutual respect but also by a deep and abiding friendship.