Second Annual Report to the Congress on United States Foreign Policy.

INTRODUCTION A PERIOD OF TRANSITION

"No goal could be greater than to make the next generation the first in this century in which America was at peace with every nation in the world."

Address on the State of the Union January 22, 1970

In the first year of this Administration we outlined a new American role. In 1970, we implemented policies which embody our new purpose.

This year, as any year, saw crises. We dealt with them without new war and while winding down the war we inherited. But our fundamental goal is deeper. It is to get at the roots of crises and to build a durable structure of international relationships.

This second annual report to the Congress and the Nation, therefore, like the first, is more than a recital of events. It reviews the premises and philosophy of our foreign policy and discusses events in the context of purposes. It explains why we have done as we have, and sets forth our hopes and concerns for the years to come.

This Administration must lead the nation through a fundamental transition in foreign policy.

As I explained in last year's report, we are at the end of an era. The postwar order of international relations--the configuration of power that emerged from the Second World War is gone. With it are gone the conditions which have determined the assumptions and practice of United States foreign policy since 1945.

No single sudden upheaval marked the end of the postwar era in the way that the World Wars of this century shattered the prewar orders of international relations. But the cumulative change since 1945 is profound nonetheless:

--Western Europe and Japan, nations physically or psychologically debilitated by the war, have regained their economic vitality, social cohesion, and political self-assurance. Their new vigor transforms our relationship into a more balanced and dynamic coalition of independent states.

--New nations have found identity and self-confidence and are acting autonomously on the world stage. They are able to shoulder more responsibility for their own security and well-being.

--In the last 20 years, the nature of the Communist challenge has been transformed. The Stalinist bloc has fragmented into competing centers of doctrine and power. One of the deepest conflicts in the world today is between Communist China and the Soviet Union. The most prevalent Communist threats now are not massive military invasions, but a more subtle mix of military, psychological, and political pressures. These developments complicate the patterns of diplomacy, presenting both new problems and new prospects.

--At the same time, the Soviet Union has expanded its military power on a global scale and has moved from an inferior status in strategic weapons to one comparable to the United States. This shift in the military equation has changed both defense doctrines and the context of diplomacy.

--Around the globe, East and West, the rigid bipolar world of the 1940's and 1950's has given way to the fluidity of a new era of multilateral diplomacy. Fifty-one nations joined the United Nations at its founding in 1945; today 127 are members. It is an increasingly heterogeneous and complex world, and the dangers of local conflict are magnified. But so, too, are the opportunities for creative diplomacy.

--Increasingly we see new issues that transcend geographic and ideological borders and confront the world community of nations. Many flow from the nature of modern technology. They reflect a shrinking globe and expanding interdependence. They include the challenges of exploring new frontiers of space and sea and the dangers of polluting the planet. These global issues call for a new dimension of international cooperation.

THE NEW AMERICAN ROLE

How is America to conduct itself in a world so different? How should we define the form and content of American participation in the 1970's?

In the era of American predominance, we resorted to American prescriptions as well as resources. In the new era, our friends are revitalized and increasingly self-reliant while the American domestic consensus has been strained by 25 years of global responsibilities. Failure to draw upon the growth of others would have stifled them and exhausted ourselves. Partnership that was always theoretically desirable is now physically and psychologically imperative.

In the era of overwhelming U.S. military strength, we and our allies could rely on the doctrine of massive retaliation. In the new era, growing Soviet power has altered the military equation. Failure to adapt to this change could lead to confrontations which pose an agonizing choice between paralysis and holocaust. Strength that served the cause of peace during a period of relative superiority needs new definitions to keep the peace during a period of relative equality.

In the era of Communist solidarity we pursued an undifferentiated negotiating approach toward Communist countries. In the new era, we see a multipolar Communism marked by a variety of attitudes toward the rest of the world. Failure to respond to this diversity would have ignored new opportunities for improving relations. Negotiation with different Communist countries on specific issues carries more promise.

Finally, in the new era, unprecedented challenges beckon nations to set aside doctrine and focus on a common agenda. A new global partnership could promote habits of working for the world's interests instead of narrow national interests.

We in this generation have before us an historic opportunity to turn the transformations of the last 25 years into new avenues for peace, and to realize the creative possibilities of a pluralistic world. We must begin with the vision of the world we seek, to infuse our actions with a sense of direction. We need a vision so that crises do not consume our energies, and tactics do not dominate our policies.

America has always had a belief in a purpose larger than itself. Two centuries ago our mission was to be a unique exemplar of free government. Two decades ago it was to take up worldwide burdens of securing the common defense, economic recovery, and political stability.

Today we must work with other nations to build an enduring structure of peace. We seek a new and stable framework of international relationships:

--which reflects the contributions and reconciles the aspirations of nations.

--which is cemented by the shared goal of coexistence and the shared practice of accommodation.

--which liberates countries and continents to realize their destinies free from the threat of war.

--which promotes social justice and human dignity.

Our participation remains crucial. Because of the abundance of our resources 71-234--72 18 and the stretch of our technology, America's impact on the world remains enormous, whether by our action or by our inaction. Our awareness of the world is too keen, and our concern for peace too deep, for us to remove the measure of stability which we have provided for the past 25 years.

But we need the resources and concepts of others so that they will build this structure with us. For it will not endure unless other nations sense that it is also of their making. Their growth in the past decades enables other nations to do more, and peace in the coming decades will require all nations to do some.

With others we will strive for something that America and the world have not experienced in this century, a full generation of peace.

The first step, of course, is to still the sound of war. We are moving toward that goal. Beyond that, we are focusing on something that men alive today can achieve for themselves and their children, on a span of peace we can realize here and now. This will be our ultimate test.

Thus the core of our new foreign policy is a partnership that reflects the basic theme of the international structure we seek. Its necessary adjuncts are strength to secure our interests and negotiation to reconcile them with the interests of others. Its fullest extension encompasses adversaries as well as friends.

It will take many years to shape the new American role. The transition from the past is underway but far from completed. During this period the task of maintaining a balance abroad and at home will test the capacity of American leadership and the understanding of the American people.

Adjustments in our policies surely will be required, but our experience in 1970 confirmed the basic soundness of our approach.

We have set a new direction. We are on course.

PART I: THE NIXON DOCTRINE

"It is not my belief that the way to peace is by giving up our friends or letting down our allies. On the contrary, our aim is to place America's international commitments on a sustainable, long-term basis, to encourage local and regional initiatives, to foster national independence and self-sufficiency, and by so doing to strengthen the total fabric of peace."

Address to the United Nations

General Assembly

September 18, 1969

This Administration began with the conviction that a global structure of peace requires a strong but redefined American role. In other countries there was growing strength and autonomy. In our own there was nascent isolationism in reaction to overextension. In the light of these changed conditions, we could not continue on the old path.

We need to replace the impulses of the previous era: both our instinct that we knew what was best for others and their temptation to lean on our prescriptions. We need to head off possible overreactions in the new era: a feeling on our part that we need not help others, and a conclusion on their part that they cannot count on America at all. We need to strengthen relations with allies and friends, and to evoke their commitment to their own future and to the international system.

Perception of the growing imbalance between the scope of America's role and the potential of America's partners thus prompted the Nixon Doctrine. It is the key to understanding what we have done during the past two years, why we have done it, and where we are going.

The Doctrine seeks to reflect these realities:

--that a major American role remains indispensable.

--that other nations can and should assume greater responsibilities, for their sake as well as ours.

--that the change in the strategic relationship calls for new doctrines. --that the emerging polycentrism of the Communist world presents different challenges and new opportunities.

TOWARD NEW FORMS OF PARTNERSHIP

The tangible expression of the new partnership is in greater material contributions by other countries. But we must first consider its primary purpose--to help make a peace that belongs to all.

For this venture we will look to others for a greater share in the definition of policy as well as in bearing the costs of programs. This psychological reorientation is more fundamental than the material redistribution; when countries feel responsible for the formulation of plans they are more apt to furnish the assets needed to make them work.

For America this could be the most critical aspect of the Doctrine. To continue our predominant contribution might not have been beyond our physical resources--though our own domestic problems summoned them. But it certainly would have exceeded our psychological resources. For no nation has the wisdom, and the understanding, and the energy required to act wisely on all problems, at all times, in every part of the world. And it asks too much of a people to understand --and therefore support--sweeping and seemingly permanent overseas involvement in local problems, particularly when other countries seem able to make greater efforts themselves.

The intellectual adjustment is a healthy development for other nations as well as for us. It requires them to think hard about some issues that had been removed, or had never appeared, on their national agendas. It is no more in their interest than in ours to place on the United States the onus for complicated decisions--the structure of an army, the outline of a development plan, the components of an economic policy, the framework of a regional alliance.

The Nixon Doctrine, then, should not be thought of primarily as the sharing of burdens or the lightening of our load. It has a more positive meaning for other nations and for ourselves.

In effect we are encouraging countries to participate fully in the creation of plans and the designing of programs. They must define the nature of their own security and determine the path of their own progress. For only in this manner will they think of their fate as truly their own.

This new sharing requires a new, more subtle form of leadership. Before, we often acted as if our role was primarily one of drawing up and selling American blueprints. Now, we must evoke the ideas of others and together consider programs that meet common needs. We will concentrate more on getting other countries engaged with us in the formulation of policies; they will be less involved in trying to influence American decisions and more involved in devising their own approaches.

More than ever before in the period since World War II, foreign policy must become the concern of many rather than few. There cannot be a structure of peace unless other nations help to fashion it. Indeed, in this central fact lie both its hope and its elusiveness: it cannot be built except by the willing hands--and minds--of all.

It was in this context that at Guam in the summer of 1969, and in my November 3, 1969 address to the Nation, I laid out the elements of new partnership.

"First, the United States will keep all of its treaty commitments." We will respect the commitments we inherited-both because of their intrinsic merit, and because of the impact of sudden shifts on regional or world stability. To desert those who have come to depend on us would cause disruption and invite aggression. It is in everyone's interest, however, including those with whom we have ties, to view undertakings as a dynamic process. Maintaining the integrity of commitments requires relating their tangible expression, such as troop deployments or financial contributions, to changing conditions.

The concrete results vary. In South Korea fewer U.S. troops are required, but Korean forces must receive more modern equipment. In NATO a continuing level of U.S. forces and greater European contributions are in order. The best way of maintaining stable relationships with our allies is jointly to reach common conclusions and jointly to act on them.

In contemplating new commitments we will apply rigorous yardsticks. What precisely is our national concern? What precisely is the threat? What would be the efficacy of our involvement? We do not rule out new commitments, but we will relate them to our interests. For as I said in last year's report:

"Our objective, in the first instance, is to support our interests over the long run with a sound foreign policy. The more that policy is based on a realistic assessment of our and others' interests, the more effective our role in the world can be. We are not involved in the world because we have commitments; we have commitments because we are involved. Our interests must shape our commitments, rather than the other way around."

"Second, we shall provide a shield if a nuclear power threatens the freedom of a nation allied with us or of a nation whose survival we consider vital to our security." Nuclear power is the element of security that our friends either cannot provide or could provide only with great and disruptive efforts. Hence, we bear special obligations toward non-nuclear countries. Their concern would be magnified if we were to leave them defenseless against nuclear blackmail, or conventional aggression backed by nuclear power. Nations in a position to build their own nuclear weapons would be likely to do so. And the spread of nuclear capabilities would be inherently destabilizing, multiplying the chances that conflicts could escalate into catastrophic exchanges.

Accordingly, while we maintain our nuclear force, we have encouraged others to forego their own under the Non-Proliferation Treaty. We have assured those signing the NPT that they would not be subject to nuclear blackmail or nuclear aggression. The Soviet Union has done so as well.

"Third, in cases involving other types of aggression we shall furnish military and economic assistance when requested in accordance with our treaty commitments. But we shall look to the nation directly threatened to assume the primary responsibility of providing the manpower for its defense." No President can guarantee that future conflicts will never involve American personnel--but in some theaters the threshold of involvement will be raised and in some instances involvement will be much more unlikely. This principle, first applied to security matters, applies as well to economic development. Our economic assistance will continue to be substantial. But we will expect countries receiving it to mobilize themselves and their resources; we will look to other developed nations to play their full role in furnishing help; and we will channel our aid increasingly through multilateral channels.

We will continue to provide elements of military strength and economic resources appropriate to our size and our interests. But it is no longer natural or possible in this age to argue that security or development around the globe is primarily America's concern. The defense and progress of other countries must be first their responsibility and second, a regional responsibility. Without the foundations of self-help and regional help, American help will not succeed. The United States can and will participate, where our interests dictate, but as a weight--not the weight-in the scale.

THE PROCESS OF IMPLEMENTATION

Policy becomes clearer only in the process of translation into programs and actions.

In this process the Nixon Doctrine seeks to reflect the need for continuity as well as the mandate for change. There are two concurrent challenges:

--to carry out our new policy so as to maintain confidence abroad.

--to define our new policy to the American people and to elicit their support.

This transition from bearing the principal burdens to invoking and supporting the efforts of others is difficult and delicate.

Some vestiges of the past consist of essentially sound relationships and valid practices. They should be preserved.

Others must be liquidated, but the method is crucial. Clearly, we could not have continued the inherited policy on Vietnam. Just as clearly, the way in which we set about to resolve this problem has a major impact on our credibility abroad and our cohesion at home. The same is true in other areas where our military presence remained too large, or our economic burden disproportionate, or our attitude paternalistic.

The challenge is not merely to reduce our presence, or redistribute our burden, or change our approach, but to do so in a way that does not call into question our very objectives.

Others judge us--and set their own course--by the steadiness of our performance as well as the merit of our ideas. Abrupt shifts in our policies--no matter how sound in concept--are unsettling, particularly for those who may have committed themselves to past practices at United States urging. For their own political future is involved. If we acquired a reputation for unsteadiness, we would isolate ourselves. We must avoid practicing either consistency or novelty for its own sake.

For the mood among many of our friends is ambivalent. They seek autonomy but still presume American initiative. They at once realize the need for their new independent role, welcome it, and are apprehensive about its responsibilities. The Nixon Doctrine recognizes that we cannot abandon friends, and must not transfer burdens too swiftly. We must strike a balance between doing too much and thus preventing self-reliance, and doing too little and thus undermining self-confidence.

This balance we seek abroad is crucial. We only compound insecurity if we modify our protective or development responsibilities without giving our friends the time and the means to adjust, materially and psychologically, to a new form of American participation in the world.

Precipitate shrinking of the American role would not bring peace. It would not reduce America's stake in a turbulent world. It would not solve our problems, either abroad or at home.

The need for steadiness overseas has a domestic corollary. While striking a balance in the world it is also necessary, and in some ways even more difficult, to find the proper balance at home.

For the American people have grown somewhat weary of 25 years of international burdens. This weariness was coming in any event, but the anguish of the Vietnam war hastened it, or at least our awareness of it. Many Americans, frustrated by the conflict in Southeast Asia, have been tempted to draw the wrong conclusions. There are lessons to be learned from our Vietnam experience-about unconventional warfare and the role of outside countries, the nature of commitments, the balance of responsibilities, the need for public understanding and support. But there is also a lesson not to be drawn: that the only antidote for undifferentiated involvement is indiscriminate retreat.

Our experience in .the 1960's has underlined the fact that we should not do more abroad than domestic opinion can sustain. But we cannot let the pendulum swing in the other direction, sweeping us toward an isolationism which could be as disastrous as excessive zeal.

Thus, while lowering our overseas presence and direct military involvement, our new policy calls for a new form of leadership, not abdication of leadership. This policy must not only reflect a changed public will. It must shape a new consensus for a balanced and positive American role.

While cutting back overseas forces prudently, we must resist the automatic reduction of the American presence everywhere without regard to consequences. While trimming our defense budget where possible and adjusting defenses to modem realities, we must resist ritualistic voting against defense spending. Mere scaling down is not an end in itself. We need to determine the proper role for our forces abroad; the level of assistance for allied forces; and the shape of our respective budgets.

The Nixon Doctrine will enable us to remain committed in ways that we can sustain. The solidity of domestic support in turn will reverberate overseas with continued confidence in American performance.

THE RECORD OF IMPLEMENTATION

Different national and regional circumstances dictate variations in style, speed, and substance in implementing the Nixon Doctrine. This past year the sharing of responsibilities was reflected in various ways.

In some areas the Nixon Doctrine resulted in reduced American presence:

--In Vietnam, we progressively transferred combat burdens in an on-going war. Vietnamization produced substantial improvement in South Vietnamese forces, the withdrawal of some 260,000 Americans by May I of this year and a decline in American casualties in 1970 to a level 70% below 1968.

--In South Korea, we moved to a more supportive role in the continuing process of deterring a new war. We announced a reduction of 20,000 in the authorized American troop ceiling together with modernization of Korean forces through expanded military assistance.

--Elsewhere in Asia we cut back our forces to reflect our declining involvement in Vietnam and the increased capabilities of our allies. Troop reductions and base consolidations by this July will lower the U.S. presence by some 12,000 in Japan, 5,000 in Okinawa, 16,000 in Thailand and 9,000 in the Philippines.

--Worldwide we cut back the U.S. official presence, civilian and military, for a more efficient and less conspicuous approach. A program begun in November 1969 reduced our government personnel abroad by about 86,000.

In other cases our new approach took different forms: --In Europe we enlisted greater material and intellectual contributions from our allies. We jointly reviewed NATO strategy and agreed to a realistic defense in which the European conventional share will be relatively larger. For the ongoing SALT negotiations we stayed in close touch with our allies not only because of their interest but also for their ideas.

--In the Western Hemisphere we have shifted from paternalism to a more balanced partnership. We sought the ideas and initiatives of our neighbors and together strengthened the mechanisms for sharing responsibilities in hemispheric development and diplomacy.

--Our foreign assistance program enabled us to help countries who were helping themselves. Congressional passage of a $ 1 billion supplemental appropriation at year's end was encouraging recognition that the Nixon Doctrine requires substantial American assistance.

--In our proposals for a new approach to foreign aid we emphasized multilateral institutions and collaboration. We will work more with, and ask more of, others in the development process.

In 1970 there were also examples of policies which belied oversimplified interpretations of the Nixon Doctrine as a formula for heedless withdrawal:

--The Cambodian sanctuary operations were not inconsistent with the plan for American disengagement. Rather they furthered the strategic purpose of insuring the Vietnamization and withdrawal programs.

--Maintaining the present level of U.S. forces in Europe does not contradict the principle of self-help and burden sharing in Asia. Rather it is the best means of eliciting greater partnership in the European theater, while recognizing the reality of the security problem.

--The discreet projection of American presence in the Mediterranean during the Jordanian crisis did not increase the chances of outside intervention. Rather it served as a reminder that outside intervention carried great risks.

The Nixon Doctrine applies most directly to our dealings with allies and friends. But it animates all areas of our new foreign policy:

--In our economic posture. We look towards increased U.S. economic and military assistance in certain areas to help our friends make full use of their resources and move on to greater self-reliance. International trade and monetary policies will demand mutual accommodations and adjustment.

--In our defense posture. We will provide the nuclear shield of the Nixon Doctrine. Our general purpose forces are more and more keyed to our partners' capabilities, to provide truly flexible response when our commitments are involved. And our security assistance program will provide indispensable support to our friends, especially where there are reductions in U.S. manpower.

--In our negotiating posture. When we conduct bilateral negotiations with the USSR, as in SALT, partnership involves close consultations with our allies both to protect their interests and solicit their views. In turn partnership requires our allies, in their negotiations, to pursue their course within a framework of common objectives. And there are areas of multilateral negotiations in which partnership is most immediately involved.

--In our global posture. Nonpolitical world problems call for cooperation that transcends national rivalries. Here, more comprehensively than in traditional realms, there is a need for shared approaches and shared participation.

THE NECESSITY FOR DIALOGUE

The Nixon Doctrine, then, is a means to fulfill our world responsibilities on a sustained basis by evoking both the contributions of our friends and the support of our own people. Its very nature calls for continuing dialogue abroad and at home.

We recognize that the Doctrine, like any philosophic attitude, is not a detailed design. In this case ambiguity is increased since it is given full meaning through a process that involves other countries. When other nations ask how the Doctrine applies to them in technical detail, the question itself recalls the pattern of the previous period when America generally provided technical prescriptions. The response to the question, to be meaningful, partly depends on them, for the Doctrine's full elaboration requires their participation. To attempt to define the new diplomacy completely by ourselves would repeat the now presumptuous instinct of the previous era and violate the very spirit of our new approach.

In coming years we will therefore be engaged in a broad and deep discussion with others concerning foreign policy and the nature of our respective roles. To define and assume new modes of partnership, to discover a new sense of participation, will pose a great intellectual challenge for our friends and ourselves. At home the challenge is comparable. It is always a requirement of American leadership to explain, as clearly as possible, its overall approach. We must convincingly demonstrate the relationship between our specific actions and our basic purposes. In turn, the leadership can ask the American people for some degree of trust, and for acknowledgment of the complexities of foreign policy. This does riot mean a moratorium on criticism. It means listening to, the rationale for specific actions and distinguishing attacks on the broad policy itself from attacks on tactical judgments.

This dialogue between the government and the people is all the more imperative in this transitional era. Gone for Americans is a foreign policy with the psychological simplicity of worrying primarily about what we want for others. In its place is a role that demands a new type of sustained effort with others.

To further this dialogue overseas and in America is the principal objective of this annual review.

To promote this dialogue is to improve the prospects that America, together with others, will play its vital part in fashioning a global structure of peace. A peace that will come when all have a share in its shaping. A peace that will last when all have a stake in its lasting.

PART II: RELATING NATIONAL INTERESTS

--Europe

--The Western Hemisphere --Indochina

--East Asia and the Pacific

-South Asia

--Africa

--The Middle East

--International Economic Policy

EUROPE

"In Europe, our policies embody precisely the three principles of a durable peace: partnership, continued strength to defend our common interests when challenged, and willingness to negotiate differences with adversaries."

U.S. Foreign Policy For The 1970's

Report to the Congress

February 18, 1970

In last year's annual review I stated the following as the agenda for the future of our relations with Western Europe:

--the evolution of a mature partnership reflecting the vitality and independence of Western European nations.

--the expansion of our cooperation in facing the common social and human challenges of modern societies.

--consultation with our NATO allies on defense strategy and force levels and on the mutual interests affected by U.S.-Soviet talks on strategic arms limitation.

--an understanding with our allies on our common objectives and respective roles in seeking a peaceful and stable order in all of Europe.

This agenda is still with us, for its tasks are rooted in our fundamental purposes, and are part of an historical process.

Clearly, if we are to found a structure of peace on the collaboration of many nations, our ties with Western Europe must be its cornerstone. This is not simply because wars on the continent have engulfed the rest of the world twice in this century. It is not simply because Europe's concentration of industrial might is crucial to the balance of power. Western Europe is central because its nations are rich in tradition and experience, strong economically, and vigorous in diplomacy and culture; they are in a position to take a major part in building a world of peace.

THE EVOLUTION OF PARTNERSHIP

When the Atlantic Alliance was formed, we were united in the face of a common danger. Today, while our concern for security remains, it is no longer enough for us to, concentrate simply on what we are trying to prevent; we need a clearer vision of what we are seeking to achieve. Our deepest challenges today cannot be addressed without a new and more positive sense of common purpose. They arise from the evolution of our relationship with each other.

The United States broke with its isolationist history at the precise moment of Europe's prostration. Our predominance in the West was a necessity in the aftermath of the Second World War. But today the renewal of Western European institutions and foreign policies is an accomplished fact. Our partnership, once a vehicle for our underwriting of Europe's defense and recovery, has grown into a more balanced, dynamic and complex coalition.

We welcome this success of our postwar policies. This Administration does not view our allies as pieces in an American Grand Design. We have accepted, for example, France's desire to maintain an independent posture in world affairs, and have strengthened our bilateral relations. In 1970, two other allies were vigorously taking the initiative in diplomacy. Chancellor Brandt pursued West Germany's Eastern Policy, seeking reconciliation with Germany's neighbors in Central and Eastern Europe; Prime Minister Heath, in his Guildhall address on November 16, declared his intention to see that British policies are determined by British interests.

Our allies' new spirit of independence, reflecting as it does their vitality as nations, can be a source of strength. But our cohesion, too, is a source of strength, which makes possible the freedom of action of individual allies. We must learn to reconcile autonomy and unity. This is America's commitment, and the Alliance's challenge.

But the necessary transition to an equal partnership is still in progress.

In the postwar period of American predominance, Americans became accustomed to view Alliance issues in largely technical terms, for we were in a position to devise strategies and programs unilaterally. Our partners often automatically accepted our prescriptions, as a way to win influence over our actions. This diminished their sense of involvement, and encouraged a sense of dependency.

Today their attitudes are ambivalent. They still look to America for leadership in European diplomacy and defense even while they assert their autonomy. They still presuppose a strong American military presence in Europe even while they no longer act as dependent. It is not surprising that many of the assumptions of 1949 should no longer apply to our relationship in 1971. But how should we define our respective roles today? This is the key question which we and our allies must face openly and frankly together in the period ahead.

When I came into office, I made a personal commitment to strengthening the ties of the West:

--My first foreign trip at the start of my term was to Western Europe, to seek the benefit of our allies' wisdom and experience in world affairs. My first stop was to meet with the North Atlantic Council in Brussels, and I then conferred in turn with the heads of state and government of Belgium, Great Britain, West Germany, Italy, and France.

--In 1970, I sought the views and counsel of Prime Ministers Wilson, Heath, and Baunsgaard, President Pompidou, Chancellor Brandt, and Allied foreign ministers, who paid official visits to Washington. In January 1970, Prime Minister Wilson became the first foreign head of government to attend a meeting of our own National Security Council, as he took part in our deliberation on policy toward Europe.

--Last fall, I travelled to Europe again, visiting Britain and Italy and NATO's Southern Headquarters in Naples, where I met with NATO Secretary General Brosio and senior Allied military commanders. Because peace in the Mediterranean--one of the focuses of my trip--is not a concern of NATO alone, I called on our valued friends in Spain, conferred at Naples with all our Ambassadors to Mediterranean countries, and visited non-aligned Yugoslavia--to deepen my understanding of the views and concerns of countries beyond the Alliance who all have a stake in peace in the region.

--The United States has consulted continuously in NATO on the status and issues of its bilateral strategic arms limitation talks with the USSR. We recognized our obligation to keep our allies fully informed and to seek their ideas. We have made clear that we would make no agreement which sacrificed their interests.

--At the milestone ministerial sessions of the North Atlantic Council in May and December 1970, we and our allies undertook and completed a fundamental review of Alliance defense strategy and posture.

But consultation is not an end in itself. What makes it imperative is the agenda before us.

Western Europe is uniting, and will soon be in a position to forge an identity of its own, distinct from America within the Atlantic world. As nations and peoples we in the West now share both the horizons and the burdens of the most advanced modern societies. This challenges us to develop a partnership engaging the collective energies and wisdom of our fifteen sovereign states.

The expansion of Soviet military power has put NATO's postwar reliance on U.S. strategic nuclear strength into a new perspective. America's guarantee of nuclear defense remains crucial, but it can no longer be the sole basis of Allied deterrence. The constant evolution in strategic conditions---in arms control as well as in weaponry--is of vital concern to our allies as well as to us. This requires us to adapt our Alliance strategy to new conditions and share its burdens.

The cruel and unnatural division of Europe is no longer accepted as inevitable or permanent. Today, there is a growing impatience with confrontation. We and our allies seek a European detente. But we know that we cannot achieve it if we let slip away the close friendships in the West and the basic conditions of stability which have set the stage for it. This obligates our allies and ourselves to conduct our diplomacy in harmony, as we jointly and severally seek concrete negotiations on the range of issues in order to make detente a reality.

In our consultation on this agenda, I have assured our allies and friends in Europe that the United States will continue to play a role of leadership, commensurate with our position in the world. But America's task today--as the Nixon Doctrine reflects--is to evoke the contribution which the Alliance is capable of making. This new purpose of our leadership and partnership will test our maturity and compassion just as the Marshall Plan tested our energy and technical skill.

The Challenge of European Unity. The European Community is on the threshold of a momentous advance. Last year, the Commission of the Community began negotiating with Great Britain, Norway, Denmark, and Ireland for their full membership. It opened talks with Sweden, Austria, Switzerland, and other members of the European Free Trade Association looking toward some form of relationship. The prospect of an expanded Community-and the determination which emerged to move toward monetary and economic union--make the Community a potential economic giant. If these come to pass, the major economies of the continent will be combined into a vast industrial power second only to the United States.

Our friends must soon decide, then, how they see Europe's role in the world and its relationship with us. The form and degree of its unity is for Europeans to settle. The United States has always supported the strengthening and enlargement of the European Community. We still do. We welcome cohesion in Europe because it makes Europe a sturdier pillar of the structure of peace. Regional cohesion contributes to world stability. And America's and Western Europe's fundamental interests are parallel in most areas of policy.

For years, however, it was believed uncritically that a unified Western Europe would automatically lift burdens from the shoulders of the United States. The truth is not so simple. European unity will also pose problems for American policy, which it would be idle to ignore.

For our closest friends are now developing a collective identity and collective policies separate from us. And unity happens to be coming fastest in the economic sphere--the area of policy in which competition seems to have the least immediate penalty and our common interest will take the most effort to insure. Each of us maintains restrictions on agricultural trade which limit the export opportunities of the other. America's main restrictions are on dairy products; the European Community's Common Agricultural Policy restrains our exports of grains. The Community's preferential trading arrangements with Mediterranean countries are a problem for American citrus exports.

The common interest requires the prosperity of both Western Europe and the United States. This means freer and expanded trade and restraint in protecting special interests. We must negotiate a reduction in our trade restrictions. We must work toward a more equitable worldwide trading system which is based upon most favored-nation treatment among all industrial nations and in which all of them accord the same tariff preferences to the entire developing world. In short, we must define our self-interest in the widest terms and fix our sights on our fundamental rather than tactical purposes.

Both sides have a heavy responsibility, therefore, as we meet in the informal regular consultation which began in 1970 between the Commission of the European Community and the United States. There have been suggestions for expanding our consultation, including the possibility of higher-level Community representation in Washington. We would welcome the implementation of any such suggestion the Community might propose--because of the importance of close consultation.

In political and military relations as well, wisdom and statesmanship will be required on both sides of the Atlantic as Europe moves toward unity.

The further evolution of European unity into other areas of policy is logical and natural; its supporters, including ourselves, have never regarded economic cohesion as an end in itself. In November, foreign ministers of Community members began semi-annual formal political consultations looking toward common positions. Ultimately we may see a single entity making policy for Western Europe in all fields, including diplomacy and defense. We would welcome this, because we believe that Western European and American interests in defense and foreign policy are complementary:

--In defense, geographic proximity makes the linking of our allies' defense systems logical and feasible; their collective power makes it advantageous. But a coherent strategy of European defense, today and as far into the future as I can see, will require mutual support across the Atlantic.

--In diplomacy we share basic objectives: Western security, European stability, East-West detente. Two strong powers in the West would add flexibility to Western diplomacy. Two strong powers could increasingly share the responsibilities of decision. This will not be automatic. To link together the foreign and defense policies of a uniting Europe and the United States will be another test of our sense of community and of our ability to perceive and pursue our common interest.

The Problems of Modern Societies. The North Atlantic Treaty embraces the overwhelming majority of the advanced industrial nations, and more than half the wealth of the world. The environment has suffered grievously from our common technological triumphs; we share the experience of seeing the technological, environmental, and social problems of modern societies grow to alarming proportions. But we also have the skills and resources needed to redress the balance. And we share a tradition of exchanging ideas. It is no accident that we are in the forefront of the world's attack on these global problems.

In 1969, the United States suggested that NATO form a Committee on the Challenges of Modern Society, as a framework for joint effort in this new dimension of partnership. The Committee was formed, and launched action programs in 1970 with pilot studies on a range of problems. For example:

--Several allies have begun cooperative production of experimental road vehicles for maximum passenger safety.

--All NATO members agreed in November to bring to an end by 1975, if possible, the deliberate discharge of oil and oily wastes into the sea.

--Allied experts explored the problems of flood control and relief.

--The Committee made plans to cosponsor a major international conference on the problems of cities at Indianapolis in May 1971.

These problems affect the societies of all of us; they can affect our relations with one another; shared experience can be the basis of finding solutions.

These are world problems, not limited to the Atlantic region. As the Charter of the Committee makes explicit, we allies see our own cooperation in the widest perspective--as a bridge between our community and the rest of the world. Japan, which works with us in the OECD, and other friendly nations have joined us in bilateral and multilateral programs. We link our efforts and will share what we learn with the United Nations and its agencies, and other multilateral organizations. We hope to help developing nations anticipate and avoid some of these byproducts of modernization. We are prepared to have the Communist world share in our effort.

ALLIANCE DEFENSE

In last year's annual report, I noted the variety of views on some central questions of defense policy that had to be faced candidly among the allies:

--What is a realistic assessment of the military threats to Western Europe?

--How long could NATO sustain a conventional forward defense against a determined Warsaw Pact attack?

--How should our tactical nuclear posture in Europe be planned to counter specific military threats?

--How should our tactical nuclear capabilities be related to our conventional posture?

--What relative burdens should be borne by the U.S. and its partners in providing the forces and other resources required by our common strategy?

--Are all NATO's capabilities in Europe sufficient to meet the needs of our strategy?

To answer these questions, I proposed that the Alliance conduct a thorough review of its strategy and defense posture in Europe for the coming decade.

The United States launched such a review in the National Security Council system, covering all the issues of European security: NATO strategy and forces, mutual force reductions, and our broader effort to enhance security through negotiation. In response to my proposal in last year's report, and at the initiative of Secretary General Brosio, our NATO allies then joined us in a major collective study of the full range of Allied defense problems in the 1970's.

The basic problem was not technical or esoteric. It was an absolute necessity to devise a sensible posture of defense we can plausibly ask our peoples to support. Many voters, legislators, and officials in Western countries have raised questions about the continuing burden of defense budgets--not because they did not see the need for security, but because they did not see a clear rationale for the forces proposed. Our armies are not ends in themselves, or merely tokens of a commitment. They have a function to perform: to aid in deterrence and to defend if deterrence fails. Therefore, the Alliance needed to work through the analysis of what realistic deterrence and defense required in Europe over the longer term. We needed to give substance to our strategy, to make it credible to ourselves as well as to our adversaries.

The result of our studies in the National Security Council and in NATO was a major achievement. The North Atlantic Council ministerial meeting in December 1970, which completed the Alliance study, was indeed, as Secretary Rogers called it, "one of the most important in the history of the Alliance." We now have the blueprint and substance of a rational defense posture, which provides the framework for resolving the policy questions I raised last year.

The Threat and NATO Strategy. We and our NATO allies do not believe that war is imminent in Europe, but we must face the possibility that it could occur. The military power of the Warsaw Pact has grown over the decade and continues to increase. Postwar Europe has seen more than its share of crises, and new crises are possible. As the annex to the December communiqué pointed out: "In addition to a capability to deter and counter major deliberate aggression, Allied forces should be so structured and organized as to be capable of dealing also with aggressions and incursions with more limited objectives associated with intimidation or the creation of faits accomplis, or with those aggressions which might be the result of accident or miscalculation."

Our review examined three alternative strategies for dealing with these contingencies:

--reliance on conventional forces alone.

--early response with nuclear weapons.

--a flexible strategy that does not preclude or force either kind of response.

America's will to employ nuclear retaliation in defense of NATO, our analysis indicated, remains central and necessary to Allied security. But in the conditions of today's new strategic equation, it can no longer be the sole basis for Allied deterrence. Today, nuclear destruction would be mutual. No NATO leader should be left with only the choice between capitulation and immediate resort to general nuclear war.

Sole reliance on conventional forces might lead an aggressor to conclude that we might accept the loss of vital territory without taking further action. Sole reliance on nuclear forces, on the other hand, might lead inevitably and unnecessarily to the very widespread devastation that we should be trying to prevent. Neither of these prospects enhances our security.

We and our allies therefore reaffirmed our consensus that we must have forces able to deter and defend below the threshold of general nuclear war, to give us full flexibility in responding to any outbreak of hostilities. This means a strong and credible deployment of modernized NATO conventional forces. These forces must be capable of rapid mobilization and reinforcement and of sustaining a successful initial forward defense against conventional attack.

The Military Situation in Europe. We next had to assess the military balance in Europe in terms of the goals of our strategy.

The economic strength of the NATO nations, we found, makes us considerably stronger in military potential than the Warsaw Pact. We and our allies collectively enjoy a three-fold advantage in Gross National Product and a two-fold advantage in population.

The actual balance of conventional military forces in Europe is much closer, however. NATO's active forces in peacetime are roughly comparable to those of the Warsaw Pact. Following mobilization, NATO is capable of maintaining forces larger than the Warsaw Pact. But geographic proximity and differences in domestic systems give the Warsaw Pact the significant advantage of being able to mobilize its reserves and reinforce more rapidly than NATO.

It follows as a practical matter that:

--NATO must be alert for warning of an impending attack, so that we can act as promptly as possible to mobilize and reinforce.

--We must improve NATO's conventional deterrent, especially correcting qualitative deficiencies in present Allied forces.

--We must maintain a sufficient tactical and strategic nuclear deterrent as a complement to our conventional forces.

--We must continue our consultation-as I urged in last year's report--on defining the precise role of tactical nuclear weapons.

Our strategic review illuminated the need for specific qualitative improvements. Several components of our posture require additional attention: the sheltering of our tactical aircraft; our logistical stocks and transport; the peacetime disposition of Allied ground forces; the protection of NATO's flanks; the standardization of Allied equipment; our armored and anti-armor forces; our overall maritime capabilities, particularly for anti-submarine defense; our machinery for mobilization and reinforcement; and NATO communications for crisis management purposes. Our studies have shown that many improvements in these areas can be made at acceptable cost.

Sharing Alliance Burdens Equitably. The conception of burden sharing in previous administrations was that our allies should share our burden; the thrust of the Nixon Doctrine is that their primary task is to shoulder their own. The emphasis is no longer on their sharing the cost of America's military commitment to Europe-although financial arrangements may play a part--but on their providing the national forces needed in conjunction with ours in support of an effective common strategy.

Our allies have responded to this shift in emphasis. We were gratified when at the December NATO Council meeting our European allies joined in a pledge to strengthen their national forces and to inaugurate a new joint program of modernizing NATO's common infrastructure.

The program announced in December will accelerate construction of aircraft shelters and an integrated communication system. It represents a landmark in the history of NATO--an effort undertaken, organized, and financed entirely by our European allies. As Secretary Laird has pointed out, this common infrastructure-the integrated network of permanent facilities supporting NATO forces in Europe-is a particularly appropriate focus of collective European effort. It is a collective asset, badly in need of improvement; our allies' effort here is of direct and permanent benefit to their own defense.

U.S. Forces in Europe. The United States faced pressures to withdraw our forces from Western Europe for budgetary reasons, and pressures to keep them there for purely symbolic reasons. All these arguments evaded the crucial question: What defense function do and should our forces in Europe perform?

I decided, despite these pressures, that given a similar approach by our allies, the United States would maintain and improve its forces in Europe and not reduce them without reciprocal action by our adversaries. This decision, which I announced at the December NATO meeting, flowed directly from the analysis we had conducted in the NSC system and reinforced in NATO consultation. It had become clear to me that without undiminished American participation in European defense, neither the Alliance's strategy, nor America's commitment, nor Western cohesion would be credible.

No token presence could serve our purpose. Our substantial contribution of United States forces--about 25 percent of NATO's peacetime capabilities in Central Europe--insures the viability of the strategy of flexible response. It enables us to found Alliance defense on something other than reliance on the threat of strategic nuclear war. It is the basis of our allies' confidence in us. It links European defense to a common strategy and to the nuclear power of the United States.

America's presence in substantial force is psychologically crucial as well. It provides the sense of security which encourages our partners' efforts to unite and to do more for themselves. Our direct and large-scale involvement in Europe is the essential ingredient of the cohesion of the West which has set the stage for the effort to negotiate a reduction of tension.

Accurately or inaccurately, our allies would interpret a substantial withdrawal of American forces as a substantial withdrawal of America's commitment. Were they to conclude this was happening, they would not necessarily do more on their own to compensate; they would more likely lose confidence in the very possibility of Western defense, and reduce their reliance on Western solidarity.

In maintaining and improving our forces in Europe--and in the seas on Europe's flanks--we are doing what is necessary to encourage our European allies to take up a greater share of the collective responsibility. They are doing so, and the Alliance is stronger for it.

EAST-WEST RELATIONS IN EUROPE

Security in Europe depends on more than NATO's military strength. The close ties of friendship in the West and the stability of the military balance set the stage for renewed effort at a broader reconciliation.

East-West conflict in Europe springs from historical and objective causes, not transient moods or personal misunderstandings. For 25 years Europe has been divided by opposing national interests and contrary philosophies, which clash over specific issues: the military confrontation of opposing coalitions, the division of Germany, the situation in and around Berlin, the nature of relations between Western and Eastern countries and institutions, and the barriers to travel and cultural and intellectual intercourse.

These issues will not be quickly resolved. To relax tensions means a patient and persistent effort to deal with specific sources and not only with their manifestations. The West will be conciliatory on substance, but we are determined to deal with substance and not simply with atmosphere.

We in the West are convinced by the history of the postwar period that a detente that does not apply equally to Eastern and Western Europe will be inherently unstable. In our view, detente means negotiating the concrete conditions of mutual security that will allow for expanded intra-European contact and cooperation without jeopardizing the security of any country. Soviet policies and doctrines, however, too often interpret detente in terms of Western ratification of the status quo and acknowledgment of continuing Soviet hegemony over Eastern Europe. Beyond this, Soviet policy has been tempted to offer a relaxation of tension selectively to some allies but not to others, and only on limited issues of primary interest to the USSR. In view of this fundamental difference, a major question for the Alliance to face is whether we can overcome the East-West stalemate while maintaining unity among ourselves and avoiding internal divisions in our countries.

A Western Consensus. In the postwar period, East-West relations were almost an exclusive preserve of Soviet and American policies and negotiations, just as the major European crises of this period were predominantly Soviet-American confrontations.

Today, our Western European allies are properly anxious to make their own contribution to East-West negotiations. They will increasingly assert their own judgment and interests in doing so. A wide variety of contacts and negotiations are proceeding today, involving different participants in different forums on several issues:

--The United States is negotiating with the USSR in SALT.

--The United States, the Soviet Union, the UK and France are holding Four Power talks at the UN on the Middle East.

--The same four powers are negotiating in Europe on Berlin.

--The Federal Republic of Germany has negotiated new treaties with the USSR and Poland, and may soon open talks with Czechoslovakia. For the first time the Chancellor of the Federal Republic has met with the East German Premier.

--France reached agreement with the USSR in 1970 for periodic consultation on major world issues.

--NATO allies have conversed bilaterally with Warsaw Pact countries on a Conference on European Security, as well as on the question of mutual reduction of forces in Europe.

At issue are major national questions (such as the relationship between East and West Germany), basic regional problems (such as mutual force reductions), and the overall U.S.-Soviet strategic relationship. Whatever the issue, however, its resolution will engage the interests of NATO and Europe as a whole.

Obviously, the Western countries do not have identical national concerns and cannot be expected to agree automatically on priorities or solutions. Each ally is the best judge of its own national interest. But our principal objective should be to harmonize our policies and insure that our efforts for detente are complementary. A differentiated detente, limited to the USSR and certain Western allies but not others, would be illusory. It would cause strains among allies. It would turn the desire for detente into an instrument of political warfare. Far from contributing to reconciliation in Europe, it would postpone it indefinitely.

Today's pursuit of detente is taking place simultaneously with efforts to strengthen the economic and political solidarity of Western Europe. The West cannot afford to allow the momentum of individual approaches to the East to put allies inadvertently in the painful position of having to choose between their national concerns and their European responsibilities.

East-West detente and Western cohesion can be mutually supporting, if the Alliance consults thoughtfully to strike a balance between individual and common interests. The United States applies such a code of consultation to itself; we have been scrupulous to maintain a dialogue with our allies on the issues and developments in SALT; in turn, our allies have worked in consultation with us on major East-West issues. It is crucial that this continue.

Our urgent task in the coming year is to achieve an understanding within the Alliance on our analysis of the sources of East-West tensions, on our respective roles in dealing with them through individual and collective diplomacy, and on our evaluation of future trends. I pledge the United States to an intensive effort of Allied consultation on these questions in 1971, at the highest level and in bilateral channels and multilateral forums.

The Major Issues: We must translate our consensus on objectives into specific policies.

Allied efforts toward mutual force reductions in Europe will continue in the coming year. Reducing the military confrontation in Europe is in the common interest of East and West. Our mutual objective should be to create a more stable military balance at lower levels and lower costs.

The problem of defining a fair agreement in precise terms is extremely complex. As in the preparations for SALT, I instructed our Government to develop the analytical building blocks of an agreement and evaluate them in differing combinations, as our contribution to the Alliance's collective deliberations. Our technical analysis is described in the Arms Control chapter of this report.

The USSR has frequently proposed a general Conference on European Security. But such a conference, in the Soviet formulation, would not address the main security issues--the German question, Berlin, mutual force reductions--but only very general themes. We and our allies are prepared to negotiate with the East in any forum. But we see little value in a conference whose agenda would be unlikely to yield progress on concrete issues, but would only deflect our energies to drafting statements and declarations the interpretation of which would inevitably be a continuing source of disagreements. Once a political basis for improving relations is created through specific negotiations already in process, a general conference might build on it to discuss other intra-European issues and forms of cooperation.

Any lasting relaxation of tension in Europe must include progress in resolving the issues related to the division of Germany.

The German national question is basically one for the German people. It is only natural that the government of the Federal Republic should assign it high priority. But as Chancellor Brandt has emphasized, it is the strength of the Western coalition and West Germany's secure place in it that have enabled his government to take initiatives which mark a new stage in the evolution of the German question. The reshaping of German relations with the East inevitably affects the interests of all European states, as well as the relationship between the U.S. and the Soviet Union.

Therefore, there has been full consultation within the Alliance during the evolution of the Federal Republic's new policies and the negotiation of its new treaties with the USSR and Poland. It is clearly established that Allied responsibilities and rights are not affected by the terms of these treaties. I emphasized in my talks with Chancellor Brandt in Washington and in intensive Allied consultation in 1970 that we support West Germany's objective of normalizing relations with its eastern neighbors, and that we view its anguish at the unnatural division of the German nation with profound compassion.

New policies and their effects in Central Europe will create new conditions and raise new issues--but none that cannot be dealt with in continuing close consultation with the Federal Republic and within the Alliance.

With the encouragement of the Federal Republic, the U.S., UK and France in August 1969 invited the USSR to discuss Berlin. Four Power ambassadorial discussions started in March 1970. The history of the postwar period demonstrates the complexity and importance of this issue.

The Western objectives are the assurance of unhindered traffic to and from Berlin, Soviet acknowledgment of the existing and entirely legitimate ties between Berlin and Bonn, and improved communications and travel in and around Berlin. An effective Four Power agreement on Berlin will have to encompass arrangements worked out between East and West Germany on technical details. We recognize that new access procedures to Berlin will not necessarily prevent administrative harassment; this will depend as much on Communist willingness to remove Berlin as a cause of friction as on the specific terms of agreement.

Thus what began essentially as a discussion of practical improvements to assure Berlin's viability has assumed greater significance in East-West relations. To the West German Government, the eastern treaties and a Berlin settlement are parts of the whole complex of Germany's future, and therefore it has conditioned the ratification of the treaties upon a satisfactory conclusion of the Berlin talks. To the Western allies, progress on Berlin will be an indicator of the possibilities of moving toward fruitful talks on broader issues of European security.

Eastern and Central Europe. The breakdown of the postwar monolithic Stalinist bloc in Europe is a fact of life. This creates new conditions, aspirations, and expectations in both Western and Eastern Europe. Just as peace and its fruits are indivisible for the West, so they must be for Eastern Europe.

While the countries of that region are in close proximity to the USSR, they also have historic ties to Western Europe and to the United States. We will not exploit these ties to undermine the security of the Soviet Union. We would not pretend that the facts of history and geography do not create special circumstances in Eastern Europe. We recognize a divergence in social, political, and economic systems between East and West.

But, in our view, every nation in Europe has the sovereign right to conduct independent policies, and to be our friend without being anyone else's enemy or being treated as such.

There are difficulties, which we recognize, attending close political relations between Eastern European nations and the United States. But within these limits there are opportunities for economic, scientific, and technological contact which we are prepared to broaden on the basis of mutual benefit.

In 1969 I visited Romania--a Warsaw Pact country--the first visit by an American President to a Communist country in 24 years. President Ceausescu visited Washington in 1970. Romania takes positions on many major issues quite different from our own, but we both recognize the right of every nation to develop its own policies in light of its own interests. Therefore our differences do not preclude consultation or practical cooperation.

Our trade with Romania doubled in 1970. We extended credits for the purchase of agricultural commodities and liberalized certain export controls for her benefit. We expanded educational and cultural exchanges and responded with immediate relief in medical supplies, foodstuffs, and other emergency needs when Romania suffered a disastrous flood in 1970.

In 1970, on President Tito's invitation, I paid the first visit by an American President to non-aligned Yugoslavia. We exchanged ideas on major international issues, especially on the Middle East. We broadened our ties of cooperation on the basis of mutual interest and a mature respect for our acknowledged differences. President Tito has now accepted my invitation to pay a return visit to the United States.

Our trade with Yugoslavia increased by over one-third in 1970. The U.S. Export-Import Bank reached agreement with Yugoslavia to increase credit, and extended a loan for Yugoslav purchase of commercial jet aircraft in this country. Romania and Yugoslavia both welcome private capital as beneficial to their economic expansion and consistent with their national policies. I will therefore shortly ask the Congress to provide authority to extend guarantees to American private investment in both countries. This is to our mutual benefit.

Romania and Yugoslavia have indicated by their policies a desire for cordial relations with the United States on the basis of reciprocity. Our relations have continued to improve because the pace and scope is determined in the first instance by them. We are responsive, and other countries in Eastern Europe who desire better relations with us will find us responsive as well. Reconciliation in Europe is in the interest of peace.

ISSUES FOR THE FUTURE

Within our evolving Atlantic community, we must deepen and extend our unity:

--to complete the transition from American predominance to a more nearly equal partnership, sharing the responsibilities of leadership.

--to reaffirm our commitment to cooperative economic and political relations across the Atlantic as a Western European entity emerges.

--to intensify our collective attack on the problems of modern society and expand it into a worldwide collaboration.

In the security field, following through on the conclusions of our joint review of Alliance defense, we must:

--insure that our common strategy is backed up by the force levels and qualitative improvements required to make it credible.

--share the common defense burden equitably.

For a wider partnership and true security in Europe, continuing our quest for reconciliation between East and West, we must:

--continue our close Allied consultation as SALT and other East-West negotiations progress.

--harmonize our individual approaches to insure that they are complementary, and preserve the cohesion and stability which make detente possible.

--seek to engage our adversaries in negotiations addressing the concrete issues that keep Europe divided.

I have repeatedly emphasized that the Nixon Doctrine is a philosophy of invigorated partnership, not a synonym for American withdrawal. Our relationship with Western Europe proves it.

WESTERN HEMISPHERE

"... all of us come from and were born to this world, our nations, through violent revolution. Now our charge and our task is to provide the means and the method through which those great changes that need to be made in the world, in our own countries and in the world, can be made through peaceful change."

Toast at a Dinner Honoring

President Caldera of Venezuela

June 2, 1970

For more than a century and a half, our most consistent peacetime foreign relations were hemispheric relations. We have shared with our sister republics the experience of gaining and preserving our independence from the Old World. It was only natural that the nations of the New World should see their destinies as intertwined and continue to pay special attention to their ties with each other. Geography and history have bound us together and nurtured a sense of community, now formalized in the treaties and institutions of the inter-American system.

The purposes and practices of our association have changed over time, but its benefits have endured. It has helped to maintain the independence of the hemisphere from outside domination, to facilitate political and economic progress, and to enhance the region's influence in the world community.

FORCES OF CHANGE

It is nevertheless understandable that tensions should develop. There is great ferment in Latin America and the Caribbean. Modernization brings extensive and frequently unsettling change, accompanied by growing nationalism. Some in the region view the United States--with its disproportionate size and wealth-more as a hindrance and threat than as a source of support.

Thus, when this Administration came into office, we had to reassess our approach. If the inter-American system was to realize the aspirations of its peoples, we would have to shape our role by the realities of the 1970's and tune our view to the perceptions of others.

One of my first decisions as President was to ask Governor Nelson Rockefeller to undertake a mission to twenty Western Hemisphere countries and to assess the needs of the region. His report identified the underlying forces of change: rapid population growth and urbanization, a revolution in communications and a rising tide of aspirations.

The response to these forces has been varied. In some countries, such as Mexico and Brazil, the rate of economic growth has been impressive; in many parts of the hemisphere there is swelling self-confidence and a determination to modernize. But many sectors chafe at the inability of domestic structures to achieve swift solutions to pressing problems.

In their quest for change, the nations of the region have increasingly turned to new methods. They are creating institutions that they consider more national in character and more responsive to indigenous needs. Efforts to reconcile the often conflicting demands of social reform and economic growth and to meet the need for popular support, have spawned statist, sometimes radical, approaches. In virtually all cases, nationalism seeks greater independence from our predominant influence; in some, a populist brand of nationalism has taken anti-U.S. turns.

ADJUSTING OUR RELATIONSHIP

Our neighbors face a fundamental issue in their relations with us: to reconcile their interest in close ties with their determination to mold their own destinies. The United States will continue for some time to be the principal source of external resources: public and private capital, export markets, and technology. But the traditional expectation that we should bear principal responsibility for accelerating development clashes with national pride and self-reliance.

This ambivalence has led them to seek adjustments in our relationships, particularly in the economic sphere, and to look elsewhere for resources. They now seek:

--continued development assistance, but with less direction and fewer restrictions.

--continued foreign investment, but on terms consistent with their sense of national dignity.

--more assured access to the markets of the United States and other industrialized nations.

The problem of tailoring our relations to new conditions is further complicated by a difference in perspective.

The United States is a major power with global responsibilities; our vision is directed primarily outward, toward building relationships that can fashion a worldwide structure of peace. In the Western Hemisphere, as elsewhere, our focus is on fostering such relationships and assisting economic and social development.

Most of the other hemispheric nations channel their energies primarily inward. The legitimacy of their governments rests on their response to the drive of their peoples for a better life. For them the predominant issues in their relations with us are the content and style of our economic relations.

The United States has traditionally responded to these aspirations. We will continue to do so, believing that our own purposes are advanced when other governments can meet the needs of their peoples. They can then increasingly direct their energies outward and contribute to the continent's constructive and peaceful change.

UNITED STATES POLICY

In my address to the Inter-American Press Association on October 31, 1969, I outlined a new concept of hemisphere partnership: "experience ... has taught us that economic and social development is not an achievement of one nation's foreign policy but something deeply rooted in each nation's own traditions." I sought to define a sustained role for the United States, one that would avoid our previous fluctuations between arousing unrealistic expectations and taking our neighbors for granted. We cannot remake continents by ourselves. Such a venture would stifle the initiative and responsibility of other nations and thus their progress and their dignity.

The immediate focus of hemispheric cooperation will be on economic and social imperatives. But these issues, while critical, are elements of a broader relationship between sovereign states. The nations of this region must improve political forms of cooperation as well. We must find ways to settle disputes that bring common danger and to work together for common benefit.

Together with our partners, we can strengthen the political bonds of the inter-American system to create an environment truly conducive to economic and social development. Our similar cultural traditions, the shared aspirations of our peoples, a lengthy history of common enterprises-there is much to draw upon. If we cannot build partnerships in the relationship with developing nations in this hemisphere, then this task will indeed be formidable elsewhere in the world.

The value of a constructive partnership is nowhere better illustrated than with our neighbor, Mexico. In 1970, we jointly traced the final lines of our common border. The comprehensive agreement which President Diaz Ordaz and I reached in Puerto Vallarta in August will, when ratified, resolve all existing border problems and establish procedures for treating future ones. Our countries' relations have never been closer. They were further cemented by my two meetings with Mexico's President and one with her then President-elect. They reflect a mutual respect and cooperation that is our object throughout the hemisphere.

In moving toward this goal, we seek to develop positive collaboration suited to the realities of this decade. It is a change in concept and style, not in commitment. We will offer ideas and leadership, but our common programs will need the ideas and leadership of our partners as well. Working with our friends on a joint agenda, our new approach will stress:

--sharing responsibility within the inter-American community.

--positive U.S. support of development efforts.

--respect for national dignity and accommodation to diversity.

--humanitarian concern.

SHARING RESPONSIBILITY

With our great material and technical resources we have often been tempted to do for others what we thought was best for them. But the modernization process takes hold only when other countries have the incentive to commit their talents fully for purposes they consider their own. In the past two years, we have moved from a predominant role to shared responsibility by helping to reshape inter-American institutions and by modifying our participation in them.

A milestone was the gathering of twenty-two Latin American governments in Vina del Mar, Chile, in May 1969 to formulate and pool their ideas on development and particularly how the U.S. might help. Their proposals--the Consensus of Vina del Mar--were then presented to me. Together with the Rockefeller Report and our own studies, they formed the essential ingredients of our policy review in the National Security Council.

Thus the measures we announced in October 1969 responded to their ideas and their concerns as well as to our own interests.

We then negotiated the details of many of the proposals in meetings of the Inter-American Economic and Social Council (IA-ECOSOC), the principal forum of the Organization of American States for development and trade. It was a new experience and a difficult adjustment. We deliberately concentrated on eliciting their contributions rather than taking most of the initiatives ourselves. Together we reached agreement on steps to improve development assistance, increase the transfer of technology, and expand trade. The results were more meaningful because they were jointly formulated.

In 1970, for the first time, the United States submitted its economic policies affecting the hemisphere for review by the Inter-American Committee for the Alliance for Progress (CIAP), as other hemisphere nations have done for many years. This symbolized our commitment to equal partnership, increased Latin American understanding of our policies, and heightened our sensitivity to the great impact of our economy on the region.

To foster collaboration in planning and managing development assistance, we:

--provided financial support for the staff of CIAP to play a greater role in setting development priorities.

--pledged financial support to increase the capabilities of the Inter-American Development Bank and CIAP to prepare projects for financing by development lenders.

--permitted CIAP to participate in the planning of U.S. bilateral development loans for the hemisphere.

--eased restrictions so that our neighbors may now spend aid dollars elsewhere in Latin America or the developing world.

--supported the expanded technical assistance programs of the OAS Secretariat General and Specialized Organizations.

--extended financial assistance to the Central American Common Market and the Caribbean Free Trade Area.

Inter-American mechanisms for noneconomic problems were improved as well. Several important revisions in the OAS Charter took effect last February: the creation of an annual OAS General Assembly; the upgrading of the IA-ECOSOC and the Educational, Scientific and Cultural Council; and the assignment of peaceful settlement functions to the OAS Permanent Council.

POSITIVE CONTRIBUTION TO DEVELOPMENT

The United States has a great interest in furthering economic and social development in Latin America. If frustration continues to grow, radical forces will depict us as an obstacle to national development. We could become increasingly alienated from our hemisphere neighbors. Instead, our resources, knowledge, and influence in the world community can provide the margin of support which helps make progress possible.

Exports represent the most reliable long-term source of foreign exchange for our friends. To help them increase their exports is to help them reduce dependence and enhance self-respect.

Latin American countries face discrimination in many trading markets in which industrialized nations offer preferential tariffs to other developing countries, such as the European Common Market's special treatment for African and Mediterranean exports. In 1970, on behalf of our hemispheric partners, we pressed hard in the Organization for Economic Cooperation and Development and in the UN Conference on Trade and Development for a generalized scheme of preferences which all developed countries would apply to all developing countries. We achieved agreement among the developed nations to go forward with comparable systems of generalized preferences. These would significantly reduce discrimination now faced by Latin American countries as well as give them preferential treatment in our market. And our own preference list pays attention to items of particular interest to Latin America.

To further help our partners earn foreign exchange, we made available direct technical assistance for export development and for the promotion of tourism.

In some Latin American countries a serious debt service burden eats up foreign exchange. Heavy borrowings for essential development funds may reach a point at which the repayments absorb a disproportionate share of their earnings. With our strong support, CIAP elicited the cooperation of other creditor nations and stimulated international financial institutions to consider solutions, such as rescheduling of interest payments.

While helping our friends increase their earnings of foreign exchange, there are many kinds of development assistance that we and other industrial nations should provide directly. The United States has supplied a substantial share of the external resources for development financing in the hemisphere. In addition to our major contributions to the International Bank for Reconstruction and Development (IBRD) and UN development activities, we gave in FY 1970:

--$422 million in bilateral AID loans and grants.

--$506 million to the Inter-American Development Bank (IDB), the principal regional entity for development lending.

--$153 million in our Food for Peace Program. In April we joined in a major replenishment of the resources of the IDB, which will permit it to increase its lending in the hemisphere by 50 percent in the next three to four years. Congress has authorized part of the $1.8 billion that I requested as the U.S. share, and I have strongly urged that the remainder be authorized early in 1971.

In the IA-ECOSOC discussions we agreed to direct a growing portion of our assistance toward regional economic groups, development of capital markets, and expansion of regional scientific and technological programs.

At year's end, the Congress authorized a contribution to completion of the last unfinished link of the Pan American Highway, the Darien Gap in Panama and Colombia. This project holds great promise for regional economic expansion. It will facilitate the movement of goods and people from one end of the continent to the other and promote trade and economic integration.

A COMMUNITY OF DIVERSITY

The year was marked by continuing internal changes, sometimes with radical overtones. We maintained contact with governments spanning a wide political spectrum.

The United States has a strong political interest in maintaining cooperation with our neighbors regardless of their domestic viewpoints. We have a clear preference for free and democratic processes. We hope that governments will evolve toward constitutional procedures. But it is not our mission to try to provide---except by example--the answers to such questions for other sovereign nations. We deal with governments as they are. Our relations depend not on their internal structures or social systems, but on actions which affect us and the inter-American system.

The new Government in Chile is a clear case in point. The 1970 election of a Socialist President may have profound implications not only for its people but for the inter-American system as well. The government's legitimacy is not in question, but its ideology is likely to influence its actions. Chile's decision to establish ties with Communist Cuba, contrary to the collective policy of the OAS, was a challenge to the inter-American system. We and our partners in the OAS will therefore observe closely the evolution of Chilean foreign policy.

Our bilateral policy is to keep open lines of communication. We will not be the ones to upset traditional relations. We assume that international rights and obligations will be observed. We also recognize that the Chilean Government's actions will be determined primarily by its own purposes, and that these will not be deflected simply by the tone of our policy. In short, we are prepared to have the kind of relationship with the Chilean government that it is prepared to have with us.

Ferment in the region provides openings for exploitation. Cuba continued to exclude itself from the inter-American system by its encouragement and support of revolution and its military ties to the Soviet Union. The latter meanwhile attempted to expand its influence and its military presence.

We do not seek confrontations with any government. But those which display unremitting hostility cannot expect our assistance. And those which violate the principles of the inter-American system, by intervening in the affairs of their neighbors or by facilitating the intervention of non-hemispheric powers, cannot expect to share the benefits of inter-American cooperation. We will work constructively with other members of the community to reduce the disruptive effect of such actions.

Many governmental disputes flow from pressures against foreign private investment. Such investment plays a constructive role in development, for no government or public agency has the vast resources required for even basic development goals. It is clearly for each country to decide its conditions for foreign investment, just as it is for each investor to decide what conditions provide adequate security and incentives. The challenge for governments and investors is to develop new approaches which satisfy the needs of both. We ask only that our citizens be treated fairly in accordance with international law.

In some tragic cases, the forces of change take on extreme forms--hijacking, kidnapping, and terrorism. These are acts of desperation, morally bankrupt. The nations of the inter-American community recently signed a convention dealing with their prevention and punishment. We hope that others will join in this commitment, and that its coverage will reach beyond the hemisphere.

CONCERN FOR PEOPLE

In my October 1969 speech I made it clear that our fundamental concern remains people:

"... a dedication to improving the quality of life in this new world of ours-to making people the center of our concerns, and to helping meet their economic, social, and human needs."

When a calamitous earthquake struck Peru last June, the United States responded immediately with both public and private assistance. As a gesture of our concern, Mrs. Nixon visited Peru, bringing relief supplies to the victims of the tragedy. Her warm reception was tribute to the profound ties between the peoples of Peru and the United States.

Friendship with the peoples of Latin America transcends fluctuations in governmental relations. In this spirit we maintained our people-to-people programs in Chile despite the uncertainty of our official relations.

Our Latin American programs also look toward local efforts in social development. Government-to-government programs in this area have been hampered by their political sensitivity. The need is for innovative ideas and programs, particularly from non-governmental sources, which are more directly responsive to social problems as perceived by the people of the region. To meet this need, we created in 1970 the Inter-American Social Development Institute. Directed by a board with a majority from the private sector, the new Institute will provide funds primarily to non-governmental organizations in the U.S. and Latin America--such as universities, credit unions, and foundations--to help them share their expertise.

ISSUES FOR THE FUTURE

We have only begun. Implementing our new approach will require difficult adjustments, for ourselves and for our partners. Together we must:

--respect and protect the independence of all members.

--provide for the peaceful resolution of disputes.

--make a better life for our peoples.

--embrace our diversity in a framework of partnership.

In such an association will the nations of this hemisphere share a stake. There will be unity not so much in common domestic structures as in mutual support for independence and mutual respect for diversity.

Our self-interest requires our creative contributions to the development of such a community, but three sets of problems constrain us:

The need to balance our Western Hemisphere interests against other domestic and foreign policy considerations. To reflect this concern in the councils of government, I again urge Congress to establish an office of Under Secretary of State for Western Hemisphere Affairs.

To promote Latin American trade I will:

--soon submit legislation to implement generalized tariff preferences.

--assure special attention in trade policies for commodities of particular interest to the region.

--continue to press for elimination or reduction of non-tariff barriers, especially those which harm the exports of Latin America and other developing areas.

To maintain an equitable share in our new bilateral assistance programs for hemisphere development, I will establish guidelines for the resources to be provided to the region through the new development institutions.

To free the use of bilateral aid we will seek final agreement among industrial countries in 1971 to untie the bulk of development assistance.

The present limitations of inter. American machinery. The United States will seek further reform of inter-American instrumentalities. Two factors limit their current effectiveness---outdated methods, and some members' concern that stronger institutions could become devices for U.S. domination. The system will be increasingly tested by the pervasive change and instabilities in the region. Together with our partners, we must resist efforts to weaken our regional system. Together we must provide it with financial support, reshape its institutions, and participate in a spirit of mutual respect.

The forces of nationalism and extremism. The United States must accommodate diversity and seek to maintain the fabric of hemispheric unity. We cannot afford to withdraw out of frustration or allow ourselves to become isolated. We shall be prepared to negotiate pragmatically to prevent or resolve bilateral disputes. And we shall avoid actions which foster or reinforce anti-U.S. nationalism.

The experience of 1970 confirmed the judgment of October 1969: "Partnership--mutuality--these do not flow naturally. We have to work at them." But the year also signalled that a more balanced relationship is taking root. In a turbulent age, the mandate for our hemispheric policy is to act compassionately, to work cooperatively, and to strengthen the bonds of a maturing partnership.

INDOCHINA

VIETNAM

"There are many nations involved in the fighting in Indochina. Tonight, all those nations, except one, announce their readiness to agree to a cease-fire. The time has come for the Government of North Vietnam to join its neighbors in a proposal to quit making war and to start making peace."

Address to the Nation

October 7, 1970

"The allied sweeps into the North Vietnamese and Vietcong base areas along the Cambodian-South Vietnamese border:

--will save American and allied lives in the future;

--will assure that the withdrawal of American troops from South Vietnam can proceed on schedule;

--will enable our program of Vietnamization to continue on its current timetable;

--should enhance the prospects for a just peace."

Report to the Nation June 30, 1970

These passages concern the two most important events of our Indochina policy during 1970. The first refers to our initiative for a cease-fire-in-place throughout Indochina, the centerpiece of the comprehensive peace proposals that I set forth on October 7. These proposals could end the war rapidly for all participants through negotiations.

The second describes the purposes of the allied operations last spring against enemy bases in Cambodia which helped to assure the progress of Vietnamization and our withdrawal program. These operations were crucial to our effort to reduce our involvement in the war in the absence of negotiations.

The Cambodian operations have borne immediate fruit while our Indochina peace proposals have not yet done so. These two events thus symbolize what has been true in Vietnam since this Administration took office: The South Vietnamese have made great progress in assuming the burdens of the war, a process which is in their hands and ours, but we have made little progress toward a negotiated peace, a process which requires Hanoi's participation.

After two years of the mandate from the American electorate, we can look back with satisfaction on the great distance we have travelled. This is my tenth major report on Indochina to the American people. The overall trend is consistent and unmistakable.

What We Found and Where We Are

Understanding our purposes in Vietnam must begin with a look at the situation we found when we took office and the situation today. Let us compare them in concrete terms.

Two years ago the authorized troop strength for Americans in Vietnam was 549,500. Troop levels had risen steadily for five years. On January 1, 1971, that authorized level was 344,000, and on May 1, 1971, there will be a new ceiling of 284,000. Troop levels have dropped at a steady rate. The process will continue.

Two years ago American combat deaths for the previous twelve months were 14,561 and averaged 278 weekly. In 1969 the figures were 9,367 and 180, respectively. In 1970 they were 4,183 and 80; and indeed in the last six months they were 1,337 and 51. The decline has been constant.

Two years ago the enemy could launch major offensives in most parts of Vietnam. The pacification program was just beginning to recover from the setbacks of the 1968 Tet offensive. Now the enemy mounts very few significant operations and is particularly quiescent in Military Regions III and IV in southern South Vietnam, which contain two-thirds of the population. Pacification has made steady progress throughout these two years.

Two years ago there was no comprehensive allied peace plan for ending the war. Now, as the result of several initiatives by the Republic of Vietnam and ourselves, we have laid out a comprehensive and flexible framework for a negotiated settlement.

Two years ago the additional demands of the Vietnam War were costing us approximately 22 billion dollars per year. Today they are costing us approximately half that.

Two years ago the ratio of South Vietnamese forces to American forces in Vietnam was less than 2 to 1. Today it is more than 3 1/2 to 1.

Two years ago the ratio of South Vietnamese to American major engagements with the enemy was about 7 to 1. Now it is about 16 to 1.

Two years ago there was no assurance that the South Vietnamese could undertake large-scale military operations on their own. Now, they have proven their ability to do so.

Two years ago the South Vietnamese constitutional system was just beginning to take hold. Since then the National Assembly and the Supreme Court have played increasingly meaningful roles, and there has been a series of elections at the province, village, and hamlet levels. Today, the political focus in South Vietnam for almost all forces except the Communists is within the established system.

Two years ago large areas of South Vietnam were unsafe and many routes impassable. Now, while there are still many dangerous pockets, the vast bulk of the country is secure.

This progress has been made possible largely by the efforts of the South Vietnamese. It is they who have compensated for the reduced U.S. effort. It is they who now carry the major part of the burden and are progressively taking on more.

In short, with assistance from us and other allies, the South Vietnamese have made their country the most dramatic and concrete example of the partnership principle of the Nixon Doctrine.

Our Choices and Our Objectives

These facts show substantial advance. But to confine discussion of Vietnam to a recital of statistics, however impressive, would be inadequate, even irresponsible. While figures reflect policies, they do not fully define purposes.

Tires, this brief record of achievements is not meant to ignore the serious difficulties that remain. We do not intend to add to a painful record of prematurely optimistic assessments on Vietnam; we will discuss the problems and uncertainties as well as the advances.

The above record does recall the situation we inherited two years ago. I will not dwell on events leading up to January, 1969, but rather on the choices we had in selecting our course.

The conflict had been costly and frustrating for Americans, and many believed that this Administration should move to end immediately either the conflict or American involvement in it.

Some urged that we escalate in an attempt to impose a military solution on the battlefield. We ruled out this approach because of the nature of the conflict and of the enemy, the costs of such a policy, the risks of a wider war, and the deeply held convictions of many of our people. Increased military pressure could not alone win a struggle that was in part guerrilla war as well as conventional invasion, and included political as well as military aspects. It would have entailed a greatly increased toll in lives, treasure, and diplomatic objectives. It would have heightened the prospects of direct intervention by Hanoi's allies. It would have split apart our own society.

Others urged that we liquidate our presence immediately, cut our losses, and leave the South Vietnamese on their own. I have repeatedly explained why I considered this a disastrous path: For the South Vietnamese people, who would have lost their collective political choice and countless individual lives. For other non-Communist countries, especially in Asia, among whom not a single leader recommended such a policy. For the global credibility of the U.S. word. For those Americans who had made such heavy sacrifices. And for the integrity of American society in the post-Vietnam era.

Thus we rejected both of these routes. Yet we knew that we could not continue previous policies which offered no hope for either peace or reduced American involvement.

We chose instead what we considered the most responsible course left to us. We sought above all a rapid negotiated solution to the conflict by progressively defining the terms of a settlement that would accommodate the legitimate interests of both sides. And in the absence of a settlement we sought, through Vietnamization, to shift American responsibilities to the South Vietnamese.

In charting this course we recognized the following realities:

--The way we treated the most painful vestige of the previous era was crucial for a successful transition to a new foreign policy for a new era.

--The other side which had fought for two decades would agree to a negotiated settlement only if the terms were generous, and if the battlefield looked less promising than the conference table.

--Progressive turnover of the burden to the Vietnamese themselves, however uncertain, was 'the only policy available once we had rejected the status quo, escalation and capitulation.

--The support of the American people during the remainder of the conflict required a diminishing U.S. involvement.

--The health of the American society after the conflict called for a solution that would not mock the sacrifices that had been made.

There has been one guiding principle, one irreducible objective, for both our negotiations and Vietnamization. I stated it on May 14, 1969, and consistently since: "We seek the opportunity for the South Vietnamese people to determine their own political future without outside interference."

In our search for a negotiated solution we have stretched our positions towards those of the other side. But we have not agreed to their demand that we impose a political future on the South Vietnamese at the conference table.

In Vietnamization we have withdrawn our forces as rapidly as the South Vietnamese could compensate for our presence. But we have not withdrawn them so as to allow the North Vietnamese to impose a political future on the battlefield.

A peaceful settlement will remain our overwhelming preference. We will not give up our search. But in the meantime we will not let down our friends.

Our policy has not satisfied--and cannot satisfy--either those who believe in a military solution or those who press for an immediate end to our involvement. For the vast majority of Americans who prefer a just peace to capitulation, there is, of course, still room for debate and criticism. But we ask these Americans to recall the situation we found two years ago, to judge the soundness of our purposes, and to measure the record to date against these purposes. They can be sure that we shall keep our promises in the future, as we have kept them in the past.

Negotiations

From the outset our constant primary goal has been a negotiated end to the war for all participants. We would take no satisfaction in the fact that after U.S. involvement and casualties were ended, Vietnamese continued to fight Vietnamese.

However, it takes two sides to negotiate, and Hanoi's attitude has been consistently intransigent. No progress has been made despite the advancement in 1970 of the two elements which might make the North Vietnamese consider negotiations to be in their interest:

--the creation of conditions which give them incentive to turn to negotiations rather than protracted war-the tremendous drain on their manpower and resources, the growing strength of the South Vietnamese military forces and political system, and the continuing support of the American people for our Indochina policy.

--the elaboration of our various proposals which are designed to make clear to the other side that they will have a fair chance for political power to the extent desired by popular will.

Since 1968 the U.S. has done almost everything that various parties--including Hanoi--told us would kindle negotiations. We halted the bombing and other acts of force against North Vietnam. We agreed to NLF participation in the Paris talks. We agreed to the principle of withdrawal and made initial withdrawals of American troops. We made substantial withdrawals, soon to total 265,000. We agreed in principle to remove all our troops. We took a series of de-escalatory steps, such as cutting back our B-52 and tactical air sorties. And we appointed a new senior negotiator in Paris.

These steps, except for the bombing halt, were unilateral measures, designed not only to reduce our involvement, but also to open the door to negotiations. Each of them was urged by the other side as a constructive contribution. None of them has generated movement by the other side.

In an effort to make progress in Paris, we have offered broad proposals for a negotiated solution to the war. On May 14, 1969, I proposed a plan which would remove all outside forces from South Vietnam and allow the people freely to decide their political future through internationally supervised elections. On July 11, 1969, President Thieu invited the other side to participate in the political life of South Vietnam.

These proposals laid out the framework for what we believed would be a resolution of the conflict equitable to all parties. We recognized, however, that a political settlement was the heart of the matter; it is what the fighting has been all about. And we knew that the other side suspected the electoral process and doubted that it would have a fair chance at political power.

We thus moved to define more precisely the political solution we envisaged. On April 20, 1970, I set forth the principles that we think should govern a fair political settlement in South Vietnam:

--A political solution must reflect the will of the South Vietnamese people and allow them to determine their future without outside interference.

--A fair political solution should reflect the existing relationship of political forces within South Vietnam.

--We will abide by the outcome of the political process agreed upon.

Having defined our principles on the central political issue, we looked for a comprehensive approach that might provide both the structure and stimulus for genuine negotiations. During the Cambodian operations I ordered a thorough review within the government of all possible initiatives that might engage the other side in meaningful dialogue. After summer-long studies and meetings, on October 7, 1970, I presented a broad five-point peace plan with the concurrence of the governments of South Vietnam, Laos and Cambodia:

--An internationally supervised cease-fire-in-place throughout Indochina, governed by principles which would make it acceptable and credible to both sides. This was designed to stop the fighting at once and hopefully create new conditions and avenues for a negotiated settlement.

--An Indochina Peace Conference. This reflected the facts that North Vietnamese forces were in Laos and Cambodia as well as Vietnam and that a stable peace in one required a stable peace in all.

--The withdrawal of all American forces from South Vietnam on a timetable to be negotiated as part of an overall settlement. This was to make clear that we were prepared to remove all American troops.

--A political settlement in South Vietnam based on the political principles I had stated on April 20. This was to reaffirm to the other side our willingness to search for a political process that would meet their concerns.

--The immediate and unconditional release of all prisoners of war, journalists, and other innocent civilian victims held by both sides. This was to underline our view that the prisoner issue was strictly humanitarian and need not await resolution of other problems.

Months of analytical work had laid the groundwork for the cease-fire proposal. We projected for a year into the future the possible developments on the ground under different cease-fire conditions. We deliberately recognized the other side's essential conditions. And we rejected cease fire proposals that looked more advantageous for our side in security terms in order to place the greatest possible emphasis on negotiability.

In making our formal proposals and throughout the last two years we have emphasized, both privately and publicly, that we and the Republic of Vietnam would be flexible and generous once serious negotiations were under way.

The other side's constant response has been to demand that we unconditionally withdraw all U.S. forces and replace the leaders of the Republic of Vietnam with a coalition government. Their position is unacceptable to us on several counts.

First, the substance of their demands. They say nothing about what they will do about North Vietnamese forces, when we believe the South Vietnamese should be free of all outside intervention. They ask us to impose a future on South Vietnam, when we believe the people should choose that future.

Secondly, their view of the negotiating process. The Communists pose their demands as preconditions to negotiations. If we were to pay this price there would be nothing left to negotiate.

Thirdly, the incompatibility of their demands. Even if we were to agree to their first demand and pull out unilaterally, we would have absolutely no incentive to agree to their second demand of assuring their political victory in South Vietnam. This would be their problem, not ours. It would be up to them to compete with the growing strength of the South Vietnamese.

Lastly, the Communist definition of a coalition government. Their definition makes a mockery of the concept itself. They prescribe that one-third of the coalition government would be from the NLF, one-third from those people in the "Saigon Administration" who stand for "peace, independence, and neutrality," and one-third from other forces who also stand for these principles.

Since the Communists reserve the right to define the principles of "peace, independence, and neutrality" and to decide which people support these principles, their proposal for a coalition government boils down to a demand that they nominate one-third of the government without restrictions and have a veto power over the other two-thirds. It is a formula for a guaranteed political takeover.

Thus, the issue is not, as some would have it, a question of a few personalities in the Saigon government standing in the way of a peaceful solution. The Communists seek not only the removal of the elected leaders of the present Government but the disruption of all organized non-Communist forces.

The fundamental question in the negotiations, in short, is the means of allocating political power in South Vietnam. The other side wants to negotiate in Paris an allotment of power that would assure their dominance. Our proposals call for a fair competitive process that would consult the will of the South Vietnamese people and reflect the existing relationship of political forces.

We recognize that finding an appropriate and equitable means of expressing South Vietnamese political will is a complex task. There is little guidance to be drawn from Vietnamese history. Nevertheless, if our adversaries ever make a political decision to negotiate seriously, I believe we could find a way to reach a solution fair for all parties. We know that after we leave, the other side will still be there. We know that for a settlement to endure all parties must want it to endure.

We remain prepared to make a major effort in the shaping of such a settlement.

Vietnamization

Although committed to a maximum effort to reach a negotiated end to the war, we needed an alternative.

For negotiations were not entirely in our hands. North Vietnamese history and doctrine did not make for encouraging prospects. Their calculus of the situation in South Vietnam, and more particularly in the United States, probably made them believe that time was on their side. And even if a settlement did come through negotiations, it might take a long period.

At home we did not have the option of continuing as we had---and the enemy knew it. So we chose a policy that we believed would gain the sustained support of the American people and thus give us a chance both to fulfill our objectives in Vietnam and to demonstrate to the other side that time was not necessarily with them. Such a policy seemed the only chance of giving the South Vietnamese a fair chance, and the best hope of inducing the North Vietnamese to negotiate.

Thus the alternative, and hopefully the spur, to negotiations, is Vietnamization that I have described on several occasions.

This policy fulfills our objective of reducing American involvement. It cannot, except over a long period, end the war altogether. Still, if Vietnamization leads to perpetuating the war, it is not by our design but because the other side refuses to settle for anything less than a guaranteed takeover.

In last year's report I described the successes of this program during its first months, and attempted to determine the depth and durability of this progress. We posed four central uncertainties for the future:

--the enemy's capability to mount sustained operations and undo our gains.

--the actual improvement in allied capabilities, particularly Vietnamese leadership, logistics, tactics, and political sensitivity.

--the alternative strategies open to the enemy, including protracted warfare, in which they could wait out our withdrawals and then, with reinvigorated efforts, once again seize the initiative.

--most importantly, the attitudes of the Vietnamese people toward both sides and the likelihood that pacification gains would stick.

These issues certainly cannot be resolved in one year. However, on all there was encouraging progress during 1970:

--The enemy, partly because of strategy, but in great measure due to limited capability, did not mount sustained large-scale operations. This was partly the result of the Cambodian operations.

--A marked improvement in South Vietnamese performance was shown repeatedly in large-scale operations both in Vietnam and in Cambodia, and in their increasing tactical and logistic skills.

--The enemy chose a protracted warfare strategy. We still face the question of whether he might regain the initiative once the bulk of our forces have left, but the growing capabilities of the South Vietnamese must give Hanoi pause.

--The attitude of the Vietnamese people remains crucial and difficult to judge, but rural security grew and pacification gains were sustained.

During 1970, concrete results of Vietnamization punctuated these trends. Our withdrawal program proceeded on schedule with the April 20 announcement of the withdrawal of another 150,000 Americans below the authorized ceiling, bringing total reductions since the start of Vietnamization to 265,500 by May 1, 1971. The very fact that we could project our withdrawals a year in advance was a sign of major progress.

As we have moved ahead with this program we have continued to confer not only with the South Vietnamese but also the other allies who have sent troops to help South Vietnam Australia, Korea, New Zealand, and Thailand.

South Vietnamese forces showed themselves increasingly capable of providing security for their country. There are now 1.1 million men bearing arms for the Government--200,000 more than in 1968. The continued strengthening of local and territorial forces freed more and more South Vietnamese regular units for combat against regular North Vietnamese Army units. The South Vietnamese accounted for a growing bulk of combat engagements. They took over more of our bases. They completely assumed naval operational responsibilities inside the country. And they substantially stepped up the role of their air forces, flying almost half the sorties in South Vietnam. More intangible, but equally significant, were their greatly increased self-confidence and initiative.

The level of fighting dropped greatly, especially in the southern portions of South Vietnam. And American casualties continued their steady decline, a result of lesser enemy activity, fewer Americans, and the increased share of the combat burden picked up by the South Vietnamese.

Pacification

American withdrawal is the primary reflection of Vietnamization while pacification is its primary goal.

Our withdrawal program poses two fundamental issues. First, at what pace can we take out our forces? We base our decisions on the above considerations backed up by various studies, such as a recently completed analysis of the large unit war situation in each of South Vietnam's four military regions.

Then, how do we protect those forces who remain? We are confident that the steadily growing strength of the South Vietnamese and the impact of the sanctuary sweeps are sufficient to handle possible threats. Nevertheless, North Vietnam might try to take advantage of our redeployments by building up its strength in the South and launching new attacks. In this case, I have made clear on a dozen occasions that I would take strong and effective measures to prevent the enemy from jeopardizing our remaining forces.

The other important aspect of Vietnamization is pacification, which in broadest terms concerns the situation in the countryside--physical security, popular allegiance, and the military, administrative, and political effectiveness of both sides. As the enemy's main force units have been pushed farther away from population centers, the task of extending governmental presence has become progressively easier.

In order to assess the progress in the countryside we developed a new indicator to measure the portions of population under Government control, under the influence of both sides, and under the control of the other side. The basic criteria are whether a hamlet has adequate defense and a fully functioning Government official resident both at day and at night. We devised tough and realistic measures of these two criteria.

In mid-1969 the indicator showed roughly 40% of the rural population under South Vietnamese control, 50% under the influence of both sides, and 10% under the control of the other side. Recently these proportions were respectively 65%, 30%, and 5%. When South Vietnam's urban population of six million, all under government control, is added to the over seven million rural population in that category, roughly 80% of the total population of South Vietnam is controlled by the Government.

This indicator cannot tell us precisely what is going on in the countryside. It does give us a good grasp of trends--and the trends have been favorable. We are confident that real and substantial progress has been made.

Honest observers can differ on quantitative measures of success in pacification; it is even more difficult to appraise such intangible factors as rural attitudes toward the central government and confidence in its ability to guide the country's affairs. But today more South Vietnamese receive governmental protection and services than at any time in the past six years.

Pacification progress has been slower, however, in certain key provinces in the northern half of South Vietnam, closer to the enemy's staging areas in North Vietnam and Laos. The supply bases in southern Laos perform the function of the destroyed sanctuaries in Cambodia. In these northern provinces the ravages of war have been more severe and the Communist infrastructure has been deeply rooted for over 20 years. Here especially the South Vietnamese Government must increase its efforts to develop capable forces and implement programs to gain the support of the rural population.

Cambodian Sanctuary Operations

Much of this accelerated progress in Vietnamization was due to the now indisputable military success of the allied operations against the enemy sanctuaries in Cambodia last spring.

The March 18 deposition of Prince Sihanouk caught us, as well as everyone else, completely by surprise. The situation that had existed in Cambodia, with the North Vietnamese and Viet Cong occupying a series of enclaves along the border, represented a troublesome but not insuperable obstacle to our efforts in South Vietnam. Our first reaction to Prince Sihanouk's removal was to encourage the negotiations which the Cambodian government was seeking with the Communists. However, Hanoi flatly refused such a course and rapidly spread out its forces to link up its base areas and pose a growing threat to the neutral government in Phnom Penh.

As I pointed out in my final report on the Cambodian operations, enemy actions during April and captured enemy documents unmistakably show their intentions. We faced the prospect of one large enemy base camp 600 miles along South Vietnam's flank; a solid supply route from the port of Sihanoukville through which most of the war materiel for the southern half of South Vietnam had come in the previous six years; and a vast staging and sanctuary area from which to attack allied forces in Vietnam with impunity. This would have meant increased enemy attacks, higher casualties among our men and our allies, and a clear threat to Vietnamization, the withdrawal program, and the security of South Vietnam.

Our choice, though difficult, seemed the more necessary the longer we pondered it. If we wished to pursue the policy of turning over responsibilities to the South Vietnamese and withdrawing our troops, we had to clear out the enemy sanctuaries. The alternative was to allow the enemy to build up this threat without challenge, to increase his attacks, and to raise allied casualties. This would sooner or later have confronted us with the choice of either halting our withdrawals, or continuing them but jeopardizing the lives of those remaining behind.

I preferred to make a difficult decision in April rather than magnifying our dilemma by postponement.

The results of our joint two-month operations with the South Vietnamese, and the subsequent sweeps of the sanctuaries by South Vietnamese forces, removed this threat. There were as well these positive results:

--greatly reduced American casualties; in the six months before the sanctuary operations the average weekly casualties were 93, in the six months after they were 51.

--extensive materiel and manpower losses for the enemy which they are taking a long time to replace.

--the ending of the concept of immune Cambodian sanctuaries.

--the dislocation of enemy supply lines and strategy in the Saigon and Mekong Delta regions; as a result the main forces war substantially ended for the southern half of the country during 1970.

--precluded the enemy from reopening his route of supply by sea.

--separation of Communist main force and guerrilla units and a boost to pacification efforts in the southern half of the Republic of Vietnam.

--insurance that our troop withdrawals would continue.

--increased time for the South Vietnamese to strengthen themselves.

--a tremendous lift in the morale and self-confidence of the South Vietnamese.

My decision to send U.S. ground forces into Cambodia, though clearly required because of these factors, was nevertheless anguishing because of the domestic reaction.

At the time those who urged an immediate American pullout from Vietnam were joined in protest by some who generally support our phased withdrawals but misread the Cambodian operations as a return to a policy of escalation. I believed then that the impact of these actions-reduced enemy activity, lowered U.S. casualties, and continued withdrawals-would ultimately persuade some of the latter of the wisdom of our decision.

While many Americans may still disagree with that decision, I think the facts since June 30 have conclusively demonstrated not only the tactical success of the operations, but also their strategic purpose of reducing American involvement in Vietnam.

Political and Economic Issues

Vietnamization has political and economic dimensions in addition to military ones. They will become increasingly important as the war winds down.

Political development in any newly independent country is a challenging task. When that country is under fire from a determined enemy, the difficulties are multiplied. The government sees its first priority as providing security. Military considerations are likely to dominate the time of officials, the content of programs, and the freedom of political life.

Nevertheless, political development in a paramilitary conflict is a crucial ingredient of a government's effort. It is increasingly important in Vietnam as the military struggle subsides. Ultimately, the fate of Vietnam will turn on political factors-the motivation of the people during the conflict; the cohesion of non-Communist political forces in a possible electoral competition with the Communists; the solidity of the political institutions during and after the war.

There has been a steady political evolution in South Vietnam beginning with the election of a Constitutional Assembly in 1966 and of the President and National Assembly in 1967. In 1970 there were continued signs of a growing commitment to the political institutions established by the 1967 Constitution. Elections for hamlet chiefs and for Village, Municipal, and Provincial Councils took place throughout the country. There were also elections for half the seats in the Upper House which attracted a wide spectrum of non-Communist political forces.

1970 saw enactment of Land-to-the-Tiller legislation, a sweeping land reform program which will give land to tenant farmers and could have significant political impact. It has our full support.

The Presidential and Lower House elections this year will further test the fabric of the constitutional system, the strengths of the various political factions, and the allegiance of the people. 1971 will show the extent of political development in South Vietnam. Vietnamese people of all factions will judge the responsiveness of the political process and register their verdicts. The enemy will seek to exploit the political currents of an election year. But it will also be watching--and perhaps drawing conclusions from--the stability of the system.

The maintenance of a sound South Vietnamese economy is crucial for Vietnamization. This problem was of great concern in 1970, but the Government moved on it with some encouraging results.

Our extensive review of the economic situation in July, 1970, made it abundantly clear that the key Vietnamization goals of constructive political change and increased South Vietnamese military performance were intimately linked to the goal of a sound economy.

Prices rose by over fifty percent in the twelve months up to mid-1970. These increases were eroding the purchasing power of the already near-subsistence pay received by many soldiers and civil servants at the very time they were being tasked with the growing burdens of Vietnamization. Moreover, if inflation had continued, the economic security of other major groups, such as farmers, veterans, and urban workers, could have been jeopardized.

In the fall of 1970 the South Vietnamese Government took strong fiscal and monetary actions, including an important reform of the exchange rate. These difficult steps, supplemented by a slight increase in our assistance to offset the increased budgetary costs of Vietnamization, dramatically arrested an accelerating inflation. The price level rose by only about four percent in the last half of the year, setting the stage for policies that can lead to more enduring economic stability.

There are two lessons to be drawn from these developments: --First, Vietnamization of the economy and the war cannot be accomplished at the same time without our economic assistance. As the South Vietnamese take on more of the fighting they divert more resources from internal production. Our assistance, by providing the external resources to help maintain internal levels of consumption for soldiers, farmers and workers, is a vital aspect of Vietnamization. We will provide external support commensurate with the military burden borne by the economy and people in this difficult period of transition.

--Second, we can do no more for the Vietnamese economy than it does for itself. The enterprise and resourcefulness of the Vietnamese people are widely acknowledged. Thus, as demonstrated in 1970, the vital link between our assistance and a sound economy is the Vietnamese Government's economic policy. We will continue to expect the Government to take all reasonable self-help measures.

While we provide assistance to support Vietnamization, we are looking towards the time when the economy can become self-sufficient. The date depends not only on the course of the war but on the pace of economic development. The country's potential is great. For example, even as the war has continued, increasing domestic rice production will cause rice imports to decline from over 700,000 annual tons in the late 1960's to about 100,000 tons in 1971 and zero in 1972. Together with the South Vietnamese we are analyzing the development prospects and plan to begin discussions this year on measures, to include additional funding, that can be taken to hasten the process. We believe other countries will want to participate in this effort.

We look forward to the day when the peoples of Vietnam, South and North, can turn from the waste of war to the constructive tasks of peace.

Prisoners of War

We have the deepest concern for the plight of our prisoners of war in Indochina. Some 1600 Americans, including pilots and soldiers and some 40 civilians, are missing or held in North Vietnam, South Vietnam, Leos, and Cambodia. Some have been held as long as six years, longer than for any other prisoners of war in our history.

The enemy violates specific requirements of the Geneva Prisoner of War Convention, by which they are bound. They violate common standards of decency as well.

They have not permitted impartial inspection of prison camps despite constant attempts to arrange such visits. They have refused to repatriate seriously sick and wounded prisoners. They have failed to identify all prisoners and to allow many of them to correspond with their families.

We and the South Vietnamese have made intensive efforts this past year to secure better treatment and the release of allied prisoners--through global diplomacy, through proposals in Paris, and through the courageous raid at Son Tay. Congressional expressions have been valuable in underlining American public concern. The world increasingly condemned the other side's practices, and the UN General Assembly passed a resolution this fall which underscored the international obligation to treat prisoners humanely.

I repeat my October 7 proposal for the immediate and unconditional release of all prisoners of war held by both sides. All prisoners, journalists, and other civilian captives should be released now to return to the place of their choice. Such action would not only meet humanitarian concerns; it might also lead to progress on other aspects of a peace settlement.

As first steps, the Republic of Vietnam, with our support, has offered to repatriate all sick and wounded prisoners of war. It has unilaterally returned groups of such prisoners, despite North Vietnam's refusal to make orderly arrangements for their repatriation. And it has proposed the release of all North Vietnamese prisoners of war in return for all U.S. and allied prisoners in Indochina and any South Vietnamese prisoners held outside South Vietnam. We profoundly regret the other side's refusal to respond to these initiatives.

The treatment of prisoners of war anywhere is not a political or military issue, but a matter of simple humanity. As I said on October 7:

"War and imprisonment should be aver for all these prisoners. They and their families have already suffered too much."

This government will continue to take all possible measures to secure the end of imprisonment as well as the end of the war.

No discussion of Vietnam would be complete without paying tribute to the brave Americans who have served there. Many have sacrificed years of their lives. Others have sacrificed life itself.

These Americans have fought in a war which differed from our previous experience. We have not sought a traditional military victory. The complex nature of this conflict posed unprecedented difficulties for those involved.

It is to their lasting credit that Americans in Vietnam have overcome these difficulties and conducted themselves in our best tradition.

Problems for the Future

There are sobering problems still remaining in Vietnam:

--Enemy Capabilities and Intentions. Despite heavy losses, the North Vietnamese have the manpower, the logistical network, and the dedication to continue fighting if they wish. Although their main force units have been greatly reduced, they still pose a considerable threat, especially in Military Regions I and II in South Vietnam. Hanoi could instead use its buildup of forces in South Leos and Northeastern Cambodia to step up its pressures against the Cambodian government or to increase its hold on Cambodian territory. In any event, Communist terrorist activities, assassinations, and kidnappings continue to exact a tragic toll from the Vietnamese people.

--The Vietnamization Process. Vietnamization made very encouraging advances during 1970. The fundamental question remains: can the South Vietnamese fully stand on their own against a determined enemy? We--and more importantly the South Vietnamese--are confident that they can. Substantial problems remain, however: improving the leadership of South Vietnamese forces at all levels; enhancing their ability to take on support as well as combat functions; providing assistance to Cambodia and bettering Vietnamese-Cambodian understanding; rooting out the Viet Cong infrastructure in the countryside; assuring political stability in the cities; managing the strains on the Vietnamese economy as we continue to Vietnamese other aspects of the conflict; and moving against corruption which not only poisons the moral atmosphere but also carries potential political impact. This is a formidable agenda, but South Vietnamese accomplishments to date demonstrate their capacity to deal with it.

--The Negotiating Stalemate. Our intensive efforts in 1970 failed to yield progress in the Paris negotiations. We frankly expected that our elaboration of political principles, the appointment of Ambassador Bruce, and the October 7 peace initiative would produce some movement from the other side. We will not give up on negotiations, though the past year indicated that it will be extremely difficult to overcome the enemy's mix of doctrine, calculations, and suspicion. There is the additional fact that as our forces decline, the role we can play on many aspects of a settlement is also bound to decline.

The substantial record of achievement in the first two years of this Administration cannot obscure one fundamental fact--the fighting continues.

If winding down the war is my greatest satisfaction in foreign policy, the failure to end it is my deepest disappointment. We will not be content until all conflict is stilled. This sentiment was the driving force behind our proposal for a cease-fire. It is at the core of our policy, for as I said on April 20:

"The death of a single man in war, whether he is an American, a South Vietnamese, a Viet Cong, or a North Vietnamese, is a human tragedy. That is why we want to end this war and achieve a just peace. We call upon our adversaries to join us in working at the conference table toward that goal."

I once again ask the other side to work for a settlement that will stop the fighting, meet the concerns of all parties, and last because all want it to last.

LAOS AND CAMBODIA

"The war in Indochina has been proved to be of one piece; it cannot be cured by treating only one of its areas of outbreak."

Address by the President

October 7, 1970

Enduring peace will come for Vietnam only when there is peace for its neighbors.

Hanoi has made the war an Indochina conflict. In South Vietnam there are some 100,000 North Vietnamese troops. In Laos there are about 90,000. In Cambodia there are over 50,000 North Vietnamese and Viet Cong. These troops challenge the legitimate governments of Laos and Cambodia, and they menace South Vietnam from within and without.

The situations in Laos and Cambodia are comparable: ---Neither one poses any threat to North Vietnam.

--North Vietnam, nevertheless, has for years been violating their neutrality and independence, guaranteed in international accords which Hanoi and its allies signed.

--In both countries North Vietnamese regular troops strip away any pretense of civil war. In Laos indigenous Pathet Lao play an insignificant military role, while in Cambodia only small numbers of Cambodians help the North Vietnamese and Viet Cong.

--In both countries Hanoi has two aims. First, and primarily, to use them as infiltration routes, staging bases, and sanctuaries for attacks against South Vietnam. Secondly, to erode governmental control in order to aid their efforts in South Vietnam and perhaps take over Laos and Cambodia themselves.

United States Policy

This canvas poses two fundamental questions for the United States:

--What should be our policy toward Laos and Cambodia as countries under external attack?

--How do we deal with the major implications for our policy in South Vietnam?

North Vietnam's aggression against Laos and Cambodia and its violation of the 1954 and 1962 Geneva Agreements are important. We care about the preservation of international agreements and the independence of these nations. But our immediate concern is that North Vietnam uses them as springboards for assaults on a country where we have a firm commitment, have invested lives, treasure, and prestige, and have Americans to protect as we progressively withdraw. Furthermore, if Hanoi were to gain control of Laos and Cambodia, a large portion of the more than 140,000 Communist troops now engaged in these countries would be freed to fight in South Vietnam.

As we pursued our policy of Vietnamization and negotiation for Vietnam we could not ignore these unavoidable facts on its flank. Our basic choices for Laos and Cambodia became:

--to seek diplomatic settlements for both countries, either as part of an all-Indochina arrangement or separately.

--to provide military support both to Laos and Cambodia and to South Vietnamese defensive operations, without U.S. ground combat involvement.

We have always wished to stabilize the borders of South Vietnam and to insure the neutrality of its neighbors by diplomatic means. My October 7 peace initiative, supported by the three governments, proposed for all of Indochina:

--a cease-fire to stop the fighting.

--an international conference to seal the peace.

--the immediate release of all prisoners of war.

This comprehensive approach came against a background of consistent efforts to reach diplomatic solutions. From the outset, this Administration has continued American support for the efforts of Prime Minister Souvanna Phouma to reconstitute the 1962 Geneva Agreements guaranteeing his country's neutrality, independence and territorial integrity. In Cambodia we long tolerated a difficult military situation and encouraged negotiations when Prince Sihanouk was removed.

To date, Hanoi has rejected diplomacy and spread the conflict. The Lao government for many years, and the Cambodian government this year, have turned to us and others for assistance.

These developments left us with the choice between military options. After our one-time sweep against the Communist bases in Cambodia, we have ruled out American ground combat troops in either Laos or Cambodia for several reasons. Our fundamental Vietnam-related objectives are served by other means. In any event, we believe the two governments can survive through their own efforts, our various kinds of assistance, and that of other friends. We look to them to shoulder the primary combat responsibilities for their own defense.

Moreover, the enemy has its own problems. Despite its ability and willingness to pour thousands of troops into all three countries, North Vietnam faces certain limits imposed by manpower drain and long supply lines. Lack of indigenous support in Laos and Cambodia severely hampers Communist troop movements. And we do not assume that Hanoi's allies want Laos and Cambodia removed from the map of Southeast Asia.

Thus we did not oppose Congressional restrictions this past year on the use of U.S. ground combat forces in those countries, even though we had strong reservations about the principle of circumscribing executive authority.

Instead of deploying our troops, we have helped those countries help themselves. In Cambodia, South Vietnam's preemptive thrusts have been crucial for their mutual defense.

Three arguments are raised against these South Vietnamese operations outside their borders:

--That they spread South Vietnamese forces thin. On the contrary, by striking against the enemy's supply system and reducing the border threat, these actions contract the territory that the South Vietnamese army must defend. The alternative of inviolate enemy sanctuaries along a front of 600 miles would stretch South Vietnamese forces much more severely.

--That South Vietnam is expanding the war. Its troops have gone only where the North Vietnamese have been entrenched and violating one country's territory to attack another. It is Hanoi which expanded the war years ago.

--That our support of the South Vietnamese will draw us into wider war. If we are to reduce our involvement in Indochina, we must shield our withdrawals by backing these sweeps against potential threats. At a time when we are cutting our military presence in one country, we are naturally reluctant to send troops into neighboring ones--on grounds both of strategy and American domestic support. It would make little sense for us, while withdrawing hundreds of thousands of ground combat troops from Vietnam, to reintroduce a few into Laos or Cambodia.

The arguments against South Vietnam's defensive actions suggest that Hanoi has the right--without provocation and with complete immunity--to send its forces into Laos and Cambodia, threaten their governments, and prepare to bring its full strength to bear on South Vietnam itself.

The choice for South Vietnam is not between limiting and expanding the war. It is between what it is doing in self-defense and passively watching the menace grow along its borders.

In time the combined populations of 28 million in South Vietnam, Laos, and Cambodia, with assistance from their regional partners, should more than balance the resources of North Vietnam, with its population of 20 million. During this transition period, however, our own defensive supporting actions are important. Let me briefly review them.

Cambodia

In Cambodia we pursued the policy of the previous Administration until North Vietnamese actions after Prince Sihanouk was deposed made this impossible.

In the previous chapter on Vietnam I briefly recalled the background and results of the allied sweeps against the Communist sanctuaries which were so vital to Vietnamization. With the operations concluded, our policy for Cambodia took shape as follows:

--No U.S. ground combat personnel in the country, and no U.S. advisors with Cambodian units.

--Air missions against enemy supplies and personnel that pose a potential threat to South Vietnam or seek to establish base areas relevant to Vietnam.

--Military assistance to the Cambodian Government in amounts and types suitable for their army.

--Encourage other countries of the region to give diplomatic assistance.

--Encourage and support the efforts of third countries who wish to furnish troops or material.

The loss of the use of Sihanoukville, as well as the base areas, was a serious setback for Hanoi. For many years almost all North Vietnamese supplies for Military Regions III and IV in South Vietnam passed through the port. Accordingly, during the latter part of 1970 the North Vietnamese stepped up their efforts to reestablish sanctuaries and their attacks on the Cambodian Government. They sought either to reopen their supply lines to southern South Vietnam or to install by force a government in Phnom Penh that would accomplish the same purpose. They failed to do either, but they posed significant threats.

To deny them renewed use of these assets we helped the Cambodians defend themselves and we supported South Vietnam's operations. Substantially greater military and economic assistance was needed to support the Cambodian army, which was growing from some 40,000 to over 200,000 in a very short period of time. The quarter billion dollars that Congress has appropriated as part of the foreign assistance supplemental recognized that Cambodia was facing outright aggression, that it was doing everything possible on its own, and that our assistance was appropriate for its self-defense and to aid Vietnamization and our withdrawals from South Vietnam.

This past year there were also encouraging signs of regional cooperation:

--The South Vietnamese, at Cambodia's request, continued to sweep the sanctuary areas, conduct ground operations in support of Cambodian forces, and provide air and logistic support and training.

--Other Asian countries, such as Thailand, Japan, Australia, New Zealand, and the Republic of China, supplied various forms of assistance.

--Eleven Asian nations met on their own initiative at Djakarta last spring and sought through diplomatic means to preserve Cambodia's neutrality and independence.

Cambodia is, in short, a concrete illustration of Nixon Doctrine principles:

--assumption of primary responsibility for its own defense.

--help from regional friends.

-our support through military and economic assistance.

The objective of all our activities related to Cambodia remains constant: to bar the reestablishment of secure Communist base areas that could jeopardize allied forces in Vietnam. Together with the South Vietnamese, we are trying to prevent the enemy from building up their capabilities for major offensives. Our aim is to destroy their supplies and disrupt their planning for assaults on allied forces in South Vietnam. Communist movements may require fluctuations in the level of our air activities as well as our increased material assistance. They will not deflect us from our overall course of phased withdrawal from Indochina.

Laos

On March 6, 1970, I gave the first comprehensive accounting of our activities in Laos that has ever been made to the American people. I traced the pattern of subversion and then invasion by North Vietnam. I reviewed U.S. efforts under previous administrations to help the legitimate government. When we took office, there had already been a U.S. military assistance program for six years and increasing U.S. air operations for four.

Since early 1963 the North Vietnamese have in effect conducted two wars in Laos. In the north they have kept up constant pressure against the neutralist government established in 1962 at their own urging. In the south they have occupied and fortified the Ho Chi Minh Trail area to attack South Vietnam.

In the face of these continuing North Vietnamese actions, we believed that the U.S. role we inherited remained important. Our material aid and air operations in the north were needed to support the Royal Lao Government and preserve the 1962 Geneva Agreements. In the south, Vietnamization called for continued air strikes against the enemy to protect allied forces. Since 1965 at least 630,000 North Vietnamese troops have streamed down the Trail. They have brought with them more than 400,000 weapons, over 100 million pounds of ammunition, and at least 200 million pounds of food.

Our defensive and supportive policy was outlined in the March 6 statement: --no American ground combat forces. --minimum American presence.

--military assistance for regular and irregular Lao forces when requested by the Lao government.

--reconnaissance flights and air operations to interdict North Vietnamese troops and supplies on the Ho Chi Minh Trail.

--logistic and air support for Lao forces when requested by the government.

Within this framework we have maintained our military aid and air operations during the past year in response to increased North Vietnamese levels of infiltration and aggression.

Southern Laos became critical for Hanoi after the allied Cambodian operations deprived it of the port of Sihanoukville and the border sanctuaries. They swelled their forces in the area by more than 25,000, captured the towns of Saravane and Attopeu, and intensively built up their supplies and their logistics network. Whereas for years southern Laos had been central to Hanoi's operations in northern South Vietnam, at the end of 1970 it was becoming the hub and crossroads of Hanoi's campaigns throughout Indochina. Almost all of its men and supplies were now flowing through this area. The strategic principles that applied to the enemy's bases in Cambodia were valid as well for southern Laos. Hanoi deepened the area's part in the Vietnam war, with direct implications for Vietnamization and our withdrawals.

The Prospects

We do not underestimate the difficulties ahead for Laos and Cambodia. Hanoi has intensified the war on these fronts and its focus is likely to remain there in the coming months.

The Lao government has already demonstrated determination to preserve its independence in the face of overt aggression, diplomatically if possible, militarily if necessary. The Cambodians also have the essential ingredients for success--national unity, maximum self-help, and the support of friends. The country's small, unprepared army is gaining both in size and ability, and the spirit of its people continues to inspire all observers. We can expect major testing of Cambodia over the coming months, but we believe that time is on its side.

Our future policy in Laos and Cambodia will follow the lines we have established. We face some very serious problems:

--At the conference table. Even if Hanoi were to negotiate genuinely about Vietnam, difficult issues remain concerning its neighbors: the removal of North Vietnamese and Viet Cong troops, the securing of South Vietnam's borders, and the reestablishment of the Geneva Agreements.

--On the battle field. Enemy intentions and capabilities in Indochina will pose some hard choices about the deployment of allied troops as we pursue our own withdrawals. While North Vietnamese activities have subsided in South Vietnam, some of their 60,000 troops massed in southern Laos could move into South Vietnam, or into Cambodia, or against northern Laos. In Cambodia we can expect sustained enemy thrusts against the government.

--In the United States. We will have the continuing responsibility of explaining the purpose and extent of our activities in Laos and Cambodia. North Vietnamese actions could require high levels of American assistance and air operations in order to further Vietnamization and our withdrawals.

I will continue to do what is necessary to protect American men as they leave Vietnam. Throughout I will keep the American people and the Congress fully informed.

A negotiated settlement for all Indochina remains our highest priority. But if the other side leaves us no choice, we; will follow the alternate route to peace--phasing out our involvement while giving the region's friendly countries the time and the means to defend themselves.

EAST ASIA AND THE PACIFIC

"Today, as we look to the future of the Pacific, we recognize that whether peace survives in the last third of the century will depend more on what happens in the Pacific than in any other area of the world."

Remarks Upon the Arrival of Prime Minister Sato of Japan November 19, 1969

The home of almost half the population of the earth, second to none in the richness of its human talents and energy, possessing vast material resources, and encompassing the central land mass of the earth, Asia and the Pacific region lie at the heart of the task of creating a stable structure of world peace. Since the Second World War, it is only in this region that developments have impelled America to send her sons to war. Asia and the Pacific includes territories of the seven most populous and the three wealthiest powers, with all that implies for the vital nature of their interests. A Pacific power ourselves, our security and economic interests are inextricably involved with the future of Asia.

It is therefore essential to our national well-being that we accept the truth---and that our policies reflect the fact--that an era has ended in Asia.

BEYOND THE NIXON DOCTRINE

A new Asia is emerging. The Nixon Doctrine is only the beginning of the adjustment of the American role to an era in which the last vestiges of the postwar period will be gone.

--The old enmities of World War II are dead or dying. So are the old dependencies of the postwar era. The next decade can see the burial of both.

--Asian states are stronger. They are able and determined to play a larger role in shaping the international structure of their region.

--They are joining together in regional structures which make them more independent of, and therefore more influential on, the policies of the greater powers.

--Each of the major powers of the Pacific region--Japan, the USSR, the People's Republic of China, and the United States--is faced with difficult decisions in adjusting its policies to the new realities of East Asia. And the decisions they make will, in themselves, centrally affect the international situation in the region.

The future structure of East Asia is, therefore, not yet clear. It depends on decisions not yet made. But it is clear that it will not be subject to the dominant influence of any one state.

It will, rather, rest on two pillars: the collective interests of Asian nations acting in regional groupings, and the policies of the four major powers concerned with the region.

Each, in the next decade, must adjust its policies to the legitimate interests of the others. Out of that process, which has already begun, is being created a new international structure in the Pacific region. The challenge for the future is to ensure that it is a structure of stability.

THE PAST--LAYING THE FOUNDATION FOR A STABLE EAST ASIA

For several decades, our approach to Asia has been rooted in conceptions, once valid, but now increasingly overtaken by time. They stemmed from our experiences, for World War II and its aftermath served to dramatize the fragility of Asia, and nowhere was the menace of the cold war more strongly evident.

Both the economies and the political institutions of East Asia were shattered by World War II. Most of the states of the region were just emerging from the trauma of colonialism. They faced the common menace of a thrusting Communist ambition, and the awesome task of attempting to handle the most grievous domestic problems with untested and unfamiliar institutions. In dealing with neither challenge could they count on any dependable relationship among themselves or with the rest of the world. Their problems threatened to overwhelm them. They were not sure they had a future, much less that it could be reached without the sacrifice of human and democratic values.

In such a situation a stable Asia was not conceivable. We .therefore acted to provide the margin of time and resources which the free nations of Asia needed so desperately.

We provided the security shield which made credible their plans for their own future. Behind that shield we undertook a leading role in supporting the political and economic progress of East Asian nations. In short, we accepted the responsibility of helping to create the foundation necessary for an international structure in the Pacific region of stability and progress and security.

THE PRESENT--THE NEED FOR A NEW APPROACH

It is precisely the success of that policy that makes a new approach .both possible and desirable. For the central fact of East Asia today is the remarkable political and economic growth of the area, and the justifiable self-confidence that has resulted from it.

Asia of today is vastly different from the Asia which required, over the past several decades, so activist an American role. Asian nations now generally have a strong and confident sense of their own national identity and future. They have generally established healthier relationships with each other, and with the outside world. They have created institutions of proven vitality. Their armed forces are stronger.

There is, to be sure, still a need for a strong American role. The development of Asian nations has not taken place evenly. The credibility and intensity of outside threats to their national security and integrity is greater for some than for others. Despite the general economic progress of Asia, the standards of living are still far too low, and we have more than a moral interest in seeing those standards improved. For poverty in Asia is inconsistent with our political interest in the stability of the area, and our economic interest in a prosperous Asia with which we are a natural trading partner.

However, the new strength in Asia is a fact, and it requires a different and more restrained American approach, designed to encourage and sustain Asian regionalism, Asian self-reliance, and Asian initiatives. For those characteristics are essential to the construction of a stable international order in the region.

THE, APPLICATION OF THE NIXON DOCTRINE

Thus it was that the Nixon Doctrine was first announced in the Pacific region, and has most actively been manifested in Asia. It serves the domestic imperative of restraint in our international role, without sacrificing our interests in Asia or defaulting on our obligations. It brings our own deep interest in the future of Asia into better and more permanent balance with the growing indigenous strength of nationalism in the area.

To clarify the Nixon Doctrine, I have twice sent Vice President Agnew to Asia. He has listened to the views of Asian leaders. He has reassured them that our purpose is not to withdraw from world affairs, but to establish the conditions which ensure our continued participation in them.

It is perhaps inevitable, but it is nonetheless an error, to judge the success of the Doctrine's application too narrowly by the reductions effected in the number of American military installations and personnel. Such reductions, to be sure, have been effected. They are described in detail elsewhere in this report. They include substantial cuts in the military and civilian American presence in Korea, Japan, Okinawa, Thailand, and the Philippines, as well as the more publicized reductions of our forces in Vietnam.

But these reductions cannot, by themselves, establish a more sound international structure in Asia, based more upon Asian efforts and self-reliance, dependent less upon American initiatives and resources. Such a structure is, by definition, a process involving the actions of many nations. It cannot be created by American actions alone.

In applying the Nixon Doctrine, we cannot move too fast without sapping the Asian sense of confidence and security which it is our purpose to sustain and nurture. And we cannot cut our own contributions to Asian security without providing for their assumption by our Asian friends. Thus, there is built into the decision to reduce our own presence the obligation to help our allies create the capacity to carry the responsibilities we are transferring. To do otherwise is to undercut our fundamental goal of creating a stable structure in Asia.

Korea is an excellent case in point. The maintenance of the level of U.S. forces in Korea had come to be viewed as a symbol of our commitment to the defense of that country. To a considerable extent, the symbol had become more important than the substance, for it inhibited critical examination of the threat, and of the capacity of local forces to deal with it. Yet it was clear that the situation in Korea had greatly changed since the decision was made in 1954 to maintain the U.S. military presence there at two combat divisions.

Today, the military strength of the Republic of Korea has greatly increased, and includes an impressive pool of skilled manpower. The economic picture has also changed. In 1953 the South Korean economy had been devastated by war. Today it is vigorous, and for the past four years has grown at a remarkable average rate of more than 10%.

This strength enables us and our Korean ally to focus upon the substance, rather than the symbolic needs, of Korean defense. Thus we joined with the Government of Korea in a comprehensive review of our program of military cooperation. Together we decided that the Republic of Korea was now better able to meet its own defense needs, provided measures were taken to modernize the equipment of its existing forces.

On February 6, therefore, our two governments announced that U.S. forces in Korea would be reduced by 20,000 by June 30, 1971, and that agreement had been reached upon a program of modernization of the Korean armed forces.

Thus, the rationale for the return home of 20,000 American troops is that the Korean armed forces, if modernized, are adequate to carry a larger share of the Korean defense burden. Their prompt modernization requires assistance from us. The Congress has wisely seen fit to make available the initial resources needed to provide that assistance.

There will be other similar instances, for our own presence has been the central element in Asian security. The only responsible alternative to continuing to carry that full burden is to help our friends build the capacity to do the job with less assistance from us. I am sure the Congress will continue to see the wisdom of such investments.

The real progress of the Nixon Doctrine is to be seen in the ability and the desire of our Asian friends to assume more of the responsibilities we have shared in the past. Such evidence is not lacking:

--In the past decade, the Gross National Product of the non-Communist nations of East Asia has tripled from $100 billion to about $300 billion.

--A decade ago our East Asian allies had about one million men under arms. Today, that figure has more than doubled, and the quality of equipment and training has significantly improved.

--The decision of Japan to contribute 1% of its Gross National Product in governmental and private transfers to foreign economic assistance by 1975 is a singular contribution to the kind of Asia they and we seek.

--No less significant is Japan's decision to liberalize its trade and capital restrictions, thus improving the access of others to the burgeoning Japanese market, and promising, to the benefit of all, a greater participation in meeting Japan's capital needs.

--The Republic of China, five years after the termination of our economic assistance, is the source of economic assistance to 23 less developed countries. This is eloquent testimony to Asian abilities to expand creatively on the base that we helped construct.

THE FUTURE--BEYOND THE NIXON DOCTRINE

From the above, I think it is fair to conclude that we and our Asian friends are well embarked on the effort to build a new relationship in which our role is defined by the Nixon Doctrine. I am confident that our role can be kept in consonance both with our interests and with those of the increasingly self-reliant and independent Asian states.

But that is only the first phase of the adjustments which we and others will have to make in Asia. In restructuring our own posture, we have set in train the readjustment of the whole international order in the Pacific region. For our past policies have been the heart of the general equilibrium which has been maintained for the past twenty years.

In the next decade our Asia policy will be dealing simultaneously with three phases of Asian development. In some countries, there will still be an absolute-though we hope diminishing--need for us to play a central role in helping them meet their security and economic requirements. In others, we will complete the process of adjusting our relationship to the concepts of the Nixon Doctrine. And with all countries, we will be striving to establish a new and stable structure reflecting the renewed vigor of the smaller Asian states, the expanding role of Japan, and the changing interests of the Soviet Union and the People's Republic of China. In the past twenty years the American people have sacrificed much, both in blood and treasure, to help set the stage where such a structure can be created in the Pacific region. It is now in sight.

The major elements of the emerging structure are clear. The nations of Asia acting in concert will play the key role. So will the individual policies of Japan, China, the Soviet Union, and the United States. But the relationship of these elements to each other is not yet clear. They will depend largely upon decisions still to be made. I would like to discuss the more salient problems involved, and their implications for American policy.

THE CONTRIBUTION OF ASIAN NATIONS WORKING TOGETHER

Asian regionalism has an essential role to play in the future structure of Asia. It is already a source of growing strength to the individual Asian nations. Through joint action, their potential influence on the future of the region far exceeds that which they can exert acting individually.

In this connection the return of Indonesia, the fifth most populous country in the world, to full participation in the regional activities of the Asian states is a signal contribution.

Some years ago an unstable Indonesia was a source of considerable concern to its neighbors. It was in a continuing state of internal tension and turmoil, and seemed a fertile ground for subversion supported from abroad. Today, under the leadership of President Suharto--who paid a State Visit to the United States in May 1970--a stable Indonesia has emerged which has reordered its goals with a sense of national purpose and direction.

But the way ahead for Indonesia is still difficult. Although it possesses motivation and enlightened leadership, it still has not recovered from the upheavals of the past to the point where it can stand alone. For the United States, the choice seems clear: to assist Indonesia in moving ahead, rather than to see it relapse into the frustrations and confusion of the past.

Accordingly, the United States has joined with other nations in the Inter-Governmental Group on Indonesia to provide the external resources necessary to complement Indonesia's own efforts. We have also helped Indonesia with a modest military assistance program intended primarily to help meet its internal security needs.

Indonesia has made good use of this assistance. Its exports have increased, its foreign exchange holdings have gone up, and rice production has improved. Most dramatically, Indonesia has cut inflation from 650% in 1966 to less than 9% in 1970.

Reflecting this improved internal situation, Indonesia has now reached a stage where it can look to matters of broader concern. With her population of 120 million and her wealth of resources, Indonesia's full participation in the regional groupings of the non-Communist states of Asia invests them with new weight and greater potential.

Thailand, with its central geographic position and the vigor of its diplomacy, has from the beginning played an essential role in the development of regional organizations. It has also manifested a spirit of cooperation in pursuit of common interests by providing significant support for the effort to repel North Vietnamese aggression in South Vietnam. At home, the Thai have sustained their steady economic progress while coping with the additional burden of checking pockets of externally supported insurgency.

The Philippines has made a notable contribution to the "Green Revolution," especially in the development of miracle rice. It has also provided medical help to the people of other countries.

The scope and effectiveness of regionalism in Asia have now reached significant levels.

--The creation, with the United Kingdom, of the Five Power Arrangement for the defense of Malaysia and Singapore is an impressive example of Asians looking to their own security needs with their own resources. It also illustrates dramatically how important a vigorous Australian and New Zealand role will be to the future stability of the region.

--SEATO is a regional security organization which has been in existence for many years and which has contributed significantly to the maintenance of a peaceful environment. It provides a framework in which nations both inside and outside the region can work together effectively for a common purpose. SEATO also is increasingly engaged in making a non-military contribution to regional stability through fostering economic and technical cooperation.

--Similarly, the ANZUS Pact has played a useful part in helping to preserve security in the Pacific region.

--In May of 1970, the Foreign Ministers of eleven Asian states, representing 350 million people, convened in Djakarta to work out a joint policy toward the Cambodian crisis, clearly showing their determination and their ability to act in common in the interest of peace in Southeast Asia.

--The Asian Development Bank, to which the U.S. has contributed only 20% of the capital, has become an established and major source of capital and technical assistance to meet Asian needs. In 1970, the Bank had its most active year to date, approving fifty-three projects and increasing its lending by 150%. I hope that the Congress will give early approval to the proposal for an additional $100 million U.S. contribution to a Special Fund permitting the Bank to finance projects which, while meritorious, require more generous terms than those now extended.

--Political differences notwithstanding, the effort continues to develop within a regional framework Southeast Asia's single major resource-- the Lower Mekong Basin. This project has an almost immeasurable potential for the well-being of the countries of the Basin: Thailand, Laos, Cambodia, and Vietnam. Along with a large number of other non-Asian states, we continue to participate actively in this massive scheme to harness the hydro-electric, irrigation, and transportation potential of one of Asia's greatest rivers. Its promise for transforming the life of the area is at least equal to the impact of TVA in our own country.

--The Asian countries have created, and are now profiting from, separate and active inter-governmental programs in education, agriculture, transportation, communications, public health, medicine, and engineering.

--The regional political associations are also showing vitality. The Asian and Pacific Council (ASPAC) is a forum of increasing importance for the joint consideration of Asia-wide problems, for it includes most of the nations of the area and stretches from Japan and Korea in the north to Australia and New Zealand in the south. The Association of Southeast Asian Nations (ASEAN) is a more tightly-knit group including Indonesia, Malaysia, the Philippines, Singapore, and Thailand. Significantly, the resumption of diplomatic relations between the Philippines and Malaysia, which had been suspended over a territorial dispute, was arranged under ASEAN auspices and announced at an ASEAN Ministerial meeting.

More important than the regional organizations themselves--and they are certainly important--is the new spirit which impels Asian leaders to work in concert. As in our own country, there is a new generation in Asia, with a new attitude of mind. Their leaders are impatient with the divisions and enmities of the past, and are not prepared to permit interference with the cooperation needed in the present.

Active regionalism, then, is one of the new realities of Asia. Its vigor is one of the guarantees of the influence of Asia's smaller states in the future political structure of the region. The strength which combination gives enables them to move toward such a structure with confidence in their stability and security.

JAPAN

Japan's economic growth is unprecedented. It has made her the third greatest economic power on earth. However, Japanese living standards still rank below those of many other developed countries, and there is a strong feeling in Japan that these standards must be raised--and raised rapidly.

Japan's wealth gives her a tremendous stake in the peace and stability of Asia, and the dynamism of her economy inevitably has a major impact on the entire region. In recognition of these facts, Japan has taken a major role in the regional activities of the area. As a permanent method of meeting her interests and discharging her responsibilities, however, these regional activities may not prove adequate. Moreover, Japan's position as a major beneficiary of a liberal international economic system is not consistent with her slowness in removing the restrictions which limit the access of others to her own vibrant domestic economy.

My Administration shares with the Government of Japan the conviction that our relationship is vital to the kind of world we both want. We are determined to act accordingly. But the future will require adjustments in the U.S.-Japanese relationship, and the issues involved are too important and their solutions too complicated to be viewed with any complacency on either side.

Fortunately, they are not. Both the Japanese and the American Governments regard each other with profound goodwill and mutual respect. Both are determined to show the greatest possible understanding of the interests of the other. The maintenance of that spirit of cooperation and goodwill is not only the goal of our policy toward Japan. It is also the best assurance that the policy will succeed.

In recognition of our growing interdependence and Japan's own increased stature, Prime Minister Sato and I agreed in November 1969 to enter into negotiations for the return of Okinawa to Japanese administration by 1972. I can now report that negotiations on this question, including the retention of our Okinawa bases, are progressing steadily. Our aim is to reach the specific agreements this spring, allowing us to obtain the necessary legislative support to proceed with reversion in 1972.

Last December, we and the Japanese agreed to significant realignments in our military bases in Japan, which will result in a reduction of some 12,000 U.S. military personnel over the next several months without adversely affecting our ability to meet our commitments to Japan or other Asian allies. The Japanese have announced plans for continuing qualitative improvements of their own self-defense capabilities, enabling them to provide for substantially all of their conventional defense requirements.

The United States and Japan have everything to gain from a further expansion of already close and profitable economic ties. Japan has for many years been America's largest overseas customer, and I am pleased to report that in 1970 our exports to Japan grew by some 35% to approximately $4.5 billion. This included more than $1 billion worth of products from America's farms, equivalent to the production of 10 million acres and the labor of more than 100,000 farmers. American purchases from Japan are even larger. The United States takes some 27% of Japan's exports, amounting in 1970 to almost $5.9 billion. I am glad to note that Japan has accelerated its program of liberalizing its restrictions on imports, and is also easing its restrictions on foreign capital investment. Despite the barriers Japan still maintains, direct American investment in Japan presently amounts to more than $1 billion. I expect this figure will increase as recognition grows within Japan that its own self-interest lies in providing wider investment opportunities.

The friendly competitive relationship, which properly characterizes this greatest transoceanic commerce in the history of mankind, is not without difficulties. An example is the protracted negotiations over the question of Japan's textile exports to the U.S., but I am confident we can find a solution which will be in our mutual interest.

In the important area of foreign aid, cooperation rather than competition is the watchword. Japan announced during the year that it intended by 1975 to raise its foreign assistance contribution to one percent of its GNP. We anticipate Japan will take a leading role in international and regional aid efforts, hopefully with less emphasis on commercial financing than in the past.

We are two strong nations of different hermitages and similar goals. If we can manage our extensive relationship effectively and imaginatively, it cannot help but contribute significantly to the well-being and prosperity of our two peoples and to the nations of the entire Pacific Basin.

THE PROBLEM OF CHINA

The People's Republic of China faces perhaps the most severe problem of all in adjusting her policies to the realities of modern Asia. With a population eight times greater than that of Japan, and possessing a much greater resource base, Mainland China nonetheless sees the free Japanese economy producing a gross national product two and a half times that of her own. The remarkable success of the Chinese people within the free economic setting of Taiwan and Singapore, and the contributions of the overseas Chinese to growth elsewhere in Asia, stands as an eloquent rebuttal to Peking's claim of unique insight and wisdom in organizing the talents of the Chinese people.

The People's Republic of China is making a claim to leadership of the less developed portions of the world. But for that claim to be credible, and for it to be pursued effectively, Communist China must expose herself to contact with the outside world. Both require the end of the insulation of Mainland China from outside realities, and therefore from change.

The twenty-two year old hostility between ourselves and the People's Republic of China is another unresolved problem, serious indeed in view of the fact that it determines our relationship with 750 million talented and energetic people.

It is a truism that an international order cannot be secure if one of the major powers remains largely outside it and hostile toward it. In this decade, therefore, there will be no more important challenge than that of drawing the People's Republic of China into a constructive relationship with the world community, and particularly with the rest of Asia.

We recognize that China's long historical experience weighs heavily on contemporary Chinese foreign policy. China has had little experience in conducting diplomacy based on the sovereign equality of nations. For centuries China dominated its neighbors, culturally and politically. In the last 150 years it has been subjected to massive foreign interventions. Thus, China's attitude toward foreign countries retains elements of aloofness, suspicion, and hostility. Under Communism these historically shaped attitudes have been sharpened by doctrines of violence and revolution, proclaimed more often than followed as principles in foreign relations.

Another factor determining Communist Chinese conduct is the intense and dangerous conflict with the USSR. It has its roots in the historical development of the vast border areas between the two countries. It is aggravated by contemporary ideological hostility, by power rivalry and nationalist antagonisms.

A clash between these two great powers is inconsistent with the kind of stable Asian structure we seek. We, therefore, see no advantage to us in the hostility between the Soviet Union and Communist China. We do not seek any. We will do nothing to sharpen that conflict--nor to encourage it. It is absurd to believe that we could collude with one of the parties against the other. We have taken great pains to make it clear that we are not attempting to do so.

At the same time, we cannot permit either Communist China or the USSR to dictate our policies and conduct toward the other. We recognize that one effect of the Sino-Soviet conflict could be to propel both countries into poses of militancy toward the non-Communist world in order to validate their credentials as revolutionary centers. It is also possible that these two major powers, engaged in such a dangerous confrontation, might have an incentive to avoid further complications in other areas of policy. In this respect, we will have to judge China, as well as the USSR, not by its rhetoric but by its actions.

We are prepared to establish a dialogue with Peking. We cannot accept its ideological precepts, or the notion that Communist China must exercise hegemony over Asia. But neither do we wish to impose on China an international position that denies its legitimate national interests.

The evolution of our dialogue with Peking cannot be at the expense of international order or our own commitments. Our attitude is public and clear. We will continue to honor our treaty commitments to the security of our Asian allies. An honorable relationship with Peking cannot be constructed at their expense.

Among these allies is the Republic of China. We have been associated with that government since its inception in 1911, and with particular intimacy when we were World War II allies. These were among the considerations behind the American decision to assist the Government of the Republic of China on Taiwan with its defense and economic needs.

Our present commitment to the security of the Republic of China on Taiwan stems from our 1954 treaty. The purpose of the treaty is exclusively defensive, and it controls the entire range of our military, relationship with the Republic of China.

Our economic assistance to the Republic of China has had gratifying results. Beginning in 1951, the U.S. provided $1.5 billion in economic assistance. Its effective and imaginative use by the Government of the Republic of China and the people of Taiwan made it possible for us to terminate the program in 1965.

I am recalling the record of friendship, assistance, and alliance between the United States and the Government of the Republic of China in order to make clear both the vitality of this relationship and the nature of our defense relationship. I do not believe that this honorable and peaceful association need constitute an obstacle to the movement toward normal relations between the United States and the People's Republic of China. As I have tried to make clear since the beginning of my Administration, while I cannot foretell the ultimate resolution of the differences between Taipei and Peking, we believe these differences must be resolved by peaceful means.

In that connection, I wish to make it clear that the United States is prepared to see the People's Republic of China play a constructive role in the family of nations. The question of its place in the United Nations is not, however, merely a question of whether it should participate. It is also a question of whether Peking should be permitted to dictate to the world the terms of its participation. For a number of years attempts have been made to deprive the Republic of China of its place as a member of the United Nations and its Specialized Agencies. We have opposed these attempts. We will continue to oppose them.

The past four years have been a period of internal turmoil and upheaval in Mainland China. A calmer mood now seems to be developing. There could be new opportunities for the People's Republic of China to explore the path of normalization of its relations with its neighbors and with the world, including our own country.

For the United States the development of a relationship with Peking embodies precisely the challenges of this decade: to deal with, and resolve, the vestiges of the post-war period that continue to influence our relationship, and to create a balanced international structure in which all nations will have a stake. We believe that such a structure should provide full scope for the influence to which China's achievements entitle it.

We continue to believe that practical measures on our part will, over time, make evident to the leaders in Peking that we are prepared for a serious dialogue. In the past year we took several such steps:

--In January and February of 1970, two meetings were held between our representatives in Warsaw, thus restoring an important channel of communication. The subsequent cancelling of the scheduled May meeting was at Chinese initiative.

--In April, we authorized the selective licensing of goods for export to the People's Republic of China.

--In August, certain restrictions were lifted on American oil companies operating abroad, so that most foreign ships could use American-owned bunkering facilities on voyages to and from mainland Chinese ports.

--During 1970, the passports of 270 Americans were validated for travel to the People's Republic of China. This brought to nearly 1,000 the number so validated. Regrettably, only three holders of such passports were permitted entry to China.

In the coming year, I will carefully examine what further steps we might take to create broader opportunities for contacts between the Chinese and American peoples, and how we might remove needless obstacles to the realization of these opportunities. We hope for, but will not be deterred by a lack of, reciprocity.

We should, however, be totally realistic about the prospects. The People's Republic of China continues to convey to its own people and to the world its determination to cast us in the devil's role. Our modest efforts to prove otherwise have not reduced Peking's doctrinaire enmity toward us. So long as this is true, so long as Peking continues to be adamant for hostility, there is little we can do by ourselves to improve the relationship. What we can do, we will.

THE SOVIET UNION

The Soviet Union is also a Pacific power. Like the others, it faces difficult adjustments in its Asian policy of great importance for the future stability of the area. The USSR's attitude toward Asia is dominated by two concerns. There is a tactical desire to limit our influence, and increase her own, among the non-Communist states of Asia. Of much greater importance, however, the USSR has a vital strategic desire to secure herself and her territories against a China whose current enmity and potential growth make serious, indeed, the possibility of a future policy of irredentism.

The Soviet Union wishes to see our influence diminished, and yet fears that diminution as enhancing the possibility of expanded Chinese influence. At the same 'time, it has to consider that a lesser American influence could contribute to a normalization of relations between ourselves and Mainland China, and might permit and encourage a focus of Chinese energies not possible under the present realities.

There need be, in all this, no irreconcilable conflict between Soviet interests in Asia and our own. We intend in our actions to keep Soviet concerns in mind, without letting them dominate our course. We seek a stable and peaceful Asia, and there is no necessity in that concept for a clash between the U.S. and the Soviet Union.

In Asia, in the coming years, we will need great flexibility. The policies of the Asian states, both great and small, are now in an historic process of adjustment. As their decisions are made, we will need to adjust our policies to them, not only with flexibility but with virtuosity. And flexibility is not always the strongest virtue of a system dependent upon public participation for its sanction and continuity. We must meet this challenge, for otherwise our policies will be forced into a rigidity ill-adapted to the problems we will face in the changing Asia of the 1970's.

SOUTH ASIA

"It is in the world interest to avoid drifting into a widening division between the have and have-not nations."

Address to the United Nations

General Assembly

October 23, 1970

American policy toward the great subcontinent of South Asia parallels that toward the East Asia and Pacific region. Our aim is a structure of peace and stability within which the people of this region can develop its great potential and their independent vision of the future. Our policy is to help these nations deal with their own problems, and to bring our activity into a stable balance with that of the other major powers with interests in the area.

In the pursuit of that goal in South Asia, however, both the nature of our interests and the condition of the region permit a sharper focus of our efforts. South Asia's fundamental problems are two: to meet the challenges of economic and political development and to turn the relationship between India and Pakistan from hostility to cooperation.

More than elsewhere in Asia, the subcontinent entered the postwar period with an established institutional structure, with a considerable reservoir of trained personnel, and with a commitment to democratic self-government and independent policies which strengthened the world's sympathy and interest in its success. Against these assets, however, were substantial liabilities. Our effort to assist the countries of the area in overcoming these liabilities has determined and still determines the structure of our policy toward South Asia.

The seven hundred million people of the subcontinent face perhaps the world's most cruel imbalance between human needs and available resources. Even with the full application of modern science and technology, with all its potential for righting such an imbalance, the problem remains severe. For India, the mere size of its population and the need for large infusions of external resources, make extremely difficult the task of organizing the society to meet its problems. For Pakistan, the difficulties are compounded by the need to harmonize the interests of two regions widely diverse in social patterns and traditions and physically separated. The smaller countries of South Asia face similar or greater barriers to progress given their limited trained manpower and natural resources.

South Asia's progress is important to us. We cannot deny our humanitarian interest in the well-being of so many people with such exigent needs. Nor can we be indifferent to the fact that a lack of progress in South Asia could encourage the polarization of the world between the developing and the industrial countries. Finally, we recognize that the unmet needs of South Asia, and its unresolved enmities, could make the area vulnerable to an undesirable level of foreign influence.

We have a deep interest in ensuring that the subcontinent does not become a focus of great power conflict. Over the past decade the major countries of South Asia have profoundly changed their relationships with the rest of the world. Pakistan has gradually moved from its position of close association with us to a complex triangular relationship, balancing her contacts with the three great powers with interests in South Asia--China, the USSR, and ourselves. India continues to follow a policy of non-alignment but of a cast significantly changed since the Chinese attack of 1962. These policy changes, by definition, affect the intimacy of our relationship with the countries of South Asia. We have no desire to try to press upon them a closer relationship than their own interests lead them to desire. Our current posture in South Asia, therefore, accords with the restraint implied in the Nixon Doctrine.

During the past year we have continued our bilateral programs of financial, technical, and food assistance. South Asia is, in fact, the largest recipient of our economic aid. We are also providing large-scale assistance to India's crucial family planning efforts. We will continue to help through those programs, and through the activities of the World Bank and the Asian Development Bank. Our effort to reinvigorate our whole system of economic aid is directly related to our desire to do this more effectively.

We have also helped deal with the consequences of one of this century's worst natural disasters. In response to the November tragedy in East Pakistan, the United States provided both immediate emergency relief and longer term aid to assist in the task of reconstruction. We are also working with the Government of Pakistan to provide greater safety for the people there in the future.

We were faced during the past year with a particularly difficult decision in regard to Pakistan's request for an exception to our general embargo on the sale of lethal weapons to the subcontinent. We decided on a one-time sale of a limited amount of military equipment. We believe that this modest exception should not upset the military balance in the area or accelerate an arms race.

In the 1970's, it is important that South Asia be able to rely on the steadiness of our policy. We will do what we can to help the countries of the area meet their economic and social needs. Recognizing that the success of that effort will be diminished by a continued failure of India and Pakistan to establish normal relations, we will, without trying to dictate to those directly concerned, encourage more normal relations between them.

We will try to keep our activities in the area in balance with those of the other major powers concerned. The policy of the Soviet Union appears to be aimed at creating a compatible area of stability on its southern borders, and at countering Chinese Communist influence. The People's Republic of China, for its part, has made a major effort to build a strong relationship with Pakistan. We will do nothing to harm legitimate Soviet and Chinese interests in the area. We are equally clear, however, that no outside power has a claim to a predominant influence, and that each can serve its own interests and the interests of South Asia best by conducting its activities in the region accordingly.

AFRICA

"Our stake in the Continent will not rest on today's crisis, on political maneuvering for passing advantage, or on the strategic priority we assign it. Our goal is to help sustain the process by which Africa will gradually realize economic progress to match its aspirations."

U.S. Foreign Policy For The 1970's

Report to the Congress

February 18, 1970

Africa is a continental experiment in nation building. The excitement and enthusiasm of national birth have phased into the more sober period of growth.

Our historic ties with Africa are deeply rooted in the cultural heritage of many of our people. Our sympathy for Africa's newly independent states is a natural product of our traditional antipathy for colonialism. Our economic interests in the continent are substantial, and growing. And our responsibilities as a global power inevitably give us an interest in the stability and well-being of so large a part of the world.

Reflecting these close ties, Secretary Rogers last year became the first Secretary of State to visit Africa. His personal observations and experiences in Morocco, Tunisia, Ethiopia, Kenya, Zambia, the Congo, Cameroon, Nigeria, Ghana, and Liberia gave a new dimension at the highest level to our knowledge and understanding of Africa. A major result of that visit was the basic policy statement issued with my warm approval in March 1970. In that statement Secretary Rogers summarized our aim in Africa as "a relationship of constructive cooperation with the nations of Africa--a cooperative and equal relationship with all who wish it."

We recognize that it is not for us to attempt to set the pattern of relationships among the states of Africa. Only the Africans can forge national unity. Those problems having to do with the building of stable national institutions are neither appropriate for, nor amenable to, much of a contribution from us. Only the Africans themselves can do such work.

The promise of the newly independent African nations is great. But they face all the normal problems associated with independence, and some special ones stemming from historic reliance on tribal organizations not always reflected in national boundaries drawn for the administrative convenience of the former colonial powers. Moreover, colonialism and racial injustice in southern Africa continue to frustrate the African sense of fulfillment.

These facts complicate the essential task of clothing new political institutions with authority. They make more difficult the problem of working out stable relationships among the nations of Africa, and between Africa and the rest of the world. They compound the exigent task of obtaining and applying the resources needed for economic development.

The Nixon Doctrine's encouragement of self-reliance has an immediate and broad applicability in Africa. Africa has depended less than other areas on American leadership and assistance, and its institutions and relationships were created without our providing either the impetus or the concept. In Africa, therefore, the conflict between the application of our new doctrine and the requirements of continuity are minimal. To an unusual degree, our conception of the current realities is unencumbered by the weight of previous undertakings. Our freedom of decision is not constrained by the demands, legal or implicit, of past commitments and actions.

Within the framework of African efforts, however, there are three primary needs of the continent to which we can contribute. Africa seeks peace, economic development, and justice; and she seeks our assistance in reaching those goals. It is in our interest to respond as generously as our resources permit.

PEACE

The major contribution we can make to the peace of the continent is to support the African effort to keep free of great power rivalries and conflicts. Africa's unresolved problems should not be used as a pretext for non-Africans to intervene. African needs for assistance should not be manipulated to establish an undue outside influence. The nations of Africa need tranquility and a chance to resolve their own domestic and inter-African problems. Conflict and involvement in Cold War rivalries can only bring harm to Africa and tragic delay in its progress.

For that reason, we seek no positions in Africa which threaten the interests of others. Nor can we condone activities by others which have that effect. Therefore, support for the inviolability of African borders and the integrity of African states is a cardinal point of American policy.

Clearly, our ability to adhere to this posture of restraint is dependent upon a similar posture by others. We believe that the African nations themselves are the best guarantors, as they are certainly the prime beneficiaries, of such restraint.

DEVELOPMENT

The second great African need to which we can contribute is economic development. Africa must obtain material resources and technology from abroad. Multilateral and private investment channels are, we believe, the most efficient means to effect capital development. But external resources can bring real progress only if Africa's own human resources are developed and mobilized for this effort. It is in this area that we believe our bilateral assistance programs can be most effective. We therefore hope to contribute to Africa's economic development in four major ways:

--Our bilateral assistance programs in the years ahead will concentrate on the development of human resources--on education, population problems, and agricultural skills. In the technical assistance field, we intend to send more highly trained technicians. This will be particularly evident in the "New Direction" of the Peace Corps programs in Africa.

--But aid alone is not sufficient. African countries also need new markets. Generalized tariff preferences will help to open new markets for their manufactured goods in the more industrialized countries. I will shortly submit legislation to authorize U.S. participation in this program. We will also continue to participate in international efforts to maintain and stabilize markets for traditional exports of primary products.

--We intend to use our influence in international lending and development agencies to encourage greater assistance to Africa. In this respect we applaud the decision of the World Bank to increase its assistance to Africa threefold.

--Finally, we will actively encourage private investment in the developing countries of Africa. Private investment is the easiest and most efficient way to transfer both resources and human skills from a developed to a developing society. American investment in Africa now stands at about three billion dollars, of which more than two-thirds is in the developing area. It has been growing annually at over 12%. We expect that a high rate will continue in coming years. In African countries favored with resources and wise leadership, I have no doubt that private investment will play a far more significant role than public aid in speeding their progress.

JUSTICE

The third broad area in which Africans seek our assistance is the search for racial and political justice in southern Africa. There is perhaps no issue which has so pernicious a potential for the well-being of Africa and for American interests there. It is, for many, the sole issue by which our friendship for Africa is measured. I wish to review in all frankness our policy toward this grievous problem.

Both our statements and our actions have, or should have, made it patently clear to all concerned that racism is abhorrent to the American people, to my administration, and to me personally. We cannot be indifferent to apartheid. Nor can we ignore the tensions created in Africa by the denial of political self-determination. We shall do what we can to foster equal opportunity and free political expression instead. We shall do so on both moral and practical grounds, for in our view there is no other solution.

The United States has, therefore, reaffirmed and continued to enforce the embargo on the sale of arms to South Africa. When Southern Rhodesia attempted to sever formal ties with Britain, we closed our Consulate there. We have reaffirmed and continued to enforce the economic sanctions against Rhodesia, and we have sought ways to ensure a more universal compliance with those sanctions.

The United States also has continued its embargo on the sale of arms for use in Portuguese African territories. In support of the United Nations effort to terminate South Africa's jurisdiction over South-West Africa, we have adopted a policy of discouraging American investment in that territory. We have sought to provide assistance and encouragement to Botswana, Lesotho, and Swaziland in their efforts to prove the viability of multiracial societies in the heart of southern Africa.

These measures define our policy toward the problems of southern Africa. We intend to continue these efforts, and to do what we can to encourage the white regimes to adopt more generous and more realistic policies toward the needs and aspirations of their black citizens.

However, just as we will not condone the violence to human dignity implicit in apartheid, we cannot associate ourselves with those who call for a violent solution to these problems.

We are convinced that the use of violence holds no promise as the solution to the problems of southern Africa. Neither the military nor the economic strength is available to force change on the white minority regimes. Violence would harden the resistance of the white minorities to evolutionary change. Resort to force would freeze the prejudice and fear which lie at the heart of the problem. Finally, violence would certainly hurt most the very people it would purport to serve.

The interests of the white regimes themselves surely dictate change. The United States believes that the outside world can and should use its contacts with southern Africa to promote and speed that change. We do not, therefore, believe the isolation of the white regimes serves African interests, or our own, or that of ultimate justice. A combination of contact and moral pressure serves all three.

PROGRESS

I have dwelt at length on the problems of Africa because it is to them that our policies are of necessity addressed. But it is necessary also to recognize the progress which is taking place.

The return of peace to Nigeria was the paramount African event of 1970. That event was all the more welcome to us, for the American zeal to help reduce the anguishing human cost of that conflict led to some misunderstanding and strain in our relations with the Nigerian Government. The United States views with admiration the humane and statesmanlike policy of reconciliation which Nigeria has adopted. We ourselves know the suffering and bitterness which a civil war entails. Our country emerged stronger and more united. Nigeria, too, has emerged from the challenge stronger and united, and ready to assume the significant role in Africa which her size, her resources, and her sixty million people dictate. That is a development of the highest significance for the future stability and well-being of Africa. We welcome it.

I should also mention the striking progress which has been made in the Democratic Republic of the Congo. Five years of peace have transformed that country from perhaps the most tortured of African states to one of the most stable. This development vindicates the faith in a united Congo which the United States displayed in darker days. President Mobutu's visit to Washington in August served to recall the support we extended to the Congo at that time, and to reaffirm the strong friendship between our two countries which has resulted.

The Emperor of Ethiopia, unique among world leaders in the length of his reign and his contribution to independent Africa, visited the United States in October. That occasion provided an opportunity for me to review with him the role of the United States in the economic progress of that ancient land, and to reaffirm the close ties of cooperation between our two countries. Ethiopia has been a leader in Africa's creation of regional organizations. Their growing vitality is encouraging, and we hope that activities of this kind will serve increasingly as the focus for economic cooperation between African countries. We believe such a development will both promote and increase the effectiveness of foreign assistance.

THE FUTURE

The potential of Africa is great, but so are its problems. We view Africa with the strongest of goodwill, tempered by the sober recognition of the limits of the contribution which we can make to many of its problems. We look to African leadership to build the framework within which other nations, including the United States, can fully contribute to a bright African future. A peaceful, progressive, and just Africa is an exciting and worthy goal. We hope by our policies to facilitate economic progress in one part of Africa, human and social justice in the other, and peace in both.

THE MIDDLE EAST

"The Middle East is a place today where local rivalries are intense, where the vital interests of the United States and the Soviet Union are both involved. Quite obviously, the primary responsibility for achieving a peaceful settlement in the Middle East rests on the nations there themselves. But in this region in particular, it is imperative that the two major powers conduct themselves so as to strengthen the forces of peace rather than to strengthen the forces of war."

Address to the United Nations

General Assembly

October 23, 1970

Vietnam is our most anguishing problem. It is not, however, the most dangerous. That grim distinction must go to the situation in the Middle East with its vastly greater potential for drawing Soviet policy and our own into a collision that could prove uncontrollable.

There are three distinct and serious aspects of the Middle East problem, each by itself difficult enough to resolve. They cannot, however, be treated in isolation. They have become enmeshed, and each tends to exacerbate and make more intractable the others. The Middle East crisis must be recognized as the product of these three dimensions:

--The Arab-Israeli conflict, which for more than twenty years has festered when it has not burned. It is the core problem of the Middle East crisis, and its intensity today is undiminished.

--Intra-Arab differences, which focus primarily on whether a negotiated settlement of the Israeli conflict is acceptable or whether force is the only solution. There are also differences over how Arab nations should be governed, which have led more than once to civil conflict. And there are rivalries growing out of disagreement about the relation of Arab states to each other in the quest for unity in the Arab world.

--The conflict between the interests of the Soviet Union and the United States, each of which is now more deeply than ever engaged in the Arab-Israeli conflict. Events surrounding the hostilities in Jordan in September showed how fragile are the barriers to direct great power confrontation in the Middle East.

America's interest in the Middle East-and the world's interest---is that the global structure of peace not be allowed to break down there. But this objective has to be pursued in a situation in rapid flux:

--The relationship between Middle East countries and outside powers has changed. The system of outside control that characterized the nineteenth and first half of the twentieth centuries is gone; the peoples of the Near East have achieved national independence. There is a continuing search for a new balance between the strong nationalisms of the area and outside forces.

--The character of the outside influences has changed. The nations of the Middle East must now come to terms on various levels with the technological, capital, political, and military presence of the United States; with a new projection of Soviet power; and with a new Europe establishing economic association through the Common Market with a number of nations in the area.

--The relationship among the outside powers has changed. With lines between the U.S. and the Soviet Union firmly drawn in Europe, their contest has spilled over to the south where no such lines exist and where local conflict and rapid change draw them into new competition. This takes place against a background of changes in their own global strategic relationship and changes in their respective national postures toward global involvement.

THE ARAB-ISRAELI CONFLICT

This protracted and bitter struggle lies at the heart of the Middle East crisis. Its harmful potential is, to be sure, enhanced by great power involvement. But the simple fact remains that the continuation of this conflict grievously damages the interests of all concerned:

--It has drawn the Soviet Union and the United States into close military association with the combatants, with all the danger that poses to world peace.

--It has caused the disruption of normal U.S. relations with a number of Arab countries. This, in turn, has increased the already excessive Arab dependence on Soviet support, and therefore their dangerous vulnerability to excessive Soviet influence.

--It has provided an issue which has been exploited and manipulated by radical elements to undercut the internal stability of the Arab nations.

--It has, for two decades, kept the 50 million people of Israel and the adjoining Arab nations in a permanent state of hostilities, and in constant fear of attack.

--It has forced both the Arab states and Israel to divert a tragically disproportionate share of their resources to the instruments and activities of war.

--It has condemned to squalor and to soul-searing hatred the lives of the Palestinian refugees, who include not only those who originally fled their homes upon the establishment of Israel, but a whole generation born and reared in the hopelessness and frustration of the refugee camps. They are the material from which history creates the tragedies of the future.

That is the outline of the situation which prevails. It is, and was when my Administration began, of deep concern to the American people.

We faced a choice. We could have elected to stand aloof from the problem, on the theory that our diplomatic intervention would serve only to complicate further an already excessively complex problem.

We rejected that course. We did so for three reasons. First, the stakes involved are too high for us to accept a passive role. Second, we could see nothing resulting from our restraint but the steady deterioration of the situation into open war. Third, it would have been intolerable to subordinate our own hopes for global peace and a more stable relationship with the Soviet Union to the local if severe-animosities of the Middle East.

Therefore--with no illusions about the difficulty or the risks--this Administration embarked upon a major and prolonged effort to achieve a peaceful settlement of the Middle East crisis. In that effort, we have encountered in full measure the difficulties we expected. We have had disappointments as well as a limited degree of success. Because this problem is so important, and because our role is central to the chances for settlement, I wish to discuss in detail our assessment of the problem, and our efforts to resolve it.

The interests of all concerned require a settlement. The purpose of the United States has been to help the parties work out among themselves a peace agreement that each would have a stake in maintaining. We have proceeded with a sense of compassion for their concerns.

The Israelis seek recognition as a nation by their neighbors in secure circumstances. In any settlement they will seek more than simple declarations of peace and of Israel's legitimacy. They also seek physical security. For Israel, peace must be something more than a paper peace.

The Arab governments seek the recovery of territories lost during the June war, justice for those who have lost lands and homes through more than twenty years of conflict, and a sense of dignity and security that will permit them to feel no longer vulnerable to attack. Peace for them must also be real.

If these concerns are to be reconciled, three conditions must be met:

--Judgment on each side that the other is willing to make and live up to commitments that could produce a just and lasting peace.

--Judgment on each side that the other will be able to keep its commitments.

--Judgment on each side that the world community can provide realistic supplementary guarantees of whatever agreements may be reached.

The United States Initiative. Throughout 1969, the United States sought a framework for an agreed settlement through bilateral talks with the Soviet Union and in the multilateral channel of the Four Powers talks, as well as through continuing consultation with Israel, Jordan, and the UAR. We sought to work out common guidelines which Ambassador Gunnar Jarring, the UN Secretary General's Special Representative, could use as a catalyst for talks between the parties.

By May of 1970 these efforts were stalled. And while they had proceeded, the intensity of the conflict had again reached the critical level. Fighting was taking place daily along the Suez Canal. In retaliation, Israeli air power had reached deep into Egypt. Fedayeen attacks had provoked serious incidents on the cease-fire lines between Israel and Jordan, Lebanon and Syria. The Soviet Union had taken steps to alter the military balance in the UAR's favor. Forces opposed to any kind of settlement were increasingly assertive in many Arab countries.

Obviously, the situation was once again about to go out of control. A new approach in the search for a settlement was urgently required.

Our experience over the past year had convinced us that no serious movement toward peace was possible unless the parties to the conflict themselves came to grips with the issues between them.

On June 19, therefore, the United States launched an initiative to get both sides to:

--re-establish the cease-fire.

--observe a military standstill in an agreed zone on both sides of the Israel-UAR cease fire line.

--agree on a set of principles as the basic starting point for Arab-Israeli talks under the auspices of Ambassador Jarring.

The essence of this proposal was described by Secretary Rogers publicly on June 25 as a major political initiative "to encourage the parties to stop shooting and start talking." The UAR, Jordan, and Israel accepted the proposal, as did the Soviet Union. Our initiative produced significant results:

--It halted the bloodshed along the cease-fire line, and thereby helped reduce national passions to a level more conducive to sober consideration of a political settlement.

--It obtained, for the first time, agreement by Israel, Jordan, and the UAR to seek "a just and lasting peace between them based on (1) mutual acknowledgment by the United Arab Republic, Jordan and Israel of each other's sovereignty, territorial integrity and political independence, and (2) Israeli withdrawal from territories occupied in the 1967 conflict, both in accordance with" the UN Security Council Resolution of November 22, 1967.

However, the ultimate goal of our initiative, a serious peace negotiation, did not follow immediately. For the Soviet and Egyptian buildup of military forces along the Suez Canal continued after the cease-fire went into effect on August 7, in violation of the agreement for a military standstill. The fragile opening toward peace was further endangered in early September by the actions of Palestinian groups which attempted to force the Government of Jordan to withdraw from the effort to reach a settlement.

The situation in Jordan deteriorated into open conflict, and the subsequent intervention of armored forces from Syria created the gravest threat to world peace since this Administration came into office.

More was at stake than Jordanian policy. As always with dangers avoided, it is not easy in retrospect to demonstrate how close to greater dangers the world really came. But the prospect which threatened can be described: If Jordan had succumbed to either internal subversion or external aggression, the danger of another full-scale Middle East war would have been at hand. With the Soviet Union so deeply involved in the military operations of the UAR, and with firm U.S. support for the survival of Israel, the risk of great-power confrontation would have been real indeed.

The United States had no responsible choice but to prevent events from running away with the ability to control them. We took a firm stand against the Syrian intervention. We acted to stabilize but not to threaten, to discourage irresponsibility without accelerating the momentum of crisis.

The Syrians withdrew, the Government of Jordan reestablished order, and a fragile agreement was reached on the future role of the organized Palestinians.

This sobering experience should demonstrate to all the parties involved the extreme volatility of the present state of affairs. The entire world has seen how precarious is the balance and how great the danger in the Middle East.

The Shape of Peace in the Middle East. It is not for the United States to attempt to set the precise terms of a Middle East peace settlement. That can be done only by the parties directly in conflict, and only by a process of negotiation with each other.

However, some of the principles and elements that must be included if a settlement is to be reached are clear and evident:

--The Arab Governments will not accept a settlement which does not provide for recovery of territories lost in the 1967 War. Without such acceptance, no settlement can have the essential quality of assured permanence.

--Israel will not agree to withdraw from occupied Arab territories, which she sees as enhancing her physical security, unless she has confidence in the permanence of the peace settlement. She also believes that the final borders to which she will withdraw must be negotiated and agreed in a binding peace settlement. She must, therefore, have confidence that no attack is forthcoming, and confidence in her acceptance by her neighbors and in other assurances.

--The lack of mutual confidence between Israel and the Arab countries is so deep that supplementary major power guarantees could add an element of assurance. Such guarantees, coupled in time with a reduction of the armed strength of both sides, can give the agreement permanence.

--No lasting settlement can be achieved in the Middle East without addressing the legitimate aspirations of the Palestinian people. For over two decades they have been the victims of conditions that command sympathy. Peace requires fruitful lives for them and their children, and a just settlement of their claims.

The immediate task is to help the belligerents construct an agreement that will achieve a workable balance between the security and recognition that Israel seeks and a just resolution, which the Arab states seek, of the territorial and Palestinian issues. Only in such a balance can peace be found.

GREAT POWER CONTEST

For over a century the Middle East has been an area of great concern to the major powers. To NATO and Europe its independence is vital, militarily and economically. Similarly the Soviet Union has important interests which we recognize.

Despite the depth of these interests-perhaps to some extent because of them-the major powers have not established a pattern of relationships with the Middle East which accommodates the interests of all. The concern caused by that fact is magnified by the instability and volatility of the region.

Any effort by any major power to secure a dominant position could exacerbate local disputes, affect Europe's security, and increase the danger to world peace. We seek no such position; we cannot allow others to establish one.

We believe that the stability of the Middle East requires establishing a balance in the activities of the various outside powers involved there. Each must be free to pursue its own legitimate interests, but within the limits imposed by respect for the legitimate interests of others and the sovereignty of the nations of the area.

On this basis, the United States sought in 1969 and 1970 to enter into discussions with the Soviet Union on the Middle East question which would have global significance for us and them, and would also contribute to making constructive peace negotiations between the Arabs and Israelis possible.

We repeatedly made clear to the Soviet leaders our desire to limit the arms race in the Middle East on a reciprocal basis:

--On February 4, 1970, I proposed to Chairman Kosygin that the United States and the Soviet Union discuss the question of limiting the arms which our two countries provide to the Middle East. The Soviets rejected this proposal as they had done similar proposals in the past.

--On March 23, Secretary Rogers announced that we would hold in abeyance a decision on Israel's request for additional aircraft, pointing out that: "Restraint will be required on the part of other major suppliers to the Middle East. No nation can pursue a policy of seeking unilateral advantage in the area if peace is to be achieved."

The Soviet Union responded by stepping up the shipment of air-defense missiles and aircraft, manned by Soviet combat crews to Egypt--the first time that Soviet combat crews have been moved to a nation outside the Communist orbit.

While indicating that the U.S. preferred restraint in the shipment of arms, I have also repeatedly stated that the military balance between the Arab states and Israel must be maintained:

--In my February 4 letter to Chairman Kosygin, I made clear that the United States would not hesitate to provide arms to Israel if they were required in order to maintain that balance.

--On July 31, I said publicly: "It is an integral part of our cease-fire proposal that neither side is to use the cease-fire period to improve its military position in the area of the cease-fire lines. All would have to refrain from . . . undertaking a military buildup of any kind in such an area."

The Soviet Union's disregard for this essential foundation for peace talks raised serious doubts about its readiness to cooperate in the effort to achieve peace. Against this background, the United States had no choice but to take further steps to help maintain the military balance.

Throughout most of 1969 we had attempted to engage the Soviet Union in developing a basis for Arab-Israeli negotiations. Our talks with the Soviets focussed particularly on three points:

--The need for an Arab commitment to accept specific obligations in a peace agreement with Israel.

--The need for an Israeli commitment to withdraw from occupied territories as part of a binding peace which establishes recognized and secure boundaries.

--The need for both sides to enter a genuine negotiating process to work out the detailed terms of a peace settlement between them.

The Soviets have persistently called for an Israeli commitment to total withdrawal from all occupied territories. The Soviets have also called for a refugee settlement which inadequately reflects the practical human and security problems involved on both sides. The United States has recognized that any changes in prewar borders should be insubstantial, but we insist that any agreement to fix final borders must be directly linked in a peace agreement to mutually agreed practical arrangements that would make these secure. These are matters for negotiation between the parties. The Soviets have insisted, however, that the major powers make these judgments and, in effect, impose them on the parties.

In June 1970, the USSR offered further formulations on some of the obligations that all parties would undertake for preventing hostile acts from their soil and on the precise time when peace would come into effect in relation to the withdrawal of troops to final borders. But these formulations, which were modifications of earlier Soviet proposals, came belatedly and still failed to take into account the need for a negotiating process engaging the parties themselves.

The U.S. continues to welcome Soviet suggestions for a settlement. But to be serious, they must meet the legitimate concerns of not one but both sides.

NATIONALISM IN THE AREA

Apart from the Arab-Israeli conflict, a strong Arab nationalism has grown in reaction to an era of outside political control which has now ended. It is nurtured by a persistent yearning for unity among Arab nations. But traditional and ideological rivalries make it difficult for Arabs to agree on the form their unity should take. The attempts to fashion unity, therefore, sharpen tensions.

At the heart of these disputes is a fundamental ideological disagreement on how Arab society should respond to pressures for rapid modernization. As a consequence, some of the more militant forces exploit issues of anti-imperialism and Arab nationalism, even where these are not the real issues. For their own nationalist or ideological reasons, they seek to reduce the U.S. position. The ironic result of their action if they succeeded--would be to make the area once again more vulnerable to outside domination.

Thus some political currents in the area make it more difficult for the U.S. to maintain, as we would wish to do, productive relations with nations on both sides of inter-Arab disputes. We will continue to maintain friendly relations with all the countries of the area which welcome our friendship. We can make a significant contribution, as we have in the past, to the development of the Arab world in the fields of education and technical training, business management, and investment. The value of the contribution we can make, and wish to make, creates a common interest in the maintenance of decent relationships which may offset pressures to disrupt them.

ISSUES FOR THE FUTURE

The search for peace---especially an Arab-Israeli settlement--and the quest for a stable U.S.-Soviet relationship that will help preserve the independence and integrity of each nation in this area will remain our top priorities. Our aim is to see an epoch begin in which strong independent nations in this area in association with each other as they choose-relate freely and constructively with the world outside. The U.S. is prepared to consider new and fresh ways to assist in the development of the region to the benefit of both Arabs and Israelis once a real peace agreement is achieved.

In pursuing those goals, the United States will face these principal issues in the months ahead:

First, if the United States is to play a major role--as we have promised to do-in helping to bring about an Arab-Israeli settlement and provide supplementary guarantees, what should be the nature and extent of our diplomatic involvement? As I pointed out at the United Nations last October, the primary responsibility for peace rests on the nations of the Middle East. What is the proper relation between the efforts of the international community to encourage a settlement and the responsibility of the negotiating parties themselves?

Second, our bilateral relations with Arab nations are in flux. With some, formal diplomatic relations have been suspended. In others, attitudes toward the U.S. and the West are undergoing reassessment. The changing relationships in the Persian Gulf necessarily raise new issues for American policy. How do we best encourage and assist the constructive forces in the area to build a regional system of stable relationships?

Finally, there is a range of broader worldwide issues that form the background to Middle East politics. Limiting the external supply of arms to the area is one such issue. The U.S.-Soviet military relationship in the Mediterranean area is another. Beyond this, what is our policy toward the broadening commercial association which the European Common Market is establishing with nations in the area? How can we help assure the access of Western Europe and Japan to the supply of oil, and also help assure that the producing states receive fair revenues for their oil?

On some of these issues, our work is already well advanced. With others we are coming to grips for the first time. Our purpose is to resolve them in a way that helps us and every nation involved in the Middle East, including above all the states of the area, to build and strengthen the relationships--at every level--that will hold together the structure of peace.

INTERNATIONAL ECONOMIC POLICY

"Peace has an economic dimension. In a world of independent states and interdependent economies, failure to collaborate is costly--in political as well as economic terms."

U.S. Foreign Policy For The 1970's

Report to the Congress

February 18, 1970

Material well-being is not the only goal of men and nations. But it is one of the bases of a decent life. The tragedy of our time is that there is not enough of it. For many members of the human race it is a matter of survival; for most nations, economic advancement and prosperity are the means of liberating men and societies from the weight of deprivation and allowing them to realize their full dignity and destiny.

Economic advancement will never approach its full potential if pursued solely within national boundaries. The interdependence of national economies in the 1970's gives all people a major stake in the effective functioning of the world economy. Economic relations have thus become centrally important in international affairs. An American policy which retreated from cooperation, or which moved toward increasing the barriers to fair and equitable economic intercourse among nations, would threaten the foundations of the partnerships which are our central foreign policy objective.

The United States remains the largest single national factor in the world economy. We thus have a strong interest in minimizing the impediments to international economic transactions for domestic economic reasons as well as for the foreign policy reasons which are highlighted in this report.

The year 1970 saw significant developments in each of the three major areas of international economic policy--monetary policy, foreign assistance, and trade:

--It was one of the most tranquil years for the international monetary system in a decade.

--We unveiled a whole new blueprint for our foreign assistance programs.

--But it also became clear that we and the rest of the trading world face the most serious challenge to our trade relations in the postwar period.

In a world of more than one hundred nations, and in a field embracing so many activities and so intimately connected to both our domestic well-being and our overall foreign policy, foreign economic policy-making is extraordinarily complex. Last month, therefore, I established a Council on International Economic Policy which I will chair personally, with the Secretary of State as vice-chairman, and which will have a new Assistant to the President for International Economic Affairs, Mr. Peter Peterson, as its Executive Director. This Council will provide a clear single focus for the full range of international economic issues at the highest level. It will ensure timely consideration of issues, help achieve consistency between international and domestic economic policy and maintain close coordination with our basic foreign policy objectives. We have upgraded and streamlined our governmental machinery to reflect the great importance we attach to foreign economic policy in the 1970's.

INTERNATIONAL MONETARY POLICY

An effective world economy requires an effective monetary system, for monetary relations affect all international transactions. The basic objective of our international monetary policy parallels that of our overall foreign policy--to work with others to build a stable system free from crises. The continued improvement in international monetary cooperation in the past few years helped make 1970 a year of relative tranquility in the monetary system, in contrast to the recurrent monetary crises which punctuated the 1960's.

The size of the United States in the world economy and the dollar's key role in the international monetary system levy a special responsibility upon us. We must manage our own economy responsibly for international as well as domestic reasons. Inflation or contraction in this country has a disruptive effect on the rest of the world economy. We intend to meet this responsibility.

In 1970, we made solid progress toward restoring stability as well as growth in the U.S. economy. Our economic policies moderated the rate of domestic inflation. Our trade surplus improved, providing a more satisfactory structure for our balance of payments. We expect to reduce inflation still further in 1971, even as our economy begins to expand again at a more satisfactory pace.

U.S. interest rates have also receded greatly from the record highs of a year ago, while interest rates in other countries have declined more gradually. We therefore no longer exert the strong pull on capital from other countries which contributed to sizable surpluses in our balance of payments on the official reserve transactions basis in 1968 and 1969; instead, a sharp reversal of short-term capital movements has temporarily but sharply increased the underlying deficit in our payments position. The continued strength of international cooperation has helped to absorb these shifts without serious impact on the monetary system, but the potential reoccurrence of such rapid and large-scale movements of funds, along with the U.S. deficit, pose important issues for the future.

Cooperation in the monetary sphere has three major objectives: --to assure an adequate growth in the supply of international money.

--to improve the means for adjusting payments imbalances and thus relating nations' economies to one another.

--to handle large-scale shifts of liquid capital without exchange crises or losses in the ability of individual nations to pursue their own monetary policies.

The first objective means assuring satisfactory growth in the supply of internationally acceptable money and credit which is needed for financing payments imbalances among countries. An inadequate rise of such reserves can lead governments to deflate their economies unnecessarily to protect their own reserves or, more likely, to take restrictive measures which directly depress the flow of trade and investment transactions. Excesses of world reserves, in contrast, can permit deficit countries to delay too long the steps needed to correct their payments imbalances, and impart a tendency toward inflationary pressures in surplus countries as a result.

Part of the easing of tensions in the monetary system in 1970 can be attributed to the decision in 1969 to create a new form of reserve asset--Special Drawing Rights (SDRs) at the International Monetary Fund--a step I called "of profound importance" in last year's report. In 1970, member countries of the IMF joined to take the historic step of creating $3.4 billion of this truly international money. Another $2.9 billion of SDRs were created on January 1 of this year, and a like amount will also be created in January 1972.

Even in their first year of existence, SDRs have won widespread acceptance as an integral part of the monetary system. They have been used extensively by some countries to help finance their payments imbalances. The United States both accepted and paid out SDRs to finance its payments position in 1970, and will continue to do so in the future as our payments situation requires. We look forward to further growth in SDRs, and to their further use by all countries. We look forward to the day when this product of remarkable international cooperation will become the primary reserve asset in the international monetary system.

We also welcome the sizable increase in IMF quotas decided upon in 1970. They will provide an increased pool of temporary financing for international payments imbalances. Most importantly, the quota increases--together with the SDRs--further enhance the position of the IMF at the center of the international monetary system, demonstrating the successful role which can be played by an international institution in a field where worldwide cooperation is a prerequisite for progress.

There was also some progress last year toward the second objective of international monetary cooperation--to improve the means by which widely diverse national economies can adjust to each other. Payments imbalances can be financed only temporarily; we need a constructive and orderly means of making more lasting rectifications--without forcing countries to resort to restrictions on international transactions, or to excessive inflation or unemployment at home.

An effective international adjustment process begins with effective economic policies in each country. Sound economies must then be soundly related to one another. Improved procedures by which orderly exchange-rate adjustments can contribute to this process would promote stability in the monetary system and help prevent the kind of crises that punctuated the 1960's. Canada's temporary freeing of its exchange rate in May 1970 demonstrated the potential utility of such a mechanism but also emphasized the question of whether there is a need for new international rules to govern its usage.

The international financial community wisely took advantage of the relative calm of 1970 to make an important advance toward an international consensus on such an improved mechanism. The Executive Directors of the IMF issued a report on the role of exchange rates which recognized that, within the broad context of stability in exchange rate relationships, more flexible techniques and practices could help improve the adjustment process and thus the international monetary system as a whole. Three possible improvements were singled out: a widening of the margins within which exchange rates could fluctuate around their par values; more frequent and already smaller changes in parities themselves; and temporary use of floating exchange rates, with appropriate safeguards, to effect transitions from one par value to another. We welcome continued work in this area by the IMF and other bodies, with particular attention to the possible need for amendments to the IMF Articles of Agreement to achieve the needed evolutionary improvements in the present system.

Finally, the massive shifts of short-term capital in recent years have drawn attention to a third dimension of international monetary relations. It has become clear that very large amounts of money can be attracted to any major country whose money and credit markets are tighter than the comparable markets in the rest of the world. We need an intensive examination to determine whether there is a need to reinforce the present techniques and procedures of international monetary cooperation to enable us better to cope with such movements.

FOREIGN ASSISTANCE

When this nation first undertook foreign assistance on a peacetime basis, in the Truman Doctrine and Marshall Plan of 1947, the rationale of our effort was clear. We were promoting economic recovery in Europe to help support the restoration of democratic institutions. Economic and military aid went hand in hand as means of strengthening our allies against the threat of Communist aggression. The weakness of our allies and friends after the Second World War left the major responsibility to the United States.

In the two decades since then, we moved from reconstruction to the support of development, as the geographic focus of our aid programs moved from Europe to the Middle East and then to Asia, Africa, and Latin America. The objectives of our programs also evolved as economic and social development became intertwined with security objectives, and as we provided aid to a wide variety of countries. For more than two decades our aid programs have therefore been justified with a wide variety of reasons. Americans who have debated the issue of foreign aid--have been unable to find a clear answer to questions about its fundamental purpose: Was it to win us friends? Was it out of altruistic motives? Was it to stimulate political democracy? Was it to maintain a forward defense? Aid appropriations declined steadily and steeply in the 1960's--principally, I am convinced, because of our confusion of purposes, and because programs tailored to the postwar period no longer suited the changed environment.

When this Administration came into office, the United States needed a new approach. We needed a new conceptual foundation that made sense in the 1970's just as the rationale of aid in the immediate postwar period made sense then.

Therefore, in 1969--after developing the principles of our overall foreign policy--I appointed a distinguished task force of experts from the business and academic communities, chaired by Mr. Rudolph Peterson, to make comprehensive and detailed recommendations on our foreign assistance programs. On the basis of their work and our subsequent analysis in the National Security Council system, I proposed a sweeping change in our foreign assistance policy in a message to Congress on September 15, 1970.

Purposes. As the Peterson Task Force pointed out, "there is not one U.S. foreign assistance program but several. They serve different purposes and should be weighed on their individual merits." We divided them into three categories:

--security assistance, the purpose of which is to promote our national security by supporting the security of other nations.

--humanitarian assistance, which embodies the traditional compassionate concern of the American people for victims of poverty, natural disaster, and political upheaval wherever they may be.

--development assistance, which strengthens our ties with the two-thirds of the human race in the lower income countries whose overriding national objective is economic and social development.

I therefore proposed to create separate organizational arrangements for each of these categories. This would enable us to fix responsibility and measure achievement more clearly--in order to end the confusion in our present approach which lumps all three purposes together in composite programs. The close relationships among these three types of assistance would of course remain important, and more effective coordination among them would be a key element in our new approach.

Our proposed new international security assistance program and our humanitarian aid efforts are discussed elsewhere in this report.

Let me explain the thinking behind our new programs for development assistance here.

Development Programs for the 1970's. The most important objective of the lower income countries of Africa, Asia, and Latin America where two-thirds of humanity live---is their economic and social progress. It is their highest priority. It is the overriding commitment of most of their governments. Thus it is a subject of central importance in our relations with them. For we cannot expect these nations to join with us in building a structure of peaceful relationships unless we cooperate with them to help solve the problems which they regard as most critical to them. Nor can we expect the changes which will inevitably come in these countries to be accomplished peacefully unless we help them do so.

Our new approach to providing this development assistance is based on recognition of major historical changes in the world.

First of all, many lower income countries are today ready and able to assume the primary responsibility for articulating their own requirements, setting their priorities, and generating the bulk of the resources necessary for their own development. They are eager to do so; in fact, they demand the recognition of their right to do so.

Secondly, while the United States remains the largest single contributor to international development, the other industrial nations of the world together extend more assistance than we do.

Thirdly, international institutions-such as the World Bank group and the regional development banks--are now capable of fusing the efforts of all countries into a true multilateral partnership for development.

The new United States assistance program will be designed to realize the full potential of this broader sharing of responsibility--with the developing countries themselves, with the other industrial nations, and with multilateral organizations. This is a major application of the Nixon Doctrine.

There are two channels of development assistance--bilateral and multilateral. I announced the broad outline of a new program of foreign assistance in my message to the Congress of September 15, 1970. I will submit detailed legislation to bring about the change. I will recommend that our bilateral assistance be provided through three new specialized institutions:

--A new U.S. International Development Corporation will be our instrument for bilateral development lending. It will rely on the recipients of its loans to identify their own development priorities clearly and to submit sound proposals for development financing. It will work increasingly within a framework set by the international development institutions.

--A new U.S. International Development Institute will break new ground in technical assistance. It will mobilize the vast expertise of the American scientific and technological community, focusing it on development problems and matching up American skills with specific needs abroad.

--The Overseas Private Investment Corporation, which I proposed in 1969 and which came into being last month, will manage our investment insurance and guaranty programs and thus assist U.S. private firms to invest--to the extent desired by host countries-in constructive development projects in lower income countries.

I have also proposed that all donor countries cooperate for development by ending the requirement that each nation's development assistance be used only to purchase goods and services produced in that nation itself. Such untying would both increase the value of aid to the lower income countries, and reduce the frictions which develop from the inherently sensitive relationship between donors and recipients. We have submitted our specific proposals to the OECD, and active negotiations with the other member countries are now in progress. I am pleased that virtually all of the industrialized countries have agreed with our proposal in principle, and we hope and expect that actual untying will commence this year.

To be effective, full sharing of responsibility for development must be multilateral and worldwide. It must link the industrialized and the lower income countries in a network of cooperation. This is fundamental to our new approach to foreign assistance.

The United States will therefore channel an increasing share of its development assistance through multilateral institutions as rapidly as practicable. We shall provide our bilateral development aid largely within the framework established by these institutions. These changes will maximize the contributions of the recipient countries and the other donor countries alike, reduce the political complications of our aid, and reduce the extensive involvement of U.S. Government personnel overseas in advising governments and monitoring programs.

Accordingly, I will shortly propose that the Congress authorize an annual contribution of $320 million over the next three years as our appropriate share to permit the International Development Association to double its "soft" (low-interest) lending capacity. I have also pressed strongly for expanding American contributions to the regional development banks of which we are members--the Asian Development Bank and the Inter-American Development Bank--and we are exploring a way to provide financial assistance to the African Development Bank. These banks play a major role in helping the lower income countries to expand their trade and mutual support on a regional basis. The Congress made a start last year on an expanded U.S. investment in the Inter-American Development Bank, and I again urge the Congress to authorize the remaining $900 million of our proportionate contribution. I also urge the Congress to authorize $100 million for our contribution to the Special Fund of the Asian Development Bank.

We have also pledged our support for other mechanisms of regional cooperation such as the Inter-American Committee for the Alliance for Progress, the new arrangements for regional integration in Latin America, the Mekong River Development Committee, and the promising links among nations in East and West Africa.

In addition to our direct support of these regional organizations, one purpose of our desire to see aid untied is to permit developing countries to use foreign assistance to purchase goods from one another in order to support greater trade among them. Indeed, our own decision to permit all developing countries to participate in the provision of commodities financed under U.S. assistance programs is already encouraging an expansion of such trade.

For trade expansion plays an important part in our new strategy for development. Developing nations wish to rely more on their own economies to provide jobs and earn the foreign exchange they need; they wish to become less reliant on aid. We share this objective with them. We have sought to enhance their trading positions by pressing for concerted action among the industrialized nations on a generalized system of tariff preferences in the industrialized markets for the exports of all of the lower income countries. I am extremely pleased that the discussions among the developed countries in 1970 produced broad movement toward a worldwide system of comparable generalized preference schemes. I will shortly be submitting legislation to authorize U.S. participation in this program.

The Downward Trend Reversed. Our foreign aid appropriation for FY 1971, signed into law last month, increases all categories of our bilateral economic assistance over last year. This follows upon an increase in FY 1970 over the level of FY 1969. Thus we are well on our way toward accomplishing one of the basic objectives which I stated in my special message on foreign assistance of September 15, 1970--to reverse the downward trend in U.S. foreign assistance.

Since I took office, appropriations for bilateral economic aid have risen as follows (in millions of dollars):

Develop- Sup- Total

FY merit porting Economic

Assistance Assistance Assistance

1969 $878 $385 $1,263 1970 917 395 1,610 1971 1,049 570 1,619 The trend has also been upward in our contributions to the international financial institutions and other multilateral development agencies (in millions of dollars):

Inter-American World Bank UNDP

FY Development Bank Asian Devel- and Total opment Bank Hard Soft Loans Others Hard Loans Soft Loans Loans (IDA) 1969 $206 $300 $20 $160 $118 $804 1970 206 300 20 160 113 799 1971 387 100 20 $246 160 116 1,029 Our total economic aid, bilateral and multilateral, has now been restored to a level nearly equivalent to that of the early 1960's. This is a firm foundation for undertaking the effort that is required.

TRADE

Changed world conditions have prompted a new foreign policy and new approaches to the other areas of international economic policy. They require a fresh look at our trade policy as well.

The central issue is, simply, whether the U.S. should continue to pursue a liberal trade policy. Leadership for freer trade has been a cornerstone of our foreign policy through six administrations and 19 Congresses. For 37 years we have considered a liberal trade policy to be in the U.S. national interest. But events in 1970, particularly the failure of the Congress to enact the modest but liberal trade bill proposed by the Administration and the near passage of protectionist trade legislation instead, demonstrated graphically the challenge to this traditional course.

Whether we continue a liberal trade policy in the 1970's or not will have a profound impact at home and abroad. This Administration is committed to the principles of free trade. We recognize that our preponderant size in the world economy gives us an international responsibility to continue on this path just as we have an international responsibility to manage our domestic economy well. I am convinced that liberal trade is in both our domestic economic interest and our foreign policy interest.

Trade benefits our economy in numerous ways. Imports broaden the range of products which is available to our consumers. They help maintain the competitive incentive for our own industries to achieve maximum efficiency and productivity. This plays an important role in our effort to restore price stability as we move toward full employment.

In addition, export earnings are crucial to many sectors of the U.S. economy, particularly our agricultural community which sells one-fourth of its harvested acreage abroad and many of our highly productive industries. Our firms, workers, and farmers can maximize their prosperity only in a world in which their products can be sold as freely in other nations as they can within our own borders. We would hobble their efforts to do so if we were to impose import restrictions, because these would surely spark counter-restrictions on our own exports as well as impair the overall competitiveness of the U.S. economy.

The domestic benefits of liberal trade are reinforced by the pervasive impact of our trade policy overseas.

Because of the world's commercial interdependence, restrictions in one nation adversely affect the economic and social welfare of many others. Political repercussions within those countries inevitably follow, and the resulting cycle of recrimination and retaliation poisons political as well as economic relations:

--Liberal trade policies are fundamental to our relations with the industrialized countries of Europe, Japan, and Canada, our major trading partners. We rely on one another's markets for billions of dollars of sales annually. Our economic relations with these countries are inseparable from our political and military relations; they are a crucial element in our partnership.

--Trade policy deeply affects our relations with the lower income countries. Assured access for their exports in the markets of the industrialized nations is crucial for their successful development. Indeed, healthy trade is one of the prime goals of our assistance programs.

--It has important implications for our relations with Communist countries. Only they would benefit from a breakdown of economic cooperation in the non-Communist world and the resulting fissures in other fields.

A continued liberal trade policy, in short, is indispensable to our domestic economic health and to a successful U.S. foreign policy. A retreat from our historic policies would greatly harm those broad international interests which we can further only with others' cooperation.

But there are strong voices in this country which maintain that liberal trade policies no longer serve our national interest. They raise serious questions, though the challenge to liberal trade policies which they pose has been greatly strengthened in recent years by the abnormal increase in imports caused by our domestic inflation and the policies and practices of some of our major trading partners.

To answer these questions within the framework of a liberal trade policy, to mesh our trade policy with the world of the 1970's, we have moved on two fronts. First, the new Council on International Economic Policy will take up trade policy as one of the first priority items on its agenda. Secondly, the Commission on International Trade and Investment, chaired by Mr. Albert Williams, which I appointed last year to study the major issues of trade and investment policy, will shortly report its recommendations to me. From these two groups should emerge any new approaches which are needed.

One conclusion is already clear: Our trade policy problem is not ours alone. It is truly international in scope. We and other countries shall all move toward freer trade together or we shall all retreat to protectionism together. Restrictionist policies in one country reinforce restrictionist pleas in another and weaken the case of those who defend freedom of trade.

The U.S., of course, maintains its own range of trade restrictions, a fact which is often conveniently forgotten by those who focus on the barriers maintained by others. And, to be sure, we must be mindful of the need to mitigate the disruptive effects on particular U.S. industries which can sometimes be caused by sharp increases in imports.

But we cannot remove our barriers unless other countries are willing to eliminate theirs on a truly reciprocal basis. For those who question our traditional trade policies can often point to the practices of some of our major trading partners. Too often some of these policies have been set without regard to the interests of other countries, including the United States. Some of them have not responded adequately to requests for change from other countries, including the U.S.

This past year's events have not been encouraging for those who support a liberal trade policy. In my report a year ago, I noted three main tasks for trade policy in the immediate future:

--passage of the trade bill I submitted in 1969 which would have maintained momentum for a liberal trade policy.

--progress in the international negotiations on non-tariff barriers and impediments to agricultural trade.

--successful resolution of the international negotiations on tariff preferences.

Only the last was achieved in 1970. The failure of the Administration's trade bill and the near success of protectionist legislation in the Congress were closely related to the slow pace of the international negotiations on trade barriers. These developments make clear that other countries can no longer proceed on the facile assumption that no matter what policies they pursue, liberal trade policies in the U.S. can be taken for granted.

Thus, international cooperation is absolutely essential if we are to maintain a liberal trade policy in the United States. Our full support for the European Community continues, but its policies--including those related to the expansion of its membership, which we also support-must take full account of our legitimate economic interests. We look to the Community, as the world's largest trading entity, to assume an ever greater responsibility for the maintenance of a liberal world trading order by pursuing liberal policies itself, and by playing a more active leadership role in seeking ways to further reduce the remaining barriers to trade. Similarly, Japan should continue its rapid reduction of the trade and investment restrictions which have long been inappropriate for the second largest national economy in the non-Communist world. It is essential that all other industrialized countries cooperate in this effort as well.

In 1970, we took a number of concrete steps on our own to further our trade policy objectives. Barriers against our exports continued to fall, as tariff reductions previously agreed were placed in effect and as we continued to press for the elimination, or at least reduction, of non-tariff obstacles to trade. To keep open markets for our agricultural exports, we vigorously urged the European Community to reduce its grain prices and to avoid taking any measures which might threaten our sales of soybeans, tobacco, and citrus. We sought modifications in the agricultural policy changes proposed by the United Kingdom. We invoked our rights in the GATT (General Agreement on Tariffs and Trade) against the preferential trading arrangements and changes in citrus and tobacco import policies recently initiated by the European Community. We will maintain and intensify these efforts in the year ahead.

Meanwhile we moved to cushion the adverse domestic impact of trade competition without resorting to legislated import restrictions. We tightened our administration of the anti-dumping laws to protect our industries against unfair pricing by their foreign competitors. We patiently sought a solution to our textile import problem through negotiations with the Japanese and other Far Eastern suppliers, although in this unique case we also came to support quota legislation in view of the disappointing progress in the negotiations; we maintained the voluntary restraint programs on meat and steel exports to the U.S.; and we negotiated new tariff quotas on imports of stainless steel flatware from Japan.

Pressures for legislated import restrictions have been fueled in past years by the failure to use two more positive alternatives available to us:

--the escape clause which provides for temporary relief from import competition for entire industries in cases where injury can be clearly demonstrated.

--the adjustment assistance provisions of our trade legislation, which provide financial and technical assistance to individual firms and workers injured by imports.

In 1970, we used these alternatives. I accepted the Tariff Commission's findings in all three cases in which it found injury to U.S. industries from imports. I extended tariff relief in three escape-clause cases. I ordered adjustment assistance for three industries and for a number of specific firms and groups of workers. And the trade bill which I submitted in late 1969, and supported through 1970, would have made these statutory alternatives more readily available in cases of real need without opening them so wide as to provide an avenue for unjustifiable pleas for protection.

We have therefore demonstrated that there are several viable alternatives to legislated import restrictions, and that we can and will use them effectively. We will defend U.S. trade interests vigorously. And we have therefore demonstrated that a continuation of our historic policy of liberal trade is both possible and profoundly in our national interest. But, in addition to our own actions, we must look to our major trading partners--specially the European Community, which when expanded in membership will account for almost one-half of all world trade--to take actions, and perhaps even new initiatives, which would enable us all to move decisively in this direction together.

ISSUES FOR THE FUTURE

There is a full and challenging agenda of international economic problems before us. Our success in dealing with this agenda will have a major impact on our overall foreign policy. Our goals will be to:

--found our global economic relations on a strong domestic base. International economic policy begins at home.

--improve the management of our international economic relations. We will look to the new Council on International Economic Policy to integrate our governmental efforts and blend our domestic and foreign economic policies.

--improve the means by which national economies can adjust to each other in a world of increased economic interdependence. We must work with others to solidify and further improve the world monetary system.

--help promote the development of lower income countries. We will seek Congressional approval of our new foreign assistance program and apply its principles of partnership with recipients and other donors alike.

--defend and encourage liberal trade policies abroad and at home. Fresh policies and enlightened partnership with our friends will be required to stem protectionism, solve the problems that feed it, and regain momentum toward a world of freer commerce.

PART III: THE SOVIET UNION

"The great central issue of our time-the question of whether the world as a whole is to live at peace--has not been resolved.

"This central issue turns in large part on the relations among the great nuclear powers. Their strength imposes on them special responsibilities of restraint and wisdom. The issue of war and peace cannot be solved unless we in the United States and the Soviet Union demonstrate both the will and the capacity to put our relationship on a basis consistent with the aspirations of mankind."

Address to the United Nations

General Assembly

October 23, 1970

In my Inaugural Address, and again at the United Nations last October, I urged the Soviet leaders to join with us in building a new and constructive relationship.

I emphasized four factors that provide a basis for such a development: --Neither of us wants a nuclear exchange.

--We both should welcome the opportunity to reduce the burden of armaments.

--We are both major industrial powers, and yet have very little trade or commercial contact with one another. Both would clearly benefit if our relationship permitted an increase in trade.

--Both are deeply involved, at home and abroad, with the need for creative economic and social change. Both our interests--and the broader world interest--would be served if our competition could be channeled more into our performances in that field.

Thus, our two nations have substantial mutual incentives to find ways of working together. We are realistic enough to recognize, however, that we also have very real differences that can continue to divide us:

We view the world and approach international affairs differently. Ideology continues to shape many aspects of Soviet policy. It dictates an attitude of constant pressure toward the external world. The Soviet Government too frequently claims that the rationale for its internal and external policies is based on universalist doctrines. In certain fundamental aspects the Soviet outlook on world affairs is incompatible with a stable international system.

The internal order of the USSR, as such, is not an object of our policy, although we do not hide our rejection of many of its features. Our relations with the USSR, as with other countries, are determined by its international behavior. Consequently, the fruitfulness of the relationship depends significantly upon the degree to which its international behavior does not reflect militant doctrinal considerations.

As the two most powerful nations in the world, we conduct global policies that bring our interests into contention across a broad range of issues. Historically, international adversaries have demonstrated a compulsion to seek every gain, however marginal, at the expense of their competitors. In this classical conception, the accumulation of gains over a period of time could alter the balance of power. This may have been realistic in the past; at least it was the essence of international affairs.

But it is folly for the great nuclear powers to conduct their policies in this manner. For if they succeed, it can only result in confrontation and potential catastrophe.

The nature of nuclear power requires that both the Soviet Union and we be willing to practice self-restraint in the pursuit of national interests. We have acted on this principle in our conduct of the SALT negotiations, in our diplomatic initiatives in the Middle East, and in our proposals to improve the situation in Berlin. We are prepared to apply it to all legitimate Soviet interests.

Such a policy of restraint, however, requires reciprocity--concretely expressed in actions.

By virtue of its size and geography, the USSR has traditionally had important security interests in Europe and East Asia. Her undoubted status as a global power obviously creates interests in other areas where Russia has not traditionally been a factor. But the natural expansion of Soviet influence in the world must not distort itself into ambitions for exclusive or predominant positions. For such a course ignores the interests of others, including ourselves. It must and will be resisted. It can, therefore, lead only to confrontation.

We often approach negotiations with differing premises. We do not suggest that the starting point--or, indeed, the culmination---of our negotiations with the USSR be the acceptance of our views and positions. Nor do we expect to resolve issues by cajoling the Soviet leaders into solutions damaging to their national interests. We cannot be expected, however, to accept the Soviet definition of every issue, to agree automatically to the Soviet order of priorities, or to accept every aggrandizement of Soviet positions abroad as a "new reality" no longer open to challenge. The principle of mutual accommodation, if it is to have any meaning, must be that both of us seek compromises, mutual concessions, and new solutions to old problems.

The relationship between the two great nuclear powers in this decade must rise above tactical considerations. We must be prepared to face issues seriously, concretely, and in a spirit of mutual respect. Durable solutions will be those which both sides have an interest in maintaining.

We are engaged in a strategic and military competition. We both possess the capability to develop our military power and project it massively into distant areas. The last two decades witnessed the transformation of the Soviet Union from a Eurasian power to an intercontinental one. The USSR now possesses military capabilities far beyond those at the command of previous Soviet leaders.

In earlier periods our strategic superiority gave us a margin of safety. Now, however, the enormous increase in Soviet capabilities has added a new and critical dimension to our relationship. The growth of Soviet power in the last several Years could tempt Soviet leaders into bolder challenges. It could lead them to underestimate the risks of certain policies. W% of course, continue to weigh carefully Soviet statements of intentions. But the existing military balance does not permit us to judge the significance of Soviet actions only by what they say--or even what we believe---are their intentions. We must measure their actions, at least in part, against their capabilities.

It is of the utmost importance that the new strategic balance of the 1970's and our interest in strategic stability not be misunderstood. Confrontation may arise from a mistaken perception of the posture of an adversary. Such a mistake can lead to a failure to appreciate the risks and consequences of probing for advantages or testing the limits of toleration. We believe that this was involved to some degree in the events which led up to the Middle East crisis last year.

It may also have been a factor in Soviet naval actions in the Caribbean in the fall of 1970. There the Soviet Union took new steps which could have afforded it the ability to again operate offensive weapons systems from this Hemisphere. That would have been contrary to the understanding between us. Only after a period of discussion did we reaffirm our understanding and amplify it to make clear that the agreement included activities related to sea-based systems.

In our relations with the USSR there should be no misconceptions of the role we will play in international affairs. This country is not withdrawing into isolation. With the Soviet Union, we want a relationship in which the interests of both are respected. When interests conflict, we prefer negotiation and restraint as the methods to adjust differences. But, when challenged, the United States will defend its interests and those of its allies. And, together with our allies, we will maintain the power to do so effectively.

A NEW AMERICAN-SOVIET RELATIONSHIP

Mutual restraint, accommodation of interests, and the changed strategic situation open broad opportunities to the Soviet Union and the United States. It is our hope that the Soviet Union will recognize, as we do, that our futures are best served by serious negotiation of the issues which divide us. We have taken the initiative in establishing an agenda on which agreement could profoundly alter the substance of our relationship:

--SALT. Given the available resources, neither of us will concede a significant strategic advantage to the other. Yet the temptation to attempt to achieve such advantage is ever present, and modern technology makes such an attempt feasible. With our current strategic capabilities, we have a unique opportunity to design a stable and mutually acceptable strategic relationship. We did not expect agreements to emerge quickly, for the most vital of interests are engaged. A resolution will not be achieved by agreement on generalities. We have put forward precise and serious proposals that would create no unilateral advantages and would cope with the major concerns of both sides. We do not yet know what conclusions the Soviet Union will draw from the facts of the situation. If its leaders share our assessment, we can unquestionably bring competition in strategic weapons under control.

--Europe. With our allies, we have entered into negotiations with the USSR to improve the Berlin situation. Arrangements which in fact bring an end to the twenty-four years of tension over Berlin would enable us to move beyond the vestiges of the postwar period that have dominated our relationship for so long. A broader era of negotiations in Europe then becomes possible. Progress toward this goal also could be obtained through a successful agreement on mutual reduction of military forces, especially in Central Europe where confrontation could be most dangerous.

--The Middle East is heavy with the danger that local and regional conflict may engulf the Great Powers in confrontation. We recognize that the USSR has acquired important interests and influence in the area, and that a lasting settlement cannot be achieved unless the Soviet Union sees it to be in its interest. We continue to believe that it is in the Soviet interest to support a reasonable settlement. The USSR is not, however, contributing to that end by providing increasingly large and dangerous numbers of weapons to the Arab states, or by building military positions for its own purposes. We are prepared to seek agreement with the USSR and the other major powers to limit arms shipments to the Middle East.

We have not tried to lay down a rigid order of priorities within this agenda. It is a fact of international politics, however, that major issues are related. The successful resolution of one such issue cannot help but improve the prospects for solving other problems. Similarly, aggressive action in one area is bound to exert a disturbing influence in other areas.

An assessment of U.S.-Soviet relations at this point in my Administration has to be mixed. There have been some encouraging developments and we welcome them. We are engaged in a serious dialogue in SALT. We have both signed the treaty to prohibit nuclear weapons from the seabeds. We have both ratified the ,treaty on non-proliferation of nuclear weapons. We have entered negotiations on the issue of Berlin. We have taken the first step toward practical cooperation in outer space.

On the other hand, certain Soviet actions in the Middle East, Berlin, and Cuba are not encouraging. Taken against a background of intensive and unrestrained anti-American propaganda, these actions inevitably suggest that intransigence remains a cardinal feature of the Soviet system.

Yet these events may have provided a basis for future progress in our relations. Properly understood, they illustrate the altogether incommensurate risks inherent in a policy of confrontation, and the marginal benefits achievable by it.

Against this background it is an appropriate moment to take stock of our relations, and to weigh the decisions necessary for further progress.

The Soviet leaders will be reviewing their own policies and programs in connection with the 24th Congress of their Party. This report sets forth my own assessment of our relations with the USSR, and the principles by which we propose to govern our relations in the future. I have outlined the factors that make for common interests and suggested an agenda of outstanding opportunities:

--a more stable military relationship for the next decade.

--a peaceful settlement of the Middle East conflict.

--an agreed framework for security in Europe. We are under no illusion that these are easy tasks. But, as I said in my address to the United Nations:

"In the world today we are at a crossroads. We can follow the old way, playing the traditional game of international relations, but at ever-increasing risk. Everyone will lose. No one will gain. Or we can take a new road.

"I invite the leaders of the Soviet Union to join us in taking that new road .... "

PART IV: SECURING NATIONAL INTERESTS

--Strategic Policy and Forces

--General Purpose Forces

--Security Assistance

--Arms Control

INTRODUCTION

The first responsibility of the President is the security of the Republic. Recognizing the danger of our times, and the costs of modern defense, the people and their Congress make available to the President vast resources to meet that responsibility. Each Administration, however, is greatly dependent on the decisions of its predecessor.

For in the field of national security, each Presidency is a link in a chain. Each Administration inherits the force in being. The long-range investments made by earlier Administrations define the ability to change that force in the near term.

I am deeply conscious that my decisions with respect to defense policy will profoundly affect the ability of my successors to ensure the nation's safety. I recognize that I cannot know, and can only imperfectly conceive, the crises which my successors may have to face. I, therefore, intend to forge a strong [ink in the chain.

We have used the National Security Council system to strengthen the process of defense planning. We have examined our defense problems within the total context of the domestic and international political and economic environments. These studies have given us the basis for a new assessment of our national priorities.

Our priorities must reflect our pressing domestic problems. They do. In Fiscal Year 1972, our overall defense expenditures, including those resources committed to Vietnam, will require a smaller share of our Gross National Product and the Federal Budget than in any year since 1950.

It needs to be understood with total clarity, however, that defense programs are not infinitely adjustable. Nor is each adjustment downward of equal significance. It is an error--and it is potentially the ultimate error--not to recognize those facts as imperative guides to national priorities. For there is an absolute point below which our security forces must never be allowed to go. That is the level of sufficiency. Above or at that level, our defense forces protect national security adequately. Below that level is one vast undifferentiated area of no security at all. For it serves no purpose in conflicts between nations to have been almost strong enough.

Our current level of security expenditures is adequate to provide the forces necessary to protect our vital interests. It must be kept that way.

STRATEGIC POLICY AND FORCES:

Strategic forces, both offensive and defensive, are the backbone of our security.

--They are the primary deterrent to strategic attacks against us or our allies.

--They face an aggressor contemplating less than all-out attacks with an unacceptable risk of escalation.

--They are essential to the maintenance of a stable political environment within which the threat of aggression or coercion against the U.S. and its allies is minimized.

Our strategic forces must be numerous enough, efficient enough, and deployed in such a way that an aggressor will always know that the sure result of a nuclear attack against us is unacceptable damage from our retaliation. That makes it imperative that our strategic power not be inferior to that of any other state. Thus I am committed to my pledge to keep our strategic forces strong. I am equally committed to seeking a stable strategic relationship with the Soviet Union through negotiations. There is no inconsistency between those goals; they are in fact complementary.

THE STRATEGIC BALANCE

Last year I reported on a new strategic policy for the 1970's. In assessing the changed strategic relationship, we faced the following realities:

--Until the late 1960's, we possessed strategic forces that provided a clear margin of superiority.

--In the late 1960's, however, the balance of strategic forces changed. While our forces were held at existing levels, the Soviet Union moved forward vigorously to develop powerful and sophisticated strategic forces which approached, and in some categories exceeded, ours in numbers and capability.

By any standard, we believe the number of Soviet strategic forces now exceeds the level needed for deterrence. Even more important than the growth in numbers has been the change in the nature of the forces the USSR chose to develop and deploy. These forces include systems--particularly the SS-9 ICBM with large multiple warheads--which, if further improved and deployed in sufficient numbers, could be uniquely suitable for a first strike against our land-based deterrent forces. The design and growth of these forces leads inescapably to profound questions concerning the threats we will face in the future, and the adequacy of our current strategic forces to meet the requirements of our security. Specifically:

--Does the Soviet Union simply seek a retaliatory capability, thus permitting the pursuit of meaningful limitations on strategic arms?

--Or does the Soviet Union seek forces which could attack and destroy vital elements of our retaliatory capability, thus requiring us to respond with additional programs of our own, involving another round of arms competition?

The past year has not provided definitive answers. Clearly, however, the USSR, over the past year, has continued to add significantly to its capabilities.

OPERATIONAL UNITED STATES AND SOVIET MISSILES

End End 1965 1969 1970 Intercontinental Ballistic Missiles: United States 934 1054 1054 USSR 224 1109 1440 Submarine-Launched Ballistic Missiles: United States 464 656 656 USSR 107 240 350 By the mid-1970's we expect the Soviets to have a force of ballistic missile submarines equal in size to our own. Furthermore, the Soviet Union has continued to make significant qualitative improvements in its strategic forces. These include new and improved versions of their Minuteman-size SS-II missile, continued testing of multiple warheads, research and testing of ABM components, and improved air defense systems.

An additional source of uncertainty is China's possession of nuclear weapons. China continues to work on strategic ballistic missiles and, by the late 1970's, can be expected to have operational ICBM's, capable of reaching the U.S.

On the other hand, the Soviet Union in the past few months appears to have slowed the deployment of land-based strategic missile launchers. The significance of this development is not clear. The USSR could be exercising self-restraint. Its leaders may have concluded, as we have, that the number of ICBM's now deployed is sufficient for their needs. Or, the slowdown could be temporary and could be followed, in due course, by a resumption of new missile deployments. The delay could mean that the Soviet Union is preparing to introduce major qualitative improvements, such as a new warhead or guidance system. Finally, the slowdown could presage the deployment of an altogether new missile system.

We will continue to watch Soviet deployments carefully. If the USSR is in fact exercising restraint, we welcome this action and will take it into account in our planning. If it turns out to be preparatory to a new intensification of the strategic arms race, it will be necessary for us to react appropriately.

THE DOCTRINE OF STRATEGIC SUFFICIENCY

Our policy remains, as I explained last year, to maintain strategic sufficiency. The concept of sufficiency is not based solely on debatable calculations and assumptions regarding possible scenarios of how a war might occur and be conducted. It is in part a political concept, and it involves judgments whether the existing and foreseeable military environment endangers our legitimate interests and aspirations.

Specifically, sufficiency has two meanings. In its narrow military sense, it means enough force to inflict a level of damage on a potential aggressor sufficient to deter him from attacking. Sole reliance on a "launch-on-warning" strategy, sometimes suggested by those who would give less weight to the protection of our forces, would force us to live at the edge of a precipice and deny us the flexibility we wish to preserve.

In its broader political sense, sufficiency means the maintenance of forces adequate to prevent us and our allies from being coerced. Thus the relationship between our strategic forces and those of the Soviet Union must be such that our ability and resolve to protect our vital security interests will not be underestimated. I must not be--and my successors must not be-limited to the indiscriminate mass destruction of enemy civilians as the sole possible response to challenges. This is especially so when that response involves the likelihood of triggering nuclear attacks on our own population. It would be inconsistent with the political meaning of sufficiency to base our force planning solely on some finite--and theoretical--capacity to inflict casualties presumed to be unacceptable to the other side.

But sufficiency also means numbers, characteristics, and deployments of our forces which the Soviet Union cannot reasonably interpret as being intended to threaten a disarming attack. Our purpose, reflected both in our strategic programs and in our SALT proposals, is to maintain a balance, and thereby reduce the likelihood of nuclear war. Insofar as we can do so by unilateral decisions, we seek to obviate the need for costly, wasteful, and dangerous cycles of strategic arms deployment.

Defensive in its essence, the decision to pursue a policy of strategic sufficiency rather than strategic superiority does not represent any lessening of our resolve not to permit our interests to be infringed. The doctrine of sufficiency represents, rather, an explicit recognition of the changed circumstances we face with regard to strategic forces. The United States and the Soviet Union have now reached a point where small numerical advantages in strategic forces have little military relevance. The attempt to obtain large advantages would spark an arms race which would, in the end, prove pointless. For both sides would almost surely commit the necessary resources to maintain a balance. We have deliberately chosen to tailor our policy to fit these realities. But we are also taking measures in other categories of military power to prevent a gap from developing in our military posture.

We hope that the Soviet Union will likewise recognize these realities, and that its force buildups are ending. It should be under no illusion that we will not respond to major quantitative and qualitative improvements which threaten to upset the strategic balance.

In pursuing our policy we have started a number of studies within the NSC framework to refine further our understanding of the strategic relationship and the number and type of forces required to maintain sufficiency. These continuing studies are important because even with numbers held constant, the relative strategic position can change through modernization and technological advances and through differing concepts for employment. In the past year, we have therefore, examined with particular care three aspects of our strategic force which are central to the concept of sufficiency-the survivability, the flexibility, and the mix of our existing forces.

The survivability of our forces. Our strategic forces must be such that the Soviet Union knows that even an all-out surprise attack will involve unacceptable costs. The survivability of our retaliatory forces is therefore essential. Without it, the Soviet Union, in some future crisis, might be tempted to strike first, or to use military or political pressure in the belief that we were effectively deterred.

Survivability of our retaliatory forces can be assured in a number of different ways:

--by increasing the number of offensive forces to insure that a sufficient number will survive a surprise attack.

--by defending ICBM's and bombers with air and missile defenses.

--by hardening our existing missile silos.

--by increasing the mobile portion of our strategic forces.

--by adding multiple independently targetable warheads to missiles to allow each surviving missile to attack more targets and hence not be defeated by a single ABM interceptor.

In seeking to improve the survivability of our forces, we have deliberately adopted measures designed to demonstrate our defensive intent. For example, because proliferating our offensive forces risks an increase in Soviet forces and a new phase in the arms race, we have not increased the number of our missiles and bombers. Instead, we have relied on alternatives such as hardening missile silos and deploying missile defenses. Our deployment of MIRV's serves the same purpose. They do not have the combination of numbers, accuracy, and warhead yield to pose a threat to the Soviet land based ICBM force.

With the programs we have undertaken, the bulk of our retaliatory forces are currently secure from attack and should remain so in the near future. However, continuing Soviet deployments and improvements--in particular, the large SS-9 missile with accurate independently targetable multiple warheads--could threaten the survivability of the land-based portion of our forces. That would not, of course, be an acceptable situation. We will, therefore, keep this matter under close review. We will, as a matter of the highest priority, take whatever steps become necessary to maintain the assured survivability of our retaliatory capabilities.

Flexibility--the responses available to us. We have reviewed our concepts for responses to various possible contingencies. We must insure that we have the forces and procedures that provide us with alternatives appropriate to the nature and level of the provocation. This means having the plans and command and control capabilities necessary to enable us to select and carry out the appropriate response without necessarily having to resort to mass destruction.

The mix of forces. For several years we have maintained three types of strategic forces--land-based ICBMs, bombers, and submarine-launched missiles. Each is capable of inflicting a high level of damage in response to a nuclear first strike. Taken together they have an unquestioned capability of inflicting an unacceptable level of damage. This concept takes advantage of the unique characteristics of each delivery system. It provides insurance against surprise enemy technological breakthroughs or unforeseen operational failures, and complicates the task of planning attacks on us. It complicates even more the longer range planning of the levels and composition of the opposing forces. If the effectiveness and survivability of one element were eroded, the Soviet Union could choose to concentrate its resources on eroding the effectiveness and survivability of the others. This would confront us with serious new decisions, and we will therefore continue to review our forces in the light of changing threats and technology to ensure that we have the best possible mix to meet the requirements of sufficiency.

While this review of the sufficiency of our strategic posture has taken place, we have also continued to seek agreement on a strategic balance with the USSR at the Strategic Arms Limitation Talks (SALT). I will discuss in greater detail elsewhere in this report the progress of those talks.

THE FORGES FOR SUFFICIENCY

Last year, I announced my commitment to maintain our existing strategic forces with relatively little change. The grounds for this decision were that:

--Sharp cutbacks would not permit us to satisfy our sufficiency .criteria and were unwarranted in view of the continuing growth of Soviet forces. Unilateral reductions could--paradoxically-eliminate any Soviet incentives for an agreement to limit strategic arms. They would also raise serious concerns among our allies, particularly in NATO.

--On the other hand, sharp increases in our forces, unless spurred by new Soviet deployments, might lead the Soviets to misunderstand our intentions, and might force them into new strategic investments they would otherwise eschew. The prospects for reaching agreement to limit strategic arms might be irreparably damaged. During the past year, I have continued this policy of deliberate restraint. Our programs have been as follows:

--We started to improve the survivability of our Minuteman force by increasing the hardness of Minuteman silos, thereby making them less vulnerable to nuclear attack. We also are continuing the deployment of Safeguard defensive sites to protect our Minuteman.

--We are adding multiple independently targetable warheads to some of our strategic missiles. This action also contributes to stability since it helps ensure a credible retaliatory capability. Without such a system in our future arsenal, the possibility of a Soviet preemptive strike against our strategic forces, combined with strong Soviet defensive forces, would make questionable the assured penetration of a sufficient number of weapons from our retaliatory capability. With multiple independently targetable warheads, each of our surviving missiles will have the capability to attack a number of targets, thereby enhancing our ability to penetrate enemy defenses.

We consider these measures to be essential to maintain the sufficiency of our strategic posture in the light of increases and improvements in the Soviet strategic forces.

To insure that our forces will remain sufficient in the future we will continue research and development on appropriate measures and systems to enhance the survivability and effectiveness of our strategic offensive and defensive forces.

In light of the negotiations on strategic arms limitations, we are acting with great restraint in introducing changes in our strategic posture. We will avoid steps which make it more difficult for the Soviet Union and ourselves to reach an agreed structure of strategic stability. At the same time, we must be prepared to take necessary steps to maintain the sufficiency of our strategic forces should an agreement not be reached within the near future.

BALLISTIC MISSILE DEFENSE

When I announced the Safeguard ABM program, I promised that "each phase of the deployment will be reviewed to insure that we are doing as much as necessary but no more than that required by the threat existing at that time." The Defense Program Review Committee has just completed a thorough review of Safeguard against the background of SALT, our strategic policy, changes in the Soviet capability, and the Chinese development of strategic forces.

--While it appears that the Soviets have slowed the increase of their missile systems, the evidence is far from unambiguous. Nor is it clear that even at present levels of Soviet forces, future qualitative improvements would not endanger our ICBM forces.

--The potential for qualitative improvements and numerical increases in Soviet forces poses a serious threat to our land-based strategic forces in the absence of agreed arms limitations on both defensive and offensive forces.

--Attacks might also be directed against our national command authorities and gravely endanger our capability to respond appropriately to the nature, scale, and source of the attack.

--We still face the disturbing possibility of accidents.

--Finally, before this decade is over, the Chinese will have the capability to threaten some of our major population centers.

These developments persuade me of the wisdom of our initial decisions to take the necessary preliminary steps for Safeguard ABM deployments. I am convinced that we must plan to continue our Safeguard program for the present.

At the same time, we have actively discussed with the Soviet Union limitations on defensive as well as offensive strategic weapons. Some limits on ABM systems are essential to any SALT agreement. We have taken this into account in our planning.

Last year Congress approved varying levels of work on the four Safeguard sites designed primarily to protect our Minuteman missiles.

I will continue a Safeguard program designed to provide maximum flexibility in the conduct of the Strategic Arms Limitation Talks. We are doing nothing which precludes any possible agreement at SALT. Our specific plans for the coming year will be announced by the Secretary of Defense.

At the same time, we have no explicit statement from the USSR as to the reasons for the leveling-off of the ICBM deployments, nor any guarantee that the apparent slow-down will continue. Moreover, the Soviet Union has been pursuing qualitative improvements which could threaten our retaliatory forces. With all the will in the world, we may be unable to secure limitations in the SALT discussions. In view of that possibility, I deem it essential that we continue with the minimum program of work on ABM.

Our strategic forces constitute 'the foundation of our nation's security. We maintain these forces, in sufficient size and character, to achieve our objective of deterrence. While we intend to maintain whatever forces are necessary to insure our deterrent, we also intend to pursue every reasonable avenue of negotiation that might end the strategic arms race--a race that contributes nothing to the real security of either side.

GENERAL PURPOSE FORCES

The change in the strategic situation in recent years profoundly enhances the importance of our general purpose forces. The Soviet Union's build-up alters the character of the strategic threat. China also is developing strategic forces, though her current capabilities are still quite limited.

With this shift in strategic realities, our potential adversaries may be tempted by the use or the threat of force below what they consider the level of general nuclear war. General purpose forces, therefore, now play a larger role in deterring attacks than at any time since the nuclear era began.

In last year's report, I pointed out that after intensive review I had decided to maintain general purpose forces adequate to deter or, if necessary defend against, a major threat to the interests of the U.S. and its allies in Europe or Asia; and simultaneously to cope with a minor contingency elsewhere. This decision reflected our assessment of certain new factors that I outlined in last year's report: --"the nuclear capability of our strategic and theater nuclear forces serves as a deterrent to full-scale Soviet attack on NATO Europe or Chinese attack on our Asian allies;

--"the prospects for a coordinated two-front attack on our allies by Russia and China are low both because of the risks of nuclear war and the improbability of Sino-Soviet cooperation. In any event, we do not believe that such a coordinated attack should be met primarily by U.S. conventional forces;

--"the desirability of insuring against greater than expected threats by maintaining more than the forces required to meet conventional threats in one theater--such as NATO Europe;

--"weakness on our part would be more provocative than continued U.S. strength, for it might encourage others to take dangerous risks, to resort to the illusion that military adventurism could succeed."

GUIDELINES FOR GENERAL PURPOSE FORCES

In this past year, we have continued to shape our general purpose forces to those concepts. Our guidelines were the following:

--Both the USSR and the Chinese have substantial forces that can be rapidly reinforced. Our capabilities thus must rest on our allies' strength, strong U.S. overseas forces, and the availability of credible reinforcements. We could not hide deficiencies from a potential enemy; weakness in conventional forces invites conventional attack.

--To serve as a realistic deterrent, our general purpose forces, together with those of our allies, must be such as to convince potential enemies that they have nothing to gain by launching conventional attacks.

--To deter conventional aggression, we and our allies together must be capable of posing unacceptable risks to potential enemies. We must not be in a position of being able to employ only strategic weapons to meet challenges to our interests. On the other hand, having a full range of options does not mean that we will necessarily limit our response to the level or intensity chosen by an enemy. Potential enemies must know that we will respond to whatever degree is required to protect our interests. They must also know that they will only worsen their situation by escalating the level of violence.

--It is our policy that future guerilla and subversive threats should be dealt with primarily by the indigenous forces of our allies. Consistent with the Nixon Doctrine, we can and will provide economic and military assistance to supplement local efforts where our interests are involved.

--Our forces will be developed and deployed to the extent possible on the basis of a common strategy with our allies and a common sharing of the defense burden.

Since these forces are crucial to our support for regional defense organizations, they are discussed more fully elsewhere in this report, particularly in the sections on Europe and Indochina. In addition, the Secretary of Defense, in his Defense Report to the Congress, will describe in detail specific measures we have taken and the progress we have made.

DESIGNING OUR GENERAL PURPOSE FORCES

Our major effort over the past year has been to develop a military posture consistent with these strategic guidelines and adequate to protect our overseas interests.

Europe. During 1970, the NATO Alliance concentrated on a thorough review of its defense posture. The central question was what strategy and mix of conventional and theater nuclear forces was best suited to the defense of the Alliance when both the U.S. and the USSR have the capabilities for mutual nuclear devastation. The review reflected the fact that Europe is moving through a time of change, and that the relationship of NATO and Warsaw Pact military forces can have a significant effect on the outcome of political negotiations.

Thus, we had to consider carefully not only the forces already deployed in Europe, but the capabilities the NATO Alliance maintains for rapid mobilization and reinforcement, and the probabilities of receiving early warning. The commitment of our own strategic forces to the Alliance deterrent, of course, was not in question.

For our part, we reviewed the contribution of United States ground, air, and naval forces. Together with our allies we concluded that:

--We should not decrease our present forces, nor should any other ally.

--The basic Alliance strategy would require maximum flexibility to deal with the full range of possible attacks.

--A realistic deterrent against conventional attacks required a substantial conventional forward defense capability.

--Important qualitative improvements would have to be made by all allies to offset the continuing improvements by the Warsaw Pact.

Asia. The situation in Asia differs significantly from that in Europe. The People's Republic of China has substantial military forces. But those forces pose a more limited and less immediate threat in Asia than do the forces of the Soviet Union in Europe. Chinese nuclear capabilities are still in an early stage of development. At the same time, our allies in Asia have not yet fully developed their own defense capabilities.

Taking account of these facts, we have reviewed general purpose force requirements in Asia. Our review indicates that we can meet our collective security objectives while placing greater reliance on our allies for their own defense. The growing strength of our allies has already resulted in a reduction of the level of our general purpose forces stationed in the region.

In all areas. The primary role of our general purpose forces is to deter and, if necessary, cope with external aggression. If aggression occurs, the use of our forces will be determined by our interests, the needs of our allies, and their defense capabilities, which we are seeking to improve. It is clear, however, that the Soviet Union's strong and balanced conventional capability enables it to project its military power to areas heretofore beyond its reach. This requires us to maintain balanced and mobile ground, sea, and air forces capable of meeting challenges to our worldwide interests.

This may impose new requirements and new burdens in the coming decade. We would prefer that rivalry with the USSR be contained through self-restraint, mutual respect for interests, and specific agreements. But I am determined that our general military posture will remain as strong as the international situation dictates.

AGENDA FOR THE FUTURE

While maintaining a realistic deterrent, we will further adjust our general purpose forces in response to changing circumstances. Our attention, for example, will be focused on:

--Manpower. Our ultimate goal is to meet our military manpower requirements without resort to the draft. In the meantime, we are working on reform of the selective service system. We have adopted a new method of selection to ensure a more equitable spreading of the burden of military service, and reduce to a minimum the uncertainties associated with the draft. Draft calls have been substantially reduced. As Vietnamization progresses, and our program of upgrading the rewards of the career service takes effect, we hope to make further reductions.

--NATO. We and our NATO Allies have agreed to improve the quality of alliance forces. In 1971, we will move to concrete programs for improving NATO's conventional capabilities, and insuring modern and sufficient strategic and theater nuclear forces.

--Asia. We will, with our allies, determine how best to help them improve their defensive capabilities. This will enable us to deal with the allocation of resources between U.S. forces and increased assistance in the area.

--Defense Review. We have defined new strategic doctrines for our nuclear forces and for our general purpose forces. But we must continue to refine our assessments of the implications of our strategies for our force composition. This will be a continuing task of this Administration.

We will also be taking measures to increase the efficiency and effectiveness of our defense establishment. The Secretary of Defense is reviewing the proposals of the Blue Ribbon Defense Panel on the organization and management of the Department of Defense. He has implemented many of them, and is preparing his recommendations to me on others. These matters will be covered fully in the Secretary's Defense Report to the Congress.

SECURITY ASSISTANCE

"The overwhelming evidence of the last 25 years--from the Marshall Plan to Vietnamization---is that a systematic program that helps other nations harness their own resources for defense and development enables them to take on the primary burden of their own defense." Message to the Congress Proposing Supplemental Foreign Assistance Appropriations November 18, 1970

The Nixon Doctrine requires a strong program of security assistance.

When Communist nations promoted the theory and practice of "wars of national liberation," particularly in the 1960's, the United States saw this as a threat to us and our allies and responded energetically. We offered advice, training, resources, reform programs, and new theories and techniques of counterinsurgency.

During those years, direct involvement was deemed appropriate in some cases. The United States, indeed, sometimes acted as if defense against conventional or guerrilla aggression anywhere in the world was principally an American responsibility. But it is not in our interest or that of our friends to act as if their security is more important to us than it is to them.

The effectiveness of American assistance depends on the will and the effort of the threatened country or region. Unless a country mobilizes its own resources, the effect of our assistance can only be limited. The best way to prevent insurgency is to meet economic and social imperatives; the best way to control it is a determined security effort by the country itself. Nothing we can do is an adequate substitute for a government supported by its people and for a nation unified and determined to defend itself. If they do make that effort, our assistance can make a crucial difference-to their security and world stability.

Security assistance has been an important aspect of United States foreign policy for nearly 25 years. Today it is more important than ever, for without it our effort to share responsibilities more widely with our friends and allies cannot succeed. As Secretary Laird has pointed out: "Many nations are willing and able to provide manpower for their own defense but lack the means to convert it to well-trained and properly equipped armed forces." Our materiel and training can enable nations whose security is important to us to deal with threats against them and to help each other to do so.

But it is not simply a matter of helping friends and allies to do more for themselves. Particularly in the areas of the world where we are reducing our manpower, we must make resources available to help them complete the transition with us. In some cases this will require substantial assistance during the period of adjustment. This is central to our new approach to American foreign policy in the 1970's.

By fostering local initiative and self-sufficiency, security assistance enables us in some instances to reduce our direct military involvement abroad. An effective security assistance program will lessen the need for and the likelihood of the engagement of American forces in future local conflicts. Thus it will ease the burdens upon the United States. But at the same time it signals to the world that the United States continues to help and support its allies.

We have addressed the specific issues and programs of security assistance with the care that befits its importance to our new foreign policy. The Peterson Report treated the purposes and structure of security assistance programs in its comprehensive analysis of U.S. foreign assistance in the 1970's. We gave specific emphasis in our FY 1971 programs to important needs of friends and allies who are shouldering the burden of their own and regional security. The passage by the Congress of the appropriation I requested a year ago, and the overwhelming support for the supplemental request I submitted last November, demonstrated fulfillment of our own responsibility.

The most significant individual country programs are discussed in the regional chapters of this annual report. The budget I presented last month, Secretary Rogers' forthcoming review of foreign policy developments, and Secretary Laird's Defense Report treat these programs in detail.

This year I will present to the Congress the design of a new International Security Assistance Program. It will be reorganized to gear it more effectively to the purposes of the Nixon Doctrine:

--It will clearly separate out our security assistance from other forms of assistance to enhance the integrity and effectiveness of each.

--It will pull together all types of security assistance into one coherent program. This will make it possible to coordinate them more efficiently and to exercise stronger policy guidance and program direction.

--It will place increasing emphasis on fostering the self-reliance of those with whom we are engaged in a cooperative effort. We will encourage them, and give them the technical assistance needed, to determine their own requirements and to make the hard decisions on resource allocation which a meaningful security posture demands.

This is a program for the 1970'S, building on partnership in the security sphere and responding to new conditions and the lessons of recent history. We look to the day when our friends and allies are free from threats to their security and able to concentrate their energies and resources-and our assistance--on the constructive tasks of economic and social development.

ARMS CONTROL

"... through negotiation we can move toward the control of armaments in a manner that will bring a greater measure of security than we can obtain from arms alone."

The President's Message to the Congress Transmitting the Ninth Report of the U.S. Arms Control and Disarmament Agency February 26, 1970

The world has no more urgent interest than reducing the danger of war, and above all, nuclear war. This creates responsibilities for all nations, but particularly for the nuclear superpowers.

The control of armaments is not a new issue in this decade or the postwar period. Man has long sought to create the mutual trust and techniques to limit and reduce arms. The historical record has been tragic. Arms control has generally foundered because it failed the test of international crises--nations could not resolve the very issues that stimulated weapons competition. At the same time, political settlements were threatened by arms rivalry--nations could not define levels that did not stimulate ever new competition and thus new antagonisms and insecurity.

PROGRESS TO DATE

In an age of great technological change and enormous nuclear power, we face even larger challenges. This Administration is dedicated to the limitation and reduction of arms. We are proud of our accomplishments.

Preventing the Spread of Nuclear Weapons. The worldwide reach of scientific knowledge enables virtually any nation in time to acquire nuclear weapons. Last year, the United States ratified the treaty to halt further proliferation of nuclear weapons. More than 100 nations have either signed or ratified this treaty, and negotiations to implement its verification procedures are in progress. If all nations act on its principles and abide by its obligations, the incentive for any additional nation to acquire nuclear arms will recede.

Preserving Peace in New Frontiers. Modern technology has opened up the vistas of outer space and the ocean depths for mankind's benefit. But it has created as well the temptation to exploit these new environments for military gain. We and other nations have acted to prohibit nuclear weapons in outer space. This Administration took the initiative to negotiate a treaty banning weapons of mass destruction from the seabeds. The United Nations overwhelmingly approved the treaty this fall, and I will soon submit it to the Senate.

Curbing Biological and Chemical Threats. Modern science has spawned the most deadly means of biological and chemical warfare. This Administration has moved on several fronts to reduce this threat:

--The United States renounced all use of biological and toxin weapons and first use of lethal and incapacitating chemical weapons. Our biological and toxin research will be confined to small programs solely for defensive purposes. I have approved a plan to destroy stockpiles of these agents and associated munitions. We announced the conversion of one major biological facility to the investigation of the health effects of certain chemicals.

--On August 19, 1970, I submitted to the Senate the 1925 Geneva Protocol banning the use in warfare of chemical and biological weapons. If ratified, the United States would join 95 other nations, including all the major powers, in supporting this treaty.

--In the Conference of the Committee on Disarmament in Geneva, we will urge further international control over the biological and chemical means of war.

STRATEGIC ARMS LIMITATION TALKS (SALT)

The most important area in which progress is yet to be made is the limitation of strategic arms. Perhaps for the first time, the evolving strategic balance allows a Soviet-American agreement which yields no unilateral advantages. The fact we have begun to discuss strategic arms with the USSR is in itself important. Agreement in such a vital area could create a new commitment to stability, and influence attitudes toward other issues.

A New Method of Preparation. In previous arms control negotiations our usual practice was to develop a single proposal, based on what would command a consensus among diverse views in the bureaucracy. This frequently led to rigidity in the negotiations; unless the other side adopted an almost identical stance, the talks deadlocked. Time and energies were then consumed in re-negotiating a position within our government.

I concluded that we needed a new approach--to give us a firmer grasp of the issues, to provide maximum flexibility in negotiations, and to speed up the overall negotiating process. Because flexibility is a virtue only within a framework of clear purpose, I ordered the most comprehensive study of weapons systems bearing on the negotiations.

We assigned the analytical tasks to a special NSC group, the Verification Panel. It first examined the various weapons systems to determine the effect of conceivable limitations on our current and projected military programs, their effect on Soviet programs, and---on the basis of this analysis--the strategic situation ensuing from particular weapons limitations.

The Panel looked as well at verification. Confidence that obligations are being adhered to is a basic requirement for stable arms control agreements and should be of equal concern to both sides. We made a detailed analysis of our ability, and the measures needed, to verify compliance with each agreement. We also studied counteractions if we detected a violation, and whether we could take them in time to protect our security.

The result was the development of individual "building blocks" for all offensive and defensive weapons. We can combine these blocks in various clusters of limitations and reductions to produce alternative proposals for the negotiations.

This enables us to respond quickly and meaningfully to any Soviet counter-proposals; at home we are not the prisoner of bureaucratic jockeying to come up with an agreed response. The focus in our dialogue, either with the USSR or within our own government, can be on substantive issues,

Differing Perspectives. We made major efforts to understand the position of the Soviet Union. Of all possible areas for negotiation, limitation of strategic weapons requires the greatest such efforts, for no nation will maintain an accord which it believes jeopardizes its survival.

This task of developing an equitable agreement is greatly complicated by our differing strategic positions and perspectives.

Even within the United States, and no doubt in the USSR, there are widely divergent views over the key elements of an effective and credible strategic posture. The technical issues are highly complex, and the political and strategic considerations engage our vital interests. It would be surprising, therefore, if there were not also large initial differences between the U.S. and the USSR.

The composition and level of our respective strategic forces reflected different geographical factors and historical development. This posed a major problem of establishing an equivalence between weapons systems with dissimilar characteristics and capabilities:

--Our deployments of offensive missile launchers were completed by 1967; the USSR continued to build different types of land-based ICBM's and a nuclear-powered missile submarine force that will equal ours within three years at current rates. The USSR has constructed a large ICBM, the SS-9, for which the U.S. has no counterpart. Deployed in sufficient numbers and armed with the multiple independently targetable warheads (MIRV's) of sufficient accuracy, this missile could threaten our land-based ICBM forces. Our MIRV systems, by contrast, do not have the combination of numbers, accuracy, and warhead yield to pose a threat to the Soviet land-based ICBM force.

--The USSR has a large force of intermediate and medium range ballistic missiles. We do not. On the other hand, our alliance commitments and their regional military programs caused us to base our tactical aircraft abroad; we also retain air power on carriers.

--The USSR has deployed an Anti-Ballistic Missile defense system, thus far in the Moscow area. We have initiated an ABM program based on different strategic principles and missile systems.

Our analysis indicated critical areas of prospective strategic instability:

--Offensive systems have clearly developed to a point where certain further improvements, as well as increased launcher deployments, could pose a threat to land-based missile retaliatory forces and thus threaten stability.

--Instability also could develop through the unchecked extension of defensive capabilities. One side might believe that its defenses could clearly limit the damage it might suffer from retaliation, and therefore that it was in a position to strike first. We took these factors into account in shaping negotiating positions for SALT. There have been three phases so far, alternating between Helsinki and Vienna: Helsinki I (November 17-December 22, 1969); Vienna I (April It-August 14, 1970); Helsinki II (November 2-December 18, 1970). The negotiators are now slated to reassemble in Vienna on March 15.

THE COURSE OF SALT NEGOTIATIONS

There has been speculation both here and abroad concerning the talks. Progress has been facilitated by our agreed policy of privacy with respect to the negotiating exchanges. I will, of course, respect that agreement. I am, therefore, free to discuss only the general character of the talks and underlying issues which have emerged.

We believed that progress could best be made if the initial exchanges encouraged agreement on the definition of the subject matter and the nature of the issues. Thus, we did not launch discussions in the traditional manner of hard, detailed proposals that might lead to early deadlock, each side supporting its opening position. Instead, we explored some general concepts of strategic stability and related them to the issues posed by limiting individual weapons systems. Our negotiating team, ably led by Ambassador Gerard Smith, reviewed our analysis, explaining how we thought agreements might evolve and their verification requirements.

This essentially exploratory approach, which included a general treatment of verification, enabled each side to gain greater understanding of the other's thinking. There was broad consensus on certain general strategic concepts. At the same time there were clear differences on whether certain systems should be included in discussions of an initial agreement.

Both sides proceeded in a thoughtful, non-polemical manner. Calm, reasoned dialogue produced a common work program for future sessions.

In the later phases of the talks, we moved from an analysis of issues to a discussion of concrete measures. Initially, the U.S. suggested possible approaches involving both numerical and qualitative limitations on strategic offensive and defensive systems, including MIRV's. We also put forward an alternative comprehensive approach which would not constrain MIRV's, but would involve reductions in offensive forces in order to maintain stability even in the face of qualitative improvements.

The Soviet Union, for its part, submitted a general proposal which diverged from ours in many respects, including a major difference on the definition of strategic systems.

When it proved difficult to make progress on the basis of the initial approaches and proposals, our preparatory work enabled us to move rapidly to a modified approach taking account of Soviet objections. Our approach incorporated alternative provisions for either limitation or a total ban of ABM. Modified proposals were put forward by the Soviet Union as well. On some issues, our views coincided or were quite close; on others there remained important differences. In many respects, Soviet suggestions on various aspects of offensive and defensive limitations lacked the specificity and detail to permit firm conclusions about their overall impact.

SALT Issues For the Future. We have been able to move from preliminary exploration of substantive issues to concrete negotiations in a fairly short period. The dialogue has been serious and businesslike. The rate of progress, however, has been influenced by differing perspectives.

This Administration has established and enunciated a concept of strategic sufficiency. We have reflected this concept in the nature and number of our strategic forces and the doctrines for their employment. All these aspects of our posture are fully aired in each year's budgetary process. As I have pointed out in the section on Strategic Forces, Soviet deployments make us uncertain whether the USSR has made a similar national commitment to strategic equilibrium.

There also remain specific differences that have gradually emerged in our exchange of proposals. These involve what an agreement should cover and how it should be verified.

--We have approached the question on what armaments to include in an initial agreement with different definitions. While recognizing that a variety of offensive systems could be construed as strategic, we believe that priority should go to those that form the core of offensive threats, ICBM's, SLBM's, and heavy strategic bombers.

--The USSR has broadly defined "strategic" offensive weapons as those that can reach the other side's territory. These terms include our theater nuclear delivery systems including those on aircraft carriers. But our carrier and land-based air forces abroad are essential components of integrated theater defenses created under alliance commitments in response to common threats. On the other hand, the Soviet approach would not include limitations or, its own theater nuclear forces, including their own medium or intermediate range missiles. During the course of the negotiations we have been making efforts, in consultation with our allies, to take account of this difference in perspective.

--There has also been a difference over whether a separate agreement limiting ABM's alone would be in our mutual interest. The U.S. believes that to be stable and satisfactory, an agreement should include limitations on both offensive and defensive systems.

--As I said last year, the requirement for adequate verification of any agreement is essential to both sides. We have not yet found a way to overcome certain differences. They are particularly difficult in connection with our attempts to limit or ban MIRV's or ABM's. We will continue working on solutions to these problems in future negotiations.

In light of these complex issues and our differing approaches, we are neither surprised nor discouraged that progress has not been more rapid. The discussions have produced the most searching examination of strategic relationships ever conducted between the United States and the USSR. Each side has had the opportunity to explain at length the particular strategic concerns caused by the present and prospective posture of the other. Both sides know better how an agreement could deal with these concerns.

The Soviet position has not been presented in the detail that ours has, but the negotiations have reached a point where views are better understood and the basis of an agreement may be emerging. Further progress is therefore possible when negotiations resume.

We need to determine how comprehensive an agreement is feasible. On the one hand, even a relatively modest accord would create a stake for both sides to preserve progress and build upon it with further agreements. Moreover, it could influence attitudes towards issues outside SALT. On the other hand, if all the effort that has gone into SALT were to produce only a token agreement, it could be counterproductive. There would be no reason to be confident that this could serve as a bridge to a more significant agreement. Therefore, we shall strive for an initial agreement which is as broad and comprehensive as possible. It must deal with the interrelationship between offensive and defensive limitations.

Two principles should be recognized. The strategic balance would be endangered if we limited defensive forces alone and left the offensive threat to our strategic forces unconstrained. It would also be dangerous, however, if only offensive forces were restrained, while defenses were allowed to become so strong that one side might no longer be deterred from striking first. To limit only one side of the offense-defense equation could rechannel the arms competition rather than effectively curtail it.

We also have to clarify the relationship between the process of negotiations-which may be protracted and involve several stages--and actions taken during the talks, and even after an initial agreement. It is clear that restraint is essential. If the Soviet leaders extend their strategic capabilities, especially in ways that increase the threat to our forces, we would face new decisions in the strategic field.

Last summer, in a press conference on July 30, 1970, I stated what appeared to me to be the only alternatives:

"We can either continue this race in which they continue their offensive missiles and we go forward with our defensive missiles, or we can reach an agreement. That is why at this point we have hopes of attempting to find, either on a comprehensive basis, and lacking a comprehensive basis, a selective basis, the first steps toward which the superpowers will limit the development of and particularly the deployment of more instruments of destruction when both have enough to destroy each other many times over."

I retain that hope and in this report reaffirm my commitment to its fulfillment. At this stage what is needed are political decisions to move towards an agreement on the basis of an equitable strategic relationship. We have taken this decision.

MUTUAL AND BALANCED FORCE REDUCTIONS IN EUROPE

Last year I indicated that we needed to study carefully mutual force reductions in Europe as one of the most fruitful areas for East-West dialogue. Accordingly, I directed that our government reinforce the preliminary work done in NATO with an intensive analysis of the issues in an agreement to reduce NATO and Warsaw Pact forces.

Problems. In many respects this subject poses even more complex problems than strategic arms limitation:

The principal objective should be a more stable military balance at lower levels of forces and costs. Therefore, reductions should have the effect of enhancing defensive capabilities, so as to diminish the incentives for attacking forces. Even if defensive capabilities were not actually improved, force reductions, as a minimum, should not create offensive advantages greater than those already existing. Yet, reductions would tend to favor offensive capabilities, since attacking forces could concentrate while reduced defensive forces were compelled to spread along a given line.

Achieving reductions that leave the balance unaffected or, preferably, improve stability, raises a number of intricate technical problems. For example, how do we establish equivalency between opposing forces? This is already difficult enough with respect to strategic arms limitations which involve relatively few weapons systems. In reducing conventional ground anti air or tactical nuclear forces a great variety of national forces and materiel would have to be considered. Furthermore, there are marked differences in the equipment, organization, and strength both within and between the opposing NATO and Warsaw Pact forces.

Preparations. Following the pattern developed for SALT, we first assembled detailed data on manpower, conventional weapons, tactical nuclear weapons, and aircraft for both sides. We compared them in areas ranging from a narrow zone in Central Europe to ones extending up to the Western USSR. We had to determine: --the current balance of forces for each category. We could then evaluate the new military equation if various forces were reduced in different degree, and gauge when one side might gain a unilateral advantage.

--our ability to verify levels of all forces so that we can confirm reductions.

--the measures needed to detect increases in the manpower or equipment of reduced forces.

Our preliminary analysis pointed up a central problem. The Warsaw Pact can mobilize and reinforce more rapidly than NATO, primarily with divisions from the USSR. Thus, in judging force reductions we must consider not only the balance of standing forces but what each side could do following various periods of mobilization and reinforcement. There are two broad approaches to reductions:

--proportionately equal ones applying the same percentage of reductions to both sides.

--asymmetrical ones in which reductions by the two sides would be made in differing amounts in different categories so that one side would make larger cuts in one category in return for larger cuts by the other side in another category to create a stable military equation at lower force levels.

The first has the advantage of simplicity but would tend to magnify the effects of any imbalances which exist at the outset. The second, because of its complexity, would pose difficult analytical and negotiating problems, but would have the advantage of providing a firmer basis for a stable relationship between the two sides. We are studying these questions with our allies.

Our preliminary conclusions suggest that the pattern of the SALT negotiations might be valid as an approach to discussions of mutual force reductions in Europe. Rather than exchanging concrete proposals at the outset, we could first explore major substantive issues and their relation to specific problems. Within this common framework we could move to more detailed discussion of individual issues. This building block approach could resolve the complex technical issues and lead to an agreement.

CONCLUSION

It is essential that the United States maintain a military force sufficient to protect our interests and meet our commitments. Were we to do less, there would be no chance of creating a stable world structure.

But it is an illusion to think that the ideal guarantee of security--for ourselves or for the world--rests on our efforts alone. While maintaining our strength, therefore, we are also making a sustained effort to achieve with the Soviet Union agreement on arms limitations. Only a designed balance of armaments can ensure security that is shared and equitable, and therefore durable.

It is for that reason that we have defined our security requirements in terms that facilitate arms control agreements. The doctrine of strategic sufficiency is fully compatible with arms limitations. So too are the role of our conventional forces and the purpose of our security assistance.

Our goal is security--and if others share that goal, it can be assured through mutual design, rather than mutual exertion. It will, in any event, be maintained.

PART V: THE WORLD INTEREST

--The United Nations

--Global Challenges

THE UNITED NATIONS

"As the United Nations begins its next quarter century, it does so richer in the experience and sobered in its understanding of what it can do and what it cannot; what should be expected and what should not.

"In the spirit of this 25th Anniversary, the United States will go the extra mile in doing our part toward making the UN succeed. We look forward to working together with all nations represented here in going beyond the mere containment of crises to building a structure of peace that promotes justice as well as assuring stability, and that will last because all have a stake in its lasting."

Address to the United Nations

General Assembly

October 23, 1970

International cooperation has always been both a human dream and a human necessity. This is more true in our time than it has ever been before.

The dream is important. Mankind aspires to lasting peace, and since its founding twenty-five years ago, the United Nations has symbolized this profound wish. But while the realization of the dream remains elusive, the necessity of international cooperation for other purposes has become imperative. For the march of technology has pressed upon the world an increasing number of exigent problems which can only be solved by collaboration among governments. As a result, the United Nations' role in facilitating international cooperation has taken on a new importance.

THE PRESERVATION OF PEACE

The major task for the world community is, of course, the preservation of peace. The need for an instrument which could further this purpose was the prime motivation behind the founding of the United Nations. The UN's ability to fill this role, however, is dependent to a considerable extent on cooperation among the major powers; and a somber fact of recent history is the failure of the victorious allies of World War II to maintain their cooperation. This being true, a crucial development would be joint recognition by the United States and the Soviet Union of a common interest in strengthening the UN's peacekeeping capacities. On October 23, before many of the world's Chiefs of State and Heads of Government assembled at the UN, I called on the USSR to put our relations "on a basis consistent with the aspirations of mankind" and to join with us in developing "practical means that will enable the United Nations to move decisively to keep the peace."

Even if UN peacekeeping efforts cannot be perfected in the world as it is, they can certainly be improved. Peacemaking in the past has depended essentially on improvisation. There were, and are, no general understandings on how these operations are to be directed or financed. One result has been that the UN has developed a large financial deficit as some countries have refused to pay their share.

We believe that a major effort should be made to reach an agreement on reliable ground rules for peacekeeping operations. Discussions are going forward directly with the Soviet Union and in a special UN Committee on this subject. One major issue is the degree of latitude which the Secretary General would have in conducting day-to-day operations, once the Security Council has authorized an undertaking. We believe he needs adequate authority to manage peacekeeping operations under the broad political supervision of the Council. While these problems have been difficult, discussions are continuing.

THE NEED FOR RESTRAINT

Because the stresses of the Cold War have limited the ability of the Security Council to play an energetic role in alleviating political crises and preserving the peace, much of the political agenda at the UN has flowed toward the General Assembly. But the operations of the Assembly have shortcomings related to the strains of a rapid growth in membership and demands for actions beyond the capacities of the United Nations.

States have traditionally addressed their foreign policies to problems affecting their own concept of their national interests. National policies were sustained, and to some extent defined and limited, by the resources which states were willing and able to commit. With all its faults, this process imposed a degree of discipline and realism upon foreign policy goals.

At the UN this pattern has been modified. Many states find themselves involved in political problems in which their own interests are very often not importantly engaged and their ability to obtain information is limited. Without self-discipline, this can easily lead the organization to adopt positions which cannot command the resources or the support required for attainment.

There are, of course, advantages in detachment, in having problems considered by a community as a whole rather than by the parties directly involved. But for this advantage to be maximized, more self-restraint is needed on the part of member states. UN members contribute best to the maintenance of peace when they examine issues on their merits instead of voting as blocs along geographical or ideological lines. And it should be remembered that problems cannot always be solved by the simple formula of choosing the middle ground between conflicting claims. To assume that justice is necessarily a middle point is to encourage adversaries to move toward extremes.

The UN does in fact mirror much of the world's social turmoil, national conflicts, and ideological differences. It has to its credit substantial accomplishments in peacekeeping, in social and economic betterment, and in drafting principles of international law. It will be strengthened to the extent that its members foreswear unrealistic rhetoric and concentrate on using the UN constructively to settle rather than publicize disputes. The UN must not become the forum where differences are exacerbated by intemperate advocacy.

HUMAN BETTERMENT

Another major function of the United Nations is to promote economic and social development. Its basic instrument for this purpose---the UN Development Program--has achieved a good record in providing technical experts and technical training to the underdeveloped countries, and in helping them survey the investment potential of their natural resources.

However, the Program has encountered two basic problems. First, its resources fall short of the job to be done. Second, even at its present level of operations, its capacity to operate efficiently is strained to the utmost. It needs to adopt improved managerial practices.

During the past year, two actions in the UN set the stage for remedying these inadequacies:

--In October, the General Assembly adopted the strategy for the Second Development Decade, which began in January 1971. The strategy set goals, the basic one being an average growth rate of 6% in developing countries, and an action program covering the spectrum of economic and social development. An important element was the affirmation by developed countries, including the United States, of efforts to achieve an aid target of the transfer of resources, government and private, equal to one percent of Gross National Product.

--In December, the General Assembly approved a series of steps to improve the capacity of the UN development system to handle larger resources effectively. These reforms should ensure much tighter coordination within each recipient country of the activities of the various UN agencies. These recommended reforms are most encouraging. We look forward to their rapid and effective implementation, which we view as a concrete test of the ability of the UN family of organizations to mold itself into a more effective instrument. Precisely because we attach great importance to the UN's role in development, we intend to apply high standards in judging its performance. The work of the United Nations and its specialized agencies is too vital to permit good intentions to substitute for accomplishment.

THE NATURE OF OUR PARTICIPATION

We intend to view the UN realistically, to face clearly what it can and cannot do, and to encourage its fullest employment on those problems of the world to which it can effectively contribute. It would be unrealistic to ignore the fact that the United Nations is not functioning as effectively as it might. But it would be equally unrealistic to view that situation as acceptable. For the United States has a transcendent interest in a more effective United Nations.

Success breeds success. If international cooperation succeeds in producing creative solutions to some of the world's pressing needs, the fabric of that cooperation will itself be greatly strengthened. This could have long-term effects beyond the solution of individual problems. For it could bring closer that lasting and general peace which has so far eluded our grasp.

We recognize that the nature of our own participation in the United Nations and its family of organizations is a central element in their health and effectiveness. In the past, particularly in the specialized agencies, our financial contributions have been too large a part of our total contribution. We intend to participate more fully in the future. We will urge that the utility of international activities be judged by the good that comes out of them rather than the good intentions that go into them.

We look forward to the report of the President's Commission for the Observance of the Twenty-Fifth Anniversary of the UN. This group of distinguished American citizens has, since last July, been studying means to enhance the effectiveness of the United Nations, and to improve U.S. participation therein. The fruit of their deliberations will receive the most serious study by my Administration.

GLOBAL CHALLENGES

The United Nations was, and is, a child of the mid-Twentieth Century. It stemmed from the perception that modem problems required a new pattern of interchange to supplement the older processes of diplomacy. Human institutions evolve in response to felt needs, and some of our most serious international needs have only recently become evident. For mankind now shares a number of new and urgent problems, which stem from the contrast between man's progress in the technological arts and his shortcomings in achieving a stable organization for international cooperation. The world has grown small, and we live increasingly in what has been described as a "global village".

The world now has community problems such as the population explosion, the uses of the oceans and seabeds, maintenance of a healthy natural environment, control of drug abuse, deterrence of airplane hijackings, and cooperation in the use of outer space.

In last year's report, and in my two speeches to the General Assembly, I suggested these problems as appropriate for UN attention. The UN has made useful beginnings on most of them, and marked progress on some. These developments are discussed in the following section of this report, along with the measures taken outside the UN. These global problems are not, of course, the exclusive property of the UN, but it is uniquely qualified to focus the energies and attention of the world on them.

I want to take particular note of one instance in which the UN did precisely that in 1970, and on a matter of the deepest interest to the American people. In October, I asked the General Assembly to express "the world interest" in the human rights of prisoners of war. I urged the Assembly to press all adversaries in the Vietnam conflict, and all other conflicts, to honor the Geneva Convention. In December, the General Assembly passed a resolution that fully met that request. This did not, of course, effect the release of our prisoners now in North Vietnam's hands, but it does bring to bear on North Vietnam the full weight of world opinion in favor of decent treatment of those prisoners. And the UN Resolution specifically called for the repatriation of seriously ill or wounded prisoners, and of all prisoners who have endured a long period of captivity. The American people, I am sure, share my gratitude to the eleven states who stood with us in sponsoring this resolution, and the fifty-five others whose support led to its passage.

THE FUTURE

In the 1970's, the United Nations faces both a challenge and an opportunity. For the member states there is a challenge to prove themselves capable of using the UN framework to meet the common needs of the international community. For the UN itself, there is an opportunity to mold itself into the efficient instrument for international cooperation which the times require.

The United States will try to meet the challenge, and to help the UN seize its opportunity.

GLOBAL CHALLENGES--THE NEW DIMENSION IN FOREIGN AFFAIRS

"Across this planet let us attack the ills that threaten peace.

"In the untapped oceans of water and space, let us harvest in peace." Address to the United Nations General Assembly October 23, 1970

It was a poet who expressed the profound political truth that the world has become a frail spaceship and that the people of the earth are its passengers. The technology which inspired that concept has also brought with it a degree of global interdependence which differs from the past not only in degree but in kind.

For our progress mocks us. The more we have succeeded in controlling our environment, the more our environment needs to be controlled. The more means we have devised to improve the quality of human life, the more that quality of life needs protection from the means we have devised.

Along with its vast contribution to our well-being, technology has given us the common capability to pollute the earth's oceans and air. It has increased the incentives for nations to assert, and attempt to enforce, territorial claims to the oceans so immoderate as to endanger the ancient right of freedom of the seas. It has brought the ability to tap--or to ravage-the resources of the sea and the ocean floor, to the vast benefit--or to the huge harm--of mankind.

These are examples of problems in which every country has a deep national interest, but which, as a practical matter, are simply not subject to satisfactory resolution by national means. They are matters on which the nations of the world must subsume their narrower interests in a broad and generous concept of the world interest. For without such an approach, we will not find the solutions which both the world interest and the national interests require. Without such an approach, we cannot fully harness the capacity of technology to meet these global challenges.

Thus there has come into being a new dimension in the foreign policy of the United States, not as a matter of choice and deliberate action on our part, but as a reflection of the demanding realities of the world in which we live. Foreign policy has, of course, always aimed at serving the nation's security and well-being. What is new is the fact that we now face an increasing range of problems which are central to our national well-being, but which are, by definition, global problems, or problems which can only be dealt with effectively on a global scale.

In addressing these problems a narrow calculation of national interests is inadequate. For viewed from that perspective, the nations of the world do sometimes have conflicting interests of a real and substantial nature. Of greater import, however, is our shared and transcendent interest in the livability of our common home, the earth. To these problems, and the opportunities they present, that interest must be our guide and the guide of others. The nurturing of that interest has now become a prime task of American leadership.

During the past year, this new dimension of our international activity has been evident at the United Nations, in a number of its associated organizations, in various regional activities, and through frequent bilateral contacts with many nations around the world. It is encouraging that the international community is showing an increasing willingness to grapple with these problems. But the fact remains that the time available for finding a solution to many of them is perilously short. I want to review our attitude toward some of the more salient issues, and the steps that are being taken by the international community to meet those issues.

THE ENVIRONMENT

No nation can keep its pollution to itself. Wastes discharged into the air and water in fact befoul a common resource. Restraint on the part of individual states, however laudable and necessary, is inadequate to the problem, for in the absence of international action, competitive economic pressures will severely limit national abilities to require the costly measures needed to protect the environment. A broad international approach is therefore necessary.

In the United Nations, this country has joined with most other nations of the world in preparing for the 1972 Stockholm Conference on the Human Environment, which will consider the whole range of environmental problems. We are also participating in discussions on the environment with such diverse groups as the United Nations Economic Commission for Europe (the nations of both Eastern and Western Europe), the Organization for Economic Cooperation and Development (the developed nations of the Free World), NATO's new Committee on the Challenges of Modern Society (our Atlantic allies), and the Inter-Governmental Maritime Consultative Organization (the major shipping nations).

These activities are developing a consensus, reflected last year in the call by the NATO/CCMS Conference on Oil Spills for an end to intentional discharges of oil and oily wastes into the oceans by the middle of this decade. The Prague Conference, called by the Economic Commission for Europe, will play an important role in promoting East-West cooperation on environmental problems. The growing international concern is also reflected in our bilateral discussions with countries such as Canada, Japan, France, Germany, Spain, and Sweden with whom we have a variety of arrangements on environment matters.

The vigor of these efforts must increase, however, for we consider it essential that the international community take at least the following measures within the near future:

--identification of pollutants and other ecological hazards which are dangerous on a global scale.

--establishment of an effective world monitoring network to keep track of these environmental dangers.

--initiation of a global information system to facilitate exchange of experience and knowledge about environment problems.

--establishment of internationally accepted air and water quality criteria and standards.

--development of international guidelines for the protection of the environment.

--achievement of comprehensive international action programs to prevent further environmental deterioration and to repair the damage already done.

--development and improvement of training and education programs to provide the skilled capability to meet the environmental challenge.

THE OCEANS

The oceans cover two-thirds of the earth. Man's use of this common asset is now undergoing a transformation. New techniques exist or are being developed which will lead to a vastly increased exploitation of the mineral and living resources of the oceans, including the mineral riches of the world's seabeds.

It is, frankly, not yet clear whether this fact will prove a boon to mankind. There is at present, no authority, international or otherwise, which can ensure the orderly and rational exploitation of these resources. That fact, plus the vast potential wealth at stake, gives cause for deep concern. There is a clear world interest in this matter, and there is a clear danger that, unless it is asserted in time, it may be lost in the confusion of unbridled commercial and national ambitions.

A closely related problem relates to the age-old right of freedom of navigation on the high seas. Traditional usage and current international law have proved to be inadequate barriers to claims which generate international tensions and endanger the rights of all to use the oceans. The claims of some nations now extend 200 miles seaward. The temptation to assert and defend such claims can only increase as technology provides new means to profit from exclusive rights to the ocean's surface.

In the past year the United States has taken the initiative in moving the world toward an equitable resolution of these two problems, while they are still soluble.

On May 23 I set forth an oceans policy which called for both a system of international regulation for the deep seabeds, and a new agreement on the breadth of territorial seas.

Our proposal for the seabeds would divide the ocean floor into two basic categories:

--Coastal states would maintain their rights to the natural resources of the seabeds up to the point where the high seas reach a depth of 200 meters.

--Seabeds under the remainder of the high seas would be regulated by an international regime. However, coastal states would license exploration and exploitation of resources as trustees for the international community beyond the 200 meter depth line to a further line which would embrace the continental margins.

As I said at the time: "The regime should provide for the collection of substantial mineral royalties to be used for international community purposes, particularly economic assistance to developing countries. It should also establish general rules to prevent unreasonable interference with other uses of the ocean, to protect the ocean from pollution, to assure the integrity of investment necessary for such exploitation, and to provide for peaceful and compulsory settlement of disputes."

In August, our Government submitted to the UN a draft treaty suggesting in detail how such a system would work. We are seeking a system which fully protects the interests of the less-developed countries in the ocean resources, as well as the interests of those nations which now possess the technological capacity to exploit them. Such an arrangement is both fair and practical. For these resources are a common heritage of mankind, and their benefits should be shared by all. And the world is unlikely to give its sanction to arrangements which do not ensure a wide sharing of those benefits. The mineral royalties involved will eventually be very large. Earmarking them for international purposes--particularly the development of the poorer nations-could be a tremendous step forward toward a solution to one of the world's most grievous problems.

On the territorial seas issue, we have proposed a new law of the sea treaty, which would establish a twelve-mile limit for territorial seas adjacent to a nation's coasts and would provide for free transit through and over international straits. It would also provide for conservation of the living resources of the high seas and recognition of the special interests of the coastal states over these resources.

These ideas were extensively discussed at the UN last fall. The U.S. initiative was widely welcomed as a step toward organizing necessary international negotiations. In December, the General Assembly passed a constructive series of resolutions on the oceans. Most important of all, the General Assembly called for an international conference on the law of the sea to be held in 1973.

At that Conference, the world will have an historic opportunity. Resources of enormous potential value can be placed under an international authority to be used for the benefit of all mankind. And three problems heavy with the possibility of conflict among nations--differing national claims to the ocean's surface, the seabeds, and fishing rights--can be resolved to the benefit of all.

We recognize the difficult and complex issues involved, but we are determined to make every effort to ensure the success of the 1973 Conference. That success would represent a signal victory for the world interest, and a convincing demonstration of the ability of the world community to meet its common problems.

POPULATION CONTROL

One of the greatest threats to the well-being of mankind is the burden of excessive population growth. If things continue as they are, this planet, which at the beginning of the century supported about 1.6 billion lives, and which now supports--often inadequately--some 3.7 billion lives, will be called upon to sustain about 7.5 billion human beings by the end of this century. Already, there are many areas of the world where population growth makes improvements in standards of living intolerably slow, if not impossible. And this is most often true where living standards are lowest. The world is already experiencing a population explosion of unprecedented dimensions. We are, in short, in a rush toward a Malthusian nightmare. That surely is not our destiny.

Therefore, while respecting fully the rights, the conscience, and the responsibilities of other nations, we have taken steps on three fronts to help curtail the growth of world population. First, in line with my statement on population in July of 1969, the United States has embarked on a major effort to support private decisions that will slow the growth of our own population. Second, the United States has given active support to the work of the United Nations agencies in this field. We have again pledged to match contributions from other countries to the United Nations Fund for Population Activities, this time up to a total of $12.5 million for 1971. Third, when it is requested of us, we extend technical and financial assistance to the family planning programs of developing nations.

INTERNATIONAL COOPERATION AGAINST CRIME

The need for international cooperation to solve certain types of criminal problems has become increasingly clear in recent years. The explosion in international travel and intercourse has had the unintended effect of greatly reducing the ability of national societies alone to control such old criminal activity as the illegal narcotics traffic, and such new criminal forms as hijacking and terrorist attacks on diplomats.

The Narcotics Problem. Narcotics addiction has been spreading with pandemic virulence. Although the severity of the problem varies widely from country to country--and is currently worse in the United States than in many countries-this affliction is spreading rapidly and without the slightest respect for national boundaries. No country is immune, and any country could be next.

There is, therefore, a strong world interest in joint action to eliminate the illegal narcotics traffic. And such cooperation is necessary, for the production and manufacture of narcotics and dangerous drugs is immeasurably easier to control than their illegal passage across national frontiers. Effective law enforcement efforts can, in fact, prevent the illegal production of most narcotics drugs, for production in quantity requires activities difficult to conceal. On the other hand, the mere scale of international movement of people and goods makes it impossible for a country to insulate itself from illegal traffic in drugs.

The control of illegal narcotics, therefore, requires an integrated attack on the demand for them, the supply of them, and their movement across international borders. To that end, the United States has actively sought international cooperation to control the production and distribution of narcotics. Our efforts have taken many forms.

We have worked closely with a large number of governments, particularly Turkey, France, and Mexico, to try to stop the illicit production and smuggling of narcotics.

In September 1970, a special session of the UN Commission on Narcotic Drugs met, at our request, to invest the international community with a sense of urgency about this problem. This meeting produced a resolution including recommendations for short and long term international action against drug abuse. These recommendations were subsequently approved by the UN's Economic and Social Council. This will bring to bear on this problem the whole array of talents and energies of the UN specialized agencies.

The short run program will concentrate on such matters as strengthening international drug control bodies, increasing technical assistance to countries that seek to improve their controls over drugs and their law enforcement capabilities, and improving research on drug abuse. To provide funds that otherwise would be unavailable for the immediate programs, a UN Special Fund for Drug Control was established. For the longer term, the UN Secretary General has been asked to develop a plan for the provision of new economic opportunities for poppy growers, and the education and rehabilitation of addicts.

In another initiative strongly supported by the U.S., a conference on psychotropic substances met in Vienna earlier this year. We are hopeful that a treaty with widespread adherence will emerge which will bring under international control a number of these dangerous substances--such as the amphetamines, barbiturates, hallucinogens, etc.--not hitherto subjected to such regulation.

The United States will be submitting shortly specific proposals to strengthen the existing Single Convention on Narcotics Drugs. In essence our amendments would provide to the International Narcotics Control Board mandatory powers where it now has only the power to request voluntary compliance.

Clearly, our Government has acted vigorously in the last year to stimulate international energies on this problem. An excellent start has been made. and we intend to intensify our efforts against the scourge of narcotics and dangerous drugs.

Hijacking. In 1970, the world-wide implications of this problem were dramatically illustrated by the hijacking to the Middle East and the subsequent destruction of four aircraft, and the attempt to force political actions upon governments as the price for the safe return of the innocent passengers. In addition to the continuing series of hijackings of Western Hemisphere aircraft to Cuba, this problem also cropped up behind the Iron Curtain with the hijacking of Soviet and Eastern European aircraft.

These events have brought the world to an awareness of the fragility of the network of international air traffic. Great as is its contribution to our well-being, it is singularly vulnerable to abuse at the hands of the irresponsible and the malevolent. The world cannot afford to permit the boon of air travel to become the tool of criminals.

Fortunately, the events of last year brought a near universal recognition of that fact. The International Civil Aviation Organization is the focus of the general readiness to deal with the problem of air piracy. With the United States playing an active role, a new treaty was drawn up and signed at a conference called by ICAO which met at The Hague at the end of the year. It recognizes aircraft hijacking as a crime, whatever the motives behind it, and ensures that hijackers will be subject to prosecution or extradition if apprehended on the territory of contracting states. I will submit this convention to the Senate shortly, and I hope the United States will be among the first to ratify it. Once that has been done, we intend to exert every effort to ensure the widest possible international acceptance of this convention, for we consider it a significant step forward.

However, we think that additional action is necessary. It should include international agreement to suspend air services to countries which refuse to cooperate in the release of hijacked aircraft and the punishment of hijackers. An agreement should cover other acts of interference with civil aircraft, such as sabotage. We intend to be vigorous in pursuing such agreements.

The Kidnapping of Diplomats. Terrorist groups in several countries have now adopted the practice of kidnapping foreign officials and ransoming them for political and judicial concessions from their own government. Kidnapping is, of course, a crime in any nation, but in this particular form it is, in addition, a direct and serious challenge to the integrity of the machinery of international life. For its very purpose is to endanger the friendship between nations, and to use the international tension that results from such kidnappings to blackmail governments.

The international community needs to recognize this crime for what it is, an assault upon international amity and cooperation. We need an agreement between the nations of the world which will guarantee the punishment of those who commit such crimes, wherever they go and whatever motives they profess. As in the case of aircraft hijacking, we need to make certain that there is no profit in such a crime, and no sanctuary for those who commit it.

The Organization of American States has adopted a Convention characterizing these acts as common crimes irrespective of motive and providing for the extradition or prosecution of the perpetrators of these offenses. This was a useful step in organizing the moral pressure of world disapproval and in acknowledging the general world interest in preventing such crimes. More is needed, however, and the United States will continue its efforts to build a firm international consensus on this matter.

ASSISTING THE VICTIMS OF DISASTER

Natural and man-made disasters continue to afflict mankind, and to call forth from the peoples of the world a generous and noble response. This compulsion to help when tragedy befalls others is evidence of the sense of common humanity which binds us together and which, in times of stress and great need, transcends the political and other issues which divide mankind.

During the past year, the earthquake in Peru, the typhoon and tidal wave in Pakistan, and the civil wars in Nigeria and Jordan were events which generated this common instinct to alleviate human suffering.

Modern technology has greatly affected both the world's desire and ability to provide disaster assistance. Modern communications are such that disasters of scale are known around the world almost immediately, and in a form which powerfully arouses the instinct to help. And modern transportation is such that aid can be effectively brought to bear in a very short period of time.

These facts underline the inadequacy of the present arrangements for coordinating international assistance to disaster victims. Once disaster strikes, the need for help is by definition a matter of great urgency. The local authorities are inevitably too overwhelmed with other tasks to deal individually with each prospective donor. Nor is there any reason to expect that local authorities at the scene of a disaster will be experienced in dealing with tragedies of such scale. It is unrealistic, in such a situation, to expect of them the experience or the detachment required to assess the need quickly and comprehensively. They should not be additionally burdened at such a moment with the task of drawing up a coordinated program for obtaining and distributing what is needed. Some single authority, in concert with the local government, should do that, and should also take on the task of dealing with all those who wish to assist to ensure that their assistance is in the most useful form.

The need for such an arrangement is, I think, clear. The victims of natural disasters are entitled to it, as are the private and government donors whose only desire is to help but who cannot, individually, ensure that their efforts have the maximum utility. The world's ability to help has been transformed by modern technology, and it is time that the world organize its efforts on an international scale and with the full benefit of the considerable experience which, unhappily, we have had with such events.

The United Nations General Assembly has indicated its desire to deal with this problem. Last year it adopted a resolution calling for the Secretary General to submit recommendations for disaster relief planning. We welcome this development and will cooperate fully with the appropriate authorities of the UN and of other countries in the development of a more rational approach by the world community to disaster relief. We hope, before the year is out, to have taken the modest organizational steps necessary to insure that the world's response to disaster victims is characterized in the future by high efficiency as well as great generosity.

PROTECTION OF ENDANGERED SPECIES

It is hardly tolerable that mankind should permit, much less cause, the extinction of fish and wildlife species. Yet, for a number of species, that is the stark prospect. For two reasons, international cooperation is required to prevent it. First, these creatures move without respect to national boundaries and cannot, therefore, be completely protected through national action. Second, the economic demand in other countries for wildlife species, both living animals and their products, has often nullified the protective efforts of individual nations of origin.

Our Endangered Species Conservation Act of 1969 was a singular step forward in this field. To be fully effective, however, there must be similar controls in other countries. In the next year, therefore, the United States will propose and seek broad adherence to an international convention on conservation of endangered species.

SCIENCE AND TECHNOLOGY

Science and technology are central to the problems of national defense, to the vigor of our own and the world economy, and to the improvement of the quality of life on this planet. They are basic tools in the effort to narrow the gap between the richer and the poorer nations.

Basic research is the source of the knowledge from which scientific and technological benefits flow to mankind. Research is one of mankind's great adventures. Its rules are as unequivocal and uncompromising as the laws of nature. Research is a unique and universally understood medium of discourse among those who practice it.

It is settled U.S. policy to encourage international cooperation in basic science. I have requested additional funds for our basic science agency, the National Science Foundation, to enable it to intensify its international activities. The Foundation already administers several bilateral programs of scientific cooperation (with Australia, Japan, Italy, and the Republic of China). Others are beginning. Among these are our programs of cooperation with Romania and Yugoslavia, which are important fruits of the revitalized political relationship we now enjoy with those two countries.

Closely allied to basic research is our national policy on technology exchange. The United States' preeminence in both fields faces us with a policy question as to how far we should share the fruits of our research and technology. There are obvious security implications in many technological developments, for example in the nuclear and space fields.

One approach for serving this security interest is the "Maginot Line" concept which attempts to restrict the transfer of expertise to other nations. It is based on the view that technological preeminence is a national asset to be guarded jealously from others. Another approach is to view our preeminence as an asset to be invested in building effective partnerships with other nations to create a world pattern of open sharing of scientific and technological knowledge.

Only the latter is a viable policy. For human knowledge is not truly subject to being hoarded. As I said in last year's report, "In an era when man possesses the power to both explore the heavens and desolate the earth, science and technology must be marshalled and shared in the cause of peaceful progress, whatever the political differences among nations." It is only through the broadest possible exchange of information that the interests of mankind can be assured, and over the long run we stand to gain as much as any nation through such exchanges. For we, more than most, are able to absorb and make use of new knowledge. Obviously, there will be some areas where restrictions are essential. Our policy, however, is to keep those areas as circumscribed as possible, and to take the leadership in encouraging the exchange of scientific and technological information.

The Space Frontier. Space is the clearest example of the necessity for international scientific cooperation and the benefits that accrue from it. The world community has already determined and agreed that space is open to all and can be made the special province of none. Space is the new frontier of man, both a physical and an intellectual frontier.

Our leading role in space is not only a reflection of our scientific and technological capacity. It is equally a measure of an older American tradition, the compulsion to cross the next mountain chain. The pressurized space suit is, in a very real sense, today's equivalent of the buckskin jacket and the buffalo robe. Apollo 14 is the latest packhorse, and its crew the most recent of a long line of American pioneers.

As mutual help and cooperation were essential to life on the American frontier, so it is on the frontier of space. It is with that sense that we approach the sharing of both the burdens and the fruits of our space activity.

Space is already a matter of broad international cooperation. We have some 250 agreements with 74 countries covering space cooperation.

And space has already been put to the service of man in the new global communications systems and in weather monitoring systems. But this is only a beginning. Space is the only area of which it can literally be said that the potential for cooperation is infinite.

We have opened virtually all of our NASA space projects to international participation. I have asked NASA to explore in the most positive way the possibilities for substantial participation by Western Europe, Japan, Canada, and Australia in our post-Apollo programs. The result is uncertain, for there are very real difficulties to be solved. We will continue our efforts to meet these problems, for a successful international program of space exploration could set a precedent of profound importance.

I have also directed NASA to make every effort to expand our space cooperation with the Soviet Union. There has been progress. Together with Soviet scientists and engineers we have worked out a procedure for the development of compatible docking systems.

In January we reached a preliminary agreement with the Soviet Union which could serve to bring much broader cooperation between us in the space field. I have instructed NASA and the Department of State to pursue this possibility with the utmost seriousness.

A New Step in Nuclear Energy Cooperation. In the field of peaceful nuclear energy, over the years there has developed a broad network of international relationships. This began with research cooperation between governments and now includes exchanges of information, fuel supply contracts and support of the International Atomic Energy Agency as well as sales of United States products and services.

As the demand for nuclear energy has increased, so has the demand for the enriched uranium to fuel power reactors. The United States supplies the fuel for many foreign programs, under safeguards and with adequate compensation. However, with the increased utilization of nuclear power, other countries with advanced programs understandably are reluctant to be totally dependent upon us, or upon anyone else, for enriched uranium to meet their power requirements.

This critical issue and its significance for our policy on non-proliferation have been under careful review. In our concern for safeguarding nuclear technology, we cannot ignore the legitimate desires of our allies for a certain independence in their energy supplies, and our own intrinsic interest in multinational cooperation in this field.

Having carefully weighed the national security and other factors involved, we have undertaken consultations with the Joint Committee on Atomic Energy of the Congress concerning ways in which the United States might assist our allies to construct a multination uranium enrichment plant to help meet future world demands.

An International Center For Systems Analysis. Our National Academy of Sciences is also actively working with the Soviet Union and other countries to establish a Center for the application of systems analysis techniques to the complex problems of advanced societies. This international, non-governmental institution, would initially bring together scholars from some eight nations of East and West to apply the most sophisticated analytical tools available to the major problems of contemporary civilization.

Better Use of Technology in Foreign Assistance Activities. No more severe task faces the developed world than facilitating the economic and social progress of the less developed nations. The role of science and technology can be crucial to success, and we need to organize our effort in this field more effectively.

My proposals to the Congress to reorganize our foreign assistance programs will, therefore, reflect the higher priority we intend to give to cooperation with the developing countries in the transfer and application of technology. It will include legislation to permit the establishment of machinery specifically designed to work with recipient countries on their own needs for research, and technological training and development.

The problems--and the opportunities--created by science and technology dominate an increasing share of our international activity. The problems we can no longer ignore, and can solve only through international cooperation. The opportunities we are determined not to miss, and can realize only through international cooperation. Taken together, these challenges constitute the new dimension of our foreign policy and of international life. The greatest importance attaches to our performance in this new dimension, for upon it rests much of the hope for a better future.

PART VI: THE NATIONAL SECURITY COUNCIL SYSTEM

"The NSC system is meant to help us address the fundamental issues, clarify our basic purposes, examine all alternatives, and plan intelligent actions. It is meant to promote the thoroughness and deliberation which are essential for an effective American foreign policy."

U.S. Foreign Policy For The 1970's

A Report to the Congress

February 18, 1970

Upon my inauguration, I reestablished the National Security Council as the principal forum for consideration of foreign policy issues and created a system of supporting committees to serve it. Chaired by the President and comprising the Vice President, the Secretaries of State and Defense, the Director of the Office of Emergency Preparedness, and others at my invitation, the Council provides a focus at the highest level of our government for full and frank discussions of national security issues. Of course, I also consult the Secretaries of State and Defense and other senior advisors individually to obtain their views on national security issues.

Too often in the past our foreign policy machinery was the captive of events. Day-to-day tactical considerations occupied our time and determined our actions. Policy emerged from a narrow rather than conceptual perspective. The National Security Council system helps us concentrate on purposes and develop policy in the context of our long-range goals.

THE PROCESS

Creativity, systematic planning, and thorough analysis are given special emphasis. It is every concerned agency's obligation to contribute information and analysis and to present and argue its position. Only in this way can I be certain that the full range of views and reasonable options has been explored.

The system helps us to bring together all the knowledge available and to bring to bear the best analytical thought of which we are capable:

--Analysis and decision must rest on the broadest possible factual base. There must be a common appreciation of the facts and of their relevance.

--Coherent policy needs a conceptual framework. Where do we want to go in the long run? What are our purposes? Our analysis must bring out all reasonable interpretations of the facts, and treat the facts in the framework of longer-range trends and our objectives.

--I have made sure that my choice is not limited to ratifying or rejecting bureaucratic compromises which submerge differences to accommodate varying interests within the government. I insist that the facts, issues, and conceptual framework for decision be presented together with alternative courses of action, their pros and cons, and costs and consequences.

THE STRUCTURE

The NSC system is designed to marshal all the resources and expertise of the departments and agencies of the government. The National Security Council is the apex of the system. It is here that the final refinement of studies conducted at lower levels provides a common framework for thorough deliberation. The Council's discussions assist me by illuminating the issues and focusing the range of realistic choice before I make my decision.

The supporting interagency groups of the system do the preparatory work before consideration of major issues by the Council:

--The Interdepartmental Groups, each chaired by an Assistant Secretary of State, are the system's basic subgroups for policy analysis. They are organized on a geographic or functional basis, and include membership from all appropriate agencies. They do the basic studies and develop the range of choices. In some instances ad hoc groups, each chaired by a representative of the appropriate agency at the Assistant Secretary level, are established to deal with specific policy issues.

--The Vietnam Special Studies Working Group is a specialized group for assembling and analyzing factual data on the Vietnam countryside, the economic situation, and other factors affecting Vietnamization. It has investigated specific topics which bear on our negotiating efforts, such as the security implications of alternative cease-fire proposals.

--The Verification Panel, a senior group at the Under Secretary level, performs the basic technical analysis to help develop choices and proposals for strategic arms limitation, approaches to mutual and balanced force reductions in Europe, and other major arms control subjects.

--The Defense Program Review Committee, also at the Under Secretary level, deals with the major issues of defense policy, posture, and budgetary support. It integrates our consideration of the strategic, international political, and economic implications of defense programs. And it relates our defense programs and resource requirements to overall national priorities and the federal budget.

We made changes in the NSC system this past year in the light of experience, primarily to provide a higher-level focus and integration below the National Security Council itself. Two principal groups were raised from the Assistant Secretary to the Under Secretary level. Because the responsibilities of officials at the Under Secretary level transcend specific geographic or functional areas, they are able to view issues in broad perspective; they can draw more fully upon the complete resources of their respective agencies to assure that the entire spectrum of arguments and alternatives is exposed.

--The Senior Review Group directs and reviews the policy studies prepared by the Interdepartmental Groups and Working Groups. It sees to it that these studies present the facts, the issues, the arguments, and the range of choice, before the studies are considered by the President and the National Security Council.

--The Washington Special Actions Group develops options for implementation of decisions during crises. In 1970, the WSAG had to deal with such situations as Cambodia, the Middle East, and Jordan. In each case, it laid the groundwork for reasoned decisions to prevent crises from expanding and threatening our interests and the peace.

The success of any policy depends largely on effective implementation by the responsible departments and agencies. The Under Secretaries Committee, chaired by the Under Secretary of State, links the process of policy formulation to the operations of the government. Through interagency review and coordination, it helps to ensure that decisions are carried out consistently with policy and uniformly throughout the foreign affairs community. It also recommends to me alternative operational steps to implement broad policy decisions; it develops the details, for example, of our positions in certain important negotiations within the guidelines laid down by the National Security Council.

ILLUSTRATIONS

1970 saw many examples of our new analytical process at work:

The Indochina Cease-fire Proposal. My October 1970 proposal for a cease-fire in Indochina was the result of months of study. The Vietnam Special Studies Working Group first made detailed analyses of the military situation in each of the military regions of South Vietnam. It examined the pattern of control in the countryside under present and foreseeable conditions. With this background the group studied possible formulas for establishing and verifying a cease fire, and the likely impact of various forms of cease fire on the military situation, the control of the countryside, and Vietnamization. At the same time, the Interdepartmental Group for East Asia analyzed the implications for negotiations of the various cease fire proposals and sought to determine the likely position of the other side.

These separate studies were then integrated and reviewed by the Senior Review Group. After discussion in the National Security Council, I chose a formula which offered more hope as a basis for negotiation over a formula which offered the greatest apparent advantage to our side. The detailed studies which were made will provide the necessary back-up if the other side indicates a willingness to talk seriously about a cease-fire.

NATO Strategy and Forces. As described in the Europe chapter of this report, a thorough review of NATO's strategic alternatives was essential. We and our allies needed a realistic Alliance defense strategy, and we had to know the nature and numbers of U.S. and allied forces required to support the strategy. This was the only way to develop the basis for deciding on force levels and the allocation of the defense burden within the Alliance.

The Defense Program Review Committee examined the comparative strengths, mobilization capabilities, logistic support, and dispositions of Warsaw Pact and NATO forces. These analyses were used to develop alternative strategies. The Committee also examined approaches to Mutual and Balanced Force Reductions in Europe, in terms of their possible effects on alternative NATO defense postures. Meanwhile, the Interdepartmental Group for Europe studied the political implications of alternative defense decisions for our relations with Western Europe and for East-West relations.

These two study efforts, integrated through the Senior Review Group and the Defense Program Review Committee, provided the National Security Council with a realistic range of options for a U.S. position on Allied strategy and on the size of our own forces in Europe. After the Council review, I reaffirmed our support for the Alliance's present defense strategy, and our intention to retain our present strength in Europe and to strengthen our NATO-committed forces.

Arms Control. The NSC Verification Panel built on the base developed last year in preparation for the Strategic Arms Limitation Talks (SALT). It kept up-to-date our technical analysis of the relative capabilities of specific weapons systems and our capacity to verify different types of limitation. This gave us the building blocks for assessing different combinations of specific limits.

Our National Security Council and NATO reviews of Alliance defense strategy highlighted the need for more intensive study of approaches to Mutual and Balanced Force Reductions in Europe. The Verification Panel is treating this question with the same careful analytical approach which has served us well in preparing for SALT.

The Middle East. The Near East Interdepartmental Group and the Senior Review Group reviewed the situation in this troubled region continuously over the past year. We sought an understanding of the requirements for longer-term stability in the area; we sought a range of choice for near-term U.S. policy steps, such as the major initiative of last summer which led to the Middle East cease-fire.

When the situation in Jordan deteriorated in September and external intervention threatened, the Washington Special Actions Group followed the situation and its implications for us closely. Realistic options were developed to help contain and end the crisis. Because the broader issues of the Middle East had been under continuing study, we were able to address the issues in Jordan not solely in terms of the immediate .crisis but in the broader context of the region and our longer-term interests and objectives.

Procedures are meant to serve purposes; they are not ends in themselves. We believe the system helps us challenge old ideas, deliberate thoughtfully, and coordinate effectively. It has promoted creativity and orderliness without developing a bureaucratic existence of its own.

We recognize that while inadequate procedures can lead to bad decisions, even good machinery cannot guarantee good ones. History will judge us by the wisdom of our policies, not the process leading to them. But our strengthened NSC system is providing crucial support.

CONCLUSION

Our new course of partnership in the world can only be steered with the sustained understanding of the American people.

With our allies and friends, first of all, we are deepening a partnership that provides the dignity and the stimulus of an increased role.

To those who have been our adversaries, we offer a partnership on the paramount world interest--to rid the earth of the scourge of war.

For all nations, we visualize a partnership that will make this planet a better place to live.

And for the American people, we seek a partnership of purpose. Just as America will listen more to others abroad, so must Americans listen more to each other at home. We have a responsibility to debate the means of achieving our foreign policy goals. But these turbulent years have taught us not so much that we must know the right answers, but that we should ask the right questions. We, therefore, have an even greater responsibility to discuss the goals themselves and, together, understand the new character of America's involvement in the world.

This partnership at home must include the advice and support of the Congress. Charged with constitutional responsibilities in foreign policy, the Congress can give perspective to the national debate and serve as a bridge between the Executive and the people.

Our new direction abroad and our new approach at home are parts of a whole. Both rest on the belief that decisions are made better when they are made by those most directly concerned. At home as well as abroad, we seek to distribute responsibilities more widely, so that new partnerships flourish in which all contribute their ideas as well as their energies.

The essence of any kind of partnership is mutual respect.

We will build that mutual respect with our friends, without dominating them or abandoning them.

We will strive for that mutual respect with our adversaries, without compromising our principles or weakening our resolve.

And we will dedicate ourselves to that mutual respect among our own people, without stifling dissent or losing our capacity for decisive action.

In America this calls for tolerance that leads to understanding, not for sentimentality that clouds perceptions. It means as well that compassion is a more profound guide than righteousness. Leaders and the public alike must pursue their goals with a sense of interdependence.

Such qualities will enable us to bring Americans together and, in so doing, help to bring the world together.

NOTES: The text of the above item was issued by the White House in the form of a 235-page booklet entitled "U.S. Foreign Policy for the 1970's: Building for Peace; A Report to the Congress by Richard Nixon, President of the United States, February 25, 1971."

On the same day, the White House released the transcript of a news briefing on the report, held on February 23, 1971, by Dr. Henry A. Kissinger, Assistant to the President for National Security Affairs.