50. Editorial Note
Under instructions from Henry Kissinger, in early 1971 the NSC Under Secretaries’ Committee completed a six-section study entitled “Report on German Offset Negotiations,” which it forwarded to the President under cover of a January 19, 1971, memorandum from Nathaniel Samuels, Acting Chairman of the Under Secretaries’ Committee. In his memorandum Samuels made the following recommendations concerning the German offset negotiations:
- “1. The Under Secretaries Committee recommends that you authorize the negotiation of a new two-year offset agreement with the Federal Republic of Germany covering the period July 1, 1971 through June 30, 1973.
- “2. The Committee recommends that, as an initial negotiation position, we seek both maximum quantity ($850 million) and best quality of components in an agreement. Such an offset agreement, together with the recently agreed European Defense Improvement Program (EDIP) would then yield a total burden-sharing package of $1.0-1.1 billion annually.
- “3. The Committee recommends that the U.S. negotiators be authorized if necessary in the course of the negotiations to reduce the quantity goal to achieve better quality. This could involve a fallback to about $700 million in terms of order of magnitude.
- “4. It is recommended that, to the extent possible, offset negotiating efforts be directed principally to maximizing those offset components which best contribute to improving German and allied conventional defense capability, preferably through direct military procurement and, possibly, by German underwriting of certain Military Assistance Programs now financed by the United States and German assumption of certain costs now borne by the United States in Germany. These are high-quality components. Other components, such as civilian procurement, loans and sales of Eximbank paper, would be assigned lower negotiating priorities.
- “5. Finally, the Under Secretaries Committee recommends your approval of the proposed negotiating scenario outlined in the enclosed report calling for a United States negotiating team to be headed by Deputy Under Secretary Samuels with negotiations concluded, if possible, by June 1.” (National Archives, RG 59, S/S Files: Lot 73 D 288, NSC/USC Memos)
In a February 17 memorandum to the Chairman of the Under Secretaries’ Committee, Kissinger reported the President’s approval of these recommendations. (Ibid., Central Files 1970-73, FN 12 GER W)
The first round of negotiations was held in Bonn March 10-11. An undated Department of State paper summarizing these talks is ibid. The second round took place in Washington April 15-16. An undated Department of State paper summarizing these talks noted in part: “As at the first round of talks in Bonn, the atmosphere was very good. However, the German position had advanced very little and at the conclusion the two sides were still quite far apart.” (Ibid.)
Following this impasse intensive behind-the-scenes maneuvering and consultations took place prior to the third round of negotiations in Bonn June 28-29. Telegraphic communications between the Embassy in Bonn and the Department of State on these efforts are ibid. A June 25 memorandum from Ernest Johnston of the National Security Council Staff to Kissinger advised that Kissinger recommend to the President that a State Department position to accept a possible further German compromise be rejected. Johnston pointed out the severe split among the State, Treasury, and Defense Departments on the U.S. position for the upcoming Bonn discussions, the shortness of time, and the uncertainty over whether the Germans were prepared to compromise further. He recommended that U.S. negotiators continue to press the Germans strongly but that no U.S. decision on what to accept be made until after the Bonn meetings. [Page 123](Ibid., Nixon Presidential Materials, NSC Files, Country Files—Europe, Box 685, Germany Volume IX 4-8/71)
Regarding the final U.S.-German negotiations leading to the initialing of an Agreed Minute on offset in Brussels on December 10, see Document 86. Additional documentation on the German offset negotiations during 1971 is scheduled for publication in a forthcoming Foreign Relations volume on Western European regional issues.