Foreign Relations of the United States, 1969–1976, Volume E-15, Part 2, Documents on Western Europe, 1973–1976, Second, Revised Edition

5. Minutes of Senior Review Group Meeting¹

Washington, January 31, 1973, 5:00–5:51 p.m.

SUBJECT

• U.S. Relations with Western Europe (NSSM 164)

PARTICIPANTS

• Chairman
• Henry A. Kissinger

• State

  • Kenneth Rush
  • William Casey
  • Walter Stoessel
  • Ralph McGuire

• Defense

  • Lawrence Eagleburger
  • John H. Morse

• JCS

  • Adm. Thomas Moorer
  • B/Gen. Keith Christensen

• CIA

  • Richard Helms
  • [name not declassified]

• Treasury

  • Paul Volcker
  • John Hennessy
  • John Hart

• CIEP

  • Peter Flanigan
  • Deane Hinton

• NSC

  • B/Gen. Brent Scowcroft
  • Helmut Sonnenfeldt
  • William Hyland
  • Robert Hormats
  • Robert Livingston
  • Jeanne W. Davis

SUMMARY OF CONCLUSIONS

It was agreed that:

—CIEP would prepare a list of economic negotiations with European countries and what we wish to accomplish in them.

—Defense would prepare a paper outlining what we want from the Europeans in the security field.

—State would prepare a paper on political issues with the European nations.

—The three papers will be considered at a later meeting and a summary consensus paper prepared.

Mr. Kissinger: Dick (Helms), do you have anything for us?

Mr. Helms briefed from the attached text.

Mr. Kissinger: I wanted to have this meeting partly because of the Heath visit, although it’s really too late to have any real input now. But we’ve been talking about the “year of Europe”, and the President at his press conference indicated we would be paying increasing attention to Europe, but we haven’t had any systematic discussion of what that means, of where we are going, what we are trying to accomplish, and the relationship between various elements of our policy. The State paper has given us three options, but they violated Kissinger’s law by putting their preferred option last rather than in the middle. The three options are the present course, plus and minus. I don’t necessarily have any better options. But, I think more integration is not likely, and that a conscious policy of attenuation is not likely either, although that may be the result. Moreover, I see some dilemmas in such things as SALT, MBFR and our trade negotiations. If the Europeans understood what we are doing in MBFR, they would see that it is overwhelmingly in their interest. We have avoided substantive discussions, first while Congress was in session and in a position to put pressure on us for US troop cuts in Europe, and now while neither the US or the Europeans really know what we are talking about. But the Europeans have interpreted this as evidence of a US-Soviet deal. On the question of forward-based systems in SALT, they apparently consider the central strategic balance of less concern to them than the weapons in Europe. Ken Rush made a good point at the Verification Panel meeting yesterday when he argued that any distinction between our treatment of a threat to the US as opposed to a threat to the European bases would make a bad impression on the Europeans. But we must also take into account the devasting impression made on the President by European behaviour during our bombing of North Vietnam. They argue about making our deterrent credible in Europe, but then are the most vicious and least understanding critics of our comparable actions in Indochina.

In the economic field, both sides have all the incentives to take maximum positions, but there are apparently no incentives to take reasonable positions. We’ve been talking in general about a global deal—the need for greater political unity, and defense and economic considerations all in one package—but I’ve seen nothing which puts this in concrete terms. What do we want from the Europeans? What are we willing to do? Maybe our best argument for economic concessions is that our military commitment depends on their showing some flexibility in economic matters. At least, this is something we should begin to discuss.

Another consideration is that Brezhnev will certainly be coming here and we will certainly be continuing intensive discussions with the Soviets.

How can we conduct these discussions without eliciting an unreasonable response from the Europeans?

Mr. Rush: I think it’s important to separate the economic considerations from the political and military. The strength of our security system depends on people. If we have a major confrontation on agriculture, for example, with our labor unions involved, there will be great pressure to reduce our commitment to NATO with an inevitable effect on Congress. The national security aspect of these problems is one of mutual benefit. If it were not, neither the US nor the Europeans would stick with it. If we hold our security commitment as hostage to economic considerations, we will end up by carrying the load. From the economic and military standpoint we should take a stronger stand on the Europeans carrying a fair share of the load. This situation began when the US was the only strong partner. Now we’re in a bad way both in trade and balance of payments. If the Europeans won’t take on their share of the load, they’re damn poor partners. But I think we can take a strong stand without needless confrontation.

Mr. Kissinger: But we don’t know exactly what we want. I think we would find it a help in the timing of the various negotiations if we understood how they are related to each other and had some idea as to the various packages we would like to propose. Then we could make a reasonable decision as to strategy. What do you think, Peter (Flanigan)?

Mr. Flanigan: I think we’re tending to overstate the scenario. On agricultural policy, we’re annoyed because the European countries are subsidizing exports to third countries while placing restrictions on us. As long as they have these preferential agreements with the European countries, we want them to get their individual tariffs down to a level where the preferences won’t hurt us. There aren’t such enormous difficulties in our economic disagreements. The broader problem is what to do about relations with Japan in connection with the multilateral economic discussions. The Europeans say all countries have to respond in the same way. If we do that, we will push Japan away. We have to bring the Europeans to a more realistic position toward Japan. I think we can develop various positions, and then begin negotiations in March on some sensitive items and demand compensation on some of the tariffs set when the European Community was expanded. We should make it clear that we’re considering retaliatory action—create a mind set.

Mr. Kissinger: What sort of a mind set?

Mr. Flanigan: Hopefully, that the US means business on this and that we will respond.

Mr. Kissinger: I have no view on this particular issue. I’m trying to get some game plan so that the issues don’t come up one at a time. That way we will be in an endless war with the Europeans on economic issues and won’t ever get around to the political and security issues. Can’t we get a list of issues? Everyone is saying we should tell Prime Minister Heath that he has to be a leader in this regard. If he says ‘what do you want me to do?’, what do we tell him?

Mr. Rush: I think a shotgun approach will accomplish nothing.

Mr. Kissinger: Some actions might be counterproductive.

Mr. Rush: On the question of preferences, take Spain. Those bases are important to us. If we fight them on the preferences, we might lose the bases. It would be counterproductive to go after their preferences if that should happen. Let’s examine the facts and see how much these things would really hurt us.

Mr. Flanigan: We haven’t had a position on some of these things—we have no position on Spain and Israel.

Mr. Kissinger: I see another problem on preferences. Could it be in our interest that some African countries might be influenced in the direction of political stability by reverse preferences? What would we gain by cutting them loose?

Mr. Flanigan: We’re not cutting them loose. We are urging the developed countries to help the less-developed countries, but reverse preferences help the developed countries.

Mr. Kissinger: Is it possible to get a comprehensive balance sheet of what everyone wants from our relations with Europe which goes beyond general statements? Get a list of the economic negotiations and what we want to accomplish? Defense could outline what we want from the Europeans in the security field. State could cover the political field. How do we handle the détente problems—in MBFR and SALT? Let’s try to get the Europeans away from the symbolic jousting and get them to the main issue. They should realize that a concrete discussion of MBFR is really their only salvation. The Europeans are still fighting the theory. After we get a look at the real issues, then we can decide our strategy—what we might trade off in the security field for some economic benefit. I have difficulty in forming any judgment without a clearer idea of the problems.

Mr. Casey: We need some way to relate them.

Mr. Volcker: The problem with our European relations is not particularly a bilateral US-European problem. Our relative external economic position is very weak. This leads to monetary upset and political frictions. These things are all related and we shouldn’t talk about trade-offs. The Europeans would be the first to bitch if the dollar is weak. If we trade a weak dollar for security, that’s no trade-off. We have a general US economic problem in the world which has its effect on Europe. There is one strand of opinion in Europe which is nationalistic and opportunistic and would pull the world apart. Another strand is Atlanticist and cooperative. Preferences in part are an example of the expansionist trend with implications far beyond their economic impact with regard to dividing the world. There’s no reason they should stop at Africa.

Mr. Kissinger: Unless the Japanese get there first.

Mr. Volcker: Yes. We want to counter this whenever it happens. We should look at preferences in this light. The economic and political issues are all tied up together but not in a way in which you can trade off easily. We should both support liberalizing forces in Europe and strengthen the US position internally or we won’t accomplish either.

Mr. Kissinger: In the Azores agreement we got Pompidou to go higher not with an economic argument but with a political argument. We didn’t want to settle the economic matters without French, but we made him aware that if he didn’t cooperate France would be isolated.

Mr. Volcker: This was an example of European resistance to something that had to be done in both our interests. That was a good agreement.

Mr. Kissinger: Nothing will happen out of a consciousness of harmony. The best policies will run into objections. But we musn’t get adhoc-ed to death in a series of separate negotiations. Present day Europe is not distinguished by great statesmanship. It is being run by a series of party bosses obsessed with domestic politics.

Mr. Volcker: It’s important to have an overall strategy and to look for something which is in our common interest. But we can take a tough position on specific issues.

Mr. Kissinger: If we can give the Europeans some theoretical rationale for what we’re doing, they’ll still resist even if it is in their long-term interests.

Mr. Flanigan: But if we don’t make headway at home, we won’t get anything from them.

Mr. Kissinger: (to Mr. Flanigan) Can you work out a paper on the economic issues? State and Defense should make their own inputs. We didn’t discuss Japan. How do we handle that?

Mr. Flanigan: The Europeans are not looking at Japan realistically as it exists now. We should use the Europeans attitude to make Japan take some steps. We should be sure the Europeans don’t tag us as pro-Japanese and vice versa, and should point out to the Europeans that Japanese economic policy is not as bad as they think.

Mr. Kissinger: What would be the practical consequences? What do we want the Europeans to do?

Mr. Flanigan: Not to design restrictions on Japan which pushes them out of their orbit and puts greater pressure on the US economy.

Adm. Moorer: I can see trade-offs within one category—Japanese versus European economic steps—but I don’t see trading off economic issues for security.

Mr. Kissinger: We could agree to maintain certain troop levels for a certain time if they make concessions in the economic field.

Mr. Rush: That would be very dangerous. Each side should believe that any steps they take are in the interests of both. We want whole-hearted cooperation on the grounds that NATO is in Europe’s best interests. If we make economic sacrifices for the sake of security, we will be undermining these policies.

Mr. Flanigan: But it would be easy to sell troop cuts to the American people if they felt they were being economically discriminated against.

Mr. Rush: That would be counterproductive. If NATO is not seen as indispensable, we would be conceding to the Russians. If we try to trade off economics for security, the Europeans would turn more to the USSR. A trade-off would weaken both economics and security.

Mr. Flanigan: We may not have the option of avoiding this, if Congress and the American people felt they’re being had.

Mr. Kissinger: There is no inherent reason why an area with a population of 400 million with a GNP larger than the Soviet Union must be protected by the ground forces of a country 3000 miles away.

Mr. Rush: Unless we can persuade the American people that our troops in Europe are in their interest.

Mr. Kissinger: We’re carrying 98% of the strategic load and a heavy load in conventional weapons. The most effective land force in Europe is American. With the strategic deterrent as a key element, you could make a good argument that the Europeans should take a farsighted view. They cannot drive economic disparity to the point that our heavy defense commitment gives them a comparative advantage.

Mr. Rush: I understand the necessity to get a good economic deal. But it will do the reverse if we trade off NATO for economic advantage. It will undermine both.

Adm. Moorer: If they won’t assist us on economic matters we can’t maintain our military strength.

Mr. Rush: They should support both in their own interest.

Mr. Kissinger: Great! But it is a political fact that we will be under greater pressure on Europe. We had a majority against us even when the Vietnam groups were backing us in Europe.

Mr. Eagleburger: Is this a threat that we could ever perform on? If they don’t perform economically, will we talk troop cuts?

Mr. Rush: The American people wouldn’t sanction keeping military strength in Europe by economic concessions, and the Europeans wouldn’t buy military strength by economic concessions.

Mr. Kissinger: That’s not the way to do it. To maintain the proper psychological climate in the US we would have to keep in mind a broader perspective than immediate economic advantage.

Mr. Flanigan: Even on the economic front, they are not an ally for which we would make big sacrifices on the military front.

Mr. Kissinger: They cannot afford to maintain that we have to be hard as nails in Europe, while they have the right to go on moralistic binges when we take hard positions in other areas.

Mr. Volcker: We have a problem of semantics—we shouldn’t talk about concessions.

Mr. Kissinger: Let’s get the three papers I asked for and we’ll have a meeting where we put them all together. We should be looking for some philosophy for the next three or four years which would encompass economic, defense and arms control policy rather than a series of ad hoc negotiations where we don’t know where we’re headed.

Mr. Flanigan: We have unity, purpose and thrust in the economic negotiations.

Mr. Volcker: Right. We just haven’t articulated it properly.

Mr. Kissinger: We’ll get a paper out summing up the consensus.

1. Summary: The Senior Review Group considered the study prepared in response to NSSM 164, United States Relations with Europe.

   Source: National Archives, Nixon Presidential Materials, NSC Files, NSC Institutional Files (H-Files), Box H–113, SRG Minutes (Originals) 1972–1973 (3 of 4). Secret. The meeting took place in the White House Situation Room. Attached but not published is Helms’ briefing, January 30. Flanigan sent the CIEP memorandum requested at this meeting to Kissinger under cover of a February 27 memorandum; the undated memorandum was entitled “US-European Relations: Economic Objectives.” (Ibid., NSC Files, Box 1052, Institutional Materials, NSC Institutional Papers—March 1973)