Foreign Relations of the United States, 1977–1980, Volume I, Foundations of Foreign Policy

88. Address by the Assistant Secretary of State for East Asian and Pacific Affairs (Holbrooke)¹

Honolulu, Hawaii, June 16, 1978

Changing Perspectives of U.S. Policy in East Asia

I am honored to be with you today to talk about U.S. policy toward Asia and I’m particularly delighted to have once again the opportunity to visit Hawaii, a State which symbolizes the U.S. role as a Pacific nation with vital security and economic interests stretching far into Asia. Today, I would like to go beyond that truism and discuss with you how the United States, and particularly these 13 Western States, relate to the emerging Pacific community.

Most Americans, especially on the eastern seaboard, first look east toward the great nations of Europe. They see Asia as far away and rather exotic. But, in fact, the Far East is not very far any more. It took me about 12 hours to fly here from Washington, but I would need only 7 more to go on to Tokyo. The tip of the Aleutian Islands of the State of Alaska extends as far west into the Pacific as New Zealand and is as close to Japan as Kansas City is to San Francisco. Asian Russia is visible across the Bering Strait from Alaska. The Sun first shines on American territory each day in Guam, which is much closer to Singapore than to San Francisco.

The Pacific is at once a transportation route, a source of national resources, including food and energy, and the locus of much of the world’s population. More ominously, because of its strategic and commercial importance, the Pacific is an area of potential conflict. Our last three wars began in Asia, and the only foreign attacks on American soil since 1812 occurred in the Pacific.

Another important dimension of America’s Asian character is of particular significance to the Western States—the cultural and ethnic bonds provided by the people who have immigrated here from the Orient. Asian-Americans have contributed to all aspects of American life since the middle of the last century. In the States which you represent, over 2 million people, or about 5½% of the population, claim an Asian heritage. Our host State of Hawaii provides one of the best examples of the influence and role of Asian-Americans in our society.

While the fundamental nature of our nation’s involvement in Asia and the Pacific is timeless, we have already entered a new era in the region, and it is time to recognize it. It is an era filled with hope and the promise of stability, prosperity, and the emergence of a genuine Pacific community. But this hope can be realized and the promise fulfilled only if the United States plays a major economic role and fulfills its responsibility to help maintain the strategic balance.

Adjusting to Circumstances

Our policy objectives are thus clear. To achieve them requires some adjustment to the changed circumstances we now find in Asia. What are some of these changes? What are the new perspectives?

The fall of Saigon marked the end of a 30-year period of history that began with the collapse of the European and Japanese colonial empires in Asia between 1944 and 1954. Playing a remarkable new role in world affairs, the United States filled part of the resulting vacuum by supporting heavily many of the new nations of the region, while Communist states were established in China, North Korea, and North Vietnam. In this period, American policy produced some striking successes and many enduring relationships. Our presence allowed many newly independent countries to buy time, time which was often well used. The reconstruction of Japan, the economic miracles in Taiwan and Korea, and the evolution of the members of the Association of South East Asian Nations (ASEAN) into strong and viable nations are remarkable successes in which we played a major role. But the period also saw our intervention in Indochina, and this triggered the most divisive foreign policy debate the country has ever known, a debate which has left hidden scars and persistent myths among both former “hawks” and former “doves.”

But as we debated our proper role in Asia, Asia itself was changing rapidly—and dramatically—and not quite the way many expected it to change. A few years ago, many predicted that, if Vietnam fell, we would be entering a period of declining stability as a voracious Communist monolith rolled over economically weak and politically shaky non-Communist countries. These smaller wars would beget larger ones until we would be in direct confrontation with one of the superpowers.

Reality looks far different. The Communist countries are economically weak and—after sharing common ground against us—are now bitterly divided. The sharpening of the Sino-Soviet split, the Vietnamese-Cambodian border skirmishing, and the recent deterioration of Vietnamese-Chinese relations clearly reveal serious and chronic problems among these countries. The roots of these three rivalries lie deep in the historical and geopolitical realities of Asia. We do not expect them to abate in the foreseeable future. This presents a sharp contrast with the other nations of the region.

The forces of regional economic integration are growing. Japan is increasing its trade with the rest of Asia. ASEAN is successfully engaged in increased economic cooperation through a web of consultations encompassing practically every phase of economic activity. Our two-way trade with ASEAN in 1977 was over $10 billion. When that is added to our approximately $15 billion in trade with Hong Kong, Korea, and Taiwan, the total is almost as large as our trade with Japan. These countries—whose combined population totals 300 million (more than South America) have achieved between 6% and 11% annual growth in GNP over the last 6 years. It is now the only group of countries in the world within which real GNP’s are doubling every 7–12 years.

As these countries prosper and mature, they will be increasingly looking to U.S. markets for more sophisticated products. To cite an example of particular interest to the Western States, Singapore’s decision to purchase thirteen 747’s and six 727’s from Boeing is the first step in a transaction which will ultimately be worth $900 million.

From the standpoint of security, the strategic balance that exists today among the four most powerful countries in the region—China, Japan, the Soviet Union, and the United States—is clearly in our nation’s interests. Although important differences remain with Peking, it is fair to say that the United States, China, and Japan share an interest in maintaining that stability—a significant and hopeful change from the pattern of the past half century in which U.S. Far Eastern policy constantly required us to choose, in effect, between China and Japan. This situation, true only since Henry Kissinger’s 1971 trip to Peking,² has created dramatic new opportunities throughout Asia: It is one of our main tasks not to lose these opportunities—which are diplomatic, strategic, political, and economic—through inattention, inaction, or misunderstanding.

The face of Asia has changed, and the U.S. role must change as well. Since the outset of the Carter Administration, we have tried to shape U.S. policies to accommodate these new perspectives. U.S. policies and actions seek to maintain the current equilibrium and not allow any single power to achieve a preponderance of influence or military superiority in the region. A new role has been defined—one that does not return us to the inappropriate level of earlier involvement in the internal affairs of the region and yet does not constitute a confusing and destabilizing “abandonment” of Asia.

As we began this process and some adjustments took place, some on both sides of the Pacific mistook them to mean a lessening of American concern about Asia or a reduced U.S. priority for the region as a whole. Others concluded from the collapse of Saigon, the closing of U.S. bases in Thailand, and our decision to reduce our military presence in Korea, that the United States was abandoning its strategic and security role in the region.

These new myths about U.S. attitudes toward Asia do not square with the reality of our foreign policy and the four basic elements of the Administration’s Asian and Pacific policy.

U.S. Military Presence

The first essential element is that we are committed to keeping a strong, flexible military presence in the region to help maintain the present balance of power. To emphasize this point, the President sent Vice President Mondale and National Security adviser Brzezinski on special missions to Asia. The Vice President visited the Philippines, Thailand, Indonesia, Australia, and New Zealand [April–May], while Dr. Brzezinski went to Korea and Japan after the People’s Republic of China [May–June].³

At every stop, they indicated publicly and privately our firm resolve to continue to play a major role in the region; and with every ally they reaffirmed the American treaty commitments to that country. Consider also the following.

• Except for our planned ground troop withdrawals from Korea, we will maintain our current level of military and naval forces in the Pacific. In addition, we will actually increase the number of tactical aircraft in Korea by 20% this year and strengthen other forces by the introduction of several advanced weapons systems within the next few years. This will include Trident nuclear missiles for our submarine fleet, cruise missiles for our B–52’s, the airborne warning and control system, and the latest advanced fighter aircraft, such as F–14’s for our carriers and F–15’s for Air Force squadrons.

• Our combat troop withdrawal from Korea is being conducted in a way that will insure that stability is maintained on the peninsula. As U.S. troops leave, we plan to turn over $800 million in military equipment to bolster South Korean forces in addition to continuing assistance to Korea’s military modernization program. The scheduled departure of our forces has been “backloaded” with only one battalion leaving this year, two more in 1979, and the withdrawal continuing into 1981–82. This careful phasing will give us ample opportunity to assess North Korea’s behavior and will give Seoul time to train and equip its units. Our commitment to the Republic of Korea remains firm. South Korean forces now defend virtually the entire demilitarized zone with the U.S. military comprising only 5% of all forces in the country. We believe that the U.S. division can be withdrawn without jeopardizing the stability which has existed for the past 25 years.

• With the agreement of the Philippine Government, and with full regard for Philippine sovereignty, we are committed to maintaining the two important U.S. bases in the Philippines. This will enhance our ability to project U.S. military strength into Southeast Asia, the Indian Ocean, the Persian Gulf, and East Africa and to protect Pacific and Indian Ocean shipping lanes over which 90% of Middle Eastern oil is transported.

Relations With Japan

The second element of our strategy is our relationship with Japan—still the cornerstone of our Asian policy.⁴ Our fundamental relationship has never been better despite serious economic stresses. The depth of commitment that both countries have brought to relieving these stresses and the efforts of Prime Minister Fukuda and President Carter have helped us resolve some difficult problems, such as the Tokai Mura nuclear facility, color TV and specialty steel imports, and fishing rights disputes. Perhaps the most significant effort has been our joint undertaking to address Japan’s current account surplus which reached $14 billion in 1977. Sparked by efforts of Japanese Minister for External Economic Affairs Nobuhiko Ushiba, Japan’s Ambassador to the United States Fumihiko Togo, our Special Representative for Trade Negotiations Robert S. Strauss, and our Ambassador to Japan Michael Mansfield, we have agreed to a number of steps such as:

• Japanese agreement to increase beef and citrus import quotas;

• Establishment of a U.S.-Japan forest products study group to explore ways to expand trade in this area; and

• Establishment of a U.S.-Japan Trade Facilitation Committee to expand U.S. exports to Japan by resolving market access problems encountered by U.S. firms.

In addition, Japan has decided to stimulate its domestic demand to absorb production and reduce pressure to export.

We are continuing regular discussions with Japan in support of these steps. The Japanese current account surpluses and our bilateral deficits with Japan continue to be large, but we believe that the trend will move in the right direction if both nations remain firmly committed to the goals we have set for ourselves in remedying this serious problem. The Multilateral Trade Negotiations (MTN) are equally important but less visible. Minister Ushiba and Ambassador Strauss agreed to get down to serious business on the MTN. They are now moving at top speed along with the European Community, Australia, and others to meet their mid-July deadline for agreement on the main elements.

Relations With the P.R.C.

The third element in our Asian and Pacific strategy is our commitment to normalizing relations with China. While we do not have a firm timetable, one of President Carter’s first actions as President was to reaffirm the Shanghai communique of 1972.⁵ He has expressed his determination to complete the process of building a new relationship with Peking.

In structuring our relationship with the Chinese, we will not enter into any agreements with others that are directed against the People’s Republic of China. We recognize and respect China’s strong commitments to independence, unity, and self-reliance.

Dr. Brzezinski’s trip to China was the most recent affirmation of the importance to both countries of the Washington-Peking relationship. As Dr. Brzezinski said in Peking, a strong and secure China is in America’s interest. I accompanied him on his visit and can attest to the fact that it enhanced U.S.-Chinese relations from a long-range strategic point of view.⁶

Nevertheless, there is an incompleteness in the relationship which, over time, could render it vulnerable to extraneous factors, raising once again the prospects of needless confrontation or misunderstanding between two major powers. This would deprive us of the opportunity to achieve greater cooperation with China on global and regional issues.

Normalization would not solve all of our problems or disagreements, but it would help consolidate our nonconfrontational relationship, and it would help insure that the current balance in the entire region remain intact. We are, therefore, convinced that normalization is an essential objective for our new Asian policy.

In pursuing this objective, we are constantly mindful of the well-being of the people of Taiwan. Thus, we are continuing to seek that framework which allows us to move ahead with our strategically and historically important relations with the People’s Republic of China while at the same time taking full account of our concerns regarding Taiwan. Our interest is that whatever solution there may be to the “Taiwan question” that it will be a peaceful one. We are confident that in the future we still would be able to continue the many mutually beneficial relationships which link us to the people of Taiwan.

Trade and Investment

The fourth key element of our post-Vietnam/Asia policy is a strong emphasis on promoting U.S. trade and investment in Asia. Economic relations are now the single most important emerging element of our relationship with Asia, and they must not turn into a one-way flow.

Prompted by our large trade deficit with the region, some have argued recently that U.S. trade with Asia is increasingly disadvantageous to the United States. It is our conviction, however, that increasing U.S. exports is the best way to reduce our trade difficulties with Asia. The reason is clear and simple: International Trade and U.S. exports create jobs for Americans.

The Department of Commerce estimates that every billion dollars of U.S. exports translates directly into 30,000 American jobs. One out of every three agricultural sector jobs is now export-directed. In the manufacturing sector, one out of every seven jobs is export-related. Thus, our exports to Japan alone in 1977—which totaled $10.5 billion—provided direct employment for 315,000 Americans. Our total exports to all of Asia in 1977 of $20.9 billion provided jobs for about 627,000 Americans. But even these figures do not tell the whole story. The Department of Labor estimates that for every job directly involved in the production of items for export, another job is created in an allied or supporting industry.

Slow export growth over the last 4 years is second only to energy imports as a cause of the large and destabilizing U.S. trade deficit. Recognizing this, President Carter asked Secretary of Commerce Kreps to head a Cabinet-level task force to review our export policy. The task force recommendations, which will be presented to the President soon, focus on modifications of governmental procedures which create disincentives to exports and propose new governmental programs to facilitate marketing efforts by U.S. firms abroad.⁷

It is here that States play a dramatic and leading role, particularly through export industries and business. More than $20 billion in exports were shipped from the Western States in 1976. California led the entire country by a large margin in the export of manufactured goods with over $8 billion in shipments and over $11 billion in total exports—65% of which went to Asian and Pacific countries. Washington, with over $3 billion in manufacturing exports, also ranked among the top eight States in the nation. Oregon sends 83% of its $1.6 billion in exports to Asia—trade which provides jobs to 11% of Oregon’s work force.

Exports are an increasingly important part of the States’ economies. Most of the Western States tripled or quadrupled the dollar value of their exports between 1972 and 1976, with Idaho registering a sixfold increase. Inflation accounted for some of those gains, but there were solid indicators of real gains. For example, the total number of persons employed in manufacturing exports in the Western States almost doubled between 1972 and 1976.

The importance of export promotion to the Western States is clear. In Alaska 22% of manufacturing employment is related to exports; in Washington, the figure is 12.5%; in Arizona and in Hawaii, it is 11.6%. In California the percentage is lower—7.8% but the absolute numbers are large: 125,000 people are employed in manufacturing exports alone.

Export promotion efforts can be helped by informing business constituents that the investment climate in Asia is much improved as well. Following the end of the Vietnam war, the American business community grew less certain about the prospects for maintaining a favorable economic climate in Asia. But now that 3 years have passed, we can see that those fears were exaggerated and unjustified. As a result of the political stability in the market economy countries, there is a tremendous regional market developing that will be increasingly hungry for American quality products and attractive to American capital. Together, utilizing already existing facilities such as the Export-Import Bank and the Overseas Private Investment Corporation, Federal and State Governments can be important catalysts in helping America increase its share of the lucrative trade and investment markets.

The other side to the coin is that the future of the Pacific community is closely tied to the maintenance of open markets in the Western States. This is true for Japan and for the newly industrializing nations of the region. The latter group, in particular, presents us with new challenges as they are becoming increasingly competitive with us in world markets. We must insure that this competition is conducted according to accepted international trade rules and that we have domestic policies in place to cushion any adjustment costs to our own industries and workers. It is essential to the growth and development of both Asia and the American West to keep our markets open.

This is not an easy task for public officials or for the Western businesses and workers that must compete. However, there is hardly anything more important to the future of the advanced developing nations of Asia nor any greater test of our ability to keep open the world economy.

There are many other subjects which I would like to discuss—our recent ANZUS consultations,⁸ the emergence of ASEAN for which Vice President Mondale expressed our strong support on his recent trip, and the question of relations with Vietnam, to whom we have made a reasonable offer to establish diplomatic relations and to lift the trade embargo. Unfortunately, time will not permit.

Human Rights

There are two humanitarian problems of deep concern—the plight of the Indochina refugees and food shortages. Refugees are still fleeing from Vietnam and the incomprehensible horrors of Cambodia; in fact, at an increasing rate lately. Many set out in rickety boats with few supplies, and estimates are that only half make it to another port. There they often languish in barely adequate conditions in makeshift camps. The Vice President and I were deeply moved by what we saw, and the Vice President reported his findings to President Carter and Secretary Vance. Our view is that the United States, with its great humanitarian tradition, cannot turn its back on this continued outflow of people.

On June 14 the Administration announced its intention to receive 25,000 Indochinese refugees per year.⁹ We will do our part, but we call on other nations to join us in an international effort to deal with this tragic situation and to assist in alleviating the burden on the Southeast Asian and Pacific countries who temporarily accommodate Indochinese refugees. Some nations, like France, Australia, Canada have responded well; others have been less helpful.

No other part of our nation has done more than the Western States to assist those already here. Despite the growing dimensions of the problem, I hope that the spirit of American compassion will not allow us to turn our backs on those still in desperate need of help.

The Indochina refugee dilemma is the most visible aspect of our human rights efforts. But the drama and urgency of that situation should not obscure the fundamental actions of the United States in promoting the dignity and rights of people in all nations. We will continue to speak out in appropriate fashion when we feel that human dignity is being diminished or those rights abridged, and we believe that real progress has been made in some countries with which we have long had, and intend to maintain, very close ties of friendship.

The other humanitarian concern I would like to mention—one long predating the refugee problem—is the state of agriculture, which remains the weakest link in the Asian development scene. Surveys by the Asian Development Bank and the World Bank indicate that improvements in rural living standards in much of non-Communist Asia lag further behind the modernized industrial sector. There are also serious food shortages and nutritional deficiencies in some areas. For example, one-third of last year’s entire world trade in rice—well over 2 million tons—went to Indonesia. This is a genuine cause for concern.

In the short term, the United States and other donors can do much to alleviate the food shortages and malnutrition plaguing some Asian countries. In the long run, the answer lies in the development and modernization in the rural economies of Asia. The United States can make a large contribution to this process with carefully directed development programs supported by PL–480¹⁰ and assistance by the Agency for International Development, support for agricultural development projects sponsored by international lending institutions, and the transfer of appropriate technology and capital to the rural sector. We are working closely with the ASEAN countries to achieve just this sort of development. Japan is also aiding in this effort.

In sum, Asia today presents both challenges and opportunities for Americans. We are an integral part of the process of change in the region because of our history, our geography, and because of shared values and interests. We will always be a power in the region, but we realize that power must be newly defined and redefined as circumstances evolve. In Asia and the Pacific, it now largely means cooperation not only with old friends but, if they wish, with old adversaries. Our interest and involvement in the region will remain, but the shape and size of that involvement will continue to adapt.

We are pleased that the governments of the region are taking the initiative in promoting the security and well-being of their peoples. We are proud of the constructive role of the United States in the area, and we look forward to continued cooperation with this most dynamic and populous region of the world.

If the people of the American West continue to build special and closer ties with the Pacific—in trade, in cultural exchange, in people-to-people contacts, and in any other ways—it will strengthen our nation, the entire vast region, and the cause of peace and progress in this most exciting and dynamic part of the world.

1. Source: Department of State Bulletin, August 1978, pp. 1–5. All brackets are in the original. Holbrooke delivered his address at the Western Governors’ Conference.
2. Kissinger made his first, secret trip to Beijing in July 1971. See Foreign Relations, 1969–1976, vol. XVII, China, 1969–1972, Documents 139–144.
3. For text of Vice President Mondale’s address at the East-West Center in Honolulu on May 10, 1978, following his trip, see BULLETIN of July 1978, p. 22. [Footnote in the original.]
4. Japan was featured in the June 1978 BULLETIN, p. 1. [Footnote in the original.]
5. See footnote 6, Document 29.
6. See footnote 21, Document 62. Brzezinski made the statement in a toast at a banquet the evening of May 20. (Power and Principle, p. 217)
7. The President established the National Export Policy Task Force in April with Kreps as chair and Weil coordinating the working group. (Richard Halloran, “Export Aid is Weighed,” The New York Times, July 21, 1978, pp. D–1, D–7) In late July, Kreps submitted to the President a 12-point national export policy plan. (John T. Norman, “Plan for a National Export Policy Is Sent to President by Administration Officials,” The Wall Street Journal, July 26, 1978, p. 14)
8. For text of the final communique issued by the ANZUS Council (Australia, New Zealand, United States) on June 8, 1978, see BULLETIN of July 1978, p. 48. [Footnote in the original.]
9. See “U.S. Will Admit More ‘Boat People,’ State Dept. Says,” The Washington Post, June 16, 1978, p. A–6.
10. See footnote 3, Document 59.