Foreign Relations of the United States, 1977–1980, Volume XXII, Southeast Asia and the Pacific

200. Memorandum of Conversation¹

Washington, October 11, 1977

SUBJECT

• Various Topics

PARTICIPANTS

• American

  • Secretary Vance
  • Under Secretary Habib
  • Assistant Secretary Holbrooke
  • Deputy Assistant Secretary Oakley

• Singaporean

  • Prime Minister Lee Kuan Yew
  • Senior Minister of State for Finance Goh Chok Tong
  • Ambassador to the U.S. Punch Coomaraswamy

United Nations

The Secretary expressed his pleasure at finally seeing Prime Minister Lee. During his two weeks at the UN, progress had been made on some issues. The UN has more life in it than was generally assumed. The U.S. is now taking it seriously, appointing good people to represent us at the UN, and dealing with issues at the UN in a realistic manner. Mr. Holbrooke added that the President’s unprecedented two days at the UN demonstrated our new attitude and had apparently made a good impression on the other members.

U.S.-Singapore Relations and ASEAN

Lee said he was at the end of this visit so there was really nothing to discuss, assuming the Secretary had been briefed on his meetings with other U.S. officials. Singapore has no problems as such with the U.S., bilateral relations are on an even keel. This is in part because Singapore steers clear of issues where there might be problems with the U.S. It could also be in part because Singapore had never benefitted from U.S. largesse, had always paid its own way, and so could relate to the U.S. honestly, without prejudices and without suspicion of being a U.S. stooge. Singapore’s views of its present situation is analogous to that of a sapling which is growing but will still need support, props, for six to eight years since it cannot yet stand all by itself.

The Secretary said he was informed of the Prime Minister’s earlier meetings and of his concern over tax deferral, new restrictions on OPIC, and the IMF gold sales. The Prime Minister’s views will be carefully considered and Secretaries Vance and Blumenthal will talk to the President about tax deferral before a final decision is made. The Secretary said he was also aware of past concerns over the U.S. presence in Asia. We intend to stay in the region and remain an Asian and Pacific power. As Mr. Holbrooke had already told Prime Minister Lee, we have had encouraging talks with President and Mrs. Marcos on a new base agreement. The U.S. wishes to work with ASEAN in ways they find most suitable.

The Prime Minister said there would be six to twelve years to consolidate ASEAN or the centrifugal forces in Asia would tear it apart. An economic basis for the inter-relationship had to be established, the greater the economic ties the more difficult it would be for political change to break up ASEAN. Japan’s financial help for ASEAN presses its members together. The U.S. should use its influence to help, making clear that if ASEAN acts in unison it will help; but if there is no such unison, the U.S. cannot help. Mr. Holbrooke said that Dick Cooper’s recent talks with ASEAN had been a good beginning and the June 1978 talks in Washington would be very important.²

The SRV

The Secretary asked Prime Minister Lee’s opinion of Vietnam and U.S. efforts to normalize relations. Lee said that normalization and the establishment of diplomatic missions is necessary for the U.S. to play a moderating role vis-a-vis the SRV. But he had no idea on how to get around the chicken-and-egg syndrome on aid and normalization. The Secretary replied that the U.S. is willing to be patient. Lee said that if the U.S. engaged them in an ongoing economic relationship, it would be able to influence them to a degree. The Secretary said we hoped to succeed but it would take time. Lee replied that it does not pay to be eager. Singapore has not established diplomatic relations with Vietnam, has played it cool since 1975. Now the Vietnamese are seriously pursuing better relations with Singapore for economic reasons. The U.S. can send signals via the IBRD and ADB pending a direct relationship.

The Secretary noted the Administration’s strong opposition to efforts to force the earmarking of funds for international financial institutions. What did Lee think of China?

The PRC

The Prime Minister replied that the less the new leaders in Peking are embarrassed by being called pragmatic, the better it would be. They are extremely sensitive about appearing to follow Mao’s policies. If the U.S. compliments them, the USSR will rebroadcast it and they will be angry at both the U.S. and the USSR. Does the U.S. see normalization soon?

The Secretary said it will take time; it is our ultimate goal but there are problems between now and then. Mr. Habib said the Chinese are aware of our problems, but they are impatient and sending us little signals, applying a little pressure. Mr. Holbrooke said the PRC wants to see U.S. movement but will not press too hard for fear of jeopardizing relations with the U.S. which it needs as support versus the USSR. Teng told the AP that the PRC would take into consideration the special circumstances of Taiwan; this is a signal of encouragement. It becomes politically more difficult for the U.S. as time goes on. Habib said we might be able to do more with trade. The Secretary said we want a broader aspect to our relations with the PRC but what can be done with trade is uncertain.

Lee said the Chinese have infinite patience. It is too soon after Mao³ to compromise on major, central issues such as the USSR or Taiwan. Their attitude is why embarrass ourselves on external issues. If we can get the technology they need without such embarrassment, okay. If not, they are ready to wait. After five years or so they may want to change their bargaining position. The PRC can’t shift Mao’s basic positions now but maybe later.

Habib noted they could get what they wanted from the West. Restrictions are not tight. The question is whether or not the U.S. can wait five years or so without seeing a shift in position. This Administration is committed to normalization on the basis of the Shanghai Communique, but the PRC probably suspects we are not fully committed. If we don’t get there (normalization) it will cause trouble.

The USSR

The Secretary said the U.S. has made considerable progress with the USSR in the past two weeks on major issues. He is convinced there will be a SALT agreement, opening the way for progress on other issues such as a comprehensive test ban treaty with the U.S., UK, and USSR next year. Trade does not look possible since Jackson-Vanik⁴ will stay on the books.

There has been progress on the Middle East, but we have a long way to go. We are awaiting news of the Israeli Cabinet decision on the U.S. working paper on the Geneva Conference. Habib said that there would be negotiations, they would be serious and lengthy, and this process will ensure there is no explosion and no oil problem. The Secretary said there has also been some progress on Southern Africa and Nigeria is playing a helpful role. On the Indian Ocean, talks will be long. The base issue is tough since the USSR wants us to withdraw from Diego Garcia, but we will not do it. Maybe we can agree on a cap on forces in the long run but not right away.

Lee replied that the U.S. gesture should have been made and it makes sense to try to hold forces down, but he doubts the Soviets will alter their deployments and plans. They are really not interested in world opinion.

1. Source: Department of State, Office of the Under Secretary for Political Affairs, 1976–1978, Lot 81D5, PCH Log, Sept 17, 1977 to Oct 31, 1977. Confidential. Drafted by Oakley (EA) on October 17; approved by Wisner (S/S) on October 20. The meeting took place in Secretary Vance’s office.
2. See footnote 5, Document 196. The second U.S.-ASEAN Dialogue took place in Washington August 3–4, 1978. See Document 131.
3. Mao died on September 9, 1976.
4. Reference is to Title IV of the Trade Act of 1974 (P.L. 93–618), which denied most-favored-nation status to nations that did not allow its citizens to emigrate.