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

237. Memorandum of Conversation¹

Washington, June 22, 1977, 7:45 a.m.

SUBJECT

• SecDef Breakfast with Prime Minister Fraser of Australia, 22 June 1977

1. A working breakfast was hosted by the Australians at Blair House at 0745 on 22 June. Those in attendance were:

• U.S.

  • The Secretary of Defense
  • The Deputy Secretary of Defense
  • Chairman, JCS, General G.S. Brown
  • Assistant Secretary of State, Richard Holbrooke
  • ASD (ISA) Mr. McGiffert
  • Deputy ASD(EA&PR) M.I. Abramowitz
  • Director, DSAA, General Fish
  • Ambassador Philip H. Alston
  • Military Assistant RADM Holcomb

• Australia

  • The Prime Minister
  • Foreign Minister Andrew Peacock
  • Secretary of Foreign Affairs, Nicholas Parkinson
  • Secretary of Defense, Sir Arthur Tange
  • Secretary of Prime Minister & Cabinet, Alan T. Carmody
  • Ambassador Alan Renouf

2. After exchanging amenities, SecDef asked what the Prime Minister had sensed in his recent discussions with Europeans. PM Fraser responded with an expression of his nation’s concern that a European war would entail shifting the US Navy from the Pacific to the Atlantic, thus leaving Southeast Asian sea lines of communication exposed. SecDef replied that few people believe that a conflict in Europe would be of long enough duration to implement such a shift. Moreover, one cannot predict that war in Europe necessarily means war in the Pacific. PM Fraser expressed doubt that conflict could be contained, even if it were as short as two weeks . . . doubt that any nation associated with the US could avoid becoming involved. SecDef speculated that a war in Central Europe could become stabilized and protracted, although that would not be as likely as escalation to thermonuclear war. The Soviets know that and we know it. Thus, war is deterred and conventional forces require new emphasis if nuclear blackmail is to be precluded.

SecDef observed that the alignment of forces is by no means as clear in Asia. PM Fraser agreed, saying that there is a real possibility of widespread protectionism within the Common Market which might put Japan in an untenable position. SecDef noted that, should Japan feel isolated either economically or unilaterally, there might be strong pressure on her to rearm. That is why the U.S. intends to remain a strong Pacific power (he noted the fact that 50-odd ships are routinely deployed to the Seventh Fleet, as opposed to 40-odd in the Sixth Fleet) and maintain the level of peacetime deployments.

PM Fraser commented that the Peoples’ Republic of China (PRC) often wants quite the opposite of what she says . . . that PRC obviously wants the U.S. to be strong relative to the USSR. The Australians sense that the PRC would prefer the status quo—US in S. Korea, in Taiwan, in the Philippines—indefinitely. Even their longtime goal of reuniting China appears to be less important than a perception of the U.S. withdrawing out of weakness. SecDef replied that the dominant question becomes how and when the U.S. “normalizes” relations with the PRC. There followed a discussion of the perception of changing U.S. posture in Asia, starting with Vietnam in 1973, and the fact that Asians look at actions regardless of the words they hear. PM Fraser repeated (three times) his conviction that adjustments out of weakness should be avoided, that the U.S. posture in Asia has to be viewed as a whole, and orchestrated deliberately (and slowly). He noted general, deepseated suspicion of Japan throughout the Western Pacific. He asserted that PRC does not want conflict in Korea.

Mr. Holbrooke interjected a comment that SecState would soon make a public disclosure of U.S. policy in Asia, followed by ASEAN consultations in early September.²

3. PM Fraser raised the question of operating U.S. P–3C aircraft out of Singapore to enhance surveillance of the Indian Ocean. He said the Australians are still strongly in favor, and that their intention is to integrate their own reconnaissance with that of the P–3C. CJCS said we are pursuing the Singapore option as an alternative to operations out of Thailand. Mr. Abramowitz reported that PM Lee of Singapore is withholding approval pending resolution of the “Congressional brawl” he expects, but that formal approval is not required in any event. Both SecDef and Fraser agreed that the option should be pursued and exercised.

4. PM Fraser then touched on the question of offsets for the $600M Australia is committed to for frigate and C–130 procurement. SecDef summarized impediments to offsetting those costs—U.S. rules, which are being overcome, and the non-competitiveness of Australian industry in high technology cases—but said we would continue to work at the problem.

5. Raising the topic of human rights, PM Fraser observed that he would not like to see the U.S. refuse to resupply ASEAN countries with arms . . . thus opening the door to the Soviets. SecDef noted that, even though the dollars involved are small, such FMS transfers will have to be considered on a case-by-case basis.

6. Indian Ocean demilitarization talks, just beginning in Moscow, were discussed and the asymmetry in U.S. and USSR objectives were acknowledged.³ PM Fraser observed that Australian concern focused on the fact that littoral nations were, presumably, only onlookers in the matter. He said they hope the U.S. will make no commitment which might preclude effective U.S. action in compliance with ANZUS Treaty.⁴ He added that even a commitment to reach agreement would be of concern.

7. PM Fraser asked SecDef for his assessment of the global balance. SecDef responded at length, concluding that military action in the Pacific/Europe/Middle East was less likely than combined political, economic, and military pressure. He noted that the Soviets have not yet achieved control of the Mid-East oil lever, and they may not. How successful we are in moving Middle East powers toward peace bears on that. PM Fraser agreed, saying miscalculation and hasty war were to be avoided at all costs. He asked about Yugoslavia contingencies. SecDef observed that a movement into Yugoslavia on the Soviets’ part would stand a good chance of impelling an Allied build-up which would not be occasioned otherwise, whether or not conflict resulted.

The meeting ended on that note.

1. Source: Washington National Records Center, RG 330, OSD Files: FRC 330–83–0124, 1, Australia (LTC Douse) 1976. Confidential. Copies were sent to McGiffert and Holbrooke. Printed from a June 23 draft. Fraser was in Washington June 21–23 for an official visit.
2. Vance addressed the Asia Society on June 29. For the text of his speech, see Department of State Bulletin, August 1, 1977, pp. 141–145. See also Foreign Relations, 1977–1980, vol. I, Foundations of Foreign Policy, Document 48. The first U.S.-ASEAN Dialogue was held in Manila September 8–10.
3. The first round of talks of the U.S.-Soviet Working Group was held June 22–27. See Foreign Relations, 1977–1980, vol. XVIII, Middle East Region; Arabian Peninsula, Documents 108 and 109.
4. The ANZUS Treaty was signed on September 1, 1951, and entered into force on April 29, 1952. (3 UST 3420; TIAS 2493)