238. Memorandum of Conversation1


  • U.S.

    • President Jimmy Carter
    • Secretary of State Cyrus Vance
    • Zbigniew Brzezinski, Assistant to the President for National Security Affairs
    • Philip Alston, U.S. Ambassador to Australia
    • Jody Powell, Press Secretary
    • Richard Holbrooke, Assistant Secretary of State for East Asia and Pacific Affairs
    • Michael Armacost, NSC Staff Member
  • Australia

    • Prime Minister J. Malcolm Fraser
    • Foreign Minister Andrew Peacock
    • Alan Philip Renouf, Australian Ambassador to the U.S.
    • A. T. Carmody, Secretary, Department of the Prime Minister and Cabinet
    • Sir Arthur Tange, Secretary, Department of Defense
    • N. F. Parkinson, Secretary, Department of Foreign Affairs
    • David Barnett, Press Secretary

President Carter: I would like to repeat what I said during the arrival ceremony about my gratitude to you for visiting the United States,2 and to affirm the importance of our historical ties. In all my travels, Australia has been one nation about whom I never have heard an adverse word. As an old submariner, I might add that I know how much our naval officers loved to stop off in your country. I regret that I never had the chance, but I hope to.

I might say that during our private meeting3 we had a brief discussion of the CIA problem [less than 1 line declassified] Prime Minister Fraser suggested that this might be a propitious time [less than 1 line declassified] I agreed, therefore, that we should look into this. We also discussed our respective relations with Japan. I asked the Prime Minister for his continuing advice as to how we should proceed in developing our policies toward the Western Pacific. And I reiterated our appreciation for the gracious way in which he has handled a difficult political [Page 781] situation arising out of the allegations of CIA activities in Australia. Would you like to lead off, Malcolm?

Prime Minister Fraser: I wish to thank you again for the warm welcome you have accorded me and my party. We are delighted to be here. Mr. President, as you may know, Australia plays a somewhat lonely role in the world. We are a democratic nation surrounded by states which do not live up to our democratic standards. We have good relations with Japan, and are eager to see them play an active role in assisting the nations of Southeast Asia. There is one element concerning your policy in the Western Pacific that may not be adequately comprehended by those who live far away from the area. After your Korean policy decision,4 “Harry” Lee of Singapore made some public statements that revealed some desperation. These may have been somewhat overdrawn, but they reflect very real concerns. He as well as all other Southeast Asian leaders want the U.S. to maintain strength and the appearance of strength in the region.

American decisions can be easily misread in Southeast Asia, as well as Japan, and China. When Andrew Peacock and I were in Peking a year ago, we had 8–9 hours with Hua Kuo-feng in formal meetings and in banquets. During that time, I never heard a critical word from the Chinese about U.S. policy. It was very plain that the Chinese wanted the manifestations of American strength to remain in Asia and the Pacific.

Concerning Taiwan, I returned with the impression that the Chinese can exhibit great patience on that issue so long as the United States takes a strong position on other key issues—above all, your dealings with the Soviet Union.

There is some relevant historical background to Asian concerns about American retrenchment. The British withdrawal from the area “east of Suez” was marked by frequent assurances of British steadfastness which were regularly broken. This has generated a certain measure of skepticism toward some U.S. professions of continuing interest in the Asian area—particularly among Lee Kuan Yew and others. From the standpoint of stability, confidence in the United States is a very important though intangible factor. I’m afraid, Mr. President, I have merely posed a problem; I have no answer to offer.

President Carter: I can answer that. We have been in Korea more than 25 years. In 1970–71 Nixon withdrew one division. That decision did not undermine the stability on the peninsula. It was never envisaged that our ground forces would remain permanently in South Korea. [Page 782] We are, however, committed to the security of South Korea and are determined to preserve stability on the peninsula. Consequently, we will handle our withdrawal in a careful, prudent, gradual manner. Our 2nd Division only represents about 7 percent of the total ground forces on the peninsula. Its military importance as a factor in the balance has been declining. As our forces are withdrawn, we will build up South Korean ground strength commensurately. Already South Korea possesses a substantial industrial capability, and they are able to assume a larger security burden. We will help them overcome deficiencies in their defenses arising out of the withdrawal of the 2nd Division. We will be turning additional anti-tank weapons over to them. We will probably leave them some of the other more advanced weapons currently utilized by the 2nd Division, and train them to use them. After the withdrawal of the 2nd Division is complete, we will still have 7–8,000 forces in Korea to provide air cover which will be permanent commitment as far as I know.

President Park understands our policy, and he has accepted the timing of our withdrawal schedule. He understands that we will “back load” our withdrawal in such a way as to leave a heavy brigade until the last phase. Thus there will not be any weakening of our position during the process of transition. We have also talked about this issue with Prime Minister Fukuda and believe that the Japanese now understand and accept our policy. I hope you will help make these points to other Asian leaders. Above all, we will proceed gradually. We will help the South Koreans upgrade their own defenses. We will consult continuously with the South Koreans and the Japanese. We will retain air units on the peninsula.

Concerning China, as you know, Cy Vance will be going to Peking later this summer.5 We would like normal relations with the People’s Republic. The accomplishment of normal ties with China would be a plus for the Administration. Americans have generally had warm feelings for China. This owes something to the role of our missionaries there. I believe the public is receptive to normalization. The problem, of course, is our treaty obligation to Taipei and the ability of Premier Hua to give peaceful assurances concerning China’s intentions toward Taiwan. That is an obstacle I don’t know how to resolve.

Prime Minister Fraser: It may be difficult to overcome that obstacle in the short term. In Peking I obtained the impression that the Chinese were grateful to Nixon for opening the door for a strategic dialogue and that their subsequent dissatisfaction reflects disappointment con [Page 783] cerning American follow-through on the consultations. I believe the Chinese may have issued the second invitation to Nixon in order to register the point that consultations with the U.S. were not developing adequately. They appear now to feel that the Soviets are getting more American attention and have sustained more serious communications with you.

President Carter: I don’t know if the Soviets would agree to that characterization.

Prime Minister Fraser: In any event, communications are a part of the problem. Is there any great urgency about resolving the Taiwan question?

President Carter: The key point will come when we formalize diplomatic relations for at that point we will have to abrogate our Mutual Defense Treaty with Taiwan.6 The People’s Republic of China has not exhibited much flexibility on matters relating to the treaty. We are looking for a way to resolve this and will study the matter intensively before Cy goes to Peking. I hope he will make progress on the issue during his trip. Essentially, we are trying to regenerate a sense of movement in our relationship.

Prime Minister Fraser: I think it is possible that you might advance the relationship by putting Taiwan on the side.

Secretary Vance: That is not the message the Chinese regularly convey to us.

Prime Minister Fraser: What I mean is that the Chinese have never changed their principles regarding a settlement of the Taiwan problem. But they display no great sense of urgency about resolving it. In my discussions with them, their major concerns appeared to be U.S. positions on big issues such as Soviet policy. And they also expressed some uneasiness about the adequacy of PRC-US consultations.

President Carter: We intend to explore any evidence of flexibility they have on this question. Our objective is to abide completely by the principles of the Shanghai Communique. We cannot, of course, enter arrangements which certify that the PRC has the right to resolve the Taiwan issue by force.

Zbigniew Brzezinski: There are actually two issues. One is to make the relationship more meaningful by taking China more fully into account in our consultations and in our global strategy. The second issue is Taiwan. Clearly we cannot normalize just by consulting with the Chinese; but we can consult without normalization.

[Page 784]

Prime Minister Fraser: You may indeed secure major benefits from your relationship without normalization. I would add that if the Taiwan issue is mishandled it would be very troublesome in Southeast Asia where mis-steps on this question could be regarded as a straight-out abrogation of treaty obligations.

President Carter: There may be many things we can do short of full-scale normalization.

Secretary Vance: Certainly we should explore those.

President Carter: I remember very well a telephone conversation that we had last July on this same subject. I believe that was practically the first time I had spoken with a Prime Minister.

On the Philippine base issue, I have every confidence that we will ultimately work out a satisfactory agreement. Kissinger, you will recall, offered an arrangement to the Filipinos last fall that involved a substantial sum of money. The Filipinos did not agree to it. They asked for more compensation. We have a variety of base agreements and alliances around the world, and we cannot afford to pay an exorbitant price for the use of bases when mutual benefits underlie our presence. We hope to continue the use of bases in the Philippines; and trust that satisfactory arrangements can be worked out.

Secretary Vance: The ball is actually in President Marcos’ court. Because of the Mindinao problem, he has been otherwise preoccupied and has expressed no urgency about resuming formal negotiations.

Prime Minister Fraser: I believe he wants every last dollar he can get out of you, but would be appalled if the U.S. were to leave.

Foreign Minister Peacock: The bases are the second largest source of income to the Filipinos, and that is a real inducement for him to come to terms. During my recent discussions with Marcos he did indicate that he hoped to reach a new agreement with you in the relatively near future.

Richard Holbrooke: I was in Manila the same week as Andrew and would like to say that the impression I derived with my talk with Marcos is that he had moderated his attitude on the base issues substantially.7 I believe the history of our past negotiation is a somewhat unsavory one and that some delay in resuming formal discussion has been healthy. I expect that a better negotiation will be possible as a result of waiting.

President Carter: I might add that during my earlier private discussion with Malcolm we talked about the huge Australian-Japanese trade, and the utility of a larger Japanese political role in Southeast Asia. We [Page 785] agreed that the Japanese are reticent to adopt a more assertive role due to historic memories in the area and their sensitivity to residual fears of Japanese economic domination. But I told the Prime Minister that we are eager to see the Japanese take on larger responsibilities. Prime Minister Fukuda performed well at London. By all accounts he was more assertive in the Summit discussions than any Japanese Prime Minister in recent memory. I believe that the Japanese can use their enormous wealth for very constructive ends, and they should be encouraged to do so.

Prime Minister Fraser: The ASEAN meeting this summer could see Japan move into a new phase in its policy toward Southeast Asia. Certainly the ASEAN countries expect a more forthcoming Japanese attitude on aid.

President Carter: The Japanese should increase the quantity and quality of their aid.

Prime Minister Fraser: At CIEC the Japanese committed themselves to double their aid program over the next five years.

President Carter: Are there any bilateral problems that need discussion?

Prime Minister Fraser: The only problem I would wish to mention is posed by the U.S. request to add an additional air carrier on the route to Australia. Up until 1974 you had one additional carrier. It withdrew, however, due to lack of profitability. There would be unfortunate repercussions in your country and ours if another carrier is added.

President Carter: Last night we got a new Civil Air Treaty with the UK by the skin of our teeth. I did not know a great deal about that issue but I spent an inordinate amount of time dealing with it. Nor am I familiar with the issue you have raised. I will have to get someone here to advise me.

Secretary Vance: I will have to disqualify myself because I formerly represented Pan Am. Warren Christopher will also have to take himself out of it because he also represented the airlines. Dick Cooper will have to be your man.

Prime Minister Fraser: Can I go back to raise a point which emerged in the Commonwealth meetings which I just attended in London? In that meeting the Africans and the Jamaicans expressed themselves in quite moderate terms on Southern African issue. But there is a general expectation that Zimbabwe will be seated in the Commonwealth within the next two years. The UK has this as an objective. I must add that during the course of the meetings words were exchanged regarding the use of force. Some nations take perhaps too relaxed an attitude toward the use of force. Nonetheless, I believe that if there is no settle [Page 786] ment of the Rhodesian problem, force will be universally embraced by all the parties in the next couple of years. The whites in Rhodesia are very tough. They will not yield readily.

We regard progress on this issue as being very important if we are to avoid an inevitable drift toward a forceful resolution of the problem. Practical policy measures toward the Rhodesian problem were discussed a bit in London. There was some feeling that restrictions on oil supplies to Rhodesia could be an effective sanction. Aren’t the OPEC nations violating the UN embargo rather freely? Would it be possible to tighten this up, in order to apply some additional pressure for settlement upon the Rhodesians? Whatever your views on this subject, I wish to say that we approve of what your Administration has done on the Southern African issue, and hope to see a continued strong U.S. role in promoting a settlement.

President Carter: Most of Rhodesia’s oil is delivered through South Africa, is it not? We have put maximum pressure on South Africa. I don’t know about whether we have addressed the OPEC countries directly on this subject. We have found some reticence among the Europeans about exerting heavy pressure on South Africa due to their large investments there.

Secretary Vance: Was there any discussion in London about a Commonwealth peace force?

Prime Minister Fraser: There were some corridor discussions on everything from the provision of electoral officers to a police force. But these discussions yielded no consensus. There was also a generally shared conviction that a leading role by the United States is important.

President Carter: We have been reluctant to take the leadership on this issue. We have offered full public and private support to the British, but think they should continue to take the lead.

Prime Minister Fraser: I’m not suggesting a change in that pattern, but I am endorsing a strong U.S. supporting role and anything you can do to inject some urgency in the settlement process. The longer the fighting goes on, the greater the danger of permanent scars on the relations between races and countries.

President Carter: Was there any mood to increase Commonwealth pressures on South Africa?

Prime Minister Fraser: Some of the Africans wanted aid to be channeled directly to the Liberation forces. The UK, Australia, and New Zealand were not amenable to this suggestion.

President Carter: How about more pressure on South Africa?

Prime Minister Fraser: There was some sentiment for this in private, but UK investments in that country are a factor.

President Carter: We have encouraged multilateral efforts through the UN; we have not devoted as much thought to attempting to do [Page 787] more through OPEC. All of Rhodesia’s oil goes through South Africa. Thus oil shipments to South Africa would have to be cut back by an appropriate amount on the supposition that Rhodesia would be the one to suffer.

Secretary Vance: We have talked in general terms about this with the UK, France, and Germany. The subject may come up Thursday morning8 in Paris. The French are edgy about this. The Brits are likewise skittish, but do not rule it out. The Germans want to reflect further on it.

President Carter: We have not gone to OPEC at this point, have we?

Secretary Vance: Not yet.

Prime Minister Fraser: Originally this was raised in terms of a demarche to the oil companies, but upon reflection it seemed more plausible to approach the OPEC nations themselves.

President Carter: You understand that we are not too eager to encourage oil embargoes.

Prime Minister Fraser: I understand. There are dangers. But this is a subject that is worthy of study. On a different subject, I would note that the Africans were unusually forthright in condemning Uganda at the Commonwealth meeting. At first many did not wish to mention Uganda adversely in the communique. After some discussion, many changed their minds. Nigeria did not join the general consensus, but apparently on grounds that someone in Africa ought to be able to talk to the Ugandans.

President Carter: Unfortunately, Amin9 dominated the headlines here during the London meeting.

Prime Minister Fraser: I was happy that he stayed away, for I feared the UK would have turned him away at the airport had he shown up.

One other subject I might mention relates to the Common Fund10—a subject about which there is much mythology. Despite such myths, if something is not done to stabilize commodity earnings, there will be trouble. I believe some sensible commodity agreements can be reached. Our experience with the International Sugar Agreement and the International Wheat Agreement has been generally favorable. We have a Wool Agreement that operates effectively within Australia. Thus it is possible to develop commodity agreements that work. Unless we make positive proposals to deal with the commodity issue, we will drift into another row with the LDCs. We Australians have been too [Page 788] reticent in putting proposals forward on this subject in the past. We now must act with a greater sense of urgency.

President Carter: As you know we have embraced the concept of a common fund. Secretary Bergland has been traveling in Asia for nearly a month trying to get a better feel for how to deal with the world food problem. We—along with you and Canada—have a chance to forge a useful alliance to deal with some of these commodity problems. Not to use food as a weapon, but to help devise constructive approaches between producers and consumers. As you know, we have participated in some successful commodity agreements, such as sugar and wheat. We are considering expanding our participation into other areas such as cocoa and copper and tin. As far as I know these have worked well. We do prefer approaching these agreements on a case-by-case basis. We have also been addressing the evolution of reserve of capital to finance such agreements. In London I listened to Schmidt’s explanation of price stabilization measures, and I think his approach has promise.11

Secretary Vance: We need to address these issues in both the small and the larger developed country groups well in advance of the UNCTAD meetings in order to come up with something which is both positive and realistic.

President Carter: I would emphasize that we don’t have any philosophical aversion to the common fund idea.

Prime Minister Fraser: We agree with your approach. We must get on to the formulation of realistic proposals.

President Carter: There is one other issue we might discuss before lunch; namely, the Indian Ocean. We are meeting with the Soviet Union now in Moscow on this question. Paul Warnke’s instructions are to go no further than to stabilize the current situation before going on to consider any mutual reductions. We would hate to see the Soviets build up their naval strength in the Indian Ocean. For example, we don’t want them to introduce attack aircraft into the region. This is a subject we don’t know very well yet. We will be cautious in our discussions with the Soviets. We will take your views into account in formulating our policy.

Prime Minister Fraser: As you know, we are opposed to any arms race in the Indian Ocean. But we are also against any arrangements that would leave the USSR in a dominant position. We want close consultations with you on this subject. Beyond this, we are anxious to avoid any arrangements which might conceivably make it difficult for [Page 789] you to exercise your obligations under the ANZUS Treaty as a result of an Indian Ocean arms control agreement with the Soviet Union.

As I understand it, the French are actively engaged in the Indian Ocean and interested in this subject. Are their deployments in the Indian Ocean to be considered separately?

President Carter: I discussed this question with Giscard. In recent correspondence I suggested that he might wish to raise this issue with Brezhnev. I have no inclination to advise him, but it is a relevant subject for their discussion. Incidentally, the other question I raised was the comprehensive test ban. In any event I can assure you that we will be adequately cautious in our dealings with the Russians on this issue and we will see that we go over the precise language of any agreement with you before anything is signed.

Over the past four years, the Soviets have been making progress with propaganda ploys on disarmament, Indian Ocean arms control, and human rights in the past. We have tried to take these issues away from them in a sincere way. When Cy Vance went to Moscow in March,12 we agreed to discuss this and a number of other issues with them seriously and we agreed to meet them halfway. We don’t know precisely what Soviet motivations are in raising Indian Ocean arms limitation.

Prime Minister Fraser: There is no great difference between us on this question, provided we consult closely.

Zbigniew Brzezinski: Generally, I believe it is better not to get the French involved in these discussions, because the Soviets in that case would wish a trade-off between themselves and all others. It would be better for the trade-off to be strictly between these two major powers.

Secretary Vance: We will have a much better feel for this question after this week of talks. The Soviets have a very competent man heading their delegation.

Zbigniew Brzezinski: For starters, they have described Berbera as a “watering spot”.

Prime Minister Fraser: The Soviet Ambassador in Canberra told me that Berbera did not even exist.

President Carter: The Somalians have also said this. We have great concern about the entire Horn area of Africa. The situation there is apparently deteriorating. The Yugoslavs enjoy constructive ties with Ethiopia, and have been quite helpful. But the most hopeful change in recent months has been the more assertive and more constructive [Page 790] attitudes taken by the Saudis. They obviously have a great stake in peace, since in any serious disturbance they stand to lose the most. They have been very cooperative.

Prime Minister Fraser: At what point do you wish to talk about uranium?

President Carter: I am really very proud of the mutual commitment we have made to seek to reverse a tide that appeared only recently to be irreversible. I think the Canadians shared that attitude which you and I have expressed.

Prime Minister Fraser: We believe, Mr. President, that you have taken a very courageous stand in forcing the world to address this issue. It is an important issue for us. We now have a bargaining coin with the Europeans. There are some trade-offs here between our policy on uranium and European attitudes toward other trade issues, including modification of their Common Agricultural Policy. We are concerned about European protectionism. They want stability in the supply of uranium. We think the principle of stable access to supplies has a wider application, most notably in our desire for stable access to the European market for our commodities.

President Carter: We share a common feeling on this question. I would suggest that we move on to lunch and discuss this further there.13

  1. Source: Carter Library, National Security Affairs, Brzezinski Material, Subject File, Box 35, Memcons: President: 6/77. Secret; Sensitive. The meeting took place in the Cabinet Room at the White House.
  2. For Carter’s and Fraser’s comments at the welcoming ceremony that morning, see Public Papers: Carter, 1977, Book I, pp. 1140–1142.
  3. Carter met with Fraser from 11:32 until 11:55 a.m. (Carter Library, Presidential Materials, Daily Diary) No memorandum of conversation of the meeting has been found.
  4. Reference is to the June 5 announcement by the administration about withdrawing U.S. ground forces from Korea. See footnote 4, Document 198.
  5. August 20–26. For the memoranda of conversation, see Foreign Relations, 1977–1980, vol. XIII, China, Documents 4752.
  6. For the text of the treaty, signed December 2, 1954, see Department of State Bulletin, vol. XXXI, pp. 895–899.
  7. See footnote 3, Document 309.
  8. June 23. Reference is to the OECD Ministerial meeting.
  9. Idi Amin, President of Uganda.
  10. At the end of its fourth session in Nairobi, Kenya, in May 1976, UNCTAD agreed to consider the establishment of the Common Fund to finance a buffer stock program designed to smooth out primary commodity price fluctuations.
  11. Reference is to the German Chancellor Helmut Schmidt’s remarks at the London Economic Summit May 7–8.
  12. March 27–30. For the memoranda of conversation, see Foreign Relations, 1977–1980, vol. VI, Soviet Union, Documents 1623.
  13. Lunch was held from 1:03 until 2:15 p.m. in the first floor private dining room at the White House. No record of the discussion has been found.