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

279. Memorandum of Conversation¹

Washington, October 4, 1980

SUBJECT

• Secretary’s Working Breakfast with Prime Minister Muldoon

PARTICIPANTS

• US

  • Secretary Edmund S. Muskie
  • David Newsom, Under Secretary for Political Affairs
  • Richard Holbrooke, Assistant Secretary for East Asian and Pacific Affairs
  • Richard McCall, Assistant Secretary for International Organization Affairs
  • Reginald Bartholomew, Director for Politico-Military Affairs
  • Anne C. Martindell, American Ambassador to New Zealand
  • Leon Billings, Executive Assistant to the Secretary
  • Frank C. Bennett, Jr., Country Director for Australia and New Zealand Affairs (Notetaker)

• NEW ZEALAND

  • Prime Minister Robert Muldoon
  • Frank Gill, New Zealand Ambassador
  • Bernard Galvin, Permanent Head, the Prime Minister’s Department
  • Bryce Harland, Assistant Secretary Minister of Foreign Affairs
  • Hugo Judd, Minister of the Embassy of New Zealand
  • Simpson Murdoch, Foreign Affairs Representative in the Prime Minister’s Department

Secretary Muskie welcomed Prime Minister Muldoon, expressing appreciation for the support the US has received from New Zealand. The Prime Minister replied by thanking the Secretary for his kind invitation and noted that New Zealand’s alliance with the US was the cornerstone of its foreign policy.

The Secretary inquired about the Prime Minister’s impressions of India as a result of his attendance at the Regional Commonwealth Prime Ministers’ Conference in New Delhi. The PM said that India and Prime Minister Gandhi [less than 1 line not declassified]. He didn’t know her well, but it seemed Mrs. Gandhi might still be suffering from the shock of the death of her son [less than 1 line not declassified]. In private she was apologetic about the current state of internal disturbances, [less than 1 line not declassified]. When questioned on the Kampuchea issue and on India’s close relationship with the USSR, Mrs. Gandhi simply repeated the standard Indian rationale without emphasis or conviction.

China, which Muldoon had visited in the first half of September, was very different. Zhao Ziyang was very active and single-mindedly devoted to development of the domestic economy. He is not very good on foreign affairs, hence the slip on conditions for a Kampuchean settlement subsequently corrected by Huang Hua. But Zhao is very clear on what he wants to do internally. His experience as a provincial governor obviously provides him with considerable expertise in this area. Zhao is very impressive and it is clear that he plans to give provincial chiefs a greater say in the development of policy. In many cases, Fujian and Guilin for example, areas will be permitted to produce what they can do most efficiently rather than have levels and types of production set by a central authority. This change is welcomed by most provincial authorities, Muldoon concluded. Muldoon found former Vice Premier Deng Xiaoping very relaxed. Party Co-chairman Hua Guofeng was also relaxed, but during the conversation Hua in effect pronounced his own obituary with some sadness.

Secretary Muskie inquired further about Zhao’s slip on Kampuchea. Muldoon said Zhao was speaking from a handwritten brief and clearly said that SRV withdrawal would not be a precondition of any settlement. Huang Hua was not present and early the following day the Chinese were careful to correct Zhao’s statement by insisting that withdrawal must begin before a settlement could be reached. However, Muldoon noted this is at least a change in the earlier Chinese position that it must be completed before a settlement could occur.

The Secretary expressed appreciation for the PM’s decision to authorize contingency talks by our respective navies with regard to an international patrol in the Gulf.² He also remarked that French Foreign Affairs Minister Francois-Poncet was quoted in the morning’s press as throwing cold water on the idea of an international patrol. The Secretary said that he didn’t know how the French expected to protect lives in the event of heightened hostilities, although we know they have ships there. It is unfortunate, Mr. Muskie said, that Francois-Poncet said what he did because it reduces the deterrent effect of our consultations and discourages us from moving ahead. The patrol could work, however, if the French ships are positioned with our own.

Assistant Secretary Holbrooke commented that the French position on an international patrol was similar to that of the Australians. Muldoon replied that Prime Minister Fraser had a serious problem with his elections (scheduled for October 18).³ He must question any US proposal closely and cannot be seen to be acting under US direction. The Secretary explained that our proposal for navy-to-navy talks was exploratory. We felt that some sort of naval peace patrol to inhibit attacks on shipping might be necessary if combat spread.

Prime Minister Muldoon asked whether we had yet had a reaction from either the Saudis or the Omanis. The Secretary replied that we have talked to them, but they don’t really have much (to patrol with). At the moment we are cooling it, but planning must go ahead. This is fine as far as New Zealand is concerned, the Prime Minister commented, as long as our navies are talking about contingencies.

A discussion of the tactical situation then took place during which the Prime Minister said that it appeared the Iran-Iraq conflict would be long and drawn out. He asked Mr. Muskie for his views on its ultimate outcome. The Secretary said that the initiative to bring fighting to an end could come from both sides, but thought it unlikely that Iraq could overwhelm Iran. Even if oil supplies are cut to Tehran and spare parts are short the Iranians are capable of protracted guerrilla warfare. New Zealand Ambassador Gill remarked that it seemed unlikely that the other Arab states will come in behind Iraq. The Secretary noted that the Arabs have mixed feelings. They are worried that Iraq could become the dominant force in the Gulf. On the other hand, they hate Khomeni who, in turn, seems to have been strengthened by the war. Under Secretary Newsom commented that there is some enthusiasm in the Gulf states for the war, but Syria opposes it. The Syrians have proposed Algeria and Libya as mediators. This won’t get far, Mr. Newsom said, therefore it is important that Pakistan President Zia and the Islamic Conference effort not be seen to have failed. The Conference should be preserved as a possible means for a settlement. Pakistan Foreign Minister Agha Shahi believes that the 1975 Agreement between Iran and Iraq offers possibilities for a settlement.

The Iraqis claim, Secretary Muskie said, that they don’t want to take territory. Both sides have been inhibited by the outside view that the war could spread to the entire Gulf. Sending US Air Force AWAC’s aircraft to Saudi Arabia has shocked the Iranians.

Prime Minister Muldoon said he wished to turn the conversation to the Kampuchean situation. The issue of Kampuchea is important to New Zealand because of its close relationship with the ASEAN countries. It is now developing in different directions he said. Australia may de-recognize the DK (in an earlier conversation with Department representatives Muldoon had said that, in view of Australian Foreign Minister Peacock’s announcement that he will probably announce de-recognition October 11 or 13, New Zealand might be forced to de-recognize before then). The Secretary noted that the DK seat in the UN is a risky business for the Administration. Fortunately, our announcement that we would support DK seating has not drawn much (domestic) political fire.⁴ The ASEAN countries told him in Kuala Lumpur, Mr. Muskie said, that the ASEAN countries want to retain the DK seat for only one more year.⁵ It is clear the war along the Thai border will not have ended by then. A settlement along the Thai border will not solve anything. The Vietnamese may be willing to negotiate a cease fire but they will not withdraw. The SRV wants to stop Chinese supplies getting to Pol Pot across the Thai border. We have spoken to the SRV which has simply not responded to suggestions for withdrawal. Repatriation of Kampucheans is another source of concern to the SRV since it is Pol Pot’s only recruitment base. This was the reason for their incursion last June. It is a very unstable situation. The ASEAN countries want a conference. The US will push for a follow-on resolution at UNGA (which New Zealand is co-sponsoring). One wonders whether the SRV doesn’t have reservations about the close ties they have with the USSR. [less than 1 line not declassified] say that we are not giving the SRV any incentives to quit. The Secretary concluded by saying he suspected that use of Cam Ranh Bay and access to the Malacca Strait are of great strategic advantage to the USSR.

Muldoon commented that Vietnam at present is strategically more important to the Russians than Cuba and is only costing them $1 billion a year instead of the $3 billion they are sinking in Cuba. He said that the impression he had gotten from talking to leaders in the area is that the Soviets are happy with their bargain. However, President Suharto spoke to him at length on the idea that Vietnam could become the Yugoslavia of the East.

Assistant Secretary Holbrooke pointed out that in the last month the Vietnamese have mounted a very clever campaign to recoup their international position, and he anticipates further moves in that direction. They will withdraw troops when the PRK no longer requests them to remain in Kampuchea and they will create a “non-aligned” Kampuchea. The SRV has announced elections in Kampuchea will be held in 1981, although they have not said whether there will be outside observers.

Turning to another issue, the Secretary expressed appreciation for New Zealand support on the PLO observer issue in the IMF/IBRD, but regretted that resolution of the problem meant excluding all observers. Mr. Muskie noted that PM Muldoon would be chairman of a committee to look into the problem. Fortunately, Muldoon said, the issues before the committee would be legal and procedural and would not involve political issues. There will be four developed and four Group of 77 members with New Zealand chairing and casting a deciding vote. He, Muldoon continued, had looked at the questions prepared by the secretariat and believed they were workable. In his view, the matter has been de-escalated. The developing countries don’t really want to see anything stop the work of the Fund and the Bank, therefore, they want to see this issue cooled down. The committee will have its first meeting in the first week of December. The Secretary commented that he was afraid that even the past effort to include the PLO as an observer will affect Congressional attitudes toward the two institutions. Africans and others, Assistant Secretary McCall pointed out, are aware that the issue of Israeli membership in the UNGA could be harmful to additional contributions from the US to UN development funds. With the price of oil up, Muldoon said, the developing countries are seeking additional assistance and know they mustn’t anger the US Congress.

The Secretary introduced the subject of possible enlargement of the UN Security Council. Assistant Secretary McCall commented that to attempt to do so was not likely to bring about a resolution of the issue in ways that would not weaken the Western position in that body. Muldoon commented that New Zealand is not going to push for enlargement. If others do and it comes up it will make a decision then. The Prime Minister said that he would talk to Foreign Minister Talboys about it despite the line of (some) in MFA favoring enlargement. He didn’t believe, Muldoon continued, that New Zealand should take a strong stand on this issue. [3½ lines not declassified]

The meeting ended without further substantive conversation.

1. Source: National Archives, RG 59, Office of the Secretariat Staff, Records of Edmund Muskie, 1980–1981, Lot 83D66, Box 3, Memcons: October–December 1980. Secret; Exdis. Drafted by Bennett (EA/ANZ) on October 8; concurred in by Holbrooke, Newsom, McCall, and Bartholomew. The meeting took place in the Thomas Jefferson Room at the Department of State.
2. Reference is to the proposal, first made public in New York during the UN General Assembly session, to form an allied naval force in the event of an imminent blockade of the Persian Gulf. (Bernard D. Nossiter, “U.S. and Allies Discuss Joint Fleet To Protect Vital Strait of Hormuz,” New York Times, September 25, 1980, p. A18) The Iran-Iraq war had begun on September 22.
3. Fraser was reelected as Australian Prime Minister on October 18.
4. Muskie announced on September 15 at his news conference that the United States would support the ASEAN position on the seating of Democratic Kampuchea in the UN General Assembly. See Department of State Bulletin, October 1980, p. G.
5. See Document 146.