Foreign Relations of the United States, 1977–1980, Volume XXVII, Western Europe

106. Memorandum From the President’s Assistant for National Security Affairs (Brzezinski) to President Carter¹

Washington, July 3, 1978

SUBJECT

• Your Visit to West Germany

Attached is the State Department briefing book.² Cy Vance’s scope paper effectively sets out the issues and approaches.³ I will also update you on the Middle East following the Vice President’s trip, and on the Horn. In addition, Henry Owen and I will give you a full brief for the Schmidt meetings on Summit economic issues, following the EC Summit in Bremen on July 6–7,⁴ and after resolution of our approach on the Dole Amendment problem.⁵

Background

Schmidt’s visit to Washington in May has gone a long way to reducing the concerns he has expressed within days or weeks of every other meeting with you.⁶ Your Annapolis speech also helped to clear the air on his central concern about our Soviet policy, which has been the focus of his doubts about US leadership.⁷

Since you met with Schmidt on May 30, the setbacks to the FDP in the Hamburg and Lower Saxony elections (eliminating the FDP from those state parliaments) have placed the Coalition in a more precarious position. For Schmidt, therefore, it is even more important to demonstrate that he can get along with the dominant power in the Alliance, while effectively representing German interests—not necessarily the same thing, especially on the issue of German economic growth. Also, he now has a greater stake in a successful Summit. And the visit to Hesse (Frankfurt) is particularly important because of the state elections there this fall.⁸

Based on your meeting with Schmidt in May, you will have the best sense of the way to pick up in your talks in Bonn. There are two key areas: resolving any remaining Summit issues, and continuing discussions on East–West relations. (If we have not resolved the problem of the Dole Amendment by the time you go to Germany, Schmidt is likely to focus in his bilateral with you on our ability to deliver our part of the Summit “package.”) You may want to report on the Vice President’s visit to the Middle East, review Cy’s talks with Gromyko, and discuss African developments—including Schmidt’s trip to Africa.

East–West Relations

Schmidt still is skeptical about U.S. steadiness, sense of purpose, and leadership in East–West relations. You might begin by reviewing the themes in the Annapolis speech and developments since then, including our African views.

On arms control, four central themes in Schmidt’s approach stand out, reflecting psychological attitudes that go beyond the specific issues:

— a sense of vulnerability and dependence on us;

— a desire that we pay attention to his underlying concerns about our nuclear commitment and about our overall ability to handle the Soviets;

— a desire to play a central role in detente, as a major world statesman; and

— a fear that somehow we will make decisions affecting German interests, without his full involvement.

SALT is most important for him. On SALT II, he is interested in timing, chances for ratification, a possible Brezhnev visit, keeping open cruise missile options, and non-circumvention. On SALT III, he is concerned about our overall method of approach, and about gray area systems.⁹

At the moment, gray area systems are the chief focus for doubts about our reliability. Yet although he proposed gray areas negotiations to Brezhnev, it is not clear that he has completely thought through either force posture or arms control implications. He is also aware that the French and British have deep reservations about gray area arms control.

Your approach should be to meet his psychological needs: reassuring him about our nuclear commitment (no “decoupling”) and about the process by which we will reach decisions on gray area systems and SALT III. In particular:

— we want to continue working with Schmidt at every step of the way on SALT II and SALT III;

— we are fully protecting German interests in SALT II;

— we have now decided to make our gray areas statement, at an appropriate time, independent of what the Soviets do (Note: this is the strong German preference);¹⁰

— we are open-minded about the way forward on gray area systems and the best means to insure that German and other European interests will be protected in SALT III;

— this fall, we will be in a position to open a dialogue with the FRG and other Allies on gray area systems, putting any arms control possibilities firmly in the context of force planning. We believe it would be unwise to commit the Alliance to negotiations in advance of that review.

Schmidt’s approach to MBFR reflects the same overall attitudes towards arms control, plus a desire to focus attention on the specific German security situation. Thus he is ambivalent about MBFR, and is unclear about where he wants it to go: on the one hand, he wants the talks to move forward; but on the other he does not want a situation where Germany is singled out for individual force limitations, outside of a wider Alliance framework.

Thus the Germans have been less positive than we have been on the recent Warsaw Pact response to the West’s MBFR initiative. They are concerned about 1) the discrepancy in Warsaw Pact data, and 2) the national force constraints in the Pact response. You can reassure Schmidt that we will continue to work closely with him on the NATO response, and that we do not believe we are now on the defensive.

At the same time, the Germans are more positive about Giscard’s proposal for a disarmament conference, although it would clearly undercut MBFR. It interests the Germans because it would broaden the area of force reductions, including both France and the Western regions of the Soviet Union.

Other Issues

ERW. If Schmidt raises enhanced radiation weapons, you might bring him up to date on the technical production question, while assuring him that you retain full control of any decision to produce. We have not yet defined criteria for Soviet restraint, and would do so at some future point only in close consultation with the Germans and others.

German Arms Sales to the PRC. Schmidt may ask about our attitudes toward West German arms sales to China, although the Germans have so far not made any commitments. The Chinese have indicated particular interest in anti-tank missiles which are co-produced by France and West Germany.

Our position is that we will not sell arms to the PRC or the USSR. We are concerned with maintaining the integrity of the COCOM system, and are concerned that the introduction of certain kinds of weaponry might be destabilizing in East Asia—particularly with regard to Taiwan’s future security. Nonetheless, we are not opposed in principle to all such sales. Each country must decide for itself. We hope that Bonn will remain in touch with us on this issue.

Taxation. Time permitting, you might urge Schmidt to accelerate the pace of negotiations, which have been moving at a snail’s pace, to modify our double-taxation treaty.¹¹ A new German corporate income tax imposes unfair burdens on American individual and corporate investors.

POMCUS. There had been a proposal for you to raise with Schmidt real estate and host nation support problems related to POMCUS. Harold Brown now believes that such discussions are unnecessary because negotiations are proceeding well. As a result, the briefing paper does not contain background on POMCUS.

1. Source: Carter Library, National Security Affairs, Brzezinski Material, Trip File, Box 13, President, Germany, 7/13–17/78: State Visit. Secret; Senstive.
2. The briefing book was not found attached.
3. Vance’s memorandum to Carter, July 2, is attached but not printed.
4. Reference is apparently to Owen’s memorandum to Carter, July 12, in which Owen noted that Carter and Schmidt agreed on MTN, suggested that Carter “should ask what Schmidt’s intentions are on growth, and press him for specifics” and proposed that on energy “[w]e can pledge both where we will be by 1985 and that we will have the measures in place by this year’s end for getting there.” Owen also wrote that “Hiss tells me that Schmidt considers US nuclear fuel supply assurances as important as energy assurances—implying that this, too, will affect the scale of any German growth decision” and that this “could be a bargaining chip of considerable importance; if Schmidt doesn’t raise it, you should.” (Carter Library, National Security Affairs, Brzezinski Material, Country File, Box 24, German Federal Republic, 7/78–1/79)
5. On June 27, Senator Robert Dole (R-KS) proposed an amendment to the energy bill that would revoke executive authority to impose fees on oil imports. See Foreign Relations, 1969–1976, Volume XXXVII, Energy Crisis, 1974–1980, Document 156. In a July 3 memorandum to Brzezinski, Hunter noted: “The Dole Amendment effectively deprives the President of his key card at the Summit—that we can pledge decisive action on energy.” Hunter added: “There is an intricate package deal at the Summit. This is not an ordinary bargaining approach—we are not trading energy and inflation action against German/Japanese growth and British/French action on MTN, as though this were trading weapons in a SALT bargaining process; but there is a trade of domestic political effort—where each element of the package enables all of the participants to sell desired action to their domestic constituencies. Thus, if the President cannot deliver, the others are in a box.” (Carter Library, National Security Affairs, Staff Material, Europe, USSR and East\West, Box 25, 7/13–17/78 Bonn Summit: Memos: 6–7/78)
6. See footnote 10, Document 101.
7. Reference to Carter’s June 7 speech at the United States Naval Academy in Annapolis; see “Address at the Commencement Exercises,” Public Papers: Carter, 1978, pp. 1052–1057.
8. On July 15, Carter visited Frankfurt; for the text of his remarks at the Frankfurt City Hall, see Department of State Bulletin, September 1978, p. 9.
9. See footnote 3, Document 12.
10. In this sentence, Carter underlined the words “gray areas statement,” next to which he wrote a question mark.
11. In this sentence, Carter underlined the words “to modify our double-taxation treaty.”