70. Memorandum From Henry Nau of the National Security Council Staff to Members of the National Security Council Staff1


  • Charges of Foreign Policy Disarray

For whatever it is worth, I have set down some thoughts about the charge that Reagan Administration foreign policy is in disarray. I had the benefit of participating in some of the general foreign policy planning activities during the transition. Moreover, in rereading the first two planning documents produced by Richard Beal’s office (one in January and one in April—see attached),2 I was struck by the extent to which the evolution of our foreign policy has followed a deliberate and discernible, albeit rough, set of assumptions and guidelines. The charge that this Administration has no foreign policy is, I think, flatly wrong. The charge reflects a failure to understand the intimate connection between domestic and foreign policy affairs.

In that spirit, let me lay out the elements of the Reagan Administration’s foreign policy design, illustrated by examples of our early successes, which I have used to good effect in my off-the-record speaking.

1. Our priority foreign policy objective has been to restore the domestic capabilities (both economic and military) and credibility (political will and self-confidence) of America’s foreign policy leadership. Hence, neglect of foreign policy due to a preoccupation with domestic policy is not a valid criticism of this Administration. Domestic and foreign policy are intimately linked (a favorite premise of liberal analysts) and this Administration understands that restored domestic vitality—economically, militarily and politically—is the essential foundation of an effective foreign policy.


A. Passage of Economic Recovery Act of 1981—already unprecedented action on tax, regulatory and expenditure policies.3 Continued success depends on political capability to sustain coalition for further [Page 263] budget cuts, clearly impaired by Stockman affair but not irreparable.4 Even if further cuts cannot be made, fight Congressional elections next year on this theme, since alternatives—tax increases or loosened money policy—are failed policies of the past.

B. Defense decisions—demonstrated President’s commitment to close window of vulnerability in its broadest sense without taking premature decisions on basing modes for land missiles which would only invite a massive escalation of USSR warheads targeted on the U.S. with no resultant improvement in U.S. missile force survivability.5 (We should exploit the pro-arms control aspects of this decision. The President chose a path which takes away the rationale for a massive escalation of Soviet weaponry to which we would then be compelled to respond.)

C. AWACS decision—demonstrated this President’s capability to command a domestic consensus on a very controversial aspect of U.S. foreign policy.6 It has done more than a thousand doctrines (e.g., the Carter Doctrine)7 to restore foreign perceptions in the Middle East/Persian Gulf of the credibility of American commitments.

D. Self-confident, non-apologetic expression and defense of American values and institutions in the international system—the President’s development speeches at the World Bank and Philadelphia8 called American foreign policy back to a clear vision of this country’s purpose and our belief in the principles and ideals of political freedom and economic opportunity (as he promised to do early in the campaign in his Chicago speech of March 1980).9

2. While restoring domestic vitality to American foreign policy, this Administration has sought to address foreign policy problems in limited, specific and pragmatic ways, emphasizing bilateral and regional rather than global or grand strategic approaches. Hence, to criticize this Administration for the absence of foreign policy pronouncements, which is often equated in the press with the absence of a foreign policy itself, is to confirm the [Page 264] Administration’s success in holding foreign policy pronouncements to a minimum while domestic capabilities and credibility are being strengthened and the yawning gap between America’s strategic proclamations and real capabilities is being closed.


A. At NATO Ministerial in May and Ottawa Summit in July,10 obtained allied agreement to hold firm on NATO defense decisions of December 1979, including Schmidt’s publicly-stated willingness to stake his political future on these decisions. (Would he have done that under Carter?)

B. Middle East—AWACS sale is not an isolated arms transfer but a major step forward in reestablishing strategic confidence in the U.S.-Saudi relationship and reinforcing Saudi Arabia’s new activist foreign policy in Lebanon ceasefire,11 in the Arab-Israeli dispute (Fahd’s peace plan),12 in the work of the Gulf Cooperation Council,13 and in OPEC (the new Saudi-engineered long-term OPEC pricing strategy).14 This more aggressive Saudi foreign policy, coupled with the U.S.-led effort to isolate the radical Arabs (Libya, etc.) is probably the key to the next step forward in the peace process, slowly bringing the Saudis, Jordanians and moderate Palestinians into some relationship (perhaps not formal) with the Camp David process. U.S. leadership is also about to produce a Sinai peacekeeping force which includes European countingents that identify European governments in a more visible way than ever before with the evolving Camp David process.15

C. Central America—Initially addressed a serious, specific situation in El Salvador (where admittedly our rhetoric at times got out of control) but quickly proceeded to wrap the El Salvador problem into [Page 265] a broader strategic design for all of Central America and Caribbean, including both security measures to blunt Cuban and Nicaraguan subversion and economic measures to attack the primary problems of poverty and despair (the Caribbean Basin Initiative).16

D. Southern Africa—Took on a hopelessly deadlocked situation and devised a controversial but now visibly successful effort to bring South Africa into a mutually acceptable process promising significant progress in 1982.17

E. Economic Summits—At both Ottawa and Cancun, United States stressed realistic, pragmatic approaches to fundamental problems of stagflation in the industrial world and poverty in the developing world, giving priority to domestic, bilateral and regional commitments to solve economic problems while deemphasizing pie-in-the-sky global solutions such as international management of interest and exchange rates or new global institutions to promote the global dialogue (Global Negotiations)18 or energy development (World Bank Energy Affiliate).19

F. North American Relations—Development of close personal relations with the leaders of our two neighbors which accounts in part for the success of the two Economic Summits (one chaired by Trudeau, the other by Trudeau and Lopez Portillo) and the containment thus far of severe bilateral problems, particularly investment policies with Canada and trade policies with Mexico.

3. While avoiding grand strategic pronouncements, U.S. policy toward the Soviet Union has recognized the fundamentally competitive character of our two societies and established very clear objectives of restoring in Europe and elsewhere the perception (which implies psychological as well as military aspects) of balance in U.S.-Soviet strategic relations and an expectation [Page 266] of restraint and reciprocity in Soviet foreign policy. The means to achieve these objectives have been primarily domestic (sending signals of a new activist U.S. foreign policy through the economic and defense programs) and bilateral or regional (e.g. El Salvador or building a strategic consensus against the Soviet threat in the Middle East and Persian Gulf). Meanwhile, global diplomacy toward the Soviet Union (and China, for that matter) has been muted, at least compared to the Kissinger and Carter years. To some extent, the emphasis on domestic capabilities and deemphasis of global diplomacy have contributed to the criticism that U.S. policy is too militaristic (i.e. too oriented toward capabilities and insufficiently oriented toward psychology and politics, particularly in Europe). But, given the Reagan emphasis on foreign policy fundamentals (domestic resources and specific problems), diplomacy understood as global maneuvering and posturing (US–USSR Summits, triangular diplomacy, etc.) becomes less necessary at least in the short-term. When U.S. capabilities were in full retreat after the Vietnam War, diplomacy was all the United States had left to work with. Now, with U.S. capabilities being refurnished, diplomacy does not need to carry the entire burden.


A. Have achieved a reaffirmation of NATO defense decisions and taken unprecedented domestic defense decisions before beginning formal process of arms control talks with Soviets (thereby ensuring that NATO and domestic defense decisions would not easily become hostage to arms control bargaining).

B. Have focused international attention on Soviet-inspired terrorism and subversion in Central America, Indo-China (including Soviet use of poison gases), and in Europe.

C. Have deliberately (thereby lowering expectations) initiated arms control discussions with the Soviet Union.

D. Have initiated effort to show shallowness of Soviet diplomacy by countering Soviet peace offensive in Europe and by pointing to Soviet absence from Cancun and the developing world (except as an arms supplier).

I have sometimes used the metaphor of an edifice to relate the three principal aspects of U.S. foreign policy underscored above.

—The foundation of the edifice is represented by the domestic efforts of U.S. foreign policy to restore economic, military and political vitality to American society.

—The pillars of the edifice are our specific bilateral and regional policies grounded in the realities of our capabilities, rather than the [Page 267] rhetoric of expansive doctrines, and essential to support the global superstructure of U.S. foreign policy.

—The superstructure is the U.S.-Soviet relation which is neither the centerpiece (or foundation) of all American foreign policy, as it seemed to be under Nixon, nor simply one issue like all others, as Carter implied through his initial deemphasis of US-Soviet relations in favor of so-called third tier countries (India, Brazil, etc.).

I would appreciate any comments you might have on these thoughts.


Paper Prepared in the National Security Council Staff20


US Confidence, Leadership and the Margin of Safety

Nothing would contribute more to international stability and to domestic revitalization in the United States, including economic recovery, than the United States’ recovering its confidence, leadership and margin of safety in world affairs.

Unfortunately, the prevailing sense among many Americans, and the country’s allies and adversaries, is that the United States is uncertain of its national interests and role in world affairs. United States foreign policy has recently been fraught with ambiguity, uncertainty, and inconsistency. Worse still is the growing view that America has grown weak in its foreign policy resolve, in its defense posture, and in its ability to respond to security threats around the globe.

The principal policy objectives of the foreign and defense policy of the new administration in the initial phase are to establish the President’s credibility and leadership in foreign affairs and the country’s commitment to peace through a new margin of safety. This objective will signal the American people and the rest of the world that President Reagan is committed to giving directions and consistency to America’s foreign policy, thereby enabling the country to play a constructive role in world affairs.

The credibility of the US is predicated upon a reversal of the adverse force imbalances and upon the creation of a new margin of [Page 268] safety. This in turn is achieved by being willing to commit sufficient resources to rearm in the areas of defense, intelligence, information and foreign assistance. Clear signals must be sent out early that while the Reagan administration recognizes military power is not a policy panacea, it also recognizes that military power is vital. The message must be unambiguously conveyed—the United States does not intend to confront the international challenges of the 1980s poorly armed or hesitant to use military force when appropriate. Supplemental budget increases are essential to augment the readiness of our conventional forces, to reduce vulnerabilities in our deterrent forces, and to improve the collection and analysis activities, as well as morale, of our intelligence community. The effect will be to increase the confidence of friends and the deterrence of foes.

These budget increases are manageable if prepared with wisdom, proper targeting and exacting cost-efficiency. They contrast with the sobering cuts in spending on the domestic side and therefore must be managed with care. But this contrast increases their significance as a signal to the domestic public, allies and foes alike. Domestic budget requirements cannot be an excuse for insufficient defense and foreign policy commitments. After all, that is precisely the excuse our allies use. Where then, is the demonstration of new American leadership?

Presenting a budget that cuts spending in many entitlement programs while increasing spending in defense areas is precisely the approach public opinion currently supports. It is essential to seize this opportunity early. The impact on the psychology of the American people in the two most important areas of current concern—foreign policy and economic conditions—will be dramatic. And in energy, one area in particular, the perception of a stronger American defense commitment in the Middle East may go a long way to reassure oil producers (e.g., Kuwait, Saudi Arabia, etc.) in this area to sustain high levels of oil production and to prevent another major world and domestic oil price increase arising from the Iran–Iraq war.

Strategic Policies

The Administration can meet the requirement to reestablish confidence, leadership and muscle in US foreign policy and defense programs through the following long-range policies:

Restore the margin of safety in US security by laying out a long-range defense program.
Rearm US foreign policy by revitalizing intelligence, information and foreign assistance programs.
Respond vigorously and assertively to the challenges of Soviet power, Allied and Third World diversity, and interdependence, [Page 269] managing crises (hostages, Poland, Central America, etc.) in a context of confidence and conviction.
Establish a strong collaborative relationship with US Allies, emphasizing a division-of-labor concept as the springboard for conducting foreign relations.
Establish a regional security framework in the Middle East/Persian Gulf to deter Soviet adventurism, local instability and conflict, and the cutoff of vital oil supplies to the West.

Policy Additions

Ensure political flexibility in the event of significant interruption of oil supplies (and/or strategic minerals) by a comprehensive national security energy policy including stockpiling, domestic allocation and international agreements.
Develop a national policy for using the strength of American agriculture in support of US foreign policy goals. Policy should address production as well as distribution of foodstuffs.

Rationale for Additions

Oil dependence of US, Western Europe and Japan will continue in the future.
Competition for oil will turn fierce when USSR becomes net importer in the 1980s.
Same holds true for cobalt, manganese, chromium.
World food shortage is on us; will get worse.

Strategic Objectives

To secure US vital interests and in order to meet effectively the varied threats to these interests, the Administration must maintain a clear focus on the following long-range strategic objectives:

Establish a sound domestic base. A stable economic foundation with a clear commitment to a robust defense program is a precondition for a successful foreign policy.
Restore a level of strategic nuclear warfighting capabilities so that the United States is not vulnerable to crisis intimidation.
Counter growth of Soviet military capabilities and surge of Soviet power into areas vital to US and Western security interests.

  1. Source: Reagan Library, European and Soviet Affairs Directorate, NSC Records, Subject File, Presidential Speeches/Interviews; NLR–170–12–16–5–7. No classification marking.
  2. It is unclear if the paper printed here as the attachment to Nau’s memorandum is the January planning document or the April planning document. Only one planning document was found attached to Nau’s memorandum.
  3. See footnote 4, Document 55.
  4. Stockman criticized the Reagan administration’s economic recovery program during a series of interviews scheduled for publication in The Atlantic Monthly in December. For additional information, see “Stockman Appears on Capitol Hill: Works With Lawmakers for the First Time Since Rebuke,” New York Times, November 22, 1981, pp. 1, 32.
  5. See footnote 5, Document 69.
  6. See footnote 10, Document 67.
  7. See Document 5 and footnote 2 thereto.
  8. See footnote 8, Document 65 and Document 66.
  9. Presumable reference to Reagan’s March 17, 1980, address before the Chicago Council on Foreign Relations. According to the New York Times, Reagan had outlined “a ‘grand strategy’ based on three principles: ‘firm convictions’ in the rightness of America’s cause; a ‘strong economy based on a free market,’ and America’s ‘unquestioned capability’ to keep the peace through superior weaponry.” (Steven V. Roberts, “Reagan, in Chicago Speech, Urges Big Increases in Military Spending,” New York Times, March 18, 1980, p. B8)
  10. See footnote 2, Document 43 and Document 57.
  11. See footnote 6, Document 53.
  12. Reference is to Fahd’s eight-point peace proposal issued by the Government of Saudi Arabia on August 8. For the text of the statement, see American Foreign Policy: Current Documents, 1981, p. 704.
  13. Established in 1981, the members of the Gulf Cooperation Council included the Governments of Saudi Arabia, Kuwait, the United Arab Emirates, Bahrain, Qatar, and Oman. The Council promoted regional cooperation on a variety of issues. In telegram 1648 from Abu Dhabi, May 27, the Embassy transmitted the text of a communiqué issued at the conclusion of the Gulf Cooperation Council’s May 25–26 summit held in Abu Dhabi. (Department of State, Central Foreign Policy File, Electronic Telegrams, D810248–0163) For additional information about the Council, see John Kifner, “Arabs May Question Oman’s Military Ties to U.S.,” New York Times, November 11, 1981, p. A9.
  14. Reference is to the Saudi proposal for a unified pricing system for OPEC oil. On October 29, OPEC members meeting in Geneva agreed to set a base price of $34 per barrel. (Douglas Martin, “OPEC Members Unite to Freeze Oil Price at $34: Saudis’ $2-a-Barrel Rise Means Increase in U.S.New York Times, October 30, 1981, pp. A1, D13)
  15. See footnote 4, Document 67.
  16. The President outlined the broad contours of the proposed Caribbean Basin Initiative in both his October 15 remarks in Philadelphia (see Document 66) and in his various statements made during the Cancun Summit (see Document 68).
  17. Presumable reference to the late October proposals regarding Namibian independence transmitted by the Contact Group to the Government of South Africa on October 26. During the October 29 question and answer session with attendees of the National Foreign Policy Conference for Editors and Broadcasters (see footnote 10, Document 67) Haig responded to a question regarding the Reagan administration’s “official policy toward South Africa,” indicating that “South Africa has come to accept 435, to accept the U.N. presence in Namibia, and we have just completed drafting a set of broad principles on about a page and a half which would be reinforcing the provisions of 435. It is currently being negotiated by the contact group with the front-line states and with South Africa. That represents progress, hopeful progress.” (Department of State Bulletin, December 1981, p. 32)
  18. See footnote 2, Document 65.
  19. Presumable reference to McNamara’s 1980 proposal to establish an affiliate to promote lending for energy projects undertaken by developing nations. The Reagan administration rejected the proposal in August 1981. For additional information, see Clyde H. Farnsworth, “U.S. Rejects Proposal to Form World Bank Energy Affiliate,” New York Times, August 13, 1981, p. D15.
  20. No classification marking. No drafting information appears on the paper.