Foreign Relations of the United States, 1969–1976, Volume III, Foreign Economic Policy; International Monetary Policy, 1969–1972

83. Memorandum From Secretary of State Rogers to President Nixon¹

Washington, December 2, 1971.

SUBJECT

• Your High Level Meetings: The Results We Seek

Your meetings with Brandt, Caetano, Heath, Pompidou, Sato and Trudeau² underscore your commitment to full consultation with our Allies prior to your discussions in Peking and Moscow.³ These meetings, however, have a significance for the Free World beyond moving further from confrontation to an era of negotiation; they should also establish the basis for resolution of current international economic and monetary issues.

Therefore, our objectives are:

• First, seek to assure that your forthcoming summit meetings with the Communist world are undertaken against the background of Free World unity and understanding;
• Second, reassure our Allies, both in the Atlantic and the Pacific, that you go to Peking and Moscow with no intention of “dealing over their heads” on any matters where their security or other vital interests might be affected;
• Third, stress that, before these summit meetings with Communist leaders, you want to see the pressing trade and financial differences between Free World countries well on the way to resolution; and
• Finally, indicate that these consultations are part of a continuing process of discussion with our Allies.

The agenda for the scheduled talks covers your visits to Peking and Moscow, the current international economic and monetary situation, other international issues such as the Middle East and South Asia, and bilateral issues.

Your own discussions should concentrate on your forthcoming visits to the Communist world and on resolving the current economic and monetary issues that tend to divide the Free World today. The cabinet-level talks that will be held in tandem can cover in addition other major international issues as well as bilateral problems.

Our Allies should be left with the clear impression that we do not intend to negotiate in Moscow on security issues that affect their interests. They should be disabused of the idea that we intend to negotiate mutual and balanced force reductions or an arrangement for a CES with the Soviets bilaterally. You should alert them to the possibility that some agreements may be reached in connection with the Moscow visit e.g., on SALT and bilateral trade issues.

I believe you should particularly stress that any ally, in going to Moscow, will be most successful if he is backed by the strength of the Alliance. To this end, you should stress your firm intent to maintain U.S. forces in Europe and the need for our Allies to pursue improvements in their conventional force capabilities.

Regarding Peking, you should emphasize that your purpose is the initiation of a dialogue to remove the misunderstanding that has accumulated over the decades. Therefore, no dramatic results or major agreements are foreseen; there is no intention to reach agreements on third party problems or change existing commitments. Sato in particular should be assured that Japan’s security and other interests will under no circumstances be undermined.

In addition, you should stress that you want to learn about each Allied leader’s views and experiences in dealings with the leaders in Peking and Moscow, stressing that shared knowledge is important to Allied unity. You should also assure our Allies that they will be informed of the results of these visits.

The agenda item on international economic and monetary issues reflects the fact that your August 15 measures have resulted in a critical change of attitude on the part of our major Allies and trading partners.⁴ It is now recognized that the imbalance in the international economic system has to be corrected and that fundamental measures are necessary to achieve this. The outcome of recent sessions of the Group of Ten in Rome appears to indicate that we now have an opportunity to reach a near-term settlement involving a major realignment of the principal currencies and some concessions in the trade field. We should concentrate our attention on realignment initially because gains in that area will produce the greatest results both in terms of our international balance of payments and in the strength of the American economy.

The shock treatment used to achieve this major breakthrough, however, has left bruised feelings and concerns about the future direction of American economic policy. The succession of consultations you will have can lead to a strengthening of allied relationships and create a firm basis for going on with the next stage in talks looking toward the creation of new monetary arrangements and negotiations for expansion of trade. Your talks can serve the purpose of beginning this next stage with the firm assurances that the United States, under your leadership, has no intention of retreating into an isolationist or protectionist policy.

Specifically, you should stress the need to:

• —move quickly to a new, credible structure of exchange rates which would help bring about a substantial improvement in our balance of payments. We would remove the surcharge and the buy-American feature of the proposed job development tax credit.
• —resolve certain trade issues immediately and work intensively on others in the next few months bilaterally and through GATT.
• —work together in the Group of Ten and the IMF on a more fundamental reform of the international monetary system, and in the OECD high-level group on preparations for a major—and reciprocal—effort to bring down barriers to industrial and agricultural trade.

Needless to say, movement toward the favorable settlement of these economic issues will strengthen ties with Europe and Japan and strengthen your hand in talks in Peking and Moscow.

In terms of press results from these meetings, I believe we should strive to achieve:

a) understanding and support for your visits to Peking and Moscow as efforts to reduce tensions without impairing Free World security;

b) agreement that current economic and monetary issues can be resolved through efforts on the part of the leading allied powers at the political level;

c) recognition that we remain, as a superpower, a nation cognizant of our Allies’ interests, prepared to take these into account, and to work with them for reasonable solutions.

William P. Rogers

1. Source: National Archives, Nixon Presidential Materials, NSC Files, Agency Files, Box 285, State Volume 13. Secret.
2. President Nixon met with Prime Minister Trudeau in Washington December 6 (see Document 85), President Pompidou in the Azores December 13-14 (see Document 219), Chancellor Brandt in Key Biscayne December 29, and Prime Minister Sato in San Clemente January 6-7, 1972 (see Document 87). Portuguese Prime Minister Caetano was the official host for Presidents Nixon and Pompidou in the Azores and gave a dinner in their honor on December 13. President Nixon met with Caetano for their Summit upon his arrival in the Azores during the evening of December 12, a largely courtesy/protocol event. Documentation on the Caetano Summit is in the National Archives, Nixon Presidential Materials, NSC Files, President’s Trip Files, Box 473, PM Caetano 1971.
3. President Nixon traveled to the People’s Republic of China February 17-28, 1972, and to the Soviet Union May 22-29, 1972.
4. Reference is to the President’s New Economic Policy; see Documents 168 ff.