Foreign Relations of the United States, 1969–1976, Volume XXXI, Foreign Economic Policy, 1973–1976

58. Memorandum From the Director of the Planning and Coordination Staff (Lord) to Secretary of State Kissinger¹

Washington, December 10, 1973.

SUBJECT

• Memorandum on the Political/Economic Relationship Between the United
• States, the European Community and Japan

The attached memo, prepared by a member of my staff, discusses a number of economic issues between the United States, the EC and Japan in a deliberately provocative way from a somewhat unconventional point of view. I do not necessarily subscribe to all of the conclusions and in fact have a number of reservations. But I think the memo raises important questions that need to be addressed, and you may wish to try some of them out during the Chiefs of Mission meeting²—as devil’s advocate.

The memo is still marked draft since the author wishes to consult with a few colleagues before making final revisions. However, it is in present form complete, highly readable, and I feel timely to read at this point.

Attachment

Washington, December 6, 1973.

Memorandum Prepared by Ernest Preeg of the Planning and Coordination Staff

Why the Political-Economic Relationship Between the United States, the European Community and Japan is Becoming more Political than Economic in Nature, and how the US Might Respond to this Situation

Summary

Certain traditional beliefs concerning the economic relationship among the industrialized countries are questioned and found less convincing than commonly viewed: for example, that international relations are based predominantly on the free interaction of market forces; that there is a clear trend toward growing economic interdependence among the industrialized countries as a group; and that there is a corresponding convergence of economic interests among these countries. The central policy conclusion from this analysis is that North America, Western Europe and Japan will become less and less willing to constrain their internal economic and related policies vis-à-vis each other (although such policy integration is likely to intensify within Europe and North America). The resulting economic relationship among the three industrialized centers will be less clearly defined and will allow far greater flexibility of diplomatic maneuver; moreover, while direct economic interests will remain important, decision issues will become relatively more political in character. Specific policy implications are discussed for the following issues: New (Atlantic) (Trilateral) Charter; international monetary reform; trade policy; the multinational corporation; relations between the advanced industrialized countries and the rest of the world; and a revised international economic institutional structure.

Introduction

It is becoming a tired cliché to say that problems among the advanced industrialized countries of North America, Western Europe and Japan are primarily economic in character, that common economic interests—and conflicts—will inevitably grow in the years ahead, and that economic diplomacy will therefore shift more and more to center stage in the overall policy relationship among these countries.

A major objective of this memorandum is to show that such a conception—at least in the terms normally discussed—is largely misleading and in certain respects a myth. The soothsayers of economic gloom and trade wars are frequently facing backward in time, trying to put back together a bygone Humpty and Dumpty of an economic relationship—call it the Bretton Words system for short—rather than looking ahead to an emerging set of circumstances quite different in character from what has gone before.

This is not to say that mismanagement of economic issues cannot cause great harm to the overall relationship among these countries. There are changes underway in the facts of economic life that must be taken into account if we are to establish a more balanced and harmonious overall relationship. But to quote a familiar adage, “facts can only be used.” And at present we often seem to be fighting the facts rather than using them.

Moreover, the political-economic policy configuration among the advanced industrialized countries is becoming more political and less economic in character. The changing policy context has both a domestic and an international dimension. On the domestic side, ever growing governmental powers and responsibilities for internal goals—economic, social, environmental, or whatever—tend to increase resistance to external constraints over national sovereignty in these areas. On the international side, the purely economic objective of maximizing world output of goods and services has been losing ground to the competing, non-economic objectives of national security, internal self-sufficiency and unadulterated chauvinism.

This memorandum deals primarily with policy measures that would be responsive to this changing context of international political-economic relations. However, it is useful first to dwell briefly on some specific conceptual and/or empirical underpinnings of the general statement above. The heuristic vehicle adopted for this is the exposure of three common views about international economic relations as largely mythological in content.

• Myth Number 1. The international economy—as expressed in the GATT and IMF articles of agreement—is based predominantly on the free interaction of market forces, with minimal government intervention. Moreover, the direction of national policies should be toward more and more “liberal” treatment of international trade and investment, meaning less government intervention, (although the espousal of the ultimate objective of global free trade is discreetly avoided). Under these circumstances, there is no conflict between the preservation of national political sovereignty in the classical sense and free economic interaction between such laissez-faire oriented nation-states.
• Reality Number 1. There is increasing government involvement in and management of national economies. This involves highly political internal issues concerning both the general level of economic activity—full employment, minimum inflation—and, to a growing extent, individual sector performance—self-sufficiency in energy and food, regional development, and industrial competence to produce computers, aircraft, armaments, etc. There is obvious conflict between these national policies and the free international flow of trade, investment and perhaps even technology. As a rule of thumb, this conflict is of greater consequence for smaller countries, highly dependent on trade, since the economic cost of forgoing economic interdependence is usually much greater for these countries.
• Myth Number 2. The dynamic of advanced industrialized society in North America, Western Europe and Japan points clearly to growing economic interdependence in coming years among these countries. This proposition can be maintained even with a considerable relaxation of Myth Number 1.
• Reality Number 2. It is unclear whether economic interdependence between these three highly industrialized centers will continue to grow and there is good reason to believe that it will decline, (although interdependence is likely to increase within Europe and within North America). The differentials in labor costs, available technology and managerial competence between the US, on the one hand, and Western Europe and Japan on the other, have been reduced greatly since the 1950s, and this in turn should reduce the economic incentives to increased trade and investment. There is also a growing political pressure to limit the power (if not the absolute growth) of the multinational corporation—perceived by some only a decade ago as the Trojan horse that would undermine the nation-state. In addition, the internal policy objectives enumerated under Reality Number 1 would tend to reduce the level of external economic interdependence. And finally, theoretical questions are being raised as to the proper definition of “economic dependence” as it bears on foreign policy relationships, which could dilute the significance of interchange among the advanced industrialized countries. (For example, it would be less painful to the US to have imports of Volkswagens and Toyotas from other industrialized countries cut off than it would be to have petroleum imports from the Mid-East terminated. On this basis, interdependence with other industrialized countries might be viewed as qualitatively less important.)
• Myth Number 3. There is a trend toward convergence of economic interests among the advanced industrialized countries. This is the ultimate—or what might be called the “architectonic myth” of much prevailing wisdom. It can be maintained even while making great concessions about Myths Number 1 and 2. However, it is also the most broadly suspect of the three.
• Reality Number 3. The divergencies in direct economic interests appear to be growing relative to the convergencies. A current glaring example is petroleum: higher world prices for oil are moving the US toward self-sufficiency in energy (to be accelerated by large government financial support); the shift in control of Middle East oil production from international firms (mostly American) to producer countries will further extricate US direct economic interest from the area; in contrast, Western Europe and Japan are being drawn further and further into dependence on imported oil; the outcome, in all likelihood, is for a growing diversity of national (or regional) interests in the energy field in coming years. (These are simply the “facts,” apart from any implication of what the best policy response should be.) It needs to be added that the issue described here concerns direct “economic interests,” and not the broader political/security interests of the countries involved.

A Central Assumption: Declining Internal Policy Constraints between North America, Western Europe and Japan

If the facts are indeed as stated (and a more detailed and rigorous analysis would be useful), what are the policy implications? A convenient point of departure is to pose the policy relationship among the industrialized countries in terms of a “tradeoff” between the gains, political as well as economic, from greater economic interdependence, on the one hand, and the constraints on national autonomy that such interdependence implies, on the other. The constraints on national autonomy can be both internal (for example, limiting the use of effectiveness of domestic economic, social, environmental and other policies) and external (for example, reducing diplomatic maneuverability because of dependence on Arab oil).

The stated long-term objective within Western Europe is to accept these constraints on a regional basis in order to achieve the economic gains from economic union—and greater political power as a group vis-à-vis the rest of the world. This objective is more comprehensive and explicit for the European Community of Nine, but the remaining industrialized countries of Western Europe have in effect accepted it as well by entering into free trade and related arrangements with the Community, and allowing their economies to become highly dependent on the Community. A similar relationship exists with respect to Canada’s dependence on the US economy, although special policy arrangements have been primarily ad hoc responses to specific needs, and Canada is somewhat ambivalent about its longer term objective.

Among the three industrial concentrations in North America, Western Europe and Japan, however, the tradeoff appears to be tending in the direction of less constraints on internal national—or regional—autonomy, even at some cost to the level of economic interdependence. The more flexible monetary relationship that is emerging is the clearest and most fundamental indicator of this trend, since exchange rate adjustment replaces the need for economic policy coordination in broadest, “macro” terms. But as described below, the trend is evident in other important areas as well.

The central assumption of the policy analysis elaborated here is that North America, Western Europe and Japan will in fact continue to become less and less willing to constrain their internal policies vis-à-vis each other, increasing the relative priority on achieving domestic or regional socioeconomic objectives, and reducing the priority given to the gains from broader international economic interdependence. This assumption rests largely on the “three realities” described above. It reflects the fact that the complexities of an advanced industrialized society, only partially understood—from urban congestion to pollution to structural unemployment to “cost push” inflation—make governments more and more cautious in entering into external commitments that would reduce freedom to deal with such problems.

This does not necessarily mean an absolute decline in trade, or even a relative decline. In fact, there is considerable flexibility in the mix of foreign economic policy instruments that can be brought to bear in achieving an optimum balance between international economic interdependence and national (or regional) autonomy. There are also certain areas of policy that are clearly headed toward closer international coordination. The crucial distinction, however, is that while the prevailing official US view would appear to be that the overall policy framework among the industrialized countries is headed toward progressive harmonization (“intensifying their cooperation in the management of their economies,” to quote the draft US–EC statement),³ the assumption made here is that the degree of policy harmonization—or more pointedly, policy constraints—between North America, Western Europe and Japan, will decline.

This central assumption, while resulting in large part from economic circumstances, has fundamental foreign policy significance. It provides the United States and the others greater flexibility for particular lines of policy, either with respect to the industrialized countries or to other parts of the world. At the same time, however, a deepening separation of the “political-economies” in the three areas could tend to weaken existing political-security ties. In sum, the entente economique among the industrialized countries, as proclaimed in many statements within the OECD and elsewhere, would give way to a more independent interaction between three major economic powers, no one of which is dominant, and which together account for roughly two-thirds of total world trade and investment.

More specifically, this assumption has the following implications for US foreign policy:

1. Western Europe will finally gain its economic independence from the United States. “Atlantic partnership” has long been ambivalent as to how independent the European side would be from the US. The implication here is that Western Europe will be progressively less dependent on the US economy and have the capacity to be highly independent in policy terms. Of course, internal divisions will limit the ability of Western Europe to utilize this independence toward concerted goals.

2. The dollar-centric system will give way to a multipolar economic system. The existing monetary relationship of managed floating rates seems to have moved in this direction more quickly than current attempts by governments to negotiate a revised monetary system which would treat the dollar in the same way as other major currencies. From the US side, our economic diplomatists must come to realize that under such circumstances their objectives will often be in self-limitation, economic events are no longer subject to their will, and a stable world economy depends not so much on US strength as on recognition of the power of others.

3. Three distinctive bilateral links with the European Community, Japan and Canada will take on greater relative importance. These distinctions will not only be on the substance of economic policies, as adapted to the differences in political-economic structures in each of the three areas, but in the broader character of the diplomatic relationship as well. Western Europe for some time to come will be only partially united, with limited ability to reach unified positions or to exert leadership responsibilities; Japan has a crucial role throughout Asia; and the US/Canada relationship is characterized by asymmetry in size and pervasive private sector linkages.

4. The rest of the world will assume multifarious economic roles in response to the largely tripolar economic orientation of the advanced industrialized countries. Many will drift toward special relationships with the regional industrialized center. Other major countries, from Brazil to India to Indonesia to Australia, will likely remain independent and important economic powers to be dealt with. The Soviet Union and China will have new opportunities to play off one industrialized power against the other, for economic or political gain.

5. A new form of “multilateral” economic system will emerge. The emphasis of such a multilateral relationship will be far less on “universal” rules tilted overwhelmingly in the direction of free market economies—as was the Bretton Woods system—and more on a recognition of the diversity of political/social/economic systems in various countries or groups of countries.

The Policy Response

The foregoing has described a revised context of political-economic relationships between North America, Western Europe and Japan. The central assumption—declining economic policy constraints among the three (while such policy integration intensifies within Europe and probably within North America)—can be resisted, and policies pursued that would attempt to work in the opposite direction. It is asserted here, however, that such an approach would be unfeasible in political terms, primarily because it is contrary to the economic interests of the countries involved. The relatively low level of economic interchange between the three (for example, as a share of GNP) simply does not justify the costs to the internal political-economies from the policy constraints implied. (In contrast, within Western Europe and within North America, the economic case in favor of regional joint management of policies can probably be sustained.)

The following suggested broad lines for US foreign economic policy are therefore based on the assumption of declining policy constraints among the three. This does not necessarily mean increased friction and conflict. Indeed, the objective of a so-called “growing web of vested economic interests” can cut both ways, and it may well be that a weaker web, and hence reduced policy constraints, will permit greater flexibility in reaching mutually agreeable accommodation to economic problems. What should be quite clear, however, is that the context of economic relationships will become increasingly merged with broader aspects of foreign policy.

The most important political-economic issues among the industrialized countries, in terms of substance or of immediate concern, are:

1. New (Atlantic) (Trilateral) Charter. A relatively loose form of trilateral political/economic statement would be most consistent with the above analysis. Such a statement could be complemented by a stronger NATO “Atlantic” declaration covering the security relationship in broadest terms. The statement could be interpreted as a European declaration of economic independence after a generation of American economic hegemony. At the same time, it could lay great emphasis on the new issues facing the advanced industrialized democratic societies, which would clearly distinguish this trilateral grouping of countries as the vanguard of an unprecedented affluent and technology-oriented society, to which all other countries, developing as well as communist, aspire.

The present draft texts of the US-European Community statement (drawing on The New York Times of November 9), indicate a rather inconsistent attitude on both sides. The US wants a “more open” trading system and “intensifying” cooperation in the management of national economies, but on the key substantive issue that would oblige the countries to intensify management of their economies—namely fixed exchange rates—the US holds back with the vague phrase, “stable but adjustable exchange rates.” The Community, in contrast, resists the terms “more open” and “intensifying” but is very pointed in the pursuit of “fixed but adjustable parities.”

A consistent statement in keeping with the analysis of this memorandum would be to accept the looser EC language for defining the overall relationship, while maintaining the more flexible terminology with regard to monetary reform. On this basis it should be possible to bring Japan in as a cosponsor to the declaration. It would appear in the US interest to keep the economic relationship in this broader, trilateral framework, in view of the interactions that exist between our economic policies toward Western Europe and Japan.

2. International monetary reform. This is the most important substantive issue for defining the longer-term political-economic relationship between North America, Western Europe and Japan. The course indicated here would be a highly flexible exchange rate system among the three, thereby allowing greater autonomy for internal national or regional policies. The present managed floating rate system would appear to meet this objective, and there seems to be growing support to make this arrangement the new system, subject to some greater specificity as to how the floating rates are managed.

At this point, however, the Europeans, at least, appear to want to go back to some form of fixed rates, and there are mixed views within the US Government. The fact of the matter is that the exchange rate issue has become more political than economic in its consequences. The present floating rate system is working reasonably well, and there may be some hybrid approaches of “fixed but adjustable parities” that would not be very different, for better or for worse, in abstract economic terms. We need to be extremely careful, however, in assessing the political impact of resuming the defense of a given set of “official” exchange rates, with all that it implies in terms of national prestige—and harmful political embarrassment to a government that has been “forced” to “devalue” its currency or to lose hundreds of millions of dollars to speculators. There is also the broader issue of whether, by a renewed commitment to some form of fixed rates, there is not a more important implied commitment to harmonize internal economic policies—which governments are politically unable to do—and which will therefore lead to periodic frustration, mutual recrimination, and a souring of the overall foreign policy relationship. The European reasons for pursuing a fixed rate monetary system are particularly unclear—and varied—and we should give priority to analyzing their views with great precision.

3. Trade policy. This is a very technical area of policy where it is easy to get lost in the forest while negotiating over a large number of sui generis trees. As an attempt to give broad direction to trade policy within the analysis presented here, three points are put forward:

a. There is no conflict between further multilateral reductions of tariffs and some other trade barriers and the more loosely defined overall policy relationship described above. Tariffs, in any event, are mostly of limited economic consequence at this point, and a gradual phasing down or out of them would reduce much of the political friction caused by recent intransigence on all sides in the trade policy field.

b. At the same time, however, the various interventionist policies mentioned earlier—self-sufficiency in food and fuels, regional and industry sector policies—conflict with the liberal trade principles of the GATT and are not now covered in trade agreements. A reasonable accommodation of these national or regional objectives, even at some cost to liberal trade principles, should receive priority attention in our negotiations with the other industrialized countries. Such accommodation may vary from one country or group of countries to another.

c. Discriminatory trading practices, and the formation of “trade blocs,” looms as the most political of trade issues. In a multipolar political world, with an inherent tendency for large powers to stake out surrounding spheres of interest, preferential trading arrangements provide a convenient vehicle, symbolic as much as substantive, for establishing such special political influence and responsibilities. The US in almost all cases should strongly oppose these arrangements on political grounds because, on the one hand, we have no sphere of influence that could be enhanced by preferential trading arrangements (the desirability or feasibility of a Latin American-US trade bloc is another first class myth) while, on the other hand, it is normally not in our interest to have other major powers establish their preferential blocs. We should find support on this issue from the many smaller and weaker countries that would prefer not to be drawn into such a dependent relationship, but which are not in a position to resist without the firm support of another major power. There would be exceptions to opposing economic blocs in certain cases, however, either where there is a clear and mutual intent to merge national economies in a fundamental way (as in Western Europe or among some groups of developing countries), which is as much a political as an economic decision, or where the dynamics of a high degree of economic interdependence make a special arrangement virtually unavoidable (such as has been the US-Canadian situation on a number of issues, or as may evolve in terms of currency linkages under a more flexible monetary system).

4. The multinational corporation. This is the most vulnerable point for the US vis-à-vis Europe. Our firms are heavily committed and could be held hostage to European demands. Various Community policies affecting foreign firms could involve some measure of discrimination. Our policy response in such a situation is made more difficult by restrictions existing elsewhere, such as in Japan and as proposed in Canada.

The US policy response therefore will need to be more delicate in this area than almost anywhere else, and could consist of the following elements:

a. Insist on the principle that between the US and the Community, there will continue to be nondiscriminatory treatment of each other’s firms, on a strictly reciprocal basis.

b. Enter negotiations to limit unfair practices by and unwarranted privileges of multinational corporations. This could involve agreements covering antitrust regulation, tax treatment, and perhaps conditions of international capital transfer. Such measures would not be totally popular with US firms, but many realize that some form of regulation is inevitable, and it is preferable at least to know what the rules are.

c. Encourage European investment in the US and, as appropriate, seek to moderate expansion of US firms in Europe. This would seem to be leaning with the wind in any event, since the incentives of the 1960s for US investment in Europe appear to have diminished. A more balanced relationship would be more acceptable politically in Europe, in keeping with true economic partnership, and would tend to even out the threat of holding foreign firms hostage to unfair treatment.

d. Where Europe insists on developing its own indigenous industry (such as in computers), acknowledge this objective in certain special cases while obtaining an equitable arrangement for affected US firms.

5. Relations between the advanced industrialized countries and the rest of the world. There is great variety in economic relationships between the industrialized countries and the rest of the world, involving conflicts as well as common interests. These issues are largely economic in that they affect US economic interests abroad, but the political implications are also of growing relative consequence. This will become more apparent under a more flexible monetary arrangement whereby overall external accounts need to balance out one way or the other.

The following are a few illustrative examples of major issues faced in common by the industrialized countries with other parts of the world:

a. International trade in petroleum and food. The economics of this issue are self-evident in that it would be preferable to import these products than to pay the substantially higher cost of internal self-sufficiency, but such economic calculations are seldom at issue, and the policy questions are rather: What price in terms of political dependence are we willing to pay as a consequence of dependence on such imports? Should we distinguish in favor of imports from friendly countries, and if so under what form of commitment? In periods of worldwide shortage, should the US distinguish between friendly and adversary countries in our export policy, and if so, how? Should we give away food to poor and undernourished people for humanitarian reasons and/or to promote international political stability? These are questions not primarily for economists, but for overall foreign policy analysis.

b. Development assistance. Again there is general agreement on the economic objective that foreign aid should help in the development process, however defined. But the difficult policy issues are often more political in nature: Should the vehicle for transmitting aid be bilateral government-to-government programs or multilateral institutions? Should aid be conditioned on highly specified criteria, which necessitate extensive outside intervention to monitor the implementation of aid, or on more general terms, leaving greater autonomy of implementation to recipient countries? What are the attitudes of the Congress and of the American people to giving assistance, on social equity or foreign policy grounds, to poorer countries?

c. Debt rescheduling. A debt rescheduling negotiation in one sense is a composite economic problem covering all past economic sins of omission and commission. But the actual negotiation is often more political than economic. Neither economics nor international law provide clear answers to a situation where a nation, in effect, cannot fulfill its external obligations—and goes bankrupt. The debtor nation almost invariably holds the upper hand in such negotiations, which complicates the position of the industrialized creditor nations. Moreover, the Soviet Union may well be headed toward a debt rescheduling crunch in the next few years, which would face Western Europe and the United States with a major political problem.

d. Expropriation. What is adequate compensation for foreign-owned property expropriated by a sovereign government? Economics and international law are again of limited help in answering this question, as witnessed by the ad hoc, highly political series of disputes in recent years.

6. A revised international economic institutional structure. A capstone to the current monetary and trade negotiations could be major revision in the international institutional structure. There are varying possibilities to exploit this opportunity. Single representation by the European Community in international economic institutions, for example, could have great political as well as economic significance. An active role for China and the Soviet Union is another institutional issue that may come to the fore. And a more integrated institutional approach between monetary, trade and investment policies (at present, investment is not covered at all within the institutional structure), could lend stability to future economic relations. However, overly binding institutional commitments—as frequently advocated by international lawyers and more traditional supporters of Bretton Woods—would likely prove undesirable in a more diversified, multipolar system of political-economic relationships.

Beyond Marxism and Capitalism

The underlying these of these various policy issues is that the advanced industrialized countries do not necessarily constitute a monolithic grouping, inevitably converging toward one integrated “post-industrial society.” Rather, there are three distinctive concentrations of advanced industrialized activity in North America, Western Europe and Japan. Each is highly self-contained, in terms of having a complete industrial structure. And to the extent that there are external dependencies, for example on fuels and raw materiels, such dependencies are not primarily among the three industrialized centers but with other parts of the world.

An important recent change has been the decline in US economic power relative to Western Europe and Japan, which further underlines the high degree of economic independence among the three. This twilight period in US economic hegemony complicates the interaction among the industrialized countries in that no one has the power to control the overall system of relationships as the United States once did, and yet the new roles stemming from more balanced economic power have not been assumed. Only a mutual recognition of this economic power limitation, translated into a joint collaboration in which no single member can successfully act independently, will provide the basis for a stable international economic system.

This conclusion must be qualified, however, by the high degree of self-sufficiency noted above. For there need not be a stable international economic system—or any international economic system in the normal sense of the term. Each of three industrialized centers could make its separate arrangements with neighboring countries to suit its needs. Such potentially “antagonistic” economic bloc formation would have tendencies toward economic rivalry and conflict, but even this economic cost might be kept within reasonable bounds. In political/security terms, however, the result could be disastrous.

What is really at stake, therefore, is the international community of nations in broadest terms. Economic interdependencies are an important part of this community, far more so than under the classical nation-state relationship which neatly separated external from internal policies. Transnational economic relationships today entail a selective merging of national sovereignty in many areas of policy, although these links are often more important within regions and between certain groups of countries than they are, in relative terms, between North America, Western Europe and Japan.

The end result is a world economy now dominated by the three “poles” of the advanced industrialized countries, but with primary impact either within the industrialized region (that is, within Western Europe and North America) or with other parts of the world. The relationship among the three, in contrast, is of relatively less direct economic consequence and hence is leading toward a looser linkage of policies. As a result, economic diplomacy, if that is the proper term, is becoming a highly complex political-economic exercise entailing these varied relationships.

Finally, the advanced industrialized countries as a group will remain for some time to come as the vanguard for an emerging and still only partially perceived “post-industrialized society,” that transcends in many ways the simple concepts of both the classical free market economy, with little or no government economic role, and the collectivist dictatorship by what is a rapidly vanishing industrial proletariat. The challenges embodied in such a new form of society are varied, ranging from urban congestion to unprecedented leisure to a growing technology of behavior modification. As for behavior modification, it would appear justified to extrapolate from the individual to the national level and to foresee a major role for the advanced industrialized countries in providing “positive reinforcement” to other aspiring countries to build a more just and peaceful world order—rather than the “aversive stimulus,” namely war, that has been the hallmark of the history of international relations up to this point.

1. Source: National Archives, RG 59, Policy Planning Council, Policy Planning Staff, Director’s Files (Winston Lord), 1969–77, Entry 5027, Box 346, Dec. 1973. Confidential. Kissinger wrote at the top of the memorandum: “Win—Interesting. See me.”
2. A European Chiefs of Mission meeting was held in London December 12–13.
3. The draft U.S.–EC Declaration of Principles transmitted in telegram 198317 to all NATO capitals, October 5, contains this phrase. (National Archives, RG 59, Central Foreign Policy Files)