Foreign Relations of the United States, 1969–1976, Volume XXXVI, Energy Crisis, 1969–1974

293. Minutes of the Secretary of State’s Staff Meeting¹

Washington, January 31, 1974.

[Omitted here are the Summary of Decisions and discussion unrelated to oil.]

Secretary Kissinger: Well, what is your judgment of what their [the Japanese] behavior is going to be at the energy conference?

Mr. Hummel: Cautious but cooperative.

Secretary Kissinger: Could you get that out of the cable with me or Kosaka—whatever his name is?²

Mr. Hummel: When they are here on the ground attending the conference, it will certainly be interesting to be involved in what’s going on. They will not be out front.

Secretary Kissinger: But will they be involved in what’s going on rather than simply procedural matters? That’s what I got out of the cable.

Mr. Hummel: I think, despite those messages, they will be heavily involved in substantive discussions; yes. They will really want to be.

Secretary Kissinger: Can we get across to them that that is what we expect?

Mr. Hummel: Yes. I’ll be back with Kosaka, that is.

Secretary Kissinger: And, you know, I’ll say this to the energy group—the participants should have no doubt that if it isn’t going to be multilateral, we’re going to go our own way; and let’s see who’s going to win a bilateral contest. It would be a disaster for everybody, but at least—I mean they cannot have us tied to a multilateral arrangement while they each go their bilateral way. And that should be conveyed to them before the meeting.

Mr. Hummel: Yes, sir.

Sir, one of the things that worries the Japanese and others—not just the Japanese—is whether or not we have made it crystal clear to the producing countries that had we said it enough times at this consumer meeting; it’s not directed at lining up a united front against them. Now—

Secretary Kissinger: We have said it a hundred times and it’s bull …—excuse me for using that language. It is, of course, designed to create a united front. That’s the only purpose of a consumer meeting. And we can waffle around this and we can say elegant things. And, of course, we should say it—but, for God Sakes, in a senior group here, let’s not kid ourselves. The purpose is to create a consumer group that improves the bargaining position of the consumers. And if the consumers, in the case of a crisis that is absolutely predicted, have no clear bilateral solution, in which they have no other choice except common disaster or a multilateral approach—if we cannot organize ourselves, then we really are in the condition of Greek cities facing Macedonia or Rome.

What is the bilateral solution? And we are not going to tackle prices head on right away—although why we should, why consumers should be embarrassed to say this—we will not try to create a bargaining mechanism for a variety of tactical reasons, most of them connected with the weakness and cowardice of the governments we’re dealing with. But the fact of the matter is that to the extent that we can get consumer restraint, common exploration of alternative resources, we are improving to the extent that we share our statistical information—by which I mean to the extent that we make our information available to them, since none of them is capable of making an analytical study.

To that extent, we are going to improve the bargaining position of everybody; and I think we can go ahead. I mean we will say all the appropriate platitudes about this not being a confrontation with producers. The fact of the matter is that the only way the consumers can protect themselves against what is a revolution in international finance, in international economics, is to share a common perception of the problem and to organize it. If they can’t do it—I mean tactically—we will use your language. But in this room let’s not delude ourselves about what we are doing (to Mr. Hummel).

Mr. Hummel: I have a feeling we haven’t used that language often enough. This is one of the things that could help the Japanese to come around and be more cooperative, if we use it often enough.

Secretary Kissinger: If the Japanese are determined to commit suicide, if the Japanese insist on a bilateral deal at current prices, they’re going to exhaust their reserves in two to three years. And we have the choice then of either outbidding them or of letting them exhaust their reserves—after which we will either be able to bid on the surplus that’s going to exist or we’re going to be able to bid after their reserves are exhausted as the only country that has financial resources left.

So it’s not a condition in which we need to be terrified. We’re not asking them to do us a favor. We are trying to help—our primary interest in this is the structure of the international system. We have no overwhelming interest in this.

Joe?

Mr. Sisco: There is a tactical question, Mr. Secretary. You probably covered it in your meetings.

Secretary Kissinger: But you can say to them we’re not going to seek a confrontation.

Mr. Rush: But the trouble is: If you say it too often, you may not convince them.

Secretary Kissinger: The facts are going to create the confrontation.

We don’t have to say we’re seeking a confrontation. If we can bring off a consumer organization on anything, that will be a fact that the producers have to keep in mind—because once it exists on consumer restraint, it can be used on a lot of other things. And, therefore, we are not going at this conference to die on the barricades with respect to what it is that this consumer organization is supposed to do. And, if we can’t get it, they’ll be forced to come to us within a year.

Joe?

Mr. Sisco: The question is a tactical one. Obviously, the French gambit is to try to limit this thing to procedure rather than substance. They sent a telegram on the EC thing that came in this morning.³

Secretary Kissinger: Put him on the distribution list (to Mr. Eagleburger)!

(Laughter.)

We’ll change this. You may not get confirmed, Joe:⁴ (Laughter.)

Mr. Sisco: I was going to say: If you ask me about this, I don’t know anything about it but is there a European country, or two European countries, within the NATO framework that you feel we can work very closely together with—

Secretary Kissinger: Yes.

Mr. Sisco: —in the context of the actual maneuvering? This is important.

Secretary Kissinger: We have the British substantially lined up. Mr. Sisco: Good.

Secretary Kissinger: And we will almost certainly get the Germans lined up.

Mr. Sisco: That’s good.

Secretary Kissinger: That will, in turn, bring the GATT. So those four we’ll almost certainly have.

I think when the Japanese come here and face the facts of life, we may keep them quiet. I don’t think we can get them to do anything very constructive. And I think we can keep the French substantially isolated—particularly when they look at the statistical analysis of the facts of life.

You see, it’s going to become overwhelmingly evident that no country can solve its balance of payments problem by trade. And if no country can do it alone, even less can a group of countries do it. The British started down the road of bilateral deals. And since you seem to be on the distribution list, you will have seen that they have now concluded that they can’t do the bilateral deals—that they can’t go beyond the one they have with Iran.

Mr. Hartman: I think it also might help, since the Japanese are coming around to us at all times about this declaration, to tell them, each time they come in, about the declaration of what this energy problem does. It illustrates the relationships we were talking about in the declaration—whether there’s inter-dependence, whether we have a cooperative system.

Secretary Kissinger: But what they want to know from us is whether we will sign a bilateral declaration with Europe if Europe refuses to sign a trilateral declaration with them.

Mr. Hartman: Well—

Secretary Kissinger: So what’s your view on that?

Mr. Hartman: I think we ought to tell them now that at the moment we’re sticking with trilateral—although you mentioned yesterday that perhaps the bilaterals—but, in any case, we’re sticking with that position—that if we see that that cannot be accomplished, we’ll be back in touch with them first before going to anyone else so that they don’t feel it’s apart from them. But I don’t think we ought to tie ourselves completely to it. We may decide to do it a different way at the end.

[Omitted here is discussion unrelated to oil.]

Mr. Herz: Can I bring up another item, sir? We have another proposal for a conference involving energy that we don’t need.

Secretary Kissinger: With the French?

Mr. Herz: No; we made it come out this morning with a proposal for a Special United Nations Assembly—as we call it—on raw materials in general. And it superficially looks like an endorsement to the French proposal, saying, “Yes, let’s discuss energy worldwide, but let’s expand it by discussing a lot of other things.”

It seems to me we have really a phenomenon here where we first make a proposal and then the French try to widen the focus by expanding the number of participants and now the Algerians come out and want to widen the focus still further with a number of subjects.⁵ Tito,⁶ within hours, came out in Dacca addressing the Bangladesh assembly, endorsing this proposal. And Tito and others are in favor of it. It looks like there may well be some jamboree of everything—

Secretary Kissinger: But they won’t be able to agree on anything.

Mr. Herz: That’s the point. It seems to me that—

Secretary Kissinger: I don’t think we should block it.

Mr. Herz: Exactly. This will take a long time to prepare. If it meets right away, it would be utter confusion.

Secretary Kissinger: I think we should be in the rear guard of those who are joining it, but I mean we shouldn’t throw any sand in.

Mr. Herz: Right.

Secretary Kissinger: We should point out what we take to be the problems, but we should never be in a blocking position.

But could somebody do some staff work on it? What is happening to your paper?

Mr. Lord: NSSM?⁷

Secretary Kissinger: Yes.

Mr. Lord: That’s the Under Secretary’s committee.

Secretary Kissinger: Under Secretary’s committee.

Mr. Lord: I want the committee to follow up on it.

Secretary Kissinger: Keep that in mind, but I want a paper on it too.

Mr. Lord: That’s right.

Secretary Kissinger: When is that due?

Mr. Wilhelm: It’s due on the 1st of March, sir.

Secretary Kissinger: After I’ve spoken on the subject!

(Laughter.)

It adds to the suspense for me! (Laughter.)

O.K.

(Whereupon, at 3:58 p.m., the meeting was concluded.)

1. Source: National Archives, RG 59, Transcripts of Secretary of State Kissinger’s Staff Meetings, 1973–1977, Box 718, Secretary’s Staff Meetings, 1/74–2/74. Secret. According to an attached list, the following people attended the meeting: Kissinger, Rush, Brown, McCloskey, Kubisch, Sisco, Hummel, Hartman, Parker, Weintraub, Herz, Easum, Maw, Lord, Wilhelm, Bremer, Eagleburger, and Pickering.
2. Telegram 1338 from Tokyo, January 30, reported the cautious Japanese reaction to U.S. views on the Washington Energy Conference. (Ibid., Central Foreign Policy Files) The Japanese Government appointed Zentaro Kosaka as special envoy to explain Japanese Middle East policies to the governments of the region. He was in the Middle East January 15–February 1. (Telegram 7385 to Middle Eastern posts, January 12; ibid.)
3. Presumably a reference to telegram 2661 from Paris, January 30, which reported French comments on an EC paper on the Washington Energy Conference. (Ibid.)
4. Sisco was appointed Under Secretary of State for Political Affairs on February 11.
5. See Document 280.
6. Josip Broz Tito, President of Yugoslavia.
7. Possibly a reference to Document 310.