Nixon, Council on International Economic Policy & Rogers on International…

1:27:32But the current laws of the community, as well as their exogenous activities through the press, are both more questionable from a legal point of view, and are more damaging to our trade interests from an economic point of view.
1:27:46Because of this, Ambassador Everly and his negotiators have been strongly defending our interests, both in imposing certain policies and actions and in laying the groundwork for demands for compensation with the community.
1:28:01And this has created an atmosphere in which the U.S. has emerged as the confronting of the community.
1:28:08During the balance of this year and next year, this confrontation can begin.
1:28:56The proper guidance is three short examples of how this confrontation can develop.
1:29:03This fall we'll be negotiating with the community on its enlargement to 10, and the effect of that enlargement has on our interests as the most single important trade item that will arise in the future.
1:29:16It relates to 125 million dollars of grain that we sell annually to the U.K.
1:29:21When the U.K. and community discussions started, we reserved our interests specifically on this matter.
1:29:28The community can argue that we will already have been compensated by virtue of the reduction in industrial tariffs that accrue to us by virtue of the U.K. adjourning the community.
1:29:37And we'll argue that this isn't legal under GATT.
1:29:40So our negotiators are going to have to know just how tough they ought to be in that stance.
1:29:46The EC has a series of preference arrangements, and we think they violate both the spirit of the most favored nation and the GATT agreements.
1:29:56What's more, they're entering into an additional series of these preference agreements.
1:30:01And our negotiators need to know just how hard they challenge the principle, and how hard we impress their compensations, particularly with regard to Spain and Israel.
1:30:12In those two countries, we already filed our objections, but we haven't moved forward on those objections or asked for specific compensation for months.
1:30:21Obviously, there are special considerations for both of those countries.
1:30:26We have a task force working on these.
1:30:29We think we're going to have unanimity on our recommendation, but that recommendation with regard to Spain and Israel should be part of the broader recommendation as to how we handle preference agreements generally.
1:30:39A third example where our negotiators need guidance has to do with the so-called gap open season.
1:30:46Certain of the tariffs, the concessions that we have made are bound, fixed for a three year period.
1:30:54As of January 1 of next year, we have the right to reserve that we can change those concessions over the next three years.
1:31:04The extent to which we notify our trading partners that we intend to reserve will indicate the degree of confrontation that we plan.
1:31:13The SDR paper, which you all have in your books, gives a number of additional negotiations where guidance is necessary.
1:31:22Developing the guidance, we want to keep in mind the broad objectives, and there is an objectives paper on this also circulating through agencies, which are essentially to sustain the will to complete the task that the President started August 15th of last year, to achieve basic reform in the monetary and trade systems, and to negotiate new rules that will reduce or eliminate the barriers to our trade with our European partners.
1:31:49Thirdly, to do it in a way
1:31:51that ultimately reduce the source of tensions that threaten our economic and our political and security interests in Europe.
1:31:58So to serve these objectives in regard to these upcoming negotiations.
1:32:04The SDR paper that you have suggested four options.
1:32:07These aren't discrete, mutually exclusive options in the usual sense, but rather they're stopping points along the way from doing very little now towards a complete, full, calibrated confrontation.
1:32:21The first option, option A, is to downplay the concentration of small actions on the issues of agriculture and preferences, where irresolvable confrontation is inevitable, and to concentrate on the few things that we can solve, like standard codes for products, electrical systems, or standards for entering goods into a country, or a few quotas such as citrus.
1:32:48In essence, the option postpones any major negotiating policy decision until after our election here, and the major European elections by next March.
1:32:58The option assumes that right now the French, who are the leaders on the other side of the confrontation, have maximum leverage, first due to the fact that England is the full vector of the community, and second due to the fact that the common agricultural policy is very popular in certain parts of Germany that are important in the election.
1:33:16by waiting further so that we can get these countries and get support from other countries in the community who tend towards a more global or at least a more Atlantic view of the system.
1:33:29Essentially, while this option A doesn't commit us to any particular strategy, it does suggest that we ease off somewhat on what has been our recently toughening posture.
1:33:41Option B is called the Atlantic Cooperative Approach, and it stresses the positive aspects of the overall G.C.-U.S. relations.
1:33:49It downplays the issues of their confrontation rooms, and it begins laying the groundwork for a possible major political initiative next year, perhaps even a NATO summit, to set directions both in the economic and in the political areas.
1:34:06suggest an easing on the kind of confrontation that's been building recently, but it does add this positive initiative.
1:34:15Options A and B have the significant merit that they avoid rocking the boat, and option B has a positive sense, but both of them permit the current trends and the current specific actions
1:34:28that are damaging to our ergonomies to proceed unchecked.
1:34:31This presents us problems not only of substance, but also of how we appear here at home in an election period, and how we appear abroad when these mobilizations are taking place.
1:34:43Option C calls for modified confrontation.
1:34:48Under this option, we continue to defend our interests strongly, but exert controlled and mounting pressures on all these issues.
1:34:57It brings as many problems as possible to a head by the turn of the year, but it does stop short of a full confrontation that would require a GATT vote that we would probably lose.
1:35:09The trouble with the GATT is that more than half of the members of the contracting parties either are members of the common market, or affiliated with the common market, or expect to be affiliated with the common market.
1:35:21This option of controlled, modified concentration could also be a prelude to a summit or some other high-level intervention next year, and it differs from option B, namely in that it would continue to press for solutions on some issues, even at the risk of increasing the tensions between the United States and the community.
1:35:42It might well be combined with option A, an effort to reinvigorate the Atlantic system, but it differs from option B,
1:35:51in the sense in which we press our case.
1:35:54For instance, if in this, under option C, if in this fall's negotiations on the EC environment that I mentioned earlier, we don't get compensation for our damage to the grain trade in the UK, then under option C, we would feel free to unilaterally unbind some of our tariffs.
1:36:15The fourth option that the paper presents is
1:36:19The suggestion to press all these issues vigorously enforces confrontation, making it clear that we won't be bound by our GATT commitments if others don't abide by theirs as we interpret them, based on the premise that meaningful reform needed to protect our interests can only be achieved in an atmosphere of crisis, as happened in 1971, and that the time has come for us to precipitate it.
1:36:45This option poses a serious threat, however, of deterioration in our trade with the community, where we do have a positive balance, and in our other relations, if the strategy fails.
1:36:56In discussing these options, there was general unanimity among the participants in the interagency group that the U.S. negotiators should be instructed to vigorously protect the U.S. interests, that is, under option C. But at that point, there were some differences on nuances.
1:37:14Some of them suggested that only by moving toward a crisis, toward option D, could concessions be run out of the market.
1:37:24Agriculture, Secretary Butts was one of those.
1:37:27Others believed that option C can and should be converted with a positive program of reinforcing the Atlantic system, option B, and that while this would present a very difficult diplomatic task, it would hold the maximum promise for advancing our interests.
1:37:44All of the participants, however, felt that the positions to be taken regarding U.S. community trade relations must be developed as a part of a broader review of our overall relations between the U.S. and Europe.
1:38:01That, Mr. President, is the statement in play as of today.
1:38:04Do you want to say something about this bill?
1:38:11President, I think Peter has covered it very well.
1:38:13I only have that as part of this program, we must expect to carry the major share of the initiative, because European communities need to be willing to be at this time a decision-making point to carry that initiative.
1:38:29And this allows us under option C to carry the initiative and manage these problems in a positive way while we're waiting to make a decision whether to build on the B proposal or the D proposal.
1:38:42I think one must believe this, that we cannot step back, we would have to carry this if anything should be done.
1:38:53What do you think the attitude of the Europeans is about to be?
1:38:56It's very strong, it's also the same.
1:39:00He was to say, I'm very, in the true sense, that today we're on a dead center.
1:39:10For the first time in the last 90 days, I think we see some real opportunities.
1:39:14The German economic ministry reported last week that their total cost for the common agricultural policy exceeded the contribution of agriculture to the gross natural product.
1:39:27And this is a great shock to the politicians in their government.
1:39:34They're now arguing over whether the facts are right.
1:39:37Both Germany and
1:39:40France have come around quietly to our back door and said, isn't there some way that we could maybe agree to some trade damage and then put it over at the same time for negotiations?
1:39:51We're still taking a rather firm line with them.
1:39:54We see how serious they are.
1:39:57So all of that, because of their elections, and because I think it is politically popular to be nationalistic Europe today,
1:40:10There are forces starting that if we keep the pressure off, and I would add that almost without exception, key people in the governments have said keep the pressure off, that there is hope.
1:40:23Because they see the opportunity to make changes after the election.
1:40:27Particularly the Italians have said don't back away from this.
1:40:31If you do, you take away any possible support that we might have in the community if you back away from a strong position.
1:40:41What about the idea of a new year again?
1:40:46It's pretty much a light on the process.
1:40:51Thank you very much.
1:40:55No, I think we have to make that assumption that they are going to be lined up against us and take everything we can to bring them around.
1:41:05As an example of this, today the European community is almost totally isolated with all of their trading partners in the gap on the enlargement.
1:41:15We've managed this in a way that they're really beginning to feel the pressure.
1:41:20If we continue to do that, I think we can make
1:41:23small progress, in the way of reverse preferences and other matters, that will show that they must face problems.
1:41:34But there's no getting around it.
1:41:36We've got to assume that they're going to be lined up against us until there's a major trade negotiation, and then they're going to have to find time in order to sort out their problems and work with us.
1:41:48And the key issue here is going to be whether they will accept
1:41:55more of an economic joining with North America.
1:42:00or with the developed country, with free trade, how we get there.
1:42:04If we can reach that, then these alignments will start to break down.
1:42:08That's going to be a key issue that we have to work toward in solving, finding solutions.
1:42:15I think we're looking at this from a non-externet perspective.
1:42:17This is true that nationalism in Europe and Japan is really running stronger than anywhere in the United States, and it's getting stronger here.
1:42:24In my opinion, that's correct.
1:42:26That's correct.
1:42:27Self-interest for these countries and free trade and all that sort of thing.
1:42:34I mean, after all, nationalism is a strike-and-response accord.
1:42:38That's what countries do.
1:42:39They'll do things that cut their own terms economically in order to play nationalist.
1:42:45No question.
1:42:45But you've got to say that as you talk to these people.
1:42:48Absolutely.
1:42:49The United States is a very profitable language of political...
1:42:53And we have to have very, very important people given in order to make it worthwhile.
1:42:59Understand, I'm not talking about the leaders.
1:43:03They'll all come in and center on it.
1:43:06I mean, they all do, and there are a lot to do otherwise.
1:43:10I'm talking about the fact that the leaders have to reflect with people, and mainly, in fact, their media.
1:43:17And I don't think that 88% of all European media is violently anti-US.
1:43:21I think you have to assume that is the position we're in today.
1:43:30That's the reason we must, in my opinion, take a very firm but manageable position in all of these matters.
1:43:37I think we also have to have in mind that in terms of the idea of going to the next congress, the next congresses,
1:43:50We're going to live a little crazy over here, just smoking opium.
1:43:54No way.
1:43:55No way.
1:43:56In fact, the Congress, we're going to have one hell of a time to keep.
1:44:00We're not moving very sharply in the other direction.
1:44:03Because the nationalism in Europe and Asia has led to nationalism in this country.
1:44:07And people, you know, why should we go all this way in this crazy business?
1:44:14Absolutely, and I think even
1:44:35The more pertinent one is that nationalism runs stronger in Europe against Japan and Asia than it does against the United States, which puts a very close second.
1:44:47That's the worst.
1:44:49The ones that, generally speaking, we talk to, the Foreign Relations Committee, the Foreign Affairs Committee, are the most unrepresentative committees in any committees in Congress.
1:45:01They only represent their committees.
1:45:02They don't represent the people in the country.
1:45:07Foreign Relations, not at all.
1:45:08The best representatives of the people in the country are the people in the Senate.
1:45:12That's why there's a law called the Foreign Affairs Committee.
1:45:15A little more, but even lately it's started happening.
1:45:18Now, you go to them on this, you know, they travel abroad, and wine and dine with it in the class, and they say, oh, you've got to be generous, you've got to do the right thing, and all that.
1:45:31Not those clubs that sit down there in the other committees.
1:45:36I find it's a very, very, very strong center.
1:45:38In other words, we talk about these things that we're going to do, and how forthcoming we're going to be in these next negotiations,
1:45:45So forth.
1:45:45I mean, all recognizing that we want to be responsible.
1:45:49We want to lead.
1:45:50We are the strongest people in the economy.
1:45:52We have to realize we can't get too far out in front of our constituency.
1:45:56Our constituency is very, very tough at the moment on this.
1:46:00Very tough.
1:46:02And I'm just talking about labor unions.
1:46:04I'm talking about the business people, except for the people in the business council, who of course represent nothing but the business council.
1:46:14I wonder if I could ask on this point of nationalism, the degree to which it is in Europe.
1:46:22European nationalism has to stick from, say, German nationalism, French nationalism, and so on, with the interplay between those.
1:46:32It has struck me that there are some quite sharp differences of opinion in the monetary field, for instance, among these countries, and I wondered if there were some that would address themselves to that dimension of nationalism.
1:46:48Mr. President, I think that George has put his finger on the road, that there is a good deal of nationalism, but I think it's mixed up nationalism, and I'm not quite sure...
1:46:56whether they're supporting the community or their nation.
1:46:58And you certainly see it in the monetary field, and you see it in the trade field, and you see it on the common agricultural policy.
1:47:06And I think that in the final analysis, the trade question is not going to be decided on nationalism or emotionalism.
1:47:13It's going to be decided on what's good for everybody.
1:47:16And I think they realize that they're...
1:47:20I think it's a question of fairness, whether from our standpoint we think that we're getting worse of it, and I think that our position as a government has to be the one that builds its outlines.
1:47:39I think we want to be a little careful about how we outline it before elections, for example.
1:47:43I know on my idea, for example, I think if we said
1:47:51Our dairy products, in a sense, are protected just the way that common agricultural products protects the grain.
1:48:06We have to keep in mind that we got a pretty good deal on the soybean thing, as you know, and that covered it.
1:48:23We negotiated that pretty slightly.
1:48:26And I think that anything of this kind would be very damaging.
1:48:29Secondly, I don't think we ought to... Well, that's a natural thing coming before election anyway, isn't it?
1:48:34Well, no.
1:48:35I would suggest that we put it in the process of adopting something.
1:48:38Furthermore, it seems to me that B and C pretty much merge, but in any event, I'd leave out 5 completely, because I think A, as I say, would be period, and I'd guarantee B would cause a hell of a problem with determinants.
1:48:52And to some extent, the British, and neither one of them are necessary at the moment.
1:48:56We've only got less than two months.
1:48:58Just so we understand, the position before the election is one of protectionism.
1:49:02That's all.
1:49:05You can all go out and gas all you want before it is.
1:49:10private audiences and the rest, you know, we'll repeat it from here.
1:49:13But this one, we cannot, that's, I don't know, that's not protectionism, that's free trade in the area, but I mean, the point is it protects, protects us.
1:49:25I mean, any, the point is any change in the president, anything that appears not to be in the interest of the United States, any concession that appears not to be in the interest of the United States, it just doesn't need to be made right now.
1:49:38It shouldn't be.
1:49:39Yeah, because the
1:49:41Free trade constituency has limited subscribers to a few Eastern magazines and this and that.
1:49:48And the agricultural community.
1:49:49Well, sometimes.
1:49:50Sometimes.
1:49:51It only depends on what they're going to get out of it.
1:49:53But I would like to suggest that George has made a very good point.
1:49:58But I think you haven't put the Europeans as people who have the best of both worlds.
1:50:02On the one hand, you have a very strong message of protectionism.
1:50:06as a country.
1:50:08But they also, as a bloc, are working very strongly together to protect the bloc's interests.
1:50:14So that in essence, you have both nationalists, and you have a bloc that is very nationalist against the United States.
1:50:22Their preferences, the trade bloc formations they're having in Hawaii, they are really creating, I think, a very alarming situation as far as they're concerned.
1:50:32And it really is a case of just a nation being nationalized.
1:50:36It's now a case of a party.
1:50:38It's very nationalistic.
1:50:40What's Bill's part is that the country's...
1:50:45Because of which nationalism prevails.
1:50:48Whether the blocs or the individuals.
1:50:51They go back and forth.
1:50:52They talk about the European community as a formidable bloc and a greedy one.
1:50:55And I think of the United States, and I always wondered whether it would go back the same way.
1:51:12Mr. President, I think that perhaps you can ask that question.
1:51:14Where they can do something on a purely nationalistic point of view, they do that.
1:51:19That's their first interest.
1:51:20Where they can, such as in the major aeronautical projects or this aerosat problem that we face.
1:51:29where they clearly don't have the base to develop an industry on their own.
1:51:33Then they go to the common market, and there, one of the negotiations Bill might well face this fall, whether or not they're allowed to set up preferences among themselves in order to develop high-technology industries.
1:51:46One of the things that Bill is going to have to fight based on some kind of a direction here...
1:51:51is the degree to which we resist any rights on the airport, tariffs or subsidies or protections for high-tech industries in aeronautics or space or electronics, etc.
1:52:01Well, I'm certainly on the line, if you know of any of these questions.
1:52:16I suspect that until they really think there is still a likelihood of something like a heart fever, and really believe that there is a likelihood of that, you know, a strong protection, that they'll continue to delay.
1:52:30The other thing I would like to suggest, however, is that some of the discussions I've had, Mr. President, with some of the people over there, there is this question of the security aspects of our relationship, you know, the
1:52:46military aspects, in which they really have the best in both worlds, which provide the umbrella, they protect their economic interests, and we must assume those urges.
1:52:56At some point, I would guess, this trade issue is going to have to be resolved in the larger arena at your level, in which we present some kind of a long-range agreement on what we're going to do about the military in this relationship.
1:53:09And that's a carrot that seems to me or a stick, depending on how you want to play it,
1:53:14It can probably not be played at this level.
1:53:16It has to be played at your level.
1:53:20To cut it out of long-term plans.
1:53:23Because I think if they ever face that alternative of our withdrawing our military support, this might give them the political will to start talking business and some of the trade matters.
1:53:37Mr. President, did I say that at the present time it seems to me that
1:53:44There's two things we complain about most, have a reason to complain about.
1:53:48One is the common agricultural policy, which obviously they can't change for the time being.
1:53:57And secondly, which causes some problems for them, serious problems for them as governments, as well as for us, because we do protect our dairy farmers the way they protect their grain farms for their plant crops.
1:54:12Secondly, the extension of preferential treatment to the African countries and the non-African countries is going to be a serious matter down the road.
1:54:24As I understand it, at the moment it doesn't really create a problem, a forced practical problem.
1:54:28It creates a problem despite my explicit concern, because I think they are permitted to do this.
1:54:32It creates a very large trading bloc, which would include not only the community, but African countries and Mediterranean countries and South Africa.
1:54:43And to that extent, it becomes a very serious problem.
1:54:48And it seems to me that those things are all going to have to be dealt with in the larger context of the trade negotiations.
1:54:55It really, the question seems to me, Mr. President, we're faced with this morning, is not whether we want to be tough or not.
1:55:01It's obvious we want to be tough for all this to be left with.
1:55:04Really, the question is, how much do we want to threaten them with that could become public?
1:55:11The two things I don't think we should threaten, whether the things contain paragraph 5, everything else is we should.
1:55:17But I think either of those threats, the one that indicates that we would make concessions as far as dairy products, and the item right here, the one that refers to withdrawing the trade concessions that we made to Germany and Europe, would be, that would obviously be a very damaging...
1:55:38Any other way, because that creates a whole new complex of problems.
1:55:42It may well be we want to face that.
1:55:43All I'm saying is let's not face it for the next two months.
1:55:46So if we can eliminate those two parts of the sort of let's be tough, here are the threats we're going to make from this option, and I was going to support it.
1:55:57I do think in these discussions, we have, we have to realize that they have complaints.
1:56:03I think ours is much better.
1:56:04We've got a much stronger case, and I think the points we're making here are all valid points.
1:56:09But they think they've got some points, too.
1:56:13And when we get to negotiating with them, I think we'll have much to better the argument.
1:56:20But I don't think it's fair to assume that they don't have some complaints too, because we have some things that they're very unhappy about.
1:56:27So, it seems to me our position is that the president should be in a tough position, a very tough position, without any specific threats, making it clear that how harming you feel, how harming you feel, as you said, Jordan, is that they get the word.
1:56:45Secondly, it seems to me we ought to try to get them to accept what the Germans have been pushing for a long time, and that is some kind of structure to negotiate with them on a regular basis.
1:56:56Gibran's position is always we should have some kind of a standing body structure so that we understand your complaints fully and we get the impact and you understand ours.
1:57:07The French have always resisted this.
1:57:10George has been conducting some discussions in the other field, and these two are very much related to him, obviously.
1:57:19So, it seems, I think we're all agreed on option C, but I would strongly oppose and hope that you would agree that we have specific threats, and during the next two months, I don't think I'll help you.
1:57:31I don't think I'll help you.
1:57:35I don't think I'll help you.
1:58:09It seems to me that we have to look much broader picture here.
1:58:12Further to that, I'd like really a question of what the Europeans and the Americans, it goes much further than what they are going to get out of the forestry of soybeans and pineapples, and there's a large difference in that sort of dairy products.
1:58:40It really goes to what Europe wants its possession to be vis-à-vis the United States, vis-à-vis the Soviet Union.
1:58:51Whether Europe wants to go along on that is now a very growing trend in what was described earlier.
1:59:03What it really means is that if the Europeans should adopt, and here is our history, if they should adopt, then all these other institutions should adopt a trade policy which is anti-U.S.,
1:59:33which would result in enthusiastic attitudes on the part of the United States on trade, that lack of enthusiasm is going to carry over politically, and it will be so very easy to withdraw.
1:59:49We started withdrawing divisions and then NATO would come apart like that.
1:59:52And then we talked about what other europeans would defend themselves, and oh, they'll never defend themselves, never.
2:00:01Yeah, that's the main reason.
2:00:02Sure, we've got the idea that we have a nuclear deterrent, and we just need a tripwire address, because we all know what it is and it won't work.
2:00:10But nevertheless...
2:00:13When the NATO thing begins to unravel, they're very, very, very big.
2:00:16You're being there in the center as an economic giant, a military pygmy, a political pygmy, at the mercy of Russian encroachment.
2:00:29Encroachment, not in terms of old-style invasion, but a very much more subtle and effective one.
2:00:54What it really means is that if the Europeans should not, and here is our story, if they should not, and all these other things fit into the picture, they should adopt a trade policy which is anti-U.S.,
2:01:22which would result in unenthusiastic attitudes on the part of the United States on trade.
2:01:30That lack of enthusiasm is going to carry over politically, and it will be so very easy to withdraw.
2:01:37We started with the droid invasions, and then NATO would come apart like that.
2:01:41And we talked about what other europeans would defend themselves, and then, oh, I'll never defend myself.
2:01:50Never.
2:01:50That's the main reason.
2:01:51Sure, we've got the idea that we have a nuclear deterrent, and we just need a tripwire address, because we all know what it is, and it won't work.
2:01:59But nevertheless, the NATO thing begins to unravel.
2:02:04They're very, very, very big.
2:02:05You're being there in the center as an economic giant, a military pygmy, a political pygmy, and to earn a Russian encroachment.
2:02:16Coaching, not in terms of old style and vision, but a very much more subtle and effective new style and vision.
2:02:24It's the influence.
2:02:25The PM leader is terrified.
2:02:27He doesn't want that to happen.
2:02:30Now your economic guy is not terrified.
2:02:33Basically their job is just to screw us.
2:02:35Ours should be to screw them.
2:02:38Between the two of us, there should be a lot of screwing.
2:02:40My idea is that that's the way it works.
2:02:42I mean, that's the way it is.
2:02:43And it should be hard marketing on both sides.
2:02:46That's the way you make a good deal on both sides.
2:02:49But basically, the political thing is going to override here.
2:02:53And it should override with us.
2:02:54And I deliver on that.
2:02:56Because we have to be very careful between now and the election at the same time.
2:03:02Because we don't raise any issues, we don't have to talk in negative terms about this.
2:03:07But when we finally come down to what we do about Europe, what is really going to matter is not trade for the sake of trade, but trade as it is related to this basic problem.
2:03:19of what we want the relationship between Europe and the United States to be.
2:03:23That is what we have in mind.
2:03:26Now here's where Bill, your people, I was hoping, I was thinking, I know you're working on a paper that you've told me that people aren't as fond of.
2:03:38They think about it now, but what we really have to come down to is we've got to examine what price we might have to pay on the trade side.
2:03:49or what price they might have to pay on the trade side.
2:03:53It could work either way.
2:03:54My point is, I'm putting it quite bluntly, I think that we've not allowed Europe, the umbilical cord of Europe, to be cut and flipped out there.
2:04:03A newborn baby, fat,
2:04:06A very interesting point in the Olympics, very interesting point.
2:04:30I didn't see much of them.
2:04:32I missed most of them.
2:04:33The shooting, all that they do, the basketball game, I read about all this, but I didn't see the race for the Russian one, the 100 meters.
2:04:43He made a very interesting comment afterwards, which I'm sure none of the audience got.
2:04:49All of you would have.
2:04:52He said that the...
2:04:55This marks the end of an era.
2:04:57He said, now the Europeans are the best in the dash.
2:05:01The Europeans.
2:05:03Say Russians.
2:05:03That's what you hear from Russia.
2:05:06You hear it from the city and the rest.
2:05:08They're all talking about the Europeans.
2:05:10Now basically, it's white racism.
2:05:13Because he knew that all of our dash, when you saw, I did see the 400 meters last night, they're all black.
2:05:20That's not bad.
2:05:21They're playing this line of Europe versus the United States and so forth.
2:05:27That's the right one.
2:05:28Now, on the other hand, the Europeans living, not the pre-Europeans, living next to the Russians, the Soviet Union, and the Eastern European communist countries,
2:05:43know that they'd be out of their damn minds if they were to come under that terrible influence, because they know they're so much better off.
2:05:49They know they don't want to be part of that crowd.
2:05:53On the other hand, they can't take us for granted.
2:05:57We have something to offer.
2:05:58We've got those divisions.
2:05:59We've got the track record.
2:06:00It's easy to be for all those things.
2:06:02It's much easier to run around Europe like the slowest shades, and say we'll take away two and a half divisions immediately, and all of our troops will be removed in a matter of three or four years.
2:06:13He's backing away from some of the things he said, though, this morning.
2:06:17Whatever he said, bye.
2:06:18But the point is, that is, that deep down is a very strong sentiment in the United States.
2:06:23We have to realize it.
2:06:24Not only in your party, but in others.
2:06:27It's in blue collar sparrows.
2:06:30A lot of these sparrows.
2:06:33They see a bad rap on the boxing matches, or the wrestling matches, or the basketball games.
2:06:38And they just put all that, these sparrows are doing us in.
2:06:41And they are.
2:06:42The point is, we know where to do them in a little better.
2:06:45That's all.
2:06:46It's the way to fight, rather than squeal about what they're doing to us.
2:06:48You do it to them, and it balances out.
2:06:52But in any event, what we have to do here...
2:06:55But having what I'm really saying here is that let's be under no illusion, after all of you in this room worked so painstakingly on trade, the rest, you're in a good cause.
2:07:06And I know where we have to go.
2:07:08I know that we cannot turn our selections just when we have them on our stand alone.
2:07:14We can't go.
2:07:15Oh yes, we could, if the United States was only looking at trade.
2:07:19in terms of its economic impact.
2:07:22We, more than any other area of the world, could get along without the rest of the world.
2:07:28And certainly, we'd get along without Europe a hell of a lot easier than any one of us, I think.
2:07:32And we look at trade, our trade, compared to our GNP,
2:07:38Good God, you compare a trillion dollars with ten, fifteen, what really difference does it make?
2:07:43It makes, of course, a little bit like a little froth on top of a beer.
2:07:48Beer would not probably advance.
2:07:49So what you really come down to is that what we have to realize is that the trade thing
2:07:58is part of a much bigger package, which all of us do.
2:08:01A bigger package, right?
2:08:03Where we have got to make it in the same way.
2:08:06The Japanese thing, of course, they need us a lot more, and Germany's not a lot more.
2:08:13And from an economic standpoint, also, we provide the deterrent for the rest.
2:08:18Yet we have to treat it with tender love and care.
2:08:22Try to
2:08:24Try to keep our friends in Japan from being undercut on our enemies in Japan.
2:08:30And eventually, for, you speak of criminalization, whatever that's going to happen then will be worse.
2:08:39Now, having said that, I don't want to get the impression that only trade is not important and cannot contribute to the other.
2:08:46It does.
2:08:47I mean, trading relations...
2:08:51Nevertheless, we have to realize here that our interests are to be served by me.
2:09:06This is tough.
2:09:21as we can, without going over the line, and where the anti-American center, among the demagogues, among the politicians in Europe, who reached a point that Europe would cut away from the United States.
2:09:38And these trade issues are about all Europeans that I've been talking about.
2:09:43I mean, they're all bored with each other, and bored with their neighbors, and they're no longer great powers, and they all know it.
2:09:50They don't matter in the world anymore, and they know it.
2:09:53So trade, therefore, is a hell of a big thing.
2:09:56Pardon, it's a hell of a big thing, the buns bag, whatever the Italians say.
2:09:59I don't know who they got it from, but they don't have something.
2:10:03The point is, it is, since it's so big for them, and rather smaller for us, we have to, it might be, we're probably going to have to give more.
2:10:14It's in the end.
2:10:16We're going to have to give more than our own interests require.
2:10:20Now, having said all that, I think the way to get to that point, however, at this time, is to let the Europeans know that there are a great number of Americans as we approach our political campaign.
2:10:33who unfortunately would welcome getting the hell out of Europe, period.
2:10:37Who would welcome putting up barriers against Europe and Japan, period.
2:10:42And under these circumstances, we in the administration were fighting the world, as I mentioned, we're fighting the battle because we realize this is not in the interest of peace, and this is in the order of interest of the economic interest and the rest, and so forth and so on.
2:10:55But deep down, we've got to realize why we're doing it.
2:10:57Let's not kid ourselves and think we're doing it, because our economic survival depends upon trade with Europe, Russia, China, or anybody else.
2:11:04It doesn't depend on it.
2:11:06It helps, but it doesn't depend upon it.
2:11:10And so with these things in mind, I think we have to realize that the econ, well, it's a better way to put it, is this whole area of our economic, and this covers my term and the rest of it,
2:11:22It also enormously affects our leadership position in the world, because that's what relations between nations are increasingly going to be in the future.
2:11:31I mean, war becomes less and less a possibility.
2:11:34We're a great power to be concerned with, because we're a horror and a hangover to deal with.
2:11:40So the game's about economics.
2:11:42So therefore, we've got to... And who's best to play that game?
2:11:45It's us, because we're strongest.
2:11:48And it's going to require us, it might go suddenly, it's unfortunate that we have to...
2:11:58This idea is not important.
2:11:59Sorry to talk about it in this very restrictive forum.
2:12:02But this is not the time to decide.
2:12:04The time to decide, though, I think, is after the election.
2:12:08For example, when we can do what we need to do, and when we can go to the Congress and say, now look here, we've got to sell it.
2:12:14And believe me, if you think selling the first day of the reciprocal trade this time to the Congress would be to try to sell anything liberalizing trade to the next Congress, it's going to be very, very difficult.
2:12:25Very difficult.
2:12:26And we've got to have a strong case, we've got to be able to make it, and I think we've got to be prepared to do it, but we've got to be prepared to do it because our interests require, and require going far beyond trade.
2:12:40President, I was wondering on this political security trade-off that we've discussed here.
2:12:48You have to take part in the political trade-off, I would say, because it's very important.
2:12:53We've learned this from the Russians.
2:12:56We never say it, you know, except about ourselves.
2:12:59Because they'll also feel how you're trying to link it.
2:13:02Link it, but don't tell them you're doing it.
2:13:08Like the ball and chain.
2:13:09What do you think are the legislative political possibilities of, after the election, some kind of a longer-term understanding of the political security side of Europe?
2:13:19Do you think?
2:13:22Yes.
2:13:22But one of the reasons the election is important in terms of
2:13:27The way you can grab the well is that if you do grab the well, it will mean for a period of a few months.
2:13:39You can do one every year.
2:13:41Now, by grab the well, we have to understand we're not talking in terms of these enormous, enormous, it's our holidays, the polls, the president, the majority of the polls, the president, the BBC.
2:13:56As I was pointing out, I was talking last night on the phone to George Killings.
2:14:10I'm going to get over to George Killings.
2:14:14Thank you very much.
2:14:20So I think I'm going to leave the country in a very small way.
2:14:25I've been thinking a little about this shit for the last few weeks.
2:14:28George is a good guy.
2:14:29He's got a real relationship with us.
2:14:34I was talking about this, and he said, you're going to be a president.
2:14:41You're going to be one of the biggest roles in all the other one.
2:14:45And I said to a group of people who were sitting down, I said, everybody calls that the great landslide, and how much would any of you estimate that he won by?
2:14:55It was fantastic.
2:15:01And I made two points.
2:15:01I said, no American, no American has ever been elected to the presidency by, to, not ever history.
2:15:11Except Washington, who didn't have any money.
2:15:19The second time.
2:15:21The first time.
2:15:23The second time.
2:15:24And Roosevelt landed in 6240.
2:15:262716.
2:15:26Truman and Johnson, I mean Johnson and Goldwater, 61 1⁄2 to 38 1⁄2.
2:15:34So, I mean, those are the landslides.
2:15:36Eisenhower is over the sea, which is the one Bill and I particularly remember, which was the biggest time, the biggest time the Republican ever won, was 57 1⁄2 to 42 1⁄2.
2:15:47It was not even close.
2:15:48It was a hell of a landslide, but it was 57 1⁄2.
2:15:51In other words, the margins changed.
2:15:53So, when we talk about margins, 34% or something like that, nothing like that, of course, happens.
2:15:58What I'm really saying,
2:16:04Except for Goldwater, Goldwater has been a constant.
2:16:06It hasn't happened since 1956.
2:16:10Because Kennedy didn't have a majority.
2:16:12Forty-nine percent.
2:16:15Of course, I digress, but I have a majority.
2:16:17We try to make it as big as we can.
2:16:20We get a ballpark of significant win.
2:16:25Then with that, we could do fairly... Then it's the time to move on.
2:16:30We really want to discuss for the country, and try to educate the country.
2:16:34If you try to educate the country before the election, you won't get the majority.
2:16:38That's the one.
2:16:40If you get the majority and then educate, now that doesn't mean you're being critical of the electorate.
2:16:44You're not holding anything back from them.
2:16:47The point is it just takes a great deal of time.
2:16:51for people on an issue like this to understand.
2:16:56We have to know what we're going to do.
2:16:58And you can't make a speech about it.
2:17:04Well, it was an interesting point.
2:17:09I saw something where the governor said, well, ask him if he dropped your $1,000.
2:17:13He said, it's just so complicated that it is something that people couldn't understand during the course of elections.
2:17:23Basically, of course, he's absolutely right.
2:17:26And of course, I'm just scared the hell out of people even if I try to educate them afterwards.
2:17:32We're not thinking anything like that.
2:17:34What I'm really saying, though, is that
2:17:36In this room, we all have to realize that what is at stake here is a massive shift in the world balance of power.
2:17:45The Russians are not playing the game.
2:17:47The Chinese are.
2:17:49The Japanese, of course, the new prime minister is feeling his oats and strutting around.
2:17:59All the talk about the United Europe acting as a bloc, and I agree with those who say they're going to want one hell of a time acting like a bloc.
2:18:07The Frenchmen don't like Germans, don't like Italians, don't like British, don't like, you know, they're going to have no time.
2:18:14We think we have problems in the Middle East, the North, the South, the East and the West.
2:18:18They talk about these countries getting together, it's going to be one hell of a deal.
2:18:22But anyway, that's the other thing, and that's why we have to play, rather than playing that jackass european community, you know, those people up in Brussels, we've got to play with chancellories of each of these countries.
2:18:37They're without a handicap, but they're going, because the Germans, for example, France has got to get along with it.
2:18:44I mean, the British have got to get along with the Germans because of the profit of the thing that the French have been doing.
2:18:50But the British don't like it.
2:18:52They're just doing it for other reasons.
2:18:54But Pete, I've got to ask you, from the standpoint of what we ought to do, I think that it's very important to come up with a part of the law in ways that you've seen in your first presentation on this.
2:19:07for us to look after the election.
2:19:08We look at it privately before the election.
2:19:12It's private.
2:19:13It comes out on a night.
2:19:14But nevertheless, the fight is that we've got to look at it after the election.
2:19:18We've got to look at it as long as it's tied into our whole political front, the kind of world that we want, the way we want the world to be.
2:19:27The Europeans are going to love it.
2:19:29They do think internationally.
2:19:32They tend to be isolations as far as their own countries are concerned.
2:19:35They think European in terms of European problems.
2:19:38And usually they like it on the other problems of the world.
2:19:42Tanzania and some other countries where they have more influence.
2:19:51But as far as we're concerned, we have to be international.
2:19:54We're in.
2:19:54We are in Europe.
2:19:56the free will of nobody else.
2:19:58And therefore, if we would be missing a great opportunity, and failing to meet a major responsibility, if we did not, rather than on a tactical case-by-case basis, say, what do we do about dairy products, what do we do about farm products, what do we do about this, have a picture that we're looking at, what we want to see politically, economically, how all this balances off, then...
2:20:26And then educate our people to support that kind of a policy.
2:20:29When I say educate, they'll come along.
2:20:32When I say people come along, they will.
2:20:34They see it in terms of their self-interest.
2:20:37They're not going to see it if they see it in the interest of some fellow down in some country far away, but you can put it in terms of America.
2:20:50And then, of course, gloss it over for the purposes of the internationalists on the Dukes.
2:20:54They like that jackass at the American Olympic Games.
2:20:58They said it wasn't terrible that the International Olympic Committee disqualified Dukes because they showed disrespect for the flag.
2:21:11Of course it wasn't terrible.
2:21:14We should can our guys and hire the other guys.
2:21:16When is it bad for people to be for their country?
2:21:24That's an American attitude that we never want to have around this place, I'm sure.
2:21:30You know, Mr. President, if the analysts were to put a security thing right, they may also be more willing to make economic concerns, because it gives them a reason to do it.
2:21:41On that point, I would like to suggest that because things are going so well in the campaign, that we as much as possible not reduce things to writing between now and the election.
2:22:03Even as an option.
2:22:06Even as an option.
2:22:48I would like everybody to think about this, to discuss it.
2:22:54The rest of the bill is absolutely right.
2:22:57I don't think there's that much to think about.
2:23:01It's a circulating memorandum.
2:23:03There's no reason to.
2:23:08There's no reason to.
2:23:10That should be true of virtue and everything.
2:23:12In the meantime...
2:23:15I think the people here are hard-working people.
2:23:18People are creative people, of course, they've done an awful good job.
2:23:24It's rather ironic, this Russian thing, how God is investigating, how we tend to them, have secrets, you know.
2:23:33We have to back a lie to keep it secret.
2:23:37It's much bigger, you know, we knew it was much bigger, all the time.
2:23:42We were going to buy a lot more, a bunch of toys, and then after the 300 million, we were going to buy an 800 million.
2:24:03Go ahead.
2:24:04I'm going to settle all these things tomorrow.

Nixon, Council on International Economic Policy & Rogers on International…

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Also recorded on September 11, 1972

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