US Economic Statecraft for Survival 1933-1991 Part 5

Explaining how economic policies fitted into the Nixon and Kissinger grand strategy, and in particular how they were used in linkage, is not easy. Partly because they became an integral part of high politics and partly because of Kissinger's back-channel diplomacy, and the general secretiveness that shrouded the workings of the Nixon Administration, piecing the full story together through primary sources is not possible. They either do not exist, or have been destroyed, or edited and changed, or removed, or are still under national security restrictions. Anthony Lake, one of Kissinger's staff, put things thus: 'The levels of knowledge and duplicity were like a Mozart opera in complexity...One reason I quit was because I kept finding myself writing misleading memos'.55 Even when NSC and CIEP doc.u.ments are available and prima facie appear reliable the discussions and decisions they record are often simply going over ground already trodden by Nixon, Kissinger and their closest advisers. In short, decisions were taken in the White House, and only thereafter were the bureaucratic and inst.i.tutional processes activated in order to confirm and ratify those decisions. However, bearing these points in mind, by focusing on Nixon, Kissinger and close a.s.sociates such as Peter Flanigan, and successive Secretaries of Commerce, Maurice Stans (196972), Peter Peterson (19723) and Frederick Dent (19735), some of the story and some of the reasoning behind the policies of economic statecraft can be teased out. Furthermore, even for the outsider looking in, there are clear phases of policy evident from its public face. After an initial period of no movement, the first phase of change during the Nixon Administration moved from a conservative and restrictive att.i.tude towards East-West trade to preparing for substantial liberalisation talks in the May 1972 Moscow summit. The second phase offered a cornucopia of economic possibilities before, during and immediately after the summit. The third phase heralded the decline of detente and is epitomised by both US domestic obstruction of the economic plans negotiated with the Soviets and growing doubts about the military balance.

How to get out of the war in Vietnam and how to link issues in order to maximise US power and leverage in obtaining that goal were the fundamental foreign-policy priorities at the start of the Nixon presidency. The Americans wanted to break down Soviet selective detente, whereby the Soviets tried to compartmentalise issues and pursue them when they felt that they had an advantage, for example in Western Europe. Kissinger and Nixon wanted to garner advantages from the USA's strength across the board and link issues together. In April 1969 there was an attempt, through the good offices of Cyrus Vance, to link strategic arms limitation talks (SALT) with progress in Vietnam, but this failed. Kissinger later commented: 'The two issues were far too incommensu-rable; the outcome of the strategic arms discussions was too uncertain, the Hanoi leaders.h.i.+p was too intractable, and the time scale required for either negotiation too difficult to synchronise.'56 It is doubtful that he actually saw the problems of linkage in such stark terms in 1969, because, as a policy, he was still trumpeting it as the way forward. During the first year of the Nixon Administration, the Soviets were repeatedly regaled with American disappointment that they had not done enough to help find a solution in Vietnam. Characteristically on 20 October 1969 Nixon said to the Soviet Amba.s.sador Anatoly Dobrynin: I hope that you will not mind this serious talk...If the Soviet Union found it possible to do something in Vietnam, and the Vietnam war ended, then we might do something dramatic to improve our relations, indeed, something more dramatic than could now be imagined. But until then, I have to say that real progress will be very difficult.57 With this kind of message coming directly from the White House, it is not surprising that the Administration's initial policy inclination on East-West trade was highly restrictive and at odds with the movement for liberalisation in the Congress.

In 1969, the mood in Congress was easing the EAA along towards liberalisation of East-West trade. Within the Administration, Rogers' State Department and Maurice Stans at Commerce favoured this kind of change, but Nixon and his 'Mr Fixit', White House a.s.sistant Peter Flanigan, were much more cautious. Henry Kissinger was also reluctant to give anything away, except in return for a substan-tial quid pro quo from the Soviets. Peter Peterson also ably supported these tactics, first as a White House a.s.sistant on International Economics and later as the Secretary of Commerce. East-West trade was a difficult policy area. It became highly complicated once the Administration considered communist states other than the likes of Cuba, North Vietnam and North Korea, which were beyond the pale. For other communist states differentiated treatment was prescribed. Nixon wanted to exacerbate differences both between the Soviet Union and its East European satellites and between the Soviet Union and communist China. With an eye on exploiting Soviet-Chinese differences, on 21 July 1969 the USA took the first small step towards an accommodation with the PRC. The State Department announced that there would be some easing of trade controls of minor significance. Four days later, responding to reporters while on Guam, Nixon said: 'As a matter of fact suggestions for relaxing restrictions vis-a-vis Communist China-incidentally, suggestions going considerably beyond those that I adopted-have been before the National Security Council for the past three months.'58 Later that summer there were moves on Eastern Europe. On 2 August 1969 Nixon became the first US president to visit a communist state; he went to Bucharest for talks with the Romanian leader Nicolae Ceaucescu and intimated to the Romanian leader the kind of linkages he thought would be necessary for substantial improvements in East-West relations. He confided in Ceaucescu (though all the time hoping he would convey his thoughts to the Chinese) that he doubted that any real detente could be achieved with the Soviets until there had been some kind of rapprochement with the PRC, and that that would in turn depend upon a resolution of the Vietnam War.59 After Nixon's return to Was.h.i.+ngton several initiatives were mounted to expand trade between the two countries, and, while there was little immediate change elsewhere in the Eastern bloc, in November 1970 Stans was told: 'With regard to sales of US products to countries in Eastern Europe other than the USSR, the President indicated that Stans was free to encourage sales to any of those countries.'60 This was Nixon's version of bridge-building, but it had a broader pattern of intent than Johnson's.

Nixon was trying to raise trade with the satellites and the PRC into high politics. He wanted to make the Soviets feel vulnerable by cultivating better relations with the communist Chinese and by fraying the ties that bound the satellites to the political control of the Kremlin. Simultaneously, he wanted to communicate to the Chinese the priority the USA placed on ending the war in Vietnam. If the Chinese would help the Americans extricate themselves, they could expect an improvement in USA-China relations and more trade. While trade policy changed with the PRC and became more adventurous with the Eastern satellites, Nixon's intention was that it should remain rigid with regard to the Soviets. There, trade was to follow politics, not the other way around-at least so Nixon professed and hoped.

The early months of the Nixon Administration were fraught with an overload of serious issues and the usual difficulties that any new executive faces upon taking office. While Nixon and his close advisers struggled to take control, identify priorities and make them clear within the executive branch, the bureaucracy, encouraged by moves in Congress with the EAA, continued on the path towards East-West trade liberalisation that had been established by Kennedy and Johnson. Stans, in particular, was keen to use executive flexibility in the export control system in favour of granting export licences. The Administration was soon confronted with a number of opportunities to expand trade in both industrial and agricultural products. In many ways it was in the latter category that the tactics and reasoning of the Administration are best revealed.

In the spring of 1969 the Soviets indicated to the US Continental Grain Company that they wanted to buy 300,000 tons of grain for $15 million as the first in a programme of ongoing purchases. But, before making a firm offer, they wanted a.s.surances that they would be treated like any other foreign buyer. In effect, this meant that the 1963 condition that at least 50 per cent of any grain sales to the Soviets must be carried in US bottoms would have to be lifted. Also at issue was the symbolism of this condition and the way it bore on the Soviet desire to be recognised and treated as an equal by the USA in international relations. Secretary of Agriculture Clifford Hardin was keen to go ahead with the sale and simply replace the provocative condition with 'a.s.surance...that every effort would be made to insure that 50 per cent of the s.h.i.+pments be made on US flag s.h.i.+ps'.61 Stans agreed, but he was aware that such a move would antagonise US labour, particularly the notoriously anti-communist longsh.o.r.emen, who could mobilise the whole AFL-CIO trade union organisation. Although public opinion had s.h.i.+fted over the years to become better disposed towards trade with the communists, there were still vested interests that caused problems for liberalisation, for example because of 'loss' of contracts for the US merchant marine, and there were also very influential swathes of opinion that either were still opposed to liberalisation or could easily be swung against it, for example, much of organised labour. It was in the light of these considerations that Nixon's chief domestic adviser John Ehrlichman questioned 'the advisability of making these sales because of adverse public reaction'.62 Even the seemingly innocuous sale of foodstuffs to the Soviet Union could not pa.s.s muster at the departmental level within the Nixon Administration. On the advice of Kissinger and Arthur Burns, at that point a Cabinet-level counsellor to the President, matters were referred to the NSC for review.63 Prompted by the movement of the EAA through the Congress and by requests for export licences for the Soviet oil industry, machinery for the Kama River Truck Plant, and for grain, the NSC discussed the whole issue of East-West trade on 14 and 21 May. The Administration, or rather Nixon, took benchmark decisions for US trade policy with the Soviet Union on the 21st.64 In preparation for these decisions, Kissinger summarised for Nixon the views of the various agencies that were involved and offered his own counsel.

My own view was not to oppose but to acquiesce in a new law granting the President discretionary authority to expand trade, while exercising this authority only in return for a political quid pro quo. I also recommended bringing the United States export control list into line with the somewhat more liberal COCOM list, since otherwise we merely lost business to our allies without affecting communist conduct. Finally, I favored issuing a license for the oil extraction plant because the long lead time for its construction would give us continuing leverage. I opposed licenses for the foundry and the corn sale.65 The nature of Kissinger's political thinking about trade with the Soviets is very evident in his reasoning here. Any idea, so far as he was concerned, that there would be trade liberalisation for its own sake was clearly without purchase. Nixon's att.i.tude was even more hard-line. Blithely unaware of contradictions between his att.i.tude towards the USSR on the one hand and the PRC and Romania on the other, Nixon p.r.o.nounced: 'I do not accept the philosophy that increased trade results in improved political relations. In fact just the converse is true. Better political relations lead to improved trade.'66 The President was unwilling to grant what he saw as trade concessions until the Soviets became more accommodating and helpful on a range of issues, including arms control and Vietnam. He thus rejected all the licensing requests and declared the Administration's opposition to any legislative liberalisation of East-West trade. Garthoff was later to declare it a tragedy that the Administration did not ask for the power to grant MFN status to the Soviets in the EAA, but that would clearly have been contrary to the whole thrust of the Nixon-Kissinger strategy of sending the right messages to obtain the right outcome from the Soviets.67 An indicator that the USA was willing to grant MFN in 1969 would have been totally premature. It was not a missed opportunity because it was never an option. Nixon did agree, however, to a process of readjustment by which the US unilateral embargo list would be brought in line with COCOM's, except for high-technology items over which the USA held a monopoly. On 28 May a presidential directive was issued, indicating the possibility of increased trade if improved political circ.u.mstances warranted it.

Over the following months it seemed to Kissinger that the momentum for trade liberalisation had developed a life of its own and was difficult to brake within the State and Commerce departments. On several occasions, he had to intervene in order to prevent give-away licensing concessions. In the autumn of 1969 Stans tried executively to decontrol 135 items on the embargo list and was pus.h.i.+ng for more liberal trade with the whole Eastern bloc along lines achieved with Romania. Kissinger had opposed what he and Nixon saw as selective detente by the Soviets, most notably with respect to Ostpolitik, but wanted to pursue identical tactics himself. He thus moved to prevent the breakdown of differentiated US responses to Eastern Europe. He prevented Stans' decontrol initiative and blocked liberalisation of trade with Eastern Europe, at least for a time. However, Kissinger was going against the flow. In December the Congress pa.s.sed the EAA. Pressures were mounting for more trade, and the gambit of holding out inducements in order to draw the Soviets into co-operating on arms-control talks and helping with the Vietnam situation were not producing tangible results. Indeed, Ambrose goes so far as to claim that there is 'no evidence [that the]...attempt to link progress in making a settlement on Vietnam with detente with the Soviet Union ever paid off in any direct way.'68 Lebow and Stein comment that neither the US public nor the Soviets would countenance linking vitally important SALT talks with the Middle East situation and Vietnam, and that by 1971 Nixon and Kissinger had to decouple links between these policy areas.69 It is hard to make definitive judgements about US linkage policy when so much depends upon the intangibles of a.s.sessing its impact upon Soviet and Chinese thinking. Ambrose is correct when he says that it is difficult to point to direct pay-offs, but there is evidence to show that the Soviets were not unmoved regarding the North Vietnamese and that they offered some support for US peace strategies. Furthermore, circ.u.mstances surrounding the May 1971 breakthrough on SALT and the lead-in to the May 1972 summit might not have had very evident linkages with the Middle East and Vietnam, but linkages were at work. In his memoirs Nixon wrote: 'A US-Soviet summit was at last possible because of two achievements: progress in the Strategic Arms Limitations Talks before the China overture was revealed, and progress on a Berlin settlement after the China announcement had been made.'70 He clearly wanted to prove that linkage had worked, but whether it worked precisely in the way he suggested is another matter. Significantly, economic incentives offered by the Americans were not mentioned, and neither Nixon's p.r.o.nouncement that there would be no radical change in Soviet-US relations until there was progress on Vietnam, nor his declaration that political must precede economic change, could be fully upheld.

The year 1970 came and went with little discernible movement on trade policy. Stans continued to press for liberalisation, but was reined in by Kissinger, and, in any case, Nixon was unwilling to develop trade with the Soviets unless there were improvements elsewhere in Soviet-US relations.71 In the autumn that looked unlikely, as tensions mounted because of the arrival of a Soviet naval flotilla in Cuba, which resurrected the fears of a Soviet nuclear presence there. Gradually, effective diplomacy solved the problem, and on 22 December Nixon sent a message to Dobrynin, via Kissinger, proposing that they should nurture a more constructive relations.h.i.+p. By January 1971 both sides were making positive noises, and there was progress in SALT, which was closely interconnected with trade. Both sides were keen to reach an arms agreement, but their different needs had caused a standoff. The Soviets only wanted limits on antiballistic missile systems (ABMs), whereas the Americans wanted that to move in tandem with limitations on offensive missiles. On 26 March and 12 May changes in the Soviet position made it possible for Nixon to announce a breakthrough on 20 May 1971. It looked as if the strategy of political change first and economic change second was being held to and was succeeding. In fact the situation was more fluid than that.

Three features of US policy provided fluidity: vagueness about the agreed position on arms talks, which allowed them to proceed; relations with the PRC; and trade prospects. On 18 January 1971 Nixon established the CIEP, which, in itself, was indicative of the growing importance of economics in US diplomacy. Peterson was appointed its executive director and on 12 April, two days before Nixon's announcement of a review of US-PRC trade relations, he sent Nixon some talking points for a meeting with Time-Life editors. They included statements that it was not Nixon's intent to antagonise the Soviets by opening trade with the Chinese, but that 'economics becomes next major thrust of American foreign policy', and in the absence of diplomatic relations 'tourists and trade become key avenues of building bridges'.72 Several days earlier, on 6 April, the Chinese had made a friendly gesture by inviting the US table tennis (ping-pong) team, at the world champions.h.i.+ps in j.a.pan, to visit the PRC: it accepted. Things were now in place for a more substantial development. On 14 April Nixon announced: 'I have asked for a list of items of a nonstrategic nature which can be placed under general licence for direct export to the People's Republic of China. Following my review and approval of specific items on this list, direct imports of designated items from China will then also be authorised.'73 Public reaction was overwhelmingly favourable. On 7 May the various economic departments implemented Nixon's new policy, and on 10 June the President formally ended the 21-year export embargo and lifted import controls.74 Meanwhile on 27 April a message from Chou En-lai, delivered via the Pakistanis, indicated the possibility of a really dramatic change in relations. After further cautious moves, and a secret trip to the PRC by Kissinger, it was announced on 15 July 1971 that Nixon would visit China before May 1972. All these moves with China had several layers of intent and meaning, but one was clearly to make the Soviets uneasy and more willing to repair relations with the West as their communist rival in the east edged towards an accommodation with the USA.75 'There was another part to the new policy [of 10 June],' as Ambrose points out, 'hardly noticed by the press, and not connected to China [in fact my view is that it was]. It was a further sweetener to the Russians in antic.i.p.ation of a SALT agreement and a summit in Moscow: Nixon ended the requirement in force since 1963, that called for half of all grain s.h.i.+pments to the Soviet Union to be carried on American flag vessels. This opened the door to a grain deal with the Soviets secretly promised by Kissinger in his back-channel talks with Dobrynin.'76 Hersh explains that on 23 April 1971 the Soviets dropped their condition that an ABM agreement must precede an agreement on offensive weapons, in exchange for a secret US promise to liberalise the export of grain and industrial machinery.77 Although Garthoff and Ambrose accept the idea that economic inducements were offered to the Soviets to create a SALT breakthrough and note that other rewards, such as contracts for the Kama River Plant, quickly followed, they do not go as far as Hersh. They are right to be more reserved, because the evidence indicates that it was the vagueness of the strategic understanding that enabled further progress with the SALT, and that US economic undertakings were of a general nature, and were later the subject of difficult negotiations with the Soviets. They were not a tight secret exclusively held within the back-channel, as Hersh suggests, and any impression that the economic side was well on its way to being sorted out, and therefore const.i.tuted the key to the SALT breakthrough, is probably misleading. However, equally misleading was the impression given by Kissinger that everything had linked in the right way for the USA.78 The Soviets had been after a grain deal since the spring of 1969, and during the late spring of 1971 moves were afoot to facilitate that and remove obstacles such as the requirement for at least 50 per cent of s.h.i.+pments to be carried in US bottoms, which the Soviets found offensive. Hersh, Garthoff, Ambrose and Lebow and Stein all emphasise that the secret promise of a grain deal by Kissinger and Nixon was part of the reverse linkage that led to the SALT breakthrough.79 On 10 May Peterson explained: 'My opposition to Communism is a matter of record. I certainly do not desire to strengthen the Communist bloc nations through this policy.' However, he went on to say that past experience of embargoing non-strategic items simply penalised US farmers; so he favoured such trade for cash or on hard credit terms.80 Commitments were clearly made, but in a general way and as part of overall s.h.i.+fts in policy rather than as a key which opened the door to detente. Furthermore, it was one thing for Kissinger and Nixon to make secret economic commitments to the Soviets: it was another to deliver them. There were always going to be domestic opposition and problems with labour organisations. Initially, Kissinger unsuccessfully attempted to smooth over domestic labour opposition to a grain deal with the Soviets, but shortly after announcing the Moscow summit for May 1972 (nicely timed for his presidential re-election bid), Nixon asked Chuck Colson to 'take the lead' with labour, towards the end of October 1971.81 The matter was so sensitive because of the secret undertakings prior to the 20 May announcement. Amba.s.sador Dobrynin may even have threatened that 'there would be no SALT agreement unless the grain deal was worked out'.82 A short time after Colson took over and cut various deals with labour, including an expansion of US merchant s.h.i.+p construction, a White House press conference announced that the unions now favoured grain sales and s.h.i.+pments to the Soviets. That same month a $136 million grain deal was announced, and in December Secretary Maskevitch went to Was.h.i.+ngton to negotiate details with Secretary of Agriculture Earl Butz. However, on the export of industrial equipment there was more heavyweight opposition. After the 20 May announcement of the SALT breakthrough, Kissinger reversed his 1969 position and authorised the export of some manufacturing items for the Kama River Truck Plant. That did not go down well with the Secretary of Defense Melvin Laird. Approval for exports was not quite as automatic as some authors have suggested The NSC Under Secretaries Committee had been at the coalface of reviewing East-West trade, but the creation of the CIEP and the fact that Defense was not a full member of it worried Laird. On 29 June he wrote to Nixon successfully pleading for the enlargement of the CIEP to include Defense. But it was not just bureaucratic matters that worried him.

I believe that there should be an interdepartmental review through the CIEP, if not the NSC system, of where the US is going in exports of heavy truck manufacturing equipment and similar items to the USSR, and the type of quid pro quo that might be expected in return. From a military standpoint, I object to helping the USSR to build trucks while they are replacing North Vietnamese truck losses in Laos. From an economic standpoint, I believe that the USSR is now strong enough to reduce non-tariff barriers to trade, modify its rigid bilateral state trading arrangements, and move to become a member of GATT, the IMF and other international economic inst.i.tutions.83 This was like expecting the Soviets to become decent free-marketeers. That did not happen, but, after a fas.h.i.+on, Laird got his review. There was a potential embarra.s.sment here for Nixon and Kissinger. They thought that Laird did not know that the quid pro quo for exporting items for the truck plant had already been, at least partly, exchanged.84 Trade problems were reviewed, but not surprisingly, especially after the summer breakthrough on Berlin, on 23 September US firms were authorised to bid for further contracts for the Kama River Truck Plant.85 By January 1972 decisions were effectively in the political decision-making hands of Henry Kissinger. One of his a.s.sistants wrote: Stans has a list of items worth $380m, including $250m for Jervis Webb Co. for Kama Truck Factory. On economic grounds issuance of these licenses after the usual interagency clearances...would normally be a routine matter. But, because of the present political climate, [Helmut] Sonnenfeldt [a.s.sistant to Kissinger] believes it is up to you to determine at what point the release of some or all of these licenses will provide the appropriate political return.86 By the spring of 1972 linkage had impacted on US-Soviet relations. The manoeuvrings with the PRC brought pressure to bear on the Soviets, and the hints and offers of trade, especially in grain, helped to draw the Soviets to a breakthrough on SALT, to an accommodation over Berlin, and to a summit meeting, which was announced in October 1971 and scheduled for the second half of May 1972. But, while linkage worked, it was also a two-way street, and Nixon found himself offering and promising economic incentives prior to political moves by the Soviets. Furthermore, even when initiatives of this sort were decided and acted upon by Nixon and Kissinger, departmental and bureaucratic problems remained (notwithstanding all the centralisation of power in the White House), most notably from Laird with his 'undisguised distrust of the notion of detente'.87 By the late fall of 1971, however, opposition was beginning to fall away. It was then that Soviet Foreign Secretary Gromyko formally raised the question of trade with Nixon. Amba.s.sador Dobrynin followed up by suggesting an exchange of economic ministers. As a result Stans visited the Soviet Union in November and talked with Kosygin and Minister of Foreign Trade, Patolichev.88 He returned 'enchanted by Soviet hospitality and with great expectations of a boom in Soviet trade'.89 Kissinger was less enthusiastic, and both his later manoeuvrings and the Indo-Pakistani war crisis in December 1971 caused further problems. Regarding the latter, Nixon ordered a slowing down of economic talks with the Soviets because of the crisis, but the momentum for economic progress nevertheless continued, albeit with frequent fluctuations of pressure on the accelerator, as Kissinger a.s.sessed and rea.s.sessed the political situation. The first phase was now over and Nixon and Kissinger could look to the forthcoming summit and plan the economic harvest of detente.

Phase Two: the economic fruits of detente, 19723.

In response to the concerns expressed by Laird, the CIEP and NSC personnel reviewed East-West trade policy, and the entire study was submitted to the President on 2 February 1972. It was largely a bootless enterprise. Crucially, the people working on the review were ignorant of some of the decisions already taken by Nixon, Kissinger and their close a.s.sociates, or else were not informed of ongoing developments. The draft report from the CIEP recommended reductions in US lists to the COCOM level, except for a few items 'deemed by the US to contribute significantly to the development, production or use of military hardware'. It suggested that the licensing system should be expedited in order to make US companies more compet.i.tive, that the same controls should apply to the Chinese as to the Soviets, and that the Administration should seek the authority to grant MFN. Importantly, the report cautioned: 'We should not use MFN as a political tool.'90 This hope was dashed twice, once by Kissinger, and once by a powerful faction in the US Congress led by Senator Jackson.

After Stans' visit to Moscow in November, Kissinger saw three remaining difficulties in the commercial realm: the Soviets' settlement of their wartime Lend-Lease debt; MFN; and linkage. Disingenuously, in his memoirs he a.s.serts that his caution was because of White House 'determination to have trade follow political progress and not precede it'.91 As we now know, the USA had already committed itself, albeit in vague terms, to some liberalisation of trade, and Kissinger was directly involved in that. He identified to others in the Administration the potential for trade in agricultural products and, after the submission of the review by NSC/CIEP, he sent NSDM 151/CIEP-DM-6 requesting, from the Agriculture and State departments respectively, negotiating scenarios for the sale of grain to the Soviets with dollar credits and that the Lend-Lease debt be dealt with.92 There is no doubt that Kissinger wanted to wring further political benefits out of the Soviets, and that the economic negotiations were still unresolved and somewhat open-ended. Sometime in March 1972 a paper prepared jointly by the CIEP and Kissinger on a 'pre-Moscow visit' read in part as follows: Negotiation long-term grain sales commitments.

Action Required Soviet response to Amba.s.sador Beam's [US amba.s.sador to Moscow] February 22 initiative. Presidential decision on extent of Commodity Credit Corporation financing. Probable April visit to Moscow by Agriculture representatives.93.

By the end of March at least some of these issues had been decided. In a telephone conversation with Secretary of the Treasury John Connally, Flanigan described to him the 'grain sales financing' terms agreed with Butz. Connally approved them.94 Even though part of the US economic hand had already been played and US negotiating positions were being established, there was still considerable room for manoeuvre. To this end, Earl Butz's trip to Moscow was delayed until April 1972 and, more significantly, there were further moves to do with MFN and linkage. Kissinger insisted that the granting of MFN status should depend on a satisfactory Lend-Lease settlement. He also wanted to postpone any US-Soviet energy deal, for example about Siberian natural gas, until after the end of the Vietnam War. 'We would in short, make economic relations depend on some demonstrated progress on matters of foreign policy importance to the United States.'95 One can only speculate that in his memoirs, Kissinger wanted to defend detente against his critics of the late 1970s and avoid the embarra.s.sing admission that economic inducements had been offered before a political breakthrough and that linkage had already been turned back on the Americans by the Soviets before the main economic talks got under way.

On 30 March a further complication for the forthcoming summit dramatically spilt onto the international chessboard when the North Vietnamese mounted a full-scale invasion of South Vietnam. Developments there had now to be watched even more closely to see how diplomatic linkages might be reforged. In the meantime, between 20 and 24 April 1972, Kissinger held talks about the pending summit with Brezhnev. Kissinger worked out a charter for detente,96 which was later signed at the summit and known as the Basic Principles Agreement, but the talks ranged widely and covered economic issues as well. The Soviet President talked urgently about MFN, suggested that co-operation on natural gas developments would benefit each side equally, but never mentioned, according to Kissinger, his real need: i.e. grain.97 Of course, that could have been because Brezhnev expected the grain to flow because of commitments made by the USA the previous year. Kissinger responded that if all went well at the summit, then they could work out the economic arrangements over the summer.98 How this squares with what was actually going on emerges from two reports about US-Soviet trade talks.

Flanigan was now very much at the centre of things. His views are important because he was an insider and had taken over as executive director of the CIEP after Peterson's elevation to Commerce Secretary in February 1972. It is apparent from his reports that, whatever commitments the USA had made before the SALT breakthrough, they did not guarantee the success of trade talks, even on grain, and that, contrary to the claims of several writers, the Americans did not have a set policy that there would be no major economic agreements before or at the summit in order subsequently to get further political concessions from the Soviets. It is also important to note that Flanigan's a.s.sessment comes after the launch of the offensive by the North Vietnamese and, despite that, he still thought that economic agreements could be reached at the summit.

His first memorandum reported the views of John Connally. He was both an influential figure and a hard-liner in the Administration. Much respected by Nixon, he was always his own man. Connally went along with the idea of a grain sale and of settling Lend-Lease on reasonable terms. He thought that $0.5 billion would be a good deal and 'money for old rope' so far as Congress and the public were concerned. He was also content to see an agreement on Eximbank credits 'if...granted in linkage with these other negotiations...He [recognised] the desirability of consummating all these negotiations in Moscow.'99 By late April three sets of talks were under way: on grain, which included a US delegation headed by Butz in Moscow 912 April; on Lend-Lease; and on natural gas. Flanigan wryly observed: 'In all three negotiations the Russians have taken positions that reflect either extreme financial naivete or unreasonable demands.'100 On grain there was a standoff because the Soviets insisted on wildly generous credit terms and would not consider US Commodity Credit Company rates. Similarly, on natural gas, which could involve $5.5 billion of investment from the USA over fifteen years: 'The [Soviet] proposal is so one-sided from a financial point of view as to be totally unrealistic.'101 And then, ironically, just as Kissinger wanted to link Lend-Lease to MFN, and Treasury Secretary Connally wanted to link Lend-Lease and Eximbank credits, so the Soviets wanted linkage connecting all three issues, though obviously imagining a different direction for leverage. Flanigan commented: We are willing to implicitly grant these conditions in a general statement. [But] Explicit acceptance of the Most Favored Nation treatment as a condition would indicate the Administration's willingness to make this proposal to Congress before completing the broader range of trade negotiations, which I believe would prejudice both our other negotiations and our position with the Congress.102 It could very well have been for this reason, rather than hopes of extracting further political concessions from the Soviets, that economic agreements were not concluded at the summit. Flanigan concluded that, if these talks were anything to go by, 'the Russians are not anxious to be in a position to sign substantial commercial agreements during the Moscow visit'.103 As an afterthought, he observed that Patolichev was to visit Was.h.i.+ngton on 7 May and that the Lend-Lease and grain discussions could then be reopened and might provide a basis for some positive action at the summit.104 What transpired from those talks was reported to Kissinger by Peterson on 17 May, just before the summit. Before looking at that, though, it is important to emphasise the actual nature of this diplomacy, as opposed to what Kissinger and Nixon claimed it to be, and also to nuance some of the findings by Hersh and Garthoff.

First of all, the manipulation of linkage by Nixon and Kissinger did not work as cleanly and effectively as they both suggested in their memoirs. The runes cast on the table by linkage were ambiguous to say the least, and never more so than in May 1972. Detente did not stop the Soviets from providing much of the equipment for the North Vietnamese invasion of the South, but that did not prevent Brezhnev from writing a letter, which Nixon received on 1 May, asking the USA to refrain from any further military action in support of the South that might jeopardise the summit. The Soviets had been taken aback by the ferocious US response to ward off the collapse of South Vietnam. Nixon stood firm: 'we'll just have to let our Soviet friends know that I'm willing to give up the summit if this is the price they have in mind to make us pay for it.'105 Here, there seems to have been little moderation of behaviour on either side engendered by detente. On the other hand, the Soviets and the Americans proceeded to the summit.106 Kissinger claimed that 'the holding of the summit was the culmination of our four years of insistence on linkage'.107 One could comment with equal plausi-bility that the summit occurred not because of linkage, but despite it.

The course of detente from the mid-1970s onwards occasioned savage criticism of its two main architects, and they both tried to deflect that in their explanations of policy. It was evident from the public steps that they took that neither of them upheld the principle that economics should follow politics in Eastern Europe and in relation to the PRC, but, despite repeated claims to the contrary both at the time and later, economics also led (or at least moved in parallel with) politics in relations with the Soviets. Kissinger and Nixon made some general commitments on grain and export liberalisation before they publicly admitted they did. On linkage, Kissinger and Nixon trumpeted their successes in tying MFN and credits to a satisfactory Lend-Lease settlement, but this, according to Flanigan, was also precisely the linkage that the Soviets wanted to make in order to exert leverage in exactly the opposite direction to which the Americans were pus.h.i.+ng. And finally, both Nixon and Kissinger claimed that the USA sought to delay economic agreements until after the summit in order to give them further leverage on the Soviets in other political areas, such as Vietnam. In fact, it seems that this was not a strong line in US policy at the time. Delay, if it was contrived, might have been because of political complications with the MFN and the Congress, rather than a tactical move to do with the Soviets. Furthermore, the Soviets seemed uninterested in finalising economic agreements at the summit, so just how much leverage was at issue is unclear.

The discovery by Hersh and Garthoff that economic concessions had been promised before the SALT breakthrough in the summer of 1971 is of great significance in any a.n.a.lysis of the nature of US economic statecraft in this period. However, their case (particularly Hersh's) is overstated. Primary sources from the Nixon Project show that the nature of these commitments was more general and vague than he allows, and thus they could not have had the strength of inducement that he imputes to them. There was still room for negotiation and manipulation by both sides. Having said that, it is also important to weigh in the balance the effect of a growing bureaucratic involvement in talks, and thus the emergence of a more complicated and less easily controlled scenario. For all their centralisation of power in the White House, Nixon and Kissinger could not control everything. When Flanigan was sucked into back-channel diplomacy, it was necessarily an enlarged channel, and so it was more difficult to control the flow. On 13 April Flanigan wrote to Bob Haldeman, Nixon's Chief of Staff: 'Because of the substantive need regarding economic negotiations, he [Kissinger] feels that I should be included on the Moscow trip. As you know, there will probably be several economic agreements to be b.u.t.toned up during the visit. In response to his question, I told him you concurred in this judgement.' Kissinger also agreed that Flanigan should discuss economic issues with European leaders. Flanigan's remark about that was: 'It is obviously not my plan to discuss my involvement in the Moscow trip with any other agencies at this time.'108 So, the back-channels continued, but grew wider, and the vague economic commitments made by Kissinger and Nixon were delegated to others to negotiate in the detail. Flanigan played a key role in negotiating the economic understandings reached in Moscow with Kosygin and Patolichev.109 The overall effect of 'giving away' economic counters prior to the SALT breakthrough was thus made even more difficult for the Soviets to cash in, though that of course does not detract from the important principle at stake here, namely that economics had become high politics in the SALT breakthrough, and economic inducements were offered in order to gain political benefits.

In his report of talks with Patolichev on 17 May, Peterson was much more optimistic and positive than Flanigan had been three weeks earlier. He believed that agreements could be made at an early date on a Joint Commercial Commission that could work out the final details of a comprehensive deal, which would include understandings on MFN, credits, Lend-Lease, a $750-million grain deal over a three-year period, and possibly on a maritime agreement. Peterson noted and accepted the two-way nature of linkage involved in the talks.

I recognize the Soviet view, as set forth in the letter between Deputy Minister Alkhimov and a.s.sistant Secretary Armstrong, that Lend-Lease settlement must in some way be related to Congressional granting of MFN for Soviet goods entering the United States and to the availability of export credits. As the letter suggests, we have tried to make clear in our discussions that for different reasons we believe that Export-Import Bank credit is linked to settlement of the Lend-Lease issue. Our differences as to the role of Lend-Lease issue are, I believe, now well understood by both sides and the importance of their early resolution has become abundantly clear.110 The summit turned out to be a great success, but, while a joint US-Soviet Commercial Commission was established to carry economic negotiations forward, nothing of economic substance was decided except on Lend-Lease. Dobrynin recounts how Nixon and Kosygin bid against each other, as in an auction, for an agreed price. 'It took them half a minute to reach a compromise for a dispute that had lasted for a generation. They met each other about halfway and settled for a payment of $722 million.'111 Other economic issues were referred to the commission for resolution. Much of the general wisdom of scholars.h.i.+p has attributed this delay over other economic matters to a deliberate ploy on the part of Nixon and Kissinger. However, the Soviets were in no hurry to finalise things, even though it was now widely known that they had a crop disaster on their hands, only partly ameliorated by a 3.5-million-ton purchase of Canadian grain in February 1972. It is clear in retrospect that Kissinger was still not being fully candid about things, for he spoke of his 'perfect astonishment' at the 'vast importance' the Soviets placed on a grain deal when we now know that he had been involved in arranging such a sale for many months. The newspaper reporter who wrote about Kissinger's 'astonishment' added: 'Because of the Soviet crop failure, there will surely be a big immediate grain deal.'112 And there was. Key insiders such as Flanigan were still talking about sewing various economic agreements up only days before the meeting. Talk like that seems incongruous if Nixon and Kissinger were really determined to stall things. On balance it would seem that the complexities involved, particularly with MFN, and genuine difficulties in the early negotiations with the Soviets, caused by their naivete about commercially acceptable terms and their intransigence, simply stretched out the timetable, and it was not possible to conclude things in Moscow. Soon after, however, things moved quickly in various US-Soviet negotiations, and by October it was possible to sign a comprehensive trade agreement.

The first deal to be consummated was over grain. Building on Butz's April visit, the Soviets soon agreed to normal commercial Commodity Corporation credit terms (6.125 per cent) in order to purchase no less than $750 million of grain over three years. The Soviets might have shown some naivete over acceptable credit terms early on, but they made up for that in the following weeks by quietly purchasing virtually the entire US grain surplus stock at rock-bottom prices. When prices rose for US consumers as a result, there was considerable outcry against US subsidies for the Soviets. This was the first serious public reaction against detente. It was known, in a playful twist on the British Great Train Robbery, as the Great Grain Robbery.113 In July Peterson went to Moscow, and there was rapid progress on MFN, credits and the final formulation of the Lend-Lease arrangements.114 On 18 October a comprehensive trade agreement was signed, with MFN for the Soviets. In a separate agreement the Soviets formalised the understanding reached by Nixon and Brezhnev and agreed to repay $722 million for Lend-Lease ($222 million more than Connally had thought acceptable) over thirty years. General credit facilities were extended to the Soviets, and on 14 October the vexatious maritime relations.h.i.+p was addressed in another agreement, in which the Soviets acknowledged the substantial domestic problems the Administration had with this.115 The Soviets did not get equal treatment compared with other trade partners of the USA, but the requirement that 50 per cent of all grain s.h.i.+pped to the USSR should be in US bottoms was reduced to 33 per cent.116 At the White House Nixon asked Patolichev to tell Brezhnev that 'he would personally follow-up in the economic field and hoped that the Chairman would also. He stated he saw the political differences diminis.h.i.+ng and economic relations becoming more and more important, and that therefore he would follow it personally.'117 On the economic front everything seemed to have fallen into place; however, even within the Nixon Administration there was still caution in relation to certain projects, most notably, energy co-operation over oil and gas. In response to Kissinger's suggestion that Nixon should throw his weight behind such co-operation, Flanigan pointed out: 'While US government has been receptive...to date, nothing so formal or impressive as Presidential support has been forthcoming.'118 The costs involved in developing Soviet oil resources would be higher than similar developments in Alaska, and so, in the future, the President might have to back away from this. It was not until the Yom Kippur War and the oil price hike it occasioned that energy co-operation with the Soviets became more attractive.119 Despite these reservations, the October agreements, along with executive action to relax the strategic embargo, resulted in a trade boom with the communist world. However, the granting of MFN was still only on paper. To become effective it had to be approved by the Congress.

Phase Three: problems with premature growth, 19734.

Over the following months a series of interrelated issues undermined detente. On the US domestic front, Democrat Senator Henry 'Scoop'Jackson, a Norwegian-American from the State of Was.h.i.+ngton, seized the initiative. Jackson was a powerful figure in the Senate whose presidential ambitions in the 1972 campaign had been thwarted early on, but he then set his eyes on the 1976 campaign, and what followed had much to do with his personal political ambitions. Jackson worked in conjunction with Charles Vanik, a House Representative from Ohio, and was ably a.s.sisted by Richard Perle, who shared Jackson's distrust of detente and of SALT in particular. They were strongly supported by organised labour, which had its own reasons for distrusting both detente and trade with the Soviets. After August 1972 there was another issue with which to attack detente: the Soviets introduced an education tax on exit visas, purportedly to recoup the cost of state education. This obstructed the emigration of dissidents (and, most importantly of all in terms of the political support to be garnered from the powerful US Jewish lobby, large numbers of Jews). It was targeted by Jackson, who, over the next two-and-a-half years, made it into a high-profile issue in US domestic politics, insisting that, unless the exit-visa tax were lifted, Congress would not grant MFN or credits for the Soviets. Soviet attacks on celebrity dissidents Sakharov and Solzhenitsyn in the summer of 1973 greatly helped the Jackson cause.

All this was bad enough for Kissinger and Nixon, but worse was to come. A further complication, partly of their own making, cropped up in early 1973. Ever since the announcement of the new economic policy in 1971, the Administration had known that, in order to change things in the trade sphere, it was vital to have the authority of a comprehensive trade act to empower the USA in a new round of GATT talks. These talks would have wide-ranging implications for the future performance of the US economy, now substantially dependent on foreign trade, and for improved economic and political relations throughout the Western Alliance. But Nixon made the mistake of tying MFN for the Soviets into t.i.tle 4 of what became the 1974 Trade Act when he sent the bill to the Congress on 10 April 1973. As things developed over the following months, the issue became polarised between, on the one hand, detente, Soviet trade and MFN, and, on the other, no MFN for the Soviets, the comprehensive trade bill and trade liberalisation in the Free World. The pursuit of the first option could defeat the entire bill and break commitments to Western allies about trade liberalisation. Pursuit of the second could destroy the 1972 US-Soviet comprehensive trade agreement and seriously damage detente.

The Administration did not handle the MFN/emigration problem effectively. Kissinger did not seem to appreciate that raising economics into high politics did not sever connections with domestic political const.i.tuencies. At a crucial point in the handling of the issue there was also a reshuffle of economic responsibilities at the start of the second administration in 1973. Peterson resigned and was replaced by Frederick Dent, and George Shultz at the Treasury was given overall responsibility for economic policy, including East-West trade. During the turmoil of changeover, Flanigan and the CIEP seized authority over the Soviet MFN situation from William Eberle at the Special Trade Representative's Office. Flanigan always tried to give the impression that he had things under control, but it transpired that he, as well as Kissinger and Nixon, badly miscalculated the size of the threat posed by Jackson and his allies.

In the wider international sphere, the Yom Kippur War demonstrated that stability on the periphery could not be guaranteed by detente and that the basic principles of the 1972 summit were hardly worth the paper they were written on. The USA, no less than the USSR, would seek unilateral advantage on the periphery as and when opportunity arose. And finally, there was the unravelling of the Watergate Affair, which undermined Nixon's authority across the board and-crucially, when it came to garnering support for detente against the forces mustered by Jackson-in the Congress.

Nixon's first mistake was to compromise with Jackson at the time of the SALT signing ceremony in the fall of 1972. He spoke at length with Jackson. The senator promised not to make the Jackson-Vanik amendment, linking credits and MFN with Soviet emigration policy, into a political issue in the run-up to the presidential election, provided Nixon would release Republican members of Congress and allow them to co-sponsor Jackson-Vanik. He agreed, but he was later to rue it. The amendment did not fade away as he expected. Quite the opposite happened: it grew in strength over the following months. The fact that quiet diplomacy by Nixon and Kissinger managed to get the Soviets to modify their policy and allow a very substantial increase in emigration numbers had no impact on Jackson. He could always demand more and he did. Administration dealings with Senator Wilbur Mills, Chairman of the Ways and Means Committee, and one of the most powerful men in the whole Congress, did not in the end help matters either. Mills made a principle of never being on the losing side, and when Jackson-Vanik looked unbeatable he made sure that he acted accordingly. The Nixon White House tended to fluctuate between compromise and highly aggressive intransigence. In September 1972, before the presidential election, there was a ground-swell in favour of compromise and accommodation with Jackson. By 19 April 1973, after the Soviets had made substantial concessions and Wilbur Smith had been temporarily won over to support the Administration's line, att.i.tudes hardened: 'there is no need for further requests by the President and his staff for co-operation or compromise from anti-MFN leaders such as Jackson, Ribicoff, Javits and Vanik.'120 Sadly for the Administration, things did not turn out as it had hoped, and soon further pleas for moderation and compromise were being sent to Jackson and his ever-growing band of supporters. By October 1973 the situation for the Administration was desperate.

On 24 October Flanigan warned Nixon that there was danger of a full Jackson-Vanik amendment being accepted, which would deny the Soviets MFN and credits.

The strategy we are following is to try to get t.i.tle IV (the MFN t.i.tle) dropped from the Bill entirely. The rationale for this position is that, considering the current Middle East negotiations [in the aftermath of the Yom Kippur War], now may not be the time to grant Soviets concessions, but it certainly is not the time for the House to vote to deny them credits and MFN.... Only through this strategy can we avoid a bad House vote, leave time to negotiate with Jackson and the entire Congress prior to the Senate vote and the Conference next year, and still preserve the Trade Bill.121.

Kissinger was now angry and fearful that the Trade Bill, MFN and credits for the Soviets were going to seriously damage the Middle East talks as well as detente in general. In November Shultz and Flanigan agreed to delay the movement of the Trade Bill through Congress for fear that action on t.i.tle IV might inflame US-Soviet relations and 'endanger the Middle East cease-fire and follow-on peace talks'.122 But, along with Eberle, they remained strongly committed to the bill and 'would support floor action now despite the risks vis-a-vis the Soviets'.123 Importantly, Laird believed that further delay would kill the trade bill. Kissinger on the other hand wanted to take that risk.

The choices open to you [Nixon] at this time are thus distasteful. On the whole, in view of the delicacy of the Middle East situation, it is probably wisest to seek a further postponement and make a major effort to keep the coalition behind the trade bill together. Such postponement should not be cast in terms of decision 'for' detente and 'against' our major trading partners in Europe and j.a.pan; rather, it should be explained as required by your efforts to achieve a settlement in the Middle East.124 Nixon did not take Kissinger's advice. The trade bill was too important. It proceeded and was pa.s.sed in the House by 272 to 140 votes with the entire Jackson-Vanik amendment intact.125 By this time there was also deep concern within the Administration about defence policy under detente. On 10 January 1974 the old-style Cold War warrior, Defense Secretary James Schlesinger,126 revealed the worries expressed by NSDM-242 when he publicly ruminated about the dangers of the Soviets achieving a counterforce capability if they continued with technological improvements allowed under the SALT interim agreement on offensive missiles. He set in motion a new development for US strategic defence based on 'meaningful symmetry'.127 A renewal of high-profile concerns for US security lent new support to those who wanted to restrict technology trade with the Soviets.

During 1974 Kissinger, Jackson and the Soviets took up a trilateral form of diplomacy to try to resolve the trade problems. Nevertheless, an agreement still proved elusive, and by the summer both Jackson and the Soviets were biding their time until Nixon bowed out because of Watergate. The MFN and credits/Soviet emigration issue continued through the opening months of the Ford Administration and into 1975, but well before Nixon resigned in August 1974 the writing was on the wall for detente and further US-Soviet trade expansion.

Nixon and Kissinger expanded trade with communist states, and that helped the balance of payments as the EAA had said it should. Another concern of the EAA, the waywardness of US licensing policy, was never adequately met because of Kissinger's insistence that political calculations should determine the flow of exports. The Administration broke free from psychological constraints that afflicted previous administrations, but not without paying costs. Kissinger's linkage policy was over-complex, introduced domestic influences into foreign policy-making, and effectively invited the Soviets to engage in reverse linkage. In the end, this was not controlled as effectively or as efficiently as either Kissinger or Nixon would have us believe. US policy also upset its allies. After preaching the merits of a tight embargo policy for so long, the US now took the lead in requesting exceptions from COCOM. By the end of Nixon's reign US grand strategy was in disarray and, because economics had become high politics, it now also included US trade policy with communist states.

9.

Ford and Carter.

The decline of detente and the approach of the second Cold War 19749.

Was detente worthwhile, or just another Soviet trick? President Gerald R.Ford1 Yet if war is too important to be left to generals, surely commerce is, in this context, too salient to be left to bankers and businessmen.

Samuel P.Huntington2.

President Ford harboured doubts about detente and suffered from deep worries about the US economy. These doubts and worries, shared by many in his Administration, combined in a way that led to changes of policy and a reconfig-uration of power within government.3 Well before Nixon resigned, there were serious problems with a longstanding ambiguity within US economic defence policy. Were policies to be devised on the a.s.sumption that the Soviets could be drawn into a network of economic cooperation that would lead to ever-improving superpower relations, or were they supposed to restrict Soviet economic and strategic capabilities and help with tactical manoeuvring in the Cold War? The strategies of engagement and seduction, on the one hand, and denial, restricting economic and strategic capabilities and weakening world communism, on the other, had always been mixed in varying proportions in US policy since the onset of the Cold War. Up to 1971 the proportion had been so heavily in favour of weakening communist states that there was little tension within the USA between the two strategies. From 1971 to 1973 the proportions had changed in favour of engagement, but now the scales were tipping back again; as they did so, evenly balanced forces vied to take control of policy, and serious tensions arose. In terms of the imagery Litwak uses, the reasons for this tipping back were to be found in both the central structure of detente and on the periphery.

In the central structure two factors were at play. The first involved complications, arising from domestic US politics, which prevented Presidents Nixon and Ford from delivering MFN and credits promised in the 1972 US-Soviet Trade Agreement. The second had to do with a ground-swell of concern that the Soviets were benefiting from SALT 1. There was fear that a Soviet window of opportunity for a nuclear first strike capability could soon appear, if they could marry the ma.s.sive throw-weight of their missiles with the kind of cutting-edge technology that already existed in the USA. This made the Americans wary of SALT 2, prompted Carter to expand the military budget, and turned thoughts once again to export controls, particularly on technology transfers.

On the periphery, any idea of a consensus on restraint had been broken by US action in the Yom Kippur War. However, when Congress refused the Ford Administration's demands for financial a.s.sistance for the beleaguered South Vietnamese regime in 1975, and thus accepted its inevitable defeat, another message was telegraphed to Moscow: that the USA would now be severely inhibited in making military countermoves against communism outside the western hemisphere. This seemed like an invitation to the Soviets to act in pursuit of their own interests on the periphery, just as the USA had done in the Middle East. From the US perspective, the net result over the next few years was: 'From Angola to the Horn of Africa to Afghanistan, whether directly or through Cuban proxies, the Soviet Union demonstrated a willingness to intervene in local and regional conflicts on a hitherto unprecedented scale.'4 Where were the restraints provided by detente in all this? What function were the economic links between the USA and the USSR now supposed to play? The tipping back of the scales was already well under way before Ford took office, but they tipped ever more dramatically after he entered the White House. These changes had important implications for the use of economic instruments of statecraft, especially when they coincided with a relative US economic decline and a domestic recession.

Gerald Ford was sworn in as the 38th President of the USA on 9 August 1974. Months later, after bitter partisan wrangling, the Congress ratified Nelson A.Rockefeller as his Vice President on 19 December. The greatest democracy in the world now had a President and a Vice President, neither of whom had been voted for by the American people. These circ.u.mstances posed questions about both the legitimacy and the authority of the new Administration. This would have been bad enough in normal times, but the times were not normal. The nation was in crisis because of Watergate, the economy was stumbling badly, detente was in sharp decline, and US economic defence policy was in disarray. In foreign affairs, while Ford was more conservative and less enamoured of detente than Nixon, he wanted continuity and kept Kissinger as Secretary of State throughout his period in office, and as NSA until November 1975. Some claimed that this was because of his lack of knowledge of foreign affairs, but in his memoirs Ford scoffed at the idea of such ignorance: 'Like so much of the wisdom in the capital, it was totally inaccurate.'5 Ford had experienced foreign issues through various committees that he had served on during his long career in the House of Representatives. It is not self-evident that this was adequate preparation for being chief diplomat, but, whatever his reasons for keeping Kissinger on and trying to move seamlessly from Nixon's to his own reign over foreign policy, he was always going to have difficulties because of the tainting of Nixon's foreign policy by domestic corruption, and the growing public reaction against detente. Trying to sustain the authority of foreign policy in the face of all this was no easy matter, and in the end Ford was only partially successful. Economic const.i.tuencies and the Cong