INTERNATIONAL NEGOTIATION HEARINGS BEFORE THE SUBCOMMITTEE ON NATIONAL SECURITY AND INTERNATIONAL OPERATIONS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP73B00296R000200120001-6
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 27
• Document Creation Date: December 12, 2016
• Document Release Date: March 7, 2002
• Sequence Number: 1
• Publication Date: February 26, 1971
• Content Type: OPEN

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INTERNATIONAL NEGOTIATION
HEARINGS
SUBCOMMITTEE ON NATIONAL SECURITY
AND INTERNATIONAL OPERATIONS
COMMITTEE ON
GOVERNMENT OPERATIONS
UNITED STATES SENATE
NINETY-SECOND CONGRESS
PART 3
FEBRUARY 26, 1971
Printed for the use of the
Committee on Government Operations
U.S. GOVERNMENT PRINTING OFFICE
57-467 WASHINGTON : 1971
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('OMMITTEE ON GOVERNMENT OPERATIONS
JOHN L. MCCLELLAN, Arkansas, Chairman
HENRY M. JACKSON, Washington
SAM J. ERV:[N, JR., North Carolina
EDMUND S. MUSKIE, Maine
ABRAHAM RIBICOFF, Connecticut
FRED R. HARRIS, Oklahoma
LEE METCALF, Montana
JAMES B. ALLEN, Alabama
HUBERT H. HUMPHREY, Minnesota
LAWTON CHILES, Florida
KARL E. MUNDT, South Dakota
JACOB K. JAVITS, New York
CHARLES H. PERCY, Illinois
EDWARD J. GURNEY, Florida
CHARLES MCC. MATHIAS, JR., Maryland
WILLIAM B. SAXBE, Ohio
WILLIAM V. ROTH, JR., Delaware
BILL BROCK, Tennessee
JAMES It. CALLOWAY, Chief Counsel and Staff Director
ARTHUR A. SHARP, Staff Editor
SUBCOMMITTEE ON NATIONAL 9ECURITY AND INTERNATIONAL OPERATIONS
HENRY M. JACKSON, Washington, Chairman
EDMUND S. MUSKIE, Maine CHARLES MCC. MATHIAS, JR., Maryland
FRED R. HARRIS, Oklahoma KARL E. MUNDT, South Dakota
HUBERT H. HUMPHREY, Minnesota BILL BROCK, Tennessee
LAWTON CHILES, Florida WILLIAM V. ROTH, JR., Delaware
DOROTHY FosDIOK, Staff Director
ROBERT W. TEI'TS, Chief Consultant
RICHARD N. PBRI,E, Professional Staff Member
PHILIP FARMER, Research Assistant
JUDITH J. SPAIIR, Chief Clerk
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CONTENTS
Pago
Opening statement, Senator Henry M. Jackson----------------------------
67
't'estimony of Dirk U. Stikker-------------------------------------------
68
III
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INTERNATIONAL NEGOTIATION
FRIDAY, FEBRUARY 26, 1971
U.S. SENATE,
SUBCOMMITTEE .ON NATIONAL SECURITY
AND INTERNATIONAL OPERATIONS,
COMMITTEE ON GOVERNMENT OPERATIONS,
Washington, D.C.
[This hearing was held in executive session and subsequently ordered made
public by the chairman of the subcommittee.]
The subcommittee met at 10:30 a.m., pursuant to notice, in room
3112, New Senate Office Building, Senator ITenry M. Jackson (chair-
man of the subcommittee) presiding.
Present : Senators Jackson, Chiles, Mathias, and Roth.
Also present : Senators Stennis and Stevens.
Staff members present : Dorothy Fosdick, staff director; Richard N.
Perle, professional staff member; Philip Farmer, research assistant;
and Judith J. Spahr, chief clerk.
Others present: Samuel Goldberg, staff of Senator Mathias; and
Edward A. Barber, staff of Senator Roth.
OPENING STATEMENT OF THE CHAIRMAN
Senator JACKSON. The subcommittee will come to order.
In the last Congress, the subcommittee initiated the first major con-
gressional inquiry on the process and problems of international ne-
gotiation. The focus of our inquiry is on lessons to be learned from past
and present experience in the conduct of negotiations. We are seeking
to get the central. issues relating to international negotiation out in
the open, to encourage, to the extent feasible, sounder attitudes and
approaches.
In view of the importance of the matter, one might expect to find
substantial analytical materials, but the fact is that little up-to-date
and systematic work has been done, and the subcommittee is plough-
ing new ground.
In our inquiry, emphasis is being placed on the importance of
understanding the other side. "It is better to know your acl erse y
than ignore him."
The hearings, studies, and other papers generated in this study
ark proving mulch in demand from people in key government posi-
tions, in. tlhe universities and iii journalism.
We are delighted to have as our witness today one of the great
statesmen of the Atlantic Community, Dr. Dirk Stikker. Ile will
G7
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68 INTERNATIONAL NEGOTIATION
speak to us this morning from his exceptional experience in inter-
national negotiations.
During World War II, when he was Managing Director of Heine-
ken's, he became active in thwarting the Nazi occupation machinery.
He also became a founder and President of the Netherlands Focmda-
tion of Labor and organizer and chairman of the Party of Freedom,
and in 1946 was a delegate to the Round Table Conference on the
political status of the Netherlands West Indies. He has since served
as Netherlands Minister for Foreign Affairs, Chairman of OIE.EC,
Ambassador to Great Britain and to Iceland, Chairman of the Nether-
lands Delegation to the Economic and Social Council of the United
Nations and Secretary General of NATO from 1961-1964. He is the
author of Men of Responsibility (1966). At present Dr. Stikker is
advising United Nations organizations on the role of private foreign
investment.
We welcome you here today, Dr. Stikker. We shall be happy to have
you proceed in your own way.
STATEMENT OF DIRK U. STIKKER
I)r. STINKER:. Thank you very much, Mr. Chairman.
It is an honor to be with you today.
I hope that I will be able in a not too long opening statement to
reciprocate in a certain sense what I receive so very often from your
side because you have publications coming out of this committee. I
have been on your mailing list and I have learned a lot from all this
documentation you have provided.
Now I prefer to speak today without notes and just speak frankly
and freely because I am now completely independent; I am no longer
in business; I am no longer in politics. The only function in a way
that I still have is that of adviser to Philippe de Seynes in the United
Nations on problems of development. That is the only official function
I still have.
Senator JACasoN. You would say you are actively retired?
Dr. STINKER. I have actively retired, and my wife complains that
I am still too active.
When I speak to you today, I would like to concentrate on three
problems and then I am open to any questions, and I like the surprise
question. I hope I will be able to give an answer to your questions.
The three problems on which I would like, to make a brief state-
ment have to do both with national security and with new forums of ne-
gotiation where discussions are now going on.
In the first place we have the negotiations which are going on at
the present moment with the OPEC countries on oil.
Then I would like to pass on to you some information about a new
forum of negotiations in the United Nations on development.
And as a special problem I would like to give you some information
about Radio Free Europe in connection with what has taken place here
in the Senate about the financing of RFE. I happen to be chairman of
the European Advisory Committee of Radio Free Europe and I am
interested that we continue the work for that organization which is,
to my mind, doing an excellent job.
May I start with the OPEC negotiations?
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NEGOTIATIONS OF THE ORGANIZATION OF PETROLEUM EXPORTING
COUNTRIES (OPEC)
For some time in my life I was with an oil company but I am not.
any longer, so I am speaking completely without any bias. I look
mainly at these problems from the point of view of national security
and of the impossibility of finding in the free world the finance for
our energy demand.
The energy demand is at the )?resent moment increasing by 8.4
percent per annum. The expectations are that in five years time it
will be 40 percent higher than it is now and that in 10 years' time it
will be between 70 and 80 percent higher than it is now.
When you look at the sources from which we get our energy, you
will. find that 4 percent of the total sources are hydroelectric and
nuclear energy; 15 percent is natural gas; 65 percent, approximately,
is oil; and the remainder is coal. I give rough worldwide figures, but
these figures are naturally different for each individual country.
Now, I don't believe there is a great chance, because of danger of
pollution, to increase highly the nuclear energy. What is possible in
the field of hydroelectric energy is unknown to me, natural gas will
increase, coal is another possibility, and especially open cast coal-min-
ing might help us to a certain extent, but basically we are dependent
on oil and we all know that 65 percent of the proven oil reserves at
the present moment are in the Middle East.
You can call the group of the OPEC countries the largest oil cartel
of the producing countries which has ever existed. We are living at
the present moment in a seller's market and OPEC is using that
position to an extent that the outcome of the Teheran meeting means
that Europe in the future will have to pay in the coming five years,
I think, about $10 billion more for its oil than it formerly did.
This will have repercussions in Libya, in Algeria, and in Saudi
Arabia as far as Saudi Arabia pumps oil to the Mediterranean. This
may lead to another increase of prices and that increase may be of
they amount of about $4 billion in the coming five years.
Then Venezuela comes in and Nigeria and they may ask, together
with some other producing countries, a further increase of some $4
billion.
The amount of increased prices by the OPEC countries may go on
and it will mean that in any case by 1975 we will have to pay about $18
billion to $20 billion more than we are paying now. There is no possi-
bility for the oil companies or corporations, small or large, to absorb,
themselves, this increase because the take of the oil companies at the
present moment is 36 cents out of a barrel and the increase in prices is
bound to be at least 50 cents.
So, there is not a chance that they can cope with this problem by
themselves. The price increase has to be passed on to the consumer.
That means price increases everywhere. For instance, a country like
India will have to pay this year about 90 pounds sterling more which
will make the equilibrium of its own balance of payments an impossi-
bility.
On top of this problem of the increased prices and the amounts
which have to be made available in foreign currency to producing
countries, i.e. the members of OPEC, we have the problem that for the
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enormous increase in energy demands, staggering new investments
will have to be made. Ti aese new investments are estimated to amount
for the corning 10 years to about $375 billion U.S. dollars: and on top
of it we have to find financing for the working capital for all these new
investments.
The total. figures you can, for instance, find in studies made by the
("hale lbfanhatton, could. amount to about $500 billion in the coming:
10 years when the free world wants to live up to the growing demands
for energy. If demands for energy cannot be met it means that our
~rrowtla rate will -(),o down and that we must slow down our economy,.
It also me.,ans that all countries will have greater difficulties in Ii-
nancin,?' their defense expenditures as we have to raise the enormous
:anxnrnt of money needed. for energy mainly in foreign currency, Thus
it will become increasingly difficult to find the financing which is nec-
essary to keep our defense forces up to the standard which I consider
to be necessary.
On top of it, you have the problem of developing countries in gen-
eial. The money which flows to developing countries at the present,
nionient goes at the rate of about $12 billion to $13 billion per annum.
1. cannot see how this can go on when the Western world has to find
money for `500 billion new investments in order to keel) -up with its
rate of growth and to live up to the demands for energy. All this means
that in the coming decade we would pay a sort of extra advantage to
the small number of oil-producing countries to the detriment of the
rest of the developing cou nt r ios who receive and need aid.
I have been somewhat surprised that in press; reports about what
%,.as going on in OPEC negotiations so little has been said how this
n, iglit also a (feet the economy of the United States, itself. You read
a lot about the consequences for Europe, Japan or India and other
voamtries but, very little about how it is going to affect the economy
of tl.e. United States, itself.
At, the present moment, the, I i.S. imports roughly 2:3 to 24 percent
of its total oil demands-that means about, 3.1 million barrels a day.
1 f the. increase in the energy demand !toes on as it is expected at the
present nioillent, I Clank that your need for imports of oil will rise
to about t; million barrels a dav.
'I'll's will, raise also for voru? balance of payments an enormous
problem,, as price;, are boundl to go lip and capital for all these new
niveshnents has to he found.
Mr. Chairman, it, seems to me,, that one aspect of this problem that
must interest your committee is that negotiations have been going on
ill) to now between the oil corporations and the producing countries.
'I'liat raises the problem of international negotiations.
N atnr Lllav your Government, has at all times been kept informed,
so that there are no secrets about it, and I would like to leave with.
you some papers containing background information. There is noth-
ui,;? secret about these papers.
Senator JAcxsox We, Will file there With the committee for its use.
1)r. STTKrdFi:. This is all aspect that I am sane that your Govern-
ment or your committee world like. to study: what would l:e the best
way to handle such problems in the future? Is it right that it should
b% the corporations who hold these negotiations or should govern-
ments be, involved?
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The problem is that if one consuming country is being involved,
then on may have the problem that other countries would prefer
to turn it over to the United Nations. Then you have to negotiate
with all countries and what may happen in a forum like the United
Nations is not easy to predict.
I had a discussion about this aspect some days ago with Philippe,
de Seynes who sometimes asks my advice or comments on problems.
The other aspect is whether there are other sources of energy to be
found. I think the prices of oil are going to be raised to such an extent
that it may well be possible that commercial exploitation of shale and
tar sands in the U.S. will become possible. In this connection it should
be mentioned that, according to latest information about research and
development, considerable mining operations on the deep seabed for
manganese ore, copper, nickel and oil may become possible. As the
deep seabed is now no man's land, new authorities would have to be
created to give the right legal status to such operations.
[t may well be that in some way incentives have to be given. With-
out alternative sources of energy the U.S. might in the future be
dependent for 40 percent of its oil demand on import which is to my
mind a national security problem, and I would believe that it is for
the U.S. of prime importance to remain independent.
Europe has only three or four or five months of reserve.
It became clear during the OPEC negotiations that Russia finds
itself also in a situation that in the future it may need imports from
OPEC countries. I think they are already flirting at the present
moment with Iran; they are talking about pipelines, and they have
given warning to their friends behind the Iron Curtain in the Balkans
that they cannot be certain Russia will be able to give them the supply
of oil in the.future as they are doing at the present moment. So, Russia
finds itself in some way in a similar situation.
A couple of weeks ago, I happened to meet, an economist of one of
the Balkan countries, Talking about the oil situation, I suggested to
him, "Would it not be a good thing that your country and other
countries should follow the same line and if there are demands for
price increases that we should consult?" He showed great interest..
A NEW UNITED NATIONS FORU1I OF NEGOTIATION ON DEVELOPTTENT
Mr. Chairman, I would now like to turn for: a moment to another
form of negotiations which is taking place in the field of developing
countries and capital flows which are needed for those countries.
It is already a couple of years ago that the United Nations Confer-
ence on Trade and Development (UNCT AD) invited me to write a
report about the role of foreign private investment in development.
I was rather surprised by this request. because during my life I have
been deeply involved in the problems of the transfer of sovereignty in
Indonesia, I had been Secretary General of NATO, and had been in
big business-was I therefore the best qualified man to write such a
report for UNCTAD. But they insisted and I was surprised when
t gave my report that it was rather favorably received just as much in
developing countries as in developed countries as amongst domestic
and foreign private enterprise. It sounds impossible but there was
nobody who complained.
57-467-71-Pt. 3--2
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72 INTERNATIONAL NEGOTIATION
One of the suggestions I made in that report, in which I addressed
myself to the four groups who are together partners in development,
was that we should stop fighting and bickering and having all these
bitter discussions in several organizations of the United Nations.
I suggested that we should develop a dialogue in panel meetings,
as we call them now, between representatives of governments of de-
veloping countries, the major organizations of the United Nations
and foreign private enterprise.
This suggestion was accepted and we had a first meeting on a world-
wide basis in Amsterdam that was followed by another meeting on a
regional basis in Medellin, Colombia. Since that time another meeting
took place, now organized, on the basis of the old documentation which
we prepared, by OAS and IADB, and a meeting took place in Rome in
the last week of January on the special situation of Latin America
in connection with the role of foreign private enterprise. This was
organized purely by the Latin Americans and, to my surprise, there
was little interest shown in the absence of Chile at that meeting..
During that meeting, one day was reserved for a separate discussion
on the so-called Andean Agreement. The Andean Agreement, you
know, is directed against the function of foreign private enterprise.
As a matter of fact, the Andean Agreement was to a large extent
influenced by one of the American professors, Professor Rosenstein-
Rodan from the Massachusetts Institute of Technology. It is often
surprising to me that some of your professors here in the United
States are acting so much against the interests of the United States
and of private enterprise.
Another professor who has - written a report on these problems is
Albert Hirschmar. of Princeton University. He published not so long
ago a fairly long report entitled!: How To Divest in Latin America,
and Why. Divestment means you have to get out. Whether old or new
investors receive adequate compensation is uncertain but, to my mind,
the investors will not. I also saw this report by Professor Hirschman
when I was visiting last year in Southeast Asia on the desks of some
Government officials. This is the sort of propaganda against foreign
private enterprise which I do not understand. I do not understand
why this should come from a professor here in the Western world.
A man like Albert, Hirschman, for instance, uses the expression that
he would hope that the lost art of expropriation and nationalization
can be reactivated. In the same style he talks of plunder by private
enterprise. I am not giving the full context of these quotes, but T
want to make these remarks because I believe that men like Rosen-
stein-Rodan and Albert Hirschman are doing great harm to
development.
The Andean Agreement was discussed during the Rome meeting.
It was defended by a representative from Peru, but met criticism
from many sides.
In this new forum of negotiations it was mentioned that a study of
the report on the Andean Agreement was being made and the sugges-
tion that this study should be circulated to the participants of the
conference was welcomed.
When I was last week in New York again Philippe de Seynes asked
me to advise him about another meeting on a. worldwide basis which
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INTERNATIONAL NEGOTIATION 73
might take place in Tokyo in the course of this year and I am happy
to give you some information on these developments, Mr. Chairman.
This is a new forum of negotiation which might be of interest to you
to follow.
Now, as the last point of my introduction I would like to raise with
you a problem of Radio Free Europe.
I would like to say this : As former Secretary General of NATO,
as Chairman of the West European Advisory Committee of Radio
Free Europe, and as one having long personal acquaintance with
RFE's broadcasting operations in Munich, I would emphasize the
following points about Radio Free Europe today.
To my mind, Radio Free Europe is serving a vital interest of the
West in its relations with Communist Europe and is doing so in a
highly responsible and professional way.
These facts are well-known to many influential persons in Western
Europe, including the hundreds of scholars, business leaders, govern-
ment officials, journalists and others who have visited the Munich
center or have taken part in the meetings of the West European Ad-
visory Committee.
These facts are also well understood by the press throughout West-
ern Europe, as has been shown by the character of their massive
coverage of Radio Free Europe's role in the recent Polish develop-
ments and their coverage of the Soviet Union's current campaign to
secure the expulsion of radio Free Europe from Munich. Recent
representative articles were published in Sueddeutsohe Zeitunq, Die
Welt, and De Telegraaf, and I will leave these copies here with you.
The recent statement which has been made here in the Senate has
caused difficulties, not yet resolved, for Radio Free Europe's position
in Western Europe. I suggest such difficulties could be largely over-
come if some arrangement were to be made whereby two things were
assured :
(a) support is furnished through some appropriate mechanism;
and (b) the present private character and independence of Radio
Free Europe are guaranteed for the future.
These are only mild suggestions I am trying to make here but if
such a thing could be done it might help us a lot and it might make it
possible for Radio Free Europe to continue its work. I would suggest
at this moment that Radio Free Europe, which is now considered by
some, as more or less the same as the Voice of America, be changed in
such a way that also the European Advisory group plays a role in
it and that in a way we try to internationalize the character so that it
is not any longer a purely American voice which is going to be heard
but that everybody can understand there is also a European group
which mives advice for its work.
Mr. Ahairman, these were the main points I wanted to mention at
the start.
Senator JACKSON. Thank you, Dr. Stikker, for a very fine statement.
I know there will be many questions. I have a number and I will
then turn to my colleagues.
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! INTERNATIONAL NEGOTIATION
i.OIJ u1` 1;0%'EII MEN']'S iN OPEC-Ty1'1: NEGO'rL '''TONS
What would be your recommendat ion as to how negotiations should
be carried on .in ."onnection with the Organization of Petroleum. Ex-
portliur Countries--OPEC? I am concerned about the way these ne-
gotiations have been carried on. Over the years the practice of having
these negotiations imdertaken by the private companies has grown up.
All of :r sudden, the subject matter has become a matter of great inter-
national concern: it ha_s a profound impact on the economy of Europe
and Japan. In addition, of course, with that kind of impact, the 1:~oliti-
(al effect is enormous.
We do have certain advisory support from our government. I un-
derstand Mr. John Irwin, the Tinder Secretary of State, was in Tehe-
ran in connection with these negotiations.
What Would be Your suggestion as to the procedure that should be
followed in the future? What lronirl be the role of the nations
involved?
Dr. STraiTu. Mr. Chairman, inv reply would be like this: I am
not a member of the International Chamber of Commerce or any
other similar organizations, as 1. want to be absolutely independent.
Neither am I any longer advising any of the corporations. Still I
have some opinions and one of these is that much more factual infor-
mation about the operations of the multinational corporation should
be made available and that there should be no secrecy about it..
If for instance. about cost and benefits, the truth will he on the
table and everybody can see what is being done by all these corpora-
tions, e.g-. in the bold of transfer of technology, then the imam ?e will
to 1~w mind greatly improve.
A 11.:1'c1at deal of information is. published for instance by your De-
le ra-rnent of Commerce. What your Department of Commerce is pro-
'Inrins' in this field is not the information which is needed. because
this is information which has to do with the balance of payments (-.oil-
It doesn't look into the basic. issues on which these cor-
~lm'ltions :ire working, what they are doing, why they are doing it.
nnO ]iow they are doing it. That. is the information that is needed.
The OECD is now making another study on cost and benefits of
foreign private enterprise and if we really can reach some agreement
on providing all the information based on agreed definitions which
is needed to understand and analyze what is going on, I think it will
be of interest that this information is not, only made available to the
governments but that it be published widely. I am sure it wil-I im-
prove, the picture of private enterprise because T believe it is rioing
much better than is thought.
T110v are not nlnlderers. and the profits they are making are rather
low instead of high as it is often said. T once made a study of this
problem. myself, on the, figures. available. The methodology, the defi-
nitions on which von have to has(, such studies are all wrong. This
is one of the first things that I think should be improved.
On the other hand, if that. information is available to ffovernmr'alts
and to those, who control governments, to parliaments. to Congress. I
think von are in a better position to make your views clear on what
1-0'i believe should he done.
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However, discussions on oil are of such at highly technical nature
that it. is extremely difficult for anybody who has not been for his
whole life in the business. I have not been and so I give you only some
figures that I know a little bit about, but I would not dare to negotiate
in this field.
So, I think it is better that a group of corporations should be al lowed
to negotiate---as they have been allowed this time, because your De-
partment of Justice did not interfere-in this case all the corpora-
tions together negotiating with the producing countries. I believe that
in the future it would be better that the corporations continue on the
proviso that their figures are known, that their governments are in-
formed and that the legislature can check-on the basis of reliable
data based in accordance with agreed methodology and definitions-
on what really is going on.
Senator JACKSON. In your wise and entertaining book, Men of
Responsibility, you indicate some of the characteristics of the French
diplomatic style under De Gaulle. For example, obtaining small suc-
cesses by playing on the nerves of your colleagues, taking refuge in
technicalities, calculating with exquisite precision the outburst of
anger and the gracious gesture, alternating flattery with threats, being
deliberately inscrutable, and so on.
I )r. S 111-KEI. It sounds well.
Senator JACKSON. I would be interested to have your comment. on
the characteristics of the Russian diplomatic approach as you have
observed it over the years. Did the Russians learn from De (sanllel
Dr. SvixKl,x. They learned a little bit from each other !
I do not believe that there is any real change in the attitude of the
Russians, not a basic change. We naturally all have to go on trying to
find ways to get nearer to each other, to understand each other, and to
know what is going on. I see nothing against that sort of thing.
But I would be very much worried if we were to believe that de-
tente is around the corner. It is not. It is not for a single moment
around the corner.
Coining back to your reference to France let me give you one ex-
ample how France sometimes frustrated better understanding of basic
problems between allies. We were talking at a certain time in my
period in NATO about nuclear weapons and we agreed that we all
should have more information about nuclear weapons. Everybody
agreed. France also agreed. But the United States insisted that there
should be one man responsible for security about these matters of a
nuclear character and they wanted to make the Secretary General of
NATO. who is a man of all trades, responsible for security about
these matters, also in France. They asked nie whether I was willing to
accept that function of security. I said yes; I am willing to do it but
there should be an agreement signed by all the countries that they
accept that the Secretary General of NATO is responsible for security
in these matters of a nuclear character. He should be able, because he
has no staff himself, to call on the CIA. or the Defense Territorial in
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France, or MI-5 or MI-6 in London or whatever other organizations
there are and these organizations should have to respond to his re-
quests; only then has he an organization behind him to handle this
security. That was accepted by all but not by France. That has been
the main reason why there has been such a long delay before any
information on nuclear weapons could be passed on to NATO mem-
bers and that has been a disturbing factor.
These are the tricky things that sometimes happened in my period.
With respect to negotiations like those over Berlin, I must say
that in NATO we received mostly, not always, information from the
United States Government. There have been cases where there was
not sufficient information available so that we did not know what was
going on. l.t. is a great help to other countries to understand what is
going on.
Senator JACKSON. I have other questions but I will defer for now.
Senator Mathias.
Senator MATHIAS. Would State Department support of Radio Free
Europe be what you speak of as "an appropriate mechanism?"
Dr. STIKKEr,. While I prefer to leave to the authorities here the
judgment as to the appropriate mechanism to furnish support for
Radio Free Europe, my main concern is that the private character
and independence of RFE continue for the future.
Senator %JATHIAS. Dr. Stikker, I am extremely interested :in your
comments about the technical nature of the OPEC negotiations and
the fact that really only people who have spent a lifetime in a cer-
tain area become competent to deal in international negotiations in
that given area.
Now, we sometimes hear pessimists say that we live in all era of
the twilight of parliaments. Senator Stennis here is pulling a mighty
,gar against that tide but I think we who live in the legislative world
have to consider the fact that a lot of observers call this the twi-
l ight of parliaments.
Are we getti:.ig into an era of such technical negotiations between
nations, or between private: interests in different nations, or with
multinational corporations, that in fact national legislatures really
have to bend t,,) the will or bend to the decisions that are made in
these forums?
1)r. STIKKER.. That is partly a problem of a system of negotiations.
It is partly also a problem of what we call in Europe supranationalism.
Senator MATIHAS. To the extent it is a system of negotiations, per-
haps we can help to correct it.
I)r. STIKKER. The system of negotiation is part of the problem.
On the supranational aspect, I always have hoped that Europe
would become a supranational al federation of confederations. I have
worked for it as much as h could but I am still doubtful. whether
we will succeed. It is still a long way off. I think you will agree there
is little chance of union now.
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On the other hand, on the system of negotiation, the forum of
negotiation, there is a change going on because of these large multi-
national corporations. When you consider, for instance, at the present
moment that the total investments made by the multinational corpora-
tions in the developing world are certainly of the magnitude of some
$50 billion leading to a production abroad of certainly double that
amount, $100 billion per annum, that is a thing that has to be looked
at carefully just as well from the point of view of the host country
as from the money-providing country.
That is again the reason that I always press for giving more infor-
mation and if you get the information under sound methodology defi-
nitions you will be in a far better position to understand.
I have been a legislator, myself; I have been in the Senate in my
own country; and I know you have sometimes to guess what is going
on; this is the wrong system. You must have the facts and you must
be absolutely certain that there is nothing wrong with these facts.
These facts, to my mind, should be far better provided than is hap-
pening at the present moment. It is something that should be insisted
on because if this information will improve you can get out of the
twilight and you can see clear again what is going on.
It is also the main reason why I gave you information about these
meetings which are now under the aegis of the United Nations taking
place between foreign private enterprise and multinational corpora-
tions with governments of developing countries. It is a new develop-
ment and you should be careful it does not get out of hand and that
you watch what is going on.
For that reason, I would like to give to your committee here some
background documentation which perhaps should be studied more
carefully so that you see the whole picture, because at the present
moment it is unclear to most people, while there is something new
going on.
Senator JACKSON. Senator Chiles.
WHAT IS TIIE PROSPECT OF STABILITY FROM OPEC NEGOTIATIONS?
Senator CHILES. In this round of OPEC negotiations that we just
went through, isn't there this time just a tremendous rise of national-
ism in these countries? Can we expect this to level off a little bit? Are
they really just feeling their oats and is this a way of showing the
power of their nationalism?
Dr. STIKKER. There is no doubt, Senator Chiles, that part of it is
nationalism. There is also greediness, and when they see the chance
to get the money, all right, they will take it.
I have always been worried whether or not at a certain moment
such an OPEC could come into existence. I remember the time of
Mossadegh-who at that time had to go to the International Court
of Justice-and I happened to be Minister of Foreign Affairs in my
country at the time when Mossadegh in his nightshirt came over to
visit me. He was a most extraordinary fellow.
I asked him, "Why do you come here to the Netherlands? Why
do you go to the International Court?"
He spoke in French but I will try to translate it in English.
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INTERNATIONAL NEGOTIATION
` Mr. Stikker'. he spoke very softly in his nightshirt in my office-
"I come here to pay my respect to the grand institution of the Inter-
national Court of Justice. Naturally when I go to plead my case I
say they are incompetent."
At, that time I had a talk with some of the oil companies as Foreign
Secretary and I asked them the question, "Do you really believe that
you will always keel) the system of reference prices, or posted prices,
as it is called, and that You are also certain that these countries will
deliver the oil -which is needed ?"
Al; that time the two companies, two of the largest companies, with
whom I was discussing this problem, replied to me and said. "Well,
you should not forget; always oil defends itself."
I I kink it was a year later that the chairman of one of the largest
American colnt)anies made the statement that the producing coun-
tries-OPEC did not exist at that time-would never kill the geese
which were laying them the golden eggs..
A year later the Shah of Persia published his book iiI s.4oui. for My
('our,trand Ciere lie used the expression, "Well, we. are ma: going
to kill any goose that is laying golden eggs, but we are going to regu-
late every goose's behavior in the general interest."
Now, he added those words "in the general interest", and that is the
questionable problem because what is happening now is only in the
direct OPEC interest. to get money out of the rest of the world, not
caring what is happening to other developing countries. That is some-
tiung which is frightening, because now some 12 countries can really
regulate foreign: policies.
Senator CHHrra~,s. 1 guess the question I am asking is this : Is this per-
haps a temporary situation because we have just now had a shift of
power. Where before the major oil companies in effect dictated what
the price would be-the power was tliere--now these countries have
suddenly realized that they don't have to take that, that they in effect
do }cold the edge and that, they can shift. Can we look forward perhaps
to there being a balance of interest, a, period of stability?
Dr. STIKKrR. What has happened in Teheran is in a way a settle-
ment for the conning five years with the Persian Gulf producing counn-
tries because tl rev accepted the lzrineiple of no basic changes in five
years. That gives some sort of stability for a certain period. But it
has not been accepted by Algeria; it has not been accepted by Libya;
and Algeria and Libya together provide about t5 percent of the oil
for Europe.
Now, if these countries are going to increase prices again or nation-
alize, then other fighting may go on.
So, I do not believe that we are certain that this problem of uncer-
tainty has cone to an end. It will continue. This also depends on
whether other sources of energy can be found.
When nuclear energy or shale oil and tar sand can be used, and
there is a great quantity available, especially in the U.S. and in
Canada, these conditions will change. Therefore I think it is far better
to concentrate in that direction than that we hopefully believe that
t here, will be a period of stability coming on. I do not yet believe in it.
1 am sorry, but I am pessimistic on this issue of stability. We can
only believe in it if, for instance, the United Nations, and especially
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11 IlUIN 1I NEGOTIATION 79
the other developing countries, will rise and say together, '`Now, this
is nonsense what is happening. Why should $18 billion go to these few
countries? lVe need the money; not they. They are rich."
RELATION OF AFFECTED GOVERNMENTS TO OPEC-TYPE NEGOTIATIONS
Senator CIIILES. Should we then start the negotiations or continue
the negotiations, not through oil companies-allowing the oil com-
pailies to provide all our technical knowledge and information which
you said is needed-but directly involve our government in these ne-
gotiations because then we have the pressure from our government for
the other things that the countries involved need from us?
Dr. STIKKER. I am doubtful whether that would help because if you
bring one country in you have to bring all of then:i in. That means you
have to go to the United Nations. What can happen in the United Na-
tions is completely unpredictable. You never know how it will turn
out.
I fully agree that the governments should be closely informed about
what is going on and should have the right to interfere and decide
whether the companies will be allowed to continue their negotiations.
There is always the antitrust law that can be used to make it impos-
sible for the present negotiations to go on. It has been allowed this
time. But to place this complicated and crucial matter in the hands of
the United Nations would to my mind create enormous delays.
I have been in a great many of such negotiations and when you look
at the history of negotiating in the Economic and Social Council and
other U.N. organizations, the results are not encouraging, certainly
not when decisions have to be taken within a few hours.
Senator JACIisoN. Right on this point, if you will yield. What con-
cerns Senator Chiles in his last question concerns me too. A large inter-
national oil company while domiciled for corporate, purposes. we will
say, in the United States or in Great Britain, or the Netherlands-to
take three major international oil companies -has a constituency that
transcends the domicile. The constituency, we will say, is Western
Europe. Let us take that as one example.
Isn't there an obligation on the part of a country like the United
States, like Britain, or like the Netherlands, to consult and confer,
shall Ave say, with the customers of that international oil corporation
that will be affected by the agreement?
I would agree that in a sense the whole world is the consumer, but
it seems to Ine there is a special obligation, where the bulk of the oil
of that company will move, we will say, to Western Europe, to consult,
confer, discuss and so on, maybe with OECD.
Dr. STIKKKFP,. There is no doubt that at the present moment the whole
problem of energy is under discussion in OECD. The same happens in
the European Common Market organization.
That is being done and naturally decisions will as far as possible
be taken, and will be passed on to the oil companies. Such decisions
will certainly have quite an influence on the behavior of the big multi-
national corporations; there is no doubt about it. Everybody fully
understands that.
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INTERNATIONAL NEGOTI TIO
As far as I am aware of these facts, here in your country your gov-
eininent has been consulted very closely. I am also certain this hap-
pened in the United Kingdom and in my own country because we
happen to have quite a share. in the Royal Dutch Shell group. There
it already close contact between governments and companies.
But consumer prices are bound to go up when you look at the figures.
At the present moment, as mentioned already, out of the selling price
of a barrel of oil, only 36 cents goes to the companies and the increase
in price which is now taking place is at the present moment more than
0 cents, which goes to the producing countries.
Now, what can the corporations do? What can you do? What can
#!'overnment do?
The time of the gunboats is past. You can't use a gunboat any longer.
Senator CIiIL]Ss. I understand that.
There were two points I was raising. One is, whether this situation
was going to level down and be on the basis of what is a reasonable
return. That is one thing that companies certainly should negotiate.
I f it. isn't, and you indicated you, thought perhaps it is still going to
he. whatever these countries think they possibly can get, regardless of
return, then it seems that we in this country or Britain or the Nether-
lands are the major losers from a -tremendous increase in price; it. is
going to cost the government a tremendous increase because of our
energy sources and how much we use. So, rather than just depend on
(xulf and other companies who still serve somewhat in a middleman
t?apacity in that they are going to buy and sell and pass on rises to
c?oiisumers and certainly try to build their profit in between, how do
se get, the leverage of government into these negotiations? There are
the things that Libya and these countries need from us, so if they are
rising all of this power because they have the oil, how do we get our
leverage in for concessions, given the things that they need from us,
to see that they do took with reason on this?
Dr. S'i'iiu ui. You are involved, and that is the main reason why I
raised the problem here.
I don't, talk here on behalf of oil companies. That is far away from
my mind at the present moment. I. ain only talking on these subjects
because of national security, of the effect, on prices for the consumers--
all prices are bound to go up--and because of the situation of develop-
ing. countries to which the money really should go instead of to these
rich oil ('ountries.
lint this is a problem, to my mind, which has to be studied here in
g 17e United States and in the other countries and I am sure that it will
be discussed in OECD meetings.
What you need is basic figures and facts so that you know exactly
what is r'oing on and what are the benefits and costs of the interna-
lional corporations. On that issue., a study is going on at the present
foment. also in the OECD, and I am sure you will receive more infor-
m rtion in the near future.
Senator JACicsoN. We would like to have it.
I might say we held a hearing yesterday on a resolution, S. Res.. 45,
sponsored by Senator Randolph and myself to authorize an in-depth
study of the energy crisis in this country. This study of our national
fuels and energy policy will inevitably involve the international prob
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lem. We hope to get that resolution acted upon shortly. This study
will be comprehensive-involving all aspects of the problem, includ-
ing those affecting national security. Your testimony here will be very
helpful.
Senator Roth.
Senator ROTH. Dr. Stikker, you were kind enough when you started
out to say that we could question you perhaps on other areas of your
experience.
I wonder if you would care to comment on the effectiveness of NATO
today, particularly in light of the future possibility that there is in
this country-at least in some people's judgment-of a new isolation-
alism developing, at least a desire for us to out back our contribution.
Also what impact do you think the discussions that West Germany is
having with Eastern Europe might have?
Dr. STINKER. Your first question relates to the contributions which
have to be made by the different members of NATO?
Senator RemIi. Yes.
Dr. STINKER. In my time as Secretary General of NATO, I always
tried to get the European countries to increase their contribution. I
thought it was essential that they should do so. I had to do it earlier
when I was still Minister of Foreign Affairs. We had a Cabinet crisis
in Holland at a certain moment. The Queen asked me to form a new
Cabinet. I knew I never was going to make it to become Prime Min-
ister. So, I thought that I was given an opportunity to write the most
unpopular program that could be written, because when you are cer-
tain that you are not going to make it, then you can be as unpopular
as you want.
Senator JACKSON. That is good political strategy.
Dr. STINKER. I wrote a program which at that time finally was
adopted by Parliament after they turned me down but the new Prime
Minister who came in was able to push it through.
At that time, we were in great difficulties both in the economic field
and about our insufficient contributions for defense. In my original
program we increased the defense budget by 50 percent and we de-
creased investment and wages-wages, mind you. And we did it. Now,
that is a stunt which sometimes may happen but you can't find such a
situation very often.
Some time ago, we had a meeting of ATA [Atlantic Treaty Asso-
ciation]. One of the countries said, "We are a democracy and in a
democracy you can't raise any larger expenditure for defense". This
is a completely wrong concept.
For my part I have always insisted that Europe should increase its
contribution. But that became rather difficult because in my time the
demands made by McNamara were too high and they could not be ac-
cepted. He asked a 25 percent increase by all European countries. For
some countries, that was an utter impossibility. You can't apply such
a general rule. You have to look at all the internal difficulties and you
have to study carefully what is going on in each country.
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82 INTERNATIONAL NEGOTIATION
Still I believe the European countries should do more. The burden-
sharing is not sufficient, I fully agree, and I have made those state-
ments on many occasions in NATO and when I was speaking in other
countries.
On the other hand, I am very worried about this tendency to isola-
tionism. You mentioned the word; I didn't. I never mention it. I
always try to avoid this word because it is extremely dangerous. When
this word is being used in your country, how much are our countries
going to believe in and accept the credibility of cooperation with the
United States? So I try to avoid that word as much as I can.
But I believe we should have a better system of burden-sharing.
There has been a slight increase, I think, in the last period but I have
not followed closely any longer what is happening in NATO. lain out
of it now.
Senator BOTH. Could I. interrupt for one minute and ask you what
you think will happen if we should withdraw those forces, for what-
ever reason, or cut, back on our contribution, what do you think would
Happen to NATO?
'T'here are those who say perhaps the European members would then
be forced to contribute more. Others say if America didn't think there
was a threat, then why should the. Europeans be concerned.
What is your feeling?
Dr. S,TIIcKF,R. There may be even some who would say it is betrer to
turn neutral now. If the U.S. is turning isolationist, others wil L say,
"What is our position now ; we cant defend ourselves."
The question you asked, was whatwould be the reaction of European
countries if the U.S. would turn isolationist. Would it beithaopine
would do more or would it be that some would even
direction'?
I fear that some of the countries in Europe might say, "All right,
now we still have it chance to perhaps make a deal with the other side
and we can stay out of any involvement; if the United States is going
to be isolationist, why should we not become neutral ?"
That is something that is frightening me more than anything else
because we have to stand together, we have to find a way for a better
sharing of the burden, I fully agree, and I always make propaganda,
for it, but I aln terribly worried about, any reduction in force, unless
it is done on the basis of full agreement and there is also some reci-
procity on the other s de of the curtain, as far as the clurtairn is st ill a
word we should use at the present, moment.
TAS'r-WJiS`L NEGOTIATIONS
Dr. STTKKER. Then you asked Tile another (luestioll about lierlinl,
b(ea.us.~ I think that is the problem that is mainly in your mind when
you spoke abaft the discussions Western Germany is now having.
I have known Brandt for many years. I have not known him as well
1s I knew %Adenauer. Sometimes in the later years, I was more w,,
pressed by the, attitude of Brandt than of Adenauer. Adenauer was
very lunch in his later years under the influence of De Gaulle. Ile
followed more or less what De Gaulle wanted him to do.
Brandt was in a difficult position when he came in office--I and talk-
ing freely-iris image in the country was not yet such that lie could
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INTF.ItNATIONAL NEGO IA I
feel certain that he had sufficient people behind him, and because of
his weak position in Parliament and the Liberals which were split,
Willy Brandt at that time may have wanted to build up his image as
soon as possible that he was a man who was doing something new and
who had new ideas. Now sometimes I have the feeling that he went too
far and too fast. That has created certain problems also for the United
States.
I am not. fully aware of the positions which have been taken in this
field by France and the United Kingdom, whether they supported him
More in his actions than the United States because I have no direct
information any longer, but I see a lot of people and I try to listen
carefully. But I am not certain that the agreements with Poland, with
Russia, which have been signed now and which have to be ratified,
are really going to be ratified, because also in his party now there is
a little bit, of fear that he has gone a little bit too far. So, they may
well try to get more out of Russia and out of the DDR on Berlin
than the DDR is willing to give. I know that there are people in this
country who sometimes say, "Well, should it now be Willy Brandt
who is to negotiate the peace of war we have won?"
So, he has to go a little bit more carefully than hc; has been goingfor
some time. A. couple of months ago, we had a meetings of Radio Free Europe
which was mainly devoted to this problem. We had representatives
from 1I countries, also of one of the neutrals. The general attitude
was not unfavorable but from many sides warnings were given that
Russia and the DDR should snake also on their side positive conces-
sions on access to and relations with West Berlin and on balanced
wi ihdrawal of forces. We had the Labor. Party- and the CDF in the
meeting. That again is a forum of negotiation where people meet each
other and try to understand each other, which can be helpful.
Senator JACKSON. Senator Stennis.
WHAT IS TIIE PROSPECT OF DETENTEWIT[I RUSSIA?
Senator STENNIS. Thank you, Air. Chairman.
I have been enthralled, very much impressed, with your statements,
and I want to thank the Chairman for inviting me here.
Just; being frank about it, Mr. Chairman, I need to hear more wit-
nesses of this caliber and of this approach and viewpoint. I want to
read this record. I missed the opening part of your statement.
I want to mention one thing to the group that I said to you before
the meeting started.
I was in the Netherlands in 1949; it was my first trip to Western
Europe; I had just become a member of the Senate. I had been a State
officer altogether before then. One of your officials said to a small
group of us after the evening meal, "Frankly, I don't believe you
Americans know what you are doing when you are insisting on all of
us withdrawing from the Pacific under the slogan of anti-colonial-
ism". He said, "You are going to find that, when we leave, a vacuum
will be created and the Communists will move in and there won't be
anyone left to try to keep them out except you", meaning the United
States.
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84 INTERNATIONAL NEGOTIATION
That was a new thought to me. It struck hard and stayed in my
mind and I have seen it happen. The intervening years unfolded
just that way.
I am impressed with what you say here. Anyone who is fan-iiliar
with the power of Soviet Russia, with their nuclear weapons and
ours also, should feel that at least somewhere, some time, we must
find some kind of common ground among the nations that have these
weapons.
Since I have been here, it has impressed me that every President
starts to go into the thing but they back off and say what you
have said, no detente, no light that You could see at the end o:F the
tunnel.
Now, you, with your vast background of remarkable achievements
and experience, say the some thing, no detente around the corner,
as you expressed it..
Would you enlarge on that point just a little more?
I am not one that want us to rush in and imprudently agree,
just for the sake of agreement. I have never been that.
You have had all this contact with the Russians during your years
with NATO, and before then and after that.
Dr. S IKKFr,;. May I try to respond in some way?
First, you made a remark about Indonesia. Indeed, I think the
United States went a little bit too far at that time in insisting not
that the transfer should take place but how it should take place
and who will be. the man to get the power in Indonesia. That was a
great mistake.
I also believe that it is wrong for any country to try to decide What
should be the future of a country after the power that had been in
control withdraws. That is a method that should be decided by the
country, itself.
I think also, for a problem like Vietnam, that when I read some-
times now in the press, in The New York Times, that the time has
come now that we should make up our mind what should be the
future government of Vietnam, you would make a mistake if you
decide such a thing, you will be back in trouble just as you are in
trouble there now, because from the moment you make a decision
who should be in control, then you get some sort of responsibility
o protect that man who comes into power.
I believed in the need for the transfer of sovereignty by the
Netherlands because it was a crazy position that a country with 1.0
million people could control, at the other end of the world, a nation
of 120 million people. It does not work any longer and it should
come. to an end. I was most unpopular when I did it. In any case,
T felt it had to he done but that the transfer should *be. done to
another group, and your gover:ument insisted too much on Sukarno.
I do not believe that in Indonesia the generals who finally revolted
against Sukarno, without any interference from the Netherlands
because we were already out a long time, would have been ready to do
so if your forces had not been in Vietnam.
Senator JAcKSoN. Are you saying that Sukarno would not have
been overthrown and the generals would not have taken the action
they did if our forces--
Dr. STIRKER.-had been already withdrawn from Vietnam.
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That is what I wrote at that time to President Johnson when he
made up his mind that he would not run again and that he would get
out. Now, I don't want to say anything more about Vietnam. I could
say a lot because I have just been in Vietnam and I have been in
Cambodia and Laos but that is not a problem for this meeting.
You asked me further about a detente.
I still believe that when you negotiate with the Russians they try
to make a certain point. They try to achieve a certain thing. When
they have made that point, they forget about all of it and they con-
tinue and want to make other points. That means that the feeling that
we have to cooperate does not basically exist yet on their side. Whether
it will ever come about, I have my doubts.
To people who talk about detente, I also quote a Japanese expres-
sion and that expression is "Same bed but different dreams", because
when you go to bed with somebody who has completely different
dreams, you may never know what may happen.
That is the same problem with Russia in relation to the rest of
the world. They have completely different conceptions. They have
not given up their Communist desire to control the world and as long
as that has not been changed, and there is no proof it has been
changed, I do not believe that detente is around the corner.
Is that clear?
Senator STENNIS. Yes, sir; that makes it very clear.
Just let me say this about isolationism, and I don't speak
for anyone except myself. I don't think that there is any rush into
isolationism in America now. That is my opinion. I think there is a
solid realization that we cannot go that way.
But there is also a realization that we should have learned a few
things since the end of World War II and we should have learned
some of the practical realities of overt intervention and so forth, like
going into Vietnam alone as an illustration of that, as I see it ; and
that we are going to be more restrained and more cautious and more
practical in the application of our internationalist policy, but cer-
tainly not rushing back to isolationism. That is my view.
I suppose I was a kind of middle-of-the-roader back 25 years ago
and perhaps I am now. But I just give that opinion for what it may
be worth, as the way I see it.
I am very strongly in favor of the United Nations and I have made
speeches in my State for it, but I think we overload it and expect too
mach of it; too fast, too much.
Thank you, Mr. Chairman, again. I want to read everything that
has been said.
Senator JACKSON. Senator Stevens.
Senator STEVENS. What are your views on our policies in South
Vietnam now?
Senator JACKSON. You have just cone back, we understand; you
have been out there recently?
Dr. STIKKER. Yes. I was there last year, the beginning of last year.
I have been several months in Southeast Asia. I have been invited to
write a report by the Asian Development Bank about the economic
future of eight countries in Southeast Asia and amongst them were
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86 INTERNATIONAL NEGOTIATION
South Vietnam, Laos, and Cambodia. So, I visited the Philippines,
Thailand, Laos, and Cambodia. I have been in Malaysia; I have been
in South Vietnam ; I have been in Singapore, and I have been in
Indonesia.
If you are interested in receiving a copy of the report which is not
published, I will be quite happy to give it to you.
Senator JACKSON. We will file it with the committee if you can
leave it.
Dr. S,rrxxim. It might be of some interest. It is again about the
role of private investment.
Senator TACKSON. Could you summarize generally whether you are
optimistic or not about some kind of resolution of the problem in
Vietnam ?
Dr. STIKKEI'.. I only wanted to give an introduction so that the Sen-
ator knows what I have been doing there.
One of the first, things I found in Vietnam was that the year before
I came the number of refugees had gone down from a million and
a half to 300,000. Now, these things do not happen unless there is a
cc.rtain reason. So. I started to investigate what can be. the reason.
Where have these people gone? A million five hundred thousand out
of 1 T nnit lion people is quite a lot.
As far as I was able to find on, answer to this question, it was due
to the fact, that South Vietnam had created what they called a popular
police force where the people have their weapons at home, also in the
small villages, and. are therefore able to defend themselves when they
are attacked by the Viet Cong, There are 500,004 people in that force.
'i'bis has given more security in those places:
In order to try to check Lip whether this information was correct,
I got in touch with several of the business people. I talked with Esso;
I talked with Shell : I talked with the people connected with pharma-
ceuticals, and I talked with people connected with dairy products
because those are the products which give an indication whether you
have your distribution system again under control in a large part of
the country. They had built up their distribution system again to about
30 percent of the country which. was far more than they had been able
to do some years ago.
I talked a lot with the younger generation because. I always look at
the younger people. You must have it from the younger people, and
when T talked to these people and I asked them what do you believe
about Vietnamizati on, they said., "We should not only talk about Viet-
rramization of the 1var; we should talk about Vietnamization of Our
policy and the economy because that is what the younger people are
interested in. The war we believe we can bring to an end. We are
rather confident."
When I asked General Abrams about the quality of the people who
are fighting in that area, he replied that they were good fighters. I
asked him, "What about the technical capacity of the people? Do they
fly their own planes? Are they able to keel) up the maintenance of the
jets they are flying ?"
his answer was, "Yes."
T talked a lot with President Thieu and I asked him mainly two
questions. I asked him. "Why are you attacking at the present moment
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I TERNATIONAL NEGOTIATION 87
the United States Government?"-something had been going on-
"Why are you doing it; this does not make sense to me."
Don't forget that a man-who wants to get out of a war-and I
dare to sav this because I have been in that similar position that your
President has now, as I have been deeply involved in the Indonesia
war and have been co-responsible for the killing of numerous Indo-
nesians-is in an extremely difficult situation and has nothing but
enemies, whether they are doves or hawks or whether they are inside
your country or outside-you have nothing but enemies.
I said to President Thieu, "Why on earth are you attacking and
making life more difficult for the President of the United States?"
. Then I asked him, because at that time the announcement had al-
ready been made about the continuing withdrawal of forces : "Do you
believe that you are able to cope with the situation when these forces
are being withdrawn under that time table which has now been indi-
cated by the U.S.?"
President Thieu felt he was.
Now, I have no proof of these facts but this information which,
to my mind, is good information, has never come out in your press.
There is other progress : the Land to the Tiller Act has been ap-
proved in the country and there is to my mind no peaceful solution
for a country like South Vietnam or for Indonesia unless von have
the fanners with you.
It is easy to control the big cities; that is not a problem; but you
must be able to have the farmers of their own free will with von
so that the village, the open areas, are behind you. Since this Lau
to the Tiller Act has been adopted, there have been statements by
the Viet Cong that every man who accepts land on the basis on which
it is now accepted and adopted and is being applied by the Viet-
namese Government, that any man who accepts that land will be
killed.
That means to say the Viet Cong is frightened at the present
moment that this new agricultural act may have an impact on the
attitude of the people on whom the future peace in that area depends.
It is the farmer, not in the city.
I saw some development in industrial areas. They have created
some industrial sites already and so I was fairly well impressed.
What I cannot understand is why these things which are good
are never out in the press.
Senator STEVENS. I was over at NATO at the conference last fall.
I was surprised how many members there from the other nations did
not know about the people's self defense force and the fact that we
have armed them with automatic rifles. As,a matter of fact, it shocked
some of the European delegates to the NATO Parliamentary Confer-
ence because they did not feel that we should turn automatic weapons
over without any restraint. I think it is probably the most stabilizing
influence in South Vietnam.
Dr. STIKICER. And the most courageous..
EUROPE'S INDIFFLRENCE, TO SOVIET PENETRATION OF MIDDLE EAST
Senator STEVENS. "Following the NATO conference this fall, we
went to Italy and we were briefed on the build-up of the Soviet mili-
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88 INTERNATIONAL NEGOTIATION
Lary forces in the Mediterranean and their presence in Egypt and
their investments in the other Arab countries.
Could you comment on what seems to me to be the astonishing
European indifference to the Soviet penetration of the Middle East
that has occurred in recent years?
1)r. STIRRER. Naturally the countries like, Greece, Turkey, and Italy
are greatly disturbed about it. I live in Italy, myself, and I know that
people are really disturbed about it. But for the others it is far away
and they just don't see it.
Senator STEVENS. Beyond that there was no real concern shown by
most Europeans in the NATO conference this fall. As a matter of -fact,
only the American delegates were interested enough to go down to
Rome to be briefed on it.
Dr. STIRRER. There was nobody else?
Senator STEvENs. Nobody else.
Dr. STIKKER. I think that is a bad attitude. That is all I can say
abort it. It is wrong.
SIGNIFICANCE OF THE SUEZ CANAL
Senator STEVENS. What leads to this indifference in the Netherlands
and France and Great Britain to the tremendous presence of Soviet
Russia?
As a matter of fact, Senator Stennis, I was quite impressed with the
briefing we got in Rome, and it was rather shocking.
Dr. STIRRER. It is shocking.
If the Suez Canal is going to be opened they can go into the Gulf,
they can close off immediately all the oil supplies and that means that
Europe can't stand on its feet ; it is finished. In three months' time,
the reserves in oil are exhausted.
Senator JACKSON. How do you feel about opening the Canal? I)o
you feel that the Canal should be reopened without a genuine settle-
ment, not just of the Israeli border problem, but also of the problem
of the Russian presence in I1'gypt
Dr. STIICxER. I am worried about it. I know there are people who
say, "For heaven's sake, let us open the Canal", but I am worried about
it. I wouldn't wan, to do it.
Senator JACKSON. U.S. oil imports cannot move through there. The
big tanker, as I understand it, would not be able to utilize the Canal
for seven years. It would take that long to widen the Canal and deep-
en it for 250,000-ton tankers.
I)r. STII:TER. They can't do it. It is an enormous difference. If you
have the small tankers, the prices have gone up from $125,000 for a
tanker going through the Canal and the price for such a tanker is now
$950,000 around the Cape. Just imagine the consequences. That is the
price increase.
LEVERAGE IN OPEC-TYPE. NEGOTIATIONS?
Senator STEVENS. Going back to the question of negotiations. have
we sort of left ourselves completely vulnerable by not inventorying the
resources that these OPEC countries need and are buying from us?
Tn effect they are taking what amounts to a collective strong-arming
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INTERNATIONAL NEGOTIATION
position on the oil resource, and not returning in kind as far as the
resources they are getting from us? I am left with the impression that
they are buying considerably from the countries that in effect are sub-
ject to this recent price increase; yet, there is no reciprocity in price
increases of the products they are buying.
Dr. STIKKER. Are you talking about the United States attitude or
the rest of the Western world?
Senator STEVENS. The total Western world, I would say.
Dr. STIKKER. In the United States there has always been to my
mind= wrongly, the feeling that it will always have sufficient oil, will
remain independent and will not be affected in its national security.
As far as Europe is concerned I have since Mossadegh's period
always been concerned that some thing could happen as has happened
now.
There have always been changes in prices, there have always been
periods that we had a seller's or periods of a buyer's market. Now it
has become suddenly clear, because of the enormous increase in the
demand for oil, that for a long time we have to live in a seller's
market.
So, the OPEC countries used this opportunity; and we should have
perhaps earlier given incentives so that those reserves in tar sand and
in shale and what-not could be used. I believe they can be used, there
is a possibility, technically speaking, to use them and that would com-
pletely change the attitude at least in your country which is important
for the rest of the world, also.
Senator STEVENS. As a result of these tremendous profits they are
getting through their increases they are going to be increasing their
demand for products from the Western world. Again getting back
to the concept of negotiation, is there any way we can assure through
the treatment that we give them in their demands, in meeting their
demands for automobiles and steel and some other things that they
are going to buy with these profits, that we will not go through this
again, that we will not have an unreasonable price increase-
ncrease based
solely on nationalism?
Dr. SUKKER. This price increase which has now been adopted by
the corporations and the five Gulf governments includes already com-
pensation for further inflation. On that basis, because they accept
now they have to buy hardware for further development, they can
pay it out of the price increase which automatically will be adjusted
when further inflation takes place.
If you compare that out of the total of 100 percent of the selling
price at present 11 percent only goes in taxes to the producing com-
pany and 47 in taxes to the consumer countries, so these people say,
"You take out of the oil which comes from our country 47 percent,
you won't give us more than 11."
So there is maybe some reason in their attitude.
Senator STEVENS. Thank you, Mr. Chairman, I have enjoyed it very
much.
Senator JACKSON. Senator Roth.
Senator ROTH. That is all I have, Mr. Chairman. Thank you, Mr.
Chairman.
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90 INTERNATIONAL NEGOTIATION
AMERICANS AS NEGOTIATORS
Senator JAOKSCN. Just before we adjourn, Dr. Stikker, do you have
a comment for us from your experience in negotiation over the years
with U.S. administrations?
I )r. STINKER. The one real concern I've had over many years is
rhat on basic questions American representatives at the beginning are
evasive because zi n administration's policy process involves so many
agencies and so many people, and so many ramifications; and once
the administration has made up its mind the evasiveness at the start
changes into an inflexible attitude.
Senator JACKSON. Dr. Stikker, on behalf of the committee, we want
to express to you our deep appreciation for your testimony, your views,
your counsel and wisdom. You have had a lot of experience and you
have demonstrated over the years that you have been a wise counselor.
We are very happy that while you were in the United States and
New York on this trip you could come to Washington to participate
in this hearing. We are most grateful.
Dr. STIKKI:R. Thank you very much. It was a pleasure.
(Whereupon, at 12:30 p.m., the subcommittee recessed, to reconvene
O
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