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We welcome without reserve these signs and sign-
posts of progress.

But we must recognize what this means for us
and for the world in which we live and with which
we trade. In the first half of this century Europe
had to adjust to the growth of a great unified
economic, political, and military power on this
continent. To a degree we are now being required
to do the same with respect to Western Europe.
Instead of seven or more very separate and dis-
united nations, each of which we heavily over-
shadow in size and strength, we are already work-
ing with a community, well on the way to a imity,
which is closely equal to and in some ways exceeds
our own in size and potential strength.

For example, the European Economic Com-
munity with the expected inclusion of the U.K.
will have a population exceeding our own by about
40 million, with a foreign trade considerably larger
than our own. In 1960 this area produced more
.steel and coal than the United States and not far
from the same number of automobiles Its over-
all rate of economic growth in terms of gross na-
tional production was in 1960 about double that of
the United States.

Opportunities in Competitive Trading System

This is not a threat to the United States but
rather a challenge and opportunity. It is an op-
portunity to show that the free economies of the
European Economic Community, the United
States, Canada, and Japan can in an open com-
petitive trading system maintain and increase the
enonnous lead which they now have over the
closed system of the Communists. It is an op-
portunity to accept and throw back the challenge
of Premier Khrushchev when he said. "We de-
clare war upon you ... in the peaceful field of
trade. We declare war; we will win over the
U.S."

However, it is obvious that to realize these new
opportunities the old ways of doing things and
the old sliibboledis will not l>e sufficient. It is
obvious that large adjustments must be made in
our thinking and in our economy. We cannot
deny the logic in nor the strength and vitality of
the economic system for which we stand. I think
it important to remind ourselves that, while tlie
Communists control one-third of the land area
and population of the glol>e, the free world
dramatically overshadows the Communists in

Department of State Bulletin



present and potential strength. For example, the
two-thirds of the world's population making up
the free world produces about 70 percent of the
world's steel, 8i percent of its petroleum, 80 per-
cent of its aliunuium, and 80 percent of its electric
power.

The aim is, of course, to utilize these great
potentials to further accelerate the expansion and
growth of the living standards of our own people
as well as the other free-world peoples. The
opportunities truly excite the imagination. For-
tunately, the adjustments that will be required by
freer trade immediately point toward higher
standards for the American worker. It is an
important and f imdamental fact, in spite of some
defeatist talk of our inability to compete in world
markets, that our commercial exports exceed our
imports by about $3 billion a year and that our
most successful export industries are those in
which the wage rates are highest. In general
wage rates are lowest in those industries that
claim to suffer the most from import competition.
It is surely not beyond our wit to make the ad-
justments that will be required. The President
yesterday submitted to the Congress a comprehen-
sive program in this whole field.^ I commend it to
you for most earnest study, not as partisans of any
particular interest but as partisans of these United
States.

The Communist bloc is, of course, not idle in
this field of trade. Although their trade is still
only a veiy small fraction of that of the free- world
countries, their trade outside the bloc has ap-
proximately doubled in the last 5 years. They
have particularly concentrated on purchasing
from economically weak countries goods which
tliose countries have difficulty in selling elsewhere.
In turn they usually demand that the country
accept Soviet bloc goods in payment, at inflated
prices. As of 1960 the Sino-Soviet bloc had ap-
proximately 300 trade agreements with 32 nations.
Somewhat over 200 of these agreements were with
less developed coimtries. The challenge that
faces us in this regard, of course, is our ability to
provide reasonably stable markets at reasonably
stable prices for the raw materials and foodstuffs
which are the very lifeblood of trade for these less
developed countries. To us a 25-percent change
in the price of rubber or wool may mean a few



' For text of President Kennedy's message on trade,
see p. 231.



cents' difference in the price of a tire or a suit.
To a country whose exports may consist of 50
percent or more of rubber or wool, just as ex-
amples, it may mean the difference between bank-
ruptcy and sufficient income to carry forward the
economic development programs of these coun-
tries. We cannot afford to be indifferent to tliis
situation, and the present administration has in-
dicated its willingness to examine these problems
on a pragmatic case-by-case basis.

International Development Assistance

Let us now turn to tliis question of foi'eign aid,
both in its military and economic aspects. First,
although we commonly use the term "aid" in this
comitry, I personally wish that it could be avoided.
If there's one thing above all others that the
newer nations of the world are seeking for them-
selves it is a sense of self-respect. To the degree
that we are able to show ourselves understanding
of this natural desire and avoid implications of
superior attitudes, it will assist in building with
these countries the friendly, cooperative relation-
ship that we are seeking. Thus I feel we should
emphasize that, while the initials of the name of
the new agency in this field spell "aid," its title
is in fact Agency for International Development,
for it is international development that is our
goal. This development, of course, must come
primarily from within the countries themselves
and by their own efforts. However, our coopera-
tion with them in assisting in furnishing those
elements in their development which they cannot
furnish themselves is often the key to their success
or failure. This may take different forms, pri-
marily technical advice, capital, or equipment.

In this endeavor we are no longer alone, for the
Western European comitries and Japan are in-
creasingly contributing in this field by economic
assistance through grants, loans, and investments.
Work is this field is being closely coordinated
through a variety of devices, including the De-
velopment Assistance Committee, a subordinate
body of the OECD [Organization for Economic
Cooperation and Development], which meets in
Europe. In addition there are the consortia or-
ganized by the World Bank. For example, in
Jime 1961 under such a consortium five countries
other than the United States, along with the World
Bank, brought their total commitments to Paki-
stan's second 5-year plan to about $270 million;



February 72, 7962



249



and during this week the Pakistan consortium
has been meeting to consider still additional
commitments.

The Marshall plan dramatically illustrated
what could be accomplished in the developed area
of Europe. Indeed it is the very success of our-
selves and Europe in rebuilding its economy, as
well as its social and political system, that has
given rise to the Berlin crisis. Berlin was the focal
point for competition between the two systems.
The Communist system was finally forced to
admit its defeat in this competition by building
the wall.

The free-enterprise system of Japan has also
shown its ability to outproduce the Communist
system. In contrast to the drop in industrial pro-
duction in Communist Qiina the last 2 years, the
astonishing Japanese rate of growth has very con-
siderably exceeded even the most exaggerated
Communist claims for their territories. While
food production in Communist China has been
dropping heavily in per capita terms, it has been
rising in almost all of free Asia. Thus I think
that we can take heart that the efforts of the coun-
tries themselves and our assistance to them is gen-
erally being put to good use. As the economies
of these countries develop, not only will they be-
come more stable politically and less subject to
Commimist blandishments and influence, but, as
more prosperous trade partners, they will con-
tribute directly to our own economy. We are thus
making an investment in our own future. For
example, if, on a per capita basis, our exports to
the imderdeveloped free countries were raised to
only one-half of our present level with the de-
veloped countries, it would approximately triple
our present exports.

I suppose that it is still true that the most sin-
cere form of flattery is imitation. It was in 1955
that the Communist bloc began seriously to at-
tempt to imitate us in this field of foreign assist-
ance. Despite the formidable economic problems
still faced within the bloc, between 1055 and 1960
the bloc made approximately $4 billion in com-
mitments for economic assistance and probably at
least $1.5 billion for military assistance. They are
taking a gamble on extending their influence
through this means. The best way to assure that
this gamble fails is for us not to let any country
feel it can prosper only — or best — through ac-
cepting Communist assistance. We need not and
do not try to "outbid" the Communists, nor do we



permit any one to "blackmail" us into giving as-
sistance by threatening to turn to the Soviets.
However, if we are going to win in this economic
competition, we must continue to show our willing-
ness to help free countries to help themselves in
an atmosphere free of coercion. For this we need
not and should not necessarily expect gratitude
from the recipients. Wliat we can and do expect
is that they maintain their independence.

Free-World Unity Must Be Maintained

Military and economic requirements are impor-
tant aspects of our foreign policy, supplementing
our diplomatic activities. But the basic arena of
world action and conflict is political. Military,
economic, foreign infonnational, and diplomatic
moves and campaigns all contribute to our politi-
cal posture.

The Soviets also recognize the political founda-
tion of ideological and power conflict. They have
always integrated their overall strategy on this
basis. Displays or boasts of military prowess,
vaunting of scientific achievements such as the
first satellites and manned orbital flights, pro-
posals for disarmament, shoepounding at the U.N.,
and many other kinds of activities are calculated
moves in a political campaign designed to further
Soviet influence through the world. We certainly
do not want to imitate the methods of the Com-
munists, but we must understand their purposes
if we are effectively to deal with them.

The first political necessity of the cold war is
basic United States unity, the kind of national
unity which produces one clear American voice —
not a dissonant chorus. There may be differing
views on the relative priorities of particular prob-
lems or solutions. But the very real bipartisan —
really, above-partisan — unity on our fundamental
aims must be maintained. The Communists have
been singularly unsuccessful in attempting to di-
vide us; let us not, in our zeal to combat them,
provide unwitting service to their cause by divid-
ing ourselves.

After our unity comes the need for unity of the
alliances binding many nations of the free world
in common cause.

The NATO alliance has served as a bulwark
shielding the tremendous economic advances in
Western Europe which we have earlier noted. We
are at present faced with the Soviet challenge over
Berlin, but while this places pressure on us, the



250



Department of Sfofe Bulletin



very fact that the Soviets have been led to such
desperate straits reflects the pressures and strains
within the Communist camp. NATO has at-
tained a degree of unity and persevering effective-
ness greater than any peacetime coalition alliance
of modem times.

Southeast Asia has been rent by deep and re-
curring Communist pressures. SEATO, nonethe-
less, has provided a degree of stability that — even
if incomplete — would otherwise have been much
less. We are vigorously aiding our friends in
South Viet- Nam to repulse the Communist revolu-
tionary guerrilla warfare and local terror by which
they seek to sap tlie strength and subvert the power
of the Government. Laos has been torn, but we
are actively seeking to help the Lao establish a
truly neutral government which will reflect the
disparate elements of the country.

We are associated with the Central Treaty Or-
ganization, tying Turkey, easternmost member of
NATO, with Pakistan, westernmost partner in
SEATO, and embracing Iran. Bilateral treaties
bind us to Japan, the Republic of Korea, the Re-
public of China, the Philippines, Australia, and
New Zealand.

The Rio Pact brings us together with the coun-
tries of Latin America against any aggressor from
without. Canada and the United States have
very close ties to permit the fullest joint efforts in
the common defense.

There is another grouping to which we belong,
one less complete and more ambitious — the United
Nations. Perhaps the violence and virulence of
Communist objections to the strengthening of the
U.N. is one of the most telling tributes to its ad-
vance. The U.N. is a great challenge in its own
right; it is also a battleground, since the Com-
munists make it so. It is one where we can, and
must, continue to strive for a wider understanding
in the world of our goals — and a wider under-
standing of the goals of the Communist powers.
The overwhelming failure of the Communists at
the last session of the General Assembly to suc-
ceed in their long campaign to emasculate the po-
sition of the Secretary-General is witness to tlie
attitude of the overwhelming majority of the free
nations.

Negotiations are, of course, a political necessity.
In this world today it is probably no less necessary
to maintain lines of conmiunication with one's
enemies than with one's friends.



Disarmament negotiations are particularly im-
portant. Recognizing the great dangers of the
terrible new engines of war, we must do all we can
to chain them. Frankly, given the Soviet attitude
to date, there seems little hope that we shall make
significant progress in the near future toward dis-
armament. But we must keep trying, both to find
any suitable safeguarded steps which can be taken
and to make clear to all that it is not we who stand
in the way of progress in this field.

These are some of the political elements in our
policy. But they do not add up to a complete
picture. We must have, and we do have, a more
fundamental and far-reacliing positive goal which
goes beyond these important contributions toward
meeting the Communist threat. Our main and
positive political objective is the establishment of a
stable world of viable, free nations. In his state
of the Union speech, President Kennedy set this
forth clearly when he said :

Yet our basic goal remains the same: a peaceful world
community of free and independent states, free to choose
their own future and their own system so long as it does
not threaten the freedom of others.

Some may choose forms and ways that we would not
choose for ourselves, but it is not for us that they are
choosing. We can welcome diversity — the Communists
cannot. For we offer a world of choice — they offer the
world of coercion.

While the challenges we face are great, our re-
sources for meeting them are even greater. There
is much to do, but we as a people have always dem-
onstrated our ability to do what must be done. I
am confident that we will continue to do so.



Ambassador Bowles Visits Middle East,
Africa, South Asia, and Far East

White House press release dated January 25

The White House announced on January 25
that Cliester Bowles, the President's Special Rep-
resentative and Adviser on African, Asian, and
Latin American Affairs, will make a trip to the
Middle East, Africa, South Asia, and the Far
East at the President's request.

One major purpose of Ambassador Bowles'
trip will be to participate in the meetings of the
U.N. Economic Commission for Africa at Addis
Ababa, Ethiopia, and the U.N. Economic Com-
mission for Asia and the Far East at Tokyo, Ja-
pan. Ambassador Bowles will aJso chair a



February 12, 1962



251



regional conference of U.S. ambassadors and their
principal advisers in East and Southeast Asia, to
be held in early March at Baguio in the Philip-
pines.

In connection with his responsibilities as Presi-
dential adviser for these areas, Ambassador
Bowles will make a series of other stops en route
to these three meetings to discuss policies and op-



erations with the various U.S. ambassadors and
their staffs. In the course of the trip Mr. Bowles
will also meet with a number of heads of govern-
ment and otlier foreign officials to discuss problems
of mutual concern.

The Ambassador expects to depart Washington
February 8 and will return Marcli 19 at the con-
clusion of the ECAFE conference at Tokyo.



A Balance Sheet on U.S. Foreign Policy



hy Chester Bowles ^



A year ago this Saturday a new administration
took office at a time of great crisis and uncertainty
in our relations with the world. Mid-January
19G2 is, therefore, a fitting time for a stocktaking
of our successes and setbacks so that we may better
chart the course that lies ahead.

It is particularly important that we examine not
only the current crises but also the forces that have
created tliese crises. The dramatic news from
abroad that dominates the headlines reflects the
clash and ferment of powerful pressures which are
transforming the lives of men and nations in every
continent.

What is the significance of these forces ? How
are we to evaluate our response to them ? Above
all, how well have we been doing as a nation?
These are important questions to which thousands
of thoughtful citizens are seeking answers.

In many cases this essential democratic task of
review and appraisal is conducted soberly,
thoughtfully, and with a deep sense of history.
Other analyses, however, reflect misinformation,
fear, and lack of balance that leads them to assert
American omnipotence in one breath and impo-
tence in the next.

For instance, in a recent issue of a great maga-



' Addres.s made before the Detroit Press Club at Detroit,
Mich., on Jan. 10 (press release 20 dated Jan. 15). Mr.
Bowles is the President's Special Representative and Ad-
viser on African, Asian, and Latin American Affairs.



zine whose circulation runs into the millions at
home and abroad, a sweeping indictment of the
conduct of American foreign policy begins with
these words:

While Americans watch, the driving engine of commu-
nist aggression rolls relentlessly on, dealing us psychologi-
cal and political defeats in every corner of the world from
Laos to Cuba to Berlin. And as our record of cold-war
losses mounts, people ask : What's wrong? What has
happened to the experts who shape and carry out our
foreign policy? Why aren't ice fiyhting back effect ii'elyf

The author of this article proceeds to answer his
own question : "Time and again," he writes, "State
has demonstrated (1) unwillingness to face the
reality of an enemy bent on our desti-uction, (2)
inability to compete."

Such indictments can only provide fuel for the
frustrated extremists who have been proposing
that the United States withdraw from the United
Nations, abandon its alliances, undermine its for-
eign trade by raising tariffs, slash its national taxes
and budgets, and simultaneously lamich hostilities
against everyone with whom we disagree.

Under these circumstances indictments of this
kind cannot be disregarded. Are we in fact "los-
ing" the cold war? Is our Government stumbling
ineptly from failure to failure? Is it true that
the State Department is loiided with bumbling
incompetents while, as some say, "the driving
engine of communist aggression rolls relentlessly
on"?



252



Department of Slate Bulletin



Factors Shaping U.S. Policy

In order to put these questions in clear perspec-
tive, let us briefly consider, first, the global forces
with which our foreign policies must contend, and,
second, the foreign policy commitments made by
the Kennedy administration before assuming
office.

As the United States emerged from its long
period of isolation following the war, it has been
confronted with a world dominated by four revolu-
tions of unprecedented dimensions.

The first of these revolutions is the so-called
revolution of rising expectations that has resulted
in the formation of 42 new countries in the last
15 years and in the liberation of more than one-
third of all manltind from European colonial rule.

The second great revolution is the emergence of
the Soviet Union under communism as a major
industrial and military power that frankly seeks
to expand its totalitarian control.

The third revolutionary change is the awaken-
ing of China, the world's most populated nation,
to become a major political and military force in
Asia.

Fourth and finally, there is the sweeping revolu-
tion in science and teclmology that has provided
weapons which are already capable of destroying
much of civilization.

Tliese are the global forces that confronted the
Kennedy administration when it assumed office 1
year ago next week. Now what about the new
course of action in the conduct of our foreign re-
lations to which the new administration has
pledged itself?

Tliis course of action has been laid down in
President Kennedy's speeches and in his book The
Strategy of Peace, in the records and writings
of his key associates and advisers, in the foreign
policy sections of the party platform adopted at
the Los Angeles convention in 1960, in the debates
during the campaign itself, and finally in the in-
augural ' and stat« of the Union * addresses last
January. It may roughly be summarized as
follows :

1. To reappraise our entire defense structure
and our ability to fulfill our overseas commit-
ments, and to modernize and bring into balance
both our conventional and nuclear weajjons
systems.



•For text, see Buixetin of Feb. 6, 1961, p. 175.
' For text, see ihid., Feb. 13, 1961, p. 207.



2. To seek the basis for a safeguarded and effec-
tive worldwide disarmament program, bringing
the State Department, Pentagon, and Atomic En-
ergy Commission together on a common, national
arms control policy, under the leadership of a
newly formed Disarmament Agency.

3. To reorganize the foreign aid program so that
it might be placed on a continuing basis with a
new sense of direction, new standards, new pur-
poses, fresh personnel, and improved administra-
tion.

4. To develop a new approach to Latin America
in keeping with the tradition of the good-neighbor
policy so that the tragic betrayal of the Cuban
revolution would not be repeated elsewhere in this
hemisphere.

5. To review our relations with Europe and the
NATO alliance with a view to encouragmg the
economic and political integration of that con-
tinent and closer cooperation with the Atlantic
community.

6. To develop a fresh approach to the problems
of colonialism, identifying ourselves with the con-
structive forces of change which are now reshaping
Africa and Asia.

7. To fully recognize the crucial significance
of such key Asian nations as Japan and India
by strengthening our relations with them and
helping them to build deeply rooted democratic
and prosperous societies.

8. To make a new effort to resolve the complex
and explosive difficulties of Southeast Asia which
had been inherited from the postwar period.

9. To undertake a continuing effort to improve
our relations with the Soviet Union, fully recog-
nizing the obstacles involved wliile being prepared
to negotiate on any issues, limited or broad, while
there is a chance for progress.

This, then, is the background of challenge and
commitment against which the record of the Ken-
nedy administration's first year in office may
properly be judged.

In reviewing that record, it is crucially im-
portant to maintain a balanced perspective. As
Mr. Eoscoe Drummond wrote a few days ago, any-
one who dispenses verbal "tranquilizer pills" to the
public is "doing the American people an acute dis-



Online LibraryUnited States. Dept. of State. Office of Public CoDepartment of State bulletin (Volume v. 46, Jan- Mar 1962) → online text (page 51 of 101)