From Colony to Superpower: U.S. Foreign Relations Since 1776 (127 page)

Nixon and Kissinger viewed these momentous developments with ambivalence and more than a touch of envy. They could not openly oppose Brandt's pursuit of goals they nominally supported. When West German conservatives enlisted the support of Cold Warriors like Dean Acheson to protest the "mad race to Moscow," the president gently deflected them. But Kissinger, even more than Nixon, developed a deep dislike for Brandt and Bahr and distrusted
Ostpolitik,
which he considered "fuzzy-minded and dangerous," a "God-send for the Soviets." He worried that it might seduce American liberals and open rifts in NATO the Soviets could exploit, thereby neutralizing U.S. gains from the China initiative.
⁶²
Vain and insecure, the two men could not but have been profoundly jealous of Brandt's achievements and worldwide recognition. They sought with little success to control and co-opt him. They did play a key role in the Berlin negotiations, typically by shutting out the State Department and working through Dobrynin and another backchannel with the U.S. ambassador to West Germany. Kissinger then delayed completion of the agreement to make it appear that his China trip had determined the outcome. Nixon claimed credit for a "major achievement."
⁶³

International economic issues also bedeviled America's relations with its major allies and further highlighted its fall from postwar hegemony. By 1970, the nation was mired in recession, marked by a drop in the gross national product and rise in unemployment and inflation. Most alarming,
for the first time since 1895 the United States ran a trade deficit. During the Cold War, U.S. foreign economic policy had been driven by national security demands. Massive spending on foreign aid, European defense, and more recently the Vietnam War fueled a growing balance of payments deficit, damaging U.S. competitiveness in world trade. America's share of world exports dropped by almost 3 percent after 1960, a result of declining productivity and the undervaluation of European and Japanese currencies in relation to the dollar. The allies had amassed large gold holdings, and U.S. economists worried that they might start buying more gold at the undervalued price of $35 per ounce. The crisis came in the summer of 1971. The U.S. balance of payments deficit for the first six months, if used as a basis for calculating the entire year, would have totaled $22 billion. The trade deficit for the third quarter exceeded $800 million. When Germany proposed to devalue the mark and Britain on August 12 asked to draw $3 billion in gold, the administration moved into action. On Friday the thirteenth, Nixon convened his economic advisers for a secret meeting at Camp David described by one aide as the "most important weekend in economics" since FDR closed the banks in 1933.
⁶⁴

Over the next three days, the administration developed a bold and comprehensive program, a historical watershed, to address the nation's economic woes. The prime mover was former Texas governor and LBJ protégé John Connally, as dominant at this time on the economic front as Kissinger on the diplomatic. Nixon had become enthralled with the former Democrat, naming him secretary of the treasury in 1971, assigning him responsibility for economic policies, and even anointing him as his successor. A large and handsome man, charming—and intimidating—in the mode of his mentor, Connally was also a strong economic nationalist. "My view's that the foreigners are out to screw us," he once observed, "and therefore it's our job to screw them first."
⁶⁵
At the Camp David meeting, about which even Kissinger was not kept informed, Connally took the "big bold approach." Tagged the New Economic Policy (until someone discovered that Lenin had once used the same label), his program imposed temporary freezes on wages, prices, and profits, lifted an excise tax to make automobiles more competitive, and enacted cuts in federal spending. Facing a trade deficit and gold drain, the administration acted unilaterally and on the principle that the United States no longer had the luxury of its
postwar generosity. The administration imposed a 10 percent surcharge on imports. In a sharp break from Bretton Woods, it "closed the gold window" by refusing to honor requests to convert gold into dollars, thus abandoning the gold standard to devalue the dollar without formally admitting to devaluation and giving U.S. exports a competitive edge.
⁶⁶

At home, the Connally program won broad public support, sparking a jump in Nixon's approval ratings and the largest one-day surge in stock market prices to that time, ultimately bringing a respite from economic bad news and helping Nixon's reelection campaign. The Europeans and Japanese got little more warning on the economic gambit than on the China initiative. They bitterly protested the surcharge on imports and the administration's monetary moves. At a November follow-up meeting at Washington's Smithsonian Institution, Connally boasted that he took the role of "bully boy on the manicured playing fields of international finance."
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The United States dropped the surcharge in return for allied agreements to eliminate specified trade restrictions. Connally also cajoled the allies into accepting a devaluation of the dollar versus their own currencies, giving a short-term stimulus to U.S. trade and keeping the alliance together. Over the longer haul, U.S. unilateralism left scars that took years to heal. The end of Bretton Woods spurred economic regionalism and prolonged currency instability. But there was no turning back. When the allies in 1973 urged the United States once again to assume responsibility for stabilizing international currencies, then Secretary of the Treasury and free market advocate George Shultz responded curtly, "Santa Claus is dead."
⁶⁸

Relations between the United States and Japan dipped to their lowest point since World War II during the Nixon years. As the Vietnam War dragged on, Japanese increasingly feared that their close ties with the United States would drag them into an unwanted war rather than protect them from some unspecified threat. Americans bristled at Japan's seeming ingratitude for past assistance and its lack of support on key issues. United States officials pressed Tokyo without much success to assume a larger role in regional defense, even join the nuclear club. American businesses began to view a once prostrate ally as a dangerous economic rival, spoke ominously of Japan, Inc., and, as in the 1930s, warned of Japanese ambitions to dominate the Pacific region, perhaps the world. Differences were compounded by the administration's ignorance of and indifference toward
Japan. Kissinger was heard to dismiss the Japanese as "little Sony salesmen"; Nixon's attitudes were shaped by World War II.
⁶⁹

One of the most contentious issues was Okinawa. The Johnson administration had got no further than broad agreement that Okinawa should revert to Japan with the United States retaining basing rights. Japanese and Okinawans continued to resent U.S. use of the island as a place to store nuclear weapons and as a base for operations in Vietnam. Some Americans believed they had paid in blood for the right to retain Okinawa. Military leaders identified it as an essential base. Nixon and Sato reached broad agreement on the future of Okinawa in late 1969. Under a treaty finally signed June 17, 1971, the United States agreed to reversion. Japan consented to U.S. retention of bases and their use for combat in the region. Responding to what the U.S. ambassador called Japan's "nuclear allergy," the United States pledged to remove its nuclear weapons. In a further agreement notable for its almost undecipherable diplomatic verbiage, the two sides agreed to discuss in an emergency the possibility of the weapons' return provided that Japan's "particular sentiment" was taken into account. Transfer occurred in May 1972.
⁷⁰

Trade issues were not so easily settled. By the time Nixon took office, the United States was incurring an annual trade deficit with Japan of more than $1.3 billion. Because of domestic politics, the major problem was textiles; Japan sold more than fifty times what it bought. Southern states, notably South Carolina, depended heavily on the textile industry, and Nixon's "southern strategy" for holding power hinged on detaching southern whites from the Democratic Party. As hundreds of plants closed and thousands of textile workers lost their jobs, pressure mounted for a hard line. During the 1969 summit, Sato appeared to accept voluntary quotas on textile exports in return for the reversion of Okinawa, but the deal broke down. Other times, U.S. negotiators secured commitments only to have the Japanese renege or the legislature reject them. Nixon privately denounced the "Jap betrayal" and yearned to "stick it to Japan." The two sides seemed close to a full-fledged trade war.
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The Nixon shocks—
shokku
in Japanese—combined in the summer of 1971 to force a textile agreement. Announcement of Nixon's visit to China on July 15 left Sato's government reeling. Less than a month later, coincidentally but significantly on the anniversary of V-J Day, announcement of
Connally's economic program—with the Japanese again getting only minutes prior notice—compounded the impact. Nixon conceded that the program was designed in part to give the Japanese "a jolt." The United States added threats to set import quotas under the Trading with the Enemy Act of 1917. In the wake of these twin shocks, Japan accepted voluntary restraints on textile exports, reduced its import quotas by more than half, and opened its markets to U.S. investors. The 1971 trade deal significantly improved Japanese-American relations and helped get Nixon through an election year.
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Nixon and Kissinger muddled through with America's major allies; with the Third World, they did not manage that. The major policy pronouncement—ostensibly—was the so-called Nixon Doctrine, announced by the president rather casually during a July 1969 press conference on Guam. The statement was not a doctrine in the sense that it comprised a set of principles carefully formulated to shape specific policies. Nixon's remarks had not even been vetted by Kissinger's staff. Originally aimed at East Asia and the Pacific, it presumably applied to Third World countries generally. It was an obvious complement to the policy of Vietnamization. Indeed, Nixon announced it along with the first troop withdrawals from Vietnam.
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The concepts were not new. Rather, they reflected Nixon's experience with New Look policies designed to avoid wars like Korea and ideas already broadly accepted in light of Vietnam to limit future U.S. entanglement in Third World conflicts. A sharp departure from John Kennedy's 1961 vow to "pay any price, bear any burden," the "doctrine" reflected a growing recognition that, as Nixon later put it, "America cannot—and will not—conceive
all
the plans, design
all
the programs, execute
all
the decisions, and undertake
all
the defense of the free nations."
⁷⁴
On Guam, the president affirmed that the United States would uphold existing treaty commitments but would be very cautious in taking on new ones. It would protect those nations vital to U.S. security who were endangered by nuclear powers. It would provide military and economic assistance to nations threatened by insurgencies or external aggression, but they—the key point—must assume primary responsibility for their own defense. It also provided a basis for extending large-scale military aid to regional powers who would be responsible for stability in their areas. Originally tagged the Guam
Doctrine by journalists, it was quickly renamed for Nixon by White House operatives who recognized its public relations value. It was applied inconsistently if at all and may have been more useful at home than in shaping foreign policy.
⁷⁵

The Nixon Doctrine reflected in part the lower priority the president and Kissinger assigned the Third World. Devotees of realpolitik, they respected power above all else, and they shared a certain disdain for Third World peoples and nations. "History has never been produced in the South," Kissinger lectured a Chilean diplomat. "The axis of history starts in Moscow, goes to Bonn, crosses over to Washington, and then goes to Tokyo."
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Often quite sophisticated in their assessments of great-power politics, they could be naive and tunnel-visioned in assessing Third World conflicts. They were uninterested in local and regional disputes unless they were linked to great-power issues or, in Nixon's case, had implications for domestic politics.
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Latin America enjoyed priority in the Nixon scheme of power politics only by virtue of its proximity to the United States and the outsize and still looming presence of Fidel Castro. Nixon and Kissinger repeatedly stressed its unimportance. When a Chilean diplomat suggested that Kissinger knew nothing about Latin America, the national security adviser shot back, "No. And I don't care."
⁷⁸
In discussing foreign aid, Nixon once referred to Latin America as a "disaster." While vowing to fight the "big battles" in foreign policy, he also made clear he preferred not to be bothered with hemispheric matters.
⁷⁹
The one exception, of course, was Cuba, which had contributed to his electoral defeat in 1960. Like other policymakers of his era, he was obsessed with Castro. Kissinger once conceded that for the president Cuba was a "neuralgic problem."
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The Castro fixation played into the administration's otherwise inexplicable and morally repugnant interference in Chile between 1970 and 1973. During the Kennedy era, Chile and its moderate president, Eduardo Frei, had been a model of what the Alliance for Progress sought to encourage. Throughout the 1960s, as in other countries, the CIA funneled huge sums of money to friendly candidates in Chile and used psychological warfare to
discredit leftists. Washington was stunned, therefore, in 1970 when, despite major contributions of funds to acceptable candidates from International Telephone and Telegraph, Pepsi-Cola, and Anaconda Copper—and the CIA—avowed Marxist, socialist, and Castro friend Dr. Salvador Allende won a plurality of votes in a three-way election. Because none of the candidates received a majority, the outcome rested with the Chilean congress.