VISIT OF ROBERT D. MULDOON PRIME MINISTER OF NEW ZEALAND JULY 24 1981

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP83B00551R000200080003-7
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 14
• Document Creation Date: December 21, 2016
• Document Release Date: July 28, 2008
• Sequence Number: 3
• Publication Date: July 18, 1981
• Content Type: MEMO

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SECRET
Obiectives
MEMORANDUM FOR: The President
FROM: Alexander M. Haig
July 18, 1981
SUBJECT: Visit of Robert D. Muldoon, Prime Minister
of New Zealand, July 24, 1981
1. The Setting
US-New Zealand relations are friendly and close. Prime
Minister Muldoon's policies are stronglpro-American. He
has consistently supported the US, and specifically its
security posture in East Asia and the Southwest Pacific,
frequently this has been in the face of domestic opposition.
Currently, he has begun preparing for a November General
Election in which his National Party, according to recent
surveys, will face an extremely close race with the Labor
and Social Credit Parties.
Prime Minister Muldoon has sought to meet with the leaders
of the new U.S. Administration, especially the President, to
validate his pro-American policies in the eyes of his party
and the voting public. It is his desire to demonstrate that
this thirty-year old alliance yields concrete benefits and
more importantly that US leaders do not merely take New
Zealand for granted but that instead we regard them as a
partner and fully take their views into account.
THE SECRETARY OF STATE
WASHINGTON
State Dept. review completed
1. To express appreciation for the Government of New
Zealand's (GNZ) support for efforts in countering
Soviet expansionism, and to emphasize our desire
to consult closely on matters of mutual concern.
2. To reaffirm the US commitment to reaching a just and
enduring peace in the Middle East and to point out
the critical role of a Sinai Multinational Force and
Observers (MFO) in the peace process and the importance
of a New Zealand contribution to the MNF.
3. To assure the GNZ that in its comprehensive review, the
US has neither accepted nor rejected the LOS Draft nor
the LOS process.
4. To outline the Administration's policy toward Asia
particularly China, and reassure the GNZ that we will
consult with them about Asian developments.
SECRET
RDS 1 & 4 (7/17/2001)
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S. To assure the Prime Minister that the Administration
is fully aware of the importance that New Zealand
attaches to greater market access for its agricultural
products and to confirm that specific bilateral trade
issues are being closely monitored at the highest evils
lithe Administration.
III. Issues
1. Western Strategic Posture and the Soviet Threat.
Soviet and Soviet-sponsored expansionism is the major
threat to world peace in this decade. They have pursued a
military bu ldup in all area' while the West was reducing
its defenses and pursuing detente. We are embarked on a
program to counter this threat and to increase substantially
our military capabilities while reinvigorating the American
economy which provides a sound base for U.S. actions. We
are encouraging our friends to take similar steps. While we
recognize that New Zealand's economic difficulties put
limits on what the country can do, we hope that the GNZ will
maintain its defense efforts and policy of sanctions
against the USSR. The GNZ participated in the consultations
with NATO on Poland and recently refused visas to Soviet
figures. The arrangements worked out with NATO (trio system
by which Australia and New Zealand are briefed by Canada,
U.R. and the Netherlands) are the most comprehensive ever
undertaken with out of area participants. Further refinements
will probably have to await a more clear cut crisis situation
as in an effort to prevent such a crisis, we have made clear
to the Soviets the impact on East-West relations of their
possible actions in Poland.
2. The Middle East Situation (Sinai Multinational Force and
Observers)
New Zealand is a potential contributor to the Sinai
Multinational Force (MNF). However, its economy is in
difficulty, its armed forces are small, and it has an
important trading relationship with Arab countries. It is
carefully weighing participation in the MFO and its implica-
tions for their relations with Arab nations. The MFO was
discussed during the ANZUS Council meeting in Wellington
June 23-2 WWe did not press for a decision at that time
but instead expressed our hope that New Zealand would
participate by.supplying an air services support unit
jointly with Australia, consisting of about 150 men and five
unarmed fixes wing aircraft and 8 helicopters. We also
explained that based on our own consultation with Arab
Governments, we do not believe they will impose trade
sanctions against countries participating in the MFO. New
Zealand did not commit itself. It would be useful if you
could reaffirm our strong desire for New Zealand articipa-
tion in the force.
SECRET
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New Zealand very much favors conclusion of a comprehensive LOS
'treaty. While they have a number of interests in a convention, they
are articular) concerned with the need to secure treaty sanction
of national control over living and non-living resources in a
200-mile economic zone and on the continental shelf which extends
well beyond the zone adjacent to their coasts. Moreover, there
are security as ects of the draft treaty related to navigation
and overflight which they believe are important from an ANZUS
perspective. In addition, the New Zealanders are sensitive to
the interests of the many developing nations of the Southwest
Pacific which are generally pro-West and are committed to conclud-
ing a treaty.
4. Administration's Asia Policy
I had successful discussions with the Chinese leaders
which have injected new momentum into our bilateral relation-
ships. I conveyed our intention to treat China as a
friend) non-allied nation with which we share strong
strategic interests. This is a natural development in the
evolution of US-China relations. Accordingly, we will amend
legislation which lumps China with the Soviet bloc. We will
also loosen controls on export of dual-use technology. Any
Chinese re uests for military equipment will be considered
on a case-by-case basis. We will consult where appropriate
with our ANZUS allies regarding prospective military sales.
The recently concluded International Conference on Kampuchea
focussed international attention on Kampuchea and Vietnam's
continued refusal to negotiate. The Conference's declara-
tion provides a satisfactory basis for continued search for
a settlement, and we will pursue this with ASEAN and other
Conference participants.
5. Bilateral Trade Issues
New Zealand's export-dependent economy was badly hurt when
the UK entered the EEC. It has searched out new markets, especial-
ly for its agricultural products (cheese, butter, beef, sheep).
Iran, Ira and the USSR have become its newest and fastest
growing markets for la and mutton. New Zealand has publicly
argued that it cannot fulfill its ANZUS commitments, particularly
replacement of major defense equipment items such as frigates,
without greater access to US and European markets for its agricul-
tural exports. Any US actions that would restrict the import of
sheepmeats or casein (NZ is, the major supplier of both these
products, the latter being a protein made from milk) would have a
serious impact on our bilateral relations. The question of how
to dispose of the Commodity Credit Corporation's surplus butter
stock, which is currently under interagency review, could seriously
affect the international butter trade which at present is dominated
by the EEC and New Zealand and is of great concern to the GNZ. You
may wish to assure Muldoon that the Administration is giving
New Zealand's concerns major consideration in the butter disposal
problems and is opposed to Congressional proposals to restrict
imports of sheep meat.
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VISITOR'S SCHEDULE
Visit of New Zealand Prime Minister Muldoon
and Mrs. Muldoon
Thursday, July 23
4:35 p.m.
7:30 p.m.
Friday, July 24
11:30 a.m. -12 noon
July 23-25, 1981
Arrival at Dulles Airport - TWA 890
Private Dinner with Ambassador and
Mrs. Gill at Blair House
Meeting with the President at the
White House
12 noon - 1:30 p.m. - Official working Luncheon at the
White House
8:00 P.M. - Dinner hosted by Ambassador and Mrs.
Gill at the New Zealand Residence
(Black Tie)
Saturday, July 25
11:00 a.m. - Open Shuttle Flight to New York - N.Y.Air
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DEPARTMENT OF STATE
BRIEFING PAPER
1. WESTERN STRATEGIC POSTURE AND THE SOVIET THREAT
In the past decade the Soviet Union has changed from an
essentially continental Dower to one with a global reach.
While modernizing their land forces, the Soviets have under-
taken an unprecedented build-up of their fleet and have con-
tinued to strengthen their air and nuclear forces, enabling
them to project their power throughout the world, both
directly and through surrogates.
In Europe, through military threats and blandishments of
arms contro and economic cooperation, they are waging a cam-
paign to split NATO while exerting massive pressure to ensure
that the bloc countries, especially Poland, remain under Soviet
control. In Southwest Asia, the USSR, through its invasion of
Afghanistan, has established another satellite, exacerbated
regional instability and placed itself in a position to
threaten access to Persian Gulf oil. In Africa, Latin America,
and Indochina, the Soviets continue to support proxy forces and
subversive activities.
US policy is designed to put restraints on Soviet capabi-
ease
lity to act globally. We are embarked on a program to increase
substantially our military capabilities, chile reinvigorating
our economy. We are encouraging our friends and allies to
increase their defense -capabilities. If the international
situation permits, we are prepared to pursue arms control agree-
ments that enhance US and Allied security.
In connection with Poland, we have been in close touch with
the New Zealanders since last December. Bilaterally, we have
briefed them on our assessment of the situation and on NATO
contingency planning.
More important, the Alliance itself has taken the unprece-
dented step of bringing New Zealand (together with Australia,
Japan and Spain) into that contingency planning process through
systematic, instructed meetings conducted by trios of NATO member
countries. Our NATO Allies also have agreed to invite high level
representatives of these four governments to post-invasion NATO
deliberations. The Allies are agreed on the need for quick
decisions on effective sanctions should there be a Soviet inter-
vention. Although the proposed sanction centerpiece--a general
embargo--poses problems for the New Zealanders, they recognize
the necessity of swift and effective countermeasures.
July 17, 1981
SECRET
GDS-7717/87
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DEPARTMENT OF STATE
BRIEFING PAPER
2a. MIDDLE EAST PEACE PROCESS AND SINAI MULTINATIONAL FORCE
New Zealand is concerned about our overall approach
to the peace process beyond the E tian-Israe i Treaty
of Peace. The virtual certainty that Begin will form
the next Israeli Government and that it will continue
its settlements policy in the occupied territories rein-
forces the doubts some of our allies have about the
prospects for success of the autonomy negotiations. The
Lebanon crisis and the Tuwaitha attack add to their con-
cerns that we need to reinvigorate our efforts on the
peace process, and in this regard Muldoon would like us
to be more forceful with t e Israeli Government.
We will want to emphasize that in the aftermath of
the Israeli attack on the Iraqi nuclear facility it is
all the more important to strengthen the existing basis
for the peace process. The next immediate step in the
Camp David process is to rin into force the agreement
we have reached with Israel and Egypt for the establish-
ment of a Multinational Force and Observers (MFO in the
Sin al-, which is to assume its peacekeeping duties upon
final Israeli withdrawal in April 1982. At the ANZUS
meeting in Wellington in June, the Secretary expressed
our hope that New Zealand will participate in the MFO
by contributing part of an air support unit along with
Australia. Muldoon has been wary of the i ea. We should
stress to him the central importance of the MFO in the
implementation of the Israeli-Egyptian Treaty of Peace,
which in turn is the bedrock for our efforts to advance
the peace process.
The President will be meeting in Washington with
Sadat August 5-6 and with Begin September 9-10, to
discuss resuming the peace process which has essentially
been in suspension since late last year. Our objective
is to bring the autonomy negotiations to a successful
conclusion, thereby taking an important first step
toward resolving the issue of the future of the Palestinian
people in a manner satisfactory to all concerned.
CONFIDENTIAL
GDS 7/17/01
July 17, 1981
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DEPARTMENT OF STATE
SQIEF'lr,.JQ PAPER
2b. MIDDLE EAST -- OTHER ISSUES
Muldoon has played a personal role in IMF and World Bank
deliberations on possible PLO o server status at annua
meetin s. n 1979 Mu oon, as Chairman of the meetings,
refuse to invite the PLO. In 1980/81, Muldoon chaired a
group studying the 1980 decision which excluded the PLO. The
question of PLO observer status is still under review by the
institutions' Executive Boards, and we arehopeful procedural
decisions last June will prevent the issue from arising at
this a s annual meetings.
Following a week of escalating cross-border violence,
including Israeli air attac s into Lebanon and Pa estinian
rocket attacks on Israeli towns, the President has sent
Ambassador Habib to Israel to work to secure a cease fire.
This is the essential first step to restoring a measure of
stability to this area and to continuing our broader effort
to reach a diplomatic resolution of the complex problems of
Lebanon, including that of Israel's confrontation with Syria
over Syrian missiles in central Lebanon. Our objective
remains to work towards restoring the authority f the"
Government of anon an a long-term stability o the
cow .
CONFIDENTIAL
GDS 7/17/0-1
July 17, 1981
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. DEPARTMENT OF STATE
3. LAt'7 OF THE SEA
New Zealand, an island nation, has navigation as its
principal concern in the Third U.N. Conference on Law of the
Sea (UNCLOS III). It is particularly dependent on maritime
navigation for trade and is vulnerable to actions by other
states which nay interfere with navigational rights. The
navigation provisions of the :.OS Draft Convention are also
viewed by New Zealand as essential to the ANZUS alliance.
The potential for offshore oil around her coastline is being
explored, and fishing grounds off her coasts remain targets
of foreign fleets. New Zealand has little interest in
seabed mining, which is the source of many of our problems
with the current text. New Zealand's navigation and resource
interests are, in their view, well protected in the Draft
Convention on the Law of the Sea now 'before UNCLOS III. New
Zealand is also acutely aware of, and supports, the interests
of the developing island nations of the Southeast Pacific,
which-very much favor the conclusion of a treaty.
In' view of the balance of New Zealand's interests, it is
not surprising that they are generally displeased .with the
U.S. decision to review our entire Law of the Sea olic
and to refuse to make commitments at least until the review
is completed this fall. They have expressed their displeasure
in a lengthy letter from Foreign Minister Talboys to Secretary
Haig and during Secretary Haie's visit to Wellington for
ANZUS. Detailed discussion of mutual concerns have also
been held by the Special Representative for the Law of the
Sea with New Zealand experts. The New Zealanders would like
us to commit ourselves, before the upcoming August session
of UNCLOS III, to resume negotiations in that forum and to
keep our demands to a minimum. We are not in a position to
make, either commitment.
We can assure them that, no decision either for or against
proceeding further in UNCLOS III has been made, nor will be
made until alter the August session. Ue hope 'New Zealand will
promote its overall LOS interest by playing an active role
in managing the August session so as to avoid formalization
of the current text or adoption of any amendments contrary
to U.S. interests.
July 17, 1981
CONFIDENTIAL
GUS 7/17/81
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DEPARTMENT OF STATE
BRIEFING PAPER
4. ADMINISTRATION'S ASIA POLICY
Muldoon will be most interested in China and Kampuchea.
Secretary Haig discussed both at the ANZUS Council meeting
in late June, but Muldoon will seek your perspective.
China: Secretary Haig's June 15-17 visit to Beijing
in ecte new momentum into our bilateral and strategic
re at ons psiOur policy is based on the premise that
China is not an adversary of the U.S. and that a healthy
relationship wit ina is important to U.S. global
strategy as well as a key to stability in Asia.
It is in our interest to assist China's modernization.
We will treat China as a friendly nation with which we are
not allied but with w is we share common interests. The
Administration will amend legislation which lumps China with
the Soviet Bloc and will loosen controls on exports of dual-
use techno to China. We inte to move to a case-b case
approach to munitions control with China, putting any nese
requests on the same footing as we apply to requests from all
other friendly nations. is is not an undertaking to sell
arms, only to consider requests in a non-discriminatory manner.
We expect this aspect of our relationship to-develop in
a careful gradual way. The U.S. is aware of the reserva-
tions ot ASEAN other Asian/Pacific friends and allies
concerning this new aspect of our relationship with China.
We will, whenever appropriate, consult with our allies and
friends regarding prospective sales of military. equipment.
Kampuchea: The UN-sponsored International Conference
on Kampuchea has just concluded in New York. There were
differences between ASEAN and China on tactics but a con-
sensus emerged on two key goals: The Vietnamese must with-
draw their troops and the Khmer must determine their own
future without foreign interference. The conference focussed
international attention on Vietnamese occupation o Kampuchea
andits continuin refusal to ne otiate a settlement. It set
out a framew for a satisfactory solution an3 established
a mechanism to continue the search for a settlement. There
will be future sessions; the door is open for Vietnam to
attend later. The conference also provides the Soviets the
means to resolve a major cause of East-West tension.
Without taking sides, the U.S. urged both ASEAN and
China to compromise their differences (which they largely
ew Zealand was supportive of the AS position on
the issues o sarmament of the Khmer factions and pro-
visions for an interim government pending free elections.
CONFIDENTIAL
GS, 7/17/81
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DEPARTMENT OF STATE
BRIEFING PAPER
5. BILATERAL TRADE ISSUES
CASEIN: A milk byproduct not produced domestically, casein
is a.ma or New Zealand export to the U.S. ($81 million in 1980).
It is imported duty-free without quota restrictions. The dairy
industry wants to restrict casein imports because it feels these
depress non- at dry milk (NFDM) prices. Congressional pressure
triggered a USDA casein study. After reviewing this, Secretary
Block decided imported casein may materially interfere-with or
threaten t e domestic price support program. He recommen e
that the U.S. International Trade Commission (USITC) initiate an
investigation to determine if casein import restrictions are
warranted. A 1979 USITC study found "virtually no relationship
between casein imports and purchases of NFDM under the price
support system." New Zealand believes U.S. import restrictions
would violate our o igationa under the General Agreement on
Tariffs an Trade (GATT).
LAMB: The U.S. countervailing duty (CVD) statute provides
relief f r U.S. industries competing with subsidized imports.
If-the subsidizing country has signed the GATT Subsidies Code,
it must be shown that a U.S. industry is being injuredEy such
imports before countervailing duties can be imposed. New Zealand
has not yet si ned the Code and does not bene it from this injury
test. U.S. wool growers have recently filect a CVD complaint
iaa nst New Zealand's subsidized lamb exports to the U.S.($35
million in 194-0T. The GNZ believes that if these exports benefited
from the injury test no countervailing duties would be imposed.
A USG team will be in Wellington July 19-24 to discuss possible
New Zealand accession to the Subsidies Code.
BUTTER: We are currently faced with the problem of dealing
with 200,000 tons of surplus butter, purchased by the Commodity
Credit Corporation under the dairy price support program. As
an alternative to expensive storage, the Administration is
exploring ways to export the butter. Since U.S. butter prices
are far above the world price, such exports must be heavily
subsidized. The main potential customer for the butter is the
U.S.S.R., a politically undesirable destination. We have been
trying-to find a way to dispose of the butter without either
disrupting the world butter market or selling the subsidized
product directly or indirectly to the Russians. The major
butter exporters, New Zealand and the European Community, are
very concerned about our plans. New Zealand has explored with
us the possibility of ourchasing the U.S. butter, processing t,
and re-ex rtin it to countries outside the Soviet Union. No
firm offer has been made by either side. Other possibilities
under review include government-to-government sales to countries
other than the U.S.S.R., sales to the private trade and continuing
to hold the butter. No decisions have been made.
July 17, 1981
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TOAST FOR THE PRESIDENT'S USE AT LUNCHEON IN HONOR OF
NEW ZEALAND PRIME MINISTER ROBERT D. MULDOON
FRIDAY, JULY 24, 1981
Mr. Prime Minister and distinguished New Zealand guests:
-- It is a special pleasure to welcome you here today. Our
meeting this morning has been exceptionally friendly and
candid, like the relationship that our two countries have
enjoyed these past three decades.
-- America and New Zealand share a common heritage. We have
fought side-by-side in every major war
in this century.
The need for us to stand together to protect the peace and
prosperity of the Western nations remains as strong today
as it has ever been.
-- New Zealand has played an important role in assisting new
countries of the Pacific to become independent and to develop
economically. We applaud the financial assistance and
training New Zealand provides to the Pacific Island states.
-- I and my Administration are pledged to strengthen and enhance
our cooperation with our closest allies. Discussions, such
as ours today, are an important part of this process.
-- Gentlemen, let us toast Prime Minister Muldoon and.his many
invaluable contributions to the deep friendship between the
United States and New Zealand.
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SUGGESTED REMARKS TO BE MADE BY THE PRESIDENT UPON THE
DEPARTURE OF PRIME MINISTER MULDOON FROM THE WHITE HOUSE
JULY 24, 1981
It has been a pleasure for me to meet and get to know Prime
Minister Muldoon of New Zealand. The Prime Minister leads
a country that has for a long time been one of our closest
friends and staunchest allies. Our meeting today has allowed
us to review a number of bilateral issues affecting our rela-
tions, and we have reached a clear understanding on all issues
discussed.
The timing of our meeting was fortuitous, as it allowed me to
brief the Prime Minister on the recently concluded Ottawa
Summit, and to discuss matters of continuing concern, such
as Poland and Afghanistan.
I want to thank Prime Minister Muldoon for coming to Washington,
and would like also to thank the people of New Zealand for the
supportive and constructive role they have played for so long.
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