STATE PAPER FOR SIG-IEP MEETING SEPTEMBER 16

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP84B00049R000501360003-9
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 5
• Document Creation Date: December 20, 2016
• Document Release Date: January 9, 2008
• Sequence Number: 3
• Publication Date: September 14, 1982
• Content Type: MEMO

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DErARTMENT OF fiTATE
UNCLASfi IFIED
With 6ECRET Attachment}
__ME~IORAN?UM FOR MRi pAVID E. PICKFORD
DEPARTMEN'Y` flF fiHE TREASURY
SUBJECT= State Paper for SIG-IEP Meeting September 16
?Attached is the gtat+~ discussion paper for use at the
Si~p'tst[~+~ ~mee~ing -of t$e SIG-i#P. .
Jb
L. Fa u l --fir ems r, I I I
Executive Secretary
Attachment:
1~s states .
cc : OVP
NSC
Agric ulture
CEA
CIA -
Commerce
? Defenas
Justice
OMF3
0?D
~?TR
- Mr. Donald P. Gregg
- Mr. Michael 0. Wheeler
- Mr. Raymond Lett
- Mr. i~illiam Niskaaen
- rs. a en Robbins
- COL John Stanford
- Mr? F. Hoary HabiCht
- pdr . Alton Ksel
- Mr. L"dwin Harper
- Mr. Dennis Whitfield
VNCL~-f A I!' IZD
(With '~j~,~"~'~achsnsnt )
State Dept. review completed
NSC review completed - unredacted segments may be declassified
Eucutlv~ 8egfatr~
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DISCUSSIO[~` PAPER FOR SEPTEMBER 16 ptEETIidG OF SIG/IEP
ON SANCTIONS ISSUES
Introduction and Background
One of the Y.ey foreign policy objectives of the Reagan
Administration has been to achieve a fundamental shift in the
way in which our Allies view their relationship with the Soviet
Union, altering a policy which in the broadest sense goes back
to the mid-1950's. w'e have sought to convince our Allies that
the emerging pattern of Soviet behavior in the I970's,
combining vast military programs with foreign. activities posing
increasing threats to vital Western interests, requires a
fundamental rethinking of the Western approach of the past
decade. This task is complicated by fact they -- and we --
supported detente in early '70's. We see it now as proven
mistake; they do not. --
The changes which we have sought relate primarily to the
economic/commercial/technological aspects of the East-West
relations. There was, and remains, a broad consensus on the
need for continued strengthening of the p:estern military
potctntiai in the fare of the growing--Soviet -m-i-litany threat.
In the economic area, however, our efforts have had to contend
-with deeply ingrained policies based on the assumption that, by
itself, Western trade with the Soviet Union would lead to more
moderate Soviet behavior.
Because the changes which we have sought are fundamental,
the valance sheet at this point-is ~ar+bigt~vus. We have been
aided by a growing, but still insufficient, realization on the
part of most of our Allies that some of the basic assumptions
regarding the nature and objectives of the Soviet system on
which "detente" policy was constructed were seriously flawed.
Soviet behavior in Africa, the Middle East, Afghanistan, and,
most importantly, in Poland provided a strong assist to our
efforts. We }~avE commitments from the Allies, which we must
see~t to implement, to strengthen COCOM. and "observe prudence",
in credit policies toward the USSR. However, these steps can
be regarded as only the beginning of what will be a long and
difficult process, and serious differences remain.
'The Polish Question
Reflecting these continuing differences, we find ourselve9
facing a crucial choice over the Polish sanctions issue.
Continuation of the sanctions dispute poses a serious threat
for the solidarity and cohesion of the Western Alliance; yet an
abrupt change in US policy could a18o be damaging because it
would further European suspicions that we are not guided by a
firm`conceptual view of East-l~Tgst re3et-#~r-a,-that we -are -
inconsfstent and vacillating. Against this background, we must
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considez whether, and if so on what basis, to seek further
East-West economic restraints which might justify modifying tt~e
measures adopted on December 29 and June 18.
1n considering this issue, we must look at the Palish
situation and the measures which wt have adopted both in terms
of our basic objectives toward Poland and in the broader
context of Western economic relations with the Soviet Union.
In terms of Poland, it will clearly be unacceptable for the
Administration to modify substantially the measures announced
by the President on December 29 and June 18 without being ab:e
to demonstrate?clearly that other actions, taken together with
our Allies, had an equal or even greater imgact on the
Soviets. A return to business as usual, as happened following
the V7azsaw Pact intervention in Czechoslovakia, would doom our
efforts to achieve a new Allied consensus on relations Mith the
6oviet Union.
We must recognize, however, that the increasingly
acrimonious trans-Atlantic dispute on the sanctions,
particularly their retroactive and extraterritorial aspects,
creates a new and formidable barrier to the achievement of our
basic policy objectives. Given the attitudes developing in
Europe in response to our sanctions measures, there is little
likelihood that uur Allies will be prerare8 tc cooperate with
us in'tleveloping more effective policies in the high technology
and credits areas. The question is whether tl~-e continuation of
tYie sanctions will not prove to be more damaging to US
interests than a relaxation of th? sanctions in exchange for
the achievement of a broader consensus on dealing both with the
Polish problem and the more basic question of economic
relations with the Soviet Union.
The pipeline
Because of its higYi visibility and obvious economic/
political impoztance, the pipeline has come to dominate
US-European discussions of the economic relationship between
the West and the Soviet Union. This amounts, unfortunately, to
reversing the order in which issues should logically be
discussed, as we are dealing with the symptom rather than the
cause of the problem r;fiich has developed bet-.~eer~ the United
States and its Allies. We need, if possible, to move the
discussion beyond the pipeline and on to more fundamental
issues. The Dassessment that the pipeline will in an}~ case
be completed and that the delays, whether through our sanctions
or Soviet incompetence, or both, will not be that great support
'the argument that trading our unilateral sanctions for an
effective multilateral package makes sense.
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Europ~an Attitudes
Unfortunatel}?, the sanctions decisions appear to have
united our Allies as few other issues have in recent years, a
dangerous situation from the US point of view for a number of
reasons. Not only does it pose a_threat to our efforts to
develop a new consensus on dealing with the Soviet Union, it
threatens to spill over into other important, but unrelated
areas, notably defense/security issues, including INF
deployment. It also establishes what could be a dangerous
pattern for the future of common European resistance to and
defiance of an American policy initiative. There are good
indications that most of our Allies are as seriously concerned
as we are over this turn of events and are prepared to make a
concerted effort to overcome the division in Western ranks.
This certainly applies to the British and Italians and moat
likely to the Germans. The French are the major question
mark. Their immediate economic interests differ somewhat from
than those of the other Allies, and their traditional
resistance to a-Common Western policy in the economic area
raises doubts whether they could agree to a compromise
solution. We cannot, under present circumstances, expect our
other European Allies to do our work for us with the French.
The Germans, who are the only Ally with influence in Paris, are
not in $ position, due to the increasing weakness of the
Schmidt-Genact~er coal3tir>n, -to be of much .help. The French
tend to ignore the British and look down upon tote Italians.
Although it will be primarily up to us to generate French
support for a solution to the impasse, our efforts mill be
greatly facilitated if we can put forward a package which gains
the support of the other key Allies.
Elem~nts of a Package
In considering possible solutions, we must divide the
problem into two components: (1) a shorter-term problem linked
explicitly to the situation in Poland, and (2) a longer-term
problem arising from our efforts to achieve a new Western
consensus on trade with the Soviet Union. The papers which
have been circulated previously lend themselves rather well to
this approach. The oil and gas measures which might be adopted
by the other P.llies against a Soviet Union could be linked
specifically to the situation in Poland. Achieving Allied
agreement to such sanctions will be difficult under any
circumstances; if they were open-ended, this objective would re
out of reach. As a temporary measure tied to Poland, in
exchange for moves on our part, it may have some proepects~
The other three areas identified in the papers, restsictionE on
credits, ~rtrengthening of COCON: end commitment8 on energy
security, (specifically no more 6oviet pipelines), ere
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long-tezm objectives which this Administration espoused prior
to the declaration of martial la.~ in Poland laensDinePolandnd
will continue to press regardless of what happ
As a package, significant progress in these four areas could be
resented as more than equivalent to the impact of
reasonably p
the extraterritorial and retroactive aspectsua~ifyethecremoval
and June -18 measures and could, therefore, j
of those aspects.
The intitial discussions which the Secretary of Stagritain,
have with his fo~ir MinisGerman candeltaly onott-erfrinoes of the
the Federal Republic of Y
UNGA, probably during the week of September 27, should give us
a good basis for determining whether the atmosphere is ripe for
.a serious dialogue on these issues.
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