' I D ' o o o o o o o ' H COPY NO _ _ _ o 'N - r - - I 1 ' lJ n_ nJ l _ - r- i ' i I I ' L J L D u THE NORTH ATLANTIC NATIONS i o I - TA SK S FOR T H E 1 9 6 0' S -- -- -- ' I C ' J3o r 1 nnso - Dt 'I' - - - - o 1r s0il s l - - - - - - TS AU1 - - - o I' 0 E' T'CPSE F o I GTlVG 11 U h--11o DECL SSIF1EI ' RBL E 3ABL RELo'AS DEJ D I PA' l' F01 EXE1 P'tTOHS - - - August 1960 I I o SECRET _ _ ___ ' FOREWARD Revised 6 3 91 Robert R Bowie To put this report in perspective the directors of the Nuclear History Program asked me to sketch briefly its origin and context The Report was prompted by an initiative taken by the NATO Council of Ministers at its meeting in Decmeber 1959 For a decade the Alliance had succeeded in preventing further Soviet expansion in Europe and in reassuring the Allies as to their security By 1959 however the Alliance faced conditions very different from those at its origin The Soviet threat was more complex Under Khrushchev the USSR was combining hints of detente with threats to Berlin and in the developing regions Its nuclear arsenal was steadily growing making the U S increasingly vulnerable and Sputnik had generated the myth of the missile gap Moreover allied relations had also changed A revived Western Europe was buliding the European Community Western Germany was a member of that as well as of NATO France under de Gaulle was taking a more indep ndent course following the lead of Britain in developing a national nuclear force The ending of colonialism was spawning dozens bf new nations suffering from poverty and political instability These changes were raising divisive issues among the allies How to respond to Soviet policy and actions How to maintain Western cooperation for economic growth How to cope with the vulnerability of the developing nations Most troubling however was the impact of approaching nuclear parity on the credibility of NATO strategy which was so dependent on the U S nuclear arsenal Would an increasingly vulnerable U S be as ready to use its nuclear arsenal in defense of Europe Should the Europeans have more control of nuclear weapons Did NATO need more conventional forces or MRBMs in Europe This ferment had led to various actions and proposals in the late 1950's such as the creation of the NATO nuclear stockpile under U S control in December 1957 the request of SACEUR General Lauris Norstad for MRBMs his concept of the pause and his call for NATO to become a nuclear power de Gaulle's demand for a u s -u K -French triumvirate to direct alliance policy rationales for the U S and French nuclear forces and the impetus to convert OEEC into OECD ble with survival in the face of a significant risk of retaliation which the invulnerable Polaris submarines coming on stream would assure despite growing Soviet capabilities Concern seemed more justified as to the lower_end of the spectrum Might nuclear parity tempt the Soviets to take a quick limited action with ready forces in order to present NATO with a fait accompli with devastating political consequences Against this risk the Report stressed the need for SHIELD forces of aobut 28-30 divisions as Norstad was already urging and for improving their quality and modernizing their conventional weapons Meeting this requirement should be linked to the offer for a multilateral nuclear forces discussed below as a single package On the nuclear issues the focus was mainly on the allied concerns arising from NATO dependence on U S nuclear weapons Maintaining the cohesion and confidence of the allies appeared to require some sharing of participation and control General Norstad had suggested a NATO nuclear force composed of mobile land-based MRBMs but vague as to structure composition and control Instead the Report proposed the formation of a sea-borne multilateral force MLF assigned to SACEUR to mitigate European concerns It would be created in two stages As a first step the U S would commit U S Polaris submarines to NATO under an agreed control formula for use by SACEUR The second stage would be the creation of a NATO seaborne missile force jointly financed owned and controlled and manned by mixed crews i e non-national Sea-basing and mixed-manning were essential features designed to assure joint control prevent national withdrawal of components reduce vulnerability and avoid other problems of a mobile landbased system In developing the proposal I discussed it with Admiral Raborn who was running the Polaris Program and other top Navy officials who agreed that such a force with mixed-manned submarines was feasible The MLF proposal had several purposes 1 to involve and reassure the Allies 2 to discourage national nuclear forces 3 to meet the stated military need for MRBMs while avoiding the problems of land-based missiles 4 to encourage European integration by the prospect that the MLF might eventually become a European force as the European Community developed in an effective political entity My assumption was that the MLF would appeal to the West Germans the Italians and the Benelux members and that skillful diplomacy could probably induce the British to fold their national force into the MLF and in time after de Gaulle perhaps even the French That the MLF became a U S proposal to NATO so quickly was due to President Eisenhower himself On August 16 at the request of Secretary Herter I briefed the President on the conclusions and recommendations of the Report focusing mainly on the politicalmilitary aspects He was at once interested in the concept of the Multilateral Force For some time he had been preoccupied with the issue of nuclear sharing with the NATO allies He was opposed At its 1959 meeting the NATO Council devoted three days to discussing the state of the Alliance and the international situation The Ministers then instructed the Permanent Council to undertake longterm planning to cover the next ten years on the objectives of the Alliance in the political military scientific and economic fieds and in regard to arms control As a result early in 1960 Secretary of State Christian Herter asked me to prepare a report to assist the State Department in this NATO planning project In late 1957 I had resigned as Director of the Policy Planing staff of the state Department to return to Harvard to head the new Center for International Affairs The understanding was that the report would represent my own views and recommendations as an outside consultant I was assisted by a small staff of officials and outside experts of my choice listed in the Letter of Transmittal to the report and was given access to classified data as required I also had the benefit of extended discussions with the Policy Planning staff of State officials in Defense and the Joint Chiefs and with General Norstad The Report completed in mid-August sought to outline an over-all strategy for the foreign and security policy of the U S and its allies for the coming decade Its basic concept was that this entailed two broad tasks one was the positive effort to build and manage a cooperative order for the prosperity and security of the non-communist nations the second was to safeguard this order from Soviet disruption while fostering Soviet evolution toward a less hostile relationship Within this context the Report undertook to identify the major political military and economic issues which the Atlantic nations would confront during the 1960's in their relations with each other with the Soviet Union and with the developing world and to recommend approaches for dealing with them through NATO or other means Thus the proposals regarding alliance strategy and nuclear weapons which are of most interest for the Nuclear History Program were but a part of the widerranging framework The Report was writen in a period of intense debate both academic and political on both sides of the Atlantic on many of the problems with which it dealt especially those relating to security Defense experts differed widely on the strategic deterrent limited warfare tactical nuclear weapons conventional forces and national nuclear forces European political leaders including West German Chancellor Konrad Adenauer were expressing uneasiness about the effects of nuclear parity In the U S defense policy had become a major issue in the President campaign In preparing the Report my aim was to be non-partisan in the hope that its conclusions might have an influence on policy-making whatever the outcome of the election Chapter Two of the Report details my analysis and proposals with respect to NATO strategy and nuclear weapons The strategic nuclear deterrent seemed to me much more robust against major aggression than many analysts argued Soviet leaders would not gam- to futher national nuclear forces such as the French because of their divisive effect on the alliance but he understood the concern of the Europeans about control of nuclear forces on which their security depended He had been sympathetic to Norstad's idea of a NATO nuclear force From his initial and later discussions it was clear that the President was attracted to the MLF concept for the reasons which prompted the proposal its multilateral character provided built-in safeguards against a national pull-out and reinforced alliance cohesion it would tend to discourage national forces a seabaorne force was less vulnerable and avoided the political and other problems of a mobile land-based force and it might ultimately evolve into a European nuclear deterrent He fully recognized the practical and legal obstacles especially getting Congressional approval but seemed to think they could be overcome At this request a second meeting was arranged for a couple of hours in mid-September with General Norstad and me At that session we canvassed in some detail questions about the organization financing control and other aspects of a multilateral force assessing the practical problems entailed General Norstad was convinced that the Europeans except de Gaulle would strongly welcome such a proposal and that it would meet many of their concerns He also felt it would offer the best prospect of approval by the Joint Atomic Energy Commitee of Congress on October 3 the President met with top officials of state and Defense to discuss the multilateral force Both Departments favored the concept though with some differences on specifics expecially the manning After these were ironed out the President approved the two-stage approach and essentially decided that the U S should 1 assign five U S Polaris submarines to NATO by 1963 as an interim phase and 2 assist in the creation of a multilateral NATO force with mixed manning to the extent deemed practical by SACEUR The next day the President discussed the MLF with Paul Henri Spaak then Secretary General of NATO strongly supporting mixed maning as a sort of Foreign Legion loyal to NATO as the best way to prevent any withdrawal of units by a member and he suggested that control might be handled essentially as outlined in the Report Spaak welcomed the proposal and believed it would reassure the European members and receive practically unanimous support except again by de Gaulle The President urged that a start be made promptly in order to resolve the various problems involved In mid-November the MLF issue was discussed with the President at some length in the NSC for formal action on the basis of a requested study by State and Defense 1 The President reaffirmed his decision to submit the proposal to the NATO Council in December and approved its specific terms Besides committing the five Polaris submarines as an Interim Force the U S would offer to assist other NATO members to create a permanent NATO force deployed at sea initially with 100 MRBMs if 1 the Force was based on multilateral ownership financing and control and with mixed manning to the extent considered operationally feasible by SACUER and 2 a suitable formula to govern decisions on use be deveoped which would maximize its effectiveness as a deterrent and establish its multi lateral character The U S would also st i -ess that the other NATO nations should strengthen their conventional forces in accordance with NATO military plans in order to maintain flexibility of response At the December 1960 meeting of the NATO Council of Min-isters Secretary Herter presented this offer Thus President Eisenhower launched the MLF as one of the last acts of his administration He fully recognized that he could not commit the incoming administration and that the MLF would require Congressional approval but he said he wanted to leave it as a legacy of his conviction of what should be done After its own NATO review the Kennedy administration essentially reaffirmed the Eisenhower offer in the President's Ottawa speech in May 196 For the next three years the MLF pursued a confused course until sunk by President Lyndon Johnson Its vicissitudes under Kennedy and Johnson were due in large part to confusion as to policy such as the 1962 Nassau agreement with the U K and the absence of the conviction and commitment that Eisenhower possessed Note In transcribing Dr Bowie's handwritten revisions to his original text I have taken the liberty of making some minor changes and or corrections regarding punctuation wording etc without altering the essential meaning - RAW o oo o DEPARTMENT I 1' o ' ---- OFFICE OF THE SECRETARY S E CR E T 1'' August 21 1960 MEMORANDUM FOR THE SECRETARY l Subject Lo1_ i-Range Planning for the Atlantic Community I 1o I have finished the report which you asked me to undertak c on the tasks facing the Atlantic nations in the coming decade It is now being reproduced and should be available upon your return 2 The report is long even though it focuses on a few key issues I found it impossible to treat these issues meaningfully in shorter compass The summary and the chapter on North Atlantic defense may warrant special attention if you are pressed for time 3 Mr Merchant arranged for me to see the President as you had requested I discussed the report's conclusions especially in the military and political fields at some length with the President on August 16 He was interested and said that he would like to discuss the military issues further with General Norstad and me He has set aside the morning of September 12 for this purpose 4 I also went over the conclusions of the report with Mr Dillon Mr Smith and Mr Kohler who were away from the Department at the time of my meeting with you 5 I have asked that copies of the report be provided Mr Dillon Mr Merchant Mr Smith Mr Kohler and Mr Martin in the Department If you approve I would suggest that copies be furnished -- with an indication that the report has not yet been acted on by the Department -- to General Goodpaster for the President General Norstad Mr Burgess and Hr Irwin S E C R E T I I ' I o ' oo o ' S E C R E T -2- and Mr Irwin for Secretai -y Gates - all of whom have asked for copies It would also be useful to send a copy to Allen Dulles CIA is preparing a related longrange estimate on NATO 6 I do not know whether you plan to make the report available outside the U S Government It could readily be put in a form which would be suitable for release to other NATO allies If you wish I can prepare an edited version for this purpose 7 I will be in Washington September 12 for the discussion with the President and will be glad to meet with you in the afternoon to discuss the report further if you wish 8 Please let me know if I can be of any help in the Department's consideration of the report Robert R Bowie o c R ' _ ' ' o --- -' 'SF - R E T ' THE NORTH ATLANTIC NATIONS TASKS FOR THE 196O's Table of Contents Page Letter of Transmittal---------------------------------- 1 SUMMARY------------------------------------------------ 5 CHAPTER ONE Challenge of the 196O's----------------- 9 CHAPTER TWO NATO Defense---------------------------- 1 CHAPTER THREE The Atlantic Nations and the Less Developed Countries--------------------- 73 I I CHAPTER FOUR Relations with the Communist Bloc------- 99 CHAPTER FIVE Resources of the Atlantic Community----- J 15 CHAPTER SIX The Requisite Political Framework------- 43 o o o SE CR Eo'I' - 1 - Dear Mr Secretary I submit herewith the report on The North Atlantic Nations Tasks for the 1960 s which you asked me to prepare This report seeks to anaiyze the issues facing the Atlantic nations in the coming decade It is designed to provide a broad framework for the NATO Planning Exercise but is not ccnfined to measures that should be undertaken through NATO It seemed to me that the Atlantic nations should consider the entire hallenge facing them in order to determine which tasks should be performed in NATO and which through other instrwnents To prepare a report of m nageable size it has been necessary to fccus on key long-range issues for which concerted effort by the Atlantic nations will be most urgently needed in the 1960 s The report dces not attempt to provide a blueprint for specific action for the decade ahead It seeks rather to lay out The Honorable Christian A Herter Secretary of State o - 2 - ooo 3 E- c R E 'T oo to lay out general purposes and guidelines on which agree ment might be reached by the Atlantic nations Such agreement would provide a framework-within which specific actions could be effectively directed to agreed purposes In preparing this report I have been assisted by a small staff drawn from various parts of the Government and from institutions outside of Washington I appreciate very much the cooperation of you and Mr Merchant in bringing this group together The Staff included Deane R Hinton FSO member of the Staff of the Mission to the European Communities Brussels Malcolm W Hoag of the Rand Corporation and former member of the Faculty of the National War College - Professor Klaus E Knorr Associate Director of the Princeton Center for International Studies Hal B Lary of the President's Council of Economic Advisors Louis Marengo Central Intelligence Agency Irving A Sirken International Cooperation Administration Francis T Williamson FSO former Director of the Office of Research and Analysis for Western Europe Department of State who is assigned to the American Embassy in Bonn 5 E C i E T o S EC R E T - 3 o - 3 - Brigadier General Hamilton A Twitchell U S Army Department of Defense was most cooperative in providing liaison with his Department nd the military services Many officers and officials from the Department of Defense were also helpful in providing information and views In addition papers on specialized topics were prepared for me by Robert Eisenberg Division of International FinanceJ Alfred Reifman Division of Commercial Policies and Treaties and Mr E B Skolnikoff of the President's Science Advisory Ccmmittee Mr Robert Komer of the Central Intelligence Agency has be n of great assistance in the drafting of the report Mr Henry Owen of the Policy Planning Staff has been particularly helpful in contributing to the Chapter on the less developed areas Many other officers of the Department of State and Professor Lincoln Gordon of the Harvard Business School who is a Consultant to the Department have commented on various portions of the report or discussed with me the problems covered I am very much indebted to all those who assisted so ably in the preparation of the report Of course the responsibility for its conclusions is mine Sincerely yours ROBERT R BOWIE o o 3 ' c c a c T THE NORTH ATLANTIC NATIONS TASKS FOR THE 1960's A Report to the Secretary of State by ROBERT R BOWIE August 1960 _ S S' C- R E T oo o o oo o o o - - o o o s E C R E T o - THE NORTH ATLANTIC NATIONS TASKS FOR THE 1960 1 s SUMMARY 'CHAPTER ONE 1 Challenge of the 1960 1 s Basic Goals pp 19 - 2 3 The Atlantic nations must try over the long run both a to shape the basic forces at work in the world so as to create a viable world order and b to prevent the Sino-Soviet Bloc from undermining that order or from dominating non-Communist countries 2 Major Tasks pp 24 - 25 To fulfill this dual goal the Atlantic naticns must a assure their defense b assist modernization of less developed areas c - develop a cclllliion strategy toward the Bloc d mobilize the resources required to accomplish their purposes e create a political framework within which they can work together to these ends 5 - o oo oo o -6 o o r c -s - E o o o T o This report analyzes tliese five tasks and the kind of actions which the Atlantic nations must undertake in order to discharge them In pursuing these tasks the Atlantic Community should redi cover the cohesion and sense of purpose which marked its c -eation- over a decade ago CHAPTER TWO 1 NATO Defense The Problem pp O o 7 - 38 During the 1950 1 s NAT0 9 s strategy was based en decisive US superiority in st -ategic and tactical nuclear weapons Under these conditions the strategy was effective in deterring agg_ression and maintain ng the co fidence of our allies __ Growing Soviet missile-nuclear capabilities are new eroding the credibility of the threat of a strategic nuclear response to less than all-out Soviet attack In consequence NATO Europe may become vulnerable to th -eats of both limited aggression and nuclear blackmail Europeans will fear both an excessive NATO response to limited aggression and the absence of a US strategic response to greater threats The Soviets may seek to exploit this vulnerability for divisive effects o o _C__ o o o o a o lk' ' ' - 7 _ The problem cannot be met by enhancing NAT0 1 s tactical nuclear capabilities For the Europeans tactical nuclear warfare would be tantamount to a general holocaust 2 Basic Approach A viable NATO strategy for the a 1960 s must enhance the non-nuclear capability of Shield forces to resist attack by Soviet ready forces and substantially lessen their dependence on nuclear weapons b enable NATO to mount nuclear retaliation against larger threats without a US veto J Revised Shield Strategy pp 39 - 51 The enhanced non-nuclear capability could be based on central front Shield forces somewhere near SACEUR 1 s target of JO divisions which will come within reach when the German build-up is completed These forces must be better trained and equipped and have more adequate reserves The added costs may be partially offset by some economies and should be well within NATO capabilities Our NATO allies should be the more willing to meet these costs because they would be related to the only kind of strategy that makes sense for European countries The tactical nuclear capability of the Shield would be iimited It would net be designed to fight a tactical nuclear war in Europe but only to deter all-out massir g 1 RE T o So - 8- S E R E T -------- of Soviet forces for conventional attack and to reinforce the strategic deterrent to Soviet nuclear attack 4 Strategic Deterrence pp 51 The need for strategic deterrence must continue to be largely met by US strategic forces which should be maintained in a high state of effectiveness But a supple- mentary NATO strategic deterrent would assure our allies that they were able to deter Soviet all-out attack on Western Europe by means under their own control Independent national str tegic forces are net a suitable answer to this need The UK's experience shows that no major European power is able to produce a credible national deterrent from its own resources Even if feasible proliferation of independent national deterrents wculd be dangerous inefficient immensely costly and have a major divisive effect on the Alliance A veto-free NATO strategic force under command of SACEUR wculd meet many European ccncerns and would not be subject to these drawbacks Sea-based systems parti ula ly POLARIS submarines offer great advantages for this fcrce They wculd be less vulnerable in war-time and lese likely to create political issues or public concern and more secure against seizure by national forces in peace-time -5 o E C R o E 7 1 - 9 The US should offer to create such a NATO strategic force in two steps a Interim Force The Interim Force would consist of US-manned POLARIS submarines deployed in European waters under the full control of SACEUR in peace and war This force would fire its missiles i upon direct order from SACEUR in the event of large-scale nuclear attack on the Treaty area or ii as the North Atlantic Council might decide in other circumstances or iii as the US might decide in the absence of an affirmative SACEUR or NAC decision b NATO Deterrent For e In setting up this Interim Force the US would offer to assist NATO in creating a multi-national submarine missile force NADET under _common financing and ownership and with mixed crews so that no ally could withdraw units and employ them as a national force The use of this force might be governed by advance authority to SACEUR to deal with large-scale nuclear attack and by NAC decision in other contingencies as in the case of the Interim Force If feasible the US would seek by minimum custody or other means to keep weapons design data secure The US submarines which had constituted the Interim Force could be sold to NADET pp 61' - 65 E ECR2T -------- y - 10 - 5 Evaluation pp 6 5 - 72 The above Shield and deterr ent proposals would be inter-dependent Together with US strategic power they would deter Soviet military actions against the _NATO area they would also safeguard against Soviet blac anail for divisive or political purposes and go far to meet legitimate European concerns CHAPTER THREEi 1 The Atlant c Nations and the Less Developed Cou tries The Problem and the Atlantic Naticns 1 Stake In It pp 73 - '79 The Atlantic nations have a vital interest in the continued independence iriternal cohesion and stability of-the less developed nations This interest is cnly likely to be fulfilled if the less developed countries can progress toward mcdernization under moderate governme t and through evolutionary means The obstacles are formidable1 decades or even generations will be required Basic responsibility for achieving this progress must rest with the less developed count ies The Atlantic nations can make a significant contribution however -since they possess mcst of the needed outside resources o - o o 2 ' SE ' RF ' I - 11 - Financial and Technical Aid pp 79 - 86 Over the next decade the Atlantic nations sh ould plan to double or triple the ir financial aid to the less developed countries If e quit ib1y shared this bu 'den can be reasonably assumed by healthy Atlantic economies It will be more difficult to meet the need of many less developed countries for people and institutions capable of effectively launching and prosecuting their cwn devel opment programs To do this they will require the advice and services of outside experts help in training their own officials and experts and assistance and encouragement in their self-help efforts Bilateral programs by' the Atlantic nations will be important in meeting this need' They should be admin- istered for their long-term effect on the less developed countries ' modernization rather than for short-term political or commercial advantage International and private agencies have many advantages in meeting the need efined above Their intimate partici- pation in nation-building is more likely to be welccme they are better able to insist on rigorous self-help and their efforts are less apt to serve as a p recedent c R ' T - - ----- f i ECT ET 12 for Soviet activity The Atl-antic nations should therefore make a special effort to enhance the effectiveness of inter- - national and private aid to less developed countries a They should support making the UN Special Fund into a key instrument for helping governments of less developed countries plan and organize their over-all development programs They should favor enlarging the Fund's scope and resources and giving it policy direction of related UN programs as necessary to this end b They should supp rt an increasing role for the IBRD and IMF in advising governments of less developed countries and an expansion in the resources of the IBRD's affiliate -- the International Development Association - c They should establish a Development Center to promote i two-way contacts between civic business and professional and labor groups in the Atlantic and less developed nations ii the rec uiting and t --ainir g of young people in the Atlantic nations for service in less developed areas and iii research on key develcpment problems S E C R E T o 8 E C l E 3 r - 13 - ' Drade With Less Developed Countries pp 67 - 93 ' In view of the dependence of the less developed countries on trade for foreign exchange the Atlantic nations should a cooperate in developing feasible methods for mitigating the effects on less develooed countries of drastic changes in prices of their primary exports and b reduce the barriers to these countries' exports of manufactured products This reduction might be undertaken simultaneously by all the Atlantic nations so that its burden could be shared The domestic impact might be cushioned by compensatcry assistance to the groups most directly affected 4 Public Order pp 93 - 97 The Atlantic naticns should seek to enhance UN capabilities for maintaining peace and order in less developed countries They should be prepared to earmark contingents or transport facilities for use by future United Nations forces and they should urge other countries to do the same 3EC E T - 14 The US and some other Atlantic nations should maintain effective forces which could be used in limited operations to hel_p less deve oped countries to maintain order or resist aggression CHAPTER FOURg 1 Relations with the Communist Blc Basic Approach pp 99 - 101 In concerting their strategy regarding relations with the Bloc the Atlantic nations must reconcile the requirements of simultaneously competing with and dealing w th the Bloc a They need to maintain both an unremitting awareness of Bloc hostility 9 even when the Bloc is following a scft line and b a continuing desire for useful relations with the Bloc even when tensions are at their peak 2 Econcmic Relations pp 1C2 - 05 The Atlantic nations shculd maintain existing limited controls on trade partly as a stand-by safeguard and should also agree to hold the annual volume of private credits to the Bloc to approximately the existing level J Exchanges ppo 105 - 10'7 The Atlantic nations should press for widening ccntacts with the Bloc and should a try to agree on common objectives and guidelines for their bilateral exchange prcgrams o t ' c J E T 3 E C it EooT - 15 b exchange information secured through these programs among themselves 4 pp 108 -109 Psvchological Warfare The Atlantic nations should seek greater coordination of objectives and actions in psychological warfare against the Bloc in order to increase its-potential impact s Arms Control pp 109 - LJ 3 The NATO countries should seek more actively to develop arms control neasure s which would serve to reduce the risk of accidental war to hinder the spread of national nuclear capabilities to stabilize aeterrence and possibly to enhance regional security in Europe In order to facilitate genuine negotiation the NATO allies should consider allowing the US tc negotiate with the USSR in accord with agreed policy In that case the US should consult regularly with its NATO partners about the progress of negctiations CHAPTER FIVE Resources cf the Atlan-ci Ccmmunitv The steady growth and effective use of resources in the Atlantic naticns is essential fer meeting the tasks ahead 1 To this end The Atlantic nations especially the larger ones should concert their economic policies more effectively through OECD to stimulate mere rapid growth They should be willing to discuss freely all aspects of domestic 5 i' C- R E T - 16 economic policies and should seek to arrive at a common view of appropriate policy objectives and priorities 119 122 2 They should consistently seek to reduce and remove restrictions on trade The Uq should take the lead by drastically revising its trade agreement legislation to permit negotiation of substantial tariff restrictions in GATT The long-range goal should be to move toward free trade at least among the more advanced nations 3 127 The US should join a reconstituted European Monetary Agreement 4 _ 21 - 127 - 1 08 - The Atlantic nations should make a renewed effort to ensure fuller and more concerted use of their scientific capabilities 128 - 134 5 -- They should expand research and develcpment tc meet NATO's need for non-nuclear weaponry and should intensify efforts to secure coordinated production of major military materiel in Europe and eventually throughout the Alliance I o o V _13'1-'- 14 _ CHAPTER SIX Requisite Political Framework Concerting of policies and actions by the Atlantic nations as discussed n prior Chapters will require a firmer political framework 1 Evolving Relations ppo 143-148 The creation of an adequate framework is complicated by the fact that relations among the Atlantic nations are - o o o o i o S F R E T in transition o '' '' '' - 17 - With bccming recovery European nations have regained their confidence and aspire to a larger role in the Alliance and in orld affairs Their total potential would justify and support such a role if effectively marshalled in an integrated Europe With the existing disparity in strength and influence however 9 even the largest of the existing European nations cannot no_w be an equal partner with the US Tensions are generated by this conflict between desire and reality and by differing policies f_cr curing it on the part of the British and the European Community and among the members of that Community 2 Structure pp 149 -154 The most radical answer would be Atlantic Confederaticn But whatever its ultimate merits it would be premature _at this stage -- a source of division and weakness and not of strength It should not however be foreclosed The more practical course is to encourage the European Community to become an effective entity if possible with Britain as a full member in the interests of the Atlantic Community and of Britain US and a With comparable resources the European Community could become full and equal partners for joint policy and action and could fashion the necessary instruments to give effect to their partnership 3 Improving Existing Instruments pp 54 - 59 In the meantime NATO and OECD must be strengthened o o o o ' o - 18 - I 'J especially for the concerting of basic planning and policies of their members a Several measures are suggested A Steering Group shquld be established within the NATO C_ouncil to develop joint proposals and policies among the five or six members having most responsibility in world affairs US UK France Federal Republic Italy and perhaps Canada The NAC would be kept informed and would act on matters of general concern b An Atlantic Planning G oup should be created to help develop a consensus on the common Atlantic interests on basic issues Ccmpcsed of three to five senior and distinguished men not representing any-nation but speaking as individuals this grcup would recommend to NATO Foreign Ministers long-range objec ives and policies c To facilitate NATO-OECD coordjnation 9 key member states of both agencies should have a single national delegation to both under a representative able to speak for his Government and to influence its policy making d To foster wider public understanding and suppcrt it would be desirable i to expand the NATO and OECD information program ii to develop the role of the NATO Parliamentarians in relation to both NATO and OECD iii to foster the nascent Atlantic Institute especially as a basis for wider public activity -- E e C ll E T - o o ' - o 7 - _- t r o o - - ' - - ' L o CHAPTER ONE CHALLENGE OF THE 196O's Table of Contents I o Page ' The Nature of the Challenge------------------ 19 II The Soviet Response-------------------------- 21 III The Response of the Atlantic Nations--------- 22 IV The Basic Tasks------------------------------ 24 sE RcT o- - ----- SECRE' ' ' ------- - 19 - CHAPTER ONE THE CHALLENGE OF THE 1960 1 s I The Nature of the Challenge -- o oo o I As they enter the 1960- -s -'-the Atlantic nations are beset by uncertainty about th challenge they face about their purposes and about their relations among themselves Ten years ago the tasks facing the Atlantic Community seemed clearer and the common course more readily definable essentially to reconstruct Europe with US help and to defend it under the umbrell of US nuclear supremacy tasks were accomplished with great success Those Over the inter- vening decade Europe atta-ined high prosperity renewed confidence and collective security But new problems have emerged Today the Atlantic nations face a much broader challenge- a challenge posed as much by dynamic forces of change as by the Communist effort to capitalize on them In their breadth and scope the new problems are far more complex and difficult than those of the last decade The Atlantic Community must find common answers to them or face the prospect of declining viability and a revival of inefficient and divisive national approaches to what are really common tasks It is vital therefore for the NATO nations to analyze their basic situation and to define their long-term purposes for the _3 CR 2 T E o R f 'foo oo - 20 coming decade In attempting to devise such long-term guidelines they must first grasp fully the nature of the larger historical cycle within which their tasks must be faced The challenge of our era far transcends the role of_NATO as a security organ or even the broad power- conf lict between the Atlantic nations and a hostile Communist Bloc It is the challenge of an age of revolution -- political social industrial and technologica l -- a centur y of dynamic change of which this power- conflict is but a part The basic forces of this ageowi mold the world environment in which the contest must be fought indeed the side which can best adjust to and oope with these forces will almost surely determine the shape of the future In the ccurse of the twentieth century the whole world o -der is being profoundly reshaped For- forty years the prier order has been breaking up under the impact of the forces of nationalism war the ontinued spread of the industrial revoluticn and the onrush of science and technology into whcle new dimensions precess are Key factors in this a the emergence of the less developed nations with the sharp dichotcmy between their vaulting aspirations and the r inability tc achieve these unaided b the grcwth of new power grcup ngs chiefly the Ccn unist Bloc the emerging European Ccmmunity and the nascent Atlantic s -E - R E T --------- r ------ I' '' oo _ ii_ - 21 - ' Community and c the niissile--nuclear X'evolution in means of warfare which is oradically al t ering old concep_ts about the use of military force We are now at midpoi t in the 20th Century Revolution The undermining of the prior_ order has about run its course The challenge of the coming d_ecade is how the new order to replace it will be shaped II The Soviet Response The Soviets have made frightening progress toward molding this order in their image And looming behind Moscow is the burgeoning power and ven more fervid ideology of Pe_iping Both are confident that history is on their side a nd that their concep_t of world order will inevitably win out Nor is this ccnGBPidence purely doctrinal they see the actual forces of change to date as moving rapidly in their favor We cannot affort to underestimate this challenge o The rapid growth in ove -all Bloc power is creating a threat on a new scale in the coming decades Even with a much lower gross output which is likely to remain lower into the 197ois the Ccmmunists are increasingly able to concentrate resources -- on investment cuter space armaments or foreign aid -- in amcunts i alling or exceeding our own There has also been a striking change in the military balance between the US and USSR Thrcughcut the 1950's s c RST' - - --- --- - 22 the US had nuclear super iority to co-m pensate for an imbalance in Qonventional st ength But Soviet acquisition of nuclear- missile capabilities is creating a nuclear stalemate the full affects of which are as yet unclear Nonetheless the Soviet leaders clearly comprehend the awesome risks of nuclear warfare They will conti ue to prefer non-military modes of conflict so long as confronted with a credible deterrent though local aggress on may seem less risky to them Mor eover to them peaceful co-existence is merely non-military conflict hence -recurrent crises are inevitable -with all the risks of miscalculation they en'tail At the least we must - expect a heightened cold war ch_allenge With new confidence in its power Moscow is shifting to a forward policy aimed primarily at exploiting the accelerating revolution in the less developed world The outcome in this most active arena of East-West conflict will profoundly effect the future of the Atlantic world But in Europe too the Communists will exploit unresolved political issues and divergent n tional aims to further their aims III The Response of the Atlantic Nations To rise successfully to the challenge of the 1960 1 s the Atlantic nations must recognize clearly the twofold nature of that challenge It involves more than defending s E C R E ' o '6' E c l E 'I oo - 23 - against a growing Communist hreat It also means responding creatively to our age of revolution 0 developing a positive and dynamic concept of where we wish to go ourselves and thus___adapting to and building on the forces of change in the world Indeed these two tasks are inseparably related we cannot accomplish one without the other Thus the Atlantic nations must set themselves both creative and defensive goals for the decade ahead 1 Creatively to shape the basic forces at work in the world toward a viable order which will accommodate the needs and aspirations of boththe developed and less developed states 2 Defensively to prevent the Ccmmunist Bloc from undermining this nascent order and substituting its own These goals are obviously long term in nature we must not limit our perspective to a decade The dynamic forces of change in the world and the contest to see who will best adapt to them will continue well beyond this period Eventually there may emerge a world order into which the evolution of the Communist states themselves might permit them to be absorbed But even if these states should cease to be aggressive the affirmative tasks of adapting to an age of revolution are a challenge in their own right -- a challenge to the dynamism and energy of free men oo s E C 1 E T - ----- - 24- IV E RET -2 _ __ '-' _ c a The Basic Tasks The real'ities of power dictate that the Atlantic nations must play a central role in fulfilling the defensive and creative goals outlined above Their military strength must form the main bulwark against Communist aggression Their economic strength must provide much of the means for constructive growth of the less developed nations With their common traditions comparable level of development and the already substantial ties among them they form a nucleus around which at least a Free World order can be built If the Atlantic nations are to use their power effectively to these ends they will need to undertake these five basic tasks First they must adapt their military strategy to the realities of the 1960's and thus help assure the security of the Free World Second they must jointly foster economic growth independence and viable societies in the less-developed world Third they must work out a common strategy to govern their political and economic relations with the nloc Fourth they must incre_ase the vitality of their own societies and the strength of their eccnomies to provide a greater margin of resources for meeting the challenges they face S E R - r o S E _ IL 1' - 25 - Finally the Atlantic naticns must develop political o ties and institutions ccmmensu ate with the unity of purpose and effort requir_ed for these tasks In agreeing en the nature and o 1rgency of these tasks the Atlantic Community shou d rediscover the cohesion and sense of purpose which marked its creation more than a decade ago This report attempts to analyze briefly the key tasks which should have priority during the coming decade In suggesting measures for attacking them the report makes no effort to provide a detaiied or precise blueprint No one can set fixed goals for 1S70 in such a period of change But if our actual _policies must be flexible and pragmatic they shculd be g ven a clearcut sense of direction which will knit them together into a coherent and effective program for the 1960fs The essence of long-range planning such as the Alliance will now undertake is to identify the key forces at work in the world and to determine how to influence or adjust to them so that the Atlantic nations can then conduct their policy within the framework of agreed long-range goals The human and material resources for fulfilling these goals can be made available of insight and will The central question is one This report tries to contribute to the insiqht only the Atlantic nations themselores can generate the will 3 E C-ll E 'f oo ' 3 i ooo o ' C '1 E 'T ' ' ' CHAPTER TWO NATO DEFENSE Table of Contents Page I Need for Review------------------------------ 2T II The Strategy of the 195O 1 s------------------- 28 III Revised Strategy for the Shield-------------- 39 ol IV Reinforcement v -Relation of Strategic and Shield Proposals--- 6T VI Broader Political Advantages of Proposals---- 68 S Strategic Deterrence-------- 51 E R F ' ' o o oo S E C R GBP '1' 0 - 27 CHAPTER TWO NATO I DEFENSE Need for Review Whatever else it may be _or become NATO must first of all assure the security of its members In its first decade the Alliance fulfilled that function Indeed it developed a system of collective defense based on common strategy and combined forces unique among peacetime alliances Today the NATO Alliance is subject to a gathering ferment of doubts and disagreement This deepening unease is rooted in a weakening consensus on the nature of the Soviet threat and on the best ways of meeting Communist pressure It is also rooted in a declining confidence in the existing strategy of the Alliance The broader threats'of the 196O 1 s make it essential that the confidence of NATO members in its ability to discharge its security function be restored Without that confidence there can be no meaningful Atlantic Community Inter-allied cohesion may weaken in the face of growing Soviet power and individual members may as a result prove easy targets for Soviet threats and cajoling To avert this danger the strategy of the Alliance and its capabilities must be adapted to the realities of the 196O's The strategy must be viable politically and psychologically as well as militarily It must give the members enough confidence in their military security to stand firm in the face of nuclear o S E C f J T - 28 - e C a E T o blackmail or limited conflicts o o It must pull them together rathe - than apart The vastly grcwing Soviet nuclear threat clearly dominates the central security question for NATO Can a strategy evolved during the 1950 1 s to meet a very different assortment of threats carry us -- with reasonable safety and confidence through the 1960 1 s What are its current advantages and disadvantages what alternative strategies are possible - II The St -ategy of the 1950 1 s 1 The St -ategic Concept a Definition The dominant official statement of NATO strategy focuses upon deterrence at three levels - i Against incursi ns infiltrations or hostile local acticns in Western Europe forward units of the NATO Shield forces act as a deterrent These units can counter these minor aggressicns if they occur without acceptance of local defeat and thus enforce a npause''o ii The Soviets can of course broaden or prolong any such minor fighting after the npause attack in Europe on a large scale Or they might begin an In either case whether or net the Soviets initiate the use of nuclear weapons they are to be met by such weapons from the outset There is no place in the official strategic concept for limited war with the o o ooo o o oo o o SoYiets in Europe oo o o C oR o E- '1' o _s- --- o o o I Expanded action in Eui ope by t i e Soviets 1 in short would call for use of all weapons and forces at NATO 1 s disposal - iii The remaining aggressive possibility is for the Soviets to begin by launching general nuclear fil o From this course they are to be deterred by the retaliatory power of the West particularly that of the strategic missiles and bombers of the United States b Risks for the Soviets This strategy when adopted rested on a very strong foundation With its nucl ar superiority the United States 'I ' was then in a position without great risk to threaten the Soviets with unacceptable__ penalties Accordingly if any non- nuclear fighting with the Soviets in Europe were broadened or prolonged NATO forces could i use nuclear weapons and ii broaden the area of hostilities to include Russia The effect was to put on the Soviets the awesome burden of making hard and risky choices At each level of Soviet choice -- whether to provoke NATO in Europe whether to move to major aggression in Europe or whether to launch general I The terms expanded action and ''expanded attack are used in this report to refer to any hostile local action which is broadened or prolonged by the Soviets and which would therefore warrant use of nuclear weapons under existing strategy SACEUR has indicated however that nuclear weapons would be used only as required o t c R E 1' ----- - 30 - o ' war_ the prospective penalties were high and the rewards low if the Soviets chose the more aggressive course If rational they should have been deterred as they certainly were if they even contemplated aggression c Risks for NATO Conversely where NATO strategy rested upon taking the initiative in employing nuclear weapons and carrying retaliation to Russia the r1sks for the West were low If the Soviets had launched general war in the 19SO's by a surprise attack upon SAC 9 they would have had to use bombers in a raid that might have yielded the def nders hours of warning and which might have had great difficulty in penetrating air defenses If they had triggered expfnded attack in Europe much less of their still meager stockp le could have been spared for nuclearexpensive tactical use than would have been possible for NATO Most of it would have had to be reserved for strategic intercon tinental bombing Not only would the Soviet forces and people have been damaged severely by more plentiful US weapons but its advantage in mobilized manpower would have been swamped by NATO nuclear weapons Europe would have been seriously but but no means irreparably damaged in the process of defending it d Economy The dominant strategy of the 19SO's thus posed unacceptable risks for the USSR and acceptable risks for NATO 3 E C R E T It had the p C_LR_ E lJ additional advantage of economy - 31 If an expanded non-nuclear attack by the Soviets need not be met in kind and reliance could be placed instead upon nuclear deterrence then preparation for non-nuclear warfare could be limited And if nuclear weapons were o balance greatly advantageous to the West then Soviet initiation of their use might be regarded as improbable Thus NATO preparations for nuclear war stressed strike-first rather than strike-second capabilities with great peacetime savings which were purchased however at the cost of marked vulnerability These economies it m st be noted were not carried in practice as far as the strategic concept might have implied The Shield of armies and supporting services was not reduced to anywhere near a mere 11 _ ripwire 1 11 and some capabilities for sizeable conventional warfare were retained This imposed additional costs but it also preserved important assets and flexibility for ma ing new strategic choices Nonetheless the dominant strategy relied mainly upon nuclear defense with its then existing advantages of acceptable risks and economy 2 Future Feasibility of Current Strategv a Effect of Growin Soviet Strategic Capabilitv The growing Soviet nuclear missile capability is eroding the credibility of current NATO strategy Its premise was US supremacy in strategic and tactical nuclear weapons With the - 32 - '' advent of relative Soviet parity however the United States could no longer uae nuclear weapons against the Soviet Union while remaining virtually unscathed Furthermore the much larger Soviet supply of fissionable material would permit nuclear weapons to be used effectively against Western Europe General war in the 1960 1 s would thus damage as well as the US North America and Western Europe e ormously with civilian casualties probably numbered in the scores of millions These soaring costs of general war cast doubt on threats to unleash it against limited aggression Yet the primary danger in this period is just such limited aggression rather than a carefully-planned large-scale invasion of Western Europe preceded by massive Soviet mobilization and deployment Where and if conflict breaks into overt military action - in Europe it will probably be minor in magnitude at the beginning We are currently faced with tense bargaining and possible hostilities for example over Berlin And so long aa East Germany remains under Soviet domination the possibility of spreading disorders cannot be wholly discounted The questicn is where and on what terms any outbreak cf hostilities on this central front would stop The Soviets could increase non-nuclear military pressure beyond the ability of our forces to respond in kind and general war Then we would have to choose between defeat Those are grim alternatives Faced with this prospect there is real danger that some - E CR ET SECRF T - 33 - of our NATO allies will feel so vulnerable militarily that they may become highly susceptible to Soviet pressures Indeed the credibility of the threat of general war to deter any expanded attack by the Soviets in Western Europe is already being increasingly questioned'by our allies and this anxiety is acting as a major divisive force in NATO today The Alliance may be subjected to severe and possibly unbearable strain as a result If our allies are not to be confronted with the prospect of such unacceptable alternatives in the event of hostilities then something must change in the strategy It is no longer politically feasible to plan to threaten general war against every expanded attack by the Soviets in Western Europe To do so clearly involves a _prospect of Western casualties on a scale which makes the threat unacceptable to cur allies and incredible to the Soviets That very incredibility in turn increases the risk of more aggressive Soviet policy The risks of current strategy have become exorbitant b Limits en Strategic Deterrence It is not feasible in the coming decade to make massi'le ' retaliation once again a reasonable and credible threat against every expanded action in Eurcpe This would mean restoring and maintaining the prospect of tolerably lcw damage to the West in general war while effectively threatening unacceptable damage to the Soviet Union This would require an assured SAC ''' s LG R EJ' - 34 - capability to destroy the steadily growing Soviet retaliatory power which 9 if the Soviets protect it well will include perhaps thousands of targets many of them sheltered or mobile dispersed 9 and concealed and all protected by a defensive network Any attempt to implement this 'alternative would involve i the certainty of considerable time and enormous expense and ii a great uncertainty of achieving the desired results It is this uncertainty of results that must be emphasized -- -We cannot be confident that threats of massive retaliation could again be a reliable deterrent against every expanded action in Europe And 9 where the stakes a so 'high gambling simply will not do There remains of course a reduced but vital range of massive Soviet aggressions for which there is no possible alternative than deterrence by a strategic threat For these as indicated later strategic deterrence should be feasible But there is no prospect of recovering a degree of strategic nuclear superiority so great that it would again permit us credibly to threaten general war in response to any expanded Soviet action in Europe c Tactical Nuclear Defense Tactical nuclear defense is not a solution A strong tactical nuclear defense had considerable appeal as long as the West but not the Soviets enjoyed nuclear plenty has been undermined The appeal Soviet nuclear plenty has rendered a NATO strategy based on tactical nuclear warfare very costly in peaceS E C R E T - 35 'time and self-defeating in wartime i Peacetime Cost At present the tactical capabilities of either side might still be crushed by a surprise nuclear attack which was relatively clean For example tactical aircraft at fixed soft bases could be destroyed with relatively few air-burst nuclear weapons with consequent relatively small damage to cities and populations But major reliance on a tactical nuclear posture would more and more lead both sid s to develop and deploy missiles which unlike current aircraft were concealed mobile or hard To destroy these missiles would require resort to much higher yield weapons It woultl require satura- tion bombing in the case of mobile targets and ground-burst - weapons in the case of fixed hard ones The political costs - of a strategy which contemplated atomic hostilities on this scale in the event ofmny expanded Soviet action would be very great The economic costs would scarcely be less For although some soft tactical targets in Eastern Europe and the Western USSR -- especially interdiction points of road and rail junctions ports and bridges -- will not grow appreciably in number the number of Soviet tactical missiles in this area would certainly grow if the West set out to create a capability for destroying them Only through such proliferation could the Soviets ensure the survival of their tactical missile capability in the face SECRET - --- 5 E C __L - 36 of a determined Western effort to create an effective countermissile force In that event W7stern nuclear missile require- ments would probably be in the thousands rather than hundreds ii War time Effect The peacetime political and economic costs of _such capabil'ities would certainly be very large But the costs of using them should tactical nuclea r war break outo would be prohibitive Such a war would destroy much of a densely populated Western Europe for which it would be difficult and immensely costly to give even minimum protection through civil defense A nuclear war in Europe cannot be so limited in civilian destruction as to be acceptable to Europeans Nuclear weapons to be sure can be small in yield and relatively cle i _ and they -- can be employed only as a ir-burst weapons against mainly military targets But military plans are not tending to implement this concept but rather its 11 dirty 11 opposite and the dynamics of combat in any case make likely swift escalation from very limited use of nuclear weapons to very damaging use The best answer to an effective little bomb is a bigger one with no natural limit on size or savagery in retaliation or counterretaliation The line between no nuclears and nuclears is definable and observable but not so the line between a clean and a ' 'dirty nuclear weapon which is a matter of degree Moreover any concept of limited nuclear war in Europe would destroy the Alliance By admitting the concept of a S E C - l E T -- S E C K E 'r - 37 - nuclear war restricted to Europe the United States would be I renouncing in current strategy to broaden the threat inherent the area of major European hostilities to the USSR Thus it would be giving the Soviet heartland sanctuary status in order to preserve North American sanctuary There can be little appeal to our allies in this most divisive of strategies An explicit attempt by the US to disengage from the most terrifying threat leaving its partners to bear the brunt of that threat would undermine NATO's central principle of common defense It would shatter rather than rebuild European con- fidence and invite a spread of neutralism iii Implications Given its consequences tactical warfare in Europe is not acceptable or credible as a deterrent to anything less than all-out Soviet attack For deterring this contingency 'it makes more sense to rely primarily upon strategic forces that threaten vital targets in the USSR -- both the existing strategic force in the US and the proposed strategic force in Europe which is discussed later in this paper These forces promise to be much more effective for deterrence and for conducting general war if deterrence fails For the outcome of general war will be determined by the degree of damage inflicted on the US and USSR rather than by the course of tactical fighting in Europe Strategic forces thus seem the most powerful and therefore lease unpromising means of deterring general war 5 E t R E ' ' And if - 38 - 3EC l ET ' we have bought this capability for strategic deterrence why duplicate it by great expenses directed toward less effective nominally tactical means to the same end It is thus as infeasible to meet NATO 1 s current military problem by a thorough effort to enhance the Shield's tactical nuclear capability as it would be to meet that problem by trying to restore high confidence in the threat of massive strategic retaliation d Conclusion Accordingly NATO should revise its strategy and forces to reflect the conditions of the 196O 9 s - For a viable NATO strategy in the coming decade two changes seem essential i A Shield in Europe whose conventional capabilities are - BO strengthened that the increasingly precarious dependence of NATO upon nuclear response to non-nuclear agg ession will be acceptably lessened ii A means of reassuring Europe that effective strategic power will be aYailable in a crisis to deter remaining threats The means of achieving these changes and their consequences are separately explored in the following two sections prefatory caution however is required inte dependent One The proposals are Unless the Shield is strengthened the prcposals to assure strategic deterrenct to Europe would be too risky for reasons that will be indicated The proposals form a package that must be judged and if accepted implemented as a whole o S E R E T - ------ o o SECRE'l oo - 39 - III Revised Strategy for the Shield 1 Scope of Revision In revising NATO strategy for the 196O 1 s the aim should be to strengthen the Shield's conventional military capabilities to defend Europe against non- uclear attacks and to reduce its risky dependence upon initiating the use of nuclear weapons By this means NATO could avoid the terrible dilemma which the current strategy invites If small non-nuclear hostilities started to spiral into greater magnitude NATO need not then choose between either i local defeat if it decided against using nuclear weapons 3 or ii tremendous casualties if it uses them NATO could instead meet greater non-nuclear threats resolutely in kind 3 with better hope for assuring a favorable out ome The burden of risky decision - would then be as much upon the Soviets as on us Arid any - pressure upon the Soviets to move to preemptive attack would be lessened In sum fulfillment of this alternative would create a much less precarious situation in Europe before or during hostilities and would enhance the cohesion of the Alliance a These are great advantages Non-Nuclear Capability To attain these advantages it is not necessary that the NATO non-nuclear capability be able to deal with the contingency of all-out conflict resulting either from deliberate maximum Soviet attack or from an unlimited spiralling of limited conflict o 5 E C R E T 40 - o f o o o E C P f 'f o All-out Attack 1 o Soviet mobilization for a non-nuclear conquest of Eur pe would present the same clear-cut and extreme provocation as a Soviet nuclear attack The same strategic forces that are reLied upon to deter nuclear attack can also deter this provocatipn Either event would justify invoking the supreme deterrent Unlimited Soiralling If NATO's conventional defenses are bolstered the likelihood of any limited hostilities in Europe spiralling into all-out conflict will be low For the Soviets would hardly continue in so dangerous a spiral if the Shield were holding and tactical victory were not close at hand They would realize that steadily expanding conflict would generate a growing risk of general war by accident or - misc a lc ul a ti on and a growing likelihood of the US threatening - strategic retaliation if the conflict were not settled on satisfactory terms For these reasons an adequate non-nuclear defense ios defined reasonably if somewhat unprecisely as one that could contain any Soviet conventional attack based on ready forces ' for a sufficient time for the wider risks to become clear Such a defense should be our stated goal The time perspective should be measured in weeks or at the most months rather than years Such forces should deter any such action or its e pah- sion for the reasons already indicated b Tactical Nuclear Capability in Europe The revised strategy would recognize that hostilities on 5E CRET - s E C R i T' o o - 41 a sea le inYolving tactical uee of nuclear weapons would rapidly move int o general strategic warfare and that primary reliance should be placed on ether means for deterring or conducting such warfare This would not imply an absence of NATO tactical nuclear weapons They would still be necessary to supplement strategic forces in deterring the Sov iets from initial use of tactical nuclear weapons and from an all-out and hence vulnerable concentration of Sowiet conventional forces in attack ng Western Europe But this concept would call for preparation on far lcwer scale than would be required -- to enable NATO to carry on tactical nuclear warfare What tactical nuclear capability would be required to fulfill these purposes if conventional defense in the theater - is thus to be assigned primacy a the Shield's goal - The rough rule should be to add nuclear to non-nuclear -capabilities only when addition is relatively inexpensive in terms of money and of compromising the Shield 9 s non-nuclear combat effectiveness Large ta ctical missiles illuatrate the issue They would replace tactical aircraft which are useful for non-nuclear w airfa r e and which with re-or ientation of design and concept could be made more so Not so an MRBM which would be an absurdly expensi7o way of carrying conventional high explosives and whose cost s a nuclear delivery weapon could only be ju3tified if it were intended to enhance the strategic deterrent o S E R E 42 SEC RB 'f' Consequently new tactical nuclear capabilities should in general be added to the Shield only to a limited extent The ' goals of strategic deterrence to all-out attack and of deterrence to lesser non-nuclear attack should have first claim on military expenditures If th se goals are fulfilled most of the burden of deterring the enemy from moving to nuclear weapons or to a decisive concentration of conventional forces because he finds our non-nuclear defenses strong can be borne by our strategic forces For these deterrent purposes however nuclear tactical air strike forces will also be needed in the theater Some small missiles dual-purpose Howitzers nuclear-capable aircraft etc which can be added at moderate cost can also be valuable in supplementing deterrence -On the other hand if this concept be accepted some current trends must and can be reversed The design of tactical aircraft oriented almost exclusively toward nuclear delivery 9 with non-nuclear capabilities severely compromised in the process is one example On the ground the compromis- ing of divisional conventional capabilities in terms of reduced artillery and the other arms should be questioned In design of equipment as well as organization and deployment of forces we must be s re that we do not so compromise our non-nuclear capabilities as to dissipate their potential adequacy 2 Effect on Deterrence On balance would this shift in strategy reinforce or s -E t- r GBP T oo ooo S E o R E 1 ' o I o o - 43 impair deterrence a Deterrent to All-out Attack The NATO strategy must attempt to deter both all-out and lesser aggression o Unde the existing and revised strategy the deterrent to all-out attac k would continue to be the threat of strategic retaliation against the Soviet Union The conquest of Western Europe should therefor eD continue to entail costs too high to be attractive b Deterrent to Lesser Aggression The change would occur at the other end of the spectrum There the deterrent would be enhanced in effectiveness The strategic threat could deter any attack aside from incursions and infiltrations so long as this threat remained credible to the Soviets a nd our allies But as its costs to the United States sorr the Soviets may be tempted to actions -for their political effect They may consider in this event that the risks of the strategic response against smaller actions are declining and that the potential political impact of such actions is increasing They may consider that the risks are declining because execution of the strategic threat would involve such disproportionate costs to the U S They may consider that the potential political advantages of lesser actions are increasing because our allies would be torn in the event of such actions between two fears i that an all-out war response would destroy them for apparently o E' c R oE ' s F C'R 'B 44 - ' rr o o o inadequate cause or ii that failure to respond would leave them naked to Soviet power The USSR might expect that threats of limited action could undermine the Alliance by the interplay and conflict of these two fears so long as NATO strategy was predicated on an all-out resp_onse to any expanded action ' As its own strength grew therefore the USSR might be tempted at some point to threaten'or undertake such limit d actions The revised strategy would mitigate this danger Greater conventional capability would allow such threats or actions to be dealt with by responses more in keeping with their scope In consequence allied hesitancy about reacting and Soviet doubts as to whether NATO would react would both be mitigated Moreover the Soviets would be deprived of the leverage of blackmail which is an adaed incentive to local aggression Not only would an effective NATO response short of general war be more certain but the Soviets would still have to weigh the serious danger that once yiole ce began i t might get out of hand and escalate into general war Hence their uncertainty about the ultimate costs to them would remain and would reinforce the certainty of an effective initial NATO response as a deterrent to such actions The revised strategy should also reduce the risks of general war because it would reduce the probability of limited aggression spiralling into general war NATO would be under less compulsion to move from non-nuclear to nuclear hostilities o o o o o 5 o E R o E '1' - 45 This NATO shift from a trigger-happy situation to an inherently mar stable situation would reduce the likelihood of enemy nuclear pre-emption Under the revised strategy initiation of nuclear weapons would mark the boundary between limited and general war It would be a conscious decision to expand hostilities through a _step that was definable observabJ e and of the gravest portent If Western retaliatory p_ower is powerful and secure as it certainly can and should be the probability that the Soviets would thus deliberately decide to convert European provocations into general war should be very small Deterrence of general war would be strong 3 Feasibility A NATO policy that minimizes the need for Western initiation of nuclear war and yet strengthens deterrence demands adequate non-nuclear forces What is adequate and how feasible is NATO financing of such forces a Size and Calibre of Forces How many NATO divisions would be required on the central front to counter an attack by Soviet ready divisions in the period ahead In determining the feasibility of the proposed strategy a precise answer is not necessary It is enough to know whether the proposal would be prohibitively expensive In considering the question military experts from the various services were consulted within a relatively narrow range Their views seemed to coincide A judgment must take account of o i - ' the probable Soviet ready divisions after recent and prospective reductiono 11 ' ii the number of these which could be allocated to the central front in Europe J iii limitations imposed by logistic difficulties and excessive vulnerability from undue massing of forces iv the defensive advantage in non-nuclear warfare estimated variously at 2 1 or 3 1 v the density of forces required for specific areas reserves etc In the light of these factors the requirements for nonnuclear defense against ready Soviet forces do not appear too ambitious In fact they__probably do not exceed the present NATO targets of 30 divisipns for Shield Forces Both logistic and military considerations would sharply limit the proportion of total Soviet ready forces which could be allocated and deployed on the central front And the Shield's defensive objective should permit its forces to counter a much larger attacking force The resulting requirement could surely be met by a NATO that has greater manpower as well as wealth than the Soviet Union and European Bloc The expected growth of German forces will bring the number on the central front to 1 According to current national intelligence estimates Soviet grcund forces will be cut from 100 combat ready divisions plus 70 cadre as of 1 January 1960 to 65 combat ready divisions plus 60 cadre as of 1 January 1962 SF GREr -47 more than 26 divisions A target of 28-30 ready divisions could be reached if some F rench forces returned from Algeria or other members increased their contributions And further cuts in Soviet conventional forces might make a lower NATO target _adequate There thus 13eems to be no rational basis for the frequently-encountered despair about NATO force levels The picture is much less reassuring regarding the kind of divisions their quality the desirable number of reserve divisions tactical air and other complementary support and stocks of arms and supplies ities must be squarely faced It is here that new responsibilOne gets the impression that many European forces suffer from a pervasive neglect which is not surprising as long as governments are persuaded that virtually all protection ests with nuclear deterrence and - tha t little urgency attaches to concepts and budgets for non nuclear defense The proposed strategic concept will not permit these rationalizations of neglect to continue For example supply levels for fighting will have to be improved Above all modern equipment and training will be essential When the adjective conventional is used to describe non-nuclear warfare it does not mean World War II equipment New weapons tactics and ideas are needed to match and surpass the Soviets in this area Complexity sophistication and high mobility of at least some key forces are required For this troops must be well- trained and ready which implies periods of service long enough ' GBPC R E ' - 48 S I to master complicated jobs R E T The political obstacles to longer service are serious but might be mit1gated or overcome if the purpose of the non-nuclear force was understood 0 b Costs and Savin s Thus the new requirements do involve considerable new expense for qualitative improvements in those forces But added outlays for these improvements must be balanced against off-setting economies made possible by other aspects of the suggested strategy Each of these potential offsetting economies is considered further below i New Technology There appears to be real promise that new guidance developments in defensive missi es suitable for use in a non-nuclear conflict may increase the dvantage of defensive over offensive forces If so 9 force level requirements for defense should drop accordingly The revolutionary advances in guidance for example may so bolster air defenses -- at least in a non-nuclear environment where those defenses should survive that any Soviet advantages in numbers of tactical aircraft may be less grievous than formerly estimated The tank spearheads of future attack might be hampered by oth r advances in guidance This is only a single illustration of reasonable possibilities but one with real point On balance new technology may not be cost-increasing though the reverse may prove to be the case Research and development needs to be urgently pursued in the now-neglected area of non - nu clear o weaponry S E C R E T f_E C R T - 49 o o o ii Other Innovations There are other pertinent possibilities for economizing ' Are there unexploited opportunities for great improvements in efficiency through integrated logistics for NATO Should they be seized despite all the political resistance attendant upon breaking the principle of national responsibility Surely these questions should be answered authoritatively by expert inquiry As with weaponry advances a renewed sense of purpose in non-nuclear defense can and should spark new efforts for innovation and improvement iii Utilitv of Reserve Forces Non-nuclear attack is not as overwhelmingly swift as nuclear attack This means renewed utility for reserve forces - equipped To be sure these reserves must be trained and Still in Western Europe the cost of reserves should be moderate They need not have the full range of advanced equipment and full supply that is required for global mobility of ready forces like the US divisions in Europe Nor obviously do they require the transport and expense of maintenance with dependents far from home should be substantial Savings These advantages may be especially great for territorial reserves While more highly-trained and equipped units operate as key mobile forces _in the theater such reserves can complement them with less mobility iv Savings in Tactical Nuclear Capabilities The greatest area for compensating economies in the theater - 5V SEC-R'F '1 o horll'ever lies in lessened preparations for tactical nucl' l II'' w i rfare If we plan on the r uclear initia tive in Europe amd ll eliance en NATO tactical nuclear foirces 9 the expenditures would be very lall ge indeed NATO would be forced thol oughly to renovate its forces 9 to ensure their survival in the face of growing Soviet tactical nucleaiir capabilities involve far more than merely adding mobile missiles of longer range Oll This would hardened Command and control centeira would have to be protec ed 9 as would all vital combat e lemel l ts dcwn to and including individual defense battel ies and basic inf ast ructure and c ther support n g facilities Operaticr 3 lJ y- expensive short-take-off-and-lar ding airplanes in dispersed locations would have to replace ll egular aircraft A full fledged sophisticated air defense aystem might ha e to be inctalled in Eu -ope akin to tha t in Nor th America Mcst o f these needs which 'llt'ould have till be met for an effect Ye tactical nuclear war capability 9 would not have tc be me- acie the proposed stx-ategy In sum the proposal fc r e-nhancing Shield ncn-nucleR c apabili ties would invcl e sigr ificant co sts mainly fo r q 1 a itative improvement These costa would be partly offaet by va iety of possible savings Hew much costs wculc go up is uncertain The alte -native of a Shield thoroughly rev mped for tac ical nuclear war in an era of growing Soviet nuclear capabilities would be far more costly Tho p rc po 'jal is e-xpensi ve cnly in S BCRE T ' SECR'2T - 51 - comparison with alternatives that would simply accept acrossthe-board deficiencies everywhere or that would move to a more trip-wire concept in Europe without facing the concomitant need to bolster strategic offense and defense capabilities c Political Requirements What is proposed is surely within the economic capability of an Alliance whose income -- especially in Europe -- has risen at such a rapid rate in recent years To be within our political reach however i Its merits and implications must be clearly understood within the Alliance Europeans will not support the unexotic but extremely useful repairing of Shield deficiencies unless they understand that fulfilling this task will reduce the likelihood that any significant use of the Shield would trigger o nuclear hostilities ii The US must maintain its share in conventional defense If we want to persuade our Allies to buttress the Shield we can hardly begin by diminishing our contributions to it Later when European contributions cari and should be greater and the threat may be lower US contributions may be able to decline without impairing our security IV But that time is not at hand Reinforcement of Strategic Deterrence 1 The Need for NATO Strategic Capabilities a The Basic Reguirement More powerful conventional forces will obviate dependence on trategic retaliation for countering certain classes ------ C R E T - 52 - S E C R E T ' --- o 'o of aggression eopecifiod above ' Out ' ' e cannot e - JC'- pe de pe nd- ence on strategic deterrence for other typee ot agg r a iorn -notably nuclear blackmail and the thre a1t of mae eive nuclee r assault on Western Europe Soviet threats of rocket attack the most flagrant fo rm of' political pr e1 u 1ure may well grow as they alr eady i hor r siignP of doing Lest Western European countrier 1 become cowed by Soviet threats these must be rendered ineffective by credible count r-threat Such a counter -threat is also re quired in orde to deterthe Soviet Union from cripeling NATO conventional forces by a nuclear blitz or from expanding a conflict to extreme limits in the event a conventional Bloc attack is 1Ni pelled by the NATO forces Even a strong conventional Shield cannot pr-ovide uch a counter-threat b The US Role US strategic forces now mnd for the for eae eable futu re must be the main instrument fo r deter r ing e xt - eme S Priet provocations in Europe as well as directly against the US Strengthe ning the Shield would lessen the burden on US st - tegic forces by reducing the range of Soviet provocations aga1r et which threats of strategic reprisals must be made Even in a period of nuclear stalemate this appears to be a cr6dible SECRET o fl E burden for strategic forces i c P E T o o' o oo 50-'o ' ' To this end We should maintain a strategic posture that lends ' real credence to our deterrent policy Soviet fe ar of US deterrent power must be maintained by preserving our strategic capability against_ the USSR espite Soviet defensive measures ii We should state and restate our intention to protect Western Europe We should make cl'ear that we believe that i t is rational for the US to equate the security of Western Europe with that of the continental US iii We should try to preserve a critical area of uncertainty in Soviet estimates of the US will and ability to strike under conditions which are highly provocative but fall short of all-out conflict The Soviets must be given some cause to fear that t e US might in this circumstance at least unleash a limited strategic nuclear war counting upon _its nuclear blackmail to intimidate a Soviet response In all these ways US deterrence can be kept suffic ently powerful in the eyes of the Soviets to meet the burden which would be placed on that deterrence under the proposed strategy c The European Requirement Providing ample US strategic power to meet these threats is indispensable but it is not enough European anxieties will center increasingly on whether that power can be counted U On in a crisis Will the United States resolutely face an acute risk of millions of American casualties in general war o 3r' CR E r S E GBP 'R B or 5 - in order to deter a looming or actual Soviet major provocation in Europe We Americans may maintain an effective strategic striking force and it is important' that we do We may say that we can be counted upon and it is important that we do But these words and military preparati ns can merely allay deep-seated 9 nxieties These anxieties will only be removed if the European members of NATO have a capability for strategic retaliation 9 in order to deter the kinds of Soviet aggression which even a strengthened Shield could not counter The following sections appraise 9 very swnmarily 9 alternative means for creating a supplemental European deterrent and propose the outlines of a constructive scheme for meeting this need 2 Independent National Deterrents The strongest evidence that the US deterrent does not fully meet the need in European eyes lies in the costly efforts f the UK and France and prospectively perhaps of others 9 to secure nuclear retaliatory power that is under their own control They are motivated of course by prestige and many other considerations apart from the fear that US retaliatory power might be withheld in a crisis Nonetheless their sizeable effort lends credence to their expressed fears about American resolution National deterrent forces should therefore be considered first in our exploration of alternatives S E C R E T o o a 55 National Military Considerations The military appeal of national forces lies in th hope that a missile capability which could assuredly place a few city destroying warheads on target might be enough to deter the Soviet Union from an attack upon the country that possesses thein The task of constructing even such a capability is enormously difficult For no European country is such a missile capability from its own efforts in sight until the latter part of this decade if then Britain has given up on its own missile and France has a long way to go By the time s ch a capability might come into being its retaliatory power would be uncertain Protectipg such a force and ssuring its ability to penetrate defenses would not be easy in view of continually advancing arms technology and in the face of a rich resourceful opponent The only certainty if this course be followed is that of high expense The military value is con ectural Another military implication is equally plain If such capabilities are attained they will virtually be confined to deterring the one contingency of mass nuclear assault upon the country in question Against any other threat their employ- ment would be known by all to be suicidal and hence the credibility of their employment would be virtually nil b Collective Military Implications If national deterrents offer such uncertain and limited military rewards for sizeable expense their import for a o 5 E C Ir E T o oo o - 56 - o o o o s B C R I 'J ' o o balanced collective force in NATO is clear They divert great resources from the needed Shie1dD while not substi uting for it They are doubly divisive in the A- lliance 9 fer they impede collective preparations while they attest to lack of faith in collective defense For collective efficiencyD a proliferation of purely national deterrents from purely national efforts is the worst of all alternatives Operationally 9 such forces also pose a grave problem If ever they are used will they be coordinated in employment with the NATO strategic elements Uncoordinated forces could lead to the worst sort of target ing namely 9 every one hitting Soviet cities almost exclusively If so 9 the Soviets 9 with no major cities left as hostages to restrain their behavior 9 and with - none of their retaliatory power damaged 9 could hardly be - expected to limit their response In a nuclear world when wars can start by accident as well as design 9 losing even the faint hope of controlling general war is extremely seriouso Coordinated operational control of global strategic elements is required c Political Considerat ons Given these sweeping military drawbacks should the US try to lessen them by i opposing national military deterrents or ii greatly reducing their wastes by weapon and other asaistance S nce the UK and even more ins1stently France are requesting US assistance in the development of independent s E C R E T oo i E R E i oo o o o oo o o - 57 o oo o o o oo o nuclear capabilities it has been argued that meeting these demands is a condition of inter-allied harmony 9 and that denying them will prejudice the a llied defense effort Though this may be true in the short runi - tho long-run consequences of _lending such assistance are almost sure to be disruptive of allied unity Yielding to French pressures would only encourage further French demands And some allies notably West Germany would soon find their under-privileged status intolerable and make demands which other a llies would strongly oppose To encourage such decentralization of deterrent power would also increase the risks of accidental or irresponsible use and the perception of this possibility would foster further discord in tho Alliance It would moreover 9 strengthen the world- wide proliferation of nu lear capabilities with all its implications for tensions risks and reduced chances for arms control Still can the United States prevent the spread of independent retaliatory forces If such proliferation is inevitable would the US do best to help its Allies direct their efforts into the relatively most promising channels save them the wasteful drain on their resources and shore up Allied cohesion as best it can In fact this proliferation is not inevitable unless we made it so Even if it were over the longer run there might be merit in slowing down the spread is firmly determined to go ahead o o o o o oo oo o o s If left to their own resources o E C R' At present only France - ' oo - - 58 even the o o o o Ll LLl o o o o o oo oo o ooo French might eventually find the effort unpalatable and the results disappointing -- esp ecially as the costs and difficulties of creating an effective d livery system become more apparent On the other handD if the US helps the F 'ench to acquire a national capability at bearable costso not only will the F_rench be encouraged to persevereD but the UK will be virtual y constrained to h '1-ng on_ to an independent nuclear force West Germany ia certain to claim the same privilege before longD and Italy may be induced to demand equal status as a middle power o Much 9 therefore 9 depends upon US policy may not succeed without US aid National efforts And even if some spread cf independent nuclear deterrents proves inevitable its scope can be greatly reduced th_e process slowed down and the new cl b members kept from acq iring weapons systems which wculd I give them strong confidence in their ability to act indep ndently 3 A Collective Deterrent for NATO National programs will seem even less attractive to European countries if a constructive alternative to independent national deterrents is put forward A multi-national deterrent is 9 in principle more attractive because it would avoid or greatly lessen the drawbacks of national deterrents But an attempt to create such a mult -national deterrent faces a new problem that many deem insuperable How can a multi- national force be d pended upon for protection when other members o s E e R E T oo o o o o C' o '--- may veto its employment C R ' o o B T o o o _ 59 - This central problem can it is believed be solved through the arrangement outlined below It is proposed that a m lti-national strategic capability be established in Europe'under the command of SACEUR purpose would be to I I Its give the European members of NATO a missile threat against the USSR which would be a serious strategic deterrent To relieve European anxieties about the ' dependability of such a force in a crisis it is proposed that SACEUR be authorized in advance by the North Atlantic Council to use the force against key Soviet strategic targets in the event that the Soviets initiate major nuclear attack on the Treaty Area The force could be used in other contingencies if and as the Council might decide The implications of such a- control arrangement wixl be considered in more detail later in this report The proposed multi-national retaliatory force could not be brought into being for several years given lead-time requir ed for international negotiation procurement and training There- fore an interim force of US-manned POLARIS submarines under the control of SACEUR is proposed which while it falls short of meeting full European demands could help to cover the gap The propose interim program would symbolize concretely US desires for constructive assistance Should the NATO members not agree to create its successor the interim program wo ld remain as an acceptable alternative o o o s t C o EUR 'T o o _ 60 - S C 'l B - The United States thus need not and sho1J1ld not bell oupplicant ' for creation of the_multi-naticnal force given ita late and problematical arrival this fGrce would not help to cloae any missile gap The US would be favoring its A1lies by helping them to set up the multi -naticnal force and it should view its bargaining about the terms on which that force was to be set up accordingly The essential components of the proposed interim and multi-national deterrent programs are outlined in par graphe 4 and 5 below their overall effect and the adeau cy of p opoeed control arrangements is evaluated in paragraph 6 4 The Interim Program INPRO a Under the Interim Prcgram the US would offer to 'make a substantial proportion of US-manned POLARIS submarinea 9 11 as they become operational available to NATO to be under the complete and direct control of SACEUR in peace and war Hie control would be exercised whether or not all the sutmarines were deployed in the area of hia cc a nd b The US wculd authorize the firing of the m asile i by order cf SACEUR in the eve-r t of majc Sc tdet nuclei r attack on the Treaty area ii by decision of NA C er other procedure approTed by the NAC in other contingencies In eithe In additicn this force might be upplemented by including other US strategic forces that are statio ed in Europe or within NATO command areas provided that the British did likewise o s E C R E T ooo oo o o S E C oo oo l E 'i o _ 61 - case the US would commit itself to comply with the decision c the US would also retain authority to fire the issiles without NATO approval Even so the arrangment would assuage European fears as to whether US strategic power would I be used 1 in their defense o d The number of POLARIS submarines in the INPRO fleet might be as high as 12 or 14 by the mid-196O 1 s i If desired merchant vessels or conventional submarines might be substituted for the POLARIS submarines e Crews would be American and warheads would remain under US custody until -the decision of employment has been made by SACEUR the NAC 1 or the President of the United States as indicated above f Since the POLARIS submarines involved would be allocated from the numbe programmed in any case for the US the US would bear the costs of production maintenance and operation S The Multi-national Strategic Force NADET The NATO Deterrent NADET is envisaged as a natural successor to the Interim Program The US would inform the European countries when it set up the Interim Program that it stood ready to assist in establishing this successor arrang ment on two conditions a NADET must be sufficiently multi-national so that no participating ally could pull out units to be employed as a national force o o For this purpose the force should be multi- S E C R o E T o o 62 o o oo o o ' o S- E R GBP Tooo national down to and including the firing crewsp and its administration ownership and financing should be multi-national b The NATO members must be able to agree on an effective means for its control This may well be difficult INPRO would 9 however have established a natural precedent which the NATO members could well follow If they did the force could be employed by SACEUR in the event of large scale nuclear attack on the Treaty area and its use in other circumstances would be as determined by the Council By such advance authority the NATO members would only be recognizing that in fact a nuclear attack on the Treaty area would inevitably trigger use of an intact NATO strategic force To safeguard data on weapons design the US would maintain -1 constructive custody of POLARIS warheads undertaking in advance to release them whenever the force was 'ordered into action under o_the agreed procedures The sole purpose of formal custody would be to preserve security of design data since it would not affect control for use it should not be objectionable to the Europeans If they objected nonetheless and pressed for full NADET custody in peacetime the US would have to decide whether this change was essential to make NADET an effective response to European concerns and thus to head off national programs Other- wise this change should be strongly resisted by the US in order not to maka available weapons design data to the participating nations Even if custody of the warheads to be trans- ferred to NADET consideration should be given to having missile o oo oo oE c R E o o SECR T- ------- and warhead maintenance provided by the US in installations required in any case for the US POLARIS aubmarin fleet If the Europeans accepted this proposal we should be - prepared to take part in common financing and manning of the submarines and supporting facilities as agreed by NATO In addition the US would be providing the warheads POLARIS submarines from the existing INPRO or new production could be sold to NADET as and when it stood ready to receive them The US would not insist that all NATO members join NADET if the prescribed conditions were fulfilled It might con- sider allowing NADET to be organized under the European Community or WEU if they desired to do so and met the prescribed conditions and put them at NATO disposal If the NATO countries wished to accept NADET without the proposed multi-national character and control the US should not agree Without this feature it would be relatively easy for NATO countries to withdraw their contributions to NADET and employ them as national units Multi-national command or ownership would not be an adequate safeguard against withdrawal if the submarine were manned by nationals of one country If servicing facilities were multi-national this could be an obstacle to effective national use over the long run but it would not hinder immediate operational use of any for national purposes If the European countries concluded that some other weapon systems than the POLARIS-submarine combination was more advantageous NADET could adopt it However there are obvious S E C R E T o o _ 64 - ' political advantages in offering what appears to be the single most promising system to our allies In any event we should strongly urge adoption of a sea-based system since this would offer great advantages In war-time such a system appears to be the least vulnerable to missile or air attack or to land invasion A Soviet first strike on such a system would cause less incidental damage to NATO countries and forces ard this would be apparent to the Europeans beforehand These advantages would apply as well during any limited hostilities when sea-borne missiles would also be secure This invulnerability of sea-borne missiles would malle I them more effective as a deterrent and less trigger-happy in the event of either a grave international crisis or limited hostilities - In peacetime sea-borne missiles would avoid the host country problem with any claim of special veto They would also be less vulnerable to Soviet intelligence and to take over by national forces They would minimize the risks of sa9otage and of nuclear accidents which would generate a strong popular neutralist reaction missile force would be 11 Most importantly a sea-borne out of sight and out of mind Instead of rushing conspicuously about European roads or railroads and thus stirring up all sorts of fears and controversies it would be undersea most of the time -- visible only when it put into a relatively small number of ports In combination these advantages are so overwhelming as SEC R T to outweigh high costs per submarine costs would not be unduly high Actually total system Some 200-odd missiles should be adequate as a strategic deterrent in view of their invulnerability 6 Evaluation of NADET a Value as Deterrent How would NADET and a bolstered Shield contribute to deterrence of Soviet attack on the Treaty area i For the contingency agreed in advance large scale nuclear attack on the Treaty area NADET would be an effective deterrent Its threat of heavy damage would supplement that of the US strategic force ii Conventional attack on the Treaty area by ready Soviet forces would be covered by the improved Shield As indicated earlier this Shield would be a more credible threat than the present uncertain threat of nuclear reaction iii Attacks on the Treaty area of greater scope but short of large scale nuclear attack such as all-out Soviet conventional attack would be covered in two ways First US striking power would threaten nuclear retaliation as at the present Second the Soviets could not count on NAC failure to agree on NADET use under these conditions Since all-out Soviet attack would be preceded by Soviet mobilization or prolonged hostilities there would be time to try to reach agreement The creation of NADET would thus reinforce the deterrent SEC R C T ' o - 66 ' -- to Soviet attack on the Treaty area and the effectiveness of NATO forces in responding to attack b Effect on National Programs Would the proposal satisfy the demand for national strategic deterrents Given the NAC-agreed advance rule of engagement and the absence of US veto the proposal would go far toward meeting European concerns in advance The major threat would have been covered With a reinforced Shield and NADET NATO would thus have made effective provision against all likely military contingencies The rE _maining unlikely contingencies would if they materialized leave time for NATO to agree on NADET action Since the Soviets could not count on non-use of NADET its deterrent value would be at least as effective o a threat as are inadequate national forces The unilateral US strategic power and the tactical weapons of other NATO countries would still be available for use even if NATO could not agree on NADET's use NADET then should meet the fundamental need to assuage European anxieties about the reliability of strategic deterrence Failing agreement on NADET INPRO will contribute materially to meeting this need Indeed our mere offer to help create a multi- national NATO capability not under US control whose use by European countries would clearly involve the US in nuclear war would probably go far to meet any European concerns as to our present willingness to use strategic power in Europe's defense T e R GBP o o c o o o ' _ 67 - Relation to Alternatives The INPRO NADET proposal would be much better than any alternative solution The disadvantages of spreading national deterrents have already been-discussed The proposal is superior to adopting the control pat ter n of the proposed MRBM program with control being shared by the US the host country and SACEUR The US veto would prevent this arrangement from meet- ing the European desire for a veto-free force which is behind the drive for national capabilities And to fo ego the US veto over missiles supplied to host countries would create new problems and tensions For many allies would consider that SACEUR's veto by itself was an inadequate safeguard against irresponsible use by national crews The best combination appears to be responsible strategic ' backing by US programs and reassurances a US strategic POLARIS capability under SACEUR control and the prospect of some form of a NADET program v Relation of Strategic and Shield Proposals The proposals for a strengthened Shield and an assured deterrent are interdependent The risks of giving our partners a trigger on nuclear war demand that they join with us in reducing the likelihood that it need be pulled because provocations in Europe of Soviet That NATO agree to strengthen the conven- tionaltional Shield should be a pre-condition to US implementation of the NATO collective deterrent Otherwise the risks would be _ 68 excessive o o o o S-EG RoETooo oo The proposals should be considered and negotiated 1 as a package The S ield build-up could begin promptly and should have made substantial progress by the time NADET came into being several years henc VI Broader Political Advantages of Proposals 1 Cementing the Alliance Strains within NATO have been obvious to all and some are so deep-rooted that no particular proposal for revised strategy can do more than mitigate them go far toward Surely however these proposals alleviating prospective strains and providing new opportunities for mutually beneficial cooperation a They avoid the most divisive of strategies The proliferation of national strategic deterrents -- surely the most disruptive course w th its foundation in gnawing doubt that others will come to one's defense in the face of the worst threat -- is countered in two ways First a strategy for limited nuclear war in Europe which would eventually drive Europeans toward deterrents of their own if not to neutrality is rejected Second a constructive alternative is offered in the form of a NATO strategic deterrent which in extremis can trigger nuclear war-- almost certainly involving the US What more striking reaffirmation of US determination to defend Europe could be given These proposals in short recognize the need for inter-allied interdependence and focus upon it b The proposed strategy lends new credence to the old goal pf a Shield in Europe In re-vitalizing the old goal and o 'o demonstrating its continued utility it restores the basis for truly collective action An integrated Shield with other associated capabilities demands a coalition effort No single country can go it alone in this area and yet together the job is well within NATO capabilities The essence of collective defense by common effort should once again be restored c Above all the proposed policy would make sense from the Western European point of view A strategy which relies on general strategic war or widespread and intensive use of tactical nuclear weapons for combatting all but minor forms of Soviet aggression will not continue to make sense to Europeans The realization of these military facts of life is bound to spread widely To refuse to discuss changes in strategy lest the discussion of the need for change create apprehensions is a heads in the sand policy It invites the prospect that the US will be dragged into change by less-well informed allies rather o 1 y 1 eading the way than Iconstructive d Finally cohesion would be strengthened because the first steps to implement these proposals could be taken by the United States quickly without protracted inter-allied negotiation The proposals for a NATO deterrent could be put forward and US actions to implement its interim phase might begin straightaway Initiatives could be taken promptly in themselves evidence of strengthening the Alliance and they could be pressed as inter-allied consensus develops Over the longer run this constructive approach should go -- s i t R E T _ 70 - ' o ' far to restore European confidence in American maturity and in European security To restore this confidence is a pre-condition of a strong Europe a strong NATO and a strong United States Tha t these proposals lend themselves to this end is their main but by no means only political-military advantage 2 Consistency with Global Requirements The proposed policy wouid increase the flexibility of NATO military response in the Treaty area and also broaden US -and for that matter Western -- choices in countering aggression in the rest of the world Suitable US strategic forces are required to back our European allies _ deterrent value elsewhere as well Those forces have great Without them the US would be in a weak position to counter aggression in the Middle East and Asia where the power of the Soviet Union and of Communist China to invade and occupy is difficult to balance by creating _sufficient local stren1t ' ho Similarly a build-up of conventional forces in Europe would require a modernization of US tactical forces permit us to do so relatively cheaply and make US divisions more effective for operations in other parts of the world 3 Avoidance of Extreme Provocation to USSR While we must be prepared resolutely to counter Soviet pressures and to apply pressures on them when the specific opportunity is promising we must also avoid acting provocatively when to do so does not on balance serve a vital purpose The Soviet Union should find the establis ment of a multi-national E C' R T - o o o o oo o o - E c - R' E oo o o o o oo o t 71 deterrent system less provocative than the development of independent strategic capabilities especially if such a development foreshadows the placing of strategic nuclear weapons into West German hands And a sea-based strategic I I capability will be less provocative than the deployment of MRBM 1 s in Western Germany The reduced dependence of NATO Shield forces upon nuclear weapons and especially upon public threats to initiate their use to compensate for non-nuclear battle weakness should dissipate Soviet incentives for pre- emptive-nuclear attack In all these respects the proposed posture should be conduciv to lessened tensions and military stability 4 Compatibility with Arms Control - One of the menits of the proposed policy is its con- sistency with continuing effort toward arms control It leaves open a wide range of options should any of them appear to be constructive avenues to progress First discouraging the development of independent national capabilities on the strategic nuclear level should facilitate rather than impede agreements and control systems in this area and lessen whatever pressure precedents may have upon the Soviets to assist China toward such capabilities Second building up non-nuclear strength will make our posture more symmetrical vis-a-vis the Soviet Union than it is now and a better position from which to negotiate regarding any reduction of conventional forces o o o ooo s E C R L oo o _ 72 o o oo o o o o o o o o o o oo oo -E e E o o o o o o _ _rn Third our lessened dependence upon tactical nuclear weapons to compensate for 'non-nuclear weakness will allow more freedom to negotiate control of nuclear weapons systems Fourth by reducing the range of possible aggressions which we cannot deter or meet without going to the brink of all-out nuclear war we will be in a better position to propose and accept measures designed to reduce the danger of strategic surprise attack o S - C 'R E T CEZEQCE o o o o o SlfCoR J --- o o o 1 1 1 oo CHAPTER THREE THE ATLANTIC NATIONS AND THE LESS DEVELOPED COUNTRIES Table of Contents Page I Introduction- ------------------------------- 1 1 II Nature of the Problem------------------------ 75 III Assistance to Less Developed Countries------- 79 IV Trade Problems of Less Developed Countries--- 87 V Public Order--------------------------------- 93 - c r ' o ' oo o o o o o oo s E o o c Ro E T o oo o oo oo ' o o - 73 - CHAPTER THREE THE ATLANTIC NATIONS AND THE LESS DEVELOPED COUNTRIES I Introduction 1 Importance As suggested earlier the Atlantic nations face a twofold task in the coming decadeg a to create over the long- run a world order congenial to their values and to stable peace and b to protect the non-Communist nations frcm domination and this emerging order from disruption by the Soviet Bloc This constructive task must focus in good measure en the less developed areas -- whose rapidly evolving course will - largely shape the world in-which our children live The stake of the Atlantic nations in the independence and viability of these areas ranks second only to their interest in defense of the Atlantic area They also have the means to serve that interest With less than half the people they have over five times the GNP of the less developed areas If properly used 9 their resour es both human and material -- can play a key role in the future growth and stability of the less developed nations 2 Need for Common Strategy_ In planning for the decade ahead the Atlantic nations should seek agreement on a broad strategy regarding the less 3 E C 'P E ' ' 74 ' oo developed areas o o o o fr E C JZ C ' 'f o o o o ' The nature of the problem the importance of action by them to meet it 9 a nd the general guidelines which might govern action Such a strategy is outlined in this Chapter The requisite actions wi1o1 have to be carrie d out through many agencies in and out of the Atlantic Community As indi- cated later NATO can play a role in establishing a political consensus as to the nature and urgency of the task and the apprcach to it which is required But NATO is net -- and should not become -- an organ for decision or action regarding less developed areas Other instruments 9 including OECD 9 are better suited to this task An agreed basic strategy can make i t easier for the Atlantic nations to concert on specific measures For thege measures will then fall into place as mutually reinfcrcing parts of a coherent over-all effort In the absence of an agreed basic strategy on the other hand 9 the Atlantic nmticna 0 actions toward less developed areas may be disjointed and ineffective The problem to which theee efforts are add essed is complex and difficulti only concerted action that is carried out with optimum vigor and efficiency will hald any i rccJpect of success Such action must be based on a common understanding of the problem and of the Atlantic nationsU stake in it The basis for such a n understanding is suggested in Sec ticn II o o o o s E 'o' E- C P o be ow o P_E C K E T ' ' ' - J Broad app 'oaches are then considered in Secticn III Aid Section IV Trade and Section V Public Crder Taken together they outline a basic strategy on which a general consensus might be sought among the Atlantic nations in planning for the 1960 1 s II Nature of the Problem 1 The Revolution in Less Developed Areas The less developed areas are now passing through a pervasive social political and economic revolution New aspira- tions for material improvement and greater personal and national status are reshaping whole societies and are radically changing their relations with the outside world This revolution has eached different stages in various countries Some of the ne ly-independent African nations 9 fer example are barely emerging f 'cm colonial or feudal status Other countries such as Mexico India Turkey and Taiwan hav acquired many of the attitudes and instituticns required L for progress Most less developed countries probably fall scmewhere between these two extremes revoluticnary fo ces impel them to modernize themselves rapidly Yet they are only partially equipped with the capacity for effective action er suitable programming to this end 2 The Atlantic Nations' Stake Tc achieve an orderly international community the less develcped countries must be able to participate in it as ' S E'C ILi ' r S c C R o E T independent effective and responsible nations The A' lanti nations share with the less developed countries a ccmmon interest in ensuring that they develcp into such naticns To do so they will have to manage the process of change under governments which can a remain independent of Co1111munist domination and at peace with their neighbors b maintain a reasonable degree of internal cohesion and stability Otherwise weakness and strife are allto J likely 9 as in the Balkans in the past _to make the l ess develcpec ccuntries the focus fer increasingly bitter great pcwer rivalry which would be equally ruinous for them and the great powers Of course this is not the only interest whi h the Atlantic nations share with less develcped countries With some they also join on political ir attel'S or for collect re security Their over-riding ccn mcn interest with the le s developed ccuntrie lies hcwever 9 in having these ccunt ies emain independent at peace 9 and rease nably c -de rly Th policy of the Atlantic nations should give priority to that ever-riding interest Their ability to influence events in less developed areas is not so great t at they can afford tc diyert their main effort frcm th s essential purpcse 3 Need fer Progress This purpose is unlikely to be fulfilled unless less oo o o s o c ' - R ' EE-C RoE'f -- - -- 77 ' developed countries can achieve adequate social and economic progress under moderate leaders ' The impulse toward modernizat -on - however ill defined its goals in many countries _ is too power_ful in most of them to be long suppressed If there seems no prospect for its fulfillment through evolutionary means 9 pressu es will mount for more rapid and dramatic change These pressures may be expressed in dis order and civil war they may be diverted by leaders who seek relief frcm internal tensions in external adventures ' or they may be captured by ruthless and effective Communist leadership The convincing prospect of progress through evolutionary means will not assure freedom from turmoil 9 but it should reduce the chances of its exploding into internal or external violence 9 and enhance the likelihood of power remaining in moderate hands 4 Obstacles to Progre ss - The obstacles to evolutionary progress are formidable and the task of overccming them will at best 9 take decades or even generations In many cases these countries lack not only needed skills and experts 9 but also and mere importantly a strong sense of community and the me o1 ns for effectiYe government They have yet to undergo the profound social cultural and insti tutional changes which modernization requires Shor-tages of es- sential resources are made worse by the impact of modern medicine on the growth of population already close to the margin of subsistence Unresolved internal tensions and external grievances ' o o s E c R E T - - -- - o - 78 - o ' - ' ooo oo o preoccupy many politically active groups and threaten periodically to erupt into violence 5 0 Role of the Atlantic Nations Basic_ responsibility_ for overcoming these obstaclea must rest with the less developed countries Modernization is as much a social 9 cultural and political as an economic phenomenon its basic mainsprings must be found within the developing society itself Even on the economic front most of the needed skills and resources must -be created and mobilized within that ccuntry ' The Atlantic nations can however 9 take actions which will significantly increase the hances of successful modernizaticn If they are to do so effectively 9 they must clearly grasp the nature of the task They must be prepared - a To broaden and i tensify their effort and to assure its continuity b To subordinate their other purposes vis-a-vis the 1ess developed countries --such as the promotion of trade or of political ties wit specific countries --to the main cbjective of helping evolutionary modernization c To concert their different national efforts in a wide variety of fields -- political econcmic 9 cultural 9 military and information -- so as to serve this objective As exper ence has shown it will be difficult to secure support for this necessary allocation of resources 9 subordination of other national interests and concerting of national efforts o oo S' E ' R 'E T o o o oo - - 79 Only a solid political consensus as to their vital interests will provide an adequate basis for the requisite acticn by the Atlantic nations The Atlantic Community can assist the less developed nations to modernizeg a by providing needed skills and resources b by shaping commercial relations with these areas so as to contribute to their growth c by strengthening the ability of these nations and of the international community to cope with threatened breakdowns of law and order The next three Sections consider these measures III Assistance to Less Developed Countr es In providing financi l and technical assistance to the less developed countries over the coming decade the Atlantic nations will have to consider a hew to increase their capacity to modernize b the role of international and private agencies and c the scope of national effort required 1 Increasing Capacity to Modernize To modernize their societies and economies the less developed countries face staggering tasks They must develop the requisite instruments for effec tive action mobilize resources devise and carry out suitable internal policies and coordinate these activities with external aid programs No outside government or agency can perform these tasks for them o o o s E C R E 'I Domestic effort and _ 80 o S E C R f 'C o o foreign assistance can be coordinat6d only with n the cclllil ry itself on the basis of its own pll'ograms and pr icrities Outside agencies can however assist the less develcped countries to discharge their tasks Indeed such outside help may be indispensable -- especially to enable many of them to create the machinery for starting and carrying en development To this end they must secure a advice and services from outside agencies and experts and b help in traini g local officials and public and private experts Moreover the attitudes needed to modernize are more likely to be stimulated by intensive exposure to growth-minded societies The less developed n tions also need outside resources on a large scale and with ccQtinuity Such resources should be furnished in ways which will assist and encourage self-help by the receiving country They must foster 9 not hinder inter al policies and actions required to modernize their societies The desired results are most likely to be attained if assisting agencies can combine beth financial and technical a ssistanc e resources Advice is more likely to be heeded if back d by resources are mere likely to be put to good use if associated with advice and technical aid In providing both skills and resources 9 a key object cf outside agencies must be to help the less developed countries to improve their capacity to plan organize 9 and carry out programs for constructive change and growth o S _ C R E T 20 E o t LI' _ o '' - 61 - Role of Internation j l and Private Ag GBP _ cie National programs of assist4nce will continue to be vitally necessary and to have to carry a great part of ths load Fer certain of these needsD however 9 international and private agencies have special advantages The governments of many less developed countries will be r eluctant to expose their innermost workings to officials of other national states 9 or to accept from them the kinds of advice and assistance they most require Inter- oo naticon al cf ficials er - private advisers -can develop mere intimate relations with these governments they can also be mere rigorous in nsiating on effective self-help 9 since they can be less inhibited by fear of generating political ill-will International and private efforts will also be less likely to serve as a pr cedent for Soviet activities The Atlantic nations shculd 9 therefcre 9 undertake to expand and make more effective relevant international and private aid programs over the next decade They could pr-cpose and take various actions to these ends a UN Sp cial Fund and Other UN Programs It would be useful to have an international agency specifi cally charged with helping less developed countries to plan their over-all development programs and to create needed institutions With expan l 1d functions and resource s 1 the 1I' i Special Fund could become such an ar -ency for Administrative Assistance J 1 n addition to financin otl1er pre-investment projects as it now lees S F C R r o o oo o _ 82 _ o E C R 'B ' C '' The Special Fund might also take over policy direQtion of th0 Expanded UN Technical Assistance Program which is n w managed by a UN Secretariat and UN specializ e-d agencies Finally the United Natio s program OPEX -for provision of international civil servants to work for the governments of less developed ountries should be expaTTded and placed on a permanent basis and OPEX might also be placed under policy direction of the - Special Fund to ensure that it is effectively geared into an cc cver-all ''moder n i ation eirfort b IBRD and L F The IBRD and IMF could play an expanding rcle in helping governments of less developed countries to handle their basic problems Their missions to these countries and resident ad- visers can help in analysis of and advice on their programs The Atlantic nations should also support a continuing enlargement in the resources of the Bank's affiliate the International Development Association once it gets under ay They should encourage the IBRD and D F to organize consortiU Ds to deal with especially large or difficult developnent or stabilization problems If the European continental countries are tc accept this b sic approach the Bank's top management will have to include more officials from these countries c Priv t Skills The Atlantic nations Bho11ld encourage increased tecl1nical assistance and related efforts by their private agencies As one o o s E -o ' R -E o L o ooo o ' i ste p to this end 9 the y might ee'caibliDh a De yelo Eme lt f ntei to promote incireaee ci cont cts and ezch amges bet we em c l ri- 9 pirofe eaional 9 labor and businesl I 01rgani2ation0 echooli i universities and local and municipal governmenta in the leaa developed and the Atlantic countries Such a Cent ell' coud also recruit and train qualifie d young people from the Atlantic nations to work in less de veloped areas In addition the Center might encourage and essist study 9 in both the Atlantic and leas developed nationa 9 cf problem in the social and physical scisnces which bear di re ctly en mcdel 'Ilization of less developed count -ie s Such re ealI' ch might remove some of the deficiencies in knowledge which currently hamper menOa aittempta to deal ith one cf the meet - difficult and complex tasks thmt h isi ewe been unc e t ike I - c o ld also provide a constructive focus fer the activ t ea cf politically influential schola s and scientists in le developed countries and expc ae them to like activi - ies in the Atl ntic nations thus helping to genera te some cf the a ttituciecs -- as well i aticn ms the knowledge -- required fo r succeeeful mcder - Such a Ce ntel could prob b y fur cticn most effe ctiYe l 7 if it were set up on a mixed public-private baei i OE D cir DAC m ght conaider the nee d fer - he Centel ' e a a help i fira- zt p 3' Scone of Natocnal Effc t The less developed count ie s net only need mc e effe ctive aidt they also will require aic en - subst n i t ly s i R E ' ' g tt t I'- oo o -s E C' R E o o o o oo o o o - 64 sc le I ooo o o ' ' Aa the y acquiire neede d skills nd agen c ie t1 9 theill' ability to use caoi't l effece-ci7e ly will illllc I'eaize o A f G ubli r g oil' even trebling cf the present flow of technical nd finan CiGBPl aid may well be necessary and useful ove I' the next decade The Atlantic nations should Wlldert ke to meet this need ' to providl i assistance in the amounts that cain be effectively used to p I'omcte moderni i ation 9 Cid 'to do this in a way which distributes the burden'equit bly mong them They should incirease inta - aticnal and pirivmte pirograms along the lines aliready discussed They should leo aub tantially e%pa c t e r national programs which will still ha- e t-o c nir -y much of the lo cil a Technical Aid The OEEC migh-t help t_o soci nul nte e i panded mnticnal technical aid progr ma o It might silso tmd5 - ak5 such suppc rt g mctivi ties ae i expainsicn o f the OEEC thiird ccunt -y ti -aini g prcgrmm under which foreign tr ineea ael5cted ncl financed by Atlantic nations so fair only by the US are trair ed in the most aip 9 ropriate European facility i ii c ent a JLi Eed re ui tment cf European administ r tors 9 educator and echnicians in auppol ' of naticn l nd UN technical a sistance pl 'cg' 'am b Financi l Aid D cussicn in the DAC may heI p to induce mere azzis-ta n e from states whcse economic posi ion is a-trong Foir he s s mo pur-poses the North Atlantic Co ur cil might reoriew f rom time to t1me the defense and econcmi aid burden being a r ried b7 ' S _ F _R L ' ' o ' o o o _ E C LE_ o o t various Atlantic nations o I I - 85 - o Periodic reports by the proposed D - velopment Center on development needs and aid programs might also help to generate public support' 'for expandei l action by European goverilll ent DAC discussion may also help to ensure that aid under nationai programs is provided on te_rms which are consistent with its purpose i e as grants or long term loans on flexible terms Many Atlantic nations are now mo r luctant to provide aid on these terms than to provide short-term oexport credits on hard I terms But export credits simply will not do the job Where national instruments for providing aid on more generous terms do not exist they will need to be created c Criteria for National Programs The Atlantic nations should seek to agree 9 in the OECD or DAC on criteria for national aid programs which would reinforce measures for self-help by receiving countries In general these criteria should not be sacrificed for short-term political benefits The viability and independence of the less developed_ countries will not be attained by short-term actions if they do not master the long-term task of modernization Where the IBRD or IMF has made an overall study of the program of a less developed country it might be useful for the Atlantic nations to consult with the Bank or Fund about the relation of their national to the broader progra o The Atlantic nations should generally not be diverted from oo o oo s E C R E T 86 o - o C'- C R i ' ' T their own purposes in an effort to grams oo 11 c ounter Soviet aid pro- They should recognize that Soviet efforts will best be frustrated by modernization of less developed countries 9 and concentrate their own activities mainly on prcmoting that process In some cases 9 they wi11 have to use aid to prevent Soviet domination of very sensitive_areas of the less developed countries' national life A better way to avert this danger 9 however 9 will be to encourage assistance to these sensitive areas through multilateral channels d Private Investment While private investment cannot meet the greater part of the less developed countries' need for external capital 9 it can provide some resourc es and it can also expose these coll tries to private skills and methods of doing business which will contribute to econc ic growth The Atlantic naticns should try to increase the flow of private investment to less developed area_s over the next decade international and private agencies should make clear to less developed countries the local policies and practices that will be needed to attract privatce investment Studies by the proposed Develcpm nt Ce nter might also help to identify some of the obstc1 cles to pt ivate investmer t and the measures that might be takt'n to remove thtm by both the Atlantic and less developed nations o o o oo s E X R E T o o o o IV o o R E 'f o o 'S E o o oo o o 2 7 Trade Problems of Less Develop d Countries 1 Role of Trade Trade alone is clearly not an adequate answer for the develop ment needs of the less developed countries But it is equally clear that trade policy must not undo but complement what aid policy aims at accomplishing o ' For these countries exports are roughly ten times as large a source of foreign exchange as capital assistance Indeed in some years 0 declines in ccmmodity prices have cut foreign exchange income by more than total aid receipts Moreover if economic growth is ever to be self-sustaining 9 the less developed countries must have relatively free access to markets for their manufactured goods as well as primary products At present the Atla tic nations import roughly twenty times as much from the LDC's as does the Soviet Blee They have a strong mutual interest in maintaining and expanding this trade in fact it is a vital interest for Western Europe which is highly dependent on the LDC's for crucial raw material and energy imports So far in seeking to re orient LDC trade the Scvie t Bloc has mainly exploited specific critical products such as Guinea bananas Cuban sugar Egyptian ccttcn and lc1 la nd Fish In the future given the Soviet resource allocation pattern the Bloc may become more attractive for the LDC's both as a scurce of investment goods and as a market for con swner manufactures This is not necessarily bad in itself but it is essential to prevent the Bloc from developing exclusive or predominant trading pcsiticns with the LDC's which would certainly be expicited for o 0 ooo o s E o ' o - 85 - o o ' o EUR' R o Ll o o oo o o o political purposes 20 Commodity Price Instabilities a Effects and Causes Instabilities in international commodity prices often have severe economic repercussions on LDC's Either boom or bust conditions can seriously unbalance economic development Moreover the adverse economic effects extend over into the social and political spheres as well These instabilities are receiving more study 9 especially in the GATT and the UN but this work has not so far led to ny very premising short-run so utions While variations en the supply side are one major sourc of the wide fluctuations in prices 9 another is large shifts in demand by the industrial nations These arise not nly from cyclical developments but o also from sudden changes in stockpiling policies and 9 net infrequently from efforts of the advanced countries to stabilize their domestic prices and shield their producers from outside competition The hesitant approach cf the Atlantic ccuntries to stabilization problems affecting foreign producers contrasts sharply with their domestic stabilization policies particularly in agriculture b Remedies The long -run correctives for this situation are doub1 le-ss 9 as so often argued i sustained growth 9 a minimum of cyclical fluctuation and sound domestic commod ty policies in the developed nations and ii diversification cf the econcmir s R E T o o o E C R E o o ' o o of the LDC 1 s ' ooo o oo o T - 69 - But these are no answers fer short-run situ ations which the Soviets stand ready to exploit by dramatic bids for surpluses and long-term purchase commitments o It is politically essential 9 therefore 9 that the Atlantic States ' - and particularly the United States which has resisted such ideas most _strongly -- examine together means for reducing specific commodity price instabilities and for mitigating adverse effects of wide market variations on over-all LDC export earnings In considering methods it is necessary to distinguish - between minerals for which supplies change only gradually and agricultural commodities where supply and often demand as well are unstable For non-ferrous minerals 9 for example 9 - an internationally admini tered buffer stcck might stabilize the market at manageable costs and without serious disadvantages Agricultural commodities however 9 probably can not be dealt with in this way To help prevent disrupting impo t and development programs it might be feasible to provide compensatory financing to ensure an LDC that its export foreign exchange earnings in one year would not fall below a certain percentage such as 90% of export earnings in a normal year 11 9 based on a moving average of a previous period This and other pos i- bilities should be discussed in DAC or the OECD bearing in mind that the IMF should probably manage any agreed scheme o o ' ooo 90 o o oo oo o o a 'l E C o F 3 Expansion of LDC Exports a Prospects ' For sustained econcmic gro-wth 9 LDC exports will ha e to expand substantially to pay fo import of investment gooda nd raw materials beyond what can be financed by assistance Yet with few except_ions 9 past trends offer little hope foll' sufficiently rapid growth of the traditional exports of the lesa developed countries Imports of primary products into the industrial countries tend to rise relatively slowly for th I'ee reasons Firat 9 shifta in the pattern of their demand to consumer durable and eervicea reduce the relative amounts of raw materials required as total output rises second substitutes especially synthetics tend to replace imported raw materialsz third protectioniam 1imit - some products e g oil wool lead and zinc Imports cf foodstuffs from the less developed count ies also tend to be held down 1 by protectionii3t agricultu ral policies 2 by low income elaaticities of demand and 3 in some cases such as coffee by high exciee taxes for revenue Under these conditions if the less developed countries a r e to expand their foreign exchange earnings to meet their needs for economic growth they will have to develop wider market 31 t'cl manufactures in the advanced cauncr1es The products tJ ically 9 would be from labor-intensive induatriee benefiting f om lowwage costs Dy shifting from such products the more developed countries often handicapped by manpower shortage cculd employ o o E o C R J T o o o o _13 R E r oo ' 'o c _ their lab r more productively in capital intensive industri s In general however economic policies in the de veloped countries tend to hamper rather than to encourage such shifts - and thus sharply conflict-both with their foreign policy interests and the economic requirements for faster growth at --- '- home as well as in the less developed countries b Remedies In these circumstances 9 _the only promising course is to revise restrictive commercial and domestic support policies so as to provide better markets for the LDC' s This wouJ d obvio- ously help these countries _expand their earnings of foreign exchange to buy capital goods needed to diversify and industrial ize their economies Just as obviously it raises the question of how the industrialized countries are to avoid the disruption - of their economies from a possible flood of low-wage cost imports There are no painless ways to pr cte LDC 1 s expor s but some ways are less painful than others i One way to minimize market disruption dang rs would be for the Atlantic nations to liberalize their restrictions together so that the brunt of the increase ih any product would tend to be shared by all ii Another way is for the Atlantic nations to accept the need for mechanisms to facilitate the adjustment of domestic agriculture industry 9 and labor to new competitive conditions iii Where export controls on the rate cf expcxt expansion - 92 o - o o E ' oR F o o o o o o3 o 'I o' oo oo o o o o of a product are not feasible because there are too many sup ' pliers 9 various methods should be explored Tariff quotas multilaterally negotiated 9 offer one possibility Another might be a to impose temporarily higher duties against imports of manufa9tures from low-wage countries subject to the condition that the degree of discrimination be progressively reduced 9 and b to apply the proceeds from such duties in part to assist adjustments in the importing countries and in part as grants to promote economic developm nt in the exporting countries Such arrangements would assist orderly adjustment tc serve the interests of the eveloped and the less developed countries alike The treatment of Japan by the Western European countries o does not offer a hopeful prospect to underdeveloped countries that aspire to achieve Japan's industrial status Thus 9 Euro- pean countries which have not yet done so should accord Japan most-favored-nation treatment in the GATT to demonstrate their interest in the plight of the countries struggling to industrialize their economies 4 Organization of Atlantic Response A strong case can be made for the view that the trade problems of the LDC I s ar e best handlt d in GATT o Bu t the global answer might well be facilitated by examination in a smaller group 9 such as OECD or NATO First 9 the GATT negotiating procedures do not readily allow for a group of countries making similar concessions in the oo o o oo oo o o oo o o R T oo - o oo o same products o o ff E -C R E oo o o r o o o - 93 so some sp cial kind of consultation a mong such countries would be needed in any case if such a proposa l were to be developed Second 9 the case for adhering to such concessions in the face of greater imports must be based on as strong a domestic political footing as possible which might be better created through agreement in some Atlantic or organization 11 defense oriented 11 In any cases however 9 any agreement n the NATO or OECD would be carried out in GATT Thirds if the objective is to provide a liberal package ' for the LDC's without 11 compen sation 11 in the trade-negotiating senses the LDC 1 s may be more understanding of outside difcussion than is supposed If the Atlantic nations are to survives the LDC problems including its trade aspects 9 must be effectively dealt with - Liberal commercial policies among the Atlantic States are importants but with respect to the LDC's the penalties for failure 'could be to impair our over-all security position For primary products at least the objective should be duty-free entry into the developed Atlantic nationss from all sources of supply not justs for examples from EEC-associated areas or from Common wealth countries It is for NATO and the OECD to demonstrate whether they can usefully help in the trade fields but the presumption is that they can and must V Public Order 1 0 The N ed Neither the broad range of aid and trade actions proposed in o o o s E R l T oo 94 - this paper nor the efforts of less developed countries themselves can assure success in modernizing their societies For this and other reasons 9 there will be a continuing danger that turmoil in these countries will periodically erupt into widespread disorder during the next decade Sucll back efforts at modernization disorder would further set It_ would create opportunities for Communist intervention_ with consequent risk of Communist takeover or spreading hostilities 2 Security Ass istance It should be a major goal of the Atlantic nations to enhance the capacity of the less developed countries to avert such disorder To this end a They should stand ready to help the less developed countries train and maintain effective internal security forces - b They should encourage the UN to help these countries train and officer their forces As in the economic field 9 UN efforts may sometimes be more welcome than national aid and may help to preclude other national i e Soviet assistance The UN has not 9 outside the Congo yet helped less developed countries to set up effective internal security forces but there is no reason why 3 i t should not do so UN Forces The Atlantic nations should seek to enhance UN capabilities for coping with disorder in less developed areas over the coming decade The need is illustrated by the Congo S E C R ' Only the United s o --- o 5 C R E T 95 - Nations could deploy fcrces to restore order there without giving a pretext for oviet intervention or generating lasting African hostility toward the West_ a The Atlantic nations shoUld respond to the efforts of the UN Secretary-General to secure ear- arking of national contingents for service in future United Nations forces by states other than permanent members of the Security Council These forces would be used as might be agreed by the states providing and requesting the forces and by the UN in such tasks as re-establishing law and order or policing borders and demarcation lines Atlantic nations which do not earmar forces should earmark transport or other logistic facilities forces should Atlantic nations which do earmark make a special effort to train these forces for the specialized types of duty involved - The Atlantic nations should also encourage other countries to respond to the SecretaryGeneral's efforts and should be prepared to assist them in training and equipping earmarked forces for UN duties b The Atlantic nations should press in the UN for steps to improve UN force stand-by arrangements 9 such as by activating a permanent headquarters establishing a UN training cadre 9 and perhaps creating UN training facilities in a neutral country They should urge that comparable stand-by arrangements be established in the observer field so that the UN can respond promptly and effectively toreque5ts for observer personnel such as were received from Lebanon in 1958 and Laos in 1959 Sf CRP r These are initial steps Other more ambitiqua mea surea to fulfill this long-range objective may well become fea si b1 e and desirable over the next decade The attitude of some of the Atlantic nations towartl the UN will be an obstaclet taking the proposed measures - - - The ' need for UN action is sufficiently clear and important 9 however to warrant a special attempt to overcome this obstacle and to create some hope that the attempt will succeed 4 Bloc Aggression There may b e occasions when local and UN forces will not suffice to restore the stability and independence of less developed countries particularly if Bloc or Bloc-supported forces should intervene The Atlantic nations should main- tain a capability for meeting such threats through limi ed operations which will minimize the risks of general war The need for such a capability will grow over 0 the next decade as turmoil in less developed areas continues and the Communists intensify their efforts to exploit it The United States and its allies should gear their long-range military plans and programs to this prospect The best course would be for national capabilities for limited operations to be separate from any military contributions to NATO As a second best if the NATO Shield forces are strengthened as proposed some of them including some US forces might S F C R J T - 97 o be specifically designated and prepared to serve as national reserves which could be deployed for limited operations elsewhere in event of emergency Their use would involve a calculated risk in the NATO area and should require consent of the Alliance If certain US forces in Europe were thus to be designated as availabl in ase of need to meet emergencies elsewhere the question as to whether these forces should be placed on a no-dependents basis may warrant study o ' E c - R E ' CHAPTER FOUR RELATIONS WITH THE COMMUNIST BLOC Table of Contents I Page Basic Principles----------------------------- 9 II Economic Relations--------------------------- 102 III Information and Cultural Exchanges----------- 'l 0 IV Psychological Warfare------------------------ l08 - V NATO and Arms Controls----------------------- lC9 SECRET --- oo oS E C R 3 T - ' - o ' CHAPTER ' FOUR RELATIONS WITH THE COMMUNIST BLOC I Basic Principles 1 - Need for Clarity of Purpose The contest between the Atlantic nations and the Bloc over what kind of world order will emerge from this century 6f change takes place in apparent paradox against a background of increasing public and private interchange between them The trend toward more intensive East-West economic relations and cultural and other exchanges bids fair to continue during the 1960 1 sJ though it may be interrupted from time to time by shifts in Soviet policy or periods of tension - This trend poses a serious dilemma for the Atlantic o nations expanding East-West contacts and negotiations enhance an impression of peaceful co-existence which may undermine their resolution to face the hard tasks of continuing competition It is difficult for democratic socie- ties to understand the need for a policy which seems to call at the same time for increased preparedness and for closer relations with the enemy That policy has already created some confusion in the Atlantic nations The problem cannot be met by relaxing the effort either to compete or to improve relations with the Bloc each of these efforts serves the interests of the Atlantic S F C- R T --- SECRE'GBP 100 nations These nations must reach a common understanding that both are necessary and try to combine them into a single coherent policy They mu st bring home to public opinion in the Atlantic nations the basic need for both a a continuing awaren ess of Bloc hostility even when the Bloc is following a soft_ line b a continuing desire to improve relations with the Bloc even when ten_sions are at their peak 2 Short- and Long-term Goals Better relations with the Bloc not only advance current policy goals they also he p to stimulate pressures for change within the Communist system and thus to promote evolutionary tendencies They may exert at least marginal leverage - toward bringing closer the time when a muting of Soviet aggres- siveness internal changes a weakening of satellite links with the USSR or Sino-Soviet schism may permit some form of lasting detente Thia long-term goal needs to be borne in mind even as the Atlantic nations concert their relations with the Bloc for more immediate purposes J Need for Coordination More effective coordination of Atlantic policies on EastWest relations is essential to serve these ends While continuance of bilateral app -oaches -- especially in the cultural field -- seems preferable to any NATO assumption of an operational role sole reliance on bilateral o SEC - R E o o t o o - 101 -- relations can lead -- and has led - to confusion and even conflict among the policies of member nations The Alliance should therefore seek both a to coordinate these policies so as to assure that they serve agreed objectives and b to promote wider exchange of-intelligence derived from contacts with the Bloc Specific Components The treatment here of relations with the Bloc is intended to illustrate the basic concepts outlined above as they affect three different kinds of relations a Those relations especially in the economic field which we choose not to prevent because they will not significantly damage our strategic interests unless they get out of hand - b Those relations notably exchanges which we delib- erately seek to develop because of the strategic advantages that we see in them The Communist states may also encourage these relations for quite dissimilar reasons The USSR for example looks upon exchanges of industry and similar delegations largely as a means of learning new techniques while we look upon them as a means of opening up Soviet society c Those relations particularly in the field of r ils_- armament which we seek to develop on the basis of a possible mutual interest with the Soviets s E t 0 ' E T_ o o o - 102 II ' $ E C R- E 'r -- '- Economic Relations 1 Trade with the Bloc Trade between the NATO and Communist countri es is an important means of direct contactr and will probably continue to grow with the Bloc's industrialization and modification of its autarchic trade policy Whi le US-Soviet trade is likely to remain mino r European NATO t de owith the Soviet Bloc already amounted to around $4 billion in 1958 The European NATO powers and Canada feel that expansion of this trade would have both economic and political advantages They are eager to seize the commercial opportunities and doubt that Bloc gains from such trade would become sufficiently large to affect the balance of power The current level of Bloc imports from the NATO pow rs is small they argue when compared with the Bloc's annual rate of capital formation More- over the goods must be paid for which is an offsetting cost and items embodying advanced technology closely related to military power are excluded by strategic trade controls Many Europeans also see commercial relations as a vehicle for more normal political relations They consider that normal treat- ment of Communist countries in as many ways as possible is necessary if tensions and antagonisms are to be reduced In view of these attitudes the US could make little headway in any effort to slow down the growth of this trade Such an effort would place a severe strain on the Alliance S E'C R '' T o o o o oo o s E C R 'E o o --103 and in the absence of military hostilities would _undoubtedly be unsuccessful On the other hand the NATO countries could and should be persuaded to continue-sufficient controls on the export of strategic goods to prevent an undue contribution to the military strength of the Blo_c These controls have gradually contracted since 1954 and are now limited to atomic energy materials implements of war or closely related items equipment incorporating advanced technology which has a direct bearing on military potential and which the Soviets cannot produce at all or in suffiGBPient quantity and certain strategic materials which are in critical short supply in the Bloc in relation to its military __ needs This present system of controls is generally accepted by the participating countries and puts no strain on the Alliance It prevents direct Western assistance to Soviet military capabilities and helps to avoid creating an image of the Atlantic countries granting to their avowed enemies shovels with which to bury them Its chief importance lies in the fact that it keeps in operation a system which can be expanded or contracted as the occasion demands the Korean War was one such occasion 2 Credits Limiting the amount of long-term credits made available to the Bloc by NATO members provides a second safe-guard E C l E ' o - 104 o o oo o o o oo oo s E ooC o R against assisting Soviet growth Ll oo o o oo These credits make a uni- lateral economic contribution to the Bloc which cannot be justified by any resulting political or economic advantage to the tlantic nations Moreover in the eyes of the less develop d countries at least large-scale credits would constitute a major element of confusion and contradiction in the Atlantic nations' policy toward the Bloc Agreement should be reached in the Alliance on a general policy concerning the extent of long-term credits Such an agreement should not be overly difficult to secure or implement since virtually all the private credits are guaranteed by governments An attempt to establish too definite or narrow a limit on the amount of private credits to the Bloc however would involve political difficulties at this time given the desires of other members of the Alliance to expand their economic relations with the Soviet Union Since all out- standing credits to the USSR total only $350 million and net credits actually used are likely to be even less it is not necessary to seek drastic action to limit credits but only agreement concerning their extent 3 Dependence on Trade with the Bloc It would also be wise for certain Atlantic countries to avoid becoming so dependent on trade with the Communist countries that it could be manipulated for political purposes o S E C R F T -- - s o o EC R E o - 105 - Since the GATT rules are inadequate to cover the special problems raised by trade between centrally planned and free economies it may be desirable to work out a multilaterally agreed framework for this type of trade a Atlantic nations should avoid giving more favorable import commitments to Communist than to non-Communist - countries b They should conduct trade with the Bloc in convertible currencies wherever feasible since otherwise the Bloc could frequently force them to import undesired commodities or to extend credits in payment for imports or for repayment of old loans c Finally the Atlantic countries should consult with each other and with other non-Communist countries regarding -appropriate measures when the Bloc appears to be playing one - non-Communist country off against the other or to be taking action which would disrupt the economy of a non-Communist country III Information and Cultural Exchanges The intensification and possible redirection of the existing information and cultural exchanges provides one way of bringing Western influence to bear on Soviet leadership and society Bilateral arrangements for such exchanges remain preferable to any general Western agreement adminis tered by the Alliance The common interest should however ' sE cn ' T o o S E c R o - 106 - E 'l' be assured by a NATO-wide agreement on the general long' range objectives of exchanges and formulation of guidelines to eliminate conflicts and to assure maximum results and b an effective system for maki_ng information derived from these exchanges available to all NATO members on a system- atic and c ti uing b sis 1 Agreement on Objectives and Guidelines Specific exchange programs should be left to the member states but their programs should be in accordance with a general_ agreement which would a reduce duplication and conflict of effort particularly in the field of industrial and technological exchanges b prevent the Bloc from playing off one NATO country against another in cultural contacts c focus NATO action on the areas of special difficulty such as radio jamming censorship and similar barriers to the flow of informationJ d develop an Alliance-wide consensus as to the need to intensify existing programs and Alliance-wide suggestions concerning new programs e provide joint financing of desirable projects by the larger members of the Alliance 2 Pooling of Information A mechanism already exists in the Alliance whereby information resulting from exchanges can be collected and made S E C R T T o s o 'o E C F t 'r ' ' available to the member states be formalized and broadened o - 107 - This system however should A useful device would be to circulate periodic questionnaires similar to the one circulated by the Secretary-General before the abortive Summit in 1960 requesting all memb rs to report and assess their experience in East-West exch_anges contribute to a The purpose would be to common understanding of the Soviet position and objectives and to provide general information on Soviet activities The International Staff could analyze this information and develop appropriate conclusions The information which is shared among members of the Alliance might also be made available to a wider audience within the Alliance At _present there is little indication that any basic intelligeqce is developed on the Soviet Union as a result of exchange programs or that any information which is developed goes beyond the staffs administering the programs Semi-annual meetings are held however by officers responsible for exchange programs in the US UK Ge many France and Italy to compare notes on the negotiation and implementation of these programs Although there is no connection between this group and NATO the group could be instructed to ensure that any intelligence or information which might be useful in determining long-range objectives should be developed and transmitted to NATO S E C R - T IV o S E C R Ll o 108 o o o o o Ps tchological Warfare 1 Need and Means for Greater Coordination Trade relations and informational or cultural exchanges - - will have only limited strategic value unless they are con ' ducted within the framework of a broad NATO strategy stressing psychological impact In this field of psychological warfare the USSR whi h orchestrates 'all aspects of its relations with non-Communist States to serve its political objectives seems well ahead of the Alliance Serious consideration should be given to greater use of the Alliance in concerting peace-time psychological warfare as a means of furthering long-range Alliance objectives While the responsibility for marshalling resources and carrying out psychological war fare programs flhould remain in the hands of the member states their efforts need to be coordinated to achieve optimum results The International Staff could be used for necessary consultation and liaison as well as for providing new ideas and encouraging national action Some initiativ es have already been taken to focus attention on the need for psychological warfare and on mechanisms to carry it out For example the German resolution of 9 March 1960 proposed a comprehensive plan for cooperation and coordination of efforts which might be used in the event of hostilities The German proposals might be thoroughly explored and broadened in scope to include peace-time activities as an initial basis for greater emphasis on this key field oo oo s ------ E' C R 2 1'' o o s E LJLE z o o o o o o o' o o o ' oo o - 109 - Content One broad purpose for psychological warfare ight be to encourage doubts and self-questioning in the top level Soviet bureaucracy While the best methods of doing this are for ' expert_ determination they should probably go beyond merely seeking verbal victories over the Communists Polemical de- bate on the relative merits of rival ideologies is unlikely to affect Soviet policy What -is required is a serious effort to introduce new approaches and new argumentation which might have an intellectual impact on the Soviet leadership Skillful psycho- logical warfare should present a range of views to the Soviet leaders which by stres sing the fact of diversity in the m dern world might induce self-doubts about their judgments and the infallibility of their system V NATO and Arms Controls A major task of the Atlantic Community in its relations with the USSR during the 1960's should be to explore any opportunity for progress in areas of mutual interest especially arms control The Atlantic nations and the USSR have a common interest in trying to reduce the risks of all-out nuclear war by rational arms controls Few developments could have a greater impact on NATO security than progress in this field NATO must be prepared to meet this problem in the 1960 1 s both on the plane of political maneuver and on that of ' sEcp T ' o S EC R3'J' o o o - 110 oo o substantive negotiation l Political Maneuver Up to now disarmament has been primarily an area of political and propaganda maneuver Whether Soviet attitudes will change sufficiently over the next decade to permit fruitful negotiation cannot be pr1 dicted nations is groping in this field The USSR like other The high value which it sets on secrecy as a security asset may long bar acceptan e of the degree of inspection required for certain types of arms control agreements On the other hand the__Soviets have a real stake in avoiding nuclear conflict and in inhibiting the Atlantic nations from threatening nuclear force to counter developments which they believe serve the Bloc's interests They may come to regard agreements even with the sacrifice of secrecy involved as worthwhile to this end Their apparent willingness to accept some degree of inspection to assure a nuclear test ban must be viewed in this light In any event we must face the certainty of further Soviet political warfare initiatives centered around the the bomb and universal disarmament themes 11 ban Agitation of these issues which capitalize on underlying fears of nuclear devastation has already had considerable impact As a conse- quence NATO is faced with growing anxiety over the effects of use of nuclear weapons These increasing political E C 0 R ii ' T 0 - -' o- --- o o 111 inhibitions especi lly in a period of nucle r stalemate'' o may erode the credibility of NATO strategy That strategy even if revised as proposed_in this report would still depend on the_threat of strategic retaliation to_deter certain types _of aggression It is essential therefore that NATO counter these Soviet disarmament 1i initiatives on the political and pi-opaganda warfare plane 2 Substantive Negotiations Arms control agreements may offer potentially great benefits as well as risks to NATO's security imperative that both be un_derstood It is The first require- ment is to achieve consensus within the Alliance on the relative risks and advan ages which various options might have and on the kinds of arms control agreements which could enhance rather than weaken NATO These might include measures a to reduce the risk of accidental or unintentional war b to avert an indiscriminate spread of national nuclear weapons capabilities c to stabilize deterrence and reduce its burden d to enhance regional security in particular areas such as Europe - li2 S E r R E o o oo rr ' A major task for NATO shou1d be to explore these and other possibilities to see which of them would serve its interest Joint study and planning by at least the major NATO powers might be useful NATO agreement shou1d be sought on the basis of such study - as to bc1sic objectives - - and guidelines for negotiating with the USSR in this field If such a NATO agreement cou1d be reached a new approach to the actual task of negotiation might be feasible Experience has shown the difficulty of several Atlantic nations trying jointly to negotiate with the USSR about arms control The possibility of reaching agreements consistent with NATO policy cou1d more readily be explored if one Atlantic nation i e th US did the negotiating within the framework of an agreed allied position The US could then consu1t regu1arly with a steering group of the major Atlantic nations most directly e g its four partners in the late Ten Nation Disarmament Committee and also consult with the North Atlantic Council as at present Allied consent wou1d of course need to be obtained to any agreement that emerged There would doubtless be serious obstacles to securing allied agreement on such a new approach to disarmament negotiations On the other hand it seems doubtful that agree- ments can be secured if negotiations are conducted by more than two or three nations The choice for the Alliance may oa EC R o E 'r s E C o o o 4 R B -T o o 113 be between some change in the existing negotiating method and a continuing haunting doubt as to whether the possibilities for reaching arms control agreements with the USSR have been - fully explored --- o -- s o o o oE T ' b E C CHAPTER ' FIVE RESOURCES OF THE ATLANTIC COMMUNITY Table of Contents Pa ge Io 1_15 Grow th an d th e Use o f Resources-------------- II Coordination of Nayional Economic Policies for Growth------------------ ---------------- i19 III Tr ade and Economic Integration--------------- 21 IV Atlantic Community Payments Problem---------- J2 7 v Scientific Research and Manpower------------- 28 VI NATO Military Production Pooling and Research an d Deve 1 opment--------------------- -------- 'J 34 - ' o c r r GBP s -_-----a-E o' ' R E 1' t - llS -- CHAPTER -- ___ _FIVE' I Growth and the Use of R lli GBP To respond to the challenges confronting them the Atlantic nations will have to _aasur the steady and rapid growth of their economies and effective use of their resources They must be concerned with the growth and use of resources a to meet expanding needs 9 b to provide a basis for liberal trade and other policies and c to offset Bloc power 1 To Meet Expanding Needs Over the decade the needa to be met by the Atlantic nations may well prove to be very great Population may grow by something like 10 percent in Western Europe and 17 percent in North Acerica Increasing urbanization together with demands for improved scho ols 9 hospitals 9 and communications will add heavily to the cost of social overhead Improvements in personal consumption will be sought an in many cases are urgently needed Techn- i logic al developments in weapons and competition in outer space may became increasingly costly High levels of investment will be needed to provide the basis for continued growth Finally a greater material contribution to econc ic development ab oad will be required as the decade progresaes Vigorous economic growth with high em ploymen-c will be nee ied to accc rn modate and reconcile these ccmpeting claims - 116 K E GBP _ L _J ' 2 ooo o ' ' ' ' ' ' ' ' ' ' ' As a Basia for Liberal Polibies A climate of growth will also _be necessary for broader reasons Growth will encourage technological progress and facilitate adaptation to changing competitive conditions and shifts in demand It will ease adjustments by countries within and without the new regional trading groups in Western Europe Expansion in the Western industrial countries will also strengthen demand for LDC exports of primary products and the capacity cf Atlantic nations to absorb without undue disturbance more imports of manufactures from the low-wage countries More generally onditions of rising demand and employment are indispensa_ole to the pursuit of liberal trade policies which in t rn contribute to further growth 3 To Offset Soviet Growth Finally rapid growth is essential to the n aintenance of the Atlantic power position vis-a-vis the Cou munist Bloc The Atlantic nations now have a 2 to 1 superiority _over the Bloc in terms of total cutput of goods and services and a 2 1 2 to 1 superiority in industrial prcduction Tha Bloc is expected to grow at much faster rateso howevero and to devote a much larger prcpc-rtion to building national power Total output cf goodG and ser rices by tl e NATO countries is expected to rise 0 with steady growth from about $850 billion in 1960 to something like $1 300 billicn in 1970 while the corresponding tor al fer the Ccmmunist Bloc is 1 i E C -R '1' I - -- o ooo E o ooo o C R E ' o ' ' o o - 117 - expected to rise frcm about $400 billion to $750 billion over the same period The NATO countries would thus maintain a considerable superiority in total output in 1970 Over the decade as a whole however their added output will not greatly exceed that of the Bloc By 1970 a nual increments to output may be of about the same order of magnitude for the Bloc and for the Alliance But relative Bloc power will be greater than the totals suggest By 1970 Bloc investment will about equal that of the NATO countries in absolute amounts And more of it will be devoted to direct industrial inv estment which may then considerably exceed similar investments by NATO co ntries in absolute t e o This is of course a key factor in the projected faster rate of growth in total output in the Bloc than in the NATO countries Thus for selected purpCEes -- whether this be investment uter space military means or foreign aid -- the Communist countries will be able to allocate resources rivaling or exceeding those spent by the Western countries as a group to say nothing of the US alone Even today though total US investment considerably exceeds that in the USSR the amount invested in industry is probably of abcut the same size in the two countries o I C -R 'r ------ i C R E T t - o----- o E o o - 118 - ' The Atlantic nations could clearly car y significantly - grea er burdens fr m present resources with lit le sacrifice in material well-being In the next decade 9 they could assume still greater burdens 9 if they achieve steady growth But neglect of growth could rapidly _and gravely impair Atlantic capability to respond to the challenges which it faces Common Actions Required In the coming decade no single nation not even the United States will be able tc provide all the resources needed for the tasks ahead The Atlantic nations are in fact interdependent should In re 'ogni tion of this fact they - a coordinate econcmic policy to attain sustained - and rapid economic growth b consistently seek to reduce and remove restrictions on trade with the goal of moving toward free trade at least among the advanced nations c extend mutual exchange rate guarantees en central bank holdings of Atlantic State currencies and restrict shifts in reserves 'cl create and maintain conditions conducive to maximum scientific and technical progress e promote Alliance-wide ccoperation in weapons research development and production o t R T 119 - ' II This Chapter discusses in turn these policy imperatives Coordination cf National Economic Policies for Growth Economic policy coordination among key economies is essential if sustained growth is to be achieved in the Free __ World 1 Basic Reasons for Policy Coordination The post-war economic growth record of the Atlantic nations is spotty Some states such as Germany and France have attained impressive gr_owth rates Others notably the US and the UK have increased their output much more slowly in recent years But most of them have experienced strains of one kind or another which they have combatted with varying degrees of success Much emains to be done by each nation - to ensure high and sustained rates of economic expansion without undue bursts of investment major inflation or other instabilities which necessitate counter measures The success of any one country in pursuing this objective is conditioned by economic events and policies in other countries especially the industrially developed ones Economic growth can proceed more rapidly if the major free economies expand in step with concerted action to minimize the risks to the balance of payments and to facilitate correction of any difficulties without national restrictive policie The successful coordination of national policies therefore becomes a matter of urgent concern to the Atlantic countries o o o # ------- -S E C R E T Implications of Economic Policy Coordination 2 Economic policy coordination has many implications two of which need to be explicitly recognized a In formulating and applying its economic policies ' ' each nation must take fully into account possible repercussions on other countries To do this there must be willingness to discuss freely all aspects of domestic economic policies In particular 9 the US and other governments must be prepared to discuss their budgetary and monetary policies as a matter of common concern US reiuctance to do this has contributed to European skepticism about the utility of the proposed OECD A change in US domest c attitudes is essential for success - b National governme tS must also seek to arrive at a concerted view of appropriate policy objectives They have actually assigned widely different priorities to growthfostering investments to collective security to aid to less developed countries and to the immediate expansion of consumption Such wide variations in priorities hardly seem appropriate in a situation where common efforts are essential J Machinery for Economic Policy Coordination The OECD should be a useful forum for econcmic policy coordination Without restricted Committees however the OECD is probably already too large fer effective action More participants impede coordination 9 inhibit frank discussion and lessen the prospects for fruitful conclusions -S E r k E ' ' SECRE T ' -- --- - -- Some degree of OECD-wide discussion 1s necessary if only for political reasons But the primary need is to concert economic policy among the key economies the US the UK and members of the European Economic Commur1 ity Together these countries produce over 70% of Free Worl GNP Within the OECD just as within NATO methods should be developed for these nations to work together more intimately As a minimum step meetings of the OECD Economic Policy Committee should generally be based on preparatory work done in a restricted Committee OE senior economists of the highest standing from the OECD Secre ariat the European Economic Commission and the Governments of the United States - United Kingdomp France G rmany and Italy Economists could be co-opteil from other states as appropriate on an ad hoc basis As the European Community develops its members will be engaged more intimately in meshing a broad range of economic policies and activities Their joint work will greatly facilitate measures for wider coordination among the Atlantic nations especially if Britain and other European nations ult tely become members of the Community III Trade and Economic Integration The Atlantic nations must consistently seek to reduce and remove trade res rictions which are detrimental both to the econcmic strength of the Atlantic Community and to SECR E T o S E C R E ' I oo ' o ' its political cohesion 1 The Atlantic rading Pattern The Atlantic States are linked to one another and to the rest of the world by a highly developed trading system Over 50% of the total external trade of all NATO countries is carried out among thems lve 1 But almost all in varying degree are highly dependent on raw materials and energy imports from th rest of the world The welfare of these highly inter ependent economies depends significantly on avoiding increased trade restrictions their rapid economic growth_on removing existing restrictions The marked progress within the past two years toward removing all quota restrictions on industrial goods has shifted - attention to the problems of agricultural trade and tariff reduction 2 Effects of Economic Integration The Six member states of European Communities have sought economic integration far beyond the mere removal of trade barriers with an ultimate political objective The Six are in the process of removing all government barriers to the flow of trade services labor and capital amongst themselves of controlling private restrictions on competition an d of evolving common commercial agricultural and general 1 NATO countries account for 60% of Free World trade EEC countries account for 24% of Free World trade and EFTA countries for 18% t E C P T - --- o o o Si CRF T 123 -- economic policies Their conviction is that increased competitio specialization and economies of scale will lead to more rational resource _allocation more rapid growth rates and higher real incomes for their citizens o To cushion the internal adjustment problems a European Bank has been provided to help i dustry reconvert and a Social Fund established to help labor adapt to the new system _ The adjustment problems for non-member countries will vary with the extent and composition of their trade with the Six In general the C mmon Market will a displace some third country exports aa internal tariffs disappear b absorb more imports as its economy expands c make its producers more competi ive within the EEC and elsewhere and tend to hold domestic and attract outside capital Expanding external trade should compensate for injury to some specific outside producers and industries especially if the Six reduce the common external tariff on a multilateral non-discriminatory basis as planned 3 Wider Trading Area In purely economic terms formation of a still wider European trading area should be beneficial Thus a Europe-wide Customs Union should produce more conomic benefits than either the EEC or the EFTA separately but also more adjustment problems for the US and other third countries An Atlantic grouping theoretically would be still SEt W Y r - 1'24 - - better at least for those in it In practical terms however the test should be what is politically attainable' and desirable in terms of national and Atlantic interest Certainly the US should not oppose formation of a broader European trading area merely ecause it could complicate US balance of payments problems B_y the same token the political potential of the Six country integration which is discussed in Chapter 6 1 should not be compromised merely to ease the trade problems of other European states These can be handled in other ways The best solution would be for the UK to accept th philosophy of the Common Market and directly negotiate its adher ence on terms which d _id not sacrifice the political in titutions or objective_s_ of the Six be encouraged to adopt this course The UK should In any case the EEC shouid be encouraged to follow liberal policies to mitigate the difficulties of others particularly states such as ' Austria and Switz rland 1 highly dependent en trade with the EEC but apparently unable to join for political reasons Failing broader EEC membership the Atlantic nations can gradually adjust to the new situation At the end of the EEC and EFTA transitional periods Atlantic economic relations would be much the same as at present between national states except that the number of units will have been reduced facilitating intra-Atlantic area coordination SEC t -r - 125 -- and the truly integrated group the EEC will be stronger than the sum of its parts otherwise would have been -The long-range problem is to prevent integrated areas such as the EEC and the us from turning inward and erecting or maintaining restrictions detrimental to the strength of the Atlantic area as a whole For the long-range problem as for the short-run adjustment problems what is initally required is reduction of tariffs The-ultimate goal shoJld be to moye tbward free trade at least among the advanced countries In this process the US must be in a position to play a major role by being ready to negotiate substantial further tariff concessions _ in GATT Otherwise it will ha e little leverage to assure that the EEC and EFTA follow liberal trading policies or to prevent revival of the Six-Seven quarrel with all its attendant strains on the Alliance Thus to meet the Atlantic trading needs like those of the LDC's the US should revise its trade agreement legislation to permit negotiation of substantial tariff reductions in GATT preferably on an across-the-board basis but perhaps by broad categories of products Domestic measures should also be adopted to facilitate adjustment by US industry and labor to an increased volume of imports J The OECD and Trade Trade problems are of world-wide concern With o o S E ooo ooo - 126 - C R r T o o o o o o t o o' oo convertibility there is no longer a financial reason for discrimination against dollar imports and consequ ntly little reason for extension of the OEEC Code of Trade Liberalization The primary forums in which to discuss e ichange re strictions QRs and tariffs are now certainly the IMF and GATT o The OECD can however play a limited role in support of GATT and IMF The OECD could and should study specific trade problems of the Atlantic area but their resolution should normally be left for negotiation in GATT or bilaterally The ECD might also focus attention on sectors where misallccation of effort is so glaring that remedies could significantly free resources for more rational use least three sectors merit Such priority att ntion energy and shipbuilding At agriculture Greater European acceptance of agricultural and energy imports could undoubtedly free substantial numbers of European workers for more productive occupations Greater American reliance on the European merchant marine and shipbuilding industries could free unquestionably US labor and capital for more prcductive employment In these ways among others the economic strength of the Alliance as a whole might be increased These are precisely the sectors however where social considerations loom largest and special interest groups are well entrenched - o o o o s a o o EC R E 't ' o o t o ' o - I27 -- o D spite limited prospects for success the OECD should endeavor to develop coordinated Atlantic agricultural ene gy and shipping policies IV Atlantic Community Payments Problems 1 Reasons for Con ern bout Payments Relations The declining ratio of US gol holdings to short-term ' liabilities to foreigners is a matter of concern But clearly the US should not be diverted by this concern from carrying out vital aid and defense policies The more relevant limiations on our capabilities as on those of our allies are limitations on real resources It is true however that shifts of liquid balances from one center to another raise questions as to ways of strengthening the international paym ents mechanism The existence in any country of lat-ge foreign-owned balances is ho th an exp ression of confidence in the strength of its currency and a potential threat to it in time of strain In a world where both the dollar and the Pound Sterling are widely used as reserves for other national currencies sudden shifts of large dollar or sterling balances by central banks could easily destroy confidence in one or another of these currencies with disastrous effects on the entire r structure of international finance trade and production In these circumstances some critics regard as anach ronistic and undesirable a system whereby one or more national SEC R C'T ' -- 128 - -- currencies serve as international reBerve media They would favor the creation of a special medium and of a central bank for central ban ks 2 Remedies The situation does not appear however to dall for so radical a solutio r for pne which would require major changes in the IMF On the contraryD the grant of an exchange guarantee would go far to reduce the risk that a crisis of confidence in the dollar might develop Consequently quiet US entry into the EMA with its provisions for mutual exchange rate guarantee cou d contribute significantly to the financial stability of tt e free world In this connection the US should together with the UK - seek commitments that othe_j - OECD member states would hold a minimum proportion of their national reserves in dollars or sterling and not shift reserves without full consultation from one currency to another or into gold While these measures would add needed strength to the international payments mechanism they are of course no remedy for situations involving structural balance of payment difficulties v Scientific Research and Manpower 1 Nature of the Problem The future of the West is dependent in large part on the rate of scientific and technological advance Efforts of the Atlantic states to progress jointly in these fields S E r k E ' ' _S_E C_ILLl - 1 29 -- would be desirable for social and economic reasons in a world devoid of Communists given Soviet concentration on science and its military applications such efforts are imperative Soviet achievements in the missile field furnish d amatic evidence of existing_ Communist scientific and technological capabilities At the same time available statistics while inadequate strongly suggest that the USSR is building toward a commanding lead over the Atlantic States as a whole in the education of engineers and technicians and in annual graduation of science majors The long run implications in terms of rel tive Communist Bloc and Atlantic Community ability to deal with global security and economic development problems are most serious - The Atlantic nations should therefore endeavor to create and maintain conditions conducive to maximum scientific and technical progress They must make optimum use of existing scientific and technological capabilities they must also maintain future superiority in face of major Soviet efforts to forge ahead Whatever the future the scientific and technological resources of the Atlantic Community are today substantially superior to those of the Soviet Bloc The scientists engineers laboratories universities and factories of these nations constitute an enormous asset -- an asset SGBP CRl- r ' 3 oo - 130 ' F C R F T ' which presently is not being fully utilized ' ' ' ' o o It is imperative that the Atlantic'States make new efforts to draw on this asset The NATO Science Committee the NATO Science Advisor and the OEEC Science and anpower Committee have made a useful beginning but their two principal activities to date need to be stepped up and additional activities initiated 2 o Principal Current Activities a Comparison of National Efforts In part these Atlantic agencies examine national efforts point out shortcomings compare policies and encourage appropriate national corrective actions Thus the long -run educational problem depends for ' o its solution primarily on pational decisions inter alia to emphasize mathematics in primary and secondary schools to provide additional research fac ilities to raise teacher salaries and to adapt traditional university organizational patterns to new problems International collaboration can help induce actions and decisions suitable to the needs For example the pending report Increasing the Effectiveness of Western Science sponsored by the NATO Science Committee outlines numerous ways to improve the current situation Its proposals are often not dramatic but this is an area for persistence and NATO should concentrate on building awareness of the dangers of failure and stimulating national efforts _ E C k E r ' 3 F C R F T ' ' ' ' -131 --- Greater efforts should be made ' o bring men responsible for national science policy in member governments together regularly to compare problems to indicate successful s olutions in their own countries and t become better aware of problems that exist elsewhere b Joint Research The Science Committee has attempted to identify scientific fields such as oceanography meteorology and space research that require or would benefit from joint research It has also sponsore fellowships and other common educational activities Here too much more could be done especially in applied research More ge_ erous financing for the fellow- ship program for conferences and for exchanges of individuals for research purposes could enormously speed the research process within the Atlantic Community 3 Additional Activities a Institute of Science and Technology One educational problem that should be tackled as a matter of priority is establishment in Europe of a graduate Institute of Science and Technology roughly comparable to the Massachusetts Institute of Technology No educational area in Europe Ji as been more neglected than engineering Creation of a full-fledged modern Institute of Science and Technology would require large resources perhaps in excess of national capabilities o o o o o o oo o o 15 E C I' ' E T' 8 E r R E ' - 132 - o It should therefore be undertaken on an international basis with the US providing some initial organizational and professional talent The US should make known its willingness to cooperate in such a venture either on an Atlantic basis or more likely in support of the European University plans for which are well advanced b Cooperation in Applied Research The Science Committee and the Science Advisor have been active in fields of basic research but do not yet have major programs in applied research or technological areas Here the normal barriers to communication between technical people are greater as a result of military or commercial secrecy and the lack of as effective an international cC mmunity 11 o The NATO Science Committee might be able to fill an important role by establishing a mechanism to examine specific scientific and technical fields as opposed to national programs to identify weakness gaps duplication and special opportunities Such a mechanism could point out opportunities for sharing of facilities and exchange of personnel highlight weak and strong areas to help avoid waste identify neglected areas and uncover duplication The common understanding that would result could lead to more extensive joint planning and joint research oo ooo o oo S E C Ll 't -- l 33 '' oo c Scientific Advice for SHAPE The NATO Science Advisor and Science Committee have been active in providing advice for the military side of ' I - NATO and in working jointly with the military on technical questions It would seem however that this relationship could be further expanded with beneficial results The Science Committee could be the sponsor of technical studies of interest to the military It c ould form scientific panels consisting of leading scientists from NATO countries to advise on the technical aspects of various military problems such as limited wa fare communications etc These studies and panels would provide objective unbiased advice on the military problems of NATO and would also involve - European scientists more intimately in the military side of the Alliance It is hard to know in advance how much is feasible in these last two fields of possible activity The effort would have to be built up over time and approached subject by subject in scientific research or development fields For some major problems and areas industrial or other obstacles will make progress slow but the attempt is essential to tap the great scientific and technological potential now unrealized in the advanced free nations It may not be decisive now but it could be in the future as the USSR continues to devote extensive resources to technological advance oo Without better scientific integration the non- -l E C -l t 1' o oo 5 E C R E T oo o o communist nations may graduaily fall behind A series of meetings of top science policy people of the member countries should be held to explore how such NATO mechanisms might work what their advantages would be and precisely what subjects mi ht be tackled Clearly such activities would eve tually require fairly large staff and the formation of many advisory panels presumably in the NATO Science Advisor's office If the mechanisms worked at all a decade of systematic effort might yield results highly significant for the strength cf the West NATO and the OEEC-OECD in Science Though both NATO and tht OEEC-OECD have science programs there has been to date little overlap in their efforts The OEEC has concentrated more on education - o in the sciences and particularly on developing curricula attacking specific problems in one or another country NATO on the other hand has taken a broader approach of instituting large new programs such as research grants and joint oceanographic research programs staffs have worked closely together The international Programs do not compete but are complementary to each other this situation must be maintained in the future VI NATO Militarv Production Pooling and Research and Development 1 The Nature of the Problem Few areas have been as promising in potential but so frustrating in practice as that of inter-allied cooperation o o o' ' o ' oo - p J LJ_' ' ' 3 M- in weapons devel pment and production The facts of mutual dependence for security have simply not permeated national defense establishments There are indeed current programs - for the declassification and exchange of technical informati oni joint researchi weapons standardization and common production - - - - but so far they do not go f r enoug h below the surface to mee the fundamental problem If integration of national military forces is to be effective 9 standardization of equipment is imperative It would be highly perilous in the technological race with the Soviets to fail to tap the full resources of European as well as American ingenuit Above all a failure to seek collective effort in munitions production tends to discredit the collective haracter of the Alliance 2 Existing Programs Progress made in recent years supports the belief that existing programs can and should be intensified The Mutual Weapons Development Program MWDP of the United - States has been successful in fostering Rand D programs in Europe Recent programs have secured coordinated large- scale production in Europe of sophisticated weapon systems e g the F-104 airplane and the HAWK ground-to-air missile These programs achieve weapons standardization automatically They stand moreover as symbols of a break-through in exchanging s nsitive weapons information among the allies o o o s o ' R E T - 136 - -_IL GBP JLE_ oo In addition the establishment 'of NATO technical centers like that for Air Defense and _research groups like that for Air Rand D AGARD is very promising the Air Defense technical center is now being compleme ted by NATO centers for anti-submarine research and for ground warfare There is scope both for other centers and for an extension of the work of the centers already in existence beyond the purely technical evaluation of weapons weapon innovation and invention The evolution of the Air Defense Technical Center to-evaluate the proposed air defense system for Europe as a whole is perhaps the first major case in point Care should be taken however to prevent the new centers from devel-0ping in isolation from each other In the future it should even be possible and desirable to establish operations research groups for NATO similar to those for the military services in the US There is reason for qualified optimism about production and Rand Din NATO in the extent of recent progress which can be used as a basis for future development New impetus may be provided by the changes in strategy recommended elsewhere in this Report Yesterday's weapons will not do for effective non-nuclear defense A re-vitalized and qualitatively strengthened Shield will require new ideas new tactical concepts and new means of implementation oo oo oo 3 i- E K E' o Technically the ccmparatively unexploited area of nonnuclear weapons offers great chances for possibly r volutionary advance politically the new program would be less prejudiced by old national fixations 3 - Programs for New Weapons The object ive should be new wea_Pons programs sparked by change in strategy But how are they to be achieved It would hardly be feasible to carry on ao fully integrated inter-allied program of concurrent research development and production for a specific novel weapon or class of weapons The administration of such an effort by 15 countries would be too cumbersome Firms or even some gov rnments will not undertake 0 mul iple attacks upon diff ult technical problems wit hout a good prospect or subsequent production contracts If production contracts are not achieved the firms lose both money and prestige Scme way should be found to reduce these penalties and to make R and D separably profitable without assurance of production contracts Rand D programs should try to meet this problem The current Mutual Weapons Development Program of the United States with its allies for example works well in terms of proved technical accomplishment from small budgets But with budgets so small and pressures so great for tangible proofs of early progress incentives are strong to bet o o s E R E T - - 13 - o ' 3' E C ' R F T o o ' - MWDP funds on the certain and rewarding projects What is needed in addition in view of the nature of Rand D is the means to devote considerable resources to more imaginative and risky ventures 4 o A NATO Military Research Corporation The establishment of an autonomous NATO Military' Research Corporation with sizeable financial resources to invest in weaponry research contracts and technical studies of military problems such as communications logistics and weapon system requirements might assist in solving many ha sic R and D problems of the Alliance In liaison with SHAPE and the Science Committee such a Corporation would provi e a means of obtaining unbiased non-national technical ad ice on the military problems of NATO and would also serve to involve European scientists and industry more intimately in military pr oblems Ultimately if the Corporation proved to be of value in the Rand D field it might be adopted to assist the NATO staff in organizing common production plans s Production Problems Standardizing the military equipment of the NATO members would obviously produce great advantages in economy convenience and effectiveness The difficulties are also apparent and well documented by experience Time has not been available for any careful study of o o o ' o this field 139 o It seems essential to stress its importance however and I to submit a few comments especially on o standardizing through agreed programs for joint or common production or specialized production a In connection with p'ossible NATO common production schemes infrastructure programa' do not ne essariiy provide an entirely adequate pattern o Common financing for programs - -- of common benefit is very attractive as are the features of free competitive bidd ng within the Alliance and procedures such as duty free entry to minimize easts But for these advantages a price has been_paid in terms of delay Since lead-times in weapons must b cut not lengthened traditional infrastructure procedures would have to be revised before - application to weapon pro rams b For straight production assuming technical possibilities are fairly well known concentration on one or a few suppliers will best serve the interest of economy and_ expedition Concentrating production of a specific item in one nation will be tolerated however only if it is reciprocated for other items Unless the US becomes a significant buyer of material produced in Europe as it should then European production to replace US sources for European military uses must be encouraged Where the NATO members can standardize on specific weapons for all NATO forces and work out an acceptable balance of oo o o oo I o o 4 4 s oo o - r4o -- E'C R F- T oo o ' ' ' o ' o ' two-way trade this is the simplest way to obtain the benefits of specialization The obstacles are clearly serious c Given the political and economic realities coordinated production of a parti ular item may be a Dore feasible way to obtain the be nefits from standardizing ' upon one weapon for all NATO forces This solution is far better than the present method of separate national production without much mutual trade Thus the embryonic common production programs should be acc lerated but the NATO members should also ta e more steps toward the simpler solution of adopting weapons develop d or produced elsewhere as the US did for example in adopting the - French SS-11 anti-tank missile instead of one developed 'here 6 Requirements for Weapons Cooperation The requirements for cooperation in weapons that emerge from these considerations are a to establish a new need for non-nuclear weaponry b to expand technical centers advisory groups and operating research centers to explore mutual weapon systems problems c to formulate bolder MWDP programs try to make R and D programs profitable in themselves whether followed by production contracts or not and to get scientific and oo o o S E c k E T o ' 8Ft RF'l' o 1 '' 't o 1 4b-_ I engineering groups in NATO countries competing in research and the early stages of development d to establish an autonomous NATO Military Research Corporation with substantial financial resources to further these specific objectives e to facilitate the ex change of technical information even further f to intensify efforts to secure coordinated production of major materiel in Europe which willo among other merits foster standardization g to move toward more reciprocal purchase of weapons and especially more US buyin 5 of European-developed weapons Care must be exercised to avoid grandiose multi-national programs before Rand D has moved through early testing phases to mitigate any uneconomic spreading of production among too many suppliers and to ensure that multi-national schemes will be consistent with acceptable lead-times o o o oo o o o o o oo o o o o s r - - o o oo oo R l i J' oo I r 1 o ' o o S E C R E T CHAPTER SIX THE REQUISITE POLITICAL FRAMEWORK o Table of Contenta Page I The Political Problem------------------------ - 4- l II The Evolving Relations among the Atlantic Nations---------- --------------------------- 44 III Structure of the Atlantic Community---------- 149 IV Improving Joint Policy-Making---------------- 15ii v Public Support------------------------------- i5a o o o o s E C E' T o o oo o SECRET CHAPTER SIX ' THE REQUISITE POLITICAL FRAMEWORK I The Political Problem To meet the formidable challenge before us will require clarity of purpose large resources and steady effort over an extended period the basic issues of security stability and growth cannot be resolved for decades Even if the Atlantic Community were a single state able to speak with one voice and decide and_ act as a unit it would find great difficulty in meeting the tasks facing it The main problem is not resources As has been said the members of the Community c an produce adequate means 9 both hl l D an and material to respond to the dangers and the opportunities born But the problems are extremely complex and stub- Even as a unified democracy the Atlantic Community would find it hard to marshall and apply its means over the long-term when the danger is not imminent assault but gradual erosiono The Atlantic nations are however far from unified NATO of course reflects the national interests and outlooks of fifteen sovereign nations 9 -varying in size from Iceland to the US Each has its own background its own traditions and its own concept of national interest In influence and responsibilities they range from the global to the parochial o ooo o -s E C k o E T o o o s o o ' o E C R E T - 144 Such variations create inherent problems in an Alliance organized on a basis of sovereign equality During the 1950's 9 when the main issues were the recovery and common defense of Western Europe 9 all members 9 large and small 9 shared a common focus broadly responsive to the task Now 9 however 9 as the Atlantic nations face a more complex set of issues 9 there is less consensus as to hew to meet them Soviet stress on detente and coexistence dampens the impetus for a common strategy and the will to divert resources from social welfare to defense and foreign affairs The broader spectrum cf neces- sary action tends to wid n 'the gap between the large and small The key issue for th next decade may be whether the Atlantic nations -- and especially these with mcst power and influence -- will be able tc make their potsntial effective in the struggle to create and def nd a viable world order con genial to free sccieties To do so will require relations and institutions to focus their political will and sense of com non purpose At present 9 the structure of relations and institutions o rithin the Atlantic community is in transition Any new insti tutions or methods will have tc take account of existing conditions and trends II The Evol ring R elatiQ_ns among the Atlantic Nations 1 R e-lative Strength cf Eur-ope The revival of Europe since 1950 has greatly modified o o S E' C R E' T ooo o S E C R t T the power relationship between West ern Europe and the US In the last decade 9 the US was dominant in the Alliance It provided the SAC sword on which Europe's security was based contributed most to the SA_CEUR sh_ eld and provided the sinews both for Europe's economic recovery and its rearmamento -- - - Todayp the European states have made a phenomenal economic recovery the us ' their rate of economic expansion exceeds that of o--oo -ooooo-r-o-oo- o o oo Far from requiring US economic assistance Western Europe is now competing vigorously with the US in world markets Simultaneously the growth f Soviet eccnomic and military power has raised some doubts in European eyes regarding relative US strength Both their recovery and their doubts have ccntributed to a new sense of political independence in Western E'lllrop with some revival of nationalism With new self-confidence the Europeans aspire to an influence and a role reflecting their strength -- or their potential They are restive with their past position and seeking in various ways to correct it 2 The European Community The creation of the European Community 9 under ccmmcn institutions is in part prompted by this aspiration The progress toward integration in continental Western Europe ha a been one of the striking features of the past decade The dynamism of the movement to date and its inherent logic suggest that still greater unity is likely to be achieved in th s E C R E o ' o o - 46 S E C R E T next decade despite differing concepts of the Cc u_ ity and the relations amcng its members From the European viewpoint greater unity is essential if Europeans are to have any significant control cf their own destinies and exercise appreciable influence in a world inhabited by powers of the s fze of the US _ the USSR and Red China Equally important European unity could help solve or mitigate many of the-divisive clashes of interest now confronting the Atlantic nations In terms of resources and GNP the largest European members represent only 10 to lZ percent as much as the United States With such disparity equal influence en common policy is out af the question whatever the forms or fictions The result is frequent fric- tion and frustration leading to unilateral natior al action A Europe able to act as an effective entity would deserve and could exercize comparable influence en common policy and action Disposing resources much nearer to those of the United States such a Europe could join in the genuine partnership of equals 3 The UK and Out r Seven One of the obstacles however to the creation of s-u ch a partno rship is the pcsiticn of the United Kingdom and tb - Britain faces difficult choices so-called Outer Seven o n their attitude toward European integration the Britis h have been torn between the 'cccgni ion th3 t clcee Fr i nco- s C R E M L ooo ooo -o ' o oo s o o ' o o ' E C R E T - 4 I i German relations can enhance Western strength and the fear that the coalescence of the Six would inevitably impair - Britain's position With three times the people and resources 9 the Community threatens to relegate the UK to a much smaller role in the The British econom ic alliance in the Atlantic Community Seven with neutral states and NATO members has only a limited political basis Whatever its economic advantages for its members its political future as a regional group appears highly uncertain If integration continues the European Community will more and more be a source of great military and economic power - whose members 9 _if they act as a unit will have a formidable voice in the decisions of the Alliance The adherence of Britain would of course greatly strengthen the Communities If the UK stays out its relative economic and political position will be weakened with adverse effects on the Alliance Consequently a reappraisal of the British relaticn'to the Communities would be in the common interest 3 The Broader Need The diversity of interest and outlook of its members and the differing national approaches to the re-structuring of Europe severely strain the cohesion of the Alliance and the capacity of its members to concert their efforts for creative defense as well as for their non-military tasks o oo o o o-s f C k E T o ' ' ' ' S E C R E T ' - 148 The Atlantic na tiona h ave 9 however 9 recognized the ne ed to find firmer bases for cooperation 9 especially in the political and economic fields and- beyond the NATO area Since the Report of the Committee o Three in 1956 9 the NATO Council has made real progress in closer consultation among the members regarding proposed policy and actions The more active role of the Secretary-General has also been an important forward step Doubtless existing procedures still leave much room fer improvement They fall short of pro- ducing the commcn strategy or priorities required for ccn ducting the world-wide effort In the economic field 9 the decision to reconstitute OEEC with the US and Canada as full members was a recog- - nGBPt ion of the need for a new orientation and direction in Atlantic institutions The new OECD can be of great value in enabling the Atlantic Community to concert economic policies within the Atlantic area and to reorient thinking and resources of its members to a wcrld wide perspective focussed especially on problems of eccncmic development The analysis of earlier chapt rs 9 however has rep-eatedly indicated the need for a mere integrated joint effort by the Atlantic nations ever the coming decade The question is how common strategy and pricrites can be attained Should it be sought through new in t itutions existing agencies be made more effective o o s C ll E T Can tli e o o S E C R E T II 9 - - 1' Structure of the Atlantic Community 1 Atlantic Confederation 0 In the perspective of the next decade 9 should the Atlantic natio s _set theinselve t_he goal of creating an Atlantic Community or Confederation rith conw on institutions Whatever may ultimately deve lop 9 a _number of factors argue against such a decision as of now For the coming decade 9 the urgent need is for capability to create unified policies and to mobilize resources and effort to carry them out An Atlantic Confederation would be relevant to these demands only if it were delegated substantial powers for decision and action Merely ceremonial or formal institutions without real transfers of authority - would be of no value for these purposes The situation is not ripe for such measures in the near future Conditions might change radically and rapidly if experience demonstrates that existing and prospective insti tutions are clearly inadequate or ineffective to cope with the challenges of the coming decade At present political opinion certainly does not appear to be at that point in the United States and probably in other countries as well A decision to move toward an Atlantic Union before the necessary domestic political support has developed for such far-reaching action would risk failure at the outset It would also create new divisive forces within the Alliance oo o s E cR E T ' o o ' SECRET - 150 - jeopardize the development of European integration 9 and generate serious 'political problems within the individual states It might divert attention and energies from the Soviet threat and the plight of the less developed countries in order to concentrate ori political problems involving Western inst tutions 9 thus perpetuating the parochial viewpoint which prevailed during much of the last decade All these factors seem to dictate a flexible and gradualist approach based on adapting and supplemen ing existing institutions This does not mean taking a decision against the concept of an Atiantic Confederation as an ultimate goal On the contra ry 9 the option to create it should not be foreclosed either by decision or specific actions ' For the present however 9 the best mean s to' fo'ster its pros _pects will be to develop concrete ways of working together and to encourage the progress to European integration 2 The Atlantic Interest in Eurcpean Integration As the Committee of Three suggested movoess toward A1 lantic cooperation and European unity should be complementary Indeed the broad interests of the Atlantic Community would be served by utilizing the political and economic gains cf iestern Europe which have already been achieved and which can be expected to develop in the next decade A strong political and economic unit in Western Europe in alliance with the US would contribute decisively to the ooo o o o o oo o s E C R GBP 'I o o o oo o o SECRET - J 5 -- political cohesion economic health and militarY strength f the Atlantic Community as a whole ' The development of common European institutions provides an organic basis for contain ing national rivalries_ and promoting Franco-German friendship-ancl cooperation _ Such an entityg able tc combine the resources of its members and to unify their policies would supply the essential foundation for equal partnership with the United States Its existence should facilitate the creation of closer links and joint agencies or institutions between Europe and the United States and thereby enhance the strength and cohesion of the Atlantic Community -- Consequently support for European integration and the - principles on which it is based a re in the interest of the Alliance It should become increasingly clear to the United Kingdom that its interests would be similarly served It would pe greatly to the long-range benefit of the Atlantic Community if the UK were to join the Communities without reservations which would cripple their effectiveness 3 NATO and OECD The foregoing analysis leads to a pragmatic approach to Atlantic institutions Over the coming decade the Atlantic nations will clearly have to collaborate much more closely to discharge the key tasks discussed in this report The forum and instruments would however be selec ed according o o o o o o - s GBP C R E r o o o oo oo o s - 152 - o oo o E C R E T '' o o o o to what is be 'st suited t o the specific activities The mili- tary measures would obviously be carried out thrcugh NATO 9 and wou1d require building on and developing the unified command apd supporting struct e for the-NADET proposal and for expansion of joint research and development and weapons In the economic field 9 in addition to national programs actions 9 heavy reliance would be placed for execution on international agencies such as the IBRD 0 IDA 9 IMF 0 UN Special Fund 9 OPEX and other UN agencies and GATT for reasons already considered But major policy fields would remain in the political and economic areas The question might be raised whether these should be divided between NATO and OECD as now ccnt emplated or consolidated in'NATO Since conversion of OEEC into OECD involves changes in membership and functions the new activities might easily have been centered in the NATO Council and Staff Without rehearsing the reascns 9 however there appear good grounds for not following this course but centering the economic functions primarily in another Atlantic instrument The efforts to coordinate economic policies to foster economic growth in the less developed countries a nd to regularize trade relaticns seem sufficiently specialized to benefit from an expert staff concentrating mainly on them These activities are more likely to evolve and develop in response to need and experience under those conditions o oo oo o o o s E C R E' I o oo oo oo o s o o oo o ' E C R E T o o 153 The role of OECD 9 however 9 is not without difficulties Should the OECD become 9 next to NAT0 9 the second major institutional tie between the Atla tic nations its operations may be affected by the presence of the European neutral states This fact can be of certain advantage in terms of possible - - relations with the LDC's or a s an attractive force for Soviet European satellites On the other hand the presence of the _ --- ___- neutrals greatl y complicates the task of making the OECD an effective instrument fer undertaking programs which have a predominant political motivation especiall y those involving burden-sharing The determination of the limits imposed by the neutrals and the problems of some smaller states however can be r solved only in the light of actual experiences gainad in the operation of the new organization Those limitationa _could also be largely mitigated by the proposals in the following section of this chapter Moreover 9 the functions of OECD need not preclude any economic activity on the part of NATO The Economic Committee and the Council might still concern themselves with stra tegic issues such as a Basic discussions of the natur magnitude and urgency of the LDC problems b Continued appraisal of Bloc economic activities and relations with the LDC 1 s and NATO members and obtaining a consensus regarding appropriate counteraction by NATO members o oo o o o o ' s E o o o o C R E T o - 154 c Considering common positions on issues of economi c import arising in broader forums particularly organizations in which the West and the Sov et Bloc are both present Both NATO and OECD may also be viewed as partial burden-sharing exercises the one concentrated on the defense burden -- the other on the aid burden Neither burden-sharing problem 9 however can rationally be dealt with separately or in isolation from the over-all economic situation and resource allocation pattern of the member states 9 which is analyzed by OECD 9 or in the isolation from the over-all political situation and pattern of national interests of member states 9 which is analyzed by NATO The emphasis on political and defense considerations in NATO and on-general economic and aid considerations in the OECD can robably never be fully reconciled It can be minimized by establishing closest cooperation between the two Secretari_ats by joint representation 9 as suggested below 9 and by efforts of the member states to follow compatible policies in both organizations IV Improving Joint Policy-Making The key problem in meeting the chalienge of th 1960 s remains How to improve the machinery of the Atlantic nations for making and carrying out a joint strategy for performing the main tasks How can they arrive at consensus regarding the threats confronting them and a coherent o o o o o o s t' C R e oo o 'l' o o o o s E C R E T - _55 - framework of priorities and polici s for meeting them The North Atlantic Council is the logical forwn for this effort Experience has shown-how hard i t will be to trans cend national and parochial concerns to advance the larger interests of the Atlantic Community Certainly no devices or machinery can substitute for lively awareness of the urgent necessity to work together as the price of survival But procedures and instrwnents can sometimes assist in the growth of such awareness and in devising measures to give i t practical meaning 1 Three such steps are suggested below A NATO Steering Group The wide disparity in power and responsibilites among members of NATO should be recognized in its machinery for consultation The smaller members should accept the fact Xhat the stronger members must bear the major burdens especially outside the Treaty area To reflect this fact an d assist in mor intimate discussion and coordination of policy NATO should establish a restricted Steering Committee of the Council The Council and its supporting Committee structure should continue as the forum in which general problems are discussed and in which NATO decisions as such are taken unanimously The Steering Committee wouldi a prepare proposals on European matters cf general concern such as security and specific issues like Berlin o o o o o o o o o o o o oo o o oo o S E C o R E T o ' o oo ooo 156 - o ' ' ' S E C R E T o ' oo o and disarmament which would be submitted to the Council as a whole for consideration and approval b discuss and concert policies of the members of the Steering Group on extra European matters The Council would be kept informed of these discussions The Steering Group might be composed initially of the US 9 UK France Germanyo and Italyo and perhaps Canada In timer it could consist of the US and the European Community when it could speak for its members The interests of the smaller states need not be impaired by such an arrangement First their interests woula be safeguarded by participation in the existing Council mechanism Secondly the Secretary- General could attend the Steering Group with authority to consult other interested member states Pinally 9 repre- sentatives of the smaller members could be added a s hoc members when the Group discussed any matters in which they might have specific concerns 2 Atlantic Policy Planning The essence of this report is that the Atlantic nations have certain basic interests in common which they will neglect at their peril and which must take precedence over their more narrow naticnal purposes or interests At times these common interests are downgraded er overlooked despite consultation among the NATO members It would be valuable to have some regular method for reasserting the wider o oo oo o o o o oo o o s E C R E T o - o oo o o I o o o o o f f S E C R E T - 5 L j interests and for analyzing the conditions and measures for advancing them o ' The Secretary-General 9 in recent years 9 has sought to do this to some ext t 9 but the nature of his position _imposes c rtain inescapable limitations o As a means for overcoming these difficulties and contrib uting to a more consistent basic approach 9 it is suggested that NATO create an Atlantic Policy Group to recommend longrange plans and policies Specifically the Group shou1d be charged withg a analyzing the over-all posit on of the Atlantic nations in relation to the world situation b defining more precisely the common interests of the Atlantic nations and c proposing policies to advance the common interests This Group shou1d be limited to three or fcur people of international repute It should be entirely separate from both the International Secretariat and from the Council 9 and shou1d report to the Council at the Foreign Ministers' level Members of the Group shou1d not in any sense represent national states they should be chosen for their breadth of view and independent judgments and shou1d speak only for themselves They should have no operational responsibilities and should 'be expected to devote perhaps a third of their time to the work of the Group o ooo o oo o ooo o o o o o oo ooo oo o s- I' C p e T o - - o o- o o ooo s o oo o E C R E T - 158 An independent formulation of common objectives and policieis unhampered by considerations of national intereats and conflicts would provide the framework for long-range policieiSlo o3 0 Joint Representation in NATO and the OECD ' Effective' doordination of policies in NATO and OECD will make it ecess ry to go beyond the linkage provided solely through common direction from home The US should seek the agreement of the UK and the key EEC member states to maintain or establish a single national delegation to NATO and the OECD under the over-all direction of one man who would be the Permanent Representative of his Government to both organizations To fulfill the functions outlined above these officials should have a position or rank in their governments nabling them to speak authoritatively for their governments and to play an active part in their policy lll$king They might form the base from which would evolve restricted executive bodies in both organizations V Public Support The development of public support is a basic necessity if the Atlantic Community is to endure To help widen un der- standing of the common problems confronting the Atlantic nations and to build consensus for their collective solution 9 several steps might be taken ooooo o o o o oo o o o oo o o o oo o o o ooo o o o s C R o o B' - ' ''' S E C R E T - 1 o 5a J- - The NATQ and OEEC information pR ograms should be ' expanded to promote support for the activities of NATO antl OECD o 2 o The annual conference of NATO Parliamentarians which has been a useful unofficial body might extend its scope to review the activities of OECD as well as NATO It could receive and debate each year reports from 'lihe SecretariesGeneral of NATO and the OECD as well as analytical reports and policy proposals from the Atlantic Policy Advisors Its deliberations could inake a major c ontribution to the sense of comm n purpose among the Atlantic nations The o possibility of converting the conference into an official Atlantic Assembly might also be explored 3 The Atlantic Institute which is well advanced o under private sponsorship could develop into a valuable forum for private and mixed public-private activities related to the Atlantic area If so modest publ c subsidy would seem well justified oo o oooo o o o o o oo s E c oo R E T This document is from the holdings of The National Security Archive Suite 701 Gelman Library The George Washington University 2130 H Street NW Washington D C 20037 Phone 202 994-7000 Fax 202 994-7005 nsarchiv@gwu edu