"Urbanization and industrialization of the costs, discharging huge amounts of organic and inorganic waste into the oceans through rivers and pipelines; the industrialization of agriculture, generating run-offs of chemical fertilizers and the discharge of DDT which reaches the oceans through the atmosphere; the swelling of tourism and the recreational uses of ocean space; the use of the oceans for human habitats, whether under water or on artificial islands-all contribute to an alteration of the balance between land and sea. Factories are being moved out to sea; oil refineries are placed on offshore platforms; airports are put on artificial islands. New energy resources and technologies, fueling a hydrogen economy, will be ocean-based rather than land-based. "The military are moving into the oceans. Strategic weapons systems, easily targetable on land by high flying "py planes or satellites, become invulnerable under the protection of the opaqueness of the seas and with the added advantage of mobility. The "second strike capacity" of the great powers resides today in the oceans. "Oceans science, finally, has been developing at a spectacular rate. The discovery of seafloor spreading and continental drift has added new dimensions to our understanding of the history and nature of our planet. The impact of this science both on industrial and military uses of the oceans is ever increasing. "There is at present no law, national or international, to regulate these new and challenging uses of the oceans. Existing international machinery is totally inadequate. The American Draft Treaty falls short of meeting most of the problems. "If unregulated, the intensification of old uses and the addition of so many new uses of the oceans will engender conflict and waste on a scale unknown in the past: problems which affect the health of the oceans and the survival of man. Problems exasperated by the so-called energy crisis and the ensuing worldwide mood of national retrenchment and short-sighted scramble for resources. "Problems which, in turn, are transnational in scope and must be solved internationally. “A revised U.S. Draft, in my opinion, should: “Give legal and economic content to the concept of the common heritage of mankind; "Ensure the conservation of the common heritage for future generations; "Ensure the full participation of the developing nations in the management of the common heritage and in the benefits derived therefrom; "Harmonize global, regional, and national interests in ocean space and re sources; "Reconcile and balance the multiple peaceful uses of ocean space and resources; "Develop a disarmament and arms control apt to bridge the gap between science, economy, and politics; and "Develop a disarmament and arms control policy for the oceans, benefiting from the awareness that many of the technologies and institutional arrangements needed to monitor and control pollution in the oceans have also an arms control effect. [From the New York Times, Dec. 30, 1973] REGULATING USE OF THE OCEANS-IT IS TIME TO CONSIDER THE FISH'S POINT OF VIEW (By Richard N. Gardner) "When the American humorist Robert Benchley was an undergraduate at Harvard, he had to answer an examination question in international law on the Northwest Atlantic fisheries dispute. Finding himself unprepared on the issues, he began: 'Some people may care to discuss this case from the point of view of England, others from the point of view of the United States, but I shall discuss it from the point of view of the fish.' "The story is now almost forgotten vintage Benchley. But the question of the point of view of the fish'-to put it more broadly, the protection of marine resources and the rational management of the oceans that cover 70 per cent of the earth's surface has become one of the most pressing in the diplomatic agenda for 1974. In Caracas, Venezuela, June 20 to August 29, 150 countries will participate in the largest conference ever held under United Nations auspices, the third U.N. Conference on the Law of the Sea. NEW LAW NEEDED "The law of the sea has appropriately been called 'the heart of international law.' From the 17th century through the early part of the 20th, countries bordering the oceans generally agreed on what was essentially a strategic definition: territorial waters were limited to three miles, the distance a 17th-century landbased cannon could shoot. The high seas beyond were free for the use of all. "The old consensus was broken by a combination of economic and social factors. As world food needs have grown, improved fishing technologies have created competition between coastal and distant-water fishing nations for marine protein supplies. Energy-hungry developed countries have turned to new deep-sea drilling techniques to explore and tap undersea oil and natural gas deposits. The rising tide of nationalism has led some less developed countries to assert exclusive claims on their offshore resources, while others not endowed with rich offshore assets want to share in the benefits of seabed exploitation. "And meanwhile scientists have issued urgent warnings: the unregulated plunder of the deep, they say, cannot continue. While more sophisticated fishing techniques, including electronic hunting devices that pinpoint schools of fish, are being used by many fleets, there are simply fewer fish to be caught. In Icelandic waters, for example, the combined British-Icelandic haddock catch was 110,000 tons in 1961. Now it is just over 40.000 tons. The 'cod war' between Iceland and Britain dramatized the fisheries problem in the North Atlantic but similar situations exist worldwide. "International pollution control, many scientists say, is even more critical. To land-based pollution sources, such as open sewer and industrial waste, and the threat from ocean-going shipping, especially from oil-spillage, have been added the side effects of undersea exploitation. "The search for energy is now under way on the seabed off 100 countries. Three American companies-including one owned by Howard Hughes-are waiting to dredge nodules rich in manganese, nickel, copper and cobalt from the Pacific floor. Failure to impose pollution controls, scientific evidence suggests, may result in the death of all ocean life. "Some marine biologists have gone even further: Since marine organisms supply 70 per cent of the world's oxygen, the death of sea life might mean the death of all biological life. "TRILLION DOLLAR CHANCE "One law of the sea expert, contemplating the vast potential of the world's oceans, has called next year's Law of the Sea conference 'the trillion dollar opportunity.' The open question is whether it will be taken. It is all too clear from the recent preparatory session here that the 150 participating countries seek a law that will serve immediate national interests. Agreement was not possible even on procedures. Balancing 'high seas' freedoms major maritime powers consider essential for security and commerce with justifiable sovereignty in and under territorial waters-all under an effective system of international regulations and benefit-sharing-will take a 'quasi-miracle' according to one diplomat. "One example of the intensity of feelings and interests surrounding these questions was the all-out battle required to secure seats for the United States on the steering and drafting committees that will set the Caracas agenda. Things have come to a pretty pass,' the diplomat complained, 'when the devloping countries don't want to find one place for the United States on a committee of 48.' IS AGREEMENT POSSIBLE? "There now seems a fair chance of compromise on a 12-mile territorial sea. which coastal states could treat as national territory subject to the right of 'innocent passage' for foreign vessels. But the key to this compromise is satisfactory settlement of a series of related issues. Here is a look at the status of only a few. "Free Transit: The United States and other maritime powers currently hold to the old three-mile limit. But they have indicated a willingness to go to 12 miles provided 'free transit' is assured through the approximately 100 international straits. Those straits are between 6 and 24 miles in width, and some of them such as Gibraltar, Malacca (between Malaysia and Indonesia) and Bab el-Mandeb (controlling the entrance to the Red Sea) are vital for international navigation. STRATEGIC ISSUES "What the maritime powers want to avoid is the creation of a series of 'Berlin corridors' around the world in which political leaders in countries controlling key straits might be tempted to stop traffic. If passage through the Strait of Malacca were restricted, for example, tankers carrying oil from the Middle East to Japan might have to travel an extra thousand miles. And American nuclear submarines could lose much of their mobility. "In return for international guarantees of free transit, international regulations to protect the straits countries from pollution and maritime accidents, are being proposed. "Special coastal rights: Latin-American countries such as Peru and Ecuador now claim a 200-mile territorial sea and other developing countries claim exclusive rights to manage all resources within a 200-mile zone. But these nations may accept a 12-mile limit if they are satisfied on the protection of their vital interests between 12 and 200 miles. "The maritime powers seem prepared to accept the concept of special coastal state rights within a 200-mile zone, again provided international pollution standards are accepted and 'high seas' freedoms observed. COMMERCE, TOO "Commercial issues are also critical here: it is estimated that 61 of the 119 coastal states (the two Germanys, Italy, Korea, and Panama are examples) have other countries' 200-mile zones between themselves and the high seas. "Fisheries: There is a growing consensus that coastal states should have special rights in coastal species of fish and possibly also in anadromous fish. One example is salmon, which spawn in streams but roam through the high seas before returning. The toughest fishery issue is that of the migratory species. The United States and others argue that catch quotas should be established set by international agencies for fish like tuna. "Benefit-Sharing: In the summer of 1970, the United States presented a seabed treaty providing that coastal states should turn over to international development agencies a substantial portion of the revenues from seabed exploitation between 200 meters and the continental margin. But developing countries with abundant offshore resources showed little interest then. "At this point, revenue sharing seems possible only on resources developed beyond continental margin, such as managnese nodules. To make the system work, an international supervisory authority would have to be established. And here a hard question to resolve will be the balance of decision-making power between countries with the capacity for seabed exploitation and the rest. "Regulation: The United States and other maritime powers have indicated that some kind of law of the sea tribunal is an essential element of any final package, particularly in view of the practical problems of balancing coastal state and international interests between 12 and 200 miles. The traditional resistance to compulsory dispute settlement by Communist countries and many developing nations suggests that this may be the toughest issue of all." [From the Washington Post, Feb. 8, 1974] STATE DOUBTS IMITATION OF CARTEL IN OIL (By Lewis H. Diuguid and Jack Egan) An internal State Department study has concluded that while countries exporting critical raw materials such as copper or bauxite may be tempted to follow the example of the cartel of oil-producing nations by restricting production and raising prices, they probably won't succeed. The main obstacle to effective commodity cartels is a lack of common political and economic objectives among the participants, according to a memorandum prepared for Secretary of State Henry Kissinger. The study claims that only extreme and exceptional circumstances allowed the Arab oil producers to achieve unity on petroleum pricing, and that aside from the issue of Israeli occupation of captured Arab territories, they are often still at odds. The State Department has been eager to disseminate the results of its study. It wishes to discourage new commodity cartels from forming and to cool what the department considers an overreaction to the threat of such combines by the Interior Department, and other agencies. The study recommends that the United States not assume an aggressive posture in dealing with the situation. Since the October Arab oil cutback and the dictated fourfold increase in crude oil prices, industrialized consumer countries have feared that other countries producing the same commodities might band together to demand higher prices. There have been efforts to form new cartels in bauxite and copper and the State Department study suggests that more can be expected. But the memorandum lists a number of stumbling blocks to their success: The absence of foreign exchange reserves to cushion most countries which depend on exports of a single commodity while they last out a period of restricted foreign sales. The likelihood that too steep a price increase will either make it profitable to exploit other new sources of supply or bring substitute materials into use. The existence of stockplies in consuming countries which would enable them to try to wait for prices to go down. The difficulties encountered by copper-exporting countries in trying to coordinate production illustrate the problems faced by raw materials producers who would like to redress, through price hikes, what they feel have been historically unfair terms of trade with the industrialized world. Copper seems a likely candidate for a cartel. It is a resource in heavy demand by industrialized countries. It is produced by a limited number of countries for export. The United States and the Soviet Union are the largest producers, but export little. A producer organization, CIPEC (an acronym for the French name of the copper exporting group) has existed since 1967, made up of Chile, Peru, Zambia and Zaire. Together, the four countries supply 80 percent of the copper in world trade. It is thus similar to OPEC, the Organization of Petroleum Exporting Countries. CIPEC a year ago actually tried to set a selling price for copper but it failed. A high official of Chile-which exports more copper than any of the others— said his country was again approached recently by other producers. But Economic Minister Fernando Leniz said Chile turned down the proposal because it felt the scheme for producers to increase prices-and eliminate the play of supply and demand by limiting copper output-would damage Chile's economic interests in the long run. Leniz pointed out that current world export prices are already very high. Copper is selling for $1 a pound, which is double what it was a year ago and triple what it was eight years ago. He argued that if inflated prices and limited supplies of oil bring on a world depression, as some have suggessted, the price of copper-which has been propelled upward by the simultaneous boom in the industrialized nations-would collapse as demand dwindled. The Chilean position indicates the split in CIPEC which has kept the organization from concerted action. 31-789 (Pt. 2) O 74 - 8 DEPARTMENT OF STAT March 7, 1974 No. 86 STATEMENT OF THE HONORABLE HENRY A. KISSINGER BEFORE THE SENATE COMMITTEE ON FINANCE I Mr. Chairman, Members of the Senate Committee on Finance: With your permission I shall devote my opening remarks today primarily to the foreign policy aspects of the Trade Reform Act which is now before your Committee. This emphasis reflects not only a logical division of responsibilities among Administration witnesses, but even more my firm conviction that the world political order for years to come will be profoundly influenced by how we manage our trade and economic relations. This Administration has, from its inception, sought to create the conditions necessary to move us from an era of confrontation to a sustained period of peace and international stability. Detente between East and West has been part of a wider design: A design which, because of the growing reality of interdependence, seeks to build a cooperative approach in the political/economic relationship among the industrialized democratic powers of North America, Western Europe and Japan. A design which confronts the issues involved in the relationship between the developed and the developing countries, and encompasses the new challenges inherent in the energy crisis, the development of the resources of the oceans, and the preservation of the environment in an age of rapid industrialization. The key to our success will be the ability of governments to negotiate expeditiously, and to resolve issues in a firm and definitive way. The United States must pursue its national interests, as must others. But our national interest requires flexibility in negotiating agreements that provide benefits to all parties. To do otherwise is to return us to the days of unrestricted competition and unrestrained hostility - to the policies of the Thirties which led to a collapse of world order. For almost three decades the major trading nations having learned the lessons of the past have sought to open their markets to one another on a reciprocal basis. The negotiations have been difficult and time consuming, but the results have been important both in economic and in political terms. The benefits of a prosperous multilateral trading relationship constitute a cornerstone of the open and cooperative political approach that has largely characterized our relationship with the advanced industrialized |