"During my visit to Warsaw last June, I agreed with the Polish leaders to increased U.S.-Polish trade and exchanges in science, technology, culture, tourism, and transportation. A joint American-Polish trade commission has been established. After our governments had reciprocally agreed to export financing arrangements, I determined that Export-Import Bank credits should be made available for transactions with Poland. Other agreements to facilitate trade, increase exchanges in science and technology, and improve consular facilities also have been signed.

"Secretary of State Rogers' visit in July to Yugoslavia reaffirmed our long-standing and cordial relationship with that important nonaligned country. Its independence, political stability, and economic well-being are key factors for continuing peace in Europe.

"Romania's desire for close and mutually beneficial relations has led during the past three years to practical cooperation and to helpful consultations, including my visit to Bucharest and President Ceausescu's trip to Washington. Last year we approved the extending of guarantees to private investment in Romania, and I continue to hope that the Congress will provide authority to extend Most Favored Nation tariff treatment to that country. In December we signed the most comprehensive cultural and scientific exchange agreement in the history of our relations with Romania.

"Last summer Secretary Rogers signed consular conventions with both Romania and Hungary. His visit to Budapest and the subsequent settlement of the long-standing United States claims against Hungary have improved prospects for more normal relations.

"We remain ready to establish constructive relationships on a reciprocal basis with all countries in Eastern Europe. Differences in social, economic, and political systems exist, and must be acknowledged frankly. But they will not bar our cooperation with any country that seeks it.

"The Conference on Security and Cooperation in Europe. In March 1969, the Warsaw Pact revived its proposal to convene a European Security Conference. Such a conference would be largely

symbolic; its purpose would be to confirm the territorial and political status quo in Europe. There was some feeling in the West that this proposal should be accepted; it was thought that it might be a way to dissipate the tensions over the invasion of Czechoslovakia in August 1968 and to test Soviet policy. Some viewed it as a way of creating a better atmosphere for subsequent talks, while others saw it as a link to more specific issues, such as force reductions.

"We were skeptical about symbolic acts that failed to deal with the substance of East-West tensions. The urgent issues of European security were the tensions over Berlin and Germany and the military confrontation in Central Europe. We could not hand over our responsibilities in Berlin to a European conference. If we could not make progress on a central issue such as Berlin, the results of a broad conference would be illusory. To stimulate an atmosphere of detente through symbolic gestures could only lead to disillusionment and insecurity.

"The United States, therefore, took the position that a European conference would only be acceptable if there was progress on specific issues, including the Berlin negotiations. A conference might be appropriate if individual countries succeeded in regulating their relations and resolving some of their territorial and political issues.

"This was accomplished by West Germany's treaties with the Soviet Union and Poland, the Quadripartite Agreement on Berlin, and the SALT agreements. At my summit meeting with the Soviet leaders in May 1972, I agreed that we now could begin preparing for a European conference with the aim of broadening European cooperation.

"Preparatory talks began last November to find out whether there was sufficient common ground to justify a conference of Foreign Ministers. A provisional agenda is being developed, which the Foreign Ministers could consider. Progress thus far suggests that the conference can be convened this year and that it may be possible to move forward on several important questions.

The participants will address certain principles of security and cooperation. If all European countries subscribe to

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common principles of conduct, and carry them out in practice, there could be a further relaxation of tensions. Certain military security matters designed to improve confidence will also be considered.

The conference would be an appropriate forum to discuss practical cooperation in economics, cultural exchange, science, and technology, on which there has already been progress in bilateral relations.

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The conference can consider how to facilitate contacts among the peoples of Europe and how to encourage countries to exchange ideas and information.

"The Conference on Security and Cooperation in Europe thus can set a new tone for European relations and establish new modes of conduct and means of cooperation. These would be practical steps toward normal relations.

"Mutual and Balanced Force Reductions. The exchanges leading up to the conference also acts as a bridge to negotiations on a more specific and central security issue--mutual and balanced force reductions in Central Europe. The prospects for arms control in Europe are obviously linked to political improvements between East and West. Throughout the 1950's and 1960's there were proposals for arms control in Europe. But it was unrealistic to expect to negotiate a reduction of forces--for example, in Germany, where there were almost continuous crises over Berlin. Moreover, the reduction of military forces in Central Europe was related to the strategic balance between the United States and Soviet Union and to the political situation within the Warsaw Pact.

"For these reasons, the NATO proposals of June 1968 to begin negotiations on force reductions were received coolly by the Warsaw Pact. Not until the Berlin and SALT agreements were concluded in 1972 was it possible to work out a sequence for beginning negotiations in separate forums on a Conference on Security and Cooperation in Europe and on mutual and balanced force reductions.

"The initial talks on mutual and balanced force reductions, now underway in Vienna, will lay the groundwork for more formal

negotiations next fall. The military and arms control aspects of force reductions are treated in other sections of this Report. Certain points that affect Atlantic political unity should be summarized.

"Perhaps more than any other single issue, the problem of force reductions crystallizes the basic issue of reconciling Alliance unity and national diversity. We will need an unprecedented degree of unity on fundamental military and political security questions. The outcome of the negotiations will affect the entire Alliance, regardless of who sits at the table: or which forces are reduced. Indeed, the very process of negotiating will test our common purposes.

"Each member brings to this issue strongly held national viewpoints. We must avoid efforts to protect national interests by procedural devices or tactical solutions. That approach would merely defer or avoid the hard questions. Ultimately it will be disruptive and open the Alliance to exploitation by the other side. Our goal must be agreement on basic security principles. We must meet individual national concerns within a common concept of security, and forthrightly address the question of how to maintain our security at reduced force levels. The issues are highly sensitive, and Alliance discussions will be painstaking and difficult.

"The United States is engaged in the most serious consultations with our allies to prepare for negotiations later this year. Force reductions in Central Europe are, of course, an element of the complex of U. S.-Soviet relations. The U.S. and Soviet forces are comparable in that they are not indigenous to Central Europe and might be candidates for reduction.

"The United States will not subordinate the security of the Alliance to Soviet-American relations. We are aware of European concerns in this regard. Repeated American reassurances, however, have not alleviated these concerns. Mutual confidence within the Alliance will develop only through an agreement on the basic security framework for the negotiations.

For your further background information on Eastern Europe, there follow some pertinent extracts from a report (dated April 19, 1973) of the Secretary of State entitled: United States Foreign Policy 1972.

"East European Countries

"U.S. relations with the countries of eastern Europe improved significantly in 1972. After accompanying President Nixon on his visits to the Soviet Union and Poland in May, Secretary Rogers visited the capitals of Yugoslavia, Romania, and Hungary in July-the first time an American Secretary of State had ever visited either of the latter two countries. The visits served as catalysts for the conclusion of consular conventions, signed by the Secretary with Poland, Hungary, and Romania, and the conclusion of a scientific research cooperation agreement with Hungary. The Secretary's discussions produced subsequent negotiations on commercial and financial issues and on scientific, technical, and cultural exchanges. These agreements demonstrated concrete achievement as well as the potential for further progress.

"Our efforts to improve relations with the countries of eastern Europe will continue to be based on the principles of mutual respect for independence and sovereignty. The use or threat of force from any quarter would be inconsistent with detente in Europe. To be our friend and to achieve a balanced progress in relations with the United States, no nation need be anyone else's enemy. Our aims are negotiation and cooperation.

"As our bilateral relations improve, we also welcome the increasing engagement of eastern and western Europe. The division of Europe has served no one's advantage and the current efforts to move from confrontation to negotiation and agreement will provide a lasting basis for peaceful cooperation.

"Yugoslavia

"Secretary Rogers' visit to Yugoslavia in July maintained the momentum of friendly relations generated by the previous exchange of visits by President Nixon and President Tito. The highlevel communication between the two governments testified to U.S. respect for the sovereignty and integrity of nonaligned Yugoslavia.

"Export-Import Bank credits, guarantees, and insurance for U.S. exports to Yugoslavia, and the availability of American investment insurance and guarantees through the Overseas Private Investment Corporation (OPIC) have encouraged U. S. exports and