The MacNeil/Lehrer Report; Arab Boycott

ROBERT MacNEIL: Good evening. Today is Yom Kippur, the Jewish day of atonement, and the third anniversary of the beginning of the last Arab- Israeli war. That war, as you remember, resulted in the 1973 Arab oil embargo, which had a drastic effect on the economies of industrial countries, including this one. Apparently by coincidence the United States and 18 of those countries today began testing on paper a plan to counter such an embargo if the Arabs should repeat it. They`re playing a kind of discrete war game.

How much we actually fear another oil embargo came very much alive last week in Congress and in the election campaign. In the dying hours of Congress, the administration fought off attempts to counter the Arab trade boycott of Israel and stop missile supplies to Saudi Arabia. Hints that the Saudis might pull another oil embargo were rife; Jimmy Carter accused President Ford of behaving in a craven fashion, which, in his words, "demeans our country and the world." These issues may well surface when Ford and Carter stage their foreign policy debate in San Francisco Wednesday night. Tonight we ask, Does our dependence on Arab oil and fear of another oil embargo now control our Middle East policy? If not, what does? Jim?

JIM LEHRER: Robin, Congress did a lot in its last several days before adjournment to side with Israel; first, there was the Ribicoff amendment to the tax bill, which denies tax credits to American com panies which comply with the Arab boycott of Israel. Then, both the House and Senate passed anti-boycott amendments to the Export Administration Act; they were waylaid and essentially killed in Conference Committee, however, by Senator John Tower of Texas. Also, the Senate Foreign Relations Committee voted 8-6 against selling Saudi Arabia $30 million worth of-maverick missiles. Only after Secretary of State Henry Kissinger personally appealed to the Committee to reverse its stand did the Committee back off and let the sale go through. All of this activity was carried out amidst those hints of a new oil embargo and political rhetoric from Jimmy Carter and other Democrats about the administration giving in to blackmail, among other things. When Saturday came, and the Congress adjourned and the dust had settled, the tally was 2-1 in favor of the administration. Only the Ribicoff amendment and the tax bill remained; President Ford signed that into law today. Congressman Jonathan Bingham, Democrat of New York, is Chairman of the House International Relations Subcommittee on Trade and Commerce, and was co-sponsor of the Export Administration Act amendment that did not make it. Congressman, what`s your own analysis of why your amendment did not make it?

JONATHAN BINGHAM: I think the administration had their people on the Hill kill it. We had had meetings with the Senate members of the Conference Committee and had arrived at a full measure of agreement as to what that bill ought to contain; and it was essentially, I think, in most particulars, the House bill, which was a strong prohibition against American concerns from complying with the Arab boycott. We never got to the formal conference stage because Senator Tower and others of the administration`s party were able to block the appointment of conferees; so we never had a formal conference meeting, we just had three informal meetings.

LEHRER: How important was this talk of a possible new Arab oil embargo in killing that, do you think?

BINGHAM: I don`t know what its impact was on the administration; of course, the Saudi Arabians themselves denied that they had made any such threat. And the rumor, I think, of a possible reimposition of the boycott was greatly exaggerated. I personally expressed the view, and feel, that they would never in the world have reimposed the boycott for this reason -- it would be against their interests to do so. They`ve been very practical and very realistic in their handling of the boycott up to now, frequently doing business with companies that were also doing business in Israel when they felt like it. And I just thought to the extent there was a threat and they denied that there was a threat -- that it was a bluff -and that it never would have happened. But I think the administration didn`t want this anti- boycott legislation to go through, and because of the time pressure at the very end of the session, they were able to make that stance stick.

LEHRER: Well, some people suggested that your amendment really wasn`t needed and that it was unnecessarily antagonistic toward the Arab world, and why bother with it, why do that -- why jeopardize our sensitive relations in the Middle East for something like that?

BINGHAM: You`re right in one sense; I don`t think the boycott has ever hurt Israel that much. But it is true -- and some of the committees that have looked into this, and three subcommittees have held hearings on this matter in the last year, have shown -- that our banks, for example, are helping to enforce the Arab boycott by refusing to handle letters of credit for exports to the Arab world that don`t contain conditions in them that are really contrary to the freedom of American business to deal with whom they choose. I think that`s the issue, and when we debated this in the International Relations Committee it wasn`t that the case for the legislation was not so much to help Israel -- in fact, that was a secondary consideration -- it was that American business simply should not be told with whom they can deal and with whom they cannot deal. And there are many businesses that feel that way; there are many that have refused already to comply with the boycott. Five states have passed anti-boycott legislation already. So this is an idea whose time has come; it`s eleven years since the Congress and the President declared that it was against the United States policy to comply with boycotts, and that business ought to be encouraged not to, And that bill was proved to be a failure. So that`s why in this particular year, I think, there`s been so much action and so much - - I would say progress -- toward legislation that would put all businesses in the same category; those who will comply with the boycott and those that won`t up to now would be put in the same category: nobody`s going to comply with it.

LEHRER: Congressman, thank you. Robin?

MacNEIL: Until this spring Joseph Sisco eras Undersecretary of State for Political Affairs. A veteran of all Dr. Kissinger`s Middle East shuttles, Mr. Sisco has been second only to the Secretary in formulating and carrying out U.S. policy in the Middle East. Joseph Sisco is currently the president of American University. Mr. Sisco, last week the administration also had fears regarding the effect on the Saudis of attempting to stop sales to them of $30 million worth of maverick missiles. What dangers did they fear in the Saudis` reaction, do you think?

JOSEPH SISCO: Well, first of all, we are committed to assist the Saudis in arms. And Robin, I think it`s well to recall that this was a policy that has been pursued for some many years. When the British got out of the Arabian peninsula and the Per8ian Gulf, American policy was faced with a very difficult decision: Do we try to substitute ourselves, or do we try to help the key partners in the area to maintain stability? So that when you`re talking about providing mavericks or helping in arms, you`ve got to remember that what the administration has had in mind is to help the Saudis defend themselves in a situation where they`ve got a big border, concerned about the communist threat in the area.

MacNEIL: Well, why, if that`s the justification, Mr. Sisco, were administration spokesmen stressing other fears? Saying, for instance, the Saudis have been among the lead in holding the oil price down or being conservative about price rises, and taking some time to scotch the hint that there might be another embargo in the offing.

SISCO: The reason is that our overall relations with Saudi Arabia depend on many things: we have friendly political relations; they are supportive of our policy, for example, generally in the United Nations. You can`t select one part of the relationship and leave out another. In other words, I think that one of the reasons why the Saudi Arabians have taken the lead to keep oil prices down is that it`s in their own interest -- there isn`t any question about that. But the factor of maintaining good, friendly relationships with the United States, having available to it the technology of the United States -- this is a factor of some importance to Saudi Arabia, and we`ve been friends now for well over two decades.

MacNEIL: Do you yourself think there is any danger of another oil embargo?

SISCO: I think, as Congressman Bingham has indicated, the Saudi Arabians were at great pains -- as well as the administration to play down these so- called `rumors." I think Saudi Arabia would think very, very seriously before it took such an action, because they have never conceived -- past and present -- the application of an embargo to be in their interest.

MacNEIL: What part does our growing and increased dependence, since the `73 embargo, on Middle Eastern oil play now in limiting our freedom of maneuver in the Middle East?

SISCO: I don`t think it has limited our freedom of maneuver. One, we continue to be committed to the survival and the security of Israel; we are also pursuing a policy of improving and deepening our relationships with the Arab world, and on its surface this may appear in conflict. In actuality, we have been able to pursue both prongs. There`s no doubt, though, Robin, that when an American thinks about 1973 and the long lines at the gas station that the area of concern as it relates to the Middle East has been broadened, and that resources and availability of these resources are a factor that has to be weighed by any administration, whether it be a Carter administration in the future or a Ford administration.

MacNEIL: So what you`re saying, just to recapitulate, is that on our minds, if not in explicit Saudi threats, was this danger, however remote.

SISCO: What is involved is that our overall interests in the area, Robin, have to take into account not only the security of Israel but have to take into account the fact that this is an area of political, economic and strategic importance, and obviously the resources in the area and availability to the United States is a factor that has to be weighed.

MacNEIL: Thank you. Jim?

LEHRER: Robin, William Beecher is a Washington correspondent for the Boston Globe, he was formerly with the Wall Street Journal and the New York Times and was a Deputy Assistant Secretary of De fense before joining the Globe; he has traveled frequently in the Middle East, among other places. Bill, what caused the Senate Foreign Relations Committee to suddenly try to block the maverick sale, do you think?

WILLIAM BEECHER: I think that was a demonstration of colossal frustration on the part of the Senate, which is probably a feeling that`s shared throughout much of the Congress -- that for at least the last eight years, and probably longer than that the executive department has been going off and secretly negotiating arms deals, making commitments, investing the prestige of the United States behind those commitments, good foreign relations between our country and those other countries, and then suddenly the Congress has got a say but it`s warned that if it says no then it jeopardizes a good deal. I think the Senate in this case was saying, "We don`t like the idea of this one, and we`re picking out this one issue among 43 presented to us to make our point."

LEHRER: Why do you feel the administration is so upset about all this? Would you agree with Mr. Sisco`s assessment of it?

BEECHER: In part; not entirely. I think the administration really is very much upset that it is no longer going to have the free hand that it has had to offer arms, especially in the Middle East and Persian Gulf areas, in a way that serves its foreign policy interests. In the case of the maverick, for example, some in the Congress were fearful that in the event of another Arab-Israeli war some of these very sophisticated weapons might find their way into the battle against Israel; and that was part of the underlying fear also involved in this case.

LEHRER: You know, it`s been suggested that -- back to Congress for a moment -- that all of this activity, not to impune anybody`s motives, but let`s say some of this activity in the last several days was really an attempt on the part of the Democratic Congress to show a lot of pro-Israel feelings right before an election, keeping in mind the Jewish vote and Jewish influence here in the United States. Did you pick up any of that?

BEECHER: When you`re in a political season, obviously that can`t be totally removed from the minds of the people who are elected to public office. You must also recall, however, that Israel has been rather popular in the Congress -- both houses -- and so there probably was a little of each there.

LEHRER: Were the Israelis strongly against this Saudi sale?

BEECHER: They were concerned about the maverick because it has in its performance characteristics certain capabilities that are more offensive than defensive; and they were concerned, being familiar with the weapon themselves because they have some, about how much damage it could do in the event of another war. I think they were very much concerned about it, yes.

LEHRER: Was the word out on the Hill that Israel does not want this sale to go through?

BEECHER: Very clearly so.

LEHRER: And was the word from, say, pro-Israel forces in the United States that they wanted that sale killed?

BEECHER: Yes, but countervailing that was the notion that, is it fair to pick on one country and one arms sale among 43 presented to the Congress, and at this time isolate that and make, perhaps, an enemy of a country that has been helpful in that it tried to moderate oil price increases. So that was a countervailing sentiment on the Hill as well.

LEHRER: And that`s where it gets to be a little political right before an election, right, that they would select this particular one?

BEECHER: Yes.

LEHRER: Do you think, in what Congress did and tried to do, it jeopardized Middle East policy generally?

BEECHER: In my own feeling, no. The sale went through, Saudi Arabia saw the administration and its friends making the good fight, trying to preserve a relationship that is there; but both the administration, Saudi Arabia and other countries who have put on notice that Congress wants to change this relationship, it wants to truly be consulted in the future -- I think that message is not lost.

LEHRER: And that`s a very important message in terms of future foreign policy, is it not, in your opinion?

BEECHER: A very important message.

LEHRER: Thank you, Bill. Robin?

MacNEIL: Yes, gentlemen, I`d like to take up with all of you the question that I asked Mr. Sisco a moment ago, but put it in another way. How much, do you think -- starting with you, Congress man -- has our growing dependence on Middle East oil, Arab oil, and that dependence has doubled or trebled since the embargo, made our policy in the Middle East a hostage to the need for that oil, Mr. Bingham?

BINGHAM: I don`t really think it`s had that much impact on the Congress. I think it was very interesting that the Congress this year was willing to vote -- both houses -- strong additional anti-boycott provisions in spite of the suggestions from businessmen that this would hurt our trade with the Arab world. We have gone along, incidentally, in the Congress, with many billions of dollars of sales of arms to Saudi Arabia and other countries. The maverick sale was just one that was picked out because it did seem to be an offensive weapon; so that in that context I don`t think that the possibility of a reimposition of an oil embargo was that crucial. There is an underlying extremely strong support for Israel in the Congress; I think Joe Sisco remembers that from his days of briefing the Congress during the 1}67 war and during the 1973 war. And this doesn`t change in terms of any threats of embargo. As a matter of fact, I think one reason the Saudis hurried to deny the report of a threat of an embargo was that they recognized that the House and the Senate would react badly to that threat and that a threat like that would be counterproductive.

MacNEIL: Yes; Mr. Beecher, do you look at it the same way -- has our freedom of maneuver been limited as our dependence on Arab oil grows in the Middle East?

BEECHER: It appears now that about 40 percent of our oil requirements come from outside the country, and a large portion of that comes from the Persian Gulf-Middle East area, That percentage appears to be on the way up, rather than down. So, mindful everyone is that looks at the problem that oil is becoming increasingly important. More than the fear of boycott, I think, is the concern about what`s going to happen to oil prices. OPEC is going to have a meeting later this year, and the attitude of two countries -- Saudi Arabia and Iran -- probably will go a long way to determining to what extent the current price is increased; it`s already a foregone conclusion that it`s going up again. I think that is a larger issue and one of more concern to those who voted on this most recent series of issues than the so-called "threat of another embargo."

MacNEIL: To bring you back in, Mr. Sisco, on this, would you say then that the fear of the price rising is acting as a limitation on our freedom of maneuver in the Middle East?

SISCO: No, Robin, I c-would agree basically with what has been said. I think there are other considerations that are much more important in terms of the kind of policy that we`re pursuing. We feel that our interests are best protected in a situation where a peace settlement is achieved in the Middle East, and that`s why we`ve been active diplomatically. We think that if the instability in the area continues, it only gives new opportunities to the Soviet Union to exploit the situation. There is always the risk of war in this area. These are the really prime considerations. But let me say, Robin, at the same time, in rephrasing your question a moment ago as far as oil as a whole, I want to make clear that I don`t favor the increasing dependence on Middle Eastern oil as far as the United States is concerned. While I don`t believe that it has reduced our maneuverability, I am concerned that if this dependence continues to increase that it could, in time, become hostage; and for this reason I think it`s important that on an all-resource basis we do everything in this country to make ourselves independent -- oil, nuclear power, geothermal, coal and the like.

MacNEIL: What percentage point do you have to reach, Mr. Sisco, before that state of being a hostage to it is reached?

SISCO: Well, for one thing, the facts prove otherwise, Robin. We played a middleman role in the last two and a half years and we brought about two disengagement agreements between Egypt and Israel and one between Syria and Israel. The basic situation in the area is still open for diplomacy. Each side has experienced successful negotiations; each side is tired of war. We`ve got an international framework for negotiation that exists. And above all, it is only the United States that is acceptable to both sides, and I believe that in 1977 -- again, whether it be a Ford administration or a Carter administration -- the time will be right for a new American initiative in this field.

MacNEIL: But if our dependence on oil greatly increased, we would have, while moral pressure on the Israeli side, our possibilities as a mediator might be compromised by the material pressure from the other side; is that what you`re suggesting?

SISCO: Yes, there`s that element of pressure, but this forgets the fact that there is a mutuality of interest between producer and consumer as it relates to oil itself. That`s one of the reasons, for example, why Saudi Arabia really entered into the embargo in `73 very reluctantly; and this is the reason why today it has taken the lead to try to keep the oil prices down. It sees friendship with the United States as key to its relationship; and moreover, the Arabs see that it`s the United States that can help make peace in the area. The Soviet Union can only help make war in the area.

MacNEIL: I see. The only reason I harp on this question is because it clearly lies behind all these charges of blackmail that have been raised politically, which we`re coming to in a moment; but just finally, on this point, could I ask you, Congressman, do you feel that part of the price of securing our oil supplies and keeping the price down has been for the administration in recent years to turn something of a blind eye, to de- emphasize the Arab boycott of Israel -- and that`s why they`re reluctant to see the Congress move more aggressively?

BINGHAM: I certainly think that the administration has not been sympathetic -- has not been sensitive -- to the issue of the boycott. Indeed, although the policy was enacted into law in 1965 that we were opposed to such boycotts, until about a year ago the administration was almost actively encouraging businesses to comply with the boycott, and even since then has vigorously opposed legislation that would give teeth to the policy that we enacted eleven years ago. I find it hard to assess the degree to which that posture on the part of the administration is the result of the fear of a loss of oil supply. I would tend to agree with Joe Sisco that it`s more a rather misguided, to me, emphasis on the need to cater to the interests of certain Arab countries to have, let us say, the most sophisticated arms, to have offensive weapons. The quarrels we`ve had on these decisions have had more to do with quantity of arms and with quality than with the fact of supplying arms; but the administration has seemed to be terribly reluctant to say no to countries such as Saudi Arabia, and I`m not prepared to say that it`s the oil problem that has brought about that reluctance.

MacNEIL: Thank you. Jim?

LEHRER: Yes. Let`s talk a few minutes, gentlemen, about domestic politics. Bill Beecher, for all the rhetoric that we`ve heard in the last several days, is there really that much difference between Ford and Carter when it comes to a Middle East policy?

BEECHER: It`s really hard to decide that; I`ve listened to the words that both have enunciated. Clearly, Jimmy Carter has discussed the maverick sale, for example, in terms that made it sound like Ford was really doing something contrary to the national interest in proceeding with it as well as the interests of stability in the Middle East. He has spoken of the boycott as an area where the administration has not, in fact, done very much. There`s one point that ought to be made there: the Commerce Department only Friday issued a report -- Friday of last week -- on this subject, and they said in the previous six months the number of requests to American companies to respect boycotts went up 50 percent, to nearly 12,000, and nearly 94 percent of the American companies so approached went along with the boycott. Now that`s a report from the Commerce Department; so there apparently is some evidence that the administration has been less than determined to make sure that the existing law and regulations are lived up to in this area.

LEHRER: Mr. Sisco, looking ahead, using the expression you`ve used two or three times now, whether it`s a Carter administration or a Ford administration certain things are going to have to happen.

Are you saying, really, that no matter who is President that this two-prong policy, also to use one of your phrases, is basically pro Israel and yet the United States is in a position where it must also deal with the Arab world and this is essential to peace in that area and all this sort of thing -- do you think that is such a position that can never be changed by anybody, by a new President?

SISCO: Jim, it just demonstrates what I think most of us have known: foreign policy is an amalgam of continuity and change. And the basic national interests as trey relate to the Middle East are relatively constant; whether it be Ford or Carter, he is going to face essentially the some circumstances and that circumstance is that both sides at least are open-minded at the present time to try to pursue further negotiations come 1977, and I have every confidence that either administration is going to see it in our interest to move and to play an important catalytic role.

LEHRER: But doesn`t that present situations that we`re confronted with right now? Bill Beecher just said it`s against United States policy for U.S. companies to participate in Arab boycott, and yet 04 percent of whatever are, and yet at the same time our government is supposed to be pro-Israel -- I mean, that`s an incredibly contradictory position for our country to be in, is it not?

SISCO: No, I don`t think so. First of all, I think that the focus, of course, is presently on the boycott and the recent arms issues; these are important, I don`t want to deny that. But what I`ve tried to suggest is we must not magnify their importance. There are other considerations as they relate to the area -- a very vital area -- that are much more important. War and peace, for example, Jim.

LEHRER: Do you agree, Congressman?

BINGHAM: I think there is a difference in emphasis between the Carter position, as I understand it, and the position of this administration. The Carter position starts with the proposition that we stand behind Israel, regardless, that that is the first proposition and that we should approach peace from that point of view, that the Arabs simply will not be able to achieve their goal of destroying Israel, and that would be the framework within which we can contribute to peace.

LEHRER: We should be interested in seeing what the two gentlemen themselves say about it on Wednesday night. Robin?

MacNEIL: Thank you all very much in Washington. Jim Lehrer and I will be back tomorrow evening. I`m Robert MacNeil. Good night.