1981 july: weinberger versus haig
At the beginning of July 1981 the new Reagan Administration was only beginning to work out the detail of its East-West policy on matters like trade and energy. Inter-agency rivalry, as well as the President's narrow escape from assassination in April, had bitten deeply into the first year. When the NSC met to take the first steps on 6 July 1981 decisions still seemed a long way off, if not altogether out of reach: Al Haig's State Department and Caspar Weinberger's Pentagon were so bitterly at odds that they couldn't even agree paperwork describing the key issues, while the options on the table were susceptible to 180 permutations, with ten interested agencies holding distinct opinions on every one. And time was pressing, because the outlines of a policy needed to be in place for the President to put before the allies at the Ottowa G7, 19-21 July.
The heart of the problem was deciding what to do about the Siberian Gas Pipeline, a huge infrastructure project being built in the Soviet Union by Western firms to supply natural gas to Western Europe. Weinberger wanted the US to do what it could to kill the project altogether, or at least significantly scale it down, denying the Soviets foreign currency and reducing Europe's dependence on Soviet energy and trade. The CIA supported him. Haig conceded the undesirability of the pipeline , but argued for a much more cautious line, reminding the President that the allies (particularly Germany) would adamantly oppose the Pentagon's policy. European allies tended to see trade interdependency with the Soviets as a good thing, calming Cold War tensions, as well as generating useful business, since Soviet earnings from gas were likely to be spent buying European goods. The allies would also resent American dictation, or the appearance of it. In all, he concluded that a US campaign againist the pipeline might well do more to split the alliance than impede construction.
That Britain might have difficulties with a policy designed to stop the pipeline was apparent from the first. Richard Allen, National Security Adviser, suggested the President ask Weinberger about the British stance in the NSC on 9 July, specifically the impact on Rolls-Royce ("a sick British firm in a British economy with a current unemployment rate of about 10 per cent"). Although the minutes have not been released, in his paper for the meeting Weinberger was optimistic that the British would cooperate, helped by "ideological compatibility and the low cost of cooperation". And it was British and Japanese compressor technology that he most wanted to deny to the Soviets, besides that of the US.
Eventually the official machine produced a set of "talking points" for the President to use in Ottowa. Little progress was made at the summit, however, and divisions within the Administration remained unresolved.
1981 august-december: deadlock
Deadlock continued in Washington through summer into autumn: the NSC considered the pipeline on 16 October, but couldn't reach a decision. (The British position was now clear: Haig commented in the meeting "Cap [Weinberger] has talked to the Brits. They suggested in no way would they go along with us".) Efforts to move things on during November came to nothing. So flawed did participants see the process by this point that the NSC actually composed an analysis of why the machine was failing, admitting that hours of the President's time were being wasted and acknowledging that Reagan had shown "fundamental good sense by refusing to make a decision until he has adequate information". On the other hand the President made a personal intervention to license the US firm Caterpillar's sale of pipe-laying vehicles for the Siberian project, short-circuiting the stalled official machine and making the policy even harder to sell to Europeans. Critics of Reagan in Europe were already talking loudly of US double standards over Soviet trade following the Administration's lifting of the US embargo on the sale of grain to the USSR. Unsurprisingly a US deputation sent to Europe in November to propose alternatives to the pipeline found no takers. The CIA at this stage saw persuading the Allies to halt the pipeline as achievable only at "great cost", if at all.
The Pentagon argued back: on 2 December 1981, Richard Perle, Assistant Defense Secretary, submitted a paper which vigourously questioned the State Department's policy on the pipeline and argued for an assertion of US leadership within the Atlantic Alliance whatever the "short-term problems with some of our European allies". But the NSC was now beginning to side with the State Department and it looked likely at this point that the final policy would please Haig more than Weinberger.
1981 december:martial law & "Chicken littles"
The declaration of martial law in Poland on Sunday 13 December 1981 changed everything.
Although the US had a well-placed source in Warsaw, who kept the CIA closely informed as to the regime's plans for a crackdown, the greater part of the government machine in Washington had no sense of its imminence. It seems that the intelligence was deemed so sensitive it was kept very close, even a key NSC official like Richard Pipes finding himself out of the loop.
Contingency planning for a possible Soviet invasion of Poland had been done almost exactly a year before at the end of the Carter Administration, in close collaboration with European allies; Carter felt his actions had staved off intervention at that point. How to respond to a crackdown by the Polish state alone was harder to decide, and reopened the now familiar Haig-Weinberger rift. The most revealing document currently available - the minutes of the NSC on 22 December 1981 - show Haig arguing strongly that U.S. measures should be calibrated so as not to split the Alliance, at least in the short-term; any break with Europe needed to be carefully thought through. Weinberger (and Kirkpatrick) voiced the opposite view that the U.S. should act on the basis of what it thought was right and live with the consequences. The President often said comparatively little in NSC meetings, but on this occasion spoke in a striking style. Reagan strongly agreed with his Defense Secretary, describing European leaders as "chicken littles" and suggesting that "if we really believe that this is the last chance of a lifetime ... a revolution started against this 'damned force', we should let our Allies know that they, too, will pay a price if they don't go along; that we have long memories".
1982 january-June:allied reactions
Sanctions against Poland were announced on in a Presidential address on Christmas Eve, with further steps against the Soviets following on 29 December. US companies were ordered to abandon all work on the Siberian pipeline, though some key questions - how far the ruling applied to their overseas subsidiaries and licensees, and how far it was retroactive - were left obscure. MT had been in close touch with the President in the run-up to the 22 December NSC meeting , but the detail of the final decision evidently surprised and dismayed her. She perceived the US to be attempting to impose its laws on the Allies (legislating "extraterritorially") and so compelling British firms to break existing contracts. She took the opportunity of a meeting with Haig in London on 29 January to send a strong message to the President, in effect suggesting a toughening of the European approach to Poland in return for the removal of the extraterritorial components of the US package.
MT's response clearly had an impact. When the NSC met to consider the sanctions argument on 26 February, the President commented (according to the memoirs of Richard Pipes) that he had been hasty and that MT had made him aware of the fact. He was ready to think again on subsidiaries and licensees. Haig supported this position, arguing that dropping the offending measures would open the way to more effective Allied sanctions on the supply of credit to the Eastern bloc. But though isolated in the Cabinet, Weinberger was strongly opposed and no immediate decison could be made.
Negotiations with the Allies came to a head at the Versailles G7, 4-6 June 1982. No agreement was reached on credit restrictions and the President returned to the US feeling let down, particularly by the French. On 22 June a toughening of US policy was announced, definitively extending sanctions to US subsidiaries and licensees. The depth of MT's feelings about this decision is apparent from her private correspondence with the President, and became public in a television interview on 1 September when she spoke of being "deeply wounded by a friend". Officials in the NSC seemed to have thought that MT was exaggerating the impact of the sanctions on the British firm principally hit, John Brown Engineering, a view gently reflected in a letter from the President defending his decision.
1982 june-november:withdrawal of the sanctions
On 25 June, Al Haig resigned as Secretary of State, at odds with many of his colleagues and the President himself over a whole range of issues. His replacement was George Shultz, whose position with the President was much stronger and whose policy was to end the pipeline argument as swiftly as possible. Caspar Weinberger began to shift position a little, evident in his record of a frank conversation with MT in London on 8 September, when she told him that she "desperately needed a face-saving solution" and he replied by admitting the importance of honouring contracts and the value of tighter controls on technology transfers to the Eastern bloc.
Shultz negotiated a package of measures with the Allies on exactly these lines, in return for which the pipeline sanctions were lifted on 13-14 November 1982.