By SMF, NARA, Date 5/12/00
The Secretary of State
September 20, 1983
Memorandum for: The President
From: George P. Shultz
Subject: Your Meeting with Margaret Thatcher, Prime Minister of the United Kingdom, September 29, 1983
This is Margaret Thatcher’s first official working visit to Washington following the June general election and will mark the effective start of her second term in office. The link between the United States and the United Kingdom is central to Thatcher’s foreign policy, and her meeting with you has been planned to emphasis that fact the beginning of her new administration. In her customary style, Thatcher will speak plainly about British interests and concerns, expecting us to respond in a similar fashion. The meeting provides us with an excellent opportunity to thank the Prime Minister for her continued support on a number of important policy issues, and also gives us a chance to make sure she hears our views on some outstanding differences.
1. The East-West Relationship
The KAL incident will be very much on Thatcher’s mind, leading her to want to discuss how to preserve necessary links with the Soviets even as political relationships with them worsen. In this context she will bring up arms control. She believes that the long-term efforts at arms control are essential to maintain the political consensus on defense. You may want to describe our overall approach of maintaining a constructive, but realistic, relationship with the Soviets; we are willing to cooperate where possible to reach agreements which are mutually advantageous, but we will confront the Soviets when they take unacceptable actions. To be successful, this strategy requires unity and co-operation on the part of the Allies. Our firm support of NATO, as exemplified by the 3 per cent defense increase, must be maintained. Regarding trade sanctions against the Soviets, she supports restricting technology transfer but is skeptical about more extensive restrictions. Our carefully calibrated approach in the KAL incident has been strongly supported by the British and merits our thanks at this point. [end p1]
2. The Middle East
Developments in Lebanon have focused HMG’s attention on the Middle East and caused Thatcher to want to upgrade the US/UK dialogue on this issue. She will stress the dangers of the MNF becoming deeply involved in the fighting and the need for a political settlement based on the principle “no victor, no vanquished”. Accepting the fact that a durable solution to the Lebanon problem requires a broader peace process which takes account of Syrian and Palestinian aims, she will want to hear your views on the peace process. We share her concern about involvement of the MNF in combat and her view on the type of political settlement required for a lasting settlement. You should add, however, that we must let the Syrians know there are limits to their aggressive actions in Lebanon. We believe moderate Arabs will support this position.
3. Economic Issues
Thatcher wants to discuss plans for next year’s London Summit. You should confirm our desire for an informal meeting, focusing on trade and finance aspects of the Williamsburg Declaration. She will underline the fragility of the European economic recovery in the face of what she considers to be high US interest rates. She will also raise British concerns about unitary taxation, seeking your support for pending legislation to block states’ use of such taxes. She will bring up the issue of “extraterritoriality”, urging legislation to limit the use of export controls for foreign policy purposes. You can reiterate that we are mindful of British concerns regarding extraterritoriality, which is extraordinarily complicated and involves questions of basic national interest. We recognize the need to communicate extensively on these cases as they arise and in the longer term to work to reduce policy differences which underlie these disagreements. You should raise our concern about E.C. proposals for Common Agricultural Policy modifications which would do great harm to our trading interests and provoke open confrontation. You should urge the UK to stand firm against such measures.
4. Central and South America
Thatcher is expected tp say that the British will maintain their garrison in Belize for the time being, but that no long term commitment is possible. You should make clear to her the importance you attach to the British forces remaining in Belize to protect the stability of the area; there is no adequate substitute for that UK garrison. Thatcher will also ask for understanding of the British position on the Falklands and express thanks for the help we have given on key political problems regarding Argentina. You should emphasize continuity of the US policy regarding this conflict between two of our friends. We will consult closely and continue to encourage a mutually acceptable negotiated solution.