SEEK CONSENSUS REGARDING EXPROPRIATION OF FOREIGN INVESTMENT

RESOLUTION URGED

Senator PERCY. Senator Fulbright, you have mentioned the Charter of Economic Rights and Duties which was an agenda item voted on by the General Assembly last year, a Mexican initiative. The United States cast a negative vote, and 16 essentially developed countries voted negatively or abstained, so we had a great separation between the developed and developing worlds on that issue.

Section 34 of that charter provides for it to be brought up again at the 30th General Assembly for revision, and modification, if necessary, and it is the U.S. position that with a few changes we could have

concurrence.

Do you think it would be worthwhile for the United States to take a leadership position in trying to bring the two worlds together; or just let sleeping dogs lie and let it drop and be another resolution adopted by the U.N. which will not be given much attention?

Mr. FULBRIGHT. I would recommend, in accordance with what I have already said, that we go to great trouble to try to bring about a consensus on this and see if we cannot get them to adopt principles dealing with this subject that we could live with. It is a very difficult subject. Again it is self-defeating to these countries who feel that they can expropriate foreign investment. Of course, the immediate effect may be slightly beneficial, but if they were experienced enough, they would realize they are killing, as they say, the goose that lays the golden egg. Many of these things are highly beneficial to the country over the years. We ourselves benefited tremendously from foreign investment. We are a good example of that. There are many good examples.

Senator PERCY. Our country was built in part by foreign investment. Mr. FULBRIGHT. Our railroads in the West originally were built primarily, I believe, with foreign capital. We didn't expropriate and it continues to be good. Of course, generalizations are always subject to qualification, but this is a good illustration of what I meant. It is an opportunity for some educational work. It is boring, tiring, time consuming, and difficult. I still think it is worthwhile, because anytime you do that or take any other measure it tends to enhance the prestige of the U.N. The ultimate success of this, just like the ultimate success of the principle of détente, depends upon the confidence of the people in it that they will get fair treatment, that it is a fair and just operation. It would contribute something to each one of these. Every time the U.N. successfully deals with anything it contributes to the prestige of that agency. It is worthwhile if you believe that the basic principle of the U.N. is a valid one and one which we seek to make effective. Of course, if you don't believe in it, or think it is all a mistake, these things fall to the ground. Your own report certainly evidences that you believe it is a sound concept that ought to be developed. That being so then every effort such as this is to its advantage.

U.N. UNIVERSITY SUPPORT AS WORTHWHILE INITIATIVE URGED

I felt that way. I referred, in my statement, at the last minute to the U.N. University. I don't wish to exaggerate that situation. It is

obviously not a tremendously significant thing, but it was approved by the U.N. and the Japanese have taken it up as their project. They have pledged $100 million payable over 5 years. There has been appointed an American, Mr. Hester, as the director or the president and the vice rector is a Japanese, who was the former president of the Tokyo University.

I have found this has become a matter of considerable pride on the part of the Japanese. It is extremely important to us for other reasons that we continue good relations with the Japanese. It is a very small thing for us to make a gesture of support and approval of that particular project if for no other reason than to please the Japanese. There are other reasons, and I think it is too bad that we have done nothing about it-absolutely nothing and it was one of these little ideas that I think would be worthwhile. It won't remake the world. It would entail relatively small amounts of money but could have great influence upon the attitude of one of the most important communities in the world to us, and that is the Japanese nation.

Senator PERCY. Carl Marcy was here testifying for a $50 million grant over a period of years. He would take that small fraction of the $722 million requested for military aid to Vietnam, that we did not authorize, and provide it for the U.N. University.

Mr. FULBRIGHT. I don't care from where you take it but it certainly is something worthwhile to be considered.

CONSUMER NATIONS SHOULD HAVE SAME RIGHTS AS PRODUCER CARTELS

Senator PERCY. One last question, because I would like to yield to Senator Biden.

The Charter of Economic Rights and Duties provided in effect that producer cartels would be encouraged in all types of commodities but that consumer organizations would be discouraged and would be looked upon almost as an unfriendly act.

Is it realistic to feel that it is all right for producers to get together and fix prices but not all right for consumers to get together, because in oil, for example, the consumers are the only ones trying to exercise a little restraint on consumption which serves the interests of the producers by extending their reserves longer?

Mr. FULBRIGHT. I don't think it is reasonable at all. I agree with you. They can't have it both ways. It is clear to me they can't expect that to be true. The consumers ought to get that same right. Senator PERCY. Thank you very much.

The CHAIRMAN. Senator Biden.

Senator BIDEN. Thank you.

ASSESSMENT OF PROPOSED ACTION DENYING ISRAEL SEAT

Senator Fulbright, it is always a pleasure to listen to you and I sincerely regret not having had the opportunity to serve on this committee when you were its chairman. I always found you make a good deal of sense.

I just have a couple of specific questions. I know my senior colleagues would like to get back to some of the broader philosophical questions you have raised in your paper. Then I will yield.

One question I do have concerns what Justice Goldberg said yesterday, as reported, I believe in the Washington Post, "A movement is underway to deny Israel its proper place in the General Assembly and in specialized agencies". Mr. Goldberg said this would be unconstitutional as was the exclusion of South Africa from last year's General Assembly debate. To block the move Mr. Goldberg said "the U.S. should serve notice that it will vote against it and would take further steps of freezing our prorata contribution to the Assembly expenses if Israel is illegally denied its seat in the Assembly. We must be extremely careful to keep our record." Now, Senator Fulbright, assuming that the General Assembly does take that action, do you concur with the assessment of Ambassador Goldberg that we should, in fact, freeze our contribution-a step viewed by him as a punitive action?

Mr. FULBRIGHT. I hesitate to recommend this business of refusing to participate if they don't do what we say. However, I would do whatever I could to prevent them taking the action with regard to Israel just as I said I disapprove and think we ought to do everything we can about the exclusion of South Africa, however we feel about the practice they are engaged in. According to recent reports in the paper, South Africa is beginning to respond by taking some minor action as a result of the criticism that has been leveled against them. This is a matter which, of course, I find very difficult to talk about having come from the South and been subject to criticisms which I think were unfair by many of my northern friends in the United States. This racial matter is a very difficult one. It has been very difficult in our own country. It is still difficult in Boston, for example. It all depends on where these things arise. People far off can be very magnanimous about it, but when it comes home-even to Boston, that jewel of our intellectual life-they have this reaction. I have great sympathy for the problems that have arisen in South Africa as a result of long history. I do not think they are barbarious people and something can be worked out that is mutually acceptable. That is why I think the U.N., when it goes so far as to exclude them, goes too far. As I said, and as Justice Goldberg said, it is unconstitutional. The same way with Israel. If I understand it correctly, this was a regional problem in UNESCO that Israel was concerned with. I am not as well informed on the details of what happened there. It is absolutely different, yet I would not approve of its exclusion. We ought not accept it and we ought to use every means that is reasonable except withdrawal. I don't believe in an organization like this that you withdraw if it doesn't go to suit you. If you become a member you have to do the best you can and use every means you can to prevent their doing something unconstitutional or irregular, but I hasten to say that we should quit. The Russians did that. I forget what displeased them. I believe they did that at the time of the Korean affair. They soon learned better than to boycott it.

So that is about the only way I can respond to that. I would hesitate saying we won't play.

Senator BIDEN. I am sure that Mayor White of Boston will like your suggestion that the U.N. negotiate his problem in Boston.

Mr. FULBRIGHT. We got lots of advice, too, from all over when we had problems in the South.

Senator BIDEN. And you're still getting it.

Mr. FULBRIGHT. Ours has settled down pretty well. They finally recognized we do a better job than they do in Boston.

I didn't really mean to inject Boston into this other than to illustrate that it is so easy for people to give advice in this area when it doesn't affect them.

NATIONALISM AND THE U.N. CONCEPT

Senator BIDEN. One last broad question or observation, I am not sure which it is.

Senator Clark raised the question or pointed out what we all, I think, agree to. The motivating force in international politics over the last 300 or 400 years has been the continuing growth of nationalism. Now, this is particularly evidenced in third world nations. I think this is understandable in most cases. These countries may be expressing these feelings more than larger countries have in the past. How do you think that the U.N., as envisioned by most, comports with the continuing growth of nationalism? Is it consistent, do you think, for us to expect that there would be any significant voluntary yielding of that national sentiment on the part of these emerging third world nations even through the remainder of this century, in the year 2000. When we are there it is easy, much easier, it seems to me, for we and the Western European nations and Russia to yield up some of our sovereignty than it is for nations who are emerging and have not acquired it yet to yield.

Mr. FULBRIGHT. Well, this is an area which is very difficult from a semantic point of view. The nationalism as such is not a bad thing. I mean people should have pride in their customs and their country. Senator BIDEN. I am not suggesting that it is, by the way.

Mr. FULBRIGHT. But it isn't inconsistent in joining the U.N. and agreeing to abide by it. You are not negating it. You are exercising your power to voluntarily accept certain obligations. Every time a country makes a treaty of any kind, it is, in a sense, binding itself to a certain course of action which, if you want to be very precise about it, means it has given up its sovereignty. Countries make treaties all the time of one kind or another, treaties of amnity and friendship and trade, and they agree to give up this absolute freedom to do as they please under any circumstance. As I say, we get into very difficult, semantic problems. I don't see anything inconsistent with sovereignty of a nation that says there are certain areas which we cannot control anyway. What can these small countries do about developing the oceans or what can they do about preventing pollution or preventing oil spills off their coasts? What can little countries that do not border on the sea or Africa do about it. Their only hope to preserve, we will say, a very important part of their national assets is to utilize some international agency to prevent or to control the oil spills and so in. This is a rather complicated area to develop at the moment, although I do not see any difficulty or inconsistency between nationalism and agreeing and cooperating fully with the United Nations.

Senator BIDEN. Thank you very much, Senator.
The CHAIRMAN. Senator Percy.

OIL PROBLEMS AND INDEXATION OF COMMODITIES

Senator PERCY. Senator Fulbright, could you tell us whether you think the oil supply problem could be negotiated under U.N. auspices? Do you think the U.N. should take a greater role and would you care to comment on the demand made by developing nations for indexation of commodities to provide to them automatic price increases in their commodity exports, as their imports increase in price?

Mr. FULBRIGHT. In response to the last part of your question, I didn't realize how far they have gone already in assuming jurisdiction in this area.

Senator PERCY. The charter that was adopted by the U.N. General Assembly for indexation is an extraordinarily complex subject.

Mr. FULBRIGHT. If they are going into that, certainly it would be appropriate to try to discuss it there if possible. Of course, I am for trying to negotiate with the oil producers in any area we can if that is possible. If the settlement in the Middle East can be brought about, I still think there is a possibility of a more gradual price adjustment rather than this tremendous increase so as to give the developing countries particularly the opportunity to adjust to the new price levels. The levels of prices will never go back to what they were. I am not really competent to go much further than to say if they brought this subject up, and as you say it is now being discussed and is part of that charter, I don't know why they didn't think it appropriate to suggest to these people that fuel and energy are just as much a part of the overall concern as food or anything else.

SENATOR FULBRIGHT'S CONTRIBUTION TO HEARING

Senator PERCY. Thank you very much. We are grateful for your appearance today, and it has been very helpful.

The CHAIRMAN. Senator Fulbright, we all join in extending our appreciation to you for this very capable handling of a difficult subject. Mr. FULBRIGHT. Thank you. This is my first return to the Hill, the first time I have been in a committee meeting, and it has made me very conscious of how long I was here and how much I miss being a member of this committee. When I see these new members I feel very sad that I am not going to have an opportunity to be with you more often.

I appreciate very much your asking me. I am very flattered you thought I might add something to this.

The CHAIRMAN. Let me ask you a quick personal question. How is the law practice coming?

Mr. FULBRIGHT. I am in a very good firm, and if you need any legal advice, we are open for business. [Laughter.]

PANEL INTRODUCTION AND COMMENDATION

The CHAIRMAN. Now we have a panel, I will ask the panelists to come around, please.

Dr. Gardner, Henry L. Moses, professor of law and international organization, Columbia University; Mr. Abraham Yeselson, chair

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