Foreign Relations of the United States, 1964–1968, Volume IX, International Development and Economic Defense Policy; Commodities

271. Memorandum of Conversation¹

Tokyo, June 7, 1965.

SUBJECT

• Wool Textiles

PARTICIPANTS

• Japan
  • Foreign Minister Shiina
  • Yoshihiro Nakayama, Director, Economic Affairs Bureau, Ministry of Foreign Affairs
  • Kiyoaki Kikuchi, Chief, U.S.-Canada Section, Economic Affairs Bureau, Ministry of Foreign Affairs
• United States
  • Ambassador Reischauer
  • Warren Christopher, Special Representative of the Secretary of State and Chairman, U.S. Wool Textile Mission
  • Stanley Nehmer, Director, Office of International Resources, Department of State

(N.B. This meeting took place prior to the opening of the U.S.-Japan wool textile talks.)

Mr. Christopher told the Foreign Minister that he brought greetings from the Secretary of State. He also extended congratulations to the Foreign Minister on the latter joining the new Cabinet of Prime Minister Sato. He expressed appreciation to the Foreign Minister for arranging the wool textile conference. He told the Minister that the United States delegation was seeking a constructive solution to the wool textile problem but that this was not a problem which the U.S. Administration could “blink away”. He said he was not going to make a detailed presentation of the U.S. position but wanted to point out to the Foreign Minister that the wool textile problem has economic, political and human aspects.

With regard to the economic aspects, the United States was almost the only unprotected market for wool textiles in the world. Japan is the largest supplier of wool textiles to the United States, and the U.S. is Japan’s largest customer. The impact of wool textile imports on the United States market was substantial in some items as, for example, men’s and boys’ worsteds where imports from Japan were equal to 42 percent of U.S. production.

Mr. Christopher said he needed to emphasize the human problem in that unemployment in the textile industry was up and was higher than unemployment in other sectors of the U. S. economy. He also pointed out that employment in the wool textile industry was down over the last decade.

From the point of view of the political aspects of the problem, Mr. Christopher noted that the wool textile industry has a strong base of support. The industry was wide-spread, being located from the South northward to New England. Furthermore, the raw wool producing industry in the western part of the United States was cooperating with the wool textile industry on this problem because the raw wool growers had no other market for their product. It was certainly the desire of the Administration to avoid unilateral measures. He said, however, that pressures were building up in Congress for taking unilateral action. He referred to the legislation proposed by Senator Muskie, namely the Orderly Marketing Act of 1965, as an example of legislative proposals for unilateral action. Mr. Christopher pointed out that President Johnson was committed to attempt to secure international action or some other means to solve the wool textile problem, and in this regard the United States delegation was in Japan to try to find some way to minimize the risk of unilateral action.

Specifically, Mr. Christopher said, we are asking the Japanese Government to agree to attend a conference to discuss the wool textile problem. He pointed out that agreeing to attend was not agreeing to agree. The conference would be free to explore the whole range of problems. He urged the Foreign Minister to have an open mind regarding the outcome of the U. S.-Japanese talks and expressed the hope that the Foreign Minister would open the door to such a conference.

Foreign Minister Shiina said that he could understand the hopes of the United States. He understood that the U. S. had approached the British and Italian Governments and that the latter expressed opposition to the idea of an international conference. The Japanese wool textile industry, he said, knows this and is against such a conference and against any international wool textile arrangement. He pointed out that many “vigorous” questions had been raised in the Diet not only by representatives of the opposition, but also by the Government party. As a result, the Japanese Government had to take a negative view of the situation. Mr. Shiina said that in view of the past record, Japan is in a very difficult position to agree to such a meeting, but the Japanese Government was willing to consider and to study the question again.

Mr. Christopher said he understood from the press and from the Japanese Embassy in Washington that the Japanese Government was opposed to an international agreement such as the Long-Term Cotton Textile Arrangement, but he said he wanted to distinguish between an international conference and a commitment with regard to an international agreement. We find it difficult to understand why a country with as much at stake as Japan has in the United States wool textile market would not be willing to attend an international conference to discuss the problem, particularly since such participation would be without commitment.

Foreign Minister Shiina said he understood that these are separate questions but the Japanese industry’s attitude is so negative that this was an extremely difficult problem for the Japanese Government. He concluded the meeting by expressing the hope that the U.S. delegation would explore the problem thoroughly with the Japanese Government and industry representatives.

At this point Messrs. Nakayama, Kikuchi, Christopher and Nehmer excused themselves from the meeting and adjourned to Mr. Nakayama’s office for further discussion. They were joined there by Mr. Fujii of the Ministry of Foreign Affairs and Mr. Ready of the Embassy. Mr. Christopher said he would have added in his discussion with Mr. Shiina if time had not run out that the United States had no fixed ideas as to the solution to the wool textile problem and that we genuinely meant that attendance at the conference would be without commitment on the part of any of the participants. Mr. Nakayama said that the wool textile problem had a political nuance in Japan as it had in the United States. He said that the U.S. side should know that MITI and the wool textile industry were both opposed to an international conference and an international agreement. He pointed out that since the U.S.-Japan meeting that was to begin later in the day was not considered to be a negotiating conference, the Foreign Office was not chairing it. He said that he would attend the opening session and would keep in close touch with the discussions. He volunteered to act as a bridge between the United States and Japanese delegations if and when problems developed.

Mr. Nakayama referred to the Long-Term Cotton Textile Arrangement, which he described as an unpopular agreement in Japan. The wool textile people say that Japan should not make the same mistake on wool textiles as was made on cotton textiles. The wool textile industry also says that the U.S. industry is in prosperous condition. He read from a report in English which indicated that Burlington Industries, J. P. Stevens and Company, and Deering-Milliken were the major producers of wool textiles in the United States and were all doing very well.

It was pointed out to Mr. Nakayama that although these companies may be doing well on an overall basis, their wool textile divisions were not doing so well and that in any event the wool textile industry includes a vast number of much smaller firms than the three which he had mentioned.

1. Source: Department of State, Central Files, INCO–WOOL 17 US–JAPAN. Limited Official Use. Drafted by Stanley Nehmer.