611.0031/1387
The Department of State to the Japanese Embassy
Memorandum
The memorandum given by the Ambassador to the Secretary of State on February 19, 1935, which touched upon various aspects of Japanese-American trade relations has been given careful consideration, and the following observations are offered in regard to the points therein raised:
(1) This Government gladly reiterates that it shares fully the desire of the Japanese Government set forth in the memorandum to bring even closer the economic relations and to increase friendship and cordiality between our two countries. It believes that the principles upon which it is conducting its international commercial policies should serve that end by helping to initiate governmental action on the part of many countries which will permit a greater interchange of goods than at present.
(2) The negotiations in which it is engaged and those which it has in prospect are aimed to serve that purpose. To the greatest extent compatible with the purpose of developing trade and the reasonable protection of its own industry, the American Government plans to generalize such concessions as it may make in these agreements, except to countries whose treatment of American trade may be deemed discriminatory and inequitable.
Whether or not any foreign government making concessions sought by the United States likewise extends these concessions to other countries is of course a matter for determination by that government. However, this occasion may be taken to state unequivocally that except in the case of Cuba, whose trade relations with this country have long been recognized as of a distinct order, this Government is in no way seeking and in no way encouraging exclusive or preferential concessions. On the contrary, it has been using every opportunity to try to combat the tendencies to which the Japanese Government calls attention.
[Page 948](3) Consonant with this policy it has abstained from various trade arrangements which other governments have sought to make with it which provided for the direct interchange of goods through ways which, while not perhaps violating the letter of treaties, would actually create somewhat preferential situations. In its avoidance of such agreements and of the various types of trade restrictions that have been adopted by many of the large trading countries of the world, it has sought to give evidence of its sincerity of purpose and its hope that other governments would likewise abstain from these practices.
(4) It agrees with the observations of the Japanese Government in regard to the maintenance of triangular trade. The advantages of such trade are apparent in the circle of commerce between Japan, the United States, and South and Central America, as described in the memorandum. Similar benefits are seen in that triangular trade which exists between Japan, the United States, and various countries in the Pacific area, as, for example, British Malaya and Netherlands India, wherein American purchases create a fund of exchange which helps to pay for purchases from other countries, including Japan.
This triangular trade rests on arrangements made by the traders themselves within the circle of trade opportunity which American policy is calculated to increase and not decrease. It is not perceived how this triangular movement of trade could be organized by governmental agreement in conformity with the suggestion made at the end of the paragraph numbered five of the Japanese memorandum. It is the judgment of the American Government that any such attempt would probably have to include all the areas in which Japanese and American interests are affected by indirect trade relations and would involve what appear to be virtually insuperable difficulties of method.
(5) It is the wish of the United States Government to lessen rather than to increase restrictions on the entry of foreign goods to the American markets. But it will of course be realized that this Government cannot be unmindful of the serious state of depression still prevalent in American industry nor of the effects upon the domestic recovery program of large and sudden increases in the imports of specific foreign commodities. It has occasionally been found necessary therefore to take steps under the provisions of existing legislation to seek certain safeguards against the destructive impact of suddenly increased imports. The Japanese memorandum cites certain instances of efforts to invoke such safeguards. The fact that action has been taken in but a few instances of relatively slight importance indicates the will and strong wish of this Government not to put any new obstacles in the way of trade between our two countries but rather the contrary.
In these few instances this Government has sought to cooperate with the Japanese Government in informal voluntary action instead [Page 949] of resorting to formal restrictive action under legislation; and the limitations proposed have been designed to stabilize imports from Japan and not to reduce them.
(6) In all matters affecting the trade between the two countries this Government will be fully disposed at all times to seek a mutually beneficial solution by thorough and candid discussion.