611B.9417/144
Memorandum by Mr. Roy Veatch of the Office of the Economic Adviser
At Mr. Sayre’s request I telephoned Mr. Yoshizawa following the conversation between Mr. Sayre and the Japanese Ambassador and asked Mr. Yoshizawa if I might make one further point which Mr. Sayre had intended to bring to the attention of the Ambassador. Mr. Yoshizawa agreed to include the following information in his memorandum of the conversation between Mr. Sayre and the Ambassador and to incorporate it in his report to Tokyo:
A shipment of 25 cases of Japanese cotton goods cut in short lengths, under six feet, had arrived in the Philippines from Japan, these goods being classified as semi-manufactured and the importers expressing willingness to pay the surcharge for semi-manufactured goods. It is possible that this shipment has been made as a test case and that certain exporters from Japan or importers in the Philippines will be inclined to follow this practice as a means of importing cotton goods into the Philippines outside of the quota on cotton piece goods. It was Mr. Sayre’s desire to place this information before the Japanese Ambassador with the expectation that he would wish to bring it to the attention of the Exporters Association since the Association probably would wish to guard against any extension of this practice as a means of evading the agreement.
Mr. Yoshizawa said that he was sure the Association would not countenance a practice of this sort and that he would see that this information was brought to its attention.
Mr. Veatch said that he supposed Mr. Yoshizawa had the same feeling that Mr. Sayre had about the present status of the Philippine textile agreement. It was Mr. Sayre’s feeling that it would not be necessary to initial any understanding regarding an adjustment of that agreement since this Government had offered to accept the Japanese suggestion regarding measurement of imports of Japanese goods from the beginning of the agreement. He would like to have, however, some indication of the position of the Japanese Government regarding a final understanding on this matter. Mr. Yoshizawa said that this was also his understanding and that he was framing his cable to Tokyo with the idea of eliciting some response from his Government.
Mr. Yoshizawa said that he had found a further despatch from Tokyo waiting for him when he returned to the Embassy from the conference with Mr. Sayre this morning. This despatch had given figures of arrivals of transshipped goods in the Philippines from Hong Kong for the month of February and for the first 15 days of March, these figures having been furnished by the Japanese Consul General in Manila. In view of the heavy importations of Japanese goods from Hong Kong in February and March, Mr. Yoshizawa was somewhat concerned about the reception that Mr. Sayre’s proposal would receive in Tokyo. Both he and the Ambassador felt that that proposal was very fair and they appreciated the spirit in which it had been made, but in view of the fact that twelve months’ importations from Hong Kong at the rate of the February arrivals would exceed 10,000,000 square meters, he was somewhat worried over the ability of the Foreign Office to get the textile exporters to agree to this Government’s offer. He intended to present the offer in as favorable a light as possible in his despatch.