611.9417/146
Memorandum by Mr. Roy Veatch of the Office of the Economic Adviser
| Conversation: | Mr. Toyoji Inouye, Commercial Secretary of the Japanese Embassy, |
| Mr. Tsuneo Hayama, Third Secretary of the Japanese Embassy, | |
| Mr. Otoshiro Kuroda, Attaché of the Japanese Embassy, | |
| Mr. Veatch. |
Mr. Inouye suggested that I lunch with him and Mr. Hayama and Mr. Kuroda in order to discuss particularly the details of a possible joint Japanese-American committee to study and advise upon the solution of problems arising out of Japanese competition in the United States. Mr. Kurusu had mentioned the possibility of such a joint committee to Mr. Sayre and Mr. Dooman and he had suggested that Mr. Inouye might attempt to get some agreement upon details of the plan before Mr. Inouye returns to Japan this summer. In addition to discussion of this plan, Mr. Inouye took the occasion to state strongly his feelings with respect to the expected action of the President increasing the rates of duty on importations of slide fasteners.
Proposed Joint Committee on Japanese-American Trade
Mr. Inouye outlined his scheme as follows: A committee would be set up in Washington, meeting perhaps regularly once a month, to include the officials of the United States Government who deal with Japanese competition and representatives of the Japanese Government in the Embassy in Washington, including Mr. Inouye, who would come from New York for the meetings. A somewhat similar committee would be set up in Tokyo, to be composed of officials of the Japanese Government who deal with the problem, including probably a representative of the Departments of Commerce and Agriculture and perhaps [Page 904] a representative of the Federation of Industries, and, on the American side, representatives of the American Embassy, including the Commercial Attaché, Mr. Williams.
At the meetings of these committees, including special meetings when necessary, the latest information regarding the trends of Japanese-American trade would be reported and discussed. In Washington an attempt would be made to have for meetings of this committee the fullest possible information regarding new developments in the importation of Japanese products into the United States, especially those which would be competitive with American products. In Japan developments affecting American interests or trade would be brought to the attention of the committee and the American representatives would have an opportunity to secure information regarding any such developments. Each committee would make full reports upon the problems considered, including recommendations of action to be taken either by the Governments or by the private commercial interests in the two countries. These reports would be exchanged by the two committees and they would be presented to the two Governments.
Mr. Inouye felt that his Government would be greatly assisted by this sort of advice and that it would be able to call upon Japanese industry to take the necessary steps to prevent the creation of difficult problems in connection with the sale of Japanese commodities in the United States. Mr Inouye himself now makes an attempt to keep his Government informed regarding developments here and to suggest where action should be taken by Japanese industry in order to prevent the creation of difficult problems. Under the new scheme such warnings would be more likely to be effective since they would have the prestige of the committee behind them, they might be much better prepared and substantiated than is possible at present and he felt that the recommendations of action would probably receive serious consideration by both Governments in time to secure favorable results.
I raised the question of the cooperation of private business in both countries, which in most instances would appear to be necessary in order to prevent the necessity of restrictive action by either Government. Mr. Inouye agreed that the cooperation of business would be necessary but said that at least in the case of Japan he felt that effective cooperation could be secured only as a result of approach by the Government to the private interests concerned. He repeatedly stated that in his opinion all business interests, whether in Japan or in the United States, were essentially selfish and shortsighted and that it is necessary to exercise governmental pressure upon them to lead them to take action which will be in line with the interests of all. To his mind, all business interests are shortsighted and interested only in immediate advantages.
[Page 905]Slide Fasteners
Mr. Inouye said that he had understood that the Tariff Commission had completed its investigation of slide fasteners and that the Commission’s report was now somewhere in the neighborhood of the White House. He had gone to the Tariff Commission yesterday, therefore, to learn as much as he could about the situation and to find out if there was anything which the Japanese might do to remedy the situation or at least to make possible delay in increasing the tariff rates on slide fasteners.
Mr. Inouye asked if I didn’t see some way to save the situation, which he thought was very unfortunate. I then explained the difficulties of our position and stated that I had had the feeling that probably the best possible action from the standpoint of the Japanese would be a moderate tariff increase since I understood it would be very difficult, if not impossible, for the Japanese industry to exercise effective control of its exports to the United States.
Mr. Inouye showed a realistic understanding of the problems in this country but in a very serious mien he sought to impress me with the dangerous position in Japan. He spoke of the manner in which certain sections of the press in Japan had played up the action of this Government in increasing the rates of duty on cotton cloth and he said the journalistic treatment of that action in this country had been widely commented upon in Japan. There was the greatest danger that the more sensational press in Japan would give such emphasis to further tariff increases in the United States directed specifically against Japanese goods, following so closely the action on cotton textiles, that the Japanese Government might be forced to take a “strong position” toward such increases and retaliation of some sort be decided upon. He himself is planning to go to Japan in July. He has had great hopes of being able to make considerable progress this summer in educating the Japanese to view with favor the action which he considers Japanese industry must take in order to allay the alarm aroused by Japanese competition in this country. In his opinion action now to increase the tariff on slide fasteners would make it practically impossible for him to make any progress in this direction.
I emphasized the fact that if action was taken by the President to increase the duty on slide fasteners it was practically certain that that action would be very moderate and would in no sense be a prohibitive tariff. In Mr. Inouye’s opinion, however, the extent of the tariff increase would have little importance because the press comments, both in the United States and in Japan, would emphasize merely the fact that the tariff was increased and that this was another step in jacking up the rates generally against Japanese products.