560.AL/2–1149: Circular telegram

The Secretary of State to Certain Diplomatic Missions 1


In preparing position for probable reopening question MFN for Japan at 3rd session GATT,2 Dept interested extent consideration given by Govt to which you accredited question since Nov meeting [Page 657]London and, assuming protocol similar to that for Germany,3 probability acceptance US position. In Emb’s opinion would establishing single yen exchange rate be essential prerequisite get acceptance?

Emb requested unless objection perceived raise question appropriate officials, pointing out position US Govt unchanged.

For Emb’s background US Govt considers assurance nondiscrimination during occupation period important consideration proper planning Japanese rehabilitation and trade program and success economic reforms. Dept feels other Govts should be willing offer this assistance to responsibility which U.S. is bearing on behalf all allies. SCAP authority being used to prevent renewal prewar Japanese competitive practices. SCAP has announced enlarged opportunities private foreign trade, e.g., foreign cos in Japan given rights re exporting similar Japanese cos. SCAP and Dept making every effort achieve single exchange rate and other steps toward normal economic relations.

Political implications equally urgent. Lack success progress towards self-support will retard broad objective democratic oriented Japan. Also failure countries, particularly those receiving US aid, grant assurances non-discriminatory treatment for Japan while receiving US financial support may cause unfavorable impression US Congress.

Dept preparing draft protocol similar German.

  1. London, Canberra, Wellington, Ottawa, New Delhi, Capetown, Karachi, and Colombo.
  2. The third session of the Contracting Parties was scheduled to be convoked at Annecy, France on April 8, 1949. For documentation on previous discussion of the question of extension of the most-favored-nation treatment principle as embodied in the General Agreement to the Occupied Areas (Germany, Japan, and Korea), see Foreign Relations, 1948, vol. i, Part 2, pp. 802, passim; there is also unpublished documentation in the central indexed files of the Department of State, principally in the 560.AL series.
  3. For text of the Agreement on Most-Favoured-Nation Treatment for Areas of Western Germany under Military Occupation (with annex), signed at Geneva, September 14, 1948, see United Nations Treaty Series, vol. 18 (1948), pp. 267 ff., or TIAS No. 1886.