560.AL/5–1049: Telegram

The Chairman of the United States Delegation (Willoughby) to the Secretary of State

secret

97. Situation MFN Japan follows: Informal conversations Annecy indicate:

1. Under UK leadership major trading nations British Commonwealth strongly opposed. Opposition Canada stiffened since Ottawa [Page 671]talks March.1 Australia and Union South Africa adamant. Czechoslovakia, China, Netherlands, Benelux countries, Cuba, Syria, and Lebanon all will vote against. Position France, India, New Zealand, Ceylon, Burma, Southern Rhodesia, Brazil and Chile uncertain and possibility that most of these might be persuaded sign protocol. Liberia, Nicaragua, Haiti, Dominican Republic, Colombia, Norway, Denmark, Sweden, Greece, Finland, Italy and Pakistan probably would support. Of countries which would support US, four already give Japan formal MFN treatment and at least four more have single tariff schedules applicable Japanese goods. Diplomatic2 protocol approved by doubtful countries as well as those known to be favorable possible immediate benefits would at most affect 5% Japanese trade.

2. Any working party MFN Japan would include countries with chief trading interest, most of which strongly opposed. Favorable report, therefore, impossible.

3. Instructions to Annecy delegations re MFN Japan by major trade countries determined Cabinet level after careful consideration. Strong pressure exerted pre-Annecy Commonwealth conference oppose MFN Japan and important Dominions sufficiently committed so reversal position extremely difficult. Impossible cause change positions by discussions with technicians here.

4. Seems unlikely UK will reverse position even if aide-mémoire reported Deptel 80, May 53 presented. Reversal position conceivable only as result such strong pressure that will be deeply resented UK as well as Dominions which have been persuaded follow UK line. If aide-mémoire not yet delivered UK Embassy, recommend reconsider. Concur view despatch 679, April 14,4 from Bliss London, that, except in most extraordinary circumstances, would not expect British attitude modified for at least year (mytel unnumbered [1400], April 5, from Paris).

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5. Pressure being exerted, especially by Acting Chairman Blanken-stein,5 complete by end May GATT matters except windup meeting after end tariff negotiations. Told chairman US not ready MFN Japan item. Said would try meet this schedule but awaiting further instructions Washington.

6. While had doubted before opening Annecy desirability sending mission selected European capitals in order influence instructions their delegations, believe now too late be useful. US technicians would be unable cause quick reversal Cabinet decisions made after forcible presentation US views by Embassies.

7. Discussion in meeting Contracting Parties, and defeat by strong majority of item believed considered by US of major import and damaging prestige and particularly undersirable in view insignificant practical benefits obtainable. Unless Department can secure reversal UK, Canada and Benelux position through high level diplomatic channels, which I consider completely impracticable, especially in view short time available, recommend withdrawing item from agenda. Suggest circulation statement indicating US firmly convinced merits MFN Japan and intends bring up later whether GATT meeting or bilaterally.

8. In view continual pressure begin discussion remaining agenda items urge instructions soonest.

9. Have agreed departure Maynard May 12. Campbell in Cairo available short notice if required.6

10. If, contrary above recommendation, Department instructs USDel proceed discussions MFN Japan in GATT request Gay be sent immediately. Otherwise not necessary now.

11. AP release London dated May 5 states US has called upon FEC relax controls of Japanese economic and foreign policy. Request information to resound [respond] queries several delegates re significance.

12. Schockner7 and Maynard concur.8

Willoughby
  1. Merrill C. Gay, Assistant Chief of the Division of Commercial Policy, had visited Ottawa in mid-March for the specific purpose of discussing with Canadian officials Canadian-Japanese trade problems in the setting of the U.S. desire to secure most-favored-nation treatment for Japan (memorandum of conversation by Gay, Ottawa, March 18, not printed, 560.AL/8–1849). This visit was an outgrowth of a lengthy conversation in Washington on March 5 between officers of the Division of Commercial Policy, the Office of Far Eastern Affairs, and the Department of the Army on the U.S. side and Canadian Embassy officials and officers of the Canadian Departments of External Affairs and Finance, regarding Canada’s views on the U.S. proposals for the treatment of Japanese merchandise trade within the framework of the General Agreement (memorandum of conversation by J. F. Shaw of the Division of Commercial Policy, March 5, not printed, 560.AL/3–549).
  2. The text in the Delegation Conference file has the word “If” in place of “Diplomatic”, reading “If protocol approved. …” (Lot 57D284, Box 110)
  3. Not printed. Among other things, it reported that “… proposed aide-mémoire now in Secretary’s hands. Circumstances may prevent Secretary immediately presenting to [British] Ambassador. …” (560.AL/5–549)
  4. Not printed.
  5. H. van Blankenstein, Chairman of the Netherlands Delegation.
  6. SCAP headquarters, Tokyo, had two representatives at the Annecy talks; these were David M. Maynard and Carl C. Campbell.
  7. Lt. Col. Lester F. Schockner, GSC, Department of the Army, was an adviser on the U.S. Delegation. He had attended all conferences in 1947–1948 (Geneva, Habana, and London) at which the most-favored-nation question had been discussed, with particular reference to the matter as it related to (the Western zones of) Occupied Germany.
  8. In telegram 100, May 14, 2 p. m., the Department replied: “Department reconsidering MFN Japan in view US Del 97 and agrees cannot be taken up prior end May. However, reluctant pull from agenda this stage. Aide-mémoire has been signed by Secretary but not presented. Instructions following.” (560.AL/5–1449)