Foreign Relations of the United States, 1951, Asia and the Pacific, Volume VI, Part 1

890.00/12–2151: Circular airgram

The Secretary of State to All Diplomatic, Technical Cooperation Administration, and Economic Cooperation Administration Far East Missions (Including South Asia)¹

secret

Washington, December 21, 1951—4:40 p. m.

Joint State and ECA Message

Subject: Relationship with Japan and Production of Essential Materials.

Following is résumé current Dept and ECA thinking for general guidance and instruction all diplomatic and ECA Missions in region.

Among US objectives in Asia are: (a) added availability short supply materials from Asia for US and free world; (b) the mitigation of pressure on US provide short supply goods to Asia; (c) a self-supporting Japan able contribute strength of free world; (d) general economic development essential to South and Southeast Asia; (e) decreased dependence of Japan and other free countries of Asia on China and other Communist dominated areas for essential foods and raw material supplies, and for market outlets particularly of strategic materials.

1. Looking toward these objectives it will be important to:

(1) develop sources essential short supply materials in Far East in free world, for instance, chrome, zinc, tungsten, copper, lead, nickel, manganese, rice, etc.;

(2) encourage increase production such materials in context of furthering general economic development Asian countries;

(3) encourage closer trading relationships among the free countries of the area;

(4) facilitate Japan’s procurement essential materials, e.g., iron ore, salt, coal, without resorting to sources supply Communist China and other Soviet bloc countries to extent inconsistent with objectives of free world;

(5) increase reliance on Japanese potential contribution manufactures for US requirements and as source of manufactures short supply in US for South and Southeast Asia area countries. Equipment and material can be procured in Japan or production can be expanded in many sectors now presenting US with serious export problems;

(6) encourage Japanese contribution toward sound economic development of the whole area. Japan can provide (some perhaps under reparations) capital equipment (textile machinery, prime movers, etc.), materials such as steel necessary for economic development as well as consumption and know-how through technical assistance and training in Japan;

(7) seek maximum cooperation of Japan and other free nations in the Far East with US in enforcing effective security trade controls.

2. Japan and South and Southeast Asian countries themselves must assume responsibility for taking initiative on developments in which interested and on increasing trade. Purposes US policy will not be served by US agencies substituting themselves for what Japanese Government or South and Southeast Asian Governments or private parties should do. Continued suspicion of Japan, ill will generated by war and non-settlement reparations claims, however, stand in way implementation objectives outlined above. Assistance should, therefore, be primarily in terms attempting develop atmosphere conducive increase confidence countries concerned of mutuality benefits through cooperation and hence to carrying out specific projects and arrangements. Toward this end encouragement should be given to maximum direct dealing on specific matters between governments or parties concerned rather than attempt serve as “broker” on specific deals. In this connection Japanese should be strongly advised as occasion arises, re their full acceptability into community trading nations, importance adherence letter and spirit last clause para 2 Preamble and Art. 12 of Peace Treaty and willingness make specific commitments this regard.²

3. US PolAd and Tokyo Field Office (ECA) in consultation GHQ SCAP will keep Washington and Missions informed:

(a) procurement possibilities in Japan;

(b) essential material developments of interest Japan; and

(c) assistance Japan prepared provide for essential material.

4. You will also be informed and instructed re DMPA country projects for development essential material with direct return to US and nature relationship with that Agency.

5. Pursuant outlined objectives you should:

(a) encourage Government to which accredited deal and facilitate dealing with Japanese in conformity sense para 2 above;

(b) encourage maximum commercial procurement financed by MSA and TCA in Japan of items short supply US (ECA Missions should note limitations ECA Regulation 1 and provision Small Business Amendment—separate cable will follow);

(c) encourage maximum procurement financed country’s own funds in Japan of items short supply US and other countries free world;

(d) discourage priority demands on US economy for short supply items procurable Japan or other countries of area;

(e) determine conditions under which Government to which accredited interested developing sources essential material;

(f) when further instructed inform Government to which accredited of projects proposed by DMPA and carry out other functions as instructed which may be assigned under ECA agreement that agency;

(g) ascertain and recommend any essential development projects that would contribute achievement objectives;

(h) encourage Government to which accredited include the expansion essential scarce material production as part economic development program;

(i) make available as much as possible STEM and TCA technicians to assist or advise re projects to develop scarce materials of interest Japan and rest free world;

(j) generally assist establish better environment trade and business relationship South and Southeast Asian countries and Japan.

6. In view political sensitivity surrounding the entire concept the Japanese position FE affairs and importance avoiding impediments finalizing peace and reparation settlements it is utmost importance in countries where STEM or TCA Missions exist that STEM or TCA Mission actions be taken with concurrence of Diplomatic Mission. Although recognize importance flexibility approach, Chief Diplomatic Mission should work out with STEM or TCA Chief for general guidance, proper delimitation responsibilities para 5 and in light respective functions both Missions and keep Washington fully informed thereof.³

7. Report immediately by cable any comments foregoing instructions.

Acheson

1. Sent to Bangkok, Saigon, Rangoon, Manila, Djakarta, Singapore, Taipei, Tokyo, New Delhi, Colombo, and Karachi. Also sent to Canberra, Wellington, and London for information only.
2. Under the last clause of paragraph 2 of the Preamble, Japan undertook “to conform to internationally accepted fair practices” in public and private trade and commerce. Article 12 dealt with Japanese foreign trade. For text of the Treaty of Peace with Japan, signed at San Francisco on September 8, see TIAS 2490; 3 UST, pt. 3, p. 3169, or American Foreign Policy: Basic Documents, 1950–1955 (Department of State Publication 6446) (Washington: Government Printing Office, 1967), vol. i, p. 425.
3. Certain other documentation regarding the interest of the ECA, the ODM, and the Department of State in coordination of the Japanese with Southeast Asian economies is in file 890.00 for 1951.