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

694.001/5–1651

Memorandum by Mr. Robert A. Fearey of the Office of Northeast Asian Affairs to the Deputy to the Consultant (Allison)

secret

[Washington,] May 16, 1951.

Subject: Inland and Coastal Shipping

The attached memorandum has just been received on the above subject from Mr. Saugstad.¹ As you will see, he recommends against the treaty’s requiring Japan to open her coasting and inland trade to foreign shipping. While the memorandum contains a certain amount of useful discussion, it does not give a clear indication, though I asked for one, as to how important it is that we not give in to the British on this point. I gather, however, from talks at various times with Radius² that it is fairly important, for the following principal reasons:

(1) The provision, if included, would give British shipping an advantage in Japan U.S. shipping would not enjoy. The hypersensitive U.S. shipping industry and lobby can be expected to oppose this strongly, even though the matter may not appear to be of great intrinsic importance.

(2) The British have a lot of coastal shipping in China. Though this shipping is now mostly active, further restrictions on its use in the China coastal and inland trade, especially if Hong Kong should be lost, might leave much of it unemployed. If this shipping, with its low cost Chinese crews, were enabled by the treaty to move over to Japanese waters the provision might work out considerably to Japan’s disadvantage.

A further point which Radius makes and which seems especially valid is that this is not the sort of thing which should be included in the treaty. If the British and Japanese agree in a post-treaty bilateral commercial agreement to give one another the right to participate in each other’s inland and coastal navigation, no one could object, though the agreement should probably be on a most-favored-nation basis. It does not seem appropriate, however, to use the treaty to require Japan to accord a unique commercial privilege of this type.

Walker³ and I are now completing a draft note⁴ to the British transmitting our redraft of Article 13 (commercial clauses). This redraft, as approved at the meeting⁵ in Mr. Dulles’ office yesterday, would not require Japan to open its inland and coastal shipping to the British or anyone else. Our position to this effect is justified in the note on the above lines.

1. Memorandum of May 16, not printed, from Jesse E. Saugstad, Chief of the Shipping Policy Staff, to Mr. Fearey. (694.001/5–1651)
2. Walter A. Radius, Director of the Office of Transport and Communications Policy.
3. Herman J. Walker of the Commercial Policy Staff.
4. Not printed.
5. Memorandum or other record of this meeting has not been found in Department of State files.