Foreign Relations of the United States, 1955–1957, East Asian Security; Cambodia; Laos, Volume XXI

172. Circular Telegram From the Department of State to Certain Diplomatic Missions¹

Washington, October 11, 1957—7:14 p.m.

344. 1. Following for background information and guidance answering any queries from host Government on US reaction to Japanese SEA economic development proposals:

2. In conversation with Secretary during recent Washington visit Japanese Foreign Minister Fujiyama² raised question US reactions toward Japanese Southeast Asian (SEA) economic development proposals. Said Japanese not necessarily intending insist on proposals originally advanced by Prime Minister Kishi,³ now awaiting reactions SEA countries. Meanwhile Japanese want start with what is feasible, will budget next year for financing technical training center for cooperation SEA nations to assist economic development countries concerned, expand trade for benefit Japan and entire free world. Said Japanese plan move in modest way and any evidence of support would help them.

3. Secretary replied that US considers growth of trade between Japan and SEA very important, in principle favors and encourages idea of economic development such as suggested by Japanese. US does not believe heavily capitalized organization proposed by Kishi practicable, prefers work through existing generalized financial institutions which adequate, rather than set up new one of limited character. US frequently asked provide funds for new regional banks, e.g. NATO proposal for African trade bank, SUNFED, proposed bank for South American development, etc. If there real opportunity do business between Japan and SEA and help needed from US we will find one means or another to help. Important thing is to find the business then see if new organization needed. Where there is good business prospect it should be possible find means provide capital. Japanese now proceeding in more modest basis and that is fine. If idea develops we may find way to help but first necessary get responses other countries which will shed light on problem.

4. Recapitulating, Secretary said idea Japan-SEA cooperation absolutely sound. Japanese have technical know-how, industrial capacity; other countries have raw materials. US does not feel new regional institutions necessary but rather present institutions adequate. Will welcome further knowledge of situation when obtained by Japanese. If business to be done but no credit available, then time to think of new institution. US fully recognizes trade vital to Japan. With population approaching 100 million Japan needs solid dependable foreign trade, not kind found on China mainland which never was really major Japanese market. Important encourage development new markets but need for new agency not demonstrated. Secretary reiterated that if responses from SEA countries to Japanese proposals indicate business can be done and more capital needed Japanese should not hesitate come to use on case-by-case basis. Under US aegis “Arc of Asia” plan had once been proposed but impossible find reality behind name. SEA countries not anxious for triangular or multilateral business and U.S. experience not good. Perhaps however Japanese will develop possibilities US could not find. US could not guarantee funds to cover shortages capital but Japanese should call cases our attention and we will try to help. End background information.

5. Report on continuing basis any reactions to Japanese economic development proposals in country to which accredited.

Herter

1. Source: Department of State, Central Files, 890.0094/100–1157. Confidential. Sent to Bangkok, Canberra, Colombo, Djakarta, Hong Kong, Kabul, Karachi, Kuala Lumpur, Manila, New Delhi, Phnom Penh, Rangoon, Saigon (with instructions to pass to the U.S. Delegation to the Colombo Plan Consultative Committee), Seoul, Singapore, Taipei, Tokyo, Vientiane, and Wellington and repeated to CINCPAC in Honolulu for the Political Adviser.

   The Colombo Plan Consultative Committee met in Saigon October 21–24. Documentation concerning U.S. participation is ibid., 890.00 for the fall of 1957.

2. The memorandum of this September 23 conversation is ibid., Secretary’s Memoranda of Conversation, Lot 64 D 199. Documentation on Aiichiro Fujiyama’s visit is scheduled for publication in volume XXIII.
3. See Document 162.