Foreign Relations of the United States, 1958–1960, Japan; Korea, Volume XVIII

52. Telegram From the Embassy in Japan to the Department of State⁰

Tokyo, April 30, 1959, 1 p.m.

2239. Secnog 7. CINCPAC exclusive for POLAD and Admiral Felt. COMUS/J exclusive for General Burns. Following are problems re Administrative Agreement put to us by Japanese:

1. Article III paragraph 1, sentences 2 and 3.

Japanese note that under Article II paragraph 1 the United States is provided with facilities and areas upon agreement with the Japanese Government. Article III paragraph 1 however gives the United States “rights, power and authority” outside our bases (over rights of way) without any Japanese agreement and only with “consultation as the occasion requires.” Inasmuch as Japan is required under Article XXV (2) (a) to “make compensation where appropriate to owners and suppliers thereof all facilities, areas and rights of way. . . as provided in. . .¹ Article III” the Japanese feel they will be subject to heavy criticism in Diet unless there is some provision indicating that Japan had a voice also in the provision of such rights of way. They feel that according to present wording of Article II paragraph 1 GOJ appears to be responsible for paying for actions of US Armed Forces on which they may not have been consulted and to which they have not agreed. In actual practice, of course, US Armed Forces do not and cannot go out of the facilities and areas to exercise their rights, but request Japanese Government to take measures on their behalf.

Accordingly, and in belief that no major substantive changes need be involved, Japanese are bringing up foregoing as a “problem” (Embtel 2097).² Japanese would like proposal from US on how to amend article to give impression that rights mentioned in Article III, paragraph 1 shall be exercised with agreement of the Japanese Government.

2. Article XIV.

This article is unusual in that it grants virtually extraterritorial rights to certain US business firms engaged in work under contract with US forces in Japan. We understand its origin lies in occupation period when because of food and housing shortages certain US firms could only be prevailed upon to come to Japan for such purpose if granted privileges substantially equal to those of occupation personnel, and when open bidding for local procurement was in many cases inexpedient. That situation has since undergone great change and we understand there are only 23 such contractors left, almost half of them in the civil aviation business.

Now large numbers of American contractors are engaged in private business in Japan on a competitive basis with Japanese contractors. Fujiyama says he cannot defend himself against charge by Japanese business interests and rest of Cabinet that it is unfair that certain American contractors enjoy privileges for carrying out contracts which give them competitive advantage over local Japanese of non-privileged American contractors. GOJ finds it cannot continue justify Article XIV if privileged contractors (a) were to participate in open bidding together with non-privileged contractors of (b) if they were to engage in Japan in any non-military contracts.

GOJ does not propose to restrict in any way free US choice of contractors to satisfy needs of US forces in Japan. However, Fujiyama points out that continuation of present language in Article XIV attracts attention not only to privileges granted US contractors, but also to privileges for members of US forces, civilian component, and dependents, which GOJ has no desire to see restricted. I believe if at all possible this strongly in our interests to eliminate this special privilege position for US contractors, for it is going to be a source of major trouble for us from now on. If we rigidly insist on Article XIV privileges for all these favored contractors we may not only jeopardize privileges armed forces enjoy and require here but we risk courting publicity on issue which competing private business firms in Japan also resent. However, I believe I could get Japanese to agree to extending such privileges where necessary to US contractors if they were brought into Japan solely for purpose of doing work for our military and engage in no other business whatsoever in Japan.

3. Article XVIII paragraphs 1 and 2.

The present provisions stipulate mutual waiver of claims as between the United States Armed Forces and all Japanese Govt agencies. Article was drafted at time when Japan had no self-defense forces. Now that Japan has such forces, the Japanese believe it reasonable to stipulate such waiver as between the self-defense forces and the United States Armed Forces rather than between US forces and all Japanese Govt agencies. The Japanese hope that in light of arrangements we have in other countries, we may be able to come forward with mutually acceptable proposal which would remove what at present appears as glaring inequality. Revision of this article would substantially improve Diet acceptability of new Administrative Agreement.

4. Article XVIII paragraph 4.

Japanese say question of duty determination under Article XVIII (civil claims) does not involve jurisdiction in sense of trial by US versus Japanese court since under paragraph 3, any cases that go to court will in any event go to a Japanese court and under paragraph 5, actions [sic] and in any event be taken in Japanese court. Question of duty determination is of importance in deciding whether case shall be treated under paragraph 3 (adjudication by Japanese, with costs shared between US and Japan) or under paragraph 5 (ex gratia payment by US).

Under paragraph 4 as presently worded, duty determination is made unilaterally by US. It may be challenged in joint committee, but there is no provision for arbitration or for judicial consideration of facts involved in duty determination. Fujiyama stated LDP members and Finance Minister aware that under NATO Status of Forces Agreement, determination whether an act is in performance of official duties is left to decision of arbitrator who is a national of receiving state. Japanese also note that under present (old) agreement with German Federal Republic,³ each party certifies the scope of official duties of its person concerned at relevant time and place, and that on basis such certification the German authorities determine whether or not the act or omission occurred in the performance of official duties. Fujiyama expressed strong hope we could give Japanese same treatment as we gave Germans. Question of duty determination in civil claims cases is one on which Diet can be expected to focus full spotlight of publicity when new agreement comes up for ratification. In opinion of Kishi and Fujiyama, present provisions of paragraph 4 are extremely vulnerable even within Cabinet. Some substantiative improvement of these provisions is considered highly important.

MacArthur

0. Source: Department of State, Central Files, 611.94/4–3059. Confidential; Limit Distribution. Transmitted in two sections and repeated to CINCPAC and COMUS/Japan.
1. Ellipses in the source text.
2. Not printed.
3. Apparently a reference to the Convention on the Presence of Foreign Forces in the Federal Republic of Germany, signed at Paris October 23, 1954, and entered into force for the United States May 6, 1955. For text, see 6 UST (pt. 5) 5689. A supplementary agreement was signed on August 3, 1959.