Foreign Relations of the United States, 1961–1963, Volumes VII, VIII, IX, Arms Control; National Security Policy; Foreign Economic Policy, Microfiche Supplement

443. Memorandum of Conversation, June 19, between Ball and Nobuhiko Ushiba, Economic Affairs Bureau, Foreign Office, Japan¹

June 19, 1961

SUBJECT

• Textiles

PARTICIPANTS

• JAPAN

  • Mr. Nobuhiko Ushiba, Director, Economic Affairs Bureau, Foreign Office
  • Mr. Akira Nishiyama, Minister, Embassy of Japan
  • Mr. Nobuyuki Nakashima, First Secretary, Embassy of Japan

• UNITED STATES

  • Mr. George W. Ball, Under Secretary of State for Economic Affairs
  • Mr. J. Robert Schaetzel, Special Assistant, Office of the Under Secretary for Economic Affairs
  • Mr. Edwin M. Martin, Assistant Secretary for Economic Affairs
  • Mr. Sidney B. Jacques, Director, Office of International Resources
  • Miss Edelen Fogarty, Commodities Division, Office of International Resources
  • Mr. Clifford C. Matlock, Economic Special Assistant, Bureau of Far Eastern Affairs
  • Mr. Leonard Bacon, Acting Director, Office of Northeast Asian Affairs
  • Miss Thelma E. Vettel, Special Assistant, Office of Northeast Asian Affairs

Since Mr. Ball was delayed at another meeting, Mr. Schaetzel opened the discussion with a brief description of the U.S. domestic political situation and its relationship to the textile problem. He described the pressures being exerted by influential members of the Congress and the textile industry for unilateral U.S. restrictions on textile imports. He then referred to the President’s seven-point statement of May 2 on textiles, with particular reference to point 6 calling for an international conference of major importing and exporting countries to consider the textile problem.

At this point Mr. Ball arrived. Mr. Ball expressed the view that it was indispensable to the solution of the textile problem that the consuming countries provide an expanding market for textiles. It would be necessary, therefore, to persuade some of the major European countries to accept this principle and to try to work out a formula which would permit a progressive increase in the acceptance of textiles. Noting the increasing number of textile producing countries throughout the world, Mr. Ball said that to avoid closing the market for textiles the problem must be worked out multilaterally. He said the U.S. would attempt to be as liberal as possible and to take Japan’s restraint into account. The alternative would be to let the situation go, and Mr. Ball expressed serious doubt as to our ability to prevent a deterioration of the situation.

Mr. Ushiba agreed that a reasonable solution could be found only in a multilateral way, as long as provision is made for experience and equitable treatment for the exporters. He said the Japanese attach great importance to the proposed international meeting and that it is receiving serious consideration in Japan. The Japanese Government and industry have formed a council to prepare for the meeting. Mr. Ushiba pointed out that many pressures are exerted on the Japanese Government on this question.

Mr. Ushiba said that Japan has long experience in dealing with the European countries on the question of import restrictions. Based on that experience the Japanese see a great deal of difficulty in the path of the conference. He said the Japanese hope the conference will succeed and are very conscious of the bad effect its failure would have on world trade. Therefore, Mr. Ushiba said, so long as the conference moves in the right direction, the Japanese will try to cooperate to the best of their ability.

Mr. Ushiba said he doubted whether the European countries were ready to help expand the textile market. He added that of course they would pay more attention to the U.S. and much would depend on the policy of the U.S. According to Japanese experience, however, the European countries are sometimes very unreasonable and the Japanese believe the conference will not be easy.

Mr. Ushiba expressed the view that so long as the basic idea of quota restrictions is maintained there is no reasonable basis for determining amounts, etc. As a basic principle, he said, the right approach should have full liberalization as a target. There might be a period of preparation and then liberalization across the board. After liberalization, in the event of market disruption, he said, there are safeguards under the GATT, and if they are not sufficient, the Japanese are ready to discuss other means to safeguard and help restore equilibrium. He said that the fear of European countries that opening the gates would result in an immediate flood of imports from Japan is not justified. In his view those countries should follow the example of Canada and the U.S.

In the coming conference, Mr. Ushiba said, this principle should be stated. Otherwise the Japanese see no usefulness in discussing levels of imports or some interim agreement. With this in mind the Japanese will cooperate to make the conference successful.

Mr. Ushiba added that there is a tendency to treat the European countries as a bloc and give the member countries some preferential status. This Mr. Ushiba believed was not right but the Japanese do not object to a European community taking form so long as their conventions comply with the GATT. Mr. Ushiba said, however, that with respect to textiles, it would be very unfortunate for the European countries to meet before the international conference to build a united front giving the non-European countries a fixed level.

Mr. Ball responded that that was not our intention in convening the meeting of major European consuming countries. The purpose is to try to persuade them to provide for expansion. Mr. Ball believed it was better to get together with them first.

Mr. Ushiba said the objective as stated by Mr. Ball would give comfort to the Japanese. He pointed out that Portugal and Spain are exporting countries; therefore there is no reason for treating European countries differently. He said the textile problem should be studied in its entirety and the underdeveloped countries should be consulted.

Mr. Ball said we were trying to introduce an element of rationality to the textile problem. Mr. Martin said we draw the line between primarily importing and primarily exporting countries rather than between European and non-European countries.

Mr. Ushiba observed that the Japanese are regularly negotiating with France, Italy, Norway, etc. on these matters. He said the Japanese may be able to furnish the U.S. with some useful information stemming from this experience.

Mr. Ushiba expressed gratification that Mr. Wyndham-White was coming to the Washington meeting. Mr. Nishiyama expressed some concern over EEC participation in the Washington meeting.

Mr. Nishiyama asked what made Mr. Ball believe the forthcoming meeting would be successful. Mr. Ball responded that it was the general concern of the European countries that unless the problem can be worked out under a multilateral arrangement it would mean unilateral quotas in the U.S. He said our European friends are interested in helping us avoid this.

Mr. Ushiba said Japan is also concerned about the possibility of unilateral U.S. quotas.

Mr. Schaetzel said that in Bonn the Germans had indicated that they were having trouble with their industry over their efforts to liberalize, and they welcomed this approach.

Mr. Ball said a multilateral approach helps producing countries with their industries. He pointed out that we are using a multilateral approach in increasing our aid to less-developed countries. Now we are saying that new producers need markets. Mr. Martin observed that any one country attempting to liberalize feels that everyone will concentrate on it; a multilateral approach makes this easier.

In response to Mr. Nishiyama’s question Mr. Ball said no formulae or figures had yet been developed. He said this was a difficult and complicated problem.

Mr. Nishiyama observed that before World War II Japan had very difficult discussions with India on such a problem; now the problem is much more complicated. He added that there were some suspicions in Japan as to what kind of proposal would be made.

Mr. Ball closed the meeting with assurances that the Japanese would be kept fully informed as to the meeting in Washington.

1. Discussion of textile problem. Confidential. 4 pp. Department of State, Central Files, 110.12BA/6–1961.