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

446. Memorandum of Conversation, June 21, between Rusk and Japanese Foreign Minister Kosaka¹

June 21, 1961

SUBJECT

• Liberalization of Trade and Payments

PARTICIPANTS

• Japan

  • Mr. Zentaro Kosaka, Foreign Minister
  • Mr. Shigenobu Shira, Deputy Vice Minister for Foreign Affairs
  • Mr. Toshiro Shimanouchi, Counselor, Ministry of Foreign Affairs
  • Mr. Koichiro Asakai, Japanese Ambassador to the United States
  • Mr. Nobuhiko Ushiba, Director, Economic Affairs Bureau, Ministry of Foreign Affairs
  • Mr. Akira Nishiyama, Minister, Embassy of Japan
  • Mr. Tadao Kato, Counselor, Embassy of Japan

• United States

  • Mr. Dean Rusk, Secretary of State
  • Mr. Chester Bowles, Under Secretary of State
  • Mr. Edwin O. Reischauer, United States Ambassador to Japan
  • Mr. Walter P. McConaughy, Assistant Secretary of State for Far Eastern Affairs
  • Mr. Paul Nitze, Assistant Secretary of Defense for International Affairs
  • Mr. Leonard L. Bacon, Acting Director, Office of Northeast Asian Affairs
  • Captain John J. Reidy, USN, Assistant to Director, Far East Region, International Security Affairs, Department of Defense
  • Mr. Richard L. Sneider, Officer-in-Charge, Japanese Affairs, Dept. of State
  • Mr. James J. Wickol, Interpreter, Department of State

The Foreign Minister remarked that, as had been indicated in the course of the conversation between President Kennedy and the Prime Minister on June 20, he wished to discuss the question of Japanese liberalization of trade. Japan is hampered by low productivity and other difficulties. It is, nevertheless, anxious to accelerate its liberalization program. At the same time, the Japanese are concerned by the apparent rising tide of protectionism in the United States, particularly with respect to textiles which are observed to have considerable political ramifications. The United States Tariff Commission has already recommended increases in tariffs on such items as ceramic tile and plate glass. Such actions may be expected to create serious economic and social difficulties in Japan. In addition, it has been noted that there are various moves to exclude Japan-made goods from the United States. Japan appreciates the efforts of the United States Government to defeat such moves in respect to woolen items. Nevertheless, organized labor is making strong efforts to limit the import of woolen suits. Finally, certain state laws appear designed to limit the use of imported articles. An example is Texas where the demand has been made that only American steel products be used in Texas highway construction. These moves give concern to Japan, and if Japan is to continue to liberalize its trade it would like to see the spirit of free trade observed on both sides for our mutual benefit.

The Secretary replied that it was certainly true that political sensitivity to imports is higher than in the earlier post-war period. This sensitivity has no special connection with imports from Japan. In fact, it dates back to the beginning of the Industrial Revolution. However, one factor which seems to suggest that this sensitivity is new is the circumstance that in the earlier post-war period our producers were not affected by competitive imports, since the industrial countries of the world, particularly in Europe, had been devastated. Now their industries have been restored and other industrial countries have entered the international market in a very vigorous fashion. We are impressed by Japan’s enterprise. Problems have arisen which are not easy to resolve and which will probably continue to demand attention. Nevertheless, it is the firm resolution of this Administration to work toward general liberalization of trade because we believe that the world’s economic health depends on an expanding trade. A “Great Debate” is expected in the coming year in Congress on our international trade policy. This should be helpful in acquainting the public with the issues. Unfortunately, our exporting industries are not so vocal as those industries which feel themselves hurt by imports. We appreciate the Foreign Minister’s remarks, and questions raised by him are under review. There is, however, no question as to the policy which the United States wishes to pursue.

The Foreign Minister noted that a similar situation obtains in both Japan and the United States. In conclusion, he wished to point out that the United States favorable merchandise trade balance is some $5 billion yearly, to which Japan contributes substantially. Japan’s imports from the United States are actually increasing despite a continuing adverse trade balance with the United States. The Japanese Administration hopes to educate its people on the benefits of liberalized trade as does the American Administration.

1. “Liberalization of Trade and Payments.” Confidential. 2 pp. Department of State, Conference Files: Lot 65 D 366, CF 1914,