231. Telegram From the Department of State to the Embassy in Japan0

1215. Central theme Under Secretary Ball’s speech to National Foreign Trade Convention on November 11 is necessity adapting US trade policies and business practices to radically new trading world now emerging. Speech cleared with White House and Petersen. For purposes illustration, speech places heavy emphasis on opportunities and problems arising from European Economic Community and prospective British adherence thereto. Japan mentioned only once, in context of Japan’s economic weakness during early post-war period. Therefore, Japanese may possibly be disturbed by preoccupation of speech with Western Europe and failure emphasize US-Japanese trade relations. If Embassy or US delegation at Hakone detects any evidence such Japanese disturbance, Japanese should be informed:

1.
Western European emphasis deliberate for it is on enlarged Common Market, its implications and policies, that our new commercial policy must rest. Speech therefore omits significant reference to problem of LDC’s as well as US-Japanese relationship. These problems encompassed however in penultimate quoted paragraph this telegram.
2.
Department considers major premises and conclusions of speech apply to Japan as well as Western Europe.

If deemed advisable you may wish to cite following excerpts from speech which apply to US trade with entire free world, including Japan:

  • First excerpt: “In blunt terms, we dare not turn our backs on the logic of our own economic position. For almost thirty years we have led the world toward freer trade. If at this late date we should yield to the importunings of those who would shelter the low-wage industries in our economy and penalize the most efficient, let us be quite clear about the consequences. We would set off a chain reaction of retaliation and counter-retaliation that would do irreparable harm to the whole Free World but would hurt us most of all. We would give up any claim to a role of [Page 497]leadership in the Free World. We would deny the strength and vitality of the economic system for which we stand.”
  • Second excerpt: “In concentrating upon the paramount problem—the problem of the European Common Market—I do not wish to overlook the fact that our new legislation must also establish a basis for continuing an open trading world with other nations. Of course, to the extent that the United States and the Common Market lower their trade barriers as a result of the negotiations between them, they will also be expanding the opportunities of others. For any such reductions in trade barriers must, of course, be on a nondiscriminatory basis. Yet authority to negotiate directly with other countries also will be needed, to increase the mutual opportunities of all nations and to weld a close-knit trading system in the Free World.”
  • Third excerpt: “We are engaged at the moment, as all of us are constantly aware, in a struggle that can determine the future of mankind—or, indeed, if mankind has any future at all. In that struggle we must make certain not only that we are economically and industrially strong, but that the Free World is united as closely as possible in pursuit of our common purpose.”

Full text being carried Tokyo USIA wireless file.

Bowles
  1. Source: Department of State, Central Files, 400.0041/11-161. Confidential; Priority. Drafted by William T. Nunley (B) on November 1, cleared by EUR/NA and William H. Brubeck (S/S) and approved by J. Robert Schaetzel (B). Also sent to Hakone for Secretary Rusk who was attending first meeting of the Joint United States-Japan Committee on Trade and Economic Affairs November 2-4. The committee’s purpose was to promote, among other things, closer cooperation and consultation on economic affairs between the two countries. The committee was established after an exchange of notes between Secretary Rusk and Foreign Minister Kosaka following Prime Minister Ikeda’s June 20-23 trip to Washington.
  2. For text of Ball’s address, see Department of State Bulletin, November 20, 1961, pp. 831-837.