362. Memorandum of Conversation0

SUBJECT

  • The Japanese Defense Effort and Military Offsets

PARTICIPANTS

  • The Secretary
  • Douglas Dillon, Secretary of the Treasury
  • Roswell L. Gilpatric, Deputy Secretary of Defense
  • Edwin O. Reischauer, American Ambassador to Japan
  • Leonard Lee Bacon, Deputy Director, Officer of East Asian Affairs
  • James J. Wickel, Language Services
  • Masayoshi Ohira, Minister of Foreign Affairs, Japan
  • Kakuei Tanaka, Minister of Finance, Japan
  • Ryuji Takeuchi, Vice Minister for Foreign Affairs, Japan
  • Koichiro Asakai, Ambassador, Embassy of Japan
  • Michio Mizoguchi, Third Secretary, Embassy of Japan

The Secretary remarked that there was one matter he would like to discuss in a very discreet way and not as part of the Joint Committee conference or to be mentioned in the Communique. It was a matter to which the President had referred at lunch today.1 We are very much concerned about the over-all defense effort of the free world especially as it relates to Asia. While we are endeavoring to press our NATO friends to increase [Page 750]their efforts in Europe the threat is now growing in Asia and the resources to meet that threat are not nearly as strong as they ought to be.2

As we look ahead into the immediate future it appears that it is now Peiping which will pose a grave problem with respect to security in the far Pacific area. As the influence of Communist China increases it can exert more pressure through North Korea and North Viet Nam and its increasingly aggressive attitude toward India as well as the nature of its differences with the USSR all indicate a growing threat to security. If, in addition, Peiping acquires a nuclear weapons capacity—and we are fully confident they are trying to do so—the danger which now exists in the Pacific area will be immeasurably increased. We fear we must all take this threat seriously. President Kennedy, after taking office, has increased the Eisenhower defense budget almost 25 percent or $10 billion. We have 16,000 men in Southeast Asia and are taking casualties almost every week in the struggle to protect the security of that area. We might hope to obtain a test-ban treaty which could forestall Chinese development of nuclear weapons or an agreement under which other nations would not supply nuclear weapons to China. But even if we would get an international agreement calculated to forestall the Communist Chinese, there is every indication that China would under no circumstances subscribe to any such agreement. I realize these are matters on which you would want to confer with Prime Minister Ikeda because of their extreme gravity. We do wish, however, to raise the possibility of Japan increasing her defense contribution faster than is planned at present; not just because we all need all the strength we can muster, but also because such an increase would serve as a signal to Moscow and Peiping that Japan, the United States, and the free world would resist any attempt by them to embark on aggression. It would help contribute to maintaining peace while Peiping and Moscow are determining what to do.

We shall be called upon to increase our own effort overseas during this period. Governor Harriman’s report of his trip to India makes it quite clear that India will require large scale assistance.

We would like to see Japan minimize the cost to the United States of the increased Japanese defense program because of the increasing major burdens the United States is now called upon to carry both internally and externally. To me personally, it is a tragedy for the United States and Japan to be obliged to discuss this problem with each other—we have [Page 751]both been working for a world in which this problem ought not to arise. But because Moscow and Peiping present an increasingly serious danger, if we are to prevent a catastrophe we must let the other side know that their aggression cannot succeed.

I fully understand the long and special history of this subject in Japan. As a matter of fact I negotiated in 1952 the first administrative agreement relating to our defense forces in Japan. Since then I have followed this subject closely. Could you indicate what significance is accorded in Japan to these security developments in the Pacific area?

The Foreign Minister said that President Kennedy had asked him a similar question at luncheon. The Japanese know that the time has come to consider this problem separately, because apart from receiving aid from the United States Japan herself must consider her own defense. Both the Finance Minister and I replied in that sense to the President’s question. In summary, up until now, it has been the Japanese view that if Japan maintains internal peace and economic stability that this self-sufficiency would in itself serve the purposes of the free world and would contribute to stabilization of countries in the Far East. But as I just said we realize the time has come for Japan to reconsider this problem. As you know, we developed our second defense plan last year under which there would be an annual increase of more than $50 million in our defense expenditures. This was done with the approval of the Finance Minister but there will be some difficulties with this plan because our original plan has not been “digested” that is, completed, as yet; consequently, there is some discrepancy between the two plans. As you know, there has been a wage increase for the self-defense forces and perhaps half of our military budget increase will be absorbed by it. Through the MAAG, the Pentagon has been gradually cutting down on its assistance to us. Therefore we must reconsider our second defense plan. At this time we must regard the problem, as the Secretary has indicated, as a most serious one. I would like to discuss it with the Finance Minister and we must ask the Prime Minister to consider it.

Minister Tanaka said he was in agreement with Minister Ohira’s expression of the need to strengthen Japan’s defenses. He, Tanaka, understood the problem quite well and wondered whether the United States had a proposal to make on what Japan might do. In making up the Japanese budget they would give such a proposal emphatic consideration.

The Secretary said that the United States had in mind, first, whether Japan could increase its total defense effort at a rate faster than presently planned so as to contribute to the general strength of the free nations; second, whether Japan could find a way to relieve the United States of the military assistance increments—this would be helpful at a time when we must try to increase our aid efforts in India and South Viet Nam; and [Page 752]third, whether Japan could find a way to take into account the local costs borne by the United States in maintaining its forces in Japan.

Since there were important matters requiring close study by both our governments, he had no wish to formulate proposals at this time, considering the great delicacy which the subject has in Japanese political life. Ambassador Reischauer could discuss later in Tokyo the details of what we have in mind. If further meetings are needed, we can hold them but we want to do this in a manner most convenient to you because of the internal political situation which we understand quite well.

The Secretary added with a smile that the President and he had not concerted to take up this matter both at lunch and here. The fact that both did so was only an indication of how much the matter was on their minds.

Secretary Dillon observed that if Japan should reach a decision to increase its defense effort we would think it possible to find various items which could be purchased in the United States more cheaply than they could be manufactured in Japan, particularly in fields such as aircraft, electronics and anti-aircraft missiles.3 Corresponding arrangements have been made by the United States with Germany and Italy. In their negotiation the Treasury took no part, considering the Pentagon was in a better position to determine what was the best course.

Our Mutual Defense program has developed this way in Europe and one incidental effect has been to relieve our balance of payments problem. That, however, is not the approach we used in making the arrangements, which were undertaken with the intention of helping Germany and Italy. It might work the same way in Japan if we should decide to move ahead. Our Pentagon and your defense officials might well make the same type of arrangements.

Secretary Rusk commented that Prime Minister Ikeda should be briefed on the growing sophistication of weapons in Mainland China and that it would be desirable to arrange such a briefing for him.

Deputy Secretary Gilpatric wished to make two points: first, in this era of nuclear weapons there is an even greater need for conventional weapons. In increasing our own defense budget there has been a 10 percent increase for conventional arms. The Pentagon views the future threat not so much as nuclear as one involving conventional weapons—witness the recent events on the Sino-Indian frontier and in the Caribbean area. What Japan faces is not primarily a nuclear threat. There does [Page 753]exist in the free world a United States nuclear deterrent which serves all of the free nations, but in the conventional weapons field each nation should provide for some of its own defense, as Japan has done, for example, with Hawk missiles and other advanced non-nuclear weapons systems. (The Secretary here mentioned in addition anti-submarine equipment.) The Soviet Union is putting 20 percent of its military budget into conventional weapons systems and our NATO allies are pursuing a similar course. Therefore we think you need to spend more on conventional weapons.

As a second consideration, Secretary Gilpatric said, he wished to emphasize the real benefit of cooperative logistic arrangements such as had been set up with Germany and Italy—joint planning, training, and development of weapons systems. Then if we had to use the weapons for defense your weapons and ours could be used interchangeably. In the case of Germany and especially Italy we have gained over the past two years major results at a lower cost than either could have achieved alone. In the same sense your military colleagues will find that these cooperative logistic arrangements will permit our two nations to work closely toward the common purpose of national defense.

The Secretary said that the United States was not raising the possibility of Japan preparing an expeditionary force to serve outside of Japan but had in mind only the question of the defense of Japan, Even that, however, is a problem. In 1954 the United States had a practical monopoly of nuclear weapons, under which we could always say that if Japan is the victim of aggression the United States will retaliate. Now the other side also has the means of delivery, in Asia as well as in Europe. A nuclear exchange is not a defense operation we would want to undertake. Consequently the separate threat of superiority in conventional weapons means that Japan is in effect held a hostage while China moves in Southeast Asia and elsewhere. Therefore he wanted a review for the Prime Minister of the changes in the past 4 or 5 years. The Secretary regretted that he had no words of comfort to give the Finance Minister, Mr. Tanaka, except to point out that Secretary Dillon himself is facing a $7 billion deficit while Secretary Gilpatric is taking $10 billion more for the defense budget.

Vice Minister Takeuchi asked whether the Japanese military had been briefed on the new development of sophisticated weapons on the mainland. The Secretary said that the subject had not been previously raised with the Japanese Government. Minister Takeuchi pointed out that if Prime Minister were briefed on such a technical subject he would have to seek advice of his military advisors. Secretary Rusk agreed that the Prime Minister would certainly wish to consult Director-General Shiga of the Defense Agency.

[Page 754]

It was agreed that the conversation would not be considered a part of the Joint Committee conference and would not figure in the record of the conference; and that there should be no disclosure that any substantive conversations at all had been held.

  1. Source: Department of State, Central Files, 794.5/12-362. Confidential. Drafted by Leonard Bacon of FE/EA; and approved in S on December 9. The conversation was held in the Secretary’s Office at the Department of State.
  2. In his public remarks at the luncheon Kennedy referred to the problem of containing “the expansion of Communism in Asia, so that we do not find the Chinese moving out into a dominant position in all of Asia, with its hundreds and hundreds of millions of people in Asia, while Western Europe is building a more prosperous life for themselves.” China was in a “belligerent phase” of “national development,” and Kennedy expressed hope that thought could be given to what role the United States and Japan could play as “partners” to “attempt to prevent the domination of Asia by Communist movement.” For text, see Public Papers of the Presidents of the United States: John F. Kennedy, 1962, pp. 850-851.
  3. During a luncheon discussion with Rusk on December 4 Ohira stated “that it was his personal opinion that the United States should leave Communist China alone. Making too much fuss about it only served to raise its prestige.” Rusk “responded that the United States will leave the Chinese Communists alone when the Chinese Communists leave others alone. When they put pressures on India or Southeast Asia, the United States must be concerned.” (Memorandum of conversation by Swayne; Department of State, Secretary’s Memoranda of Conversation: Lot 65 D 330)
  4. According to telegram 895 to Tokyo, October 19, marked “Joint State-Defense Treasury message,” the U.S. Government tentatively hoped by a combination of reduced defense expenditures in Japan and an increase in Japanese purchases of U.S. military equipment to improve the balance of payments by $100 million in FY 1963, $200 million in FY 1964, and $300 million in FY 1965. (Ibid., Central Files, 794.5/10-1962)