250. Message From Secretary of State Rusk and the Under Secretary of State (Ball) to President Johnson, in Texas1
We know that you are being pressed by John Pastore2 and Ed Muskie3 to give some hard assurances about the wool textile problem when you are in New England Monday.4 We urge you very strongly, however, to avoid any commitments that might imply or subsequently involve legislation imposing mandatory quotas.
George Ball worked out some language today with Mike Feldman, Governor Herter and representatives of Commerce and Labor. We can live with this language but it represents the absolute maximum we can go without creating great difficulties for the future.
As you know, we have done more for the textile industry since 1961 than for any other industry. In order to counter the pressure for mandatory quotas George Ball successfully negotiated an unprecedented international agreement that has resulted in checking the rate of increase in imports of cotton textiles.5 Obstructionist at first, the industry now enthusiastically supports this agreement, but we are going to have a rough time keeping it alive over the next few years since we have applied it in a very hard-nosed manner and created mounting resentment in other countries.
The situation in the wool textile industry is different from cotton. In the case of cotton, our imports come largely from the less developed countries. Wool textiles, however, come principally from the United Kingdom, Italy and Japan. Alec Home’s government has made it clear to us that Britain is not going to agree to voluntary restraints on their wool textile exports to the United States any more than we would be prepared to accept voluntary restraints on our exports to them.
Our best hope is to try to work something out within the context of the Kennedy Round trade negotiations that will stabilize wool textile imports and this is what we all understand will be attempted. But we do not dare be too explicit in what we promise since no one can tell how things will work out.
[Page 661]The textile industry knows that we have done our best to try to negotiate a voluntary arrangement for wool textiles. They themselves have been working at it in collaboration with us. They have learned the hard way that a voluntary arrangement is not feasible in the present climate. They are, therefore, bringing great pressure during the campaign period to try to get you to make some statement which they can construe as support for mandatory quota legislation. It seems altogether likely that they have timed a wave of woolen mill closings in the last month with this in mind. It seems hardly accidental that Bob Stevens chose to announce the closing of his mill in Lisbon Falls, Maine, on Thursday just in advance of your New England trip.
The wool textile industry is in a process of concentration and restructuring. Small family mills are being taken over by big companies and either closed or modernized. The most pressing problem for wool textiles is not imports but the competition of synthetics and other substitute fibres and the fact that large parts of the industry have been backward and asleep.
There is no doubt that imports have risen in relation to consumption in recent years but this year they are actually running at a rate 25 percent under last year.
We do not need to emphasize how unfortunate it would be if you said anything in New England that would be interpreted as approval for mandatory quotas for wool textile imports. We have worked strenuously for years to get rid of quota restrictions on industrial manufactures. Today there are hardly any such quotas left among the principal trading nations although some still treat Japan in a discriminatory fashion.
We ourselves have avoided quotas on industrial manufactures all during the post-war period in spite of enormous pressure. For you to show any sign of departing from this practice now would subject you to a flood of demands for similar treatment by practically every other industry—many of which have a better argument than wool textiles. In the course of the campaign you will be visiting thirty states and each has an industry that feels it has a strong case for quota protection.
Moreover, any indication of sympathy for quotas on your part would be a signal for similar action by other trading nations—to say nothing of the fact that the imposition of mandatory quotas on wool textiles would require the payment of compensation in the form of other trade concessions amounting to over $250 million.
So far in the campaign, you have not yet spoken on our world trading policy and whatever you say will be given great attention. The big metropolitan liberal newspapers have already expressed some concern over what they regarded as protectionist measures by the Kennedy Administration and the recent drive for beef import restrictions by Mike [Page 662] Mansfield and other Democratic leaders has aroused their skepticism. Goldwater has now switched around. He is trying to establish himself as a liberal trader and has charged your administration with having “raised a host of new and inconsistent barriers to trade.”
Other nations around the world are on the alert to see what you say on this issue. The woolen textile import problem is an old story and has become a test of American intentions in the whole trading field.
We are in real trouble in Japan as a result of the succession of restraints we have imposed on their trade over the past two or three years. We cannot afford again to make the same mistake with Japan that we made during the thirties. Italy also is, as you know, in a dangerous political phase—and actions by us to restrict their exports while their economy is so shaky would play into Communist hands.
We know Chris Herter is also greatly concerned about this problem because of its implications for the Kennedy Round.
- Source: Johnson Library, National Security File, Subject File, Trade—General, vol. 2 [2 of 2], Box 47. Limited Official Use. The message was actually addressed to the White House Message Center for transmission to the President. At the bottom of the source text are Ball’s handwritten initials.↩
- Democratic Senator from Rhode Island.↩
- Democratic Senator from Maine.↩
- September 28.↩
- Reference is to the Long-Term Arrangement Regarding International Trade in Cotton Textiles signed in Geneva under GATT auspices by 19 countries in 1962. (13 UST 2672)↩