Foreign Relations of the United States, 1964–1968, Volume IX, International Development and Economic Defense Policy; Commodities

213. Memorandum of Conversation¹

Washington, April 1, 1964.

SUBJECT

• Possible International Wool Textile Agreement—Japan

PARTICIPANTS

• Embassy of Japan
  • Mr. Susumu Nakagawa, Minister
  • Mr. Shigeru Otsuka, First Secretary
• Department of State
  • Mr. Philip H. Trezise, Acting Assistant Secretary for Economics Affairs
  • Mr. Claus W. Ruser, Chief, Fibers and Textiles Division, Office of International Resources
  • Mr. Robert J. Wilson, International Economist, EA/J

Mr. Nakagawa called to present an Aide-Memoire reaffirming the opposition of the Japanese Government to an International Agreement for wool textiles (copy attached).²

Mr. Trezise inquired whether the Government of Japan felt that such an agreement was near. Mr. Nakagawa replied that his Government was not sure how to interpret recent developments. He noted the recent meeting in Paris of representatives of the United States and European wool textile industries and press reports that a Congressional Delegation and industry leaders had recently met with Department officials to review the question of an international agreement.

Mr. Trezise inquired what import restrictions Japan still maintains with respect to wool textiles. Mr. Nakagawa and Mr. Otsuka said that Japan no longer maintained any quantitative import restrictions on wool textiles but they were not sure about the tariff on such imports. (Mr. Otsuka subsequently telephoned Mr. Ruser to advise him that the rate of duty on most wool fabrics was 20 percent, with some wool textiles dutiable at 15 percent.) The Japanese officials said that there was an inter-governmental agreement between Japan and the United Kingdom under which wool fabrics exports from the United Kingdom are limited, but they were not sure about the level of exports permissible under this bilateral agreement. (Mr. Otsuka subsequently advised that the export ceiling under this agreement was confidential and that the Embassy was asking authority to disclose the export levels.) The Japanese officials were not certain whether there were similar understandings with other wool textile exporting countries but promised to provide whatever information might be available.

The conversation then turned to restrictions on wool textile exports from Japan to Western Europe. The Japanese officials referred to export agreements with the United Kingdom and the Federal Republic of Germany but they were unable to provide any details and were unable to confirm the existence of similar agreements with other European countries. They promised to provide additional information on these arrangements.

Mr. Trezise then turned to the pressures facing the United States Government from wool textile interests to negotiate an international wool textile agreement. He noted the argument of the United States industry that the United States even now is the only major industrial country to maintain a completely open wool textile market; whereas many European countries continue to maintain quantitative import restrictions. This fact presents the United States Government with a point of considerable difficulty: imports to this country continue to rise while other countries do not seem to be prepared to eliminate their quantitative limitations.

The Japanese officials agreed that the possibility of an “international wool textile agreement would be considerably lessened if there were freer trade in wool textiles.”

Mr. Trezise then stated that we are still studying the question of an international agreement and that no decision had as yet been reached whether and how to proceed on this matter. He noted that we had several times discussed with the British and Italian Embassies the attitudes of their Governments towards an agreement, but that no formal approach had been made since late 1962 to discuss such an arrangement. The United Kingdom remained firmly opposed to such an agreement, whereas the attitude of the Italian Government, while opposed, was perhaps somewhat more ambiguous. The United States Government had always felt that an international agreement would have to include Italy, Japan and the United Kingdom. Not much thought had been given how and to what extent other significant suppliers would have to be brought under such an agreement.

Mr. Trezise reassured Minister Nakagawa that we would approach Japan before we would take formal and public steps to initiate negotiations of an agreement, if we should decide to take action. The United States was very conscious of Japanese trade interests in this area and the problem of avoiding discrimination against Japan.

Mr. Trezise confirmed that political pressures on the Administration to act were very strong.

Mr. Nakagawa then referred to recent press reports that Congres-sional leaders interested in this matter were expecting a report from the Department on the current attitude of other friendly countries towards an agreement.

Mr. Trezise indicated that Congressmen and industry representatives would have to be told that the Department is not yet in a position to give such a report. He reemphasized that further work would have to be done within the Government and that we would not approach any other Government on this matter until these studies had been completed. No decision has as yet been made on whether and how to proceed on this matter.

1. Source: Department of State, Central Files, INCO–WOOL 17 US–JAPAN. Limited Official Use. Drafted by Claus W. Ruser (E/OR/FTD) and approved in E on June 12.
2. Not printed. The Japanese aide-memoire, dated March 31, stated that “in view of the recent developments in the international woolen textile trade involving a move of American and European private business circles concerned to conclude an international woolen textiles agreement, the Japanese Government wishes to reaffirm its position of opposing such agreement of any nature, which would serve only to impair international free trade in woolen textiles.”