3. Airgram From the Embassy in Korea to the Department of State 1

A–553. Subject: Aide-Mémoire from ROKG in Connection with Secretary of State's Visit. Ref: Seoul's A–540, January 31, 1964.2

[Page 5]
1.
Submitted as an enclosure to this airgram is the text of an Aide-Mémoire handed by the Vice Minister of Foreign Affairs to the Counselor for Political Affairs on January 30, the day following the visit to Seoul for the Secretary of State. Prior to the Secretary's arrival, there had been frequent mention in the press of a memorandum, setting forth the ROK Government's position on problems of mutual US–ROK interest, which was to be presented to the Secretary during his visit. No such presentation took place and it is presumed that the Aide-Mémoire is the document in question. Why the Korean officials did not go through with their original plan to present the paper while the Secretary was in Seoul is not known at this time.
2.
The Aide-Mémoire covers four main subjects: (a) The Level of Military Forces; (b) ROK-Japan Talks for the Normalization of Diplomatic Relations; (c) Economic Stabilization and Development Plan; and (d) Status of Forces Agreement, these being at the present time the four principal areas of concern of the ROK Government in its relations with the United States. All except the fourth were raised with the Secretary by President Pak Chong-hui.3 Although not discussed, the Status of Forces Agreement negotiations were recognized by the President and the Secretary to be a subject of major interest and, accordingly, were mentioned prominently in the Joint Communiqué issued following their conversation.4
3.
It should be noted that while, with one exception noted below, all of the points made by the President in his discussion with the Secretary are contained in the Aide-Mémoire, there are a number of items in the Aide-Mémoire which the President did not take up with the Secretary. It is not known whether the omissions, listed below, were the result of a conscious decision by Pak to concentrate only on the points which he did mention, either for emphasis or because of the shortness of time available, or whether they were inadvertent.
4.
On the subject of military force levels, Pak spoke exclusively about the necessity for retaining present levels. He did not refer to the questions of improvement of the equipment of the ROK armed forces, maintenance of local procurement by the U.S. armed forces at last year's level, or the supply of P.L. 480 products to the ROK armed forces, which are discussed in subparagraphs (b), (c), and (d), respectively of paragraph 5, Section I of the Aide-Mémoire.
5.
With regard to the ROK-Japan normalization issue, Pak did not mention to the Secretary the proposal to speed up the payment of the [Page 6]property claims settlement, the question of the legal status of ROK residents of Japan, or the dispute over Tok-to (Takeshima Island), discussed in subparagraphs (b), (e), and (f), respectively of paragraph 3, Section II. While omission of the latter two subjects appears appropriate in view of the limited time available for the conversation, it is surprising that the President did not refer to his Government's desire for U.S. intervention with the Japanese to obtain speedier payment of the property claims settlement, particularly since the Minister of Foreign Affairs had specifically told the Ambassador a few days prior to the visit that this would be one of the requests which Pak would make to the Secretary.
6.
In discussing the general topic of economic stabilization and U.S. aid, Pak did not make the references to the ROK Five Year Plans contained in the Aide-Mémoire, nor did he cover the points concerning fertilizer imports [Section III, para. 3(b)],5 maintenance of the present exchange rate [3(c)], and offshore procurement [3(d)]. In discussing the MAP transfer program, Pak suggested suspension for two or three years instead of the 5 years recommended in the Aide-Mémoire [3(e)]. He did ask for the creation by the U.S. Government of favorable conditions for Korean imports but did not refer specifically to the problem of textile quotas [3(f)].
7.
It was during his discussion of this general topic that Pak deviated from the subjects covered in the Aide-Mémoire by asking for an additional 20 million to 30 million dollars of aid in order to check the price spiral (para 28, refair).6 The degree of seriousness with which the ROKG regards this request is as yet undetermined, but it can be presumed that we will be faced with further references to the need for additional economic assistance including supporting assistance throughout the year.
8.
Some of the topics included in the Aide-Mémoire were also discussed at the separate conferences attended by Secretary of Commerce Hodges, Secretary of Labor Wirtz and other members of the party. The substance of these conferences is being reported separately.7 A study of the gist of these conferences, Pak's conversation with the Secretary, and the Aide-Mémoire should afford a comprehensive view [Page 7]of the stance currently being taken by the ROKG with regard to its relations with the United States Government.
For the Ambassador: Philip C. Habib
Counselor of Embassy for
Political Affairs

Attachment8

AIDE-MEMOIRE

On the occasion of the visit to Korea of Mr. Dean Rusk, Secretary of State of the United States of America, the Government of the Republic of Korea wishes to present its views and position on the following problems of mutual interest to the Governments of the Republic of Korea and the United States.

1. The Level of Military Forces

1.
The North Korean regime has recently reinforced its combat resources by not only activating a new Army Corps but also expanding arsenals, ammunition and military vehicle manufacturing factories. On the other hand, the Communist regime has been maintaining close ties with bellicose Communist China and is constantly preparing for its renewal of an invasion against the Republic of Korea.
2.
The existing armistice agreement has merely been a military measure for temporary cease-fire and the flagrant violation of the armistice committed by the Communists along the demarcation line is causing serious uneasiness in Korea.
3.
In view of the present situation in South East Asia, particularly military instability in Laos and fruitless anti-guerrilla warfare in South Viet-Nam, the presence of the U.S. armed forces and the maintenance of powerful ROK military forces are essential for checking further Communist expansion in this part of the free world.
4.
Although there has been a partial withdrawal of the U.S. armed forces in Europe particularly from West Germany, the security of Europe will not be affected owing to the presence of the effective North Atlantic Treaty Organization. However, since there is no such collective security organization so firmly established as NATO in the Far East, the existing [Page 8]Korea-U.S. Mutual Defense Treaty alone would not be sufficient enough to relieve the feeling of uneasiness from the Korean people.
5.

As the new Government has just been established in Korea, it requires considerable time to lay down solid democratic foundation in political, economic and social fields.

Taking into account the above mentioned internal and external situations confronting Korea, the following are presented for favorable consideration by the U.S. Government:

a.
The strength of ROK military forces and the U.S. armed forces in Korea should continuously be kept at present level. The reduction of the military forces might be considered only after having examined both internal and external situations in the future.
b.
The improvement of ROK military equipments should be implemented promptly. The incident of January 14, 1964, in which an F–86 jet was shot down by the North Koreans, clearly indicates that the Communist forces in the North have superior weapons.
c.
The military procurement by the U.S. armed forces in Korea should not be reduced from the level of last year, as any reduction in the amount of the U.S. military procurement is bound to have a direct and profound effect upon the stability of Korean economy.
d.
In order to alleviate the hardship suffered by the men in uniform due to the low salary allowance, it is desired that the U.S. Government would continue to supply U.S. surplus agricultural products to ROK military forces.

II. ROK-Japan Talks for the Normalization of Diplomatic Relations

1.
As the United States and other free nations desire, the Korean Government firmly stands by its basic policy to realize an early normalization of diplomatic relations between Korean and Japan from a broader scope of view-point that it would be of significant benefit to Korea and Japan as well as to the general free world interests.
2.
However, the Korea-Japan normalization question has recently become a serious domestic political issue in Korea due to the national sentiment, derived from the past relations of the two countries, and the negative attitude from certain segments of the opposition parties. Primary reasons and commonplace belief attributable to such attitude of the opposition may be given as follows:
a.
They believe that the Korean fishing industry has been greatly handicapped by the Japanese monopoly of the fishery and their indiscriminate catch in the past, the consequences of which have resulted in curtailing the yearly per capita income of the Korean fishermen to mere 27 U.S. dollars at present. Under such circumstances, the Korean fishermen have naturally come to entertain a deep-rooted fear against the Japanese fishing industry. They also fear that any concession on the [Page 9]Peace Line would lead the Japanese fishery, overwhelmingly superior in number of fishing vessels, scale, equipment and technique, to indulge in random fishing activities, the result of which would undoubtedly bring about exhaustion of fishery resources and eventual ruin of the Korean fishery.
b.
It is also feared that the Japanese economic cooperation which is to follow the normalization of the relations between the two countries may result in a reduction of the United States assistance to Korea.
c.

They feel with resentment that the Korean Government is engaging in a low-postured diplomacy toward Japan at the expense of excessive concessions in an attempt to tide over the present economic crisis arising from inflation and shortage of foreign exchange in Korea.

It is feared that any venture to settle the matter under such unfavorable circumstances may bring about a crisis of the present Government. The Korean Government, however, is firmly resolved to settle the problem with grave determination.

3.
It is, therefore, earnestly requested that the United States would render its utmost cooperation in support of the position of the Korean Government in the following lines:
a.

Attitude of Japanese Government

It is hoped that the Japanese Government fully realize the difficulties confronted by the Korean Government and show sincerity in seeking an early normalization of the relations between the two countries.

b.

Property Claims Payment

It is desired that the property claims payment which is to9 be made in a shorter period and a larger portion of payment be made during initial period. In this connection, the good offices of the United States Government is solicited to urge the Japanese Government to consider favorably the request of the Korean Government.

c.

United States Aid to Korea

The Koreans fear that an influx of the Japanese capital into Korea may result in what may be called “an economic invasion “ by Japan. In order to mitigate such sentiment entertained by the Korean public, it is desired that the United States would maintain present level of economic aid to Korea and encourage its positive investment in Korea.10

d.

Fishery and Peace Line Question

The following are the basic principles of the Korean Government for the settlement of the fishery question.

(1)
It is deemed absolutely necessary to establish appropriate fishing regulatory measures for the purpose of preserving fishery resources in the waters adjacent to Korea. Only under this premise, Japan would be allowed to maintain status quo of their fishing activities on the basis of its past catch in the waters within the Peace Line.
(2)
The Korean fishermen should not be made victims of the pressure of the Japanese fishing activities, leading to an eventual ruin of the Korean fishery.
(3)
Extreme gap between the fishery capabilities of the two countries being the primary deterrent to the settlement of the fishery and the Peace Line question, it is desirable that Japan offer assistance to Korea as fishery cooperation at least in the amount of over 100 million dollars to improve Korean fishery capability. In this connection, it is earnestly hoped that the United States would advise the Japanese Government that the recent instructions given to the Korean delegation on this subject were made in full consideration of the Japanese position and therefore no further concession is possible on the part of the Korean Government.

e.

Legal Status of Korean Residents in Japan

The Korean Government maintains that the question of legal status of the Korean residents in Japan must be solved with due consideration of the historical background that has led to their presence in Japan and they should be given a special legal status and more favorable treatments than those accorded to ordinary aliens in Japan.11 Since it is expected that the solution of this question in line with the above principles would stimulate the affiliation of the Communist-inclined Korean residents in Japan to democratic camp, especially during the Tokyo Olympic games, it is desired that the Japanese Government would favorably consider the Korean position on this question.

f.

Question of Dok-To Island 12

The question being out of the scope of the Korea-Japan normalization talks, the Japanese Government should refrain from taking up the subject at the negotiations aimed at an early normalization of the relations between the two countries.

[Page 11]

III. Economic Stabilization & Development Plan

1.

It is the prevailing view of the Korean Government that the first five year economic development plan has achieved considerable progress. Especially, the economic development plan has contributed a great deal to the development of key industries and manufacturing fields as well as in the expansion of import-saving industry and the increase of export productions. At the same time, the Government notes that in the course of planning and implementation there have been many setbacks resulted from a series of unexpected changes in the economic climate and high growth rate of population. However, the Korean Government is firmly determined to carry out the current five year economic development plan through supplementary adjustments and reasonable modifications.

Furthermore, the Government is contemplating a more practical and effective second year economic development plan which would be based upon the achievements and experiences gained through the implementation of the preceding one.

2.

One of the most urgent tasks confronting with this Government is to stabilize price levels and to overcome the extremely unfavorable balance of international payment.

In an effort to cope with such a situation, the Korean Government, in consultation with the United States Operation Mission, had established a financial stabilization program in the fiscal year 1963, and exerted utmost efforts to maintain and strengthen those measures. As in the case of last year, the Government has set up another stabilization program for the fiscal year 1964 and will effectively implement the program in cooperation with the United States Operation Mission.

However, with respect to the international balance of payment, it is noted with regret that this country, in spite of all the efforts being made, still has to go a long way to reverse the current unfavorable trend.

From the beginning of the fiscal year 1962, the United States economic aids have been steadily kept on the downward trend. The heavy cuts in the aids have come not only in the field of Supporting Assistance but also in such indirect fields as Military Assistance Program Transfer, off-shore procurement of United Nations forces and restrictive quota system on certain Korean products for export to the United States of America.

These reductions simultaneously effected in the aids have inevitably brought tremendous and unbearable pressures upon all the segments of the Korean economy.

Above all, the Korean Government wishes to remind the United States that the Republic of Korea, being at the forefront of anti-Communist struggle, has constantly to be on the alert and to maintain a strong [Page 12]military, economic and political posture to cope with ever-increasing menace in the Far East.

3.
Therefore, the Korean Government, in the light of general economic situation set forth in the above, would like to take this opportunity to urge the Government of the United States to take into immediate and favorable consideration the following requests:
a.
The Supporting Assistance should be maintained at 1963 level at least for five years hereafter.
b.
The fertilizer import through Supporting Assistance and grain import under PL–480 program should be expedited so as to meet the seasonal demands.
c.
The dollar-won exchange rate should be maintained at the present level to prevent any possible impacts that may effect upon price levels such as inflationary trend and psychological chain reaction.
d.
The proper measures should be taken to ensure the present level of the U.S. offshore procurement program.
e.
The initiation of overall Military Assistance Program Transfer should be suspended for five years, as it would create heavy burden on the Korean economy.
f.
The overall trade and commercial policy toward Korea should be re-examined in more favorable terms and the restriction imposed on the quota for the Korean textile goods should be relaxed.
g.
The Supporting Assistance funds should be timely released in the future as was the case of recent release of 15 million dollars of Supporting Assistance fund which has greatly relieved the economic difficulties in Korea.

IV. Status of Forces Agreement

1.
It is recalled that prior to the resumption in September 1962 of the current negotiations for an agreement covering the status of the United States armed forces in Korea, the Republic of Korea and the United States announced that the conclusion of the agreement would await the restoration of civil government.
2.
It need not reiterate the sincere desire of the Korean peoples for an early conclusion of such an agreement in order to seek reasonable and equitable solution of many problems arising from the stationing of the troops in Korea. It is also to be noted that the Korean populace has shown, particularly after the civil government was restored in Korea, an increased concern over the progress of the present negotiations. The Korean Government, therefore, would like to urge the United States Government to render its fullest cooperation possible so as to arrive at the conclusion of the said agreement at an earliest possible date.
3.
In particular, the Korean Government desires to complete discussions, as soon as practicable, on all the important articles including the subject of criminal jurisdiction, the draft of which has not yet been tabled. The Korean Government further requests that, with regard to a pending issue of compensation to the owners of private facilities and areas used by the United States armed forces, the Government of the United States, taking into account current financial difficulties of the Korean Government, would bear the compensation with sympathetic understanding.
  1. Source: National Archives and Records Administration, RG 59, Central Files 1964–66, POL 1 KOREA S-US. Secret. Drafted by Fleck; cleared by Doherty and Rosa; and approved by Habib. Repeated to Tokyo and CINCPAC for POLAD.
  2. Airgram A–540 from Seoul, January 31, transmitted the memorandum of the 3-hour conversation between Rusk and Pak on January 29 in Seoul. Documentation on Rusk's visit to Seoul is ibid., Conference Files: Lot 66 D 110, Chronology of International Conferences Abroad, 1961–1964.
  3. Rusk and Pak also discussed the implications of France's recognition of Communist China as well as threats posed to the Far East by Communist China. (Ibid.)
  4. The joint communiqué is printed in American Foreign Policy: Current Documents, 1964, pp. 920–921.
  5. All brackets in the source text.
  6. Airgram A–540 makes no mention of Rusk's response to Pak's request, except to note that Rusk complimented Pak on his “courage to bite the bullet and take steps needed to get the Korean economy moving “ and mentioned several alternative methods available to promote economic development in Korea.
  7. Memoranda of those conversations are in the National Archives and Records Administration, RG 59, Conference Files: Lot 66 D 110, Chronology of International Conferences Abroad, 1961–1964.
  8. Confidential.
  9. be made over a period of 10 years. [Footnote in the source text.]
  10. Rusk told the Korean Ambassador in Washington in late February that although “aid could not of course be permanent feature of US–ROK relations, its level for ROK will be determined by actual needs of situation; neither ROK nor US would wish permanent aid relationship. Nor do we have in mind a shift of aid burden to Japan, which ROK would not desire and Japan would not desire or accept. “ (Telegram 758 to Seoul, February 28; National Archives and Records Administration, RG 59, Central Files 1964–66, POL JAPAN–KOR S)
  11. In 1964 approximately 600,000 Koreans, brought to Japan as laborers during World War II, resided in Japan. Defense intelligence analysts represented that both countries competed for control and influence over that population, which lived in “depressed circumstances “ and depended on relief from the Japanese Government. (DIA Intelligence Summary, March 25; Johnson Library, National Security File, Files of Robert W. Komer, Japan-Korea, December 1963–March 1966)
  12. Referred to as Takeshima by the Japanese, Dok-To (or Tokto), a barren island in the Sea of Japan, had long been a point of contention between Korea and Japan.