15. Department of State Policy Paper1



Looking ahead over the next ten years, we can expect to find ourselves dealing with an increasingly strong, confident and nationalistic Japan. Pro-Western, conservative elements will probably retain control at least until 1969 or 1970, possibly alternating power thereafter with socialist governments of considerably more moderate hue than today's Japan Socialist Party. Japanese society will increasingly resemble Western industrial societies—urbanized and suburbanized, sophisticated consumer tastes, apartment dwelling and gadget served. Japan's economic [Page 17]and security relations with the U.S. will remain vitally important to it—and scarcely less so to us—but the relationship will become less predominant in Japan's foreign relations and more pragmatic as Japan seeks its own way in the world and attempts to reduce its present extraordinary dependence on the U.S. China will remain an area of potential policy difference with us, but with the odds against a major split on recognition and other basic issues, partly because of the broad consensus in Japan in favor of self-determination on Taiwan. As Japan assumes a greater share of Free World burdens and responsibilities, it will demand, and we will wish to accord it, a greater voice in East Asian and world policy decisions.

There is no reason why we cannot live with these changes, and indeed benefit from them. Japan may be less under our influence than now, but it will be firmly anti-Communist, internally less divided, more conscious of its responsibilities, and over-all a greater source of Free World strength than it is today. Determined and able to stand on its own feet in pursuit of what it considers its true national interests, its position will increasingly resemble that of our major European Free World allies.

What the U.S. does or does not do in and with respect to Japan will remain highly important to Japan's future course, and thus to our own Far Eastern and world position. Events have proved the soundness of our Japan policies of recent years, and there appears no present ground for believing that the main elements of those policies will not retain validity over most of the next decade. Programs to promote moderating trends on the left should be continued as long as they are needed and effective. U.S. security guarantees should be maintained as the umbrella under which Japan should be encouraged steadily to expand and modernize its home defense forces and pursue other domestic and foreign programs directly or indirectly contributory to Free World interests. These include an enlarged and improved development assistance program, trade and investment liberalization, an ROK settlement, cooperative economic assistance programs in the Ryukyus, and expansion and modernization of Japan's neglected public services. Efforts should be made to guide Japanese energies in directions adapted to Japan's national aptitudes and motivations, including such projects as a revamped and generously financed foreign trainee program. The possibility should not be excluded of Japan's eventually, possibly within the next 10 years, assuming defense responsibilities outside the immediate Japan area, beginning with participation, hopefully well within the decade, in UN peace-keeping activities. Maintenance and strengthening of our consultative relationship with the Japanese Government on world problems of mutual concern will be of continuing importance in our efforts to keep Japan closely identified with and a major contributor to Free World goals and programs.

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The prime requirement of a healthy course of developments in Japan over the next decade will be an adequate rate of growth of Japan's foreign trade. A trading nation, Japan stands to benefit greatly from Free World trade liberalization efforts, but is hampered in its desire to participate fully in reductions of trade barriers by the continued existence of a substantial proportion of high-cost, protected industries, by the rigidities of the Japanese wage and employment system, and by the economy's vulnerability to trade fluctuations arising from its heavy dependence on trade. The problem is clearly recognized in Japan, but U.S. patience, firmness and example will critically influence the outcome. It is difficult to see how Japan's minimum economic goals can be attained unless Japan is afforded opportunity to expand its sales on the U.S. market at least in proportion with the growth of the U.S. GNP— though maintenance of the high annual rate of sales expansion to the U.S. of past years (26% 1953–60 and 10% 1960–62) cannot be expected. This will require firm Executive Branch resistance of American industry demands for curtailment of Japanese imports, except in what will probably continue to be rare instances where market disruption can actually be proved. It is only less important that when the U.S. must act contrary to Japanese trading interests, time and effort be taken to put the best possible face on the action through diplomatic and other means to minimize the adverse reaction in Japan, instead of the Japanese learning of the matter for the first time through Washington press announcements, as so often in the past.

An attempt to predict Japanese developments ten years ahead should allow sufficient of the saving element of the earthquakes and typhoons that mark the natural scene. It would be rash to assume that the day of the sudden and unforeseen—the 1952 May Day riots, the “Golden Dragon” fallout excitement, the Girard Case, the 1960 Security Treaty turmoil—is over in Japan, or that seizures of irrationality in the Japanese character are now happily matters of the past. Wise U.S. policy toward Japan will reflect a capacity to anticipate and move quickly to encompass the unexpected.

[Omitted here is the body of the 92-page report consisting of the following sections: I. Introduction, II. Importance of Japan, III. Political Situation and Prospects, IV. Economic Situation and Prospects, V. Foreign Policy Objectives and Prospects, VI. Military Situation and Prospects, and VII. U.S. Policy Tasks.]

  1. Source: National Archives and Records Administration, RG 59, Central Files 1964–66, POL 1 JAPAN–US. Secret. Prepared as a Basic National Security Policy Task by the Bureau of Far Eastern Affairs; approved by the Embassy in Japan and the Secretary of State.