33. Action Memorandum From the Assistant Secretary of State for Far Eastern Affairs (Bundy) to the Under Secretary of State (Ball)1

SUBJECT

  • Frictions in U.S.-Japan Relations

The accumulation of a number of irritating problems between the U.S. and Japan has had an abrasive effect on the fundamentally sound [Page 42]and mutually beneficial relations between our two countries. U.S. actions and attitudes in certain areas of special interest to Japan have raised doubts in the minds of many Japanese as to the true value which the U.S. places on its partnership with Japan, and, therefore, as to actual U.S. intentions toward Japan. It may be said that our good relations with Japan, which have been carefully developed over the past 19 years, are being eroded by a series of pin pricks.

Over the past few years we have quite properly stepped up pressures on Japan to increase significantly its assumption of international responsibilities. We are pressing Japan a) to expand its military establishment while we drastically curtail grant military aid and reduce U.S. forces in Japan; b) to purchase more military equipment from the U.S.; c) to cooperate in the maintenance of our position in the Ryukyus; d) to increase aid to the LDCs generally; e) to give special assistance to South Viet-Nam, Laos and Cyprus; f) to cooperate in the economic denial policies against Cuba and Communist China; g) to participate fully in the Kennedy Round; h) to accelerate liberalization of the remaining import restrictions and of direct foreign investment; i) to take a flexible and generous position on the political and economic issues involved in Japan’s negotiations of over-all settlement with the Republic of Korea. These are all actions of great importance to the U.S. and the Free World generally. From the Japanese viewpoint, however, they are not easily taken since they involve the allocation of important resources to projects which are not especially popular in Japan.

At the same time, however, we have been unable to accommodate the Japanese in a number of areas of special interest to them. We turned down their request for a civil air route to and beyond New York. After three negotiating rounds extending over a 15 month period we have not yet reached agreement on the Japanese proposal for a new convention on the North Pacific Fisheries. (The Japanese regard both the Civil Air Agreement and the North Pacific Fisheries Convention as “unequal” agreements imposed during or after the Occupation.) We granted an exemption from the Interest Equalization Tax to Canada— but not to Japan. One year after our unprecedented request to audit a Japanese company’s books in the welded steel pipe anti-dumping case and the Japanese Government’s equally unprecedented acceptance of our request, we have not disposed of the case; meanwhile, however, we have favorably disposed of a number of more recent European pipe cases. We enacted the Saylor Amendment which applies a 100 percent “Buy America” policy to the Urban Mass Transportation Act. We enacted the Bartlett Act, which threatens to eliminate the Japanese long-standing king crab fishery from the Eastern Bering Sea, an area which the Japanese consider to be high seas. We have pressed for an international meeting to consider an agreement on wool textile exports. (A [Page 43]summary of the nature and status of certain current problems with Japan is attached as Tab A.)2

The fact that many of our approaches to the Japanese in the trade field (e.g. wool) stem from domestic pressures for unilateral action underscores the growing Japanese belief that the U.S. is shifting to a protectionist trade policy. They believe that we think first of our Atlantic partners in considering problems or actions which are at least as important to Japan as to the Atlantic nations. The abrasive effect of these issues stems primarily from their very accumulation and from the fact that each U.S. action seems to be taken in isolation without regard for its consistency with our other important requests or for the over-all partnership relationship between the two countries. As Minister Tanaka pointed out to Secretary Dillon in September, many Japanese believe that Japan’s active cooperation with the U.S. on many important matters has not been reciprocated and they are asking, “How has the U.S. cooperated with Japan?” (Tab B).3

Ambassador Reischauer stressed the need to consider individual problems in the context of our over-all relationship with Japan in his telegram 637 of August 20, (Tab C).4 This requires a careful and continuing assessment of our objectives to establish the relative priority and importance of the actions we want Japan to take. It is in this context that we should evaluate specific issues to determine the actions which we can and will take. FE is prepared to offer some proposals along the lines indicated in Tab D.5 But to achieve results calls for active and close coordination among U.S. Departments and agencies dealing with various matters affecting Japan, as well as Government-wide knowledge and understanding of our over-all stake in Japan.

Recommendation:

It is recommended that you suggest to the Secretary that a Cabinet-level meeting be called of the United States members of the Joint U.S.-Japan Committee on Trade and Economic Affairs, and Mr. McGeorge Bundy, Governor Harter and AID Administrator Bell to review the [Page 44]basic problem of U.S.-Japan relations, with particular attention to the issues outlined in Tab D.6

George W. Ball 7
  1. Source: National Archives and Records Administration, RG 59, Central Files 1964–66, POL 7 JAPAN. Confidential.
  2. Attached but not printed; Tab A detailed problems relating to wool textiles, civil aviation, the Saylor amendment on mass transportation, the interest equalization tax, the anti-dumping investigation into Japanese steel pipe, consultations regarding king crab, and North Pacific fisheries negotiations.
  3. Attached but not printed; Tab B is the memorandum of a September 6 conversation between Tanaka and Dillon on the interest equalization tax.
  4. Document 22.
  5. Attached but not printed; Tab D is entitled “Recommended Economic Policy Actions on Japan.”
  6. A note on the last page of the memorandum reads: “U suggested and Secretary concurred w[ith] reservation.” Ball forwarded this memorandum and supporting documents to Rusk on November 10. He also indicated that the Cabinet-level meeting should take place, but added the proviso that its scheduling await a decision on a possible visit by Sato in the near future. Rusk approved Ball’s suggestion as indicated by the handwritten notation “OK, DR” on the Ball memorandum. (Memorandum from Ball to Rusk, November 10; National Archives and Records Administration, RG 59, Central Files 1964–66, POL 7 JAPAN)
  7. Printed from a copy that indicates Ball signed the original.