39. Action Memorandum From the Assistant Secretary of State for Far Eastern Affairs (Bundy) to Secretary of State Rusk1
- The Sato Visit; Proposed Cabinet-Level Meeting on Economic Problems
During Prime Minister Sato’s visit we should be prepared to state the U.S. Government’s position on a number of important economic problems of common concern to the U.S. and Japan. These problems are described briefly in Tab B,2 and are related to the proposed U.S. policy actions outlined in Tab C. Of the eleven specific issues summarized in Tab B, the first five items represent areas in which the United States desires an improvement in Japanese performance;3 the remaining six items represent areas in which Japan desires improvement in U.S. performance.4
For some time, the Department has considered means to engage the full and active support of your Cabinet colleagues in a common effort to eliminate needless difficulties in current U.S.-Japanese economic relations. Prime Minister Sato’s visit offers an occasion for review with your Cabinet colleagues the nature of the problem against the backdrop of our total relationship with Japan to gain their understanding and support of positions you will take, and to anticipate subsequent U.S. actions which will be required to implement those positions set forth in Part II of Tab C. We have discussed these issues with working levels in the other agencies concerned and shall have obtained clearances or identified differences before any meeting you might hold with your colleagues. We believe that reconciliation of the differences between the State and Commerce Departments on textiles will require your intercession with Secretary Hodges, bilaterally or in the context of discussion with other Cabinet colleagues of our total relationship with Japan.[Page 59]
Both an immediate and longer term purpose would be achieved by your chairing a meeting at a convenient time between January 7 and 11 with the U.S. members of the Joint U.S.-Japan Committee on Trade and Economic Affairs plus Mr. McGeorge Bundy and Governor Herter to review these economic problems to obtain your colleagues’ support for the actions proposed in Tab C. During the talks with Prime Minister Sato, I believe it will be necessary for the President personally to handle only one of these economic problems, i.e. civil aviation. The others should be handled by you, supported, in the case of the Interest Equalization Tax, by Secretary Dillon, perhaps at your Working Luncheon.5 Other members of the Cabinet should support the U.S. positions you take in the conversations that they may have with Prime Minister Sato, Minister Shiina or Ambassador Takeuchi at your Working Luncheon on January 12 or at other social occasions.
It is recommended that you:
- Sign the attached eight letters (enclosing Tabs B and C) to the U.S. members of the Joint U.S.-Japan Committee on Trade and Economic Affairs and to Mr. McGeorge Bundy and Governor Herter, inviting them to a meeting at a convenient time between January 7 and 11 to review U.S.-Japan economic problems in preparation for Prime Minister Sato’s visit to Washington (Tab A);6 or
- Approve the preparation of letters along the lines of Tab A which, instead of inviting the addressees to a meeting, transmits Tabs B and C to them and seeks their active support for the positions outlined therein.
- Source: National Archives and Records Administration, RG 59, Central Files 1964–66, POL 7 JAPAN. Confidential. Drafted by Barnett and Vettel and cleared by Trezise, Reischauer, and Feldman.↩
- Attached but not printed.↩
- The five items were U.S.-Japan Defense Relations, Aid to the Developing Countries, Japan’s Trade with the Communist Bloc, Direct Investment, and the Kennedy Round.↩
- The six items were Civil Aviation, the Interest Equalization Tax, Cotton Textiles, Wool Textiles, North Pacific Fisheries Negotiations, and the Saylor Amendment to the Urban Mass Transportation Act.↩
- Dillon and Sato discussed the Interest Equalization Tax at a meeting on January 13. (Memorandum of conversation, National Archives and Records Administration, RG 59, Central Files 1964–66, POL JAPAN–US)↩
- William Bundy added a handwritten note to this recommendation stating, “We prefer this, as does WH Staff.” Although not indicated on the memorandum, Rusk also concurred, and the appropriate letters from Rusk were sent on January 7 to McGeorge Bundy, Dillon, Freeman, Heller, Herter, Hodges, Udall, and Wirtz. (Ibid., POL 7 JAPAN) Rusk’s calendar for the days preceeding the Sato visit does not reflect the meeting. (Johnson Library, Rusk Appointment Books, 1965)↩
- See the joint communiqué issued by Kennedy and Ikeda on June 22, 1961, in American Foreign Policy: Current Documents, 1961, pp. 964–965.↩
- The text of the agreement of August 27, 1963, is in 14 UST 1078.↩