206. Letter From the Special Representative for Trade Negotiations-Designate (Gilbert) to the President’s Assistant for National Security Affairs (Kissinger)1

Dear Henry:

This is a follow-up to our hasty conversation of Monday afternoon on the subject of the sought-after voluntary international arrangement to limit manmade and woolen textile imports.

I see little prospect of success in this effort by proceeding further along the present route. The key to success, of course, lies in cooperation by the four principal exporting countries in the Far East—Japan, Taiwan, Hong Kong and Korea. An unfortunate result of Secretary Stans’ European visit was that in each of the Far Eastern countries subsequently visited, the public, the industry and governments were completely forewarned as to his purposes through the press, industry sources, and diplomatic sources.

Thus forewarned, positions were taken before his arrival (as by the Japanese Diet) from which the governments could not withdraw in the face of U.S. threats (the Mills telegram)2 and pressure. There is no reason to expect this situation to change absent a change in approach by the United States. Furthermore, an inflexible resolve to proceed on the present course also seems to involve a tacit decision to proceed irrespective of the costs both direct to U.S. trade and indirectly to U.S. policy. These costs do not appear to me to have been considered or weighed in the choice of methods of achieving the President’s purposes.

In Europe, the national governments and international institutions were unenthusiastic (to put it mildly) about the proposal for an international textile conference under GATT auspices for a variety of reasons. They were reluctant on principle to see the GATT used as a purely trade restrictionist vehicle. For practical reasons, they were reluctant to participate in a GATT effort of this sort to which they did not attribute any substantial chance of success. They identified the problem as a U.S.-Far Eastern problem (as did Secretary Stans) and repeatedly asked why they should be involved at all in such a problem.

The enclosed Memorandum of Conversation with Minister Yoshino of the Japanese Embassy, Washington, is, I think, very interesting.3 [Page 534](No copies have been made or circulated other than the one enclosed.)

From informal conversations with EEC Commissioners I have the clear impression that if the United States were to arrange suitable bilateral agreements with the four Far Eastern countries and were then to suggest an international conference under GATT auspices for the purpose of bringing the various bilaterals together into an international arrangement to operate under GATT surveillance, we would then find Europeans receptive to such a conference. A similar suggestion has been made unofficially by the British.

To follow this proposed route would require a selective approach as to the products to be covered. There would also have to be a provision in each of the agreements for periodic review of the U.S. market for such textiles and consultations looking toward inclusion by agreement of the parties of any other products the market for which in the United States should show similar disruption.

Negotiations for such bilaterals between the United States and the Far Eastern countries, if they are to be successful, must be conducted without fanfare or publicity. We should use high-level influence only to the extent necessary to convince the countries involved, particularly Japan, of the seriousness of the U.S. determination to find a solution. We should advise them that the President will shortly be sending a trusted emissary to open negotiations.4 Pretty clearly, Japan should not be approached again on the subject of textiles except in the broadest terms until after agreement had been reached with the other three (the effectiveness of each agreement could well be conditioned on execution of similar agreements with the other three).

At the Joint U.S.-Japanese Ministerial meeting in Japan the latter part of this month5 it would seem to me wise (a) to exclude textiles from discussion at the plenary sessions, and (b) to include textiles among the other items of importance which concern the United States because they contribute to the unacceptable level of the current, adverse trade balance in U.S.-Japan trade. It seems clearly predictable that textiles will be the subject of press inquiries in Tokyo and a uniform answer to such inquiries should be determined in advance—one which does not minimize [Page 535]the importance of the problem but which does not put textiles as the number one problem.

The multilateral discussions under GATT auspices to which I have referred as a second step could eventually be consolidated with the efforts due to commence in the autumn looking toward a renewal of the Long Term Textile Arrangement, which expires in 1970.

In short, I believe that there is a basis for genuine hope that a major step toward accomplishing the President’s objective can be achieved by quiet negotiation with the Far Eastern countries concerned, and that conclusion of this first step can reasonably be expected to pave the way for further broadening of the arrangements by multilateral discussion at a later date. I doubt that this route would produce the watertight restrictions which Secretary Stans has been contemplating, but I am inclined to believe that enough can be accomplished via this route to satisfy the President’s commitment. The present course of action seems destined to lead into quota legislation as its inevitable end and no one can predict or control how broad a field such legislation would cover—shoes, steel, electronics, etc. Somehow or other I find it hard to believe that the President’s commitment to the textile industry6 is such that he could contemplate being responsible for dismantling the entire pattern of trade agreements built up over the past 30 years or so.

Sincerely,

Carl J. Gilbert
  1. Source: National Archives, Nixon Presidential Materials, NSC Files, Subject Files, Box 403, Office of the STR. Personal.
  2. Not further identified.
  3. Not printed. The meeting on June 27 covered a number of topics.
  4. Not further identified. Bergsten began a July 18 memorandum to Kissinger as follows: “The President has asked Arthur Burns to ‘handle the textile issue’. It is not fully clear whether this means just within the White House of as a full takeover from Secretary Stans, although I think the former is much more likely.” (National Archives, Nixon Presidential Materials, NSC Files, Subject Files, Box 399, Textiles, Volume I)
  5. Secretaries Rogers and Stans attended the meeting in Tokyo July 29-31; see Foreign Relations, 1969-1976, vol. III, Document 23.
  6. See Document 184.