230. Editorial Note
On May 11, 1970, Chairman Wilbur Mills of the House Ways and Means Committee began hearings on foreign trade. Among the matters before the Committee were the administration’s trade proposals sent to Congress November 18, 1969 (see Public Papers of the Presidents of the [Page 591]United States: Richard Nixon, 1969, pages 940-946), and proposals for shoe and textile quotas, the Mills Bill. Six administration witnesses were scheduled for the first week, beginning with Gilbert on May 11 and Stans on May 12. A series of memoranda dated from May 6 to 12, from Fred Bergsten to Henry Kissinger, some with attachments from the principals setting forth their positions, briefed Kissinger and reminded him of the need for decisions. (All in National Archives, Nixon Presidential Materials, NSC Files, Subject Files, Box 399, Textiles Volume II)
On May 7 Bergsten reported to Kissinger that Paul McCracken had convened a meeting that day at which all agencies agreed that the administration should oppose shoe quotas. The unresolved issue was textile quotas, and Peter Flanigan and Bergsten were preparing an options paper for the President. The Commerce and possibly Agriculture Departments recommended against opposing textile quotas on the grounds that opposition would undercut the ongoing negotiations with Japan, but other agencies, including the State and Labor Departments, favored opposing textile quotas at that time, stressing the preference for a voluntary solution, which they expected to achieve.
On May 6 Bergsten had reminded Kissinger that he had agreed to develop a position on shoes, and set out four options: 1) support the Mills Bill, with sharp cutbacks on imports, which the Commerce Department supported to maintain pressure on the Japanese negotiations, but which the State Department opposed on foreign policy grounds, believing that Sato’s commitment and not the fear of legislation was the only hope of agreement with the Japanese; 2) submit the administration’s own quota bill with more moderate restraints; 3) take no position pending the outcome of the Japanese negotiations; and 4) oppose quotas, as proposed by the State Department.
On May 11 Bergsten informed Kissinger that Under Secretary Richardson would be calling him shortly to protest an addition to the textile quota position Kissinger had worked out with Flanigan and Stans: the President would not veto a textile quota bill if Congress passed one. The Department of State feared that a Commerce Department amendment that would limit quotas only to Asian countries would be doubly damaging to relations with Japan. Bergsten informed Kissinger that Richardson would recommend that Secretary Rogers call the President if Kissinger would not agree to a change. (Ibid.)
The President did call Richardson the morning of May 11. He had earlier called and talked briefly to Deputy Assistant Secretary of State for East Asian Affairs William Sullivan; no record of those discussions has been found. Kissinger did not see the President until later that morning. (Ibid., White House Central Files, President’s Daily Diary)[Page 592]
On May 12 Bergsten reported to Kissinger that Stans had read to the House Ways and Means Committee the statement that Kissinger and Flanigan had agreed on: “Recent action, which I cannot detail, leads us to believe more strongly than ever that such agreements can be successfully concluded in the next several weeks. Therefore, the Administration requests the Congress to defer consideration of the textile portion of the Mills Bill for several weeks. If at the end of this period our expectations prove to be wrong and we are unsuccessful in negotiating voluntary agreements, we will at that time consider the matter with Congress.” Stans told the Committee he expected at least one successful agreement by the second week of June when the hearings were scheduled to end, and Bergsten expressed his opinion that that was the deadline for getting at least a voluntary agreement with the Japanese. He also informed Kissinger that both Gilbert and Stans had stated the administration would oppose shoe quotas and would propose a domestic action program for that industry instead.