235. Editorial Note

The Japanese Foreign and Trade Ministers were in Washington June 22-24, 1970, to review a number of items of mutual concern with their U.S. counterparts, including textiles. As reported in the June 24 joint statement at the conclusion of the talks, they were unable to reach agreement on textile imports to the United States. The principals recognized the importance of the issue, and expressed a desire to continue the discussions at an appropriate time in an effort to resolve the problem. (Department of State Bulletin, July 13, 1970, page 34) On that day the President also announced a program for assistance to the footwear industry, pursuant to Gilbert’s and Stans’ testimony on May 11 and May 12. (Ibid., July 20, 1970, pages 91-93) Regarding their testimony, see Document 230.

On June 24, June 29, and July 2 Fred Bergsten sent memoranda to Henry Kissinger warning him of the dangers of a protectionist outcome, and suggesting that the President meet with Congressmen Mills and Byrnes to limit the bill that the House Ways and Means Committee would report out. On July 2 he also informed Kissinger that Mills had recently adjourned the hearings until July 7. The June 24 memorandum is in the National Archives, Nixon Presidential Materials, NSC Files, Subject Files, Box 399, Textiles Volume II; the other two are ibid., Box 401, Trade General, Volume II 4/70-12/70.

On July 2 Bergsten sent a separate memorandum to Kissinger informing him that senior European Community officials had visited Washington July 1-2 to consult on trade legislation. The EC officials were concerned about quota legislation on textiles and possibly other items, which they feared, as quoted by Bergsten, “could lead to a new trend in world trade policy.” The Community requested and the U.S. side agreed to unofficial quadripartite consultations with Great Britain and Japan under GATT auspices in Geneva, a proposal the United States had rejected 3 weeks earlier in order not to jeopardize negotiations with Japan. Bergsten added that Mills had concurred when informed of the forthcoming consultations, and the EC had agreed the agenda was open for U.S. grievances against other participants as well. (Ibid., Box 401, Trade General, Volume II 4/70-12/70)

In a July 2 memorandum to President Nixon, Kissinger requested a decision on resolving agency differences on textile quota legislation: “The agencies agree that we should seek an amendment to the pending textile quota legislation, which we support, to give the President flexibility to waive the quotas for imports which are not disruptive. However, they differ on how the amendment should read. Commerce wants authority to waive quotas both by product category and country, while State wants to limit the authority to product categories in order to [Page 606]avoid pressures to use a broader authority for country discrimination.” Kissinger was particularly concerned about retaliatory steps and a trade war if quotas were applied against Europe. Kissinger recommended (and indicated Flanigan and Timmons concurred) the Commerce Department approach, and he initialed the President’s approval on the memorandum. (Ibid., Box 399, Textiles, Volume II)