Foreign Relations of the United States, 1969–1976, Volume XVII, China, 1969–1972

134. Backchannel Message From the President’s Assistant for International Economic Affairs (Peterson) to Ambassador Kennedy, in Taipei¹

Washington, June 8, 1971, 1229Z.

Eyes Only for Amb Kennedy, Taipei from Peter Peterson. After lengthy discussion, the President’s decision on the Islands is that the deal has gone too far and too many commitments made to back off now.² I showed your wire on this and even reread portion dealing with its importance.³ The President was deeply regretful that he could not help on this, but he felt that the decision was simply not possible. The President has instructed me to tell you that he will send a senior military representative in August to review with GRC in “a favorable and forthcoming way” important defense possibilities.⁴ I’ve explained that this makes final negotiations now very difficult but decision is August visit because of need to do this while Congress is out in August. Not to complicate your life further but I just talked with Roger⁵ Bryce Harlow confirms from high sources that Mills has made some kind of commitment to support quota bill next spring.

Apparently, the 2.7 billion that industry representatives there agreed to strikes them as too much here in this country and that 2.2 billion was the ceiling.

I have just called Milliken to say that the President would certainly appreciate their staying with us in this effort and if it breaks up now it would be hard to reconstitute the effort. He said they felt that likelihood is good enough for quota legislation that they would probably take their chances and come home now.

My recommendation is that you tell GRC that deal must be at a volume level that you can get industry to really accept and that this is important enough to us that we will have to review defense and other carrots and sticks in order to achieve it.

Then I would go on and start in other two countries and let GRC stew about potential U.S. actions. If industry says they want to come back to U.S., I’d be inclined to go on anyway and see what it takes in other two countries to get deal industry would accept. I think it would be better if industry would stay but it’s not essential. My reasoning is that if you can get deal that sounds reasonable not only to some of the industry but also the public, then I think we are far better off than having appeared to have failed and only Presidential alternative would be to support what could be a disastrous, wide-ranging quota bill on many categories or veto and still lose textile support. If we don’t make any deal, it certainly would seem to hurt the President a lot and help political opponents equally. I’ve explored this with top advisers and all agree that the best deal we can make is a lot better than none at all. Do your best on this basis.⁶ The President deeply appreciates what you are doing.⁷

1. Source: National Archives, Nixon Presidential Materials, White House Special Files, President’s Office Files, Box 87, Memoranda for the President. Secret; Eyes Only.
2. Nixon, Kissinger, and Peterson met at Camp David from 3:25 to 4:10 p.m. on June 7. (Ibid., White House Central Files, President’s Daily Diary) According to a draft telegram to Rogers by U. Alexis Johnson: “Henry Kissinger stepped into the breach with material that I supplied him, and last night [June 7] obtained the President’s decision that we would not change our position on the Senkakus. However, this points up the heat that GRC is bringing to bear on us and in turn in some degree probably reflects the heat that GRC is feeling on a subject which it neglected for so long.” (Ibid., RG 59, U. Alexis Johnson Files: Lot 96 D 695, Nodis Chrono 1971) Kissinger and Johnson discussed the Senkaku Island issue by telephone on the morning of June 7. Johnson stated: “The principle that we are applying is that we receive the islands from Japan for administration and are returning them to Japan without prejudice to the rights—no position between the two governments on it.” (Memorandum of conversation between Kissinger and Johnson, June 7, 10:35 a.m.; ibid., Telcons, May–June 1971)
3. See Document 133 and footnote 2 thereto.
4. In an October 5 memorandum to Haig, Holdridge wrote that Peterson’s office had contacted him to note that no military assistance mission had been dispatched to Taiwan. He noted, “Given Ambassador Kennedy’s promise to the GRC, and given the doubts likely to be raised in their mind by any considerable postponement of the survey mission, we should move ahead reasonably soon to send a suitable officer to Taiwan.” Haig’s handwritten comment on the bottom of the memorandum reads: “Cripes John—this is dynamite. In any event we should wait till we see how textiles come out.” (National Archives, Nixon Presidential Materials, NSC Files, Box 522, Country Files, Far East, China, Vol. IX)
5. Representative Wilbur D. Mills (D–Arkansas) was the ranking member of the House Ways and Means Committee.
6. On June 7 Kennedy told Chiang Ching-Kuo of the decision on the Senkaku Islands. Chiang asked that the U.S. Government categorically state at the time of the signing of the Okinawa reversion agreement that the final status of the islands had not been determined and should be settled by all parties involved. (Backchannel message from Kennedy to Peterson, June 9; ibid., White House Special Files, Staff Member and Office Files, Peter Peterson, Box 1, 1971, Textile Negotiations (cables)) In a June 10 memorandum to Kissinger, Johnson noted that Rogers had raised this issue with Japanese Foreign Minister Aichi at their meeting in Paris on June 9. (Ibid., RG 59, U. Alexis Johnson Files: Lot 96 D 695, Kissinger, Henry, 1971) On June 12 Peterson informed Kennedy, who was in Seoul, that Rogers had approached Aichi, “strongly urging GOJ to discuss issue with GRC prior to signature of Okinawa Agreement on June 17.” He also noted that a Department of State spokesman would announce on June 17 that a return of “administrative rights” to Japan of the Senkaku Islands “can in no way prejudice the underlying claims of the Republic of China.” (Ibid., Nixon Presidential Materials, White House Special Files, Staff Member and Office Files, Peter Peterson, Box 1, 1971, Textile Negotiations (cables)) On June 15 Peterson cabled Kennedy, in Seoul, stating that Aichi had met with the ROC Ambassador in Tokyo to discuss the Senkaku issue. (Ibid.) On July 12 Chiang Ching-Kuo complained to McConaughy that “the Japanese so far have refused to talk in any meaningful way on the subject.” (Telegram 3388 from Taipei, July 12; ibid., RG 59, Central Files 1970–73, POL CHINAT)
7. An exchange of notes between Rogers and Ambassador Shen on June 29 extended and amended the October 12, 1967, agreement on trade in cotton textiles. See TIAS 6361 (the 1967 agreement), TIAS 7011 (an exchange of notes for an interim agreement signed in late December 1970), and TIAS 7135 (the June 1971 notes). The agreement was further extended and amended in August 1971 (TIAS 7177). A new agreement was reached in December 1971 (TIAS 7249, corrected in TIAS 7469). The United States and the Republic of China were also parties to a multilateral accord on trade in wool and man-made fiber textile products in December 1971 (TIAS 7493 and 7498).