91. Conversation Among President Nixon, Secretary of the Treasury Connally, the Under Secretary of State for Political Affairs (Johnson), and Others1
Connally: I obviously don’t have the information, but I might, parenthetically, ask: what do we get for the one and a half billion that we’ve committed to, in terms of military preparedness of, of Korea? What if Korea—
Connally: Every time I ask, every time we start talking about economic matters, everybody wants to keep the trade off in the economic field. When we talk about military matters, they’ve got nothing to give us in the military field. What do we get for it?
Johnson: Two—two things. We got, we got modernization of their forces—
Connally: What does that—?
Johnson: —which they needed, which they needed, and which was justified on its own merits. It was needed on its own merits. And secondly, we got the reduction of our, our—
Nixon: Reduction of our forces.
Johnson: —our forces; the 20,000 forces that we drew out of there.
Nixon: Well, but—[Page 237]
Connally: Look, I understand, but we will have to have Korea’s consent to reduce our forces, you know.
Connally: Now, if it’s in our interest, that’s fine. But we don’t have to have their unilateral consent.
Johnson: No, no—
Nixon: I—I think, I think John has got a point here. Let me say, Alex, that I do not go as far as some, and that I know, I know the diplomats have to take a different view, and you must argue it, always. But, believe me that it doesn’t—when it comes to linking, I’ll obey the linking. Military linkage, economic linkage, I’m for it, if it serves our overall interests. That’s really what’s it’s about—
Connally: That’s all I’m saying, Mr. President.
Nixon: Don’t compartmentalize it too much.
Nixon: I think it’s very important, very important to try to get—if you can work it out on an economic basis, fine. But the, the [unclear] a little bit of linkage—what’s that?
Connally: May I suggest, Mr. President, that we ask Pete—that you ask Pete to do one other thing if it appears worth [doing]. Let’s see what [unclear] might lead to withdrawal. We approach this again from the standpoint of, “What can we give ‘em? What more can we give ‘em?” Let’s see what they already have that we can withdraw. Hong Kong? What, what can Hong Kong do for us, except send us textiles? Now, how important is this if we just maintain a, a great relationship with Hong Kong. Taiwan, they live at our sufferance, to be cold about it. Now, they’re our friends, and we want to support ‘em, but what can they do? Why do we argue with them if we can withdraw if they don’t go along with it? Korea’s the same way.
Nixon: They live at our sufferance.
Connally: Sure, they live at our sufferance. And all I’m saying is—I don’t want to be completely bull-faced, just about 90 percent—but let’s see what they’ve already got that we can take away from them if they don’t want to go. Just don’t get [unclear] and stand back, give ‘em something else.
Johnson: My point, Mr. President, is not that I oppose the linkage, as such, but I, I would be hopeful that we each accomplish this within the economic framework.
Kennedy: Alex, could I, could I respond to that?
Kennedy: I—I don’t think, I don’t think any of us would argue that if you could do it with as little as possible—[Page 238]
Kennedy: —we should do it.
Kennedy: But, I, I do want to remind you of this chart. We are talking about 34 percent of their exports. We probably are talking about a society that is counting on this growth as part of their national, you know, forward planning. We’re talking about 45 percent growth, and we’re gonna try to talk them into accepting under—between 5 and 10 on a third of their exports. And I—my only view is that it’s gonna take [unclear].
Nixon: Five and ten, you mean—?
Kennedy: To meet the industry requirements. I mean, we’re gonna have to go from 45 down to 5. Is this right, Maury?
Stans: Yes, yes—
Kennedy: Somewhere between 5 and 10 [unclear]—
Stans: Five in some categories, ten on others—
Kennedy: And, so, all I’m trying to suggest is we’ve got quite a job to get—
Nixon: Now, now let’s [unclear]—I don’t—I want to be sure I understand what that is. You say that their growth is 45 now?
Kennedy: I’m saying that—
Nixon: Textiles are their exports. I understand this.
Kennedy: Yeah. Thirty-four percent of their exports are textiles—
Nixon: Right, exports—
Kennedy: They have been growing at 45 percent compounded. Commerce prepared these forms. We had six people working—
Nixon: Yeah. Sure, sure.
Kennedy: —and the industry position, now, is somewhere between 5 and 10 percent. And I simply—
Nixon: This is our industry, now?
Kennedy: I mean, in order to make a deal that is, that is—
Stans: My point being—
Kennedy: —specific guidelines.
Stans: —in case you’re not aware of it, in our discussions with ‘em last year, they proposed a—an agreement on a 43 percent increase per year. Subsequently, they’ve gotten it to 30 percent, but that’s as low as they’ve ever gone, so—
Nixon: You mean the other countries?
Stans: Korea.[Page 239]
Kennedy: Well, Koreans are tough partners.
Nixon: They all are.
Stans: Could I—?
Nixon: Koreans are tough.
Stans: Could I raise a point on the economic “carrots,” as you called ‘em? I would agree with Alex that if we could it would be great, but I’m not sure that these economic carrots are good enough, or that there aren’t some considerable risks in some of those that are on the charts. For example, to increase the allowances of cotton goods, and to put textiles under general preferences, these are things that could not be secret from the rest of the world. And if we put textiles under general preferences for Korea and Taiwan, I think we’d have trouble with South America and in Africa and in all the other countries that would want textiles under general preferences. So, we open up a can of worms there that could cause us a lot of trouble.
- Source: National Archives, Nixon Presidential Materials, White House Tapes, Cabinet Room, Presidential Recordings, Conversation 53–2. No classification marking. According to the President’s Daily Diary, the conversation was held in the Cabinet Room between 9:34 and 10:45 a.m. Also attending were Kissinger, Stans, David Kennedy, Peterson, Shultz, and Flanigan. (Ibid., White House Central Files) The editors transcribed the portions of the conversation printed here specifically for this volume.↩