94. Memorandum From Ernest Johnston of the National Security Council Staff to the President’s Assistant for National Security Affairs (Kissinger)1


  • Korean Textile Negotiations

Attached at Tab A is a memorandum which Peter Peterson has sent to the President seeking authorization for use of economic carrots in order to get Korean agreement to voluntary textile restraints.2

This is the memorandum which I mentioned in my memorandum to you of June 15, 1971 (Tab B).3 John Holdridge and I worked closely with Peterson’s staff on its preparation.

The President on April 16 had approved in principle a list of economic and military carrots for the Korean textile negotiations. You had stressed that if military carrots were to be included, you would wish to be consulted further. The Peterson memorandum does not propose military carrots, though Peterson expresses the opinion that they may have to come subsequently if the economic package is insufficient. Our probable need for military carrots if we negotiate with the Koreans on their Vietnam troop levels would make the inclusion of military carrots in a textile deal doubly difficult.

The Peterson memorandum includes two principal inducements for a Korean textile settlement. They are:

  • —That we continue our AID development lending beyond 1972 at approximately the current level of $20 to $25 million a year, giving a total over five years of $100 million.
  • —That we increase annual PL 480 sales above the current $100 million level by about $40 million and reduce the amount available for U.S. uses so that over the next five years the increase would amount to $250 million.

This total package of about $350 million would compensate the Koreans about equal to a conservative estimate of the amount which they would lose in potential sales by concluding a five-year textile restraint agreement with the United States.

  1. Source: National Archives, Nixon Presidential Materials, NSC Files, Box 542, Country Files, Far East, Korea, Vol. IV, 1 Jan–31 Dec 1971. No classification marking. According to a note on the first page, this memorandum was “OBE.”
  2. Tab A, dated June 15, is attached but not printed.
  3. Tab B is attached but not printed.