Foreign Relations of the United States, 1969-1976, Volume XIX, Part 2, Japan, 1969-1972

31. Memorandum of Conversation¹

Washington, November 20, 1969, 10:15 a.m.

PARTICIPANTS

• Prime Minister Eisaku Sato of Japan
• The President
• Genichi Akatani, Deputy Director of Information, Ministry of Foreign Affairs (Interpreter)
• James J. Wickel, Special Assistant to Ambassador Meyer (Interpreter)

SUBJECT

• (1) Textiles; (2) Trade and Capital Liberalization; (3) Japan’s Role

The Prime Minister thanked the President for the magnanimous conclusion reached in yesterday morning’s meeting.² This morning he wished to discuss the subjects held over from yesterday. He noted that early Japanese press reports on yesterday’s meeting were sensational, probably because the two of them completed their talks the first day.

(1) Textiles

The President wished to discuss economic problems, beginning with one which presented a political problem for him here just as Okinawa created a difficult one for the Prime Minister in Japan; this problem, textiles, was controversial in both countries, but the President did not wish to allow it to develop into an impasse between them. A number of Senators and Congressmen had in fact already introduced bills to legislate quota restrictions on textile and other imports. He felt deeply that this would harm our bilateral relations with Japan, as well as with other countries. The problem was, however, that he could not beat “something” with “nothing.” He explained to the Prime Minister that he had pledged during his campaign to seek voluntary restrictions from our friends abroad to avoid legislative controls, even though he acknowledged that this would pose a problem for the Prime Minister, because of the big role played by textiles in Japanese industry. In any case he did not desire any outward indication of a link between Okinawa and textiles.

The Prime Minister agreed emphatically that these two issues must be kept separate.

The President said, on the other hand, that he had a political obligation to seek a settlement. He wished to suggest that “at an appropriate time” the United States seek a comprehensive agreement on textiles in the GATT but had no intention of disclosing the fact of this discussion now, because there would be misunderstanding in Japan even if it were only indicated that he and the Prime Minister had discussed the matter.

The Prime Minister agreed that it would not be wise to let it be known publicly that he and the President were discussing textiles.

The President said that he also thought that it would be more helpful if the Joint Communiqué contained only general language with respect to trade and capital liberalization. However, he asked the Prime Minister for his views on how to proceed in the GATT at a later “appropriate” time. What did the Prime Minister feel that the United States could expect of Japan at such time.

The Prime Minister said that he felt strongly that this matter could only be resolved within the GATT framework. He added that it was a problem which should have been resolved during the previous Administration, but it had not, and was a subject for discussion between them now.

The President said that this was a problem which had been left on his desk.

The Prime Minister noted that the previous Administration had left a number of problems to the President for resolution, including Okinawa and textiles. He recognized that textiles were not a new problem because he had discussed them with President Johnson on a previous visit in 1967, and apologized for embarrassing the President by not resolving the issue earlier. Therefore, he himself felt most strongly even before this visit that he must consider this problem seriously, particularly because he had not been able to resolve it in his discussions with President Johnson. Recalling his statement of yesterday, that he was “determined” to consider fully how to resolve the issue, the Prime Minister explained that he was bound by the unanimous Diet resolution against a bilateral agreement on textiles between Japan and the United States, but added that he was free to try to seek a settlement on a multilateral basis through the GATT. However, he cautioned, it would be “nonsense” to seek a meeting in the GATT to debate this issue before knowing in advance the general trend such discussions would take and the conclusions they might reach on possible solutions. Therefore, he wished to suggest preliminary bilateral discussions of textiles before raising the issue in the GATT. Japan’s textile industry was self-serving: it initially opposed any proposal by the United States to resolve the issue within the GATT, and then later opposed the United States proposal for a bilateral settlement. He realized that he would have to try to “guide” the industry in Japan because its position remained adamant. Even though Japan’s industrial structure was changing, light industry (including textiles) still occupied a strong position. Just as the President was concerned about the strength of the American industry, he also had to be concerned about the industry’s strong position in Japan. What was needed to resolve this issue was complete mutual understanding. After a short pause, the Prime Minister said with strong emphasis, “Let’s do it.”

The President suggested that we might lead the matter in this direction, for it would be unfortunate if the United States raised the issue in the GATT only to be confronted there by Japan. He was confident that he and the Prime Minister could work out a common position, which also would protect their political flanks at the same time.

The Prime Minister noted that the GATT was established as an international institution to resolve such trade problems, just as the World Bank and the International Monetary Fund were founded to handle other specialized international matters. In Japan, those who opposed the United States proposals were advocating that it follow the procedures provided under the GATT if it wished to seek relief. In response to such statements, he had always said that this would be too rigid an approach, however logical. Instead he always advocated that Japan and the United States, being full partners, resolve the problem in the spirit of sincerity through adequate discussions. Of course, cooperation between the United States and Japan was a prerequisite if we were to persuade the other nations to accept a solution under the GATT. Unless both nations agreed on what to do, and how to handle the discussions in GATT, there would be no sense in convening a meeting at the GATT; otherwise the only result would be an open confrontation between Japan and the United States. In the end, he hoped to persuade and “guide” the industry in Japan to accept this procedure leading to a solution.

The President noted that delegations of both countries were now engaged in such a discussion in Geneva. However, because the United States would raise the issue in the GATT “at an appropriate time” he suggested that he and the Prime Minister try to work out a common position beforehand to avoid a confrontation in the GATT. He did not wish to refer to textiles specifically in the Joint Communiqué, or in statements to the press, lest this prove embarrassing to the Prime Minister.

The Prime Minister agreed that it would be better to leave out any reference to textiles from the Joint Communiqué, but noted that any statement to the press that they had not discussed such a major bilateral problem as textiles would seem to be a “lie.” He preferred to tell the press that they had discussed textiles, but to take care to keep them separate from Okinawa. He also preferred that preliminary discussions continue in Geneva rather than calling for a new meeting in a new forum, and that any public statements which had to be made be issued in Geneva.

The President said that we would “fuzz it up” in discussing this issue with the press and simply say that he and the Prime Minister had discussed over-all trade questions, and would continue to do so.

The Prime Minister said that there were strong feelings in Japan that the GATT simply could not be ignored in seeking to resolve such a complex issue.

The President said that we would leave any reference to textiles out of the Joint Communiqué, but he agreed that this would not convince anyone that they had not discussed them.

The Prime Minister said that no progress could be expected in discussions in the GATT in the absence of a prior understanding between the United States and Japan. Thorough preliminary bilateral discussions were “essential” to put the President’s suggestion on the tracks, and to work out a common approach to the other countries concerned. Perhaps Japan’s work would consist of leading such developing countries as the ROK, Taiwan, Hong Kong and Israel, for as they proceeded to industrialize they would follow the same course as Japan had, and would stress light industry including textiles to begin with. However, it would be an extremely delicate matter for Japan to handle. On the other hand, without the cooperation of Japan, the United States probably could not develop a successful worldwide textile policy.

The President hoped that the Prime Minister would also cover another very important matter in his talk at the Press Club this noon, Japan’s trade and investment restrictions in general.³ As the Prime Minister knew, a number of American firms wished to have the opportunity to enter the Japanese market, but Japan still had restrictions against American, and indeed any other foreign investment. In view of Japan’s large continuing trade surplus, any indication by the Prime Minister that Japan was moving toward a more liberal trade and investment policy would be very helpful. Of course, he would not indicate specifically what Japan might do, for it was up to every government and every people to decide its own destiny, but this was a “hot issue” in our economic and industrial communities and both expected the Prime Minister to make some statement while he was in the United States about trade and investment liberalization in general, not about textiles specifically.

The Prime Minister said that the GOJ was continuing to implement a “positive” policy for the liberalization of both trade and capital. As Assistant Secretary Trezise noted during his recent discussions of these matters in Japan, there was dissatisfaction abroad with the slow tempo of Japan’s efforts. However, before discussing this matter, he wished to return to the question of textiles, and attempt to reach some final decision with the President. Noting that the solution of the textile problem being proposed by the United States ran counter to the philosophy and trend toward liberalization, he emphasized the need to conduct full preliminary discussions in Geneva, to the extent possible on an “open” basis. Some matters might have to remain confidential, but to the greatest extent possible these discussions should be “open.” To ensure the success of the discussions in Geneva both governments should cooperate more closely in this preliminary phase. He had issued detailed instructions to Ambassador Nakayama, Japan’s chief delegate in Geneva, before leaving for Washington, but Ambassador Nakayama had reported some disappointment at the trend of the initial meeting. He noted that it had been pointed out to Ambassador Nakayama in new instructions just issued that no talks in the beginning are fully satisfactory, but that these discussions were expected to to maintain an open road to continuing discussions. The direction in which they might lead depended, of course, on the relationship between Japan and the United States.

The President said that perhaps this matter should be thrashed out thoroughly in preliminary talks in Geneva before raising it in the GATT.

The Prime Minister agreed, noting that some people had proposed a different forum and a different venue other than Geneva, even suggesting a separate conference. He preferred that the current discussions in Geneva continue there. Since secrecy was difficult to maintain, he also preferred that these be as open as possible, although some matters could be kept secret, depending on their subject.

The President agreed that it was necessary for both governments to continue these talks; if and when they reached a deadlock we could consider an alternate form.

The Prime Minister, noting that the United States obviously was anxious to resolve this question as quickly as possible, said that it was only natural that it would hasten to try to secure a resolution even while he and the President continued to discuss the matter. However, he asked the President to understand his political position, which required that the fact that they had already conducted these “preliminary negotiations” be kept secret. This was an extremely delicate matter, closely related to the dissolution of the Diet and general elections, but nevertheless, he was hopeful that he and the President would resolve this issue.

The President said that he understood these political problems.

The Prime Minister also requested that the United States not try to persuade textile producers such as the ROK to accept certain proposals by saying that Japan had already accepted them. It was embarrassing to raise such a minor matter, but he felt that it was important to do so. More important, however, was the timing of convening a meeting in the GATT to deal with textiles; this should be decided only after a thorough evaluation of the situation.

The President said that he had in mind “an appropriate time.”

The Prime Minister said that he and the President need not decide such a matter, which could probably be left to advisors to determine.

The Prime Minister reminisced about a trip to England he made with former Prime Minister Yoshida some years ago. When an MP from Manchester (a textile competitor) charged that Japan exploited cheap labor, Yoshida responded that post-war legislation prevented such exploitation. The MP then charged that enacting legislation and enforcing it were two different matters. The following day Churchill apologized for this rudeness, but Yoshida cheerfully explained that Japan had been criticized more severely elsewhere, and that he faced even more rude questioning in his own Diet.

The Prime Minister said that he told this story as a reminder that developing nations moved into the production of textiles as the first step toward industrialization. He congratulated the President on the recent Republican Gubernatorial victories, and hoped that his party would be equally successful in the coming mid-term Congressional elections. Personally, he wished to do something constructive to ensure a victory for the President.

The President said that it was most important that he and the Prime Minister each understand the problems the other faced; if they did, he was confident that a solution could be worked out, one which the Prime Minister could sell to business and government circles in his country, just as he could in this country. He was confident that they could reach agreement on some middle ground.

The Prime Minister said that he always advocated officially even closer cooperation between Japan and the United States but beyond that, on a personal basis, he added that it was essential that he and the President fully discuss such matters as textiles. The handwritten letter sent by the President in response to his own congratulatory telegram the night of the election victory was a great source of comfort to him; it was in this spirit of closeness that he wished to continue to discuss directly textiles, or any other problems which might arise.

The Prime Minister said that he explained the difficult matters he would discuss in Washington during an audience with the Emperor on the eve of his departure. The Emperor understood the problems thoroughly, and asked that his regards be conveyed to the President together with his appreciation for the understanding shown Japan by the President.

The President appreciated this and asked that the Prime Minister convey his respects to the Emperor, whom he had met in 1953 as Vice President.

The Prime Minister said that he would report fully to the Emperor the “magnanimous consideration” shown Japan by the President in these current discussions.

The President recalled his meeting with the Crown Prince in 1954 in Hawaii.

The Prime Minister said that the Emperor had once visited England, as Crown Prince, to attend a review of the fleet but the Empress had never been abroad. She was growing older, but hoped to make at least one foreign visit. In his own case, he regretted that he never mastered English, even though he travelled abroad as a young man.

The President observed that he seemed to understand all the English that was necessary, which reminded him of a story about George Washington, whose hearing failed with age, but of whom it was said that he heard only what he wished in cabinet meetings, and nothing of which he did not.

The Prime Minister asked that the President understand what he was trying to say with respect to textiles: more and frequent communication between both countries was needed to see where we would be going in any talks at Geneva.

The President said that textiles involved several Departments (State and Commerce), and had to be coordinated by the White House. On occasion, therefore, Dr. Kissinger might wish to discuss them with any representative the Prime Minister wished to name.

The Prime Minister said that Dr. Kissinger could call upon Ambassador Shimoda; he was solid, could keep a secret, and enjoyed the Prime Minister’s full confidence.

The President said that we could also communicate through Ambassador Meyer, who enjoyed his full confidence. However, in Washington it was necessary for the White House to coordinate the conflicting views of the several departments involved in textiles.

The Prime Minister repeated his request that the United States study the situation thoroughly as the first step toward a solution.

The President said “Let’s do something on the textile front”. (Note: The President and the Prime Minister shook hands on their agreement to resolve the textile issue.)

(2) Trade and Capital Liberalization

The Prime Minister, returning to the subject of liberalization said that some reference to it must be included in the Joint Communiqué but need not be too detailed or lengthy. He asked for the President’s suggestion.

The President said that he had no specific language to suggest. Whatever the working group agreed to would be satisfactory, but whatever was said should be positive. In particular it would be important for the Prime Minister to make a positive statement at the Press Club because many Americans wished to know whether Japan would move toward greater liberalization and our business community was watching every word in the Joint Communiqué, and in the Prime Minister’s every statement, in the expectation that he would make a positive statement while in the United States.

The President said in terms of the future, 10 or 20 years from now, that both Japan and the United States would be greatly helped by liberalization. The present textile problem was an “aberration.” Both were efficient productive trading countries and would obviously benefit greatly from liberalization. However, there were protectionist elements in Japan seeking to maintain import restrictions and the protectionist elements in the United States were growing stronger. If the Prime Minister could make a good statement on liberalization it would help him (the President) beat down the protectionist sentiment here, and in addition help greatly when he asked Congress to reduce tariff barriers later. However, if Japan, which currently enjoyed such a favorable balance of trade did not relax its restrictions people here would question why we should. The President emphasized therefore that both he and the Prime Minister should move in the direction of liberalization. Apart from textiles, we should move toward freer trade in all areas because Japan was the best overseas customer of the United States, and almost the same thing could be said in reverse, and both of us would benefit even more from freer trade with Western Europe and the developing countries.

The Prime Minister agreed completely. He explained that some Japanese business leaders preferred to speak of “the internationalization of industry” rather than “liberalization”, although both meant approximately the same thing. He thought this new term was planted among them by Mr. Kendall (President of Pepsi Cola) whom he would see Friday night⁴ in New York at Governor Rockefeller’s dinner.

The President said that this dinner in New York would be very important; anything constructive he could say there would be most helpful, because everybody there would be a hard-headed businessman like Mr. Mizukami, and would wish to hear what the Prime Minister had to say.

The Prime Minister noted that everyone on the guest list seemed to be a supporter of the President’s party.

The Prime Minister also noted that he met Mr. Townsend (Chrysler) at the White House last night; they talked briefly about the Chrysler–Mitsubishi joint venture.

The President said that representatives of the Big 3 in the automobile industry usually attended such dinners.

(3) Japan’s Role

The Prime Minister thought that the Joint Communiqué might also refer to the Agreement on Peaceful Space Cooperation and to technological exchanges.

The President said that in this new era in our relations both should recognize that over and above our responsibilities for the future of each of our nations and own interests, we also have a greater responsibility for the shape of the world and its economic and political institutions. He thought that Japan was now at a point where it could play a greater role consistent with its domestic situation not just in Asia but also on the world scene. He did not indicate what the Government or the people of Japan should do, for each nation should choose its own destiny. However, as he said after dinner last night, he did not believe the Japanese people would long remain satisfied to play only the role of a self-sufficient, highly productive, rich economic giant. As Herman Kahn predicted, Japan might well exceed all of us in per capita income by the end of this century but more important than clothing, housing or television was the role the people could play beyond this.⁵ He felt, therefore, that Japan should move to a “higher posture” in the area of trade, investment, political development of Asia and, to the extent that we can agree, between us even in security. We would welcome this, and judging from his talks with other Asian leaders the President knew that they would also welcome Japan’s playing such a role. As he said yesterday, the world would be healthier if Japan could be added “as a fifth finger” to the four existing areas of great power, the United States, Western Europe, the Soviet Union and China.

The Prime Minister said that he had been deeply moved by the President’s remarks after dinner last night, but he was not convinced that Herman Kahn was correct about Japan’s future. To draw an analogy, the United States had already finished first in a marathon race, and the Soviet Union second, but the spectators were anxiously looking to see which of the runners bunched in the pack far back would come in third; Japan might be slightly ahead of the other nations in the pack, but it was far behind the first and second countries that had already finished.

The President noted that Japan was “coming up fast” and, assuming little change in conditions Japan’s per capita income would increase greatly. The Soviet Union was tied-up in its bureaucratic system, and in any case had never really had a high level of per capita income, and American productivity was not increasing as it should, although we hoped to do better in the future.

The Prime Minister hoped that the Japanese people understood that they owed much to the United States for their progress; personally, he was firmly convinced that Japan was deeply indebted to the United States for its assistance and cooperation, which have made possible Japan’s great economic progress. He could understand how some Americans, from their point of view, might distrust Japan; after the United States opened Japan to the world a century ago and helped it to make great progress toward modernization during the Meiji period, Japan fought a war against the United States and lost. Japan must do its utmost to restore the trust it thus lost. Reaffirming the President’s statement of yesterday, he agreed that the world would be more secure if the number one and number two nations in the Free World cooperated more closely; it was exactly such closer cooperation based on mutual trust which he sought to achieve, and his political destiny was to fight against the Socialists and Communists whose ideology placed them in opposition to this.

The President said that he had discussed Japan’s possible future role at great length with Mr. McNamara, who felt that Japan was already playing a crucial role in the Asian Development Bank. With respect to the development of Southeast Asia in the post-Vietnam period, the President noted that Japan had already expressed a willingness to cooperate in the development of the Mekong River basin and both North and South Vietnam. The United States would be pleased to cooperate if Japan would assume the leadership in this area, since it would be far better to have an Asian nation take the initiative rather than the United States. He asked the Prime Minister about his views on what Japan might be able to do, for example, could Japan call a conference to discuss such a program.

The Prime Minister said that he too had hoped to discuss this very matter in view of the importance of the post-Vietnam period. He recalled that it had been quite a shock to Japan, the enemy, to hear that the Allied Powers were preparing their post-war Japan policy during the height of World War II. All attention was now focussed on withdrawing military forces from Vietnam, but it was equally important to discuss and decide on post-war programs now. A “master plan” for the post-war period was essential and if one were made known to the enemy it might blunt his present hostility. If the United States wished to call such a conference, Japan would gladly participate. This need not be done immediately, but it was important to announce a post-war goal with “vision”, for the adversaries in Vietnam, including for example the ROK, and all other nations in the area would be deeply affected by the end of the war.

The President asked whether the Prime Minister thought Japan could call such a conference in Tokyo during the summer or fall of 1970. There was some feeling here that such a conference could not discuss an economic development program, including certainly the post-war development of Vietnam without involving all the participants in the war. It would be helpful if Japan, the leading nation in Asia, and in particular the financial leader, could initiate such a conference. Of course he would not suggest that the Prime Minister do anything harmful to his own position in Japan.

The Prime Minister said that he would certainly be willing to consider the possibility. As the President knew, Japan’s policy was devoted to peace under the peace constitution and Japan was well known as a peaceful nation. The natural forum to discuss post-Vietnam programs was the Ministerial Conference for Asian Economic Development, an organization which met first in Tokyo several years back and now looked forward to its fifth regular meeting in Djakarta. The post-Vietnam period could well be discussed in this forum, since the other nations of the area which participated also needed assistance. The Asian Development Bank would also present an appropriate forum because of the key role it would play in financing any programs. If the President had a specific proposal in mind, the Prime Minister was sure that it could be discussed at the fifth annual Ministerial Conference in Djakarta. He noted that the United States also played a large role in the ADB, with its large subscription; the ADB, widely thought of as a second World Bank, could benefit from additional contributions. Perhaps Secretary Kennedy would have some ideas.

The President said that a shift to multilateral financing of aid projects was essential because of the unpopularity of bilateral assistance in the United States.

The Prime Minister said that the situation would have been far more difficult without economic assistance. Be that as it may, the withdrawal of United States troops from Vietnam would greatly affect such nations as Thailand as well as the ROK, which also had contributed many troops.

The President said that the real point was that all the developed nations should understand that realistic aid would be good business for them because at present they traded largely among themselves.

The Prime Minister said that we all preferred to associate with the rich rather than the poor.

(4) US–USSR Relations and Vietnam

The President, if the Prime Minister desired, wished to present his evaluation of the SALT talks and the prospects in Vietnam. Without intending to involve Japan in either, he wanted the Prime Minister, as a world leader, to know what we had in our mind to help him correctly interpret our future actions. At the time of the inauguration the President said that we were entering an era of negotiations with the Soviet Union, instead of confrontation, but these negotiations have not produced much. In a discussion of the nine-month-long era of negotiation with Soviet Ambassador Dobrynin in October he recalled telling the Ambassador that not much progress had been made in the Middle East or Vietnam or on other pending issues. In confidence he told the Prime Minister that he had jokingly told the Ambassador that nine months was long enough to have a baby, but so far we have had only a series of miscarriages in our talks with the Soviets. The President said that his own evaluation of the Soviet line was that it was temperate in official statements but “hard” in action. The Soviets have not helped significantly to cool off the situation in the Middle East, nor were they playing much of a role in trying to get the North Vietnamese to negotiate seriously in Paris. He said this not in anger, but more in sorrow.

The President further noted that United States and the Soviets would ratify the NPT on Monday, which would be announced then. In addition, the SALT was moving forward. There was much naive talk that the SALT would result in the control of the development of arms by the United States and the Soviet Union, but he explained that our purpose was to achieve a limitation on the production and deployment of missiles, which would reduce the burden of arms on our economy as well as reduce the danger to the world. We had to negotiate hard and realistically, however, because this was for the “blue chips.” What had deterred the Soviet Union and Communism in general these past twenty years was American nuclear power. At the time President Kennedy made his decision during the Cuban missile crisis the United States lead over the Soviet Union in strategic missiles was 8 or 10 to one, but subsequently the Soviets had closed the gap and at the present they were equal in numbers, and probably ahead in weight; the United States was stronger on the sea and in the air. For this reason he felt he had to make a decision to go ahead with the ABM, to prevent the Soviets from achieving strategic superiority by making a breakthrough in defensive missiles. He noted that he could not accept a unilateral ban on the MIRV, as some dove Senators insisted, for if the Soviet Union MIRVed their missiles and we did not, they would automatically gain a 5 times or 6 times advantage over the United States.

The President did not state this as a rigid, war-like statement, but simply to describe a fact of international life. United States policy has always been, and would always be that it would never use nuclear weapons except in defense. The United States had no ambition to expand at the expense of other countries; for example it was not in Vietnam to create an American South Vietnam but to ensure that the South Vietnamese could create their own South Vietnam.

The President said that the new Soviet leaders differed somewhat from the old ones, but it should be borne in mind that they were still Communists, and still had the aim of conquering the world, although not through war because they understood full well that it would destroy both sides. However, he emphasized, if one side was committed to expansion and conquest of the world, and the other side to the defense of all the individual nations to choose their own course, we must be certain that the United States retained its ability to defend itself and other nations against such expansion by conquest, and that the United States not be placed in a position of inferiority against those who wish to expand their system throughout the world, which they could do without war if they enjoyed such superiority by threats and blackmail. Therefore, we owed it to ourselves and to the other nations under the American security umbrella to bargain in good faith but realistically.

The Prime Minister expressed his appreciation and complete agreement. The Soviet Union was indeed a Communist state and had not abandoned its idea of world conquest. Further, it had a very strong tendency to place its own interest first. For example, it continued its “unnatural occupation” of Japan’s northern territories, the return of which the people of Japan desired as strongly as they desired the return of Okinawa, but whenever the Government of Japan raised this issue the Soviets refused to negotiate on the grounds that it had already been settled permanently. However, he did note some recent changes in Soviet attitudes toward Japan, such as agreeing to permit Japan Air Lines to fly its own aircraft on the air route across Siberia, beginning next year. The Soviets were also interested in securing Japanese assistance to develop Siberia, but nothing had been worked out yet because the Soviets were reluctant to provide the Japanese necessary access.

The Prime Minister said that he continued to adamantly refuse to accept a Soviet invitation to visit Moscow.

The President said “someday, perhaps.”

The Prime Minister said “that day will never come.”

The President noted his interest in these matters, pointing out that Soviet refusal to discuss the northern territories stood in contrast to his own discussions with the Prime Minister about Okinawa.

The Prime Minister noted bitterly that the Soviets did not even fight Japan for the northern territories, but simply occupied them after the war was over.

(5) Steel

The Prime Minister wished to raise one additional point today, the steel industry voluntary agreement to restrict exports to the United States. Leaders of the steel industry, who were concerned that some small steel companies in Japan were not living up to the voluntary agreement, called before his departure for Washington, to request the Prime Minister to convey to the President their wishes that the “flames of the textile problem” not be allowed to spread to steel. It was important to note the sincerity of the industry because of the organization of the New Japan Steel Corporation through the merger of Japan’s two largest steel producers (Fuji and Yawata) thereby creating perhaps the world’s largest producer of steel.

1. Source: Library of Congress, Manuscript Division, Kissinger Papers, Box TS 63, Memcons, Presidential File, 1969. Top Secret; Sensitive. Drafted by Wickel on November 24. The meeting took place at the White House. The President’s Daily Diary indicates that Nixon, Sato, and two interpreters met from 10:18 a.m. to 12:30 p.m. (National Archives, Nixon Presidential Materials, White House Central Files, Daily Diary) On November 19 Nixon received talking points from Kissinger for the next day’s meetings with Sato. (Library of Congress, Manuscript Division, Kissinger Papers, Box TS 63, Memcons, Presidential File, 1969) He also received pre-arranged “Procedural Steps” for dealing with the textile question. These indicated that Sato would inform Nixon “that there are serious bilateral textile discussions going on in Geneva and he will hold himself personally responsible for the achievement of a comprehensive agreement by the end of December 1969 to be reduced to writing. This agreement should be kept confidential until and during the GATT meeting but he pledges that during the GATT meeting he will do his utmost to achieve agreement in accordance with the understanding reached in December.” (Ibid.) See Document 30.
2. See Document 27.
3. Sato spoke at the National Press Club on November 21 following the conclusion of his visit with Nixon.
4. November 21.
5. Herman Kahn, a strategic theorist and futurologist, worked on a study during 1966–1967, which circulated within the U.S. Government and predicted that the Japanese economy would continue to grow faster than the rest of the developed world and that Japan would emerge as an important actor in world affairs. Kahn’s findings were later published in his books The Emerging Japanese Superstate: Challenge and Response (Englewood Cliffs, N.J.: Prentice-Hall, 1970).