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

50. Memorandum From the President’s Assistant for National Security Affairs (Kissinger) to President Nixon¹

Washington, August 17, 1970.

SUBJECT

• Secretary Stans’ Report on Textile Negotiations

Secretary Stans has forwarded a day-by-day account of his textile negotiations with the Japanese Minister of Trade and Industry, Kiichi Miyazawa, June 22–24.²

It is clear that the principal problem was the length of the agreement, and that compromises on the other points had either been reached or seemed attainable.

On timing, the Japanese were willing to agree to restraints for twelve to eighteen months, provided the United States would agree not to expand the time limit of the agreement or expand the concept of voluntary restraints to other industries. The U.S. insisted on an agreement lasting at least until 1973. The Japanese argued that they could not accept the longer period without a justification beyond the timing of U.S. elections.

On other key elements:

—The Japanese were willing to agree to comprehensive coverage, consisting of one overall limitation for sensitive goods (23 items) which would be restrained, and one (largely fictitious) overall category for non-sensitive goods, which would not.

—The Japanese agreed that the United States could call for consultations on non-sensitive (and thus non-restricted) items whenever we found imports disturbing. If no satisfactory solution resulted from the consultations, the United States could unilaterally restrict imports within 30 days and the Japanese would not press their compensation rights in GATT.

—The Japanese wanted a base year of calendar 1969 for synthetics and calendar 1968 for wool, the best year from their standpoint for both. The U.S. wanted fiscal 1969 for both, which would have been more restrictive on both. Compromise appeared possible.

—On the rate of growth, Japan wanted imports to increase according to increases in U.S. consumption over several past years, including the rapid growth of most of the 1960’s, whereas the U.S. preferred a more restrictive year-to-year calculation.

On the purely diplomatic side, Secretary Stans apparently indicated to Miyazawa that he based his position on what he understood were specific points that had been agreed to last November by you and Prime Minister Sato. Miyazawa said he had questioned Sato on this, and that Sato said there had been no explicit understanding on specifics—that he had simply promised “to do his utmost” to reach satisfactory agreement. Miyazawa claimed that his sole reason for coming was to fulfill that promise—not to forestall the Mills bill, nor to meet the demands of the U.S. textile industry. Miyazawa said that his coming should be construed as representing the Prime Minister’s promise “to do his utmost.”

Comments

When we approach the Japanese again on textile negotiations, the situation will be very much influenced by the status of the Mills bill and your position on it. However, part of the situation brought out in the Miyazawa–Stans conversation will remain the same.

In an effort to help re-start the negotiations, and help head off restrictive U.S. legislation, GATT Director-General Long has personally offered an informal proposal which meets our position on most counts—including duration. Our people are assessing it in detail, as are the Japanese. If it looks acceptable to us, we will see whether the Japanese are sufficiently interested to make new talks worthwhile.

An agreement by mid-October with Japan, if one were possible, would put you in the best possible position to veto the trade legislation which is likely to reach your desk about that time—since your textile commitment would have been taken care of by other means. We could also begin negotiations shortly with Hong Kong, Korea, and Taiwan, to demonstrate action and perhaps to make it easier for the Japanese to negotiate.

1. Source: National Archives, Nixon Presidential Materials, NSC Files, Box 399, Subject Files, Textiles, Vol. II, 1970. Secret. Sent for information. A notation on the memorandum indicates Nixon saw it. On August 17 Bergsten sent Kissinger a memorandum concerning Stans’ report and recommended that Kissinger sign this memorandum and forward it to the President without Stans’ report.
2. Stans’ account of his textile negotiations was attached to Bergsten’s August 17 memorandum to Kissinger. (Ibid.) Also attached, but not printed, was a July 21 memorandum from Stans to Nixon summarizing the negotiations. See Document 47 and footnote 2 thereto.