69. Editorial Note
During the early part of 1971, U.S.-Japanese textile negotiations commenced with no prospect of settlement on the immediate horizon. While government-to-government negotiations made only halting progress, there were rumors about parallel negotiations between Congressman Wilbur Mills (D–Arkansas) and representatives of the Japanese textile industry. On February 26, 1971, C. Fred Bergsten of the NSC staff wrote a memorandum for President’s Assistant for National Security Affairs Kissinger reporting that the head of the Japanese industry had agreed to Mills’ suggestion that Japan unilaterally restrain textile exports to the United States. Bergsten depicted this news as an “apparent breakthrough.” (National Archives, Nixon Presidential Materials, NSC Files, Box 400, Subject Files, Textiles, Vol. IV, 1971) That same day, Mills, President Nixon, and a few other attendees met for an 8:30 a.m. breakfast. A record of this meeting indicates that “Mills went on at some length to develop for the President Mills’ ideas about voluntary action by the Japanese to limit their textile exports to the United States.” The President expressed little interest in this topic and changed the subject back to hearings and bills before the House Ways and Means Committee. (Ibid., White House Special Files, President’s Office Files, Box 84, Memoranda for the President, beginning February 21, 1971)
On March 8, the Nixon administration learned of an agreement negotiated between Mills and the Japan Textile Federation that marked a new development in the textile dispute between the United States and Japan. The Japanese Textile Federation announced that it would adopt voluntary export restrictions lasting 36 months. These restrictions would allow Japanese textile exports to the United States to increase 5 percent for the first year, 6 percent for the second year, and 6 percent for the third year. The proposal was contingent upon other major textile exporting countries (especially Taiwan, South Korea, and Hong Kong) adopting similar restraints. (Ibid., Nixon Presidential Materials, NSC Files, Box 400, Subject Files, Textiles, Vol. IV, 1971)
Following the Textile Federation’s declaration, Shigeru Hori, the Chief Cabinet Secretary in Prime Minister Sato’s government, officially announced, “The Government of Japan . . . considers that in view of this new development, it is no longer necessary to continue the negotiations between this Government and the Government of the United States which have been conducted by Mr. Ushiba and Mr. Flanigan.” (Ibid.) On March 8 Mills also issued a statement praising the proposal. (Ibid.) Meanwhile, on the same day, Japanese Ambassador Ushiba orally conveyed a message from Sato intended for Nixon. Of the voluntary export restraints, Sato noted, “I realize that these [Page 188] restraints may fall short of the expectations of your Government, but strongly hope that, taking into account the long-term considerations of friendship between Japan and the United States, the understanding and the support of your Government will be forthcoming so that it will be possible to bring this difficult matter to a close.” (Ibid.) Bergsten responded to the Japanese textile industry offer by writing to Kissinger that “the Mills initiative is a godsend” from a “foreign policy and trade policy standpoint.” Yet, he noted, “The Mills initiative also completely undercuts the Administration’s effort to negotiate an arrangement consistent with the President’s commitment to the textile industry.” (Ibid.) The next day, March 9, Senator Strom Thurmond (R–South Carolina) who possessed close ties to the textile industry, sent Nixon a letter in which he denounced the Mills agreement and asked Nixon to repudiate it. (Ibid., White House Special Files, Staff Member and Office Files, Box 11, Peter Flanigan, Textiles, May 1969–Nov. 1972)
On March 9, President Nixon, at the request of his assistant, Peter Flanigan, met with the Ad Hoc Textile Group (consisting of Office of Management and Budget Director Shultz, and Presidential assistants Kissinger, Flanigan, and Peterson). Flanigan prepared a memorandum sketching out options for the President in anticipation of this meeting. (Ibid., Nixon Presidential Materials, NSC Files, Box 400, Subject Files, Textiles, Vol. IV, 1971) According to a transcript specifically prepared by the editors for this volume, Nixon said that Mills’ deal was “an inadequate, a totally inadequate thing.” Later in the conversation, Nixon commented: “The Japanese have given us a bad deal. Mills is now holding us on a hook and we’ve got to find a way to get off of it.” (Ibid., White House Tapes, Oval Office, Conversation No. 464–9, 11:39 am–12:03 pm) A March 9 memorandum for the President’s file summarizes the meeting: “The President was impatient with the suggestion that either the foreign relations aspects of the problem should be considered, or that consideration should be given to Mills’ sensitivity on the trade matter. The President pointed out that Mills was a pragmatic politician who would do with regard to each item of legislation what was in his best interest. Mills would not, in the President’s opinion, let action on the textile issue influence his position on welfare reform or revenue sharing. The President concluded that it was necessary to send textile quota legislation to the Hill. He instructed that a message be drawn to indicate why the Japanese offer was inadequate, to indicate his impatience with the Japanese government for unilaterally breaking off negotiations, and stating that he would send legislation and would monitor monthly Japanese imports.” (Ibid., White House Special Files, President’s Office Files, Box 84, Memoranda for the President, beginning March 7, 1971) Bergsten wrote a memorandum to Kissinger on March 11, in which he declared, “It has now been demon [Page 189] strated once more that textiles overshadow all other aspects of U.S. trade policy, and indeed foreign economic policy. . . . We simply must avoid the ad hoc, totally inadequate staffing which characterized our policy-making on the issue this week.” (Ibid., NSC Files, Box 400, Subject Files, Textiles, Vol. IV, 1971)