140. Memorandum From Secretary of Commerce Stans to the President’s Assistant for National Security Affairs (Kissinger)1

SUJBECT

  • Thai Cotton Textiles

I have read carefully the State Department’s memorandum of October 292 recommending that we release from embargo the Thai cotton apparel awaiting entry.3 The grounds for this recommendation after acknowledgement by State that the Thai Government has handled the matter badly, are that “a political decision (is necessary) permitting the entry of the embargoed goods, not further consideration of the problem as a purely textile matter …”

This is probably the worst possible time for the Administration to make textile import decisions on policy grounds such as these. We have just concluded four understandings on wool and man-made fiber textiles with our principal Asian suppliers. These understandings need to be converted into agreements, notes exchanged, and the agreements implemented. The President has reaffirmed to the domestic textile industry that he intends to implement these agreements effectively to [Page 305]hold imports from these countries within the terms of the agreements. This means that we will need to implement these agreements in purely textile terms. If we allow policy considerations such as those suggested by State to intervene, the Administration will lose the confidence of the industry and call into question our intentions with regard to the implementation of the new Asian agreements.

The Thai Government has indeed handled the matter badly.

1.
It neglected to advise its industry that the U.S. had invoked the provisions of the Long Term Cotton Textile Arrangement (LTA).
2.
It permitted shipments to continue without control during the 60-day period provided for consultations so that significantly more than the restraint level specified in our April 29 note to the Thai Government was shipped subsequent to the receipt of our note.
3.
It did not avail itself of the opportunity to consult until the last day of the 60-day period specified for consultations in the LTA.
4.
Its official representative assured us that further shipments would cease as of August 1, but our records show that shipments continued into September. (October data are not yet available.)

The State Department has not handled the matter well either.

1.
In January 1971 Embassy Bangkok was requested in a State Department message cleared by the Interagency Textile Administrative Committee to alert the Thai Government about the possibility of action under the LTA on the items now in dispute. The Embassy chose not to do so.
2.
In August 1971 when the Thais came to Washington to consult on this matter, Commerce proposed that we suggest to the Thais the negotiation of a bilateral agreement together with the outline of arrangement and the dates for such a negotiation. State did not concur.
3.
In September 1971, Commerce proposed that one of its senior officials could undertake such a negotiation while he was in Hong Kong the last week of that month. State did not concur.
4.
In October 1971, Commerce proposed that we ask the Thai Government to enter into a memorandum of understanding—just as was done with the four major Asian suppliers of wool and man-mades— that would contain the key points of a bilateral agreement. We offered to release the embargoed goods immediately thereafter when the Thai delegation came to Washington to negotiate an agreement and before an agreement was negotiated. State did not concur.

Despite my clear negative reactions to the State Department memorandum and the difficulty I have in seeing how the embargoed pajamas can be such ad adverse factor in our relations with the Thai Government, we have proposed another approach to resolve this problem which has been accepted by State, Treasury, Agriculture, Labor, and STR. It involves releasing a portion of the embargoed goods if the Thai Government will agree to begin the negotiation of a bilateral agreement on a date certain in the near future and, if no agreement is reached, [Page 306]the quantity so released will be charged against the level for the second year the restraints are in effect. The amount of goods to be released is equal to the second year’s restraint level. State is proceeding to communicate with the Thai Government along these lines.

Maurice H. Stans
  1. Source: National Archives, Nixon Presidential Materials, NSC Files, Box 563, Country Files, Far East, Thailand, Vol. V. Limited Official Use.
  2. The Department of State memorandum to Kissinger, October 29, stated that the embargo of the 50,000 dozen pair of cotton nightwear “is now damaging our overall relationship with Thailand.” It stated the Department’s belief that “the political realities of the present situation require immediate release of the nightwear in exchange for a Thai promise to negotiate.” (National Archives, RG 59, Central Files 1970–73, INCO– COTTON 17 US–THAI)
  3. See Document 134.