171. Memorandum of Conversation, Washington, March 27, 1973, 10:30 a.m.1 2


March 27, 1973 10:30 a.m.


  • Finance Minister Aichi
  • Ambassador Ushiba
  • Secretary Shultz
  • Dr. Kissinger
  • Robert Hormats

The President briefly joined meeting at 10:50 a.m.

Kissinger: I am very pleased to have the pleasure of seeing you again. I know what a constructive role you have played in recent discussions.

Aichi: It is an honor to see you again and for you to give me the opportunity to visit with you. We appreciate the cooperative position the United States has taken on these matters. We appreciated Paul Volcker’s coming first to Japan to convey a message from the President in February. We have done our best to cooperate with the American Government. Things are going very smoothly. Our goal is a real float although there is now some intervention. We are even selling some dollars to keep the rate moderate. The trend of Japanese exports to the US is declining. You must recognize that we have to take hard political decisions at home to deal with this, but things are moving and we think the trend will continue to decrease.

Kissinger: I know you recognize the importance of our need for a liberalization of Japanese trade. This is for economic and political reasons. It is highly important to us. Beyond that there must be long-term agreement with Europe, Japan and the US and other highly industrialized countries. We will be working on this in the latter part of this year. This will be done in direct consultation with Japan.

Aichi: We are liberalizing not only on goods but also on capital. By April we will submit legislation to the Diet on capital liberalization.

Shultz: Inflows and outflows?

Amb. Ushiba: We have already liberalized completely on outflows.

Kissinger: Strengthening our relationship with Japan is one of the chief objectives of the President’s second term. We look forward to receiving the Emperor. We will submit dates in a few weeks. If these are o.k. with [Page 2] the Emperor, I am sure we can find an appropriate time.

Aichi: If it is o.k. with Tanaka, I will do my best to help you find a convenient time and I will convey your message to him.

At this point Dr. Kissinger briefly left the room.

Shultz: Trade liberalization is very important to us. I know you are not as optimistic about this as some, but I hope some progress can be made.

Dr. Kissinger returned.

Kissinger: If you can convey this message about the Emperor to the Prime Minister we would be very happy to welcome him. We expect the Prime Minister tentatively during the first week in August and the Emperor later in the fall. We have not announced this yet, but we have already been in contact with the Prime Minister’s office. We want to restrain this in the press.

Amb. Ushiba: Oh! You have already been in contact with the Prime Minister’s office?

Kissinger: Last June I met with five former Foreign Ministers; three were candidates for Prime Ministership and would say nothing. The only ones who said anything were the Finance Ministers.

Kissinger: What is your view of the international monetary situation?

Aichi: At present it is a bit quiet. But there is not yet confidence in the future. Last night there were many views on whether we should set a date for the next Ministerial meeting or not and on which dates it should be held. We are asking the Deputies to study the details. There are difficult issues including convertibility, how to make SDRs more attractive, developing countries, etc.

Kissinger: It is very important to have fundamental reform. The system is now subject to intense speculation.

Aichi: To prevent speculation we need a common idea about the future structure. For the time being things are a bit quiet.

Shultz: We are still of the view that our September proposals provide the basis for a new structure. We recognize that some issues have been raised, but the basic structure can hold up. We have yet to hear anything wrong with that approach or any strong arguments against it.

Kissinger: What issues do you see in Japanese-US relations?

[Page 3]

Aichi: In the general election we lost seats in the Diet and the Communists gained. This was against our expectations. There was also some increase in the Socialists. They are against America and against the Us-Japanese Security Treaty. We need to persuade the general public that our opinion and position is right. There are movements in Japan against the US. Recently in the Diet I have been accused of making secret promises to the American Government.

The Russians have invited Tanaka to visit Moscow this autumn, or any time, so they say. He is thinking of autumn.

Kissinger: We think that is a good thing. Will you continue to ask for the two islands?

Aichi: Yes.

Shultz: One remarkable thing is that throughout the recent Ministerial meeting exchange rates remained calm. For this to happen during a major meeting of Finance Ministers is quite an achievement.

Kissinger: I remember our dealings while you were Foreign Minister. We faced very difficult problems and you always handled them honorably and fairly. Moreover, you understood what we were saying and we did not always understand what we were saying.

Aichi: I also want to say how pleased we are with Ambassador Ingersoll. He is very thoughtful and doing good work.

Kissinger: We in the White House have great confidence in Ingersoll. He can communicate directly with me and with the President. He is an awfully good man; and as a matter of fact Secretary Shultz recommended him for the job.

I have been three times in Japan in less than one year. I am thinking about coming for a longer visit some time this year—three days maybe.

At this point the President entered.

The President: It is so good to see you again, Mr. Finance Minister. I am glad that you had the opportunity to meet with Secretary Shultz and Henry.

Aichi: It is a great honor to see you again, Mr. President.

[Page 4]

The President: I want you to know how strongly I feel about good relations between the US and Japan. We hear a lot about the US dealing with Europe but I want you to know that there is no deal unless Japan also is involved. Japan and the US are the two biggest economic powers. We are equals. There will be no arrangements with Europe which leave Japan out.

Henry, do we have the time for the Prime Minister’s visit?

Kissinger: Yes, it is some time in early August. I think August 3.

The President: That’s good. I am looking forward to seeing the Prime Minister and the Emperor too. Then perhaps a trip to Japan next year. I hope you are getting along with Secretary Shultz. He has my complete confidence, and please don’t treat him too badly; be good to him.

Aichi: Thank you very much, Mr. President. I will convey this to Prime Minister Tanaka, I am sure he will be pleased to hear this.

The President: Thank you. It has been good to see you and I look forward to seeing you when the Prime Minister comes here.

Aichi: Thank you.

  1. Source: National Archives, Nixon Presidential Materials, NSC Files, Country Files, Far East, Box 538, Japan, volume 9, January–June 1973. Secret; Nodis. The conversation took place in Kissinger’s office. In a briefing memorandum to Kissinger, March 26, Hormats described the“object of the meeting” as strengthening Aichi “at home” and expressing appreciation for recent Japanese measures to liberalize trade and revalue the yen. (Ibid.)
  2. Kissinger, Aichi, and Ushiba discussed trade and monetary issues. Nixon joined the conversation near the end.