160. Memorandum From the Special Representative for Economic Summits (Owen) to President Carter 1
- Letter to Fukuda
The judgment of our experts is that Fukuda’s 2.5 trillion yen stimulus is a good start but is not sufficient to achieve the 1½% growth increase that Fukuda pledged at the Summit for the Japanese fiscal year 1978 (ending March 31, 1979). Ushiba said, when he was here last week,4 that Fukuda will decide in November to send a second supplemental budget to the Diet in January 1979, if it appears that the 7% growth target is not going to be achieved. This would be more likely to affect growth in the Japanese fiscal year 1979 and 1978.
The Japanese are also taking some trade actions to reduce their external surplus; these, too, appear too limited.
We need to persuade the Japanese to take, before you go to Japan next year for the Summit, the additional growth and trade measures required to achieve a substantial reduction in their external surplus. Otherwise your visit will take place under the shadow of growing U.S.-Japanese recrimination. The attached reply was drafted with this in mind.
- Source: Carter Library, National Security Affairs, Brzezinski Material, President’s Correspondence with Foreign Leaders File, Box 11, Japan: Prime Minister Takeo Fukuda, 1–12/78. No classification marking. Sent for action.↩
- Tab B, attached but not printed, is a September 2 letter from Togo to Carter transmitting a September 2 message from Fukuda on Japan’s economic stimulus package. Carter initialed at the top of Togo’s letter.↩
- In a September 22 note to Carter, Brzezinski noted that he had held back the draft letter “until the conclusion of the Camp David Summit and in the belief that it would be strengthened if you could refer to passage of the natural gas legislation. I think it best not to delay any longer.” (Carter Library, National Security Affairs, Brzezinski Material, President’s Correspondence with Foreign Leaders File, Box 11, Japan: Prime Minister Takeo Fukuda, 1–12/78) The Camp David Summit took place September 5–17.↩
- Ushiba and Minister of Agriculture Ichiro Nakagawa visited Washington for talks with Strauss and U.S. officials September 5–7. Telegram 228538 to Tokyo, September 8, transmitted the text of the STR press release issued at the end of the visit. (National Archives, RG 59, Central Foreign Policy File, D780367–0177) Telegram 231273 to Tokyo and the Mission in Geneva, September 12, provided a summary of the talks. (National Archives, RG 59, Central Foreign Policy File, D780371–0683)↩
- No classification marking.↩
- Carter vacationed in Georgia, Idaho, and Wyoming August 18–30. (Carter Library, Presidential Materials, President’s Daily Diary)↩
- Possibly a reference to an August 16 discussion in which Fukuda told Mansfield that “he was particularly worried about the declining value of the dollar. As a key currency, if the dollar’s credibility were to be lost, it would become virtually impossible for other economies to maintain orderly and stable management.” Fukuda asked Mansfield to report his concern. (Telegram 14808 from Tokyo, August 17; National Archives, RG 59, Central Foreign Policy File, D780335–1005) See also footnote 4, Document 154.↩