Foreign Relations of the United States, 1977–1980, Volume III, Foreign Economic Policy

70. Memorandum From the Special Representative for Economic Summits (Owen) to President Carter¹

Washington, October 28, 1977

SUBJECT

• Letter to Prime Minister Fukuda

Attached is a draft reply to Prime Minister Fukuda’s letter.² I have cleared its substance with State, Treasury, Commerce, and Bob Strauss.

Inter-agency work is going forward in preparing a package of measures on which the US and Japan could agree to reduce Japan’s external surplus. Our thought is that Bob Strauss would discuss these measures with Fukuda and other Japanese officials, when he goes to Japan in early December—with the object of reaching an agreement then or as soon thereafter as possible, to be announced simultaneously in Washington and Tokyo.

Yoshino (the diplomat who brought Fukuda’s letter) and I agreed that there should be no evident connection between agreement on such a package and a Presidential trip to Japan. I made clear that there could be no trip without prior agreement on a package. He made clear that if this agreement were reached, the Japanese government would hope you could visit Japan—preferably in 1978 and, if not, in 1979.³

We don’t know whether the Japanese are prepared to do what is necessary to reduce the surplus substantially. Yoshino, who is honest and close to Fukuda, was encouraging; other reports are not. We will only find out by trying.

1. Source: Carter Library, National Security Affairs, Brzezinski Material, Presi-dent’s Correspondence with Foreign Leaders File, Box 11, Japan: Prime Minister Takeo Fukuda, 2–12/77. No classification marking. Sent for action. Brzezinski initialed the memorandum.
2. The attached draft is not printed. In his October 19 letter to Carter, Fukuda discussed his government’s economic stimulus program and urged industrialized country cooperation. (Ibid.) In an October 27 memorandum to Brzezinski, Tarnoff characterized Fukuda’s letter as an appeal “for patience and U.S. understanding of the efforts his government has taken to deal with the current account surplus.” (Ibid.) Carter’s reply to Fukuda is printed as Document 71.
3. In his October 27 memorandum to Brzezinski (see footnote 2 above), Tarnoff noted that, in addition to Owen, Yoshino had met with Cooper, Solomon, Strauss, and Wallich “to get a sense of what GOJ actions the USG thought would be necessary and sufficient in the current situation.”