234. Telegram From the Embassy in Japan to the Department of State1
443. Reference: Department telegram 328.2 Wool Textiles. Pursuant reftel I presented statement on wool textiles to MITI Minister Sakurauchi August 3 during course my initial call on him. I had originally planned use meeting to take up GOJ trade liberalization and aid to Vietnam but felt it inadvisable raise these issues in same breath with wool proposal.
Following usual amenities Sakurauchi assured me of his deep interest in Japanese-American relationships dating back to time he worked on security pact as member of Diet Foreign Affairs Committee with special emphasis on economic cooperation envisaged in pact. He asserted determination try continue improve relations between Japan and US through economic affairs for which he is now responsible.
Sakurauchi thanked us for support in attainment OECD membership and expressed his desire that trade might be still further increased with US and with LDC’s. I told Sakurauchi that we believed in lowering trade barriers; that we were glad to see a very great increase in Japan’s trade with US, including healthy growth of Japanese exports; that we were still firmly committed to success of Kennedy Round; however, we do believe in the orderly expansion of trade and that made the wool textile problem especially important. Sakurauchi at this point was given text of statement cited reftel with oral translation into Japanese.
He said he could not answer questions raised offhand but he was interested to know what happened to our special mission sent Great Britain and Italy. I replied we would be very glad to inquire for more details from Washington as to their results; additionally, we assumed he would be in touch with UK and Italy directly.
Sakurauchi referred to his predecessor Fukuda’s opposition to wool agreement which Fukuda had expressed to Secretary Hodges. He recalled that cotton textile agreement had worked harshly against Japan, as bilateral followed by multilateral agreement covered period when Japan’s share of US market dropped from 70 percent of US imports to less than 20 percent. In response I pointed out this experience with cotton textiles showed that multilateral arrangements might be preferable to bilateral; and also that while cotton textiles were by no means the only items which were controlled to insure orderly marketing, total of Japanese [Page 629] exports continued to increase at rapid rate, indicating value of emphasis on orderly marketing.
While Sakurauchi wished to reserve his formal reply to our statement, he presumed that Ikeda Cabinet would still be opposed to an international wool conference.
In view of the importance of presenting statement to the Foreign Office in timely fashion, prior my call on MITI Minister, EconMin called on Nakayama (Director, Econ Affairs Bureau, FonOff) and handed him copy of statement. Nakayama said that he could not comment in detail re substantive issue but his immediate offhand reaction was to question seriously whether proposal for conference was consistent with spirit of Kennedy Round and principles of GATT. He asked whether similar paper had been given to other govts. EconMin said he thought that paper was being given only to GOJ but that it reflected discussion which special mission had had with UK and Italian officials and was in effect a substitute for such visit to Japan. In response to Nakayama’s question, EconMin said initial UK Govt request to US approach had been negative and that Italians had taken the proposal under consideration.
Nakayama said he was sure substance of US approach would become known to press immediately after Ambassador’s approach to MITI. EconMin requested, and Nakayama agreed, that text of US statement, which designated as talking paper, would be considered confidential.
Embassy expects strong reaction from press.