Mry
l,
1969
qgII]qE!.!,EL
Office of ihe Vic. Presidenr Office of ur. S.c.elary oi Staie Offtce of th. Secrerdry ol Derense Offi.e of ih. Dlrecto., Ofllce ot Er,ersHr.!, P.epa.edDess
SUtsIxCl: Pape. on U, S, Tr.de Xjissio. to the NSC M=eting - lvedresd.y, ntay 7
1,6. Edst
for
Inclosed is the pape.!-S, Tra.te l,rissio:r io rhe_a.r trsi_.rhlch
,111 be iiscuss.c by 10:00 A.NI-
c.:
ril.-:_s.
;;r;;lJle-r.;;J.y, ,v., z a:
Und.r Secret:ri, ol Sieie
cheirhar, Iorni chie!s .r St.!i Di.ecto. of cert.aL Inieltigln.e Secretary o! ihe Treasrry S.crerary .f Comnelce Secreta.y ol lab., Secretory of Agriculture
Tie S;eciel T.a.i. qepreseniat:?: ,i.. ;,i!ns, Cor:tr;o!1or r. ih. ?.esiJa.r M., \l.rn!\:n, Asslstaf,! io the p.esiC.rt for Urban AJfatrs
CONF]DENT1AI,
U
s
NSC Meeling 7 ]|,!.zy 1969
Trade Mission to tle
lar
East
Three major policy issnes mus! be decided fo, tLe foriLcomnrg bade missior to lhc Ear Easi wlich tea'€s or May 9: tle U.S. position iovard Ja!2nt; nnlort bairie!sj Jalan's barriers !o lcrcign
positio, on iexiile imporis lrom all loE places to be wiiiled -- Japan, (or.a, Taiqan, and IIorA Kon8. The is3ues are iriinat.I-v rclared to ea.n.thcr and, b..ausc of lhe imlorrance ol trade to tL.sc connkjesi tooreiallU,S, for.ign policy tovard eacl ot lheh.
lePea I! the t*eriy y.ars since Japan's econo-ic mira.te 6eean, ar over polulared, vai-de'astated, resources-!oo! .ostry l:a5 beconE the third larg.sl ecorohic poqer ir ilc vorld, and th. sorld leader in hany irdusirics. Japza's Ciovt]l iate conrinEs toL. thc high.st ol ary 'ieweroped counfut; its cxports collitu: to expand at tn. lrigl.st .a!e i, dE irdrslrialized lvorld; ana it has r.cently .e.orded larg.
ialan.e oI paymenis strrpluscs. The U.S. and Japarcse €conomics are closely litrled bt raree and rapidl)- groviag tiade and a common reliance on the strengUr of the dollai.
The Cro*th ol Japan as a majcr economic power 6ase ir East Asia, iis int.gration i!!o ur ,!ee worldls e.6nomy, aad irs close
relations \ri1h tle Unliea Staics havc b.cn Crea y assisted b7 thc U.ited Siatcs. l\fe hawe encourag.d ard assisted tlese derdlophents to a subsiantilr degrce by shonlderjtg tlle cosis of deferdins JaPan, by cxrcnding preferred a.c€ss to th. U.S. capital harket:ra by continued efforts io drav .rapa! inro iater.-ztio,ar orCari?arons-
las also b.cr of greai lerefit to the U.S. JaPan, s.cold onlr !. ClEda, is the most im?or:aht harket for linned Siares *poris, O!. agri.ultural exp.rt3 a!one are ah.ui El biUi.n annualry. Japan.se and U.S. loti.ies are ge.eral1t i, accord in lhe G-{TT, the OECD, tle IMF, the Cronp of Ten a!C. ot!.e! internaiional o:ganizaljons The plocess
2
such as UNCTAD.* Japanes. cconomjc gro\7i! has aI.o iorn,ed roundatior ol lhe grotrirg tens! ot U. S, .IaPa, Partx..sli?-
il,.
Bni thc .uireri !aii.rr ard si,e ol our econofti. relaLions ar. produciig serions probl.rn. qllicn ar. prnnarily focns.d il rhc balate of parnerts, particularly rrade and lriliiary expenditures. Th€ U.S. hilatelal tradc de{jcit }iln J2p:r i, 1963 vas Sl.1 bitlior ard u1e U. s, bjlateral paFn.nis deficit va. alotri $r binion, Amajor conp.ncnl of dLe Uaer was U.s, mililarr c:lcnditures in Jalan of:,b.\r 3570 r.i11ion, To. la.gc .,t.ni, ih. d.ficils are direcrl nnpact ol ihc lricirarn !'e: ard die coriiruing hiCh rarcE of r.oao,-j. erowth ir the United Stztcs- Th. lrade delicil is atso ihe r.sr1t ol a strons Jtrranese eip.rt parfJrrnar:c. barcd or c6$IciiLi,e ad,ariiAo and key.d ro inc U. s. nnr]r.l, .otri,.d riih Japar.sc proi!.lionis:n. Our bala!.e ol payn.f,ts positjo! Laj benefited ir.r .o.pefaLit. Ja?ar.se action, bui w. have ,ot achjevcd a fIU tir:rti2l oJisei by Japal oI olr hjlitary .xli.n.liiures.
U.s. corc.rr iirh br,lnnce or !a!ments and n.t ira.lc ro:iii.r hes arisen onl!.in the past fe$ r.a.s, vh.n ilb..art. 1pp:r.ni ihzt restoratio! of c.Lliljbrnr r.E or.ratl ba]a,.c of Patrn.r,lt ras essential. 1l t]]€ U,s. is Lo ballnce ils payr.nts, orrty corDtri.s ln su{rlus l,ositions can alf.ra to absorb ih. iEpa.t or U.s. acjrsinentIt has a.cordnrgly bec.Dr. in.reasirAly cl.ar in reccrl y.- t 1\1i surplus coufuies mNt play an inrportaat role in any soluiion ot i\c adj8lm.at pr.blem. The nor. directly thc impacl olU.S. ad,ilr:n,en. iarls on ihs major srrptus counries, su.! as Japar ar Pres:nt, tn. les: Jorce cou Iikcly ir is r]rni Ahe.ican adjnsiir.nt
- .,'ill " lol'.:-". Japanr. e.oaoii. sirergth, irs Iaree fad. str.!Ius !'iiI bor'c tne United Sral.s znd :h. r,t!1.1ai large, its r..cri slrius as .na oI lie v.rldrs si.oagesi srrp1ts naljoi', ana rh. i !.rlzni tr:de a.C econolic nnjrlicaiion3 o: ls futuie grorrih - al1 !.ar!a1l il!: assll.P tion by Jalar .i grca!.r ecoro ni. resgonsibilit/ end ac.el.reti.a Dr consir!.tire ?oli.i.s in lield.s ol clnc.rn t. tne Unitc.i S!arcs. ".'pl'
toaloor d-r' 'o r-..-.
l.Cencral ACrecmeni on Tariffs a,d Trade (G"ATT) OrCarizatior lor E.onDrnic Cooperaiion ard D€vclolmeni (OECD) I!!ernalioni;l r,i.r.rary Fr.d {}\'IF) iinit..l Neti.ns Cor:...a.. .! Ti3.ie aad D.v.l.j,ient (Un"Cfr\!)
l Tradc fric!jols betveen rlre u.s. ard Japan ne'c arisc, in rcccnt years because ol (a) slErply increasing Japarese pe&kation ol the U.S. markel lo. ma1uf2-.lu.ed goo.ls, 1,nic! has in turn fos!ered !rol.cijod.t scDtimcnt i, d1. U, S. i and (b) Japanrs proie.ii.ris! atri.ude on c.rtain problems and @witlirg.css to accord U.S. producers ready access io the Jalanes. mar\e! hvhich confast \yitn Japanrs eeneral siaace on inlerEiion:1 iradc issu.s). Bot! iss!es hzve arous.d th. conccr! of U.S. bnsi,essnen ard sornc ll.mberE ol Congless. Japan u3€s a variety of policics ald procedures io Proicct its domestic markets. Quoia !estrictionsi main.ai.sd cortrary io GATT rules, are hor. €ytonsiv. thatrthorc of any other hajor indDsfializcd co-r:iry. The ert€nsire JapanDs€ slslcn oa inrporl corlrol !) ocedur.s eqlally poses scri.ls obsla.Iei ro American exports. At tirc sa,]. rnne Japan has lccn loic.d io cnt.r irio agr.ci,lcris r ilh dea.lc!:d c.u,!r ics otler th::n the U.S, to limil iis .r?orts of ar teasr one majoi 1rrodac1, tert es. And nrlortnal rerLrjciions r.s liirg fl.r Oov3rr,r..r-jlauriry lics, retlectitrg decp-scat..1el.nrc:ts ol Jalarcse .u1iui., aA.l ro il:. dirliculiy of lorciBn rc&tration oI the Japarese marhd. The problal ol Japa&3. !.qclaiioa of -tlrerjcan -arl:.:s i. rrot amcnarnc to eas, soluiior. T\e !.!.fatior is iuda]nc!Latlr oared on a stong Japar€se cor,p.titi'c a.s:ljon i! r orld marlels at pr4s€ni excnange rate5, aggrafaied hy i.J12iiorar,v !ressures ii Lh. udred Siaies inreccnl ycars. Volurlary restraint5 by JaPan on some of i!s e{oris io Euopears nzy divert so,)3 s.lcs ro the u, s, , bui ai the same lir. Japan hainiains sr.h rcstrainrs or ?3 cx (This itr.hdcr an.r! 33 cottoi, iextile plodrcts ud.r thc l,TA alC about
Ihe inn.djatc cain for U.S. exporrers ola relaral:.i of Jnl t:nete imrn:t quoras Yould pr.lab1, n.t he dramnLic be.aus. !t t\e r.1aii..\' smal1 ar.,oun! Dl U- S. tradc r'llic! is air.ct1, aff.cred lProb.blt tess tlan 6l0C millior .i onr lolai crporrj). Reh.nal ol oiher Jalrfu3e barriers to ihp.rts and som. of .ncir infor.ral !:.iiers {on1d resxlr ia an additioial (b.! difii.llt io qErillt) ircrczs. in rrade, fiov..er, renoval.f Japaics! qtror. resixiciions vould reduc. a maj.r j.riranl in U.s, -Ja?:, re1_.iions.
r.srri.tiorc or lor€igr direct ilvestte'i arso hinaer ihe ab ity .l U.s, fi]Ts ro surmonnt JaPanese irza! iarri.rs aat hare ers:drree 5L:nr: !.S. blsincss zre !.liri.al re.e.:,:r,:,i. Altt.rLgh rr.r.-:lj, oi sr.olnar.i inportr.ce t.caus: .l Lh. U S. nal.r.e .i !1 n€ni: :rr.3r.i: lf iesi:1nr !or.1ar .lrie.! rn'r:1:re.rL. Je!.-:e li'..rati_ zation of sr.h inr.slmeni ollers jr.reasiiglv atrac6 e potdniia] t't Ja?aneJe
-1U.S, inv.stors to iniprolc their posjrio, in Japan zrd othcr Asian malkeis and is fcrvertly sotghr by 301ie imPortar! U.S. irdls:ri.s For its part, Japzn Creaily f.ars gIorvjng ?ressures in tnc Uniled Siates to rcstrici lEiPorls. Tne Jap..esc !i.v wiil exfem€ conccr, actioDs b, otler counLri.s wlici mig\i restric! Jaran's bad. Fox .aam!'l., Jap:n rezci.d fxeneti.ally !o :!c Possilriliiy of a U S bolder tar in 19a3 and suLscqnclLly suppo.i.d a I<R iarirl cut 2...1cra_ tioi as a trad. e:landing nli€rnzrive. JaPln is also concerncd abo:1 currenr U.S. !!rs[i.riors 3u.] as r!. ASP (nsroirs valuatjor Pro.edue (\,hjch ihe U. s, has de. .d to sc.k l! gisl::ior to r€more). Th. r.sira r .r Japaiese also ies.nt tetug l.rc..l illo ' 'oluntal"" exporis \yhic! dey naw. adolLed io .l.:rs. lroLecrio Jt senlite.L nr tleU-S, bni relar.t as a for,! .l U. S non-Ltifr ][rri.r.
1he.. are fodr hajor ..onomic issu.s behr€en tho U.S. and Japm al this 1nxe: (1) Jlpnn's i:nporl r.s(riclions, (2) Japxnrs h.urcrs to lorcisn dire.t invesLtoent, (3) L€xlil,"s, lrd (1) r..I:urs ll.lp fo. rlic U.s. bxlxnc. olpi,rncnls. Thc Li.S. mal rl som. pon,L lrve to decide otrils lrio.ilies arnong inese Iour ar.as, consi.lering bol]] .lesiuLility f.om our sl.ndpolin and possib,lity oI acli€!tug Jnlan's .dopernlion. SiD.. ure fo.tn.onr g h.Lde missioh to $e aar ,.s1 \till deal o y wilh thc iirs! lh.. ol $ese jsstres, llris prr.r \ill locnF on ih. aftiroL,lh rclcDing at slrcril ponris 1o rc nnDli.nlions lor our b3lrDc. ofpalnrenls 3rrargemenrs \iin Jap3n. our tcrtil. tl.cisiobnrrst ol..urs. relnle to Kofe., Tanrar, 4nd tk rg liong as Nell rs Jnpar.
Lr siSrilicut rcdu.l.iois lL. Prcs.nr U,s. poli.y is to press 'igorol:lJ quot. roslr-irLions pre.enLlI cDrir.ted lrj JnIb, sircc bodr co nlrics qr.c Ux* drei. irtc.osls ir€ bosl s.r\.d irr ilid. .$lnsioD r.lllcr tlur..Dir..lid!. IloNever, $e hare n iciied in Lilrlput neAolirLions llat lho ll.h oI a sxlislcto.J r€sponse at .D e.rly d.r. \fill n,rk. it neccrs.rl, lor the L.S, to sect CA?T auihoriz.tiotr for rcl.liaturt a.Li..ir x:l.nrsi J.D3n. '1lie tn:l..1 51ri.s !,i3 ils. Nd. coniinLing rerrescEalions lof rcdor.l oI oLI.r roD lxrilrl)ir.iers. AnI V. S. rppr@ch loNerl s.nievnrg these olj€cfi,es
\ill
L. h:,ldicappen
! sitrnrlt.h.ors rllorl t orilnjtr r.\r rollni:ry c$o rellrliDts ffotu irlid, ..9.! on *ool.n bd srnlhcti. tcrlilcs, or bJ uJ ouEr ti,S, lr.t.ctionisl ac-
by
tion RlleclinE J3prn. Or ure oihcr l*nd, ne\ U.s, initiilires to lib..alize lrade Nill rej)L.ce our €ff.rLs \riLlr i.!in aDd nrtuimize to some C.Aree t!r. costs liircd Luccr...\ eliofnitir.. sp.cilic lib.frli:iins srcps o, Dxrri.rlar nllcresl to Jipd, srch 1s reloxl .I -.\sP rld olllcr crslohs ralelion pr.c.rhres lvhich afiect Jspuese exthrLs, roukl be porticullrlt cosl-li itilrg, Tns Rcri.$ GrouF is agreeJ
tlrl lh. U.s.
slotrld contiDue lo pxrstr.
4!3re!Ic r,
(a) c.rii:r8]!9!tae!|!9\!;r-qr_-!*rsTau_8_&].-r9!9r4 gtbr.rillqbrt]4ts or:r'rL.rr iir.rcsL to fl'. r,.s. ! xrr o) .!!r_]!-!!.rii. ..iL..reflrr]]rNr.s (c. g. , Iormrr iniocl:i-erdqrJ]_\t -IllI)_1licai1s,lrlr_f l,:Benot f..fi...ri.q ir a r€as.nabl. rri.Lrl.rii.i..
1.
nr ir,rir.r i. ilrsr.lr i L;.tI l ii,lnlrirlli.r lor rctrlirtory acrio$ egf,nrsi Ja-.tur, telrnrg rl[t it migh! hrve a .hritr rrarrio. in othe. major Jarrase narhels, Dx.li.ut^rl, Europo.
Jtrlnd
|"s r ni.rjoi iit.rli
!,
Pressnr. lltr.(i,\ !h. rnLtllilrL,r'.1 C.\T1' ,r.nt.$orli $oul.l cas. ih.
tlsh ol Lh. COJ i. jrsiili|g doN.slicrlll nentbarricrs.
Ll,c
3. A scl..Lir! .nd t;.siLl. Ir.1i.J'\rri.lr sflo s only tnc ceA....l nt
r€mor.l ollfnd! xnC !.st
Rlso uscs
nntllilat.rtrl ci:rFls
ill,J.ir.rdlstnn.cs aDd aloids rli. d&rrgc 10 o r orcr.)l rcl:tions \viil J.).a $hicI is nntf.nl nnilii.r:tl U-S. r.sort io sxn.l!ons.
q.!i 1.
'1n. p.l c, js
sl.$, con,!I.x,
2. lt lr.s noL vorked !.r)
n.1l io
nn.l diJlicnli to
rfl)lJ
iD a
c.rrsisl..l
deLe,
3. rl coLdd deterior:le inlo a!9&9!
Folicv
olr.hlirion
or bc o!er_
tat.n by Corg}'.ssion.l a.lior nnF.sirg nnndntoiJ sanctiom.
4.
xvch iI successful, th. Doli.yvilt nol hxre imlact on sctnal 1r..1c.
i
I sigiiricurt jm
'oror.r
L',on,:l ...e:qJ.'
:, cb!
!.rri-!
couler-rlqq:qs!,3!!4q!lQ!t!ril_s:!!rl!
-,,".,edb,",\
lqlllql
ediale
\ o 'l
ro...).
.l
Lr.gLl9!tll!1!!!:
!iqls)
Egl ..d finm.irl
1,
Japan's e.onoilic
2.
Undof e\isling d.mesiic l.Eislxlion,
d.DendeDce lpon
re
fie u.s. gives
could incrciso
us
tl li.3 or
gre.l
trnporc
iglri lrve snccassiil p.o3p.cts in tr!d. lerms lrecNse lalrn l'odld: (a) presnm.blr l,herllize lcce:s 1o ils har'\ot rathet tlu sdioNlJ dahiSe urc ajor m3rtpl lor J.lctrese exporld, rrd (b) hnir rre e\nli of ils r.t.lirlion sin.e ure e.onnuic cosl ol a ll..lc co.rront3rior *onld lrc lar Sl ertcr io. Jlpdn.
3. It
! discr.tiorar! ji:sis coulJ o5!i.lc (..r3'c> io. .c':o^ro,ao. r1 .'or,, oep"..,a' .L f.'['1.1o". and cvcn rroF &DRs:ng to o,,r r.lrliof,s ,f h J!!an and olltcr ..nr}jes. l.
Lrsin! the
m€.sr.s avlilnLle
on
q9!l
r. U.s. lrad. rcixlialion or s.r.lioDs ro!]d d:nl*eoL\ ov.rxll lorcjll poli.l, rchtiorslnp iitlr .Ial)in b! nriling rh.Ig.s or nlinlridiii.n inrl tLs!rirni nali.n a.d $ouldNca\cn LL. pro U.S. .lion iviLllib ixlln on sectrril'':nd oth.r Unil!L.rRl imr,!siLion ol U.s. imporl q{ol.s $onld not lr. l.!.1uLld.r GATT drd \youkl t!,.r!Iof. scrjoxsli !1Lect ou. Dosilion orlead.rstip i: irl.r-
2.
Since jt is ruril,cry $xt lj,s, Qlts could b. tirnil.d to Jq)rn, fl,is .oulil Iend Lo r lull-sc.lc !raC! $ar rilh oLiicf nrijof c.f
3.
polic!
'nrl.s.
4. It$otld r.tu.e
Jaloesc (illi,\Jness to , rxn,tain.r,DorL r.rLx:rrr or
5. Illv.dd likely 1e3d to Jxir.r.s.
rcixlinnon ag.itrslteJ lrs e\Dor.s
lcul to redrcorl Ja!i!r.se \rilli4rcss lo .oop.r.F \n\ d,. d rcnlf..liz.rion oI u.s, on int.rn.lion.l fL.r.err its doll.r xn.l .clrrnatrg Iro coNcrLi.s €{I.nditt.s ir J.lrn ou nilitnrJ
6. lt
cotrld
res.f!.s lnto u.s.
?, floorl oI
Eol.l,
Tle policJ coxriins tlr. d.lreer oI ercouragnrg lre C..9.ss to pxss
imlort
quota leeislation
.
rol htiled io JrFm.
3.
!t could crusc Japan to eplorc r61.1ionsi[ps niUr Co onnnst Chin. and/orthe USSRNlichit\eonldrot. ulder pr.se.t.ir.unrsto..si our.rrisc do and $hiclr hiBht htrIt our intcresis.
-8i9!r!!li.s,ri-qi!!!rs! p!is!-ll,lir49r!j! !!ll!l! The t.S. I^s also nadc c.rlinuirg r€fr€s.ntRti.ns lor lihTaliTolior oI Japd's resld.tions aXinrst lo.eign dir.cl irrtstment. rl.inU rn re:Ponse
to our lrodding, lib.rrliz.ticn hns tlhcn p!r.c rnd i\e Jr?2naso rssure us thot Iurdrer 5te!s lrill lrc lorilcon.ing, NeYeruicless, ,rnD.n's resbicliolr rc mdin b, f.r thc ti3ht st mrirtrincd bJ any indqstfinlizctl .oulttl and theJ continue to rr$c ihll hLr.I of tlr.ir n,arsirr corld ho! slx.d direcl conn.lition ,t
no,e rlnr lo.e:s. . ,:o-
Ls,' o..o..rro
Sete.al U.s. induslues, such as atrtonobilcs, are i.tensolr interest€d nr S.i.iDg dire.t ac..ss to urt J.D...s. mlrh.l. lt is nnl'ntsi n. b .LLLx.ti! the rolunrc oi L.-!. inrcslm.rts trhicnmi:Ilc t:r.l.if. i!hlii.rs $.rc
lo\tr.d bu-! ii.oUai|.LrjL. i."r!_,i t ro\:t!lr .I.h lxrirr t]lr iiE ir.fet,s. ir lride $hi.n {ould resuil lronr co.tspon jng reducrions in J.panese ifrFort
rr
41
, orL'':::.
1!l
-S:g
1,
Achieves
2.
Avoids D.ssirlt si3nificant
dajo. lroliticrl
gain \vilh
J!!.n.
slorl tcnr c.sts to U.S
3. nenlor.s oblion: .orlljrLNith U.s. brl
dce oi)ayhcnls
p.o!r.nr lvhich
rcsbrnr lorcj$ di.ecL irrcsrhr.nl bt u.s. fhrns.
seeks to
!!!! 1. rrorecocs trolixbly siSrific[l loig lcrh coNncrcii] 2,
bxlxhc. oI pxynenls
nodnccs
sxins lo
r.s. firrc,
rrogtss lo\rrd !.]ric'j.g onr o)j.clie. oitrecnrg rll
i:rpcs of
n .rn.ri.hnl tfnnsa.tions-
sLrio(slr lrnrt oLi relrtions ir lli. U,S. blsinc:s ..nmnnitJ..d risli losingil,oir surporl Ior n liDcril hade !.!i.].
3,
Could
Ir: qo\llllta_] . [,j! !l!! ]!t_!t!!!g lg9rr:lrl L\c! ]!lt!r .lrj.{' lilrsg!r.s,-vq!{ !!,!1!!! !!t&,r.,!tL,s !!!!!!! !lll!lLl1l1!1!-:lir:, Au.rn.1iv.
1. Aroids.ish olrnajor polinc.l
otr
coDfrortslion \,!lh JaD.tr.
Provi.l.s oDDorhrnity for : s.l.clilc .rd ltenble }]olic' lhi.n arords coblinuin3.hxn.c to rxrJ in.erti!â‚Źs md s clions .s $arnrle.l bJ ci.cnn_
2.
3.,At lcmr pxrt\'.esponsnc
10
inlcrcsls oI t:.S. busincssncn,
A!!i
1,
onlJ sliglr liltolihuod ol g.ttilg accolerm..i Jq.nese response-
2. nisls
diss.rrslaction ht U.S, bnsnrss xnd possible r.dlcrion olil:o:r lor suppori libe.rl U.S. lrnd. policl.s-
3.
Por!.lLrltos ur. confl!.i{itn our lrahnc..l p:,!nienrs rcstnints pr.-
o --L:. Al.,, ", : I l. .' la" Ior JaDo, j{ rl.t dq n L relpoid sal!':!lg!94L -lllrllil l!!1S100 nillim ,J .'or' ,.'1. o:...: | . t.eall.rr und.r tl,c \olrmrxr! !]t!ill:!!!!llli-!\.t!rcjsrl l.ndilq r]1 LL fih,n.i,1
1.
i's1i1Ltrions ad.rillisLcred br
cc.rotr1ic jn)torLx.ce lo Jrpfu!.I .! ra:1 si|rificant ]c\c{1. to lhe !-.S, positior.
Circtr 1lr. poliil.3]
trc.tnerl, so
!r. lcdrr.t ]l.scrve ndrd,
ud
Eorh
lh.ir pr.loD.d
2. Illhe tlr.eli \.r. i !)lo r.ried, corld n,:.rsinrllt lr.lP ttc U.s brlrhc. ol rrNnlerls Ll r.dr.ils c.riLrl oulrlo(s i. Jalar. SqL decisidn iJ lle Niron Adnrirnstrnlior l. rc!{niaLe the pasl U.S. rccolnjtion oI Jarrn'i6 slc.ixl c.ononic .€l3Lj.nshi! {iLh fic U.S. ar.l lelcc conl.l raisc l Mjo polilicrl roN $(h J.Ixn.
1.
$rould rppear as
i
2, Il lhe thr.alirad io b! in!l.nc!l.d, co l.l lead io Jipahrs. rclxljril.n in lre olcrllbrlan.. olpxtnents li€1.1, suclrs uDNilllnsness ton.xhrliz. U.S. militarr .\ptndilrD es in
JaLrxn and
.enrcrsjon ol dollxr reseNes nrb g.ld-
Gir.n Jalxnrs slilt jnto a siztrle { rmsoMoly sixLlc balin.o ol prl'_ hents snrplLrs, md ils rctlu.ed reliancc on U,S, cnpitnl, thc pr.le.red irert_ hant hay no lon[e] b. nccded a1,\1\rJ -- ns apEoach, iI successlul, $oul.l inDli.itlf, tic onr l\a.ds .lnnirattug the prclcr.n.es in ihc neax tu1ure. (1hi3 .on bc.omes nlnrirortrnl iI$c xr. successfLri in climimling tnc coiimls.nd lhe lnT alioredFr si.ce the preler.rc.s sou!.Iobvious\ tla disappo.r. )
3.
Allcrn.tive
1!' C)14!11!4 !!!1!r!!l$1s in,\ll.
x.iv. !1nr'!lre
p!s!g!s !!!!&u !!i!-Y,l9i.l!L1,!lor-4!.-{i19!: !rl-!!rl! $e Lr. : j 1r)4!.rrbrr!!!!!!11! l!rrlj,,r:!rr!4!re!r!!t!!1,9{:ls&{h
!!!i lerer'.ge in achi.vi.g ou ohjc.tires. (lr the .rse oi reslrictlon. otr ,nDar..r lnr.stD.!t in ihe U.S. , could deDar tlrrn rcccss to U.S. haturnl rcs.ur.cs rhich the} eovet).
1, $onld incrcrse frir
2.
rvoukl lorce Jn!1n to coordiu.tc its tr.dc
coxrtDa^-TBL
od inresrDert Dolicr.
as
q9E
1. nificr d pli..nrs ih. cons ol Alr.rn.ti\.II ir llre trad. s.clion or, iI con$in.d rilfi Alt mxtirc llli cnDlulal.r \ith th. cons ciloil $.rc.
2.
Jlpanes. irecstnrenl nr ihe U.S,, Notrld be ijgh1, disc$ninxto4 and rvould hurL our balancc ofpavhcrts in the shorL In Or. case
otr.strictiors
oD
!ar&! fie issuc is hov lo d.xl Nilh ilo gro$Lh iD inrrorts oI \roolcD ..d s)Itl.lic tcr(ilcs n,b rrc u.S. sitNn llle lr:mc\ofh ol oLr orcrsll lrolicJ ol lr.cr
trade, in nccord.n.e \filh pl'crious '!dmi!istr.Lion s'dtemenL! on ie\ti1cs, rtl ta{ing inio accoutrt orcr.ll !.S, lorcign poli.l inter.sts in J.!rn .nd thc .lsixr LDCS, Tlrc tlrce Asixr coruh'i.s public\' irl lriral.lv rnd llohg lidr! Drjvatlll hrr. c\prccsed opposition lo an! roluniarr rr.nAcr.\l and hre disctrss.d jonri oppositio. to otrr profosnl.
agr..rl.ni o! t?\til.s \illb. :ccoNFaricd Lil' I correspondiig r.dnclioD in Jrprtris f.slonsi1.n.!s on LIc olh.r t{o cconouic issrcs.lreadr aiscLtsscd.nd perl,nrs !r ldr.rse polilical rcoctions. Ihtlr. ose ofdr t][oe LDCS. 3rr tc\lil. rn!r'o..h nill run c.Lul.r lo our prolessed foli.v
h
tha c.se u! J.:p.n, ary
ofsunporLiig econ.ini. d.vclopm.ni rhror:tlr trjde 3s {ell as xi.l; uris conn-a.1i.iion rvill bo prrticrl:rly crhb:truiri.S nr riorea axl lanral, nh.t.u aid . olts h.re stresse.l eipansior oI lh.ir €xForts. l! .ddition, ine tn.ec ]-Dcs especinllJ Korcr ard T.nran -- ,rc 9...1\' corce.led ibonl lI. in{1c. or thcir tr.S. e$endinLres fo, ltrc $.r ]uvc econonri.s oI th. .nd ol llre \ stinNlns, altlonglr its iqrorlinc. hi. proyided them \dll, nn.dd.d econoi\ic boen d€clhiug, an.l $cJ a.c r.ttrely seehi'rg oplorhhllics to tulhcr incrc.sc tl.if eQorts to.ompe.rnte lor LI. ealect.d ccc.crscs in u.s e)?ndihr.s, Sirce tertiles ar. i k.r. cor:Donent of mI sr.l ir.r.13e5, a r€ilrest llr rcst'.i.i. at lhjs thne \ill bc rnrti.nxri, foLlreson]. to our or.rall relations \ilh ll).n. rn 1n. sp.cific cise ol Iiorea, 1re $ill Iace d.inand. I.r comp.nsltorl 3id sin.c \vool€ns and sytnhetic textiles e.count for ii percent oI thei.lo[x] terlilc exlorts The nl.lninde olthe costs (.nd lonelits)diilers thon3 urE alr.nntne 6lEciljc aDproa.lres o{uin..] lielo\. In 2ddilion, ure corts lill bc :Jl..lcd b! Ure conte* in$hich our proli,ssl Is rrde. TLc-\'cd rrc rc'.l!.ed, .sieci3lll vis a vis Jem, by ! firnr Annihistrxliotr .onDril.re lq!.el elimtnriion of nSP indlossibt.thcr cuslons ral,,rtlDn lrocedurcs, toltrhc othor r.xil.libcrxl jzi.z s!DS, dd lo liDill r.rist !r..ic..i.,rilt I.Si.Itrri.n, ln :d.lit!.!, ll). A;,drs ry.n].i, oI ..!.r., rre mor.. i:illi:g t! rc.oFl r.rlricliois ii tlre., rei. conrjuccd dri uDilat€r.l quota l.gistrllor rns ! reel possibiti[ in Ur r]sen.e .i wolunarj, rcsh.int r9eeD.)ris,
lio! i5 .rcnt rJlr cL!r.tr, llt. Jr.!i.n Cr.r! .gr..i Llr.ri n.lre ii.l.,trr nr thc lorLii.oirirg.l!i.r L'i,r ll,rl rr coDsid.r onr i,r\lllc i)r!llorl 1, b. .xlr'. nclJ s.rions. 11. sltonkl sxt tl,rL \e b.liey. tl,r'. tlrc. lilrt.riil.l)lihrLn (Cl li.I l) is ttc L.ri I rili,Ll. add, iD lo\r l.!, $Otss .n L.F.l[Ll ol]rcr .otn[i's ri]l xgrrr Lo d,s., ss it rv[h ns al : G]!T] m!.Li.g. rnl he slrrdd .lc.rll llnrc ol].r rll oirlions for shiIli!g Lo. dilLr.nt apl)roacL if . nlllil.liml arrsng.rr.nL.rnroi bc
{,Ii.he.:.r
s.crclxrJ
ot
SLrns rl,otrlC
. !I!!!!.{\r!!,!lt!l!n,i9-rll!I-\jool .h,l rMm.{lc C r,.nl on lrl .r n1,l,l. 1
tibcf tcrLil. pro
!q 11) Th.
Pr.s .rlrs
!on'
rilNriri
1o L!,.
nnl,,sLrr
iorlrl L. nr)lil.c,
(2) ti$onl.l rer.rc a nxjor trolili..L dsl.clc 1r n.\r rr.de lelislxLton and .oxkl tl\: help corl rc pr.s:nrc lor Drot.cliohisL.clia,!s to 1rr1!los. (3) Avolds rist oI lcgrslrt.d q!oiis xnd lrn& risli oI J.!'cn,g reLilr.Lior $hr01r conld pro(lL,cc a trad. r2r. {.1) A GATT sucliohed.!rrtrn.rt n.rtd htrre a 3r..Ll.r sorn ol rcspcchLilily anil frorid. rtr iri.rn.Lio!il,\'.grccd se'! oi:J.Ls.l r!].s,
(5) Redi..s.otts nr,rnr.n, snr.c jl no\1.1 r.t)ro so cldrrlr sn,:lLtl ou" for rcsl.xint. (ljolvcycr, cJuld nr.rcare c.5ts h IiLLr.Do lor sr.re r.son, (6) I n1hl.s 0s t. d-xr \ill rDr .irr..rlli! .. rnl.:i \iiLl..,l tlf ti,,.xt ol r.lxli.liou ii n.:o1i.L.d L,ra.r C.\'l'l !tl,i..s,
(lj irrc.tl tri.s
n;1h
rrr!
1.!:i .l r r...r l.:;lr]]iiox n,r liiririnj i.i!,,rfLs h o,i ..Irts
\,lrol1. d. rt!i Ii1r. iia..,!.its.
(3) Prorid€s n n,ecaxrisxl for rclcctilt us. of c6!l.ois o! scnsili!. items, .s ralidlr ns r,..rssxl-i i. dcal l'jrh tusi-.rori,ls ir::de sirhti.ns. (9) Pr€rcnts Nstrai,ring c.un'.ries tuo,r sotlill sr.cific ha.lo conrlo.srlion
IloD
s or
rehlixtinr l.sll1'.
qeL (1)
Iiill
i,rcr.as..DDrch.rsion !b.ul
tl.
tuLLUc
dir..Lior oI U,S. lo.eiSn
(2) woul.l loslor atpeararcc ol Lr,s, liiurope.n collition xgnnrst
r.;\si.rs.
G) n.quires rooljer.lion or nnropcrns ud cx!.dians Nho ru!. a,redJ ItDitcd leslil. iE1]orLs l.on rLia \ix lilxlc*lor uilxl.r'rl .onlr'ols and Nho Inr. alrc.dt in.lid(cd rel .irrcc!olel!U,s., for. lrrictJ oI rcasdns, nr.ludirgUrcir donLts rlioul t)i. U.S, c.onomic casc. (.i) lvoukt e..oua:c.tlrcr indlsiries in u,s. d :Llrroad, \v h srong.r e.onon c .as.s lot lrlot .Lion. L s.ck sirnilar arrlng{.1ents.
(s) DislorLs IrGi. !r.nc rib.raliTinS plrtosca or CAf'1.
2-
N(
ooli1rc '
:!1r J r
llr!.: (r) Con.enn at.s
'l
.
phll.\r.rcrs! tlrerebt mirimiziugloliti.Ll cosls \rith.ountries 0r.inly ii nrroFc) lririch \voild no!Ic nsk.d ro reslmir (2)
on
sF.cilic
l..r.s
cATl
G-{11 ouL of tle !!ctrre (al rongl in prin.iptc N. Preier to sce as the fo.al!oir! for [ad. jssu.s).
(3) probablt aroids .Luoh leeistati.n
(r)
Arso prerents pensrrior f.oD ns
and
lcn.o risk ol.elnljrtion.
resi.rinins .oLdl.i.s tou gctlixg spe.ific tlde con_ or retllirtins le:JlJ.
f9!i (1) IIdustrJ \onld b. diss.Lisler]. (2) I'.jls ro prolide a nrcanr oI prerdntnrg n.\v e\lorl.rs ndr rl}nily o 6ign.d xgr..Llp r brsc levol .t U,c -ii,erso o{ couxirics reho l
huildtug
nâ‚Źnts, (Tirir is prrnculrrll'
objcctionxblc to JrDUr.
)
ll) J:Yrh.ril iI. olrnr Asi:.i. ror:J lie sinsl.J ot,L D! rliir .l,l]rra.r :jd hen.c .osri riii ihrn xo lrL r. i|.r..s.r]. l,lhis ..dd ri. Il1rri.IJ ollr!]i
b) U,S. sl.l.m.nls \li.li r.rU nat..le otrr tulc.1ion oIfulotixLnrg ncnls rill otlt.rs as Dccd r.is:s. )
3.
llarr:ct
xilr..
ltit tl:t'tiotrrrnstitf- tq!!-s!
.r | ,\ ,.,. _.,. .. ..0" ,.( nc.d lor il, bt nsing O.1T1 .lr'1lrl. x X xirllrr orn .scrl claar.. ColrN.x tion cor1.l Llr.tr lr. i.!,io!irtcd Lilrlirxllr.
(1) Prolccti.x is scl.ct\'. d lin)iled lo .!scs \icrc r.al problctls cnsl, ther.bJ ncul.alizins fr.jor sorroo oI ior.iAD oirposilion !o l;.s. elfort. (2) Silce .$li.jl co,nr .!sili.x ie l]rori.led, duag.lo â‚Źsts is sh!.!ly redr.i.d.nd l).rhps $lioll] aroid.d.
ou.r
U S. jnlcr
qsrL
(1) Ihdrsl$ hns tccn djssxiisli.rlrllh a,is apr..ich h tlc }nsl r..l01rar il,js approach xriglrl no! rer\or. !oliLi.rl obslxcl.s Lo neN had. lozjslation.
A ."1"i
{2) Thc c.DLrols mig,ll bc in.Iroclivc.
a.l l..o l ".;d..,.r .Inngc jt IroN a conLroll.d
i
ilcrn
td
xchine us.d ro mrlt( ox.
le\Lil.
- ',oo 'r... 1..1.''i
urcollr-olle.l itcm.
(3) Prcsont cscxno cli sc provjsio.s \ioLnd lirc to bc nmcndcd 10 ,r!lt. r-lls a}pro.cl po;sible, Th. !.esid.rl l[s shernj .lcci.l.d Lo s..h s!.r.rn.nd_ mdrl ir dris Jc.r's ir'.rlc l.:islati.n, buL io do so il llris .olrcJ nrie rL g.t ur a clans. (hl.I leunitLtd ercesrir. cscapnrg! snrce tcf,lil. indhLrt sapporl
(r)
Thc
}rr.sxl.ltr.u,.l
iion, inl 1 Cr.isinn
..
.
1l! !
L,r
rh
trrill
cuLiing auuDrity tr L,r.vidc.onlPeNrscct snllicicnt rfur.riiJ irxs 3l..xdy LcDn nlade
nccd
r
r.L',
.'.1.-"e..-
Tnc Ad,ninistu:ior .oLit n iciLc uEl il sotrkl nr!I).rt, al lctrsr rx.ill!, . bill rhich did no', rdshi.t inrt)!rtr L.o scrcrcll rc. g., rJ roU;n.ir: Ir..L pr.s.nL le\.ls ard so.r. sl,tL.jrq ofmxrlcl lr.rlI in dE tulnre).
G) Coul.l arcirl nnconrroll.n lcAisl.rion, {hi.I could be so restrjc ,e tlat it\yould gereut€ s6.re r.rrli:,lion, scriorslJ drragnrS ovcrrll (2) lvonld prolirl. slf,niEhlroNud iFirlorch 10 fi. prorreh pelhlilliug U.S. to pro\.ide com!.trs.tion $roL:!h.onriensntingla.iflreductiors (\yh.n auli,d.in' b do so is obt2in.rl) o. lorrig! .ou.Lrics to relriixte (3) Wotrkl reli.re us olonglirg LnId.n of ncgotixtnrg .nd .dlrnisilring roluhlary lorcig! .ontrols. agrr-
(1) \,oul.l ru rirt of allorins lcSisi.lion Lo AeL ouL or c.ntr.l !s pro (r) uhlcss a Presi.loiir! r€lo trdr rlrr.rlrnld in rosporsc,
(r)
\you1d co5trhc
U.s, inlcDrs ol..hpcnsiti.n or r.lxli.rion
(3) Would lre dillicult to av.id
p.. as Fer
snrrhr fe.tm€nt Ior other nldnsties.