Foreign Relations of the United States, 1952–1954, China and Japan, Volume XIV, Part 2

493.949/8–2753

No. 679
Memorandum by the Deputy Assistant Secretary of State for Far Eastern Affairs (Johnson) to the Secretary of State

secret

[Washington,] August 27, 1953.

Subject:

• Japan’s Trade with Communist China

Discussion:

Attached for your consideration is a proposed telegram¹ on this subject to Embassy Tokyo.

The telegram instructs our Embassy on the reply which it should make to the Japanese Government’s request that it be released from the terms of the 1952 bilateral agreement on export controls and be permitted to relax its controls over trade with Communist China to the level agreed multilaterally.² The Japanese are bound under the agreement to embargo over 400 items in addition to those agreed to be strategic by the Paris Committee.

After learning of the President’s views on the subject transmitted to you in Denver,³ Department officers drafted and attempted to clear with the other agencies concerned a telegram that was considered to be more responsive to your instructions than the attached answer. That telegram, in substance, would have informed the Japanese that the United States was now willing to have the bilateral agreement lapse by stages. Defense and Commerce, however, were not prepared to have the United States at this time commit itself to eventual elimination of the bilateral agreement. They base their position on the recent NSC policy directive (NSC 152/2)⁴ which states that we should “continue intensified efforts to persuade our allies to refrain from relaxing their controls on trade with Communist China.” The attached telegram says, in effect, that the United States is willing to see some readjustments made in the items covered by the bilateral agreement but these adjustments would by no means result in a liberalization of Japanese controls to the multilateral level. It represents the best compromise obtainable without a Cabinet-level review of the question.

Recommendation:

It is recommended that you sign the attached telegram if you consider that it reasonably meets your wishes and those of the President. If not, it is suggested that you raise the issue at the Cabinet level. There are alternative approaches to that contained in the telegram which would come closer to the Japanese objective of dropping back to the multilaterally agreed level of controls. These would be: (a) to drop all items from the bilateral agreement which are not on U.S. security lists; (b) or to drop the entire bilateral agreement.

Concurrences:

E concurs in this memorandum.

1. Not found attached. Apparently identical to telegram 523 to Tokyo, Document 681.
2. See footnote 2, Document 674.

3. Dulles’ memorandum of his conversation held in Denver on Aug. 10 with the President, Robertson, and Ambassador Lodge reads in part:

   “I reported on the unsatisfactory condition in Japan as regards their own security efforts and their economic extravagance in terms of imports. I said that I very strongly emphasized this in the same talk with Prime Minister Yoshida when I had advised him of the prospective return of the Amami Island group.

   “The President expressed very strongly the view that we should encourage a liberalization of trade between Japan and China in terms of non-strategic goods. He felt that trade could be a weapon on our side and that such trade was indispensable to the livelihood of Japan.

   “There then ensued a discussion of general character with reference to US trade policies.” (Attached to note from O’Connor to Waugh, 493.9431/8–1153)

4. For text of NSC 152/2, “Economic Defense”, July 31, 1953, see vol. i, Part 2, p. 1009.