Foreign Relations of the United States, 1955–1957, Foreign Economic Policy; Foreign Information Program, Volume IX

33. Memorandum From the Assistant Secretary of State for Economic Affairs (Waugh) to the Acting Secretary of State¹

Washington, May 26, 1955.

SUBJECT

• Request for President’s Approval of Results of Tariff Negotiations Involving Japan

Discussion

The tariff negotiations for the accession of Japan to GATT, which have been in progress since February 21, have been successfully completed. In these negotiations, 17 countries, including the United States, have negotiated reciprocal tariff concessions with Japan. The results of the negotiations, especially as concerns the balance of concessions obtained and granted by the United States, must be approved by the President before the United States negotiators can enter into an agreement embodying the concessions that have been negotiated. If the United States is to sign, Presidential approval must be sought promptly since United States authority under the Trade Agreements Act expires on June 11.

In an enclosed memorandum from the Acting Chairman of the Interdepartmental Committee on Trade Agreements,² the results of the negotiation are described in detail (Tab B).³ A memorandum for your signature transmitting this material to the President is attached (Tab A).⁴

The negotiation between the United States and Japan, after an initial setback caused by Japanese misunderstanding of the negotiating techniques, proved very substantial and entirely satisfactory. The United States negotiators were able to obtain Japanese tariff bindings or reductions (chiefly the former) on goods of which United States exports to Japan in 1953 were valued at $395 million. In exchange we granted concessions binding or reducing United States tariffs on goods of which imports from Japan were valued in 1953 at $123 million.

The tariff negotiations between third countries and Japan were considerably less comprehensive than our own, even though we intervened, where feasible, to expand the scope of such negotiations by offering to make up to the third countries compensation Japan could not provide. The decision of the United Kingdom not to participate in the negotiations, taken early last November, made the smaller European countries hesitant to negotiate especially since France took the same attitude. As a result the important Benelux countries reversed an earlier decision and did not negotiate with Japan. The United Kingdom’s later public announcement, in mid-April, that it would not accept GATT rights and obligations with Japan intensified the difficulty. Moreover, since most of the countries that did negotiate have little trade with Japan or buy more from Japan than they sell to it, the possibilities for meaningful tariff concessions were limited.

A good beginning in helping to expand Japan’s trading opportunities has nevertheless been made in the third country negotiations which cover approximately an additional $13 to $14 million of Japan’s export trade. More importantly, we anticipate that the negotiations will lead to a favorable vote by the two-thirds majority required to bring about Japan’s accession to GATT. With accession, Japan will be assured the very important benefits of guaranteed most-favored-nation treatment in all GATT countries except those which exercise their right to refuse GATT relations with Japan. This achievement alone means success in one of the important economic objectives which the United States has been seeking for Japan.⁵

Recommendation

That you sign the memorandum (Tab A) to the President transmitting the Committee’s recommendations.⁶

1. Source: Department of State, International Trade Files: Lot 76 D 75, Memoranda to the President, January–June 1955. Secret. Drafted by Potter and concurred in by 10 other offices or bureaus in the Department.
2. The Interdepartmental Committee on Trade Agreements, also known as the Trade Agreements Committee (TAC), was established on June 23, 1934, to make recommendations to the President on trade matters. Its membership included representatives from the Departments of State, Agriculture, Commerce, Interior, Labor, Defense, and the Treasury, the Tariff Commission, and later the International Cooperation Administration.
3. Not printed. The memorandum, signed by Acting Chairman of the Trade Agreements Committee Woodbury Willoughby, contained individual annexes detailing U.S. and Japanese concessions and third-country negotiations with Japan.
4. Not printed.
5. Japan became a full member of GATT on August 11, 1955, by unanimous vote of the contracting parties. The text of the “Accession of Japan to the General Agreement on Tariffs and Trade” is printed in Basic Instruments and Selected Documents, Fourth Supplement, p. 33.
6. The memorandum was signed by Acting Secretary of State Hoover on May 30, and the Committee’s recommendations were approved by the President on June 3.