Foreign Relations of the United States, 1961–1963, Volume IX, Foreign Economic Policy

288. Memorandum of Conversation⁰

Washington, October 1, 1963, 4 p.m.

SUBJECT

• Woolen Textiles

PARTICIPANTS

• George W. Ball, Acting Secretary of State
• Ryuji Takeuchi, Ambassador of Japan
• Thelma Vettel, Special Assistant to the Director of the Office of East Asian Affairs

The Ambassador said that rumors were circulating in Tokyo to the effect that the United States is approaching Italy and the U.K. on a plan to conclude an international agreement on wool textile imports after the pattern of the cotton textile arrangement. He said that the Japanese would not like such an arrangement and were concerned about the possibility of such a proposal. They fear that one day the U.S. may approach Japan saying it has agreement with Italy and others and asking Japan to join.

The Acting Secretary said that there had been great pressure from the American industry to do something about wool textile imports. This was a matter of considerable discussion within the Administration some time ago.

Mr. Ball said that not very long ago representatives of the American wool textile trade returned from the U.K. reporting that some sectors of the British trade would favor an international agreement. The U.S. Government therefore inquired of the British Government if they would be prepared to consider an international agreement; the British Government’s response was negative. He said that we had not discussed this with the Italian Government, although we may have reported to them. Mr. Ball said that developments in wool textile imports continue to be a matter of concern. He said that we have again been advised informally by the American trade that they have been in touch with the British, Italian and French wool textile trade and that there is sentiment in Europe favoring some arrangement.

The Acting Secretary said that the U.S. has no present plans to try to press for any kind of arrangement. If, however, it were to become clear that the British and Italian Governments were inclined to go along with an international arrangement, we would find ourselves in a difficult position to avoid it. Therefore, the Acting Secretary could not say that the U.S. would never come to the Japanese Government with such a proposal.

The Ambassador said he hoped that Japan would not be placed in the position of being the last to know of any such plan.

Mr. Ball said we would keep the Ambassador fully informed. He pointed out that the initiative had been that of the U.S. industry. He wondered if the U.S. industry had been in touch with the Japanese industry—as they had with the British and Italian Governments. The Ambassador believed the Japanese industry had not been approached.

The Acting Secretary wondered why the Italian industry would favor such an arrangement.

The Ambassador said his information was that the Italian industry as a whole opposed such an arrangement but that certain members of the industry are resigned to it. With the “Kennedy Round” in the offing and pressures from the U.S., some of the Italian trade reportedly believe it may be better to acquiesce now and get a better deal. The Ambassador said he did not feel very sure about Italy, but felt more sure about the British. He thought perhaps that it would be best for Japan to speak out. He emphasized again that the Japanese do not want to be the last to be informed and find themselves cornered.

The Acting Secretary assured the Ambassador that if the matter reached the governmental level he would be kept informed.

The Ambassador indicated that, without referring to anything the Acting Secretary had said, he intended to warn his Government that it must not be too optimistic on this matter. He also indicated that he might recommend that his Government tell the outside world that it opposes a wool textile agreement.

The Ambassador commented that the cotton textile agreement, with its detailed and restrictive provisions, was very difficult to handle in Japan, and to add a wool textile agreement would be most difficult. He expressed the view that such a proposal would constitute the worst possible propaganda for the U.S.

0. Source: Department of State, Secretary’s Memoranda of Conversation: Lot 65 D 330. Limited Official Use. Drafted by Vettel on October 2, and approved in U on October 7. The source text is labeled “Part III of IV.”