Office of the Historian

312. Airgram From the Mission to the European Office of the United Nations to the Department of State1

Tagg A–906
Geneva, July 10, 1966.

SUBJECT

  • RTS Negotiations with Japan

REF

  • Tagg 41712

From Blumenthal. Shown as enclosure 1 is a draft text of a letter to be signed by representatives of the Delegations of the United States and Japan to indicate that a settlement has been reached with respect to (1) the claim for compensation by the United States for an increase in duty on magnesia clinker of seawater origin and (2) the claim for compensation by Japan for an increase in duty on trucks exported to the United States.

The draft text was shown to and tentatively accepted by the Japanese Delegation on July 7, 1966, as correctly reflecting the substance of the understandings with respect to the above claims. The U.S. Delegation has made clear to the Japanese Delegation that the draft text is subject to potential amendments and changes by Washington.3

No reference is made in the proposed letter to the question of either the amount of net impairment arising from these claims or the two Governments’ continuing reservation of positions concerning the legal status of the claims. Recognizing that the United States did not accept Japan’s claim for compensation for the increase in U.S. duty on trucks on the basis of “substantial supplier rights” the U.S. Delegation suggested including a sentence which might read as follows: “The settlement of these issues is without prejudice to the positions taken by each Delegation in the 1964 RTS discussions.” This suggestion was not considered acceptable by the Japanese Delegation, and hence, was dropped from the enclosed text.

[Page 830]

The Delegation requests Washington reactions to the enclosed text together with such amendments as may be necessary to meet United States requirements.

Tubby

Enclosure4

Draft text of letter relating to RTS negotiations with Japan:

Dear Mr. Ambassador:

The Delegation of the United States wishes to refer to two issues which have been outstanding between our Governments relating to (1) the claim for compensation by the United States for tariff action by Japan affecting imports of magnesia clinker of seawater origin and (2) the claim for compensation by Japan for tariff action by the United States affecting imports of trucks valued at more than $1,000, which are referred to in the “Agreed Minute of Discussions between the Delegation of the United States and the Delegation of Japan”, signed in Geneva on December 16, 1964.5 With respect to these issues, the following are our understandings:

A.
In negotiations under GATT Article XXVIII for the establishment of a consolidated Schedule XX in terms of the revised Tariff Schedules of the United States which were concluded on June 28, 1966, the Delegation of the United States and the Delegation of Japan agreed that the new concessions in the consolidated Schedule XX constitute a “package” which takes into consideration the respective claims on magnesia clinker of seawater origin imported by Japan, and on trucks valued at more than $1,000 imported by the United States.
B.
The above claims therefore shall be considered settled upon implementation of the new concessions in the consolidated Schedule XX.

Your confirmation of the above understandings on behalf of the Delegations of Japan would be appreciated.

Sincerely yours,

W. Michael Blumenthal 6
  1. Source: Department of State, Central Files, FT 7 GATT. Limited Official Use. Drafted by Martin Y. Hirabayashi on July 7, cleared by Helen L. Brewster (KR), and approved by James H. Lewis. Repeated to Tokyo.↩
  2. Dated June 30. (Ibid., FT 13–2 US)↩
  3. Airgram A–34 to Geneva, August 5, stated, among other things, that the letter attached to this airgram was acceptable provided that the phrase “constitute a package which” was omitted from paragraph A. (Ibid., FT 7 GATT)↩
  4. Limited Official Use.↩
  5. Not further identified.↩
  6. Printed from a copy that bears this typed signature.↩