Foreign Relations of the United States, 1964–1968, Volume VIII, International Monetary and Trade Policy

366. Telegram From the Embassy in Japan to the Department of State¹

Tokyo, June 20, 1967, 1115Z.

9027. GATT. Refs: A. State 212564;² B. State 212730.³

1. Immediately upon receipt reftel B, I asked for appointment with Prime Minister who received me at 4:30 this afternoon. Miyazaki of FonOff was also present.

2. In presenting President’s letter to Prime Minister I tried to emphasize gravity of situation by saying this was the most serious problem that had arisen since I arrived here and fact President has personally written to Prime Minister on subject emphasized gravity with which President viewed question.

3. I also handed Prime Minister talking paper⁴ based on material in reftel A.

4. After reading letter, Prime Minister said this was most serious problem that had arisen in relations between two countries since he became Prime Minister; that he and all those concerned in GOJ had honestly thought that principle of Japanese reservation on food aid, which GOJ had made consistently clear throughout Geneva negotiations, had been accepted by all delegations—only possible question being formulation of terms of reservation. (In later conversation with Vice FonMin Ushiba he said that fact that several days after Wyndham White announced agreement on all essential points Blumenthal made approach to Aoki for modification of Japanese statement of intent was further indication to them that USG had accepted principle of Japanese reservation.)

5. Prime Minister said that new instructions had been carried by Tsurumi to Geneva which he hoped would resolve problem. However when I pressed him, he was not willing to say that instructions would fully meet position taken in President’s letter. He said, “We have to face the fact that we differ on what has happened and on what should be done.” I said I agreed and wanted to emphasize the problem faced by the President, particularly noting statement in President’s letter that food aid was “an indispensable element in the balance of the entire negotiation.”

6. Prime Minister said that he felt it best for locus of negotiations to continue to be in Geneva; that he would ask Vice FonMin Ushiba to immediately telephone Tsurumi in Geneva to discuss his instructions in light of President’s letter and my call on Prime Minister. After about forty minutes of discussion he asked that I immediately go to see Ushiba, which I did.

7. I gave Ushiba copies of President’s letter and talking paper, and in long discussion emphasized gravity of situation and points made in President’s letter and in talking paper.

8. Ushiba emphasized “consistent position” Japan has taken on food aid throughout the negotiations and the honest understanding of representatives of all GOJ Ministries present at Geneva that principle of Japanese reservation had been accepted, also the problem within the GOJ and the Diet of now reversing position on a matter of such important principle. He said he honestly doubted whether GOJ could obtain approval of Diet for an agreement incorporating our position on food aid, “Thus it is essential that we find a compromise.”

9. He indicated that GOJ was willing to: (1) modify the language on the statement of intent as suggested by Blumenthal, overcoming the problem of GOJ “insuring” what recipient countries would do; (2) reiterate Japanese assurance on access; (3) agree to sale of commodities for local currency to be used for grant aid economic development; and (4) provide assurance on “additionality”. He also said that some of Japan’s commodity assistance could be in the form of food. He went on to say, however, that Japanese Government must reserve on the principle of cash or grain assistance.

10. I said that this clearly did not meet the position taken in President’s letter and we were therefore confronted with a most serious situation. However, as we did not seem to be getting anywhere tonight we agreed that we would each await reports from tonight’s meeting in Geneva and be in touch in the morning.

11. During course our discussion on balance of advantages, Ushiba said that at one point in negotiations in Geneva U.S. side offered to improve its industrial concessions to bring Japan into the food-aid program; however, Japan rejected this because GOJ is opposed to principle of having food aid incorporated as part of KR package.

Johnson

1. Source: Department of State, Central Files, FT 13–2 US. Confidential; Immediate. Repeated to Geneva for the Mission and passed to the White House and USIA.
2. Telegram 212564 to Tokyo, June 13, discussed the rationale for inclusion of food aid in a grains arrangement. (Ibid., AGR 15)
3. Document 365.
4. Not found.