281. Telegram From the Embassy in Japan to the Department of State1
301. Subject: Wool Textiles. Ref: Deptel 234, info Geneva GATT 2998.2 EconMin raised status of GOJ’s review of wool textile question with Nakayama (Director, Econ Affairs Bureau, FonOff) July 26. Nakayama said question had been discussed within GOJ and MITI had been in touch with industry but indicated no real progress had yet been made. He said that, as follow up to Joint Econ Committee discussions, he intended to take matter up again with MITI.
Nakayama said, although international conference unacceptable to Japanese, he recognized need for Japanese exporters to avoid disrupting U.S. market. He implied some thought might have been given to possibility of controlling prices or volume of Japanese exports. Off record, he indicated he had taken rather strong line with MITI insisting description problem must be faced. Nakayama asked whether Embassy could provide him with list of specific items where some action by Japanese might help to overcome problem. He mentioned that Japanese exports to U.S. of mixed wool-silk suitings had grown very rapidly and suggested this might be item on which restraint called for.
EconMin said he would seek guidance but had doubts that U.S. would wish to provide such a list. U.S. industry fears that if agreement were reached on orderly marketing of selected items Japanese would concentrate export efforts on other items and merely shift rather than resolve industry problem. Industry prefers, therefore, to talk in terms of across-the-board arrangements.
Comment: 1. We believe that Nakayama’s remarks re recognition of need to avoid market disruption and his request for list of items where some action might be helpful should be viewed as personal reactions of senior policy level official seeking way out of present impasse and not as firm indication that MITI and Japanese industry now prepared to move in direction suggested.
2. Dept may wish to consider whether U.S. should give more explicit encouragement to idea of Japanese voluntary restraints on wool textile exports. Emb is convinced very little point continue pushing for international conference. In time, a bilateral understanding may be feasible. For the near term, voluntary restraints, with beginning of dialogue at industry level, could bring some relief.
[Page 708]3. Embassy aware from conversations with U.S. delegation to Tokyo wool textile talks that men’s and boy’s suitings, particularly sharkskin, constitute special problem for U.S. industry but had assumed this was in area of all-wool, not mixed wool-silk fabrics. Would appreciate Department’s comment on this point.