Office of the Historian

42. Memorandum From Acting Secretary of State Katzenbach to President Johnson1

Washington, undated.

SUBJECT

  • Your Meeting with the Prime Minister of New Zealand2

Holyoake will have three main concerns:

  • The U.S. presidential election and what it means for our policy in Asia.
  • The Viet-Nam situation and negotiations.
  • U.S.-New Zealand economic relations.

A. U.S. Presidential Election and Asia Policy

Unlike his colleague, Australian Prime Minister Gorton, Holyoake is an experienced and cautious man who has avoided jumping to conclusions or speculating about the possibility of a return to U.S. “isolationism” under your successor. He is nevertheless keenly interested in the U.S. political situation and its implications for future U.S. policy in Asia, to which New Zealandʼs own policy is closely linked. This visit gives him a chance to make a first-hand assessment, and gives us an opportunity to help him get a clear picture and influence his thinking in a helpful direction.

Suggest you

  • —Discuss the election and the candidates fully and frankly with Holyoake.
  • —Emphasize that the U.S. will continue to stand by its commitments in Asia no matter who wins the election.
  • —Stress that your successor, like you, will look to the free nations of Asia to show increasing initiative and leadership in working out regional solutions to their problems. We will always be ready to cooperate.
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B. Viet-Nam

While New Zealandʼs military contribution to Viet-Nam is small (550 men), Holyoake has been a firm, consistent and articulate supporter of allied policy. He is anxious for close consultations with you on the current phase of the war and negotiations.

Suggest you

  • —Review the military and political situation in Viet-Nam.
  • —Express appreciation for New Zealandʼs contribution.
  • —Review the Paris talks and the outlook.
  • —Assure Holyoake that our position will be based on the Manila Communique and the 14 Points, and that we stand on effective implementation of the Geneva Accords on Laos and Viet-Nam, and for free choice under the “one-man, one-vote” principle in South Viet-Nam.
  • —Promise to continue to keep in close touch on developments.

C. U.S.-New Zealand Economic Relations

The New Zealand economic situation, while showing some signs of improvement, is still unfavorable to the Government, which must face an election next year. The outcome of the election may depend upon economic conditions then prevailing. If Holyoakeʼs party loses, the Labor opposition (which officially advocates withdrawal from Viet-Nam) will come to power. The GNZ has recently asked us to review our economic relations with an eye to improving them.

Since early 1967, Holyoakeʼs government has had to impose unpopular austerity measures to deal with serious balance of payments difficulties. Its efforts have been complicated by subsidized European exports of dairy surpluses and U.S. import restrictions against New Zealand meat and dairy products, which are resented in New Zealand. New Zealand has, through a U.S. importer of New Zealand dairy products, filed with Treasury a request for imposition of countervailing duties on subsidized European Community exports of dairy products to the U.S. Unless this request is withdrawn, Treasury will eventually have to act on it, and the Community could well retaliate against a substantial volume of subsidized U.S. exports.

Suggest you

—Tell Holyoake that at his Governmentʼs request we have completed a careful study of our economic relations. Our conclusions are as follows:

1.
We regret there is little we can do to meet New Zealandʼs desire for increased access to the U.S. market for its meat.
2.
We are aware of New Zealandʼs problems in finding overseas markets for its products and particularly for its dairy products. We are prepared to help by providing increased market opportunities in the U.S. [Page 106] for some dairy products. We cannot do so, however, unless New Zealand will withdraw its request for countervailing duties against European Community dairy products. You understand that this matter is now under discussion.
3.
Other areas in which we feel we could be helpful are:
(a)
facilitation of private U.S. investment in New Zealand;
(b)
working closely with the GNZ to identify logical areas for Eximbank financing to assist New Zealandʼs economic development;
(c)
provision of every possible opportunity to New Zealand firms to compete for contracts let by the Department of Defense.

We are ready to proceed at once with detailed discussions on all of these subjects.

These are the high points. Additional talking points are enclosed.3

Nicholas deB. Katzenbach
  1. Source: Department of State, S/S-Visit Files: Lot 70 D 418, V 70A. Secret. No date appears on the source text, but Document 43 indicates it was dated October 7. There is no drafting information on the source text, although a supplementary memorandum (see Document 43) and a covering memorandum to Katzenbach recommending that it be sent to the President were drafted by Carleton C. Brower, the Officer in charge of New Zealand Affairs, suggesting that he was the likely drafter of this memorandum. Brower also prepared a scope paper, September 16, for this visit. (Department of State, S/S-Visit Files: Lot 70 D 418, V 70A)↩
  2. Prime Minister Holyoake made an official visit to Washington October 9–10 where he also attended the ANZUS Council meeting on October 10. Holyoake met alone with Johnson on October 9 from 12:18 to 1 p.m., although they were joined briefly by Rusk and Tom Johnson from 12:25 to 12:30 p.m. (Johnson Library, Presidentʼs Daily Diary) No other record of this meeting has been found.↩
  3. Attached, but not printed.↩