Foreign Relations of the United States, 1969–1976, Volume E–12, Documents on East and Southeast Asia, 1973–1976

197. Minutes of Senior Review Group Meeting, Washington, November 11, 1974, 11:06 a.m.–12:02 p.m.¹ ²

Washington, November 11, 1974, 11:06 a.m.–12:02 p.m.

SENIOR REVIEW GROUP MEETING
November 11, 1974

Time and Place: 11:06 a.m. - 12:02 p.m., White House situation Room
Subject: Japan

PARTICIPANTS:

• Chairman
• Henry A. Kissinger
• State
• Joseph Sisco
• Winston Lord
• Philip Habib
• Defense
• Amos Jordan
• Morton Abramowicz
• JCS
• Gen. George S. Brown
• Lt. Gen. John W. Pauly
• CIA
• William Colby
• Evelyn Colbert
• Treasury
• Jack Bennett
• CIEP
• Amb. William Eberle
• NSC
• Lt. Gen. Brent Scowcroft
• Robert Hormats
• John Froebe
• James Barnum
• Susan Schiffer

SUMMARY OF CONCLUSIONS

It was agreed that:

• —State Department would prepare a briefing paper and talking points on U.S. agricultural exports to Japan in the multilateral context of developing the institutional arrangements discussed at the recent World Food Conference;
• —Defense would prepare a paper and talking points on the specifics of U.S.-Japan defense cooperation;
• —Treasury would do a paper and talking points on Japan’s approach to its balance of payments problems; and
• —State Department would prepare a paper and talking points on ways to achieve increased Japanese economic assistance to South Vietnam.

Mr. Kissinger: Bill (Mr. Colby), would you like to brief?

Mr. Colby briefed from the attached text.

Mr. Kissinger: If he (Prime Minister Tanaka) resigns, will there have to be new elections?

Mr. Habib: No. The party (The Liberal Democratic Party) (LDP) have to choose a new prime minister. They will probably select one on a temporary basis until the party convention is held next July. Whoever they select will serve until the party convention in July.

Mr. Kissinger: Can Tanaka remain as party chief then?

Mr. Habib: No. He has to resign from both jobs.

Mr. Kissinger: Then it’s not like the European system. In Germany they split the positions.

Mr. Habib That’s true in Germany, but not in Japan.

Mr. Kissinger: Will there be an interim Prime Minister, or will they hold convention to pick one?

Mr. Habib: Well, it’s rather confusing, but one proposal being bantered about quite prominently is that the party will pick some type of safe appointee — like Shiina. Somebody who is not controversial. That person would stay in office until the convention is held in July. Shiina would appear to be the choice, but the problem is that he is ill. He has not been very active since the early 1960s. He’s the noncontroversial type. He settled the trouble with South Korea recently if you will recall, and is presently the Vice President of the Liberal Democratic Party. There is some indication that Tanaka will resign shortly after the Presidents trip, but probably not before.

Mr. Kissinger: Yes, and then we can get the credit for that, no?

Mr. Habib: We can arrange that if you want.

Mr. Kissinger: What I mean is that Tanaka’s resignation will be a reflection on us, won’t it?

Mr. Habib: No, not really. Tanaka is not expected to survive whether the President is to make a trip there or not. He simply has lost the confidence of the Japanese people. His government has had no coherent policy — that’s our Embassy’s view, anyway, and his string has simply run out. To my way of thinking, Tanaka is no great loss. Now, if Ohira comes in, that would he alright.

Mr. Kissinger: it has been my experience that Tanaka has never uttered a true word in his life. You’re right, he won’t be any great loss.

Mr. Habib: In my view, Tanaka’s most likely successor is (Finance Minister) Fukuda. This would be Fukuda’s last try. Ohira is probably the most likely successor, but I’d put my money on Fukuda.

Kissinger: Ohira is okay.

Habib: Yes, he is. He’s first class.

Mr. Kissinger: Who here was at the Energy Conference? Anybody? Anyway, at the end of the conference, all the foreign ministers were sitting around — we were hung up on something, and Ohira was off to one side looking like he was asleep. He woke up long enough to utter three sentences, which emerged as the “Ohira Compromise.” Well, the next day when asked to expound on his remarks, he completely turned it around — said the opposite thing. The British, in turn, completely misinterpreted Ohira’s remarks. What finally came out was totally opposite from what Ohira intended. That’s Ohira.

I guess it would be best to suggest that the President spend most of his time in group meetings and not with Tanaka alone.

Mr. Habib: That’s going to be hard to do. It will depend on who Tanaka has with him. He’s keeping (Foreign Minister) Kimura and Ohira fully informed. I think Ohira will be present for all the meetings.

Mr. Kissinger: Every meeting that I have had with Tanaka he has wanted somebody with him. Ohira should be present. It would be best to have two present at all times. Do I have Ambassador Yasukawa’s views on what is to take place?

Mr. Habib: Yes, they are in your office. They were there on Saturday. The briefing books and everything are there. Yasukawa is one who we can trust.

Mr. Kissinger: Okay. Now, the basic question, is there something the President should settle while he is there?

Mr. Habib: There is not really much to settle. We have some things we think the President should speak to — the Yakutsk Natural Gas thing, for example.

Mr. Kissinger: What is the status of the Export-import legislation?

Ambassador Eberle: It’s held up, that’s the status.

Mr. Kissinger: Why?

Ambassador Eberle: The energy deal with the Russians.

Mr. Kissinger: What are they (Congress) trying to do?

Ambassador Eberle: Congress is insisting that any energy deal with Russia be approved by them first, it’s as simple as that.

Mr. Kissinger: Does the Senate understand what it is doing?

Ambassador Eberle: They are just impossible up there. There is no one to talk to.

Mr. Kissinger: They have us pushed to the limits as it is.

Ambassador Eberle: I agree that we have to go back up there (Congress) and push.

Kissinger: Do you think we can get an increase of the ceiling?

Ambassador Eberle: I don’t know. The trouble is, we don’t have any carrots to offer.

Mr. Kissinger: You’re right, we have no carrots. The trouble is we can’t give the Japanese an answer (on Export-Import Bank financing) if we had to. Our inclination, as I understand it, is to take Option 3 (delay a decision on Export-import participation until we can formulate a basic energy policy under Project Independence, but no objection to Japanese participation in the meantime or to participation by U.S. private banks and firms) and agree to the $45 million, or whatever it is.

Mr. Habib: But that’s not really an option, because we can’t even consider it until after the legislation is passed.

Mr. Kissinger: Basically, we ought to provide financing for China and Russia as well.

Ambassador Eberle: If our decision (to provide Export-import financing) leaks, it will destroy what credibility we have in Congress.

Mr. Sisco: And you can bet the Japanese will blab.

Mr. Kissinger: My inclination is that the President should not discuss the question at all. We have to wait until the legislation passes anyway. It will leak, you can bet on that. If he (President) tells them that he will give them the financing after the legislation passes, this will be leaked. Even if he says he is inclined against granting the financing this would help us in Congress, but not gain us anything with the Japanese. I don’t see that there is anything to be gained by talking about it before the legislation passes. The Europeans are going to want to contribute to Yakutsk. The Japanese can get any amount of financing they wart from the Europeans. The Germans are eager to contribute.

Ambassador Eberle: I concur.

Mr. Kissinger: The President ought to stay away from giving any impression that Congress isn’t ready.

Ambassador Eberle: I agree.

Mr. Kissinger: Do we have anybody on the Hill to talk to about energy? Who’s against the legislation?

Ambassador Eberle: Senator Stevenson is one. Senator Jackson, as you know, is a party to it. Proxmire and Byrd are all against it (Export-Import legislation). What you have is a coalition of liberals and strong conservatives. I really feel quite uncomfortable about the whole bill.

Mr. Kissinger: Alright then, we have no choice. Now, agricultural exports. You guys screwed me up this time by putting the preferred option as number three. The preferred option always used to be number two. What does Option 3 mean? (Accommodate Japans interest within a new framework, of U.S. policy on stockpiling, long-term Supply arrangements, and new GATT rules.)

Mr. Habib: Essentially, it means that we continue doing what we have been doing.

Mr. Kissinger: What would they get, preferential access?

Mr. Habib: What they would get is stockpile assurances.

Mr. Kissinger: Can we give them preferential access without letting then stockpile?

Ambassador Eberle: Technically, the Europeans and Japanese are already getting preferential access. The problem is that the Japanese want to stockpile, and that is not allowed under preferential treatment.

Mr. Kissinger: Why do they want to stockpile?

Ambassador Eberle: Basically, they are worried whether or not we are going to remain an adequate supplier.

Mr. Habib: They could go for more long-term arrangements.

Ambassador Eberle: I think we ought to encourage them into long-term agreements.

Mr. Kissinger: I agree, long-term agreements can’t hurt us.

Ambassador Eberle: Unless there is a shortage.

Mr. Kissinger: Is somebody doing anything about creating those changes we talked about at the World Food Conference?

Ambassador Eberle: No, not to my knowledge.

Mr. Kissinger: Joe (Mr. Sisco), when we get back to the Department, start pushing on these institutional arrangements we talked about at the WFC. Do it out of State.

Is there anything that the President can say to the Japanese about agriculture?

Ambassador Eberle: He can thank them for being a good customer and ask them to keep following the policies they are following today. After that, there’s really nothing.

Mr. Habib: About all he can do is refer to the agricultural policies of today.

Mr. Kissinger: What do we want the Japanese to do regarding the World Food Council? I’m serious about what I said in my speech.

Ambassador Eberle: We can ask them for their support of the groups you advocated.

Mr. Kissinger: Can we get somebody to do a paper on what we have in mind for them and what would happen if they don’t support these groups?

Ambassador Eberle: Sure, but they don’t look on these groups as the answer to their long-term supply problem.

Mr. Kissing: They can get it through cut reserves — purchase the stuff and then hold on to it. That is not excluded under the WFC.

Ambassador Eberle: Then that gets into bilateral negotiations.

Mr. Kissinger: We have to use bilateral talks as an entre into these groups. (To Mr. Sisco) Get Enders to work on a paper, and clear it with Eberle and Tack (Bennett).

Now, fisheries — is there anything the President can say to the Japanese on this issue?

Mr. Habib: Not really, but one of the problems is that he told these people up in the Northwest that he would be taking up the fisheries problem with the Japanese.

Mr. Kissinger: What would he (the President) say to the Japanese?

Mr. Habib: That we have some bilateral talks scheduled for early next month and that they should take a constructive attitude toward them. Trouble, is, the Japanese are likely to be very hard-headed on anything we say about fisheries. It’s really a question of whether the issue will come up. I think it would be wise for the President to impress upon the Japanese that we are really serious about this fishing thing. Option 2 is our preferred position.

Mr. Kissinger: What is Option 2?

Mr. Habib: Just about what I just said. Have the President raise the issue at the highest level — that we’re serious about Japan’s reducing its present catch, and urge the Japanese to take a more constructive attitude the upcoming fishery negotiations.

Mr. Kissinger: If I know the Japanese, we’ll end up with Option 3 or 4.

Mr. Habib: True, but we have to give them some signal that we take this thing seriously.

Mr. Kissinger: Okay. Defense issues. What do you have in mind (to Mr. Jordan)?

Mr. Jordan: Nothing really. We think we are on track.

Mr. Kissinger: What is it exactly that we are doing?

Jordan: You mean in the way of planning?

General Brown: Well, we want to work more with them on the air defense thing and we are continuing to talk with them about F–4 co-production, and want to consult with them more effectively on a number of things. They want to expand their air defense...

Mr. Kissinger Do they have any air defense system now?

General Brown: Yes, they have some A-4s and some radars.

Mr. Kissinger: How many?

General Brown: I don’t have those figures with me.

Mr. Kissinger: What do you mean by consulting more effectively?

General Brown: It means spending more of their money for existing weapons systems — improvement.

Kissinger: What new weapons systems are they producing?

General Brown: None.

Mr. Kissinger: What does this Option mean (reading from briefing book)? I mean, what do you want out of that?

Mr. Abramowicz: What we want — what it boils down to is we want an increased level of complimentarity between U.S. and Japanese military forces. We want them to purchase our aircraft — its regally based on a maritime threat, with anti-submarine warfare (ASW) planes being the primary purchase. We are trying to work out that they will assume a larger ASW role. Little has been done so far.

Mr. Jordan: They are putting more into the ASW program.

Mr. Kissinger: I have no quarrel with these suggestions. What happens if these come up during the President’s visit? Can you put your desires into some type of conceptual framework? Can you do a paper like that?

Jordan: sure.

Mr. Kissinger: Give me two or three pages on just what you visualize.

Mr. Jordan: Sure.

General Brown: What the Japanese are really concerned about is the drawdown of U.S. forces.

Mr. Kissinger: I talked to the President about that this morning, and he is firm that we will not reduce our forces in Asia. That is definitely out of consideration, and it is a subject he is not eager to discuss. There will be no drawdown of forces in Asia.

General Brown: That’s helpful.

Mr. Jordan: Our basic problem in that area is the danger of a congressionally mandated 50,000-man cut.

Mr. Kissinger: I know, but there are to be no drawdowns of forces.

Mr. Abramowicz: That does not rule out minor adjustments of forces, does it?

Mr. Kissinger: No. There can he minor adjustments, but we want to keep the overall ceiling it is now.

Mr. Habib: The Japanese want us to stay, and in force,

Mr. Kissinger: Okay — on international economics. Is there anything you would want to bring up, Zack (Mr. Bennett)?

Mr. Bennett: Apart from the energy question?

Mr. Kissinger: Yes. On energy, we’re all agreed.

Mr. Bennett: Well, as far as the international economic picture, I don’t think the President needs to complain about a thing. I think things are going along all right.

Mr. Kissinger: What have we done about Giscard’s meeting?

Mr. Bennett: This is something they are locked into, and I don’t think they can get out of it.

Mr. Kissinger: I don’t see how Giscard can have his conference without our participation.

Mr. Bennett: I don’t either.

Mr. Habib: Neither do I.

Mr. Colby: Is all this talk of a U.S.-Japan-Western Europe trilateral relationship all that good?

Mr. Kissinger: No, it isn’t. A trilateral relationship has the disadvantage of bringing in the Europeans and a repeat of last years fiasco. The Japanese will never go for it: they prefer to work on a bilateral relationship, anyway. We ought to drop the whole idea.

Mr. Bennett: One point I would like to make about the Japanese economy is that the President really has nothing to complain to them about. He might warn them about not overdoing the deflation, but that’s about all.

Mr. Kissinger: What is it that we don’t want them to do, then?

Mr. Bennett: Just not to overdo the domestic deflation. They have all kinds of methods to manipulate and adjust the trade balance.

Ambassador Eberle: We have an analysis that Japan will have a $20 billion trade surplus by 1930.

Mr. Kissinger: How can they do that?

Ambassador Eberle: Through export expansion and by manipulating the yen.

Mr. Kissinger: It has been my experience that the Japanese are not great conceptual thinkers. You can pretty much tell them what to do and they will follow it. Jack (Mr. Bennett), can you do a paper on what the President is to say on that point? We have to give him (the President) more to say than just, “no surpluses.” And also put in the paper something on the overall economic situation.

Mr. Bennett: Sure.

Mr. Colby: Can we make a stronger pitch to the Japanese for more help for South Vietnam.

Mr. Kissinger: Yes, definitely.

Mr. Habib: We have to get the Japanese more involved in aid to South Vietnam. We are really up against it on this aid to South Vietnam.

Mr. Kissinger: (To Mr. Habib) Can you do a paper on this?

Mr. Habib: Yes, State will do it.

Mr. Kissinger: Give him (the President) some talking points.

Mr. Habib: Should we include Cambodia, Laos, and others in that?

Mr. Kissinger: Were most interested in aid to South Vietnam.

Mr. Colby: if you include Cambodia and Laos, you fuzz the South Vietnam issue. That is what we really need.

Mr. Kissinger: Right. Okay, Brent (General Scowcroft), can you collect these papers and put them in the President’s briefing book? I’ll talk to the President about an NSC Meeting. I’m inclined to think we don’t need one, but I’ll check with him.

1. Source: Ford Library, NSC Institutional Files (H-Files), Box H–23, Institutional Files, Meetings (IFM), Meeting Minutes, SRG, Originals, November 1974–January 1975. Secret; Sensitive. The text of Colby’s briefing is attached but not published. The briefing material that the Departments of State, Defense, and Treasury produced in response to Kissinger’s tasking is ibid., Box H–13, Institutional Files, Meetings (IFM), SRG Meeting, Japan, November 11, 1974 (3).
2. The Group discussed the response to NSSM 210 and Kissinger asked the relevant departments to prepare briefing materials for the President’s upcoming trip to Japan.