Aug 2, nssm 122 summary by Nixon Foundation

NSsr{-122 POLICY TOI{ATD

JAI}N '

SI'UUARY

I sta.biliEv o! change Psvcholoqicat Politic;I ana seculitY Factots Policy option. - Politidal

anit

adjustnents in rapd's Derense

The Ecoronic setting

the Eoononic Probfens

obiectives in it. lconohic

turaaions witn Japan The Econmi. oPtions ope! to us Agen.y Comments on the Economic sectioas ol NSSM-122

the enclosed ,esponse to NssM 122 ,as subetanttallv of hiE ittention completed beforâ&#x201A;Ź Plesident Nixonrs shock waves ftajo! causea rnat announcement to :i wisit Pe]<inqout sorttno tire in Lrll be s6ne ""-" rt" raoanese politjcs, orn therr fo! tl-eir doresric Lo Pek'nq and idipei, and ehe relationi il, lesDect ".irir"" lri" ":lr rn" unilec stc-Fs. -niriallv, hou'ver, the rccl _apan Hcs nol conqulLed cbout Ehis move has been thaE rapan ds . hea!ry bl6w to the wanlls u:Lhin i"t.-*.*. 'ae o Min srer sato, tl,e no'" so because rL cee ii"=i:.. "t i".ne neel= of a spii-s ol olh'! polrti'al reLba.ks foE -;;';;;;"ti;. leadership. rt h;s also inspiled speculation ;;. tne uslJePdn relallonship i' r",". io",' Lne 'urure;r 'ndependenL' toreidn Dolicv, and fea's a".,.a" , " rore china policv Most Tdp.n's om about ;d recr ninaLjonq qr6arl dorestic Dolr t1 car Ehe r .onplicdt6d i mDor LanLtv,' v ., o' Lhe nainstred Lhe abjriLY doubls aboJt ;,i;"4;;;, ""s .i.=" i.r.ti"r"l,ip uiih_ the us a.d the GRc, to survive the co sJrPrises. ho-ave!, tend rhe lasting possible aesess to t {ilI t1-:"fo!e -ol be tlign_ @liLical internal on rapan's :i","i "i .rti. oevelopnen: norp unttl relarions\i6 us/Iapan ,".t. "r i." vjew of ihe about its futuie alirectio! is knoPn and nore of the dlst in JaDan has settled. aor the moment, the possible adverse bv effecis on the us/Japan lelationship can be tenpered has shalen tldr Lhis de\elopnen-"r i"" 'i.rr an "w"r-;6ss sith the oosi Lion oa Lhose rho favo! d 'lose tel.LioDshlD srtn goa s a'hieve out relv to Lhe !s and on

spe-i icdl I /, Elrs suqgesrs d resuption or the ctosest rcnsurlaEion Lirh Lhe Jaoanese o1 Lhe C'1ina probrer, ""-.i.]. the i;.1udinq L.cE-cs a- Ehe !N. IL suggesLs avoidins an excesslvery and PekLnd us oolicy to*.td ,ppea-anie or. sott touqh poltcY toward Jalan.

Thinqs seefrinqly unielated to china also app1, in Ehis 'olL;xE, s'nci i,e,7rtrin" ue do fo! the lmediate how irpoltanl i"1".. ,ir t" inte.pr.;o I rapan $ terrs orexdple, the lor wiih chlna. ,. i""..; .r.p- in c;npa,ison see nos to anxiet\ lookinq ai-h special . "D"n;se viI] De i;;;;;7'; ;i";";;' in Anchoiase in septenbe!, ;::-."-.,:,;i-L;;

qivâ&#x201A;Źn bv Lhe Adninistralion i-o Uu a.o,-" o! srpport _,;aLv. "t ^"a i". or.l"u"u ";ve_sion "ir61lv, JaPan's responsivcness to our economic pressules can also be influenced by the extent to {hiel tl1e leadership sees Japarrs lnterests affecteil by chira poricy develolnents.

?olM -IY4Bq-q4!4!-:_9ry most dvnaic ]a:m is :he second rargest ed the_he i.o onlv non uorlo, ano in ,hro,insrrial oo!"-dpan's capaciLv -conomc csr6. -:';;;;;";-"'.-,'"."-. ! rt p*sen- --ends ho.d .dpan's ";;;.' ,aDan's -r,.- L'..,ssP :n Lhe te30's. iip.;;".;'.;;o".: rnhibit-ons' i rre'o dl. 'rom PlesenL l ii, "i_ "".could be formidable. the A biv.tal factor in determinins the state ofsitl and bevona the 19?ors entir; iacific ar.a durins txe united il-ir" i".i"it". of the r;lationship betseenthe soviet china, comunist ii^i"= ..a :.r.". Neitner letain can the Pacific nations of .r.'.*"tt.. ,ii"" as a states, ^Ji the united indiffelent p!oat anv past or a look half centurv review of the qrll sl-d, Lhete is no re.ri". ot p.-clres' o.o"tnso ror un-c'o fe's er_" . poEe-Liat i"i-:,.*' _'. nis'orLu'e Lddins and ,noer i - o o. ;.i"-' "...' one basic quesiion: what dan be done to There ts relationship bet'een ;aintatn a friendly and constructiveare subsiatiatv to the US and Japan? The other issues

At Fresent, Japan is po1itica1Iy, ec.nofri.al1Y also nas a maior stake in includins broad interests

achiewe other qoats:

.ritically dependent on us, ana militarily, but the us .raserwinq the relationshiP, i" ,oula iot ,ish to endase!

-- P.latical stabtlitv in Asia:

r.ro, :r;i

Japatr is

.;;;_ d--sprrimstic inhibi-rn

cnd "ppr_\e' .ions cbo-L Japd countiies, rapan's dvnmic econonic per_

third into forhece will ultlmately tra6late itself {i11 be correspondinq political influencer which t"mperea uy the altiance ith the Us. Japan

I far chosen to pulsue a non-militarv gleat role and, barrinq a najor rlpture rith the irs, {ould probably persist in this line. - Trade: .lapd is ou! secold rarqest, and by far ou;-i-Gt raPidly qrowing, expo!! harket, r! is a natter of highest conceln that this nalket be aqqlessively exploited dd that steps be ta*en -asible "cc-sa io anelicdn ro -s. .'4 r-xi-. has so Dower

expoiters and investors. -- Re3\tccion of tension in Asia: rhis lonsdeeply involve Japan, nolablv teln Dro(rNill an th; .volution of the relationship anong Japd, chiha and the us. rt rilr require the avoidance bet{een china and Japan, ,hich

if Japar bec e dubious about Ls securiry comitnents and if Japah wele to acquire a major ntlitary fo.ce-- \-cr .-. no_-FroIi!e' cLion: Tne dev'lopbe nrqh v . -. o' ,.;=;,,4p;;;--Eil"p"ourd prmpt otilers by itself ed could desrat,il:zins policy of rejecting nuclea! weapons râ&#x201A;Źsts in larqe part on JaPanis faith in rhe us deterrent. B-roen shalino: ,- ueE Jap Eo colr ribute mole to the stabflity and developnent of East Asia in partnership with us, Japd is lhe only nation of Asia that has a significant stake in Asian developnent as well as the resoulces

would suxeLy arise

wirh ,hich to promote it.

securitv comitmenis in East Asia: In oliler to lies T oii alr dererB: cdm Lnents co ou!theal maxinu in Asia, includins Japdr we must have :easible use of out bases in .rapan ana the closest cooperati.n of the Jaloese

III.

S1ABILITY OR CHANGE

PSYCHOIOGICA', POIITICAI,

vrith Japan serwes both Us and The relati..,.iip Japanese national interest6 {e11 , but it is conlnq

in the 1970s. At plesent I eld: -h6se o, r- : ' .-' .' tr6oid'e por_n' id" ror d ,, ,a. ,n 2o ad ir achiewinq a nueually satisfactory adj of pola.y Hith respect to the china Plobleft.

- The steps taken to inPlenent NSDM 13 sL.rersiL rle ccr_enenL -o pem't rhe of our nilitary positionr teaLened the psychologtcal basis for public oppoBition to the securitv Tleatv and help.d preserve the ID?'6 political hegemony there ire co Doisibilities for sllain in tne months aheaal. base structure se virl x;tain sdbstantiallv possibilities fo! triction, tri!h attendant on okinava the JaPanese by the Senate and aPProvat obLaining and Die! of the o^i.a{a Rewersion aqreement pleseDts sore oi_'rcJtEres, oar-icularly if the deb-.es .af1-cr --otion- d!oL,ed by economic probtefts and become e.tangled in Japan uitn the chtha debate. Bur ro date the policies laid d@! in NSDM 13 have suc.essfrlly ptorected the overall political and Eecurity aspects of this k€y telationship. The JaDanese scene - Despite plessure f!@ political close ties vith the us, tile eleme;Ts :iittE;faEi-ro in Lrapan and iheir hetrs would Dresent xulinq elenelts prer;r to eontihue the close relationshiP rith ;robabry this decade and to avoid the acqulsition the !s ihrough of a fraior nititary establishtent. In Japdr where the Doritical leadership must contend Pith intense intr-aFarty factional rivalries, a genera1Iy ho6tile media, and exrra-parli ertary harass(ent, while buirding a corsensus for policy action, najo! delartures NSDrir

develop v€ry s 1o{1y.

Today's readels are the politica:l descende!€5 ot former Prime Minister shigeru Yoshida, who alecreed ove! that the preservation of a close relationship uith the us vas essential at any cost. Their o{n political ski11, their denoDstlat4d success dd the lacti of an issx. on uhich the badfy fragnenteit opposition could conhine against ths seems to assule tnaL they sill renain in office. ,urthemole, the

.i" of -he pcsr 20 ve.'si good plo'pects virl .s ip .-'n io 6asure ihat tLev ' i;;-",::-, '^.,- '^ drc'um fo! d. lons as or i;. ;..-. ;. ,..- "."," var d - t},eLYcredibiritv ical oolit ror oPoorErr ";;,, ;":i;,'; o,tn, a d a !;.ipIocar us aLLitude abouL "";;;.'. F the relationshtp' Lo "'- no' psyc'o'ogica'Y P'ePaled ;ii" , ..:.-.- :, r e.n ".d export n'nded' thev sttll a Japanese i, -'-^ " ror bordels' t'eir beload ;;i- ;.- o. - u,iLy 'o," Lh' !eraE'ionor .as oLLs'de -, o o;' i";;"--"" ". ""' -he Fox dd :;"; ; " .". l" "^.. " with L enE.lorenenl dj!e ii"-c,ic. -"i . v c;oioed nu LitdLeral ."1'-''. on ;;;" ;; .-".,- "i'. '". 6xpos.-e re rlmrted Deep ."".- po ;;;"".;. "'cd. b"r'ie s 'lose rapanese p'vino.oo.'aI ""a on raPaese ",ii-"."t .-...,, r" Lr," ; s- o. ' " -s to roreisn opPosed ;:,;"-:"; .;i _al ro Isrg' ' "

rrom JaPdts q'outj econon-c acLlar dno sp'. , r' ,.r- ;;Ij.trv, , ' rios,er ) is seore ad Lhet ;;--i- ";:;'.'--".. ;"; .":-;" ".-.. - ,- q sLa.dcrd Ena- is raoidrv r' - 'qpono.e reer Lhct Ane!icds *.. ;"".;;.;i.;

".' !, r"pa: ' PosE ua! "econonic ""'.=."a r""' a o-"-or:'. v.e' o'rapd dd iLg the ,orld. wieH theit economic achievements rr..esrrr o r_d.Iv d 'er rrv o'oaLient dd

ii" "i"i,, i-i"i'-; l" position in ". ii'"-;."i1

o oi ro " ""a;'n econotrry' orsdized or a h- Da.r" '"or Eh'!- .* e*pefrence econdc tneir rese reeard "".;;,.;;. ';- "-. thaL Japan r"" *'",:. -i r.* v ' '9i le, consrde-ing uo!rd ".. Eo! -",t on Lne orLs-de ar -; ::--i:;". "ep-. ,".-1,""collrne^Lal .i Lo Lhe ;:. ;; . ." f"""i" .r,i.r. are f3! alL ' lcrtcal purposes whotlv

r.i'

are lhat }merlcds and rre andividuil- vastlv betEer off J.

,c G nd t -;s

of -easurenent n rPTs ot d 5o.ia1 ove.nead. ?ne? are, n

effecr, sttrl stlivinq to catch up and feel thev

have

. or5 I chanc'-'her' ale lacioYs u'- could reliance on the Us. There -o .o Eed- o!Ls-ap "".,, ..:e' -r.rhn'-ic 's 9ro{in9 economtc r. the lest of the to!14, asia ard sith a1l of i"vcr.'...nt fliction betwee! the serious caused rhici nas already drawback anelican also the There is Japanese in sore led to unease fron asi: {bich has comitments' our securitv of the credibilitv atout "ircl.= on the sorld stage could also alte! ' nc., a." :apan's aEent eno.lonalrsn and .ir" '"..-,,, ' "s c;' d oe loLsed bI f! s-raEionq or sliqhts arisinq fron a denial of the status nxich Japan.se feel is uarrated bv their acc@Plishnents' Ihe china ProSlem - The China problen is espe.ialfY s tlenendols inportance to de li c;I;5e-caG;;r-it politics. This qoes well bevond the JaEan se domestic the us consults ith Japd of "n:!stio. although that is cer;n Chr.r :o1icY developments, e 'pe'L hore inpolta^E patr The Lalnl / relctrons ror belL_r aq!ta-ion 1 Lh: , desD .6 inEerse i om vlrtu.lrv Lhe entire spectrm o! the tne opposiiion and rrom nithin its @n partv ranks, has Partv Demociatic r rin;-nainstled of the Liberal .jRc' sL o q and oaqslandi, q c'es Lo the D'kMq, oY vil !ieo TnF Dr l-doe'shrp Is coarinuarly {hose propaganda proclain6 that JaPd's plesent rulers a.e revivi"; rapanese mititalrsn. rapa aat china are far more rikely to be bitter liva1s for influence in Asia thah not, and the Japanese leadership feels rhat ?eking's ftain objectives are to brinq atown the s.t" c""".i.."t ald split the Us-Japan lelationship' noves bY the Us in the china field have an imediate and Potentiallv exPlostve impact on .he domestic politiaar foltunes of lhe conservative leadership, and in turn on the us-Japan relationshiP' PorrcY

ojlMâ&#x201A;Ź :_-!9!M!4!

E! !

There are rouqhlv four btoad optlons f6. the future c.ndrct or Us poliaical and securitv rerations 'ith

. Ihe cdptel'v ot ou/ relationsh'p orfels an .i " Le var:e.v of possiDl' cdrbinations cheges ou! policv i; tne securitv_ad ioriti""r ".pe"ts ofalso on ou! toward .raDan ,ould have a najor i Pact abilitv t; attain our econonic aoats. Nonethelessr rhe tirsl ah. t""i.s srqsest d seneral ranse. conciJsions rdqe "i .ti naio! ro^s ii r.p-i..,. ".ii"." Jdod,

ffi ::*@.,"".,'--i$".--.!+#i=#n#ffi +.Aia;r atre@ qer farces or a rarg9MlgI

- Mailtains a lelationship Phich stifl serves our intelests rell. - Assures ndimm US influenc. ove! Japan. avoids disruptive po1itlca1/Eeculitv cha.ges LhdE

,ould t;hioi- the.olution of econonic

Awoids a

destabilizlnq Japeâ&#x201A;ŹEâ&#x201A;Ź nilitalv ro1e,

particularly nuclea! ans. Reassures Japan's

Ensures

neigiborB, including the

haxins relention of

Us base

PRc

structule'

security buldels onlv moderatelv' q'ouEn or healtav nationclism ed assutrpLion or greatP' resPonsrbilities' - Not acceptable to Japa fo! long run dal night

Reduces Us

lead to backtash.

political dissatisfaction tn us uith Japdese "f!ee ride. " Risks

"iIt

jro::r. . LrL.spt,.r,r tor

Ja)rdn

All ot the lxos ci opticn 1, Dtus: co!14 allovialre us e.orori. .iiffi.nrii.rc Provirles.rore.l.ne!rs oI qrear Faier statu. a.r Jnlan uiLirort .esor t to exten!;ir,e ,e.xnrrent aa.n..l s,rapaicse e,crcl-.s into ..ns f ruct,i re ,- or . i':

aid a!J ac.eDr:.Lle ecorlo:ri. b.harioi. Redrci.i Ja.an's d$x,nd!.!.c on Us, oasino '"', o. : t' -l o. .:c, "..;.

llay s'.inuIrte Ji?a.ese .or.!etiti6h vitil us econ.rni.al1w ar.l t,.titi.a1ly in other areas nn.

n):

lir.ke:J

dl!rr.t1..,

.ra;ai 1E.s

iEd.j

a;ncnaL1.

!s re.urity trre.:..

r. Incourcqe J. sr" rs ^p":.n 2 excelt !n addiErgilncruolng ,oJe, Ac4-E=;;-tance !o the RoK ald Roc. 9!S: - should leduce us exPenditules or asian defdse - Japan attains qreat power status.

of Present uslJalan e9!:

Has

qenerallydestabilizing effect throuqhout

of rapanese nilitarism - Arouses chinese fearsintentions; endangels and suspiciols of US IsDores ]rox/JaPan antasonism Increases risks that ,raPan may enbark on load to complete military indePerdence and nuelear

to more .onpetitive relationshtp -itn vs, ?olilically dd e.ononica1lY. weakens Us i.rluâ&#x201A;Źnce in thâ&#x201A;Ź area. in - creates najor donestic polittcar problens to aPproach auihoritarian would leqnire JaDe: nilitarY as6me any overseas Japan to enable aid o! tloop Fresence. Activelv encourace Japan to assme some o! resent us securitv role in last As1a. ,-eads

- Relieves Us of present defense burdens in Asia, at leas! tempolalilY.

!9!. very.lestabilizinq effect txroughout Asla. Leads to china-Japa confrontation. po, !.-cd l ,/s'em: wouio be ..conpiis-F; onl) ;) "dLhor-td' "n means. - Leads to likelihood Japan {i11 seeL nucfear shortcut to milita4 Power. - Plobably oould eliminate us ilfluence thlough-

Has

] JAIAX'S DX|I]N5E ROI,E uhder either of tne lirst two options di.cussed

ADJIJS'TMINTS

above, 'no Fe!h.ps Lh6 Lh.rd, ;EI^--EE.;j:;:4L '

iE;I;I

Lh6l--Z-/o's

'pa1uoJld

'olLlhue

1i L'd stdteq aE least o-vond. under 1s72-r6, ,aPan will le "elr

tEe For]MutiiFG-red DETE;F siqnificdtly stlengthen its abilitv to defend the home islands, plus okLnavra, against convenlional coDsider a*ack -- a th;ea! which tre Japanese do .ot powe! project frllitarv abitiry to Lalge. Japa's bevond lis sLrro.'dinq u..6r' and ailsPacF vrlI nol epdl's defcnse expendihai/e rnc.paseo appte.iab y, less tnd It of CNP at sonething tules ,ilI lefrain in absolnte tems, JaPdrs unde. this plan, nonetheless, u i ole thd' double under â&#x201A;ŹsendiEules o, defens' ' d outlav o_ sone p].r, lo_ !o-dl vhic\ cJllLhis

Ir is doubtful that the united states, even if it ,e!e desirable, could obtain a substdtial levision sholt of a velv drastic of the Fouith Defense Plan .r. l,lesLetn Pdc'ric Du.t-back o, L-6,niteo ]]. secL. "1 siLuation ;nd a shcrD oerE-ioratio' possibilities, h@everr for rn East asia. rhere are adiushents in Japan's secuiity role within the conte;t of thi. plan and the Nixon Docttine. rhese s99PSI3Illt. Exanpl4s:

L-re'

dafenEe

intelliqence, continqen.y !lartins,

..n-r.t]]affisic

on a. eroandinq 5ca1e. (Becr

military equipnent sa1es. cs c,an' aid dt le3st

e\ a , -d saDalate1y ror Lhe i''1'. pG-;ITlTIty potential souaheast Asia recipients.) Rox, the ROcr and^o, . ro w.'-d .lonat coopelation

"iLhtheffi. rhe-* irppi&il=--

.-: r o ' ' ;- rc;--eePE-;- EIE -aDaner_ 'ooperatlon >ecu-''y o! .h- - e" v I vith valYing Each haa already been tried i! deglees of slc.ess. Eacn tike'isc involves ltogressivelv qreater potitical sensitivities tn JaPan, and JaPanese (Particulatlv the involvement in the defense cRC) is a controverstal and sensitive Political issue in t6ose countries. Neverth.less, under .areful politicat guidance, each alproach has sone Eossibility of success. .r

sinply stated, Japa.'s i.terests ii preserving the retationshiF are greater thanjt..)rs, sirce Japan'â&#x201A;Ź entire JaPan is accoldinslv foreign policy is based ulon up to the loint vhere menat,re to p;rsuasion rr.n the Japanese bacone colwin.ed that te Put a much louer value on the relationship. obtainins ou, negoeiating goats oith Japan would be easier, thercrore, if in tne process ,e prortded incentives bearin.J on Jafanis ovn interestB in preservinq the allian.e an.1 its necd for reassurance that we do reqara Jalan as an al1v, an equal and a naior p@er

ir its

own

right.

The forrowins are .oae sugsested .ourses of action ,!ich bear on Japan's oHn aibitions and conceins. o!" s ".Ls a'd A. Acknouleoa..ao-..' r." ".r"",'7;.-;;a_-;;n s ,,_i -Lo q*,r * .\"... * .'" rtr ' -;TI;. --!ft-k-'''

-,,* -.',rr*

Take

rerv se!ious11

and suPpoit b

**+:j-#iit'j3io*'f#.=,.,..'= _L qirl oecone.rucldr 1cy qoal. Frjo: td11cy reiinaj!-., ;;;i ,@i: Ljirl oor

or crrrna obra:ns l":,".i -, -ne ie6pre'" Fepublrc1ikeIv, there is ir. ci,r""." =""t. it, as seene dd oleater ,tvalrv and ten3ion between TokvoinLole'i"t ,.". r-"-" ;-1r , ind it increasrnstv PPc lrhe i" pt"; Asran second fiddle ro Ene "ri. _he .tt" "r ". sec:, iLv councir -- espe.iallv lecLs !e ;.d tne ur -- -o lonce!te!frs' r,""* " "i".""- po"er realit Ps excepl in rLctear ioaav's

:::m r.

poqer -nc.Lo a oId." Eor Japan rn anv 9,eaL

this fron rcfi.d-ddltG$ 'E; oplcLidlo as tiom as a."as, comulst and other ?ekinq 'e1r pelhaps dnd Asia ron-cdunist ."." ;.o"osel a-esteen ..rrri r-1""- lLseIr. Houever, Japanrsb'!!ed q' uele rf Japd evouslv Hould sul'rc! r,om o-rL.io;r o, and "s wjllinsnes! ro support r;.. . l- oa eo provrae assisLan'e - woutd -;; be nate!iarIy leduced

l;".ffi

mjd Japanese interests' $al sl (N=i;;;!fic leslect to lt-imnoiâ&#x201A;Źant,'th aEis ,s- @?!faI surprises dislike intensetv china. The Japanese and are plone

4. --ppo-. " 'ore ,i-i,-E-;.@, "",. the oEcD and

ptonine^L -apahese ro'e in

s ".5 st-f .'ne

H Maintain Jalan's confidence ir ou! secu!+ folce sllucture in tne main r. Retain an adequate _{elcone efforts isla;a;-6A aIlE;;. reject an owerarea and to redu.e tenslons in fte seas mititar! role for themselves for domeslic political reasons and because of their awaleness of the suspicions their neighbols harbo! of Japanâ&#x201A;Źse

Ilsofa! as the defense of Japab is 4bitions. concernedr they believe tltel! en effolts ale co!sonant nith tne Nixon Docttine. aut thele is condrawd@n rn LhaL the us artila bevono the Point uhere cleolbi.iLY in our sedlity comitnents ca be naintained. nil iLary lnto a closer !elationship Lhroudh lolnt prahnrnq ano ex;;iia=.---TIr=-= -oliLtca I v de llccEe in,i cpa, ;iE;E--ein rad -alion or ioint plcnn ne ror n:Iitary pu?poses can be 6ensationalized and exploiteil. H@ewer, uithin politically contlo1ted 1irits, it .an constitute a message of Japaese desirous of naintairirg the alliance. I

r\ furlhe! ledeDlorents in North;i-iF iE_ lff.l*: lt IurLhe! led:'qnre.Ls a-6 necessc'v to! bldqere Y o! should at least avoid unPlea5at sulPlises.

1. continue support o- r.pd'!s space 9!el9:-4:.9! Droordm, This is one oF Ehe :-f-za-reraE.on do should be ehcoulaqed to Lhe *1Lhin tne lrmiLs ihposes bY security considerations. viu JaDah aDd otner Pacifjc nuclea! entichnen! ia;-imultitalera1

?Ili;-aie stasselinq in .cale and Japan accordinqly has an imense nuclear powe! plogrd. Japan is uncertain about ou! ability to supPlv its futule fuel neeas and seeks to palticiPate in a jor-L p odr"n, rne-e are many draHbacks Lo thi( DosslbrtrEy, buL iE uould be one wav or ensurrld it" .raouese do not develop a cap.l]I1itv etr'u-

.13 vII.

The Economic

settinq

Our political and secuyity interests in maintaining a healthy cooperative xelationship with Japan vere stressed earty in tnis lrssi{. Our economi. reratio.ship with Japan is also inpoltant--it affe.tsr and is affected by, orr political and seculity relationships

In spite of a vast and profitable ttade bet$een usr our economic problac ar. tne subject of inc.easins these lroblens are resolved wiLl bear on olr naterial well-being and, more generatty, our relations vith one of t6e worlat's major industlia1 povers. Thlee inter-connecteil probletr can be delineated in the U.s.-Japan econoiic lelationship. The baldce-ofpaynents position of both countries is in serious disequilibliun. u.s. imports fron Jalan are groving fast and are leading to uidespraad a?preh.nsion and hostility bt nuch of ,herican business ad Iabor. Japd maintains restrictions on inports and on invest enr from abroad olt of keeping vith its nev economic strength, while other couitries besides the u.s. naintain restrictions against Japan. 1) The U.S. nalan.e of payments is in excâ&#x201A;Źssi@ deficit and tho Japaese balance of layments is in ercessive surptus. In both coutries the problem is a.ute ana lequires early attention. Irhile the u,s. payrents ptoblem is of long standing, it has become much hore serious in râ&#x201A;Źcent nonths as oux traditional trade suplus has giwen ay to a tlade deficit. l{eanwhile, Jrpan, vhose ba .n.6 or pa1'-. ts posrtion qas a precarrous one unliI a f.w years agor has moved int'o solid surplus but its n ntality has not aajustcd rapidly enough to

This is not ro say, houever, that tne plob1eh is purely a bilatexal one. Each comtry is in disequilibrim rith the torld as a vThole. and lhe freasures that are adopted to deal with the balance of-payments problen by each countrt, must tako into accou.t the impacts on trade and payrents aith thiral countries.

fact that Japan is in excessive snrplus and the unitec stares is iD ercessive defici! atoes rot necessarily mean that lherc is a. adversary lelationship the tso countries in the balance-of-pa1re.ts area. let een Lls topd ruch -o qain lrom reo..'o/unii . eurp.tus, Inst6ad n n- e in.re)sed o' ado'nq rurthe! to its les.ves fron s3 billion ir 1963 to @re than 97 biuion !ow), Japan could nakc betler use of its resources to neet pressing needs for social capilal aDd to inlrove the living stahaards of Japa.ese .onsmers. 'Ihe United States has muctr to gain, parlicularly in tehs of world nonetary stability aDd tle abiLity to fu]fil1 political and e.ononic objecti@s, from reducinq its deficit. Thus the issues hov to achieve in the bal&ce of payments t'. ob\ious qoa- oi berte! Do_.n_4 '- th:l-ym_1r Po!i.ions of each of the tqo countxies. 2) me rapid grorth in g.S. inlorts from Jalan is the most visible an.l dramatic asPect of a mole genelal Ir.S, problen: a sharp ris6 in total impotts relacive !o comestic Bpending ald output. Ilhatever .an be dore to deal iritn tbe qcneral problem vi11 also hetP solve the specifi. problem of imports fron Japan. leYond this, difficultics uill no doubt temain \rith resPect to specific industries t]]at are injured by imporls. ror these cases, remeaies i! ehe fom of escape clauses aid adjustment assist cc elist but neeil to be improvea. A leturn of the economy to fu1l .nnloyflent uill also neIp. The open issue concens che advisabilily of specific ,iport restrictions by the united states o, eipott restrictions by .rapan, The debate on this issue tu s on the trade-off betveen ,educinq the pressure of imports on enlloymant and profits in specific induslries and imposing costs on other sectors of the u.S. econony. 3) Japanese iry)ort restriciions take the lo.n not only of tariffs or quotas but also of variols otler non-taxiff barriexs, boih fomal dtl intomal. It is clearty in the u.s. interest that these lractices be The

u.s. Government also seeLs a disnantlinq restrictions on investfrent in Japan. There of Jaran's disagreement about whelher tne gains fron u.S. is The

in€stment in rapan uoulat be offset bv short-ru balanceoE paymehts losses .nd Lha disaffectior concerned uith 'exporting iobs "

Ix.

Japanese Actions

.ralan is beqinninq to recognize that its reached the Point vrhere slbstatrtial e;onomic piosress hasa,e no lonsor cmPatible .Jl"i." e.onomic ;ationalism partners' o," interests, nith those or its major i,itn it" "t eco'ofric ,i t t},. requiremerts of the i.telnational

since 1963 JaDar has b€en liberalizing its rhis restridtions over foreis; trade and investflent. annollced Japan and in J@e rc;enllv 1." 0"."..."r"t.t.a dn 3-ooint Droq'a oe.'qne. to Joa- (ill- orr 'L'lenr .qis As: resu-., ou!iad rne re:c o, *l,r.*. controfs """"".,. in JaPanese leduction ,irr s.e a further -" """. ;.er trade ahd investment: subsLanE:ollv -.Bv S-DLenbc', . apcr uillrava sDl-.e'r ro o iEerE uflbe! ,;d,.;d Lh' , oilh are inco.sistent qlotas which inrort

llmila io;s oa oi,... o. po,-_.'o-jo r'v"" ' ment abroait bY their natioDals. is sLill --,thouqh lo-,-q i v.rr.-r. in.-p.n poticv sratei_n " h.:vi rv.csLric!ed, -'cea' dd sD:ci!i" dctio' s (ror exlap e, 'h_\s e"'s u ne'""'d t;Lols' nH or-.r ioas 'je al1 bur rorn- 11 conpleredi s'19ge-. thdt " Lhaulng '6 udar of --An extensive shakeup at the seni.! lewels dl rrdoe 0f rnt-rarioncl nlnist!7 -he _ '" _ndJst,y . "; signi-/ a c,: 'l Jror \

LtudiLi;,.t rc:i,- ive dpp'oach ro ro-" 9i ' tlado ad in€stment to a ne , more inrer national apDxoach. of the senio, hieraxchv, a'd tt. vi". ^:"i.t.., deputY vice ninistcx lost u\€ir have save one all bureau directors qive' hc5 oo''_nne'L 'cr..p"n""" ,obs, I". ;"rt.r relations;ith th. us to! plioritv.

1,.\arItl).lr.s:i, ,r.r)r. ..i1jnu..i

t. rr.jn1.i)r inr!), t ,.,,,;,.,,,.

nnd

o- l . . . ,, .. t.,. " 'a(rniri:'ir:nLj.v. cui..1.rra. , rnt .ir. stanarrJ n.thoti of s.t11.rmrrr. rh. j.))v.j tjrr!ri: risrri.tion. rrf.rctr:!ctLy bJr

' y o

..i.,q

us arr r I Li. .s r)roar i.; !r.i.ra1 ..j!(.r.ni i.n th. us coy.rnN.nt on th. !ro.c u:i .Lj..,ri\r.. in orr ..onoriic relations Hitl)

JrPan.

1". would

li!:P to ...:

--dr. r.:r.!:!l

of Jr).!

ri ar:tiIici.:l rostrarii:.

--the avoidancc, o. an.tioratton, of prolr:t6ns cauri..i Ly a .i.a:r) i..ic.s. iD Japanesc exlcrts of specific proircts; --thc r!:riuctjol, if h.r th. ctilination/ oi J,,, lL '. \1.1.'r..o',1 i I -o' But vc do;of aqra. on tl;e px:ioriri.s cach or d).sc obje.tivos should b! gil,en, or1 tn. cxnct j.ntcrpr.tation of each .))j.ctiv.:, <ud, rlost inPorlatrt oI all/ ho! thesc goals are to )re achiov.d, The ,icoD.xric ostr:.ns oD.n ro r,s

". r.. .,r.. u.:,.1:r-..rlr.

oj-.c].

...r:.

rrh,

.n;. q

ot.

n .o .5c

,-o:1c 5 in

J t,.:, (l) ri .'. o" u! t rl t' a1l.!\,ir{ar {r,s. .rade and Danrch,"s Diobt.:rs, Lo (2) incr.aiin! dip:rorutic p;c.N,.; on rarrn uiOrin rte cxr:!ttinq iht.jnrtional I:ar.j,o,k, ro (3) d.velopjns a centrally-djr:c.r.d str:aL:.!ir \))r jch Iould jnvo:lvc untrc' .n,.1 b'i.il . ,rrl t.V ,...."_n . I P.1, ...,,. I . .' .r.s :... . ! ,r.. rhc.c options arc consrrlcl.xl to Drovid. dr.duf,t..l prcssurc.r or lcv.r.!e i,r u:j-Jr],nn ncroiiarionr; uith Optjon l cprcrdrti !9 rcl.tj!.:lv ilr.r pr.r:rsnr. aD(l OpLion 3 ra,Dr.ji..tirq .luii. hci!t pr..s sur,r.

Sria,rji!

1. Ilre problerns of rh. US Dalancc of fay[cnts and I - - t.. Lit...c 'Il. .,..: L rr...... r il PrL"i ,1 ,.. r .,. i , t ,,

( r. L J L .i..i.

:,,,r1 ,1,,

...co,i.-'. !^r' ). js .... .,,, fJr.:ou .or!.,:,io., ...rii ri -n ar:c conccrn.d, it matt.rrs rittle xrrarhcr thc corietitj.on is..ra!.nese or zarbirn. such Dro5rcins r'.'.i|. c- r) .d.j. i'.^Dpronchins \. . c ra L,. , r. r, Jrn n.:. r. r . I r ,lolr ). : ,:, 1,. o. .....i.o ....-. byi, ,'...i.).: ii,,. I i...,...- Lr,. i,ot . -r .,.f. ,, iu.r'i, oi i n''!rr "'"r:' xur.fcrf conrcLrrion. 1.. ,"..;

2. rn:rofar r! Jd)iri)(,ir r.rrrjijii.jrisrx i:r.xtril t:r:.:aL cDt al I ovar \)our.1 {:arl ror aj{;j 1jr.!.Ir:tr rid1 rtry J.pnn. J. 7t 10. '. - i. ..,.,. . .i.l .ri ca.iast for ib. Jat,.n.s. ,1d",-,,,i.i," k coopcr:ircn \rith. o)a1r.nrr!, .!.jx hrrrt.a j r.j j;1.i.c on ..ril

5. .I 9...nal aDirrotrci to trad. tib.xnli2ation nost lljh.ly to lrc:tp r..l!rc.r th..alcr:r. clfccrs on thcis us of th. e:j!.ns:ion oi thc Colrion rrar]:ct and orher 6.. ... 't/, .- ',1_ . .:r. .nt rrr, (.,. \.... .. 1 ., 1 .i .Lr .o o.. or;. , .could rcsolve nary of tte curr:.Dt tcns:jons arong us. ,

!!:n. :1, Il. elniiot irLii..t )j.r ra|j.llly thc g.n.r:.1 ,.,,,,i,'' U.S. tradc arrl pari::rnt! si:nnii.on, or: if ihdc.d they c.D be accoi:irlislr.d. Ire..r:i. o! t)r. urq.rncy of tnc U.s.Ja!.r Froblc!trs, lh..se n.r3ui.s nay op.:rat. too slorl.y to brinq ..loquate r.Ij.r( to th. U.s. bata.cc of paymcnta. 2. Japancse c:lortjr to tic Unitr:d pt.tes anC Japdrrs ri-.1 ,,.1 - ,,.1y .o., t1. io-..or rJ.. y . .l ... .. ... o,9 ' in rhc Lrn:i,rc(t stat.s. Ile hai Pror.ctionisr: prerslrc. stand thc h.st cha.c. oI D.!txii:r_i2i.! rh.ree presslr.s by t.linq aclioD di!6.t1t a.jainst tho Dhcnon.Da uhich

4. Du.toiar. e{foris to a.hj.;!,. jJnpro!.d L1s-Jn!an eco!ohic rcl,tj.ons .l!c!r..i r,oi Le c.nar'u.l n. 'j-,il.nL.r.:lijjD,, Ei.l,at.j:al !j1(l.rrntij!ir: carl rhlic 4 :,jgni Jj.n)1t coni:xjtrutj.on 1,o t.lr. soluii.on ot o!. o!.rnj:t. ii::il{: and pn1,rL.)lts !liIficDlt,o!, itcral. .rforrr. ro Hris cn.l . jd.rr.{1 vLLl' L'j,-r- .rrt ur( l.c-,t'..,

nornn:l trrcti.c.

l. tc s.ul.] ns. thc LI,s. .rapar cabib.t taltrs i. S.plcr,rlr.r f.r a ,rhoramrt) di.cuis:l.n .I Lrr. curraDt .tatc of lroii, our ccor.n:i.s rri th tha .l:pr:.ss p!r!os. of .onvi.icing thc Jnl)ancs. tl,nti as a necessary oI thc intcrnatioral rdju-rr r 1 r,roc s, rr'.y irust taletJart aggi.ssivc action to sti r I dre L hci r .r. ro r, a.d, .ois(l!.nr:ty, incrcase thej.r t plrr.

hi1! I oJ!r,tifq B. lrâ&#x201A;Ź sho!1.1 .ll tnrt occa:rion and thc lrund hceting to con(tLr.,. a ai lirt dctcD,inod cahira:i..rr to achiere v.n rclal !atior C. l,hcrc acrtc polilj.cnl prcssure. ,lr s oJ i!.cific er:ports -)r.') 7,,4 rr...' bv J''.j. LL' ,..,J o..'\ 1. very c):c.pti onal cases.Dd should lrc rlpl)ljcd iox a cl.arly liinitcd p.riod oJ ,

D. Hc sboul.l also asrcrr our JaPanesc behavj or. In particular:

leq.t. liqhls to beltet

l. S.ck authorization nD.tar ]\rticte XxlI:t ot GAI:I to rctaliaLc iqaj.h3i Japan,s .)r!orts ro lhc ,o,,,,o, i ,, o. 1,,' i ..: o, .o . . | .r< I I i .t (l /.. ,I GATI )rulo:r, thc lroposcit rctaliarjon u.d., 1\rticle xf,Irr: corld bc discrinj,atoiy aD.t co|ld exceed the injury rc coinr,,tin or,) 2. Prcs. Jrpan to nr.ndo. its ifr?ort fr:consing systcrtr and, i! nco.ssary, tal:c violatrion of lar. r'i r.c . (s. '1. ..'.

3. !ursuc .rcry case \rhcrc qi Iind Don-trriff tteasur.5 trs.n lo r.s '.ri ct inporrs or iti[ulatc erDorit.. (our l..us o^ dnrPing and rorci!n snbsidi.s can rocl sor. of thc probl.tr,s in thiE ar6a. ) i:ova r rl al;,ijl! a s.,.jrivo .rbj .ci:.nd irroulld not lrc I/ yd, pr.s!.d ejtn thc J.pnf.r.r., ti!jvtrt.l y or p!L1ic)),, {ntj.1

thcr. ii corlrlletc nqr.c ..t nt tL. hiqh.rt :lavc1 tlr.,! such pr.rs$n,c is rijicly.

trl]Il

'20 4, cortinLlc-Li rr.:is trrc Japancjrc to aar. (r]trt \i. rdusr urcir in'J.s1,ient rcstrri.tions.

!oco.,.i2c ih.r ihc fi !irniijrl sirarcrurc of tl)a J.!rn,L.:c i.duslr), ar,C l)r. t)r..,.nt ula.r.-vl]!etjon of u)c y.n pnt li.rirs ox tlro .rr.nt ro rhich Jalrn! rill allo iorein. rrr:..ro)rs" of oristiDg :inv..t .nt in (jotrrst to ncx ilv.srneDt. ) E. llc slronld cD.:ourn.. irrjrr. \rilh its taroe aDd qroNing intcDitjoDal .trrt1u., to irnpa:t rior:c, Dy ,cdu.:in9 j.nport duti(:, lorrrinq s.ri. of i.1.: .otmodi,.! taacs, liLr.,:nli zirr its .1!rri.!l.tlri:L .v.rcofling its prcs.xl: rc.;D,ir.i s1ou dov. a.a!,o:ll.i.:i, 9({.ral:ly li:isr:Dg co)su ltion

F. \rc shor:r(i a:lso u:. tlr. c.Dinctlo\rcl discussions iD Sctf.rlcri to J:.acli .qr!.rt r1: lrith |h. Jdp.noie vicrr not only ol tnc titcrni!r:on:il a.l:jnstrir..t !roc.rs b!t a:rso oD al)i)roi)riat.r .:ic !oljcy ior a nrajor ih.\r:,trirI po,cx, iiorc sDocificall!/.c shoula fr.3s Jatrnn to ljIc up to it5 onc pcrc.xL ai.d corriri l:xr.rt .n(1 to :roIhc. .nb:trnLi.:l 1y tl!6 tcrn. on rrhi.ch i{: ert.rLris ztid to 1!.ir; d.\,.1oird .ouitrics.

lrq, l. coDtinled !r...ur., djplonrti..:t1y aprticdi ha. gott.D r.sullts/ espc(r:i::l1y in th. 115L 2 to 3 y.ars. The for further pr:ogxcss at thi. iiJie seem v.ry gooa. Possibilitj.c. 2. thcjrc reasurcjr rrould rot discjirlnatc aq.inst J.pan. It is !or! a f!1:t-Ilcd(.rl ]roi,er/ n..tifj:.r:.r)t frojl th. Ur,it.C liinrjdon or ccrneDr, \,ith s..5itivitic:j at lcasr as acut. as tho...f oth.r.J.ent po\r.rs, e i\u5t trcat tlapan as ec lreat the olhcx poricr.. 3. Ihc.a i1lasures .Dvisa!. thc !:rc of atl tho legal instr!:icn'is at our.lisDosal to !fo'.ect oLir jrtcr.rsrs. ,ltre r.trliat:ior un.1.r nrticlc x)iII:l: r,lri.)r ae lirc:{!ie is a polrcrtul sancti.,n, virttr.lly u)prcc.d.nrj{:.tr brt ir is a ]oqiti[r{rc oDc provid.i tor in tlic clx?. rn J!n./ ui. S..rctary of St.tc.Jave ).ot.:g' ' , i-r ..- r i . /Lt-r1 rr r'.r,. ihv6(c Lr,is c^l. .1,.r i.rr 4. Use of fairly coDv.Dtj onal 'r:nstr:trri.Dts fox assortj.nlr our !j..Jhts x..(t r. spcciil jlitilication or tc.JiitatioD.

q:!.u1111

a nodcsr rcviiiunL:ion of trrr: .i D..r or'-.the Jirlr,r.sc trad.: , ll:c.iaft of ti.3cd.r..r n Fcrcen! rrvalDri:ion uour.j cu Lj' al).ul: i2 b:ittjon and rou '/ J !. j\Ir, 57t' " tlr'o,r,l "i:,jlr .. r cfl.crrve rry Lt

l. fhis oplion d..s n.r ..ir:D1i-lr i'1, targers foJ: oLrr bilnrorJl Lr!,-( ani pi\ i.r,15,quI Lirrti!. to date by Jn!.,' provior: no as.xrrrr.. ,-irat .olclt on thjs oDtioD to aclj.vo irr.

na.ing of Jap:.n's r.:itrictj.on. on in(ar.t tDvesr

't'' t 'l'r a,

l.-

:''!i

r,!E; trrnr or cor,.,c. d..s not ncc.pt r)r.s. I7-iIc j a!9u'rcDiir rqninr;L l)):..:j n!l hDan on inv.slmcnt.

d'. ..o

tvro

llsrairli:in . .tr..ia1 Qr:l:in! .,roLr! xr(l.ir tire courci on Iht.):h.'riorrl rrc.n.ri.c rr()lri.y to .tov()to) fo. ur. :.,

|,,,

I v:lih lrrpan. 5:r. f.i.JcLirtirq irriri liould oi,5.dy I)]I:):1.,r1:; sdta 9r all i)lc.rf. .rrs of optj.on 2n Lhroxglr r plus y: o. s..rlt a .o)i.rirriort fr()jr Japan to elihinntc or to rc-luce jjt ri,tanLj.lly Ja!5,: Liaec nn.t ptry:.c.ts surpl.us Nirh rn. u.itt.l stlr.s Li, thc crd dj 1973 or 1!74. rrhese Ncnns n.y ir.lurt. ., J"l1rirc.. lolicy ro l)ror:iorc ilpolts/ tiinit or dircrrify .:r.ort.r, ,1. s..L to lrorh out uilli Jnn:rn.1. .r: af!,cmcnt, incltr.l inq an '.arly 1r.rni,:q si.t.i, for r55urj.! thnr. Jattr.es. e:poits ot )r:iiii.ulrr co,.f,oli ti..:; to '.:lr. uilit.d st.rtei co ,or.r)t.ril a! i:u.h a ,atc <r: to dj.rDriL rhc rtorrlstic rErk.\t. l. lly lrovi(linq tnat . c.n,.ral nlqeiiatinq stratcdrtr.l., CIJ'rr, the optio, fur:.j.Shca lhc lJcst fo!!,n ur.lQ: pr...!rt cj rcufi:rt.rn.i.:,i, for .o.idi!nting i:hc planninrr .f U.s. ,oic:i9n ccol.rri. \ro ict. toi:ard JaD.n. r1)o Crir! !ra: forF.d to provj.i. a.ilear to)-t.vcL fo.rs lor ;.'j '.o .,ol _.:... includir)9 {x.,.1., in!c:1rent, ),rlance oi p..y.jents, and iinarce. rosponsi),il;t! lor cenrral flon .rr, \-.r. 1ne .: I .:.. r. diraciion r i o,r ,. oi .:. !o ccononic pr:.!lcns rj.ir JaIraD fi!s id.aj.lJ jnto the dcsig)ratcd. rolc oi rrlre crnp lron both po:ti.cy and orgahiz-rio .' ::. 1,.o. .r... 2, optio) 3 provid.s for a sitecific l)jt.:tera1 trnde piy)i.nts and t.rqct tor Japan ard the tilinq tor its achielcFcrt, So.rc agcnci.s Dati.ve rhar rho atrsoncc of b() .leveloliJd

cor Erc. protDscs consi.l.):ation o! th. follon,ihq neasu.e:

fntorm J.p<rn that tI it failjr to,:tihcralizc in\rar.l ir,! .' '. ', :r.1 .:..'. .: 1..... .t r snch f.iil!,:., |).(ir..5 an xtl.or::., oij'.r! on t,.s. .,xpor,u,l to.ra!.x, Li'.. th. u.n. r;i.ll .orr:,i.l.rr i rvins ro r{rrir.ri.r: t1!.: j ir, r,, oa prorin.t.r of t1,... j,ilLr;r:,ic:i rjllr r:.:,ltct: to \ihic), J.plnr. i.fvc.LL(:),t liL.rrli2.rion lriinjD:;

rudr ip..ific tar.,c'.:s in ihc FSli has contrilNl(l to J.r.r':; .lbj.tity to n.l.c va.l\e t,oli.v :rta'..n.nts to l.i.h.r rli2. but ih fact to ovc at lr:s oDr d.,libcrAr;e Pa.c.

3. Thc carr] \rrnin., sy;kr of thjs ortion corrr.s Dondg ir lurp.sa to tlr. .l1.cir.t s.r'.1n.)d rr!clLirrisrr \tIich th{ }jC is c!r:r..'.It;t1i:.ntrtin.J t. D.totl.t.,)ith J.D.n. thi.r li:c ri.cl,.ii.u xould ):.placir tli.r nrti(,rr;:l r:eastr:.s mairtnino.l Ly {:lr. ljc )i.r)rrr c.unLr:j.s rcaar.ling s.,rsitjve inpo):ts Iroir Japi n. 4. 'Ih. i:iri. sociis rjir. fo): soi,r rrr:..rj.rcnE \rith Jap:n to q!ar,.l a9.j,rsf rnilic .)r|:.nion of .):por:ts to thc U.s. of piriicrl.t J.frn.!ic Pr..]Lr.t5, Lic ltcidanrc^ (ir.)ran.r. l'.d.rarion of xcor.n.ic or.;rniz:,1iorrr), Io, .a ary)1.c, i.s u!.ji19 tnz L: "e:rch lr.l!3try cElablisI a \ratch-dog cohiiti:ec to !1!ntd ngriD.,t export i!.t.n..s vhic\ lravc ar undn. i,xpact or narli.t! olcrsca:,, 5. lllo allf.ach of oirtior 3 is reenca hov if the p!.:ssu.s bui rdirq in u. S, :idsin.ss, lab.,r and aqrictlf..1 .:rrlr :i r:.r r.,l:l .ir jl c..,:r:.,,:, :o, i:trrilr Lrnj 1ai.r:.1 ifu ,o ra a.iusql. 6, Prorlt and deci5ivc a.,ltor lry tl,. U.s. GovclD ent Dccded to !:edi:.ss th. ov4rall u,s. larmcrts imbalan.e \rhi.I JapnD is a rEjor coni,:ilrxtirq facl:or,

I. e hnvc ncv.r ds),..] anoth., .ouDtry to a.hievc a balrnce i! ils ecoxonic rclalion. !itl1 trr. Il. nnvc never as,rcd ailothcr colnlry to limit crlports of a numler oI Pro_ 2. The targ'.t olrlljrrcd in 3 could not be ,egotiatcd. 'xhe J:rirancsc .joverDncrt cotrln h.: re.JDond co)tttu.tjvaly to dcr.nas \:l,ich nould ;e intctFr:ctcd ,ry tha .ratan.se nent i5 alrca.iy lndcr h.avy .rta.): lron tll:hin '.h.1 !uljn.j part) rnJ froir t)tc .fliosi1r:on on i.rsuos-.'ChiDa poti.y aDd tl). Or:irnLa a.irocrt.nt--dirccrlY invotve.l with ttjc U. s. ):.lation.hjP.

3, ]\ltl,uflir .rr l.!jtj,n.1:. d.m.n.],,, jn :,o 1,ay ric)r {i.nlli l). i.t.rr,r:.:tcd <1. s.inilirq dojn!, . out Ja!.i for ur)j(j,r.:rt -urr,ir..i51. tro,rti:..t could scv.r.lI rl riaj.D .,:r g.t,!,: L rcllrti.x.r \rith JaPan, Ihis could t!j1 . !,.al..lry, .oo:,!,:trlir'. rciatj...hip into a 1. lro irrrlx,'. eco.oiy ..n:ld '.nsrre" aDI gil,cn Dal.hcc .I r):rrf.!t s vj tli r.,.ttr.r n.r l:.,t d.o.orxl'--e.iDc.j a1:r-y \rith ox. :i:: lin:.;c nnd r1rr,. ri. j.I J.!ri,r \rr. Lo clirii!at. itl sur:1,'lxs \ritl, th. u,s., Ur.rc is .1.nb. .!.\rt ho,;: mtlr th. ov!r:aI:l U,s. balance of p.y,nrr ts UoulaL i)x::r:o!.. (rror .::rnr.Li)1e, iI JaPan Lrcr. !o rcd!.. jrs .rD.rrs ot :irrl:or.l,i1!r to thc u.s., /$aricars initrht i:viLch'!a, Lnying ,i.11 c.trs ftom Duioli., ) 5. ,l brilnt.r.l rptroi:ril ooxld h. a :lonq stc! ba.li to a D.r'..,r \r.rld.c.i6tr]c 5y.t.ri .nd voLld estabtish a prcc.:d.!n:l,hj.n hirht bo !..,4 ag.jnsl ns lrI oth.rst for eram?1c, liy rrcs'L.r) ULN:o|. rni.I rori ha3 a $3 ])illion dcricit in its tra.ic !ith u., att.:.ii, Lo r.r,,r r. J:!iir iJon. t. achic!. ir:,.,':r.,!raj {::trr{r.:l .i-. :!_it- tii. ir< r "r..i)r::o.a:l coi,:ri!,:)1, lrY th4 us |our( :ox ort tr.:litj.a1 an.1 socuritY l.lox<{,v.,r, s!c)r .osts ionla l)c inclrr:cd ol cconoiric ljains \.li.cn hav. Dot be.n . \.''1 1 .',o. I l'.\' .o I ,. Undcr oP,.jon 3 Il, "vo:rrrrtar:r" controls ,j.ul.i beeon. thc rD:].. rathcr t),nn LIc .lc.l)'.ion j.n onr: traao d:iscriNin.ijn., nq,tirct rai ar, Il \ioulil ..t vjtn Jir.n,ir..crp. c:lals.r" rrr:ic1, r:..r11irc. tnat the aiidc tlrr

.if1.Iica]1]ind!Str7s.cjJjn.il,:oi:.ction !hat it i:: bcj.irg injur.a li1 ir,t.rrs. Ii Foula strohili)cn i. Jrjran and ino:c.sc qoYcrnntnt thc rolc oI cnrtels j.rt.r!.ntjon jn lh. d.l:;rj !..r ..n1:rol of llrc cconoi/. optj.on 3 II could sct a pr.ccd.ni vhj.lr cou1.l nltimat.ty o.urr J i'... r.. n. Tho xalc's Un.li:rin,.ra:tJri(:s' coii!trittcc uoula bc tl). rort a,ti)io,r:iatc J.rni lo Nort oLit and coorii)i,tc a "D.qoli.ntir:9 f1at" Io! Jr!i.r Ilrri.cu!.r1y 9jv.n il..t high !o1itical iripnct.

'-s!qr4:

Not..: nl.1 of rtrr abor,. assrfr. I coDtj.nuatj.on oi Ir. ji, ctioris r:o obruin ontion! jriijrf:r.torY solntions to ih^ tcxtillc and ste.I i jrorl: !/ ?/

':".3. "I',':: ll' 1t,,.;"' "'.'.i'....'"..: " :=ll_ j,' :, ' il : ', , I 1", ." -l , ,,: -,. ,:' :, :,,j:' ,: ,". . .,t..,.:.,": , il:i:'l:l ,l.J , ;' . 'od,i iiii' s,..\

:- ',' l,;,'e,. " ,:.:,.,"-,",r..

t'O)